CQMMELfe-Ei^W^ Lf BMARX: 
 
CftowU Cam Bt\\M Eibraty 
 
Cornell University Library 
 KFN5345.T97 
 
 Business corporations In New York :atre 
 
 3 1924 021 908 292 
 
Cornell University 
 Library 
 
 The original of tiiis book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924021908292 
 
Business . Corporations 
 In New York 
 
 A Treatise on all the law of the 
 State of New York relating to 
 all private business corpor- 
 ations, domestic and foreign 
 
 With Forms and Text of Statutes 
 as Amended to January ist, IQIQ 
 
 by 
 FRANK HUBBARD TWYEFFORT 
 
 Author of "New York Estates and Surrogates" 
 of the New York State Bar 
 
 THE LAWYERS' CO-OPERATIVE PUBLISHING COMPANY 
 
 Rochester, New York 
 
 1918 
 
COPYRIGHT. 1918 
 
 BY 
 
 FRANK H. TWYEFFORT 
 
 COMPOSITION, PLATING, PRE8SW0RK, BINDING 
 
 J. B. LYON COMPANYf ALBANY, N. Y, 
 
To 
 
 and 
 
 the memory of 
 
 L. P. T. 
 
PREFACE 
 
 With the completion of the present volume the author 
 accomplishes the task he set himself, when he determined to 
 specialize in the law of decedents' estates and corporations, 
 of writing a text-book on each of these subjects. The plan of 
 this book is like that of his work on " New York Estates and 
 Surrogates," that is, to begin at the logical starting-point 
 (in the present treatise with a discussion of the law affecting 
 " Promoters "), and to carry on consecutively to the final 
 chapter on ' ' Foreign Corporations. ' ' The author 's endeavor 
 in his prior book to make its contents speedily accessible to 
 the busy practitioner by preparing a cyclopedic analysis as 
 well as the usual index has not only been continued in the 
 following pages but has been supplemented by a thumb index. 
 
 The law of corporations is so largely statutory that the 
 author has printed the text of the various statutes affecting 
 corporations at the end of the book in the alphabetical order 
 in which they are found in the Consolidated Laws. He has 
 also, in his citations, referred by section, chapter- and year 
 . of enactment to the particular statute expounded in the 
 apposite text, so that the careful lawyer might compare its 
 wording with that of the statute as it stands when a concrete 
 question is presented to him for answer. 
 
 The author acknowledges with thanks the permission of 
 John N. Blair, Esq., Charles F. Bostwick, Esq., William H. 
 Harkness, Esq., Donald Harper, Esq., and William Mason 
 Smith, Esq., all of the New York Bar, to use various forms ; 
 and of Dean Chase, The Banks Law Publishing Company, 
 The J. B. Lyon Company, and The Edward Thompson Com- 
 pany, to use various statutes ; as well as the kindness of his 
 publishers during the progress of his labors. He solicits sug- 
 gestions for improvements in the book; and trusts it may be 
 of help to his brother-lawyers. 
 
 FRANK H. TWYEFFORT. 
 128 Broadway, New York City, September, 1918. 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Aaronson v. David Meyer Brew- 
 ing Co., 29 Misc. 289, 60 Supp. 
 523 . 
 
 Abbott V. American Hard Rubber 
 Co., 33 Barb. 578 
 
 Abbott V. Harbeson Textile Co., 
 
 162 A. D. 406, 147 Supp. 1031 
 
 333, 
 
 A. B. C. Pence Co. ads. Brown, 
 52 Hun 151, 5 Supp. 95 
 
 Abendroth ads. Richardson, 43 
 Barb. a02; 236, 
 
 Able Realty Maintenance Co., 
 Inc. ads. Kemp, 174 A. D. 242, 
 160 Supp. 1055 
 
 Abrams v. Manhattan Consumers 
 Brewing Co,, 142 A. D. 392, 
 126 Supp. 844 483, 
 
 Accessory Transit Co. ads. Ham- 
 ilton, 26 Barb. 46 
 
 Acker v. Coughlin, 103 A. D. 1, 92 
 Supp. 700 
 
 Acorn Brass Mfg. Co. v. Ruten- 
 berg, 147 A. D. 533, 132 Supp. 
 600 
 
 Adams v. Lamison Store-Service 
 Co., 59 Hun 127, 13 Supp. 118. 
 
 Adams v. Mills, 60 N. Y. 533 
 
 Adams v. Slingerland, 87 A. D. 
 312, 84 Supp. 323 
 
 Adams v. Wallace, 82 A. D. 117, 
 81 Supp. 848 
 
 Adams Furniture & Mfg. Co. ads. 
 Pruyne, 92 Hun 214, 36 Supp. 
 361 
 
 Addickes ads. American Broom 
 & Brush Co., 19 Misc. 36, 42 
 Supp. 871 
 
 A. D. Farmer & Son Co. v. Hum- 
 boldt Publishing Co., 27 Misc. 
 314, 57 Supp. 821 
 
 Adler & Co., Matter of, 174 N. Y, 
 287, 66 N. E. 929 
 
 Adlow Construction Co. ads. 
 Union Estate Co., 221 N. Y. 
 183, 116 N. E. 984 
 
 Adriance v. Roome, 52 Barb. 399. 
 
 Adriatic Fire Ins. Co. ada. 
 Rogers, 148 N. Y. 34, 42 N. E. 
 575 
 
 Advertising Co., People ex rel., v. 
 Roberts, 4 A. D. 288, 39 Supp. 
 448, aflf'd 151 N. Y. 621, 45 N. 
 E. 113-5 • 
 
 MoUan Co. ads. Wilson, 64 A. D. 
 337, 73 Supp. 150, aff'd 170 
 N. Y. 618, 63 N. E. 1123 
 
 366 
 333 
 
 350 
 674 
 246 
 
 477 
 
 485 
 927 
 930 
 
 838 
 
 531 
 390 
 
 233 
 
 232 
 
 256 
 
 881 
 
 508 
 766 
 
 469 
 362 
 
 598 
 
 864 
 612 
 
 .(Etna Explosives Co., Inc., v. Bas- 
 sick, 176 A. D. 577, 163 Supp. 
 917 366 
 
 Agnelli v. Shetzin, 68 Misc. 329, 
 123 Supp. 979 396 
 
 Agnew ads. Firestone Tire & Rub- 
 ber Co., 194 N. Y. 166, 24 L. 
 R. A. (N. S.) 628, 86 N. E. 
 1116 
 
 Agricultural Ins. Co. v. Benning- 
 hofif, 93 N. Y. 495 
 
 Aikin v. Wasson, 24 N. Y. 482. . 
 
 A. J. Johnson Co., People ex rel., 
 V. Roberts, 159 N. Y. 70, 45 L. 
 R. A. 126, 53 N. E. 685. 853, 863, 
 
 Akberg v. John Kress Brewing 
 Co., 65 Hun 182, 19 Supp. 656, 
 aff'd 138 N. Y. 648, 34 N. E. 
 513 
 
 Albany Foundry Co. ads. Gaitley, 
 167 A. D. 10, 141 Supp. 676, 
 aff'd 216 N. Y. 69'3, 110 N. E. 
 1041 
 
 Albany Hospital, Board of Gov- 
 ernors of, ads. People ex rel. 
 Walker, 61 Barb. 397 351 
 
 Albany Insurance Co. ads. Peo- 
 ple, 92 N. Y. 458 710, 
 
 Albany & Susquehanna R. R. Co. 
 ads. Johnson, 54 N. Y. 416 
 
 Albany & Susquehanna R. R. Co., 
 
 ads. People, 55 Barb. 344 . . 175, 
 
 . 301, 
 
 Alberger ads. Buffalo Grape 
 Sugar Co., 22 Hun 349 125 
 
 Albert Palmer Co. ads. De Bost, 
 36 Hun 386 367 
 
 Albro Co. ads. McVity, 90 A. D. 
 109, 86 Supp. 144, aff'd 180 
 N. Y. 554, 73 N. E. 1126 461 
 
 Alden & Co. v. N. Y. Commercial 
 Co., 157 A. D. 872, 142 Supp. 
 772 •. 
 
 Aldridge ads. St. Albans Beef 
 Co., 112 A. D. 803, 99 Supp. 
 398 841, 
 
 Alexander v. Brown, 9 Hun 641 . . 
 
 Alexander v. Gauldwell, 83 N. Y. 
 480 
 
 Alexander v. Donohue, 143 N. Y. 
 203, 38 N. E. 263 207 
 
 Alexander ads. Ketchum, 168 A. 
 D. 38, 153 Supp. 864 142 
 
 Alexander ads. Maine Products 
 Co., No. 1, 115 A. D. 109, 100 
 Supp. 709 97 
 
 228 
 
 432 
 249 
 
 866 
 
 521 
 
 505 
 
 728 
 
 297 
 311 
 
 659 
 
 885 
 457 
 
 430 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Alexander ads. Maine Products 
 Co., No. 2, 115 A. D. 112, 100 
 Supp. 711 154 
 
 Alexander ads. Maine Products 
 Co., No. 3, 115 A. D. 475, 101 
 Supp. 464 196 
 
 Allen ads. Bosworth, 168 N. Y. 
 157, 55 L. R. A. 751, 61 N. E. 
 163 415, 427 
 
 Allen V. Clark, 108 X. Y. 269, 15 
 N. E. 387 '. 387 
 
 Allen ads. Hine, 87 Hun 516, 34 
 Supp. 577, aff'd 156 N. Y. 658, 
 50 N. E. 1118 375 
 
 Allen ads. Hyatt, 56 N. Y. 553 . . 158 
 
 170 
 
 Allegheny & Kinzua E. R. Co. 
 ads. O'Beirne, 157 N. Y. 372, 
 45 N. E. 873 287 
 
 Alpha Portland Cement Co. v. 
 Schratwieser Fireproof Con- 
 struction Co., 146 A. D. 571, 
 131 Supp. 142 885 
 
 Alsing Co. V. New England 
 Quartz Co., 66 A. D. 473, 73 
 Supp. 347, aff'd 174 N. Y. 536, 
 66 N. E. 1110 916 
 
 Althause, People ex rel. v. Giroux 
 Consolidated Mines Co., 122 
 A. D. 617, 107 Supp. 188.. 54, 58 
 
 Althause v. Giroux, No. 2, 56 
 Misc. 511, 107 Supp. 193 853 
 
 Althause v. Giroux Consolidated 
 Mines Co., 150 A. D. 580, 135 
 Supp. 500 848 
 
 Althause v. Guaranty Trust Co.. 
 78 Misc. 181, 137 Supp. 945.. 848 
 
 Amazon Ins. Co. ads. Keeney, 36 
 Hun 66 823 
 
 Ainazones Co. ads. Martin's Bank 
 (Ltd.), 98 A. D. 146, 90 Supp. 
 734 919 
 
 American Aluminum Co. ads. 
 Bedford, 51 A. D. 537, 64 Supp. 
 856 132 
 
 American Bank Note Co., People 
 ex rel. v. Sohmer, 157 A. D. 1, 
 141 Supp. 635, aff'd 210 N. Y. 
 621, 104 N. E. 1137'. . .698, 710, 732 
 
 American & British Mfg. Co. t. 
 International Power Co., 173 
 A. D. 319, 159 Supp. 582 931 
 
 American & British Mfg. Co. ads. 
 Page, 129 A. D. 346, 113 Supp. 
 734 113 
 
 .\merican Bell Telephone Co. ads. 
 People, 117 N. Y. 241, 22 N. E. 
 1057 844 
 
 American Bible Soc. ads. Sher- 
 wood, 40 N. Y. (1 Keyes) 561. 457 
 
 824 
 
 American Box Strap Co. ads. 
 Bowler, 22 Misc. 335, 49 Supp. 
 153 355 
 
 American Brewing Co. ads. Keat- 
 ing, 62 A. D. 501, 71 Supp. 95. 462 
 
 American Broom & Brush Co. v. 
 Addiekes, 19 Misc. 36, 42 Supp. 
 871 881 
 
 American Can Co. v. Grassi Con- 
 tracting Co., Inc., 102 Misc. 
 230, 168 Supp. 689 891 
 
 American Case & Register Co. v. 
 Griswold, 143 A. D. 807, 128 
 Supp. 206 S41 
 
 American Cigar Lighter Co., Mat- 
 ter of, 77 Misc. 643, 138 Supp. 
 455 34 
 
 American Contracting & Dredg- 
 ing Co., People ex rel. Wemple, 
 129 N. Y. 558, 29 N. E. 812.. 
 
 American District Telegraph Co. 
 V. Woodbury, 127 A. D. 455, 
 112 Supp. 165 774 
 
 American Dock Co. ads. Hanover 
 Nat. B'k, 75 Hun 55, 26 Supp. 
 1055, aff'd 148 N. Y. 612, 43 
 N. E. 72 359 
 
 American Dock & Trust Co. ads. 
 Bank of N. Y., 70 Hun 152, 24 
 Supp. 406, aff'd 143 N. Y. 559, 
 38 N. E. 713 361 
 
 American Exchange Nat. B'k, 
 People ex rel. v. Purdy, 196 N. 
 Y. 270, 89 N. E. 838 692, 789 
 
 American Gas & Electric Co. ads. 
 Russell, 152 A. D. 136, 136 
 Supp. 602 104, 107 
 
 American Gear & Spring Co. ads. 
 Cummings, 87 Hun 598, 34 
 34 Supp. 541 291 
 
 American Grocery Co. v. Flint, 
 
 5 A. D. 263, 39 Supp. 1 344 
 
 American Grocery Co. v. Pratt, 
 36 A. D. 152, 55 Supp. 467, 
 aff'd 161 N. Y. 649, 57 N. E. 
 1103 512 
 
 American Grocery Co. ads. Reedy 
 Elevator Co., 24 Misc; 678, 53 
 Supp. 989 924 
 
 American Hard Rubber Co. ads. 
 Abbott, 33 Barb. 578 333 
 
 American Ice Co. ads. People, 135 
 A. D. 180, 120 Supp. 41 823 
 
 American Ice Go. ads. Wilson, 206 
 Fed. 736 161 
 
 American Ink Co. v. Riegel Sack 
 Co., 79 Misc. 421, 140 Supp. 
 107 883 
 
 American Lace Works, Matter of, 
 30 A. D. 321, 51 Supp. 818 674 
 
TABLE OF CASES 
 
 IX 
 
 References are to pages. 
 
 American Linen Thread Co. ads. 
 
 De G-roff, 21 N. Y. 124 460 
 
 American Loan & Trust Co. ads. 
 Bean, 122 N. Y. 622, 26 N. E. 
 
 11 142 
 
 American Loan & Trust Co. ads. 
 
 Gibson, 58 liun 443, 12 Supp. 
 
 444 ' 277 
 
 American Loan & Trust Co. ads. 
 
 People, 150 N. Y. 117, 44 N. H. 
 
 949 
 
 American Loan & Trust Co. ads. 
 
 People, 172 N. Y. 371, 65 N. E. 
 
 200 667, 668, 669 
 
 American Loan &, Trust Co. ads. 
 
 People, 177 N. Y. 231, 69 N. E. 
 
 420 571 
 
 American Loan & Trust Co. ads. 
 
 People, 177 N. Y. 467, 69 N. E. 
 
 1105 592, 680 
 
 American Locomotive Co. ads. 
 
 Montevil, 173 A. D. 387, 159 
 
 Supp. 21 523 
 
 American Motor Co. ads. Maury, 
 
 25 iiisc. 657, 56 Supp. 316, 
 
 aff'd 38 A. D. 623, 57 Supp. 
 
 1142 926 
 
 American Optical Co. ads. Thomp- 
 son, 173 A. D. 123, 159 Supp. 
 
 412 510 
 
 American Press Assn. v. Brant- 
 
 ingham, 57 A. D. 399, 68 Supp. 
 
 285 122 
 
 American Press Assn. v. Brant- 
 
 ingham, 75 A. D. 435, 78 Supp. 
 
 305 122 
 
 American Press Assn., No. 1, ads. 
 
 People ex rel. Britton, 148 A. 
 
 D. 651, 133 Supp. 216 58 
 
 American Palace Car Co. ads. 
 
 Slater, 146 A. D. 859, 131 Supp. 
 
 17 924 
 
 American Kealty Co. ads. Cool- 
 
 idge, 91 A. D. 14, 86 Supp. 
 
 318 895 
 
 American Rubber Tire Co. ads. 
 
 Conant, 48 A. D. 327, 62 Supp. 
 
 974 523 
 
 American Security & Trust Co. 
 
 ads. Hansen, 159 A. D. 801, 144 
 
 Supp. 839 912 
 
 American Silk Works v. Salomon, 
 
 4 Hun 135 77 
 
 American Surety Co., People ex 
 
 rel. V. Campbell, 64 Hun 417, 
 
 19 Supp. 652 734 
 
 American Surety Co. of N. Y., 
 
 People ex rel. v. Campbell, 74 
 
 Hun 101, 26 Supp. 462, aflf'd 
 
 143 N. Y. 625, 37 N. E. 827. . . 725 
 
 American Tarter Co. v. American 
 Tarter Co., 57 A. D. 411, 68 
 
 Supp. 236 ■ 879 
 
 American Telephone & Telegraph 
 Co. ads. Barrett, 138 N. Y. 491, 
 
 34 N. E. 289 435 
 
 American Thread Co. People ex 
 rel. V. Feitner, 30 Misc. 641, 64 
 
 Supp. 321 '....787, 792 
 
 American Tube & Iron Co., 150 
 
 N. Y. 42, 44 N. E. 944. .639, 683 
 American Union Fire Ins. Co. 
 ads. Martyne, 216 N. Y. 183, 
 
 110 N. E. 502 931 
 
 American Union Life Ins. Co. 
 ads. People ex rel. Mackey, 31 
 
 Misc. 617, 64 Supp. 916 59 
 
 American Zylonite Co. ads. Camp- 
 bell, 122 N. Y. 455, 11 L. R. 
 
 A. 596, 25 N. E. 853 69, 137 
 
 Amsterdam Improvement Co. ads. 
 Lancaster, 140 N. Y. 576, 24 
 L. R. A. 322, 35 N. E. 964. ... 824 
 
 870 
 Anaconda Copper Co. ads. Lewi- 
 sohn Bros., 29 A. D. 552, 51 
 
 Supp. 1089 415 
 
 Anderson v. Nicholas, 28 N. Y. 
 
 600 .. 118 
 
 Andrews ads. Atlanta Hill Gold 
 Mining & Milling Co., 120 N. 
 
 Y. 58, 23 N. E. 987 356 
 
 Andrews ads. Boynton, 63 N. Y. 
 
 93 108 
 
 Andrews ads. French, 81 Hun 
 272, 30 Supp. 796, aff'd 145 N. 
 Y. 441, 40 N. E. 214. .475, 481, 484 
 Andrews v. Reiners, 112 A. D. 
 
 378, 98 Supp. 658 546 
 
 Andrews ads. Schenck, 57 N. Y. 
 
 133 222 
 
 Andrews ads. State Bank of Rock 
 Valley, 2 Misc. 394, 21 Supp. 
 
 948 877 
 
 Angldile Computing Scale Co., 
 V. Gladstone, 164 A. D. 370, 149 
 
 Supp. 807 836, 838, 888, 889 
 
 Angle ads. Howarth, 162 N. Y. 
 179, 47 L. R. A. 725, 56 N. E. 
 
 489 210, 244, 930 
 
 Angle ads. Shibley, 37 N. Y. 626. 89 
 Anglo-American Mtge. & Trust 
 Co. ads. Walker, 72 Hun 334, 
 
 25 Supp. 432 2, 5, 77 
 
 Anglo-American Prov. Co. v. 
 Davis Prov. Co., 169 N. Y. 506, 
 
 62 X. E. 587 " 872 
 
 Anglo-American Savings & Loan 
 Assn., 60 A. D. 389, 69 Supp. 
 1054 259 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Ann Arbor E. K. Co. ads Fergu- 
 son, 17 A. D. 336, 45 Supp. 
 
 172 290 
 
 Ansaldi Co., Inc., ads. Shaw, 178 
 
 A. D. 589, 165 Supp. 872 101 
 
 341, 475 
 Appleton ads. Garrett Co., 101 
 
 A. D. 507, 92 Supp. 136, aflf'd 
 
 184 N. Y. 557, 76 jST. E. 1099. 208 
 Arcade Ry. Co. ads. Astor, 113 
 
 N. Y. 93, 2 L. E. A. 789, 20 
 
 N. E. 594 10 
 
 Archer v. Dunham, 89 Hun 387, 
 
 35 Supp. 387 117 
 
 Archer v. Hesse, 164 A. D. 493, 
 
 150 Supp. 296 109, 195 
 
 Archer Pan-Coast Co. ads. Noll, 
 
 60 A. D. 414, 69 Supp. 1007.. 431 
 Argus Co., Matter of Petition of, 
 
 138 N. Y. 557, 34 N. E. 388.. 50 
 136,' 140, 144, 307, 308, 313, 318 
 Arkell Publishing Co., Matter of, 
 
 29 Misc. 145, 60 Supp. 832 672 
 
 Armenia Insurance Co. ads. Dud- 
 ley, 115 A. D. 380, 100 Supp. 
 
 818 197 
 
 Armimes Copper Mine Co. ads. 
 
 Wolf, 6 Misc. 562, 27 Supp. 
 
 642 551 
 
 Armor Gas <fe Oil Co. ads Sommer, 
 
 71 Misc. 211, 128 Supp. 382, 
 
 aff'd 147 A. D. 919, 131 Supp. 
 
 1144 109 
 
 Armstrong v. Danahy, 75 Hun 
 
 405, 27 Supp. 60 93 
 
 Arnold ads. Saranac & L. P. R. E. 
 
 Co., 167 N. Y. 368, 60 N. E. 
 
 10 
 
 Arnot V. Erie Ry. Co., 67 N. Y. 
 
 315 491 
 
 Arnot V. Pittston & Elmira Coal 
 
 Co., 68 N. Y. 558 499, 501 
 
 Art Metal Construction. Co. ads. 
 
 Meredith, 97 Misc. 69, 161 
 
 Supp. 1 203 
 
 Arthur v. Griswold, 55 N. Y. 400. 441 
 A. iS. Baker Co. ads. Cochran, 30 
 
 Misc. 48, 61 Supp. 724 674 
 
 A. S. Fountain Co., People ex rel. 
 
 V. Roberts, 158 N. Y. 168, 58 
 
 N. E. 1104 710, 714 
 
 Ashby ads. Gallagher, 26 Barb. 
 
 143 249 
 
 Ashley ads. Trumbull, 26 A. D. 
 
 356, 49 Supp. 786 243 
 
 Ashman ads. Piatt, 32 Hun 230. . 682 
 Ashworth ads.'Licausi, 78 A. D. 
 
 486, 79 Supp. 631 435 
 
 Asphalt Construction Co. v. Bou- 
 
 ker, 150 A. D. 691, 135 Supp. 
 
 714, aff'd 210 N. Y. 643, 105 
 
 X. E. 1098 358 
 
 Aspinwall ads. Eaton, 19 N. Y. 
 119 207 
 
 Aspinwall v. Sacchi, 57 N. Y. 331. 235 
 
 236 
 
 Assessors ads. People ex rel. 
 Brooklyn Elevated R. E. Co., 
 10 A. D. 393, 41 Supp. 769 .. . 792 
 
 Assessors ads. People ex rel. Edi- 
 son El. 111. Co., 156 N. Y. 417, 
 42 L. E. A. 2«0, 51 N. E. 269 726 
 
 Assets Eealization Co. v. Howard, 
 211 X. Y. 430, 105 N. E. 680. . . 229 
 
 Assets Eealization Co. ads. 
 Wrightsville Hardware Co., 
 159 A. D. 849, 144 Supp. 991.. 873 
 
 Associated Lace Makers' Co. ads. 
 Stillman, 14 Misc. 503, 35 
 Supp. 1071 378 
 
 Associated Manufacturers' Ins. 
 Co. ads. Cummer Lumber Co., 
 67 A. D. 151, 73 Supp. 668, 
 aflf'd, 173 N. Y. 633, 66 N. E. 
 1106 837 
 
 Associated Physicians & Surgeons 
 ads. Parmelee, 9 Misc. 458, 30 
 Supp. 250 : 365 
 
 Associated Physicians & Surgeons 
 ads. Parmalecf, 11 Misc. 363, 32 
 Supp. 149 365 
 
 Associated Press of the State of 
 X. Y. ads. Matthews, 136 X. Y. 
 333, 32 N. E. 981 501 
 
 Asten ads. People ex r«l. Butch- 
 ers' Hide & Melting Co., 100 
 X. Y, 597, 3 N. E. 788. , . .750, 751 
 
 Astor ads. Garrett Co., 67 A. D. 
 595, 73 Supp. 966 157 
 
 Astor V. Arcade Ey. Co., 113 N. 
 Y, 93, 2 L. E. A. 789, 20 N. E. 
 594 16 
 
 Astor V. Westchester Gas-Light 
 Co., 33 Hun 333 260 
 
 Astor Fire Ins. Co. ads. Einn, 59 
 N. Y. 143 638 
 
 Astor Trust Co. ads. Eabbe, 61 
 Misc. 650, 114 Supp. 131 928 
 
 Atkins V. Judson, 33 A. D. 42, 53 
 Supp. 504 279 
 
 Atlanta Hill Gold Mining & Mill- 
 ing Co. V. Andrews, 120 N. Y. 
 58, 23 N. E. 987 356 
 
 Atlas Iron Construction Co., Mat- 
 ter of, 19 A. D. 415, 46 Supp. 
 467 671 
 
 Atlantic Ave. E. R. Co. ads. Peo- 
 ple, 57 Hun 378, 10 Supp. 907, 
 aff'd 125 N. Y. 513, 26 N. E. 
 622 558, 559, 587 
 
 Atlantic Construction Co. v. 
 Krensler, 40 A. D. 268, 57 Supp. 
 983 92, 529, 881 
 
TABLE OF CASES 
 
 References are to pages. 
 
 XI 
 
 Atlantic Dredging Co. v. Beard, 
 145 A. D. 342, 130 Supp. 4, 
 affd 203 N. Y. 584, 96 N.. E. 
 415 933 
 
 Atlantic & Great Western Ey. Co' 
 ads. Gurney, 58 N. Y. 358 .. . 
 
 Atlantic & Pacific E. R. Co. ads. 
 Boorman, 17 Hun 555, aff'd 78 
 N. Y. 599 
 
 Atlantic & Pacific Tea Co. ads. 
 Sautter, 92 Misc. 378, 156 
 Supp. 992 
 
 Atlantic Terra Cotta Co. adV. 
 Bond, 137 A. D. 671, 122 Supp. 
 425 4, 182, 
 
 Atlantic Trust Co. v. Crystal 
 Water Co., 72 A. D. 539, 76 
 Supp. 647 264, 275, 
 
 Attleboro Nat. B'k v. Wendell, 64 
 Hun 208, 19 Supp. 45 
 
 Attorney-General, Matter of, 50 
 Hun 511, 3 Supp. 464 
 
 Attorney-General, Matter of, 79 
 Hun 369, 29 Supp. 449 
 
 Attorney-General, Matter of, 81 
 Hun 541, 30 Supp. 1093 
 
 Attorney-General, Matter of, 124 
 
 A. D. 401, 108 Supp. 823 
 
 500, 
 
 Attorney-General v. Continental 
 Life Ins. Co., 27 Hun 195, 
 dism'd 90 N. Y. 45 
 
 Attorney-General v. Continental 
 Life Ins. Co., 27 Hun 524, 
 dism'd 93 N. Y. 45 
 
 Attorney-General v. Continental 
 Life Ins. Co., 28 Hun 360, aflf'd 
 93 N. Y. 630 
 
 Attorney-General v. Continental 
 Ins. Co., 32 Hun 223 
 
 Attorney-General v. Guardian 
 Mutual Life Ins. Co., 77 N. Y. 
 272 
 
 Attrill ads. Huntington, 118 In. y. 
 365, 23 N. E. 544 102, 103, 
 
 Attrill V. Rockaway Beach Im- 
 provement Co., 25 Hun 509. . . 
 
 Attrill ads. Taylor, 31 Hun 132. . 
 
 Auburn Button Co. v. Sylvester, 
 68 Hun 401, 22 Supp. 891 
 
 Auburn City Ey. Co. ads. Jen- 
 kins, 27 A. D. 553, 50 Supp. 
 852 
 
 Auburn & Ovrasco Lake R. R. 
 ads. Emerson, 13 Hun 150. .. . 
 
 Austen v. Hudson River Tele- 
 phone Co., 73 Hun 96, 25 Supp. 
 916 
 
 Automatic Chain Co., Matter of, 
 134 A. D. 863, 119 Supp. 379, 
 aff'd 198 N. Y. 618, 92 N. B. 
 1078 581, 
 
 937 
 673 
 
 421 
 
 913 
 
 315 
 
 278 
 
 526 
 
 561 
 
 561 
 
 561 
 
 493 
 561 
 
 551 
 
 663 
 
 671 
 663 
 
 527 
 
 398 
 
 678 
 399 
 
 565 
 
 491 
 436 
 
 757 
 
 594 
 
 373 
 
 880 
 
 62 
 
 505 
 
 267 
 
 533 
 
 323 
 
 Automatic Gas Co. ads. Bigelow 
 Co., 56 Misc. 389, 107 Supp. 
 894 f^^. 
 
 Automobile Coaching Co. ads. 
 Ginsberg, 151 A. D. 627, 130 
 Supp. 354 4 479 
 
 Automobile Touring Co. ads. 
 BischoflF, 97 A. D. 17, 89 Supp. 
 
 594 : . 
 
 Averell ads. Moss, 10 N. Y. 449. 
 213, 230, 235, 456, 
 
 Averell ads. Rochester Savings 
 Bank, 96 N. Y. 467 265, 
 
 Averill ads. Central N.. Y. Tele- 
 phone & Telegraph Co., 55 Misc. 
 346, 10i5 Supp. 378 500 
 
 Avon, Geneseo & Mt. Morris Co. 
 ads. Curtis, 49 Barb. 148 
 
 Avon • Springs Sanitarium Co. v. 
 Kellogg, 125 A. ». 51, 109 Supp. 
 153, aff'd 194 N. Y. 567, 88 
 N. E. 1132 125 
 
 Ayer ads. Rathbone, No. 1, 84 
 A. D. 184, 82 Supp. 239 
 
 Ayer ads. Rathbone, No. 2', 84 A. 
 
 D. 186, 82 Supp. 235. . .81, 82, 86 
 
 211, 214, 237 
 
 Babbitt v. Gibbs, 150 N. Y. 281, 
 44 N. E. 952 616 
 
 Babcock v. Beman, 11 N. Y. 20ff. 374 
 
 Babcock v. Schuylkill & Lehigh 
 Valley R. R. Co., 133 N. Y. " 
 420, 31 N. E. 30 612 
 
 Babcock & Wilcox Co. ads. Henry, 
 196 N. Y. 302, 89 N. E. 942 . . 850 
 
 851 
 
 Badger ads. Partridge, 25 Barb. 
 146 122, 312, 505. 540 
 
 Badger ads. Phoenix Warehousing 
 Co., 6 Hun 293 78, 92 
 
 Badger ads. Phoenix Warehousing 
 Co., 67 N. Y. 294 78, 94, 184 
 
 Badische Fabrik, People ex rel. 
 V. Roberts, 152 N. Y. 59, 36 
 L. R. A. 756, 46 N. E. 761.709, 844 
 
 Bagdon v. Philadelphia & Read- 
 ing Coal & Iron Co., 178 A. D. 
 662, 165 Supp. 910 875 
 
 Bagdon v. Philadelphia & Read- 
 ing Co., 217 N. Y. 432, L. R. A. 
 1916F, 407, 111 N. E. 1075... 908 
 
 Bagley V. Carthage, W. & S. H. 
 R. R. Co., 165 N. Y. 179, 58 
 N. E. 895 319, 354 
 
 Bagley ads. Watertown Nat. B'k, 
 134 A. D. 831, 119 Supp. 592. 384 
 
 Bagley & Sewall Co. v. Ehrlicher, 
 8 A. D. 581, 40 Supp. 922 571 
 
 Bagley & Sewall Co. v. Lennig, 
 61 A. D. 26, 70 Supp. 242. .. . 527 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Bailey v. Buffalo Crosstown Kv. 
 
 Co., 14 Hun 483 .'. 355 
 
 Bailey v. County of Buchanan, 
 
 115 N. Y. 297, 6 L. E. A. 562, 
 
 22 N. E. 155 271 
 
 Bailey v. HoUister, 26 N. Y. 112. 208 
 Bailey & Co. ads. Schreger, 97 
 
 A. D. 185, 89 Supp. 870 361 
 
 Bain ads. South Buffalo Natural 
 
 Gas Co., 9 Misc. 425, 30 Supp. 
 
 264 80 
 
 Baird ads. Booth Brothers, 83 
 
 A. D. 495, 82 Supp. 432 462 
 
 Baird v. Hagen, 143 A. D. 679, 
 
 128 Supp. 2'17 141 
 
 Baird ads. Olney, 7 A. D. 95, 40 
 
 Supp. 202 478 
 
 Baker v. Emerson, 4 A. D. 348, 
 
 38 Supp. 576 484 
 
 Baiter ads. Farmers' Loan & 
 
 Trust Co., 20 Misc. 387, 46 
 
 Supp. 266 683 
 
 Baker v. Turner, 19 A. D. 223, 
 
 46 Supp. 25 638 
 
 Baker ads. Van Amburgh, 81 N. 
 
 Y. 46 305, 389 
 
 Baker ads. Veeder, 83 N. Y. 156. 400 
 Baldwin ads. Brookford Mills, 
 
 Inc., 154 A. D. 553, 139 Supp. 
 
 195 843 
 
 Baldwin ads. Fulton Fire Ins. 
 
 Co., 37 X. Y. 648 530 
 
 Bald-win ads. Knox, 80 N. Y. 610. 233 
 
 389 392 
 Ball V. Gerard, 160 A. D. 619,' 
 
 146 Supp. 81 152 
 
 Ball ads. The Lozier Motor Co., 
 
 53 Misc. 375, 104 Supp. 771. . . 325 
 Ballard ads. People, 134 N. Y. 
 
 269, 17 L. R. A. 737, 32 N. E. 
 
 54 502, 550 
 
 Ballard ads. People, 136 N. Y. 
 
 639, 32 N. E. 611 600 
 
 Baltimore & Ohio E. E. Co. ads. 
 
 Cutting, 65 A. D. 414, 73 Supp. 
 
 21, dism'd 177 N. Y. 552, 69 
 
 X. E. 1122 285 
 
 Baltimore & Ohio E. E. Co. ads. 
 
 Morrison, 177 A. D. 613, 164 
 
 Supp. 258 872 
 
 Baltimore & Ohio Southwestern 
 
 E. E. Co. ads. Buell, 39 A. D. 
 
 236, 57 Supp. Ill 353, 902 
 
 Baup V. National Macaroni Co., 
 
 15 A. D. 522, 44 Supp. 546 374 
 
 Bank of China, etc. v. Morse, 168 
 
 X. Y. 458, 56 L. E. A. 139, 61 
 
 X. E. 774 83, 174 
 
 Bank of the Metropolis v. Faber, 
 
 38 A. D. 158, 56 Supp. 542 312 
 
 Bank of Metropolis v. Faber, 150 
 
 N. Y. 200, 44 N. E. 779 453 
 
 Bank of the Metropolis ads. 
 
 Wright, 110 N. Y. 237, 1 L. E. 
 
 A. 289, 18 X. E. 79 15S 
 
 Bank of Montreal, People ex rel. 
 
 V. Commissioners of Taxes, o9 
 
 X. Y. 40 857 
 
 Bank of N. Y. v. American Dock 
 
 6 Trust Co., 70 Hun 152, 24 
 Supp. 406, aff'd 143 N. Y. 559, 
 
 38 N. E. 713 361 
 
 Bank for Savings, People ex rel. 
 
 V. Miller, 177 X. Y. 461, 69 N. 
 
 E. 1103 7-24 
 
 Bank of Staten Island ads. Peo- 
 ple, 112 A. D. 791, 99 Supp. 
 
 486 645 
 
 Bankers' & Merchants' Telegraph 
 
 Co. ads. Farmers' Loan & T. 
 
 Co., 119 N. Y. 15, 23 N. E. 173. 2S4 
 
 290 
 
 Bankers' & Merchants' Telegraph 
 Co. ads. Farmers' Loan & T. 
 Co., 148 N. Y. 315, 31 L. E. A. 
 403, 42 X. E. 707 282, 47S 
 
 Bankers' Safe Deposit Co., Peo- 
 ple ex rel. v. O'Donnel, 54 
 Misc. 5, 105 Supp. 457 748 
 
 Bankers' Trust Co. v. Dietz Co., 
 157 A. D. 594, 142 Supp. 847. 160 
 
 202 
 
 Banking Assn. v. White Lead Co., 
 35N. Y. 505 375 
 
 Barber ads. Easterly, 65 N. Y. 
 252 390 
 
 Barber Asphalt Paving Co. v. 
 
 Gayley, — Misc. , N. Y. 
 
 L. J. Feb. 26, 1918 238, 5.38 
 
 Barclay v. Culver, 30 Hun 1 175 
 
 Bard v. Poole, 12 N. Y. 495 468 
 
 Barden ads. Weaver, 49 X. Y. 
 286 121, 125 
 
 Barker ads. People ex rel. 
 Bleecker St. E. Co., 85 Hun 
 210, 32 Supp. 990 747 
 
 Barker ads. People ex rel. Broad- 
 way Improvement Co., 14 A. D. 
 412, 43 Supp. 1015 763 
 
 Barker ads. People ex rel. Bronx 
 Gas Co., 22 A. D. 161, 47 Supp. 
 1020; 155 N. Y. 308 792 
 
 Barker ads. People ex rel. Clear- 
 ing House, 31 A. D. 315, 51 
 Supp. 1102, aff'd 158 X"^. Y. 709, 
 53 N. E. 1130, aff'd 171 U. S. 
 276 and 176 U S. 287 749 
 
 Barker ads. People ex rel. Con- 
 solidated Telegraph, etc., Co., 
 
 7 A. D. 27, 39 Supp. 776, aff'd 
 
 151 N. Y. 639, 45 N. E. 1133. . 737 
 741, 761 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Barker ads. People ex rel. Dela- 
 ware & Hudson Canal Co., 23 
 Misc. 188, 51 Supp. 1105 750 
 
 Barker ads. People ex rel. Edison 
 Electric Co., 91 Hun 594, 36 
 Supp. 844 23, 756 
 
 Barker ads. . People ex rel. Edi- 
 son Electric Illuminating Co., 
 139 N. Y. 53, 34 N. E. 722. . . . 761 
 
 Barker ads. People ex rel. Edi- 
 son General Electric Co., 141 
 N. Y. 251, 36 N. E. 196 164 
 
 Barker ads. People ex rel. Equi- 
 table Gas-Light Co., 66 Hun 
 21, 20 Supp. 797, aflf'd 137 N. 
 Y. 544, 33 N. E. 336 749, 793 
 
 Barker ads. People ex rel. Gen- 
 eral Electric Co., 91 Hun 590, 
 36 Supp. 842, aff'd 149 N. Y. 
 589, 44 N. E. 1127 755 
 
 Barker ads. People ex rel. Ger- 
 man Looking Glass Plate Co., 
 75 Hun 6, 26 Supp. 971 761 
 
 Barker ads. People ex rel. Haw- 
 ley Box Co., 23 A. D. 532, 48 
 iSupp. 557 754 
 
 Barker ads. People ex rel. Kep- 
 pler, 22 A. D. 120, 47 Supp. 
 958, aff'd 155 N. Y. 661, 49 N. 
 E. 1102 753, 764 
 
 Barker ads. People ex rel. Knick- 
 erbocker Press, 87 Hun 341, 34 
 ■Supp. 269, aff'd 147 N. Y. 715, 
 42 N. E. 725 756 
 
 Barker ads. People ex rel. Man- 
 hattan By. Co., 146 N. Y. 304, 
 40 N. E. 996 744, 746, 752, 753 
 
 Barker ads. People ex rel. Man- 
 hattan R. Co., 152 N. Y. 417, 
 46 N. E. 875 753, 787 
 
 Barker ads. People ex rel. Man- 
 hattan Ry. Co., 165 N. Y. 305, 
 59 N. E. 151 
 
 Barker ads. People ex rel. Martin 
 Bros. Co., 14 Misc. 382, 36 
 Supp. 76 858 
 
 Barker ads. People ex rel. Milling 
 Co., 147 N. Y. 31, 29 L. R. A. 
 
 393, 41 N. E. 435 860 
 
 Barker ads. People ex rel. Mc- 
 Shane Mfg. Co., 23 A. D. 530, 
 48 Supp. 558, aff'd 155 N. Y. 
 
 665, 49 N. E. 1103 856 
 
 Barker ads. People ex rel. N. Y. 
 Real Est. Assn., 29 A. D. 325, 
 
 51 Supp. 567 749 
 
 Barker ads. People ex rel. Ori- 
 noka Mills, 84 A. D. 469, 83 
 
 Supp. 33 738, 740 
 
 Barker ads. People ex rel. Second 
 Ave. B. R. Co., 141 N. Y. 196, 
 36N. E. 184 751 
 
 Barker ads. People ex rel. Sher- 
 
 win Co., 5 A. D. 246, 39 Supp. 
 
 151, aff'd 149 N. Y. 623, 44 
 
 N. E. 1128 
 
 Barker ads. People ex rel. Sloane, 
 
 76 Hun 454, 27 Supp. 1082 .... 
 Barker ads. People ex rel. Thur- 
 
 ber, Wyland Co., 141 N. Y. 
 
 118, 23 L. R. A. 95, 35 N. E. 
 
 1073 
 
 Barker ads. People ex rel. U. S. 
 
 Trust Co., 86 Hun 131, 33 Supp. 
 
 388 
 
 Barker ads. People ex rel. Yel- 
 low Pine Co., 23 A. D. 524, 48 
 
 Supp. 553, aff'd 155 N. Y. 665, 
 
 49 N. E. 1103 
 
 Barkin Construction Co. v. Good- 
 man, 221 N. Y. 156, 116 N. E. 
 
 770 
 
 Barlow ads. Jones, 62 N. Y. 202. 
 Barlow ads. Miller, 78 A. D. 331, 
 
 79 Supp. 964 
 
 Barlow ads. Whitney Arms Co., 
 
 63 N. Y. 62 339, 388, 390, 
 
 459, 460, 462, 
 Barmore ads. Heath, 50 N. Y. 
 
 302 
 
 Barnaby ads. Sanders, 166 A. D. 
 
 274, 151 Supp. 580 79, 
 
 Barnaby ads. Sanders, 173 A. D. 
 
 244, 159 Supp. 579 
 
 Barnard ads. Black River & Utica 
 
 R. R. Co., 31 Barb. 258 
 
 Barnes v. Mobile & Northwestern 
 
 R. R. Co., 12 Hun 126 
 
 Barnes v. Newcomb, 89 N. Y. 108. 
 Barnes v. Wheaton, 80 Hun 8, 29 
 
 Supp. 830 
 
 Barnett v. Chicago & Lake Huron 
 
 R. R. Co., 4 Hun 114 
 
 Barney v. Whalen, 56 Misc. 278, 
 
 106 Supp. 434 
 
 Barney, People ex rel., v. Whalen, 
 119 A. D. 749, 104 Supp. 555, 
 
 aff'd 189 N. Y. 560, 82 N. E. 
 
 1131 20, 
 
 Barney & Smith Car Co. v. Bliss 
 Co., 100 Misc. 21, 164 Supp. 
 
 800 '■ 
 
 Barr v. N. Y., Lake Erie & West- 
 ern R. R. Co., 96 N. Y. 444.. 
 
 Barr v. N. Y., Lake Erie & West- 
 ern R. R. Co., 125 N. Y. 263, 
 26 N. E. 145 200, 
 
 Barrett ads. Corning, 22 Misc. 
 241, 48 Supp. 1013 
 
 Barrett v. American Telephone & 
 Telegraph Co., 138 N. Y. 491, 
 34 N. E. 289 .... 
 
 860 
 741 
 
 859 
 754 
 
 857 
 
 468 
 390 
 
 413 
 
 453 
 761 
 
 594 
 
 95 
 
 477 
 
 13 
 
 912 
 336 
 
 210 
 
 905 
 
 600 
 
 25 
 
 876 
 
 202 
 205 
 
 321 
 420 
 
 435 
 
TABLE OF GASES 
 
 References are to pages. 
 
 Barril v. Calender Water-Proofing 
 
 Co., 50 Hun 257, 2 Supp. 758 . . 354 
 Barron ads. Goldshear, 42 Misc. 
 
 198, 85 Supp. 395 323 
 
 Barron & Cooke H. & P. Co. ads. 
 Kieley, 87 A. D. 317, 84 Supp. 
 
 306 628 
 
 Barstow Stove Co. v. Darling, 81 
 
 Hun 564, 30 Supp. 1033 473 
 
 Bartels, People ex rel v. Borg- 
 stede, 169 A. D. 421, 155 Supp. 
 322 51 
 
 Bartlett v. Drew, 57 X. Y. 587 . . 240 
 Bartlett ads. Lehman-Cherley, 
 135 A. D. 674, 120 Supp. 501, 
 aflf'd 202 N. Y. 524, 95 N. E. 
 
 1125 442 
 
 Barwin Realty Co. v. Batterman 
 Co., 169 A. D. 415, 155 Supp. 
 
 178 684 
 
 Bassick ads. ^Etna Explosives 
 Co., 176 A. D. 577, 163 Supp. 
 
 917 366 
 
 Batchelder v. Council Grove 
 Water Co., 131 N. Y. 42, 29 
 
 N. E. 801 275 
 
 Batchelder & Lincoln Co. v. 
 Knopf, 54 A. D. 329, 66 Supp. 
 
 513 835 
 
 Bateman v. Straus, 86 A. D. 540, 
 
 83 Supp. 785 154 
 
 Bates ads. Dickey, 13 Misc. 489, 
 
 35 Supp. 525 634 
 
 Bath Gas Light Co. v. Cleffv, 151 
 N. Y. 24, 36 L. R. A. 664, 45 
 
 N. E. 390 503 
 
 Batterman v. Journal Co., 28 
 
 Misc. 375, 59 Supp. 965 511 
 
 Batterman Co. ads. Barwin 
 Realty Co., 109 A. D. 415, 155 
 
 Supp. 178 684 
 
 Battershall v. Davis, 31 Barb. 
 
 323 95 
 
 Bauer ads. Davids. 155 A. D. 97, 
 140 Supp. 55, aff'd 209 X. Y. 
 
 539, 102 N. E. 1101 421 
 
 Bauer v. Piatt, 72 Hun 326, 25 
 
 Supp. 426 339 
 
 Baum V. Sporborg, 146 A. D. 537, 
 
 131 Supp. 267 196 
 
 B. & C. Electrical Construction 
 Co., The, V. Owen, 176 A. D. 
 
 399, 163 Supp. 31 100 
 
 Bay State Shoe & Leather Co., 
 People ex rel. v. McLean, 80 
 
 N. Y. 254 ;..741, 756, 857 
 
 Beach ads. Presbyterian Society, 
 
 74N. Y. 72 94 
 
 Beakes Dairy Co. ads. Wesley, 72 
 
 Misc. 260, 131 Supp. 212 436 
 
 Beals V. Buffalo Construction 
 Co., 49 A. D. 589, 63 Supp. 635. 84 
 95, 173, 184 
 
 Bean v. American Loan & Trust 
 
 Co., 122 N. Y. 622, 26 N. E. 11. 142 
 Bean v. Flint, 204 N. Y. 153, 97 
 
 X. E. 490 ■ 151 
 
 Beard ads. Atlantic Dredging Co., 
 145 A. D. 342, 130 Supp. 4, 
 aff'd 2(33 N. Y. 584, 96 N. E. 
 
 415 935, 937 
 
 Beard ads. Gaskell, 58 Hun 101, 
 
 11 Supp. 399 452 
 
 Beardsley v. Johnson, 121 N. Y. 
 
 224, 24 N. E. 380 299, 304, 538 
 
 Beck V. North Packing & Provi- 
 sion Co., 159 A. D. 418, 144 
 
 Supp. 602 !113, 915 
 
 Bedell ads. McCrea, 9 Misc. :!72. 
 
 29 Supp. 705 187. 188 
 
 Bedford v. American Aluminum 
 Co., 51 A. D. 537, 64 Supp. 
 
 856 132 
 
 Bee Publishing Co. ads. Vitolo, 
 
 66 A. D. 582, 73 Supp. 273 911 
 
 Beebe v. Richmond Light & Power 
 
 Co., 3 A. D. 334, 38 Supp. 395. 266 
 Beech ads. People ex rel. Belknap, 
 
 19 Hun 259 21 
 
 Beers v. N. Y. Life Ins. Co., 66 
 
 Hun 75, 20 Supp. 788 357 
 
 Beers v. Phoenix Glass Co., 14 
 
 Barb. 358 337, 471 
 
 Bee Publishing Co. ads. Vitolo, 
 
 66 A. D. 582, 73 Supp. 273. . . 91.> 
 Behan v. Phelps, 27 Misc. 7 IS, 
 
 59 Supp. 713 436 
 
 Belknap, People ex rel. v. Beech. 
 
 19 Hun 259 21 
 
 Bell ads. Hoagland, 36 Barb. 57 . . 62 
 
 2.'!n 
 Bellinger v. Bentlev, 1 Hun 562. . 'r'-l 
 Belmont v. Coleman, 21 N. Y. 90. 211 
 Belmont ads. Continental Securi- 
 ties Co.. 206 N. Y. 7, 51 L. V,. 
 A. (X. S.) 112. 99 N. E. 13S. . 174 
 196, 201, 332, 418, 419, 420 
 Belmont v. Erie Ry. Co., 52 Barb. 
 
 637 62fi 
 
 Belmont v. Signa Iron Co., 12 
 
 A. D. 441, 42 Supp. 122 92 
 
 Beman ads. Babeock, 11 N. Y. 
 
 200 :!"4 
 
 Benedict ads. Bradt, 17 N. Y. 93. -ITO 
 
 Benedict v. Guardian Trust Co.. 
 
 58 A. D. 302, 68 Supp. 1082. . . .ill 
 Benedict ads. General Rubber 
 
 Co.. 215 N. Y. 18, L. R. A. 
 
 191.5F, 617, 109 N. E. 96 405 
 
 B. P. 0. Elks v. Improved B. P. 
 
 0. Elks. 205 N. Y. 459, L. R. A. 
 
 1015B. 1074. 98 N. E. 756 36 
 
 Bengston v. Thingvalla Steamship 
 
 Co., 31 Hun 96 918 
 
TABLE OF CASES 
 
 XV 
 
 References are to pages. 
 
 Bennett v. Electric Construction 
 Co., 8 A. D. 301, 40 Supp. 1139. 
 
 Bennett ads. Ottinger, 144 A D 
 525, 129 Supp. 819, rev'd on 
 other point 203 N. Y. 554, 96 
 X. B. 1123 
 
 Bennett ads. Watson, 12 Barb. 
 196 
 
 Benninghoff v. Agricultural Ins. 
 Co., 93 N. Y. 495 
 
 Bentley ads. Bellinger, 1 Hun 562. 
 
 Berdell ads. Wallace, 24 Hun 
 379 
 
 Bergen v. National Architects' 
 Bronze Co., 173 A. D. 680, 160 
 Supp. 331 
 
 Bernard ads. Csesar, 156 A. D. 
 
 724, 141 Supp. 659, aff'd 209 
 
 N. Y. 570, 103 N. E. 1122.... 
 
 476, 485, 
 
 Berner v. Collier Co., 179 A. D. 
 732, 167 Supp. 39 
 
 Bernstein v. Lispenard Realty 
 Co., 53 Misc. 273, 103 Supp. 
 210 ; .. 
 
 Bernstrom ads. Dupignec, ^6 A. 
 
 D. 105, 78 Supp. 705 
 
 Berwind-White Coal Mining Co. 
 
 V.' Ewart, 90 Hun 60, 35 Supp. 
 
 573 ; 
 
 Berwind-White Mining Co. v. 
 
 Wadsworth, 27 A. D. 550, 50 
 
 • Supp. 501 
 
 Betts ads. Schafuss, 94 Misc. 463, 
 
 157 Supp. 608 
 
 Betz ads. Lilienthal, 185 N. Y. 
 
 153, 77 N. E. 1002 348, 
 
 Betz ads. Michel, 108 A. D. 241, 
 
 95 Supp. 844 199, 
 
 Bevan v. Eoach, 142 A. D. 541, 
 
 127 Supp. 68 
 
 Beveridge v. New York Elevated 
 
 R. R. Co., 112 N. Y. 1, 2 L. R. 
 
 A. 648, 19 N. E. 489 170, 
 
 Beveridge Brewing Co. ads. Peo- 
 ple, 91 Hun 313, 36 Supp. 525. 
 Bhumgare Co., People ex rel. v. 
 
 Wells, 93 A. D. 212, 87 Supp. 
 
 543, aff'd 179 N. Y. 529, 71 N. 
 
 E. 1136 
 
 Bibb Mfg. Co., People ex rel. v. 
 
 Wells, 84 A. D. 330, 82 Supp. 
 
 564 
 
 Biddle Purchasing Co. v. Snyder, 
 
 109 A. D. 679, 96 Supp. 356. . 
 Bigelow Co. V. Automatic Gas 
 
 Co., 56 Misc. 389, 107 Supp. 
 
 894 
 
 Bigelow ads. Plimpton, 93 N. Y. 
 
 592 900, 
 
 Bigelow Blue Stone Co. ads. War- 
 ren, 74 Hun 304, 26 Supp. 649, 
 
 921 
 
 336 
 
 522 
 
 432 
 522 
 
 156 
 
 195 
 
 396 
 
 489 
 
 905 
 
 430 
 
 504 
 
 226 
 
 226 
 
 146 
 
 685 
 404 
 
 152 
 
 334 
 673 
 
 762 
 
 797 
 618 
 
 373 
 922 
 
 app. dism'd 142 N. Y. 669, 37 
 
 N. E. 571 
 
 ads. Dean, 25 Hun 122, 
 
 aff'd 93 N. Y. 662 
 
 Biglin, Matter of v. Friendship 
 
 Assn., 46 Hun 223 
 
 Bilbrough ads. Globe Yarn Mills, 
 
 2 Misc. loo, 21 Supp. 2 876 
 
 Billingham v. Gleason Mfg. Co., 
 
 43 Misc. 681, 88 Supp. 398 
 
 Billingham v. Gleason Mfg. Co., 
 
 101 A. D. 476, 91 Supp. 1046, 
 
 aff'd 185 N. Y. 571, 78 N. E.' 
 
 1099 
 
 Billings V. Robinson, 94 N. Y. 
 
 415 
 
 Billings V. Shaw, 209 N. Y. 265, 
 
 103 N. E. 142 322, 337, 
 
 Billington ads. Williams, 150 A. 
 
 D. 439, 135 Supp. 32, app. 
 
 dism'd 211 N. Y. 527, 105 
 
 N. E. 823 291 
 
 Binghamton Electric Co., Matter 
 
 of, 143 N. Y. 261, 38 N. E. 297. 
 
 627, 
 
 Birdsall Mfg. Co. ads. Shuler, 
 
 17 A. D. 228, 45 Supp. 725.'. . . 
 Birkenwald v. May Co., 179 A. D. 
 
 658, 166 Supp. 1073 911 
 
 Birmingham Nat. B'k v. Mosser, 
 
 14 Hun 605 226 
 
 Bischoff V. Automobile Touring 
 
 Co., 97 A. D. 17, 89 Supp. 594. 
 Bissell V. Michigan Southern & 
 
 Northern Indiana R. E. Co., 22 
 
 N. Y. 258 449, 455, 
 
 Black V. Ellis, 197 N. Y. 402, 90 
 
 N. E. 958 ..: 271, 
 
 Black Hawk Gold Mining Co. ads. 
 
 Carpenter, 65 N. Y. 43... 257, 
 
 259, 260, 
 
 Black River & Utica R. R. Co. v. 
 
 Barnerd, 31 Barb. 258 
 
 Black River & Utica R. R. Co. v. 
 
 Clarke, 25 N. Y. 208 184 
 
 Blackington Co., People ex rel. v. 
 
 Roberts, 4 A. D. 388, 38 Supp. 
 
 872, aff'd 151 N. Y. 651, 46 
 
 N. E. 1150 
 
 Blair ads. Gursky, 218 N. Y. 41, 
 
 L. R. A. 1916r, 359, 112 N. E. 
 
 431 908, 913, 
 
 Blair ads. Jacobs, 157 A. D. 601, 
 
 142 Supp. 897 933 
 
 Blair ads. Meyer, 109 N. Y. 600, 
 
 17 N. E. 228 93 
 
 Blair ads. Taylor, 59 Hun 347, 13 
 
 Supp. 154 143 
 
 Blake v. Buffalo Creek E. R. Co., 
 
 56 N. Y. 485 321 
 
 Blake v. Griswold, 103 N. Y. 429, 
 
 9 N. E. 434 400 
 
 266 
 
 120 
 
 55 
 
 169 
 
 82 
 
 379 
 
 598 
 632 
 
 472 
 
 880 
 
 454 
 
 479 
 
 258 
 276 
 
 13 
 
 698 
 
 933 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Blake v. Griswold, 104 ]^'. Y. 613, 
 
 11 N. E. 137 514 
 
 Blanchard Co. ads. Pray, 95 A. D. 
 
 423, 88 Supp. 650 379 
 
 Blaugas Co. ads. Ottmann, 171 A. 
 
 D. 197, 157 Supp. 413 442 
 
 Bleecker St. & Fulton Ferry E. R. 
 Co. ads. Feople, 140 A. D. 611, 
 
 125 Supp. 1045 560 
 
 Bleecker St. E. Co., People ex 
 rel. V. Barker, 85 Hun 210, 32 
 
 Supp. 990 747 
 
 Bliss ads. Mawhinney, 117 A. D. 
 255, 102 Supp. 279; aff'd 189 
 
 N. Y. 501, 81 N. E. 1169 618 
 
 Bliss ads. Mawhinner, 124 A. D. 
 609, 109 Supp. 332; app. dism'd 
 194 N. Y. 590, 88 N. E. 1125. . 613 
 Bliss V. Matteson, 45 N. Y. 22. . 337 
 Bliss ads. Merchants' Bank, 35 
 
 N. Y. 412 391 
 
 Bliss ads. Eoeky Mountain Nat. 
 
 Bank, 89 N. Y. 338 226 
 
 Bliss ads. Shaler & Hall Quarry 
 Co., 34 Barb. 309; aff'd 27 N. Y. 
 
 297..: 391, 392 
 
 Bliss Co. ads. Barney & Smith 
 Car Co., 100 Misc. 21, 164 
 
 Supp. 800 876 
 
 Block ads. People ex rel. N. Y. 
 Central E. E. Co., 178 A. D. 
 
 251 786 
 
 Bloom V. National Savings & 
 Loan Co., 152 N. Y. 114, 46 
 
 N. E. 166 402 
 
 Blum ads. Hunting, 69 Hun 562, 
 23 Supp. 965; aff'd 143 N. Y. 
 
 511, 38 N. E. 716 251, 252 
 
 Blum ads. Jones, 145 N. Y. 333, 
 
 39' N. E. 954. ' 488, 636 
 
 Blum V. Whitney, 185 N. Y. 232, 
 
 77 N. E. 1159 495 
 
 Blumenthal v. Biekart, Inc., v. 
 Crowley, No. 2, 138 A. D. 845, 
 
 123 Supp. 520 823 
 
 Blitz ads. Manufacturers' Com- 
 mercial Co., 131 A. D. 17, 115 
 
 Supp. 402 887, 891 
 
 Board of Assessors of Brooklyn 
 ads. Brooklvn City E. E. Co., 
 
 92 N. Y. 430 759 
 
 Board of Tax Commissioners ads. 
 People ex rel. East Eiver T. E. 
 Co., 160 A. D. 771, 146 Supp. 
 
 112 770 
 
 Boardman v. Lake Shore & Michi- 
 gan Southern Rt. Co., 84 N. Y. 
 
 157 ". .70, 122, 161, 164 
 
 166, 168, 169, 207, 612, 898 
 Boaz T. Sterlingworth Ev. Supply 
 Co., 68 A. D. 1, 73 Supp. 1039 . 194 
 
 Bodemann ads. Fenkart, 64 Misc. 
 
 140, 118 Supp. 1 873 
 
 Bogart V. N. Y. & Long Is. E. R. 
 Co.. lis A. D. 50, 102 Supp. 
 1093; aff'd 191 N. Y. 550, 85 
 
 N. E. 1106 355, 363 
 
 Bogert V. Otto G<as Engine Works, 
 
 28 A. D. 463, 51 Supp. 118. . . 917 
 Bolen V. Crosby, 49 N. Y. 183 
 
 388, 391 
 Bon Bon Co., Inc., ads. Morgan, 
 
 165 A. D. 89, 150 Supp. 668.. 100 
 Bonbright & Co. v. State of New 
 York, 165 A. D. 640, 151 Supp. 
 
 35 813 
 
 Bond V. Atlantic Terra Cotta Co., 
 137 A. D. 671, 122 Supp. 425. 4 
 182, 314, 315 
 Bonewurads Great Northern 
 Jloulding Co., No. 1, 128 A. D. 
 
 831, 113 Supp. 60 886 
 
 Bonnell v. Griswold, 68 N. Y. 294 390 
 Bonnell v. Griswold, 80 N. Y. 128 
 
 , 389, 513 
 Bonnell v. Griswold, 89 N. Y. 122 
 
 397, 399, 400 
 Bonwit Bros. ads. People ex rel. 
 Stauffer, 69 Misc. 70, 125 Supp. 
 
 958 51 
 
 Boorman v. Atlantic & Pacific E. 
 R. Co., 17 Hun 555; aff'd 78 
 
 N. Y. 599 421 
 
 Booth V. Bunce, 24 N. Y. 592 75 
 
 Booth V. Consolidated Fruit Jar 
 Co., 62 Misc. 252, 114 Supp. 
 
 1000 53, 167 
 
 Booth ads. Wright, 69 N. Y. 
 
 620 388 
 
 Booth Brothers v. Baird, 83 A. D. 
 
 495, 82 Supp. 432 462 
 
 Booth & Flynn, Ltd., ads. Wolski, 
 
 93 Misc. 651, 157 Supp. 294. . . 90S 
 Bopp ads. Hirschfeld, 5 A. D. 
 
 202, 39 Supp. 24 237 
 
 Bopp ads. Hirschfeld, 145 N. Y. 
 
 84, 39 N. E. 817 212 
 
 Borgstede ads. People ex rel. Bar- 
 tels, 169 A. D. 421, 155 Supp. 
 
 322 51 
 
 Borough Bank v. Lampheer, 154 
 
 A. D. 177, 138 Supp. 864 77 
 
 Borst ads. Tinkham, 31 Barb. 
 
 407 596 
 
 Boston & Albany E. R. Co. ads. 
 
 Flike, 53 N. Y. 549 519 
 
 Boston & Bolivia Rubber Co. 
 ads. Sadler, 140 A. D. 367, 125 
 Supp. 407; aff'd 202 N. Y. 547, 
 
 9.5 N. E. 1139 905 
 
 Boston, Hoosac Tunnel & Western 
 Rv. Co. ads. People, 27 Hun 
 528 560 
 
TABLE OF CASES 
 
 xvii 
 
 References are to pages. 
 
 Boston, Hoosac Tunnel & Western 
 Ey. Co. ads. Latham, 38 Hun 
 265 
 
 Boston Woven Cordage Co. ads. 
 Watson, 75 Hun 115, 26 Supp. 
 1101 _ 
 
 Bostwick ads. Brinkerhoff, 88 N 
 
 „Y.52 ; 337^ 
 
 Bostwiek ads. Brinckerhoff, 99 
 N. Y. 185, 1 N. E. 663 
 
 Bostwick ads. Brinckerhoff, 105 
 X. Y. 567, 12N. E. 58 
 
 Bostwiek v. Young, 118 A. D 
 490, 103 Supp. 607; aff'd 194 
 N. Y. 516, 87 N. E. 115... 101, 
 
 Bosworth V. Allen, 168 ST. Y. 157 
 55 L. E. A. 751, 61 N. E. 
 163 415^ 
 
 Boucker Co., Matter of, v. Calla- 
 han Co., 218 N. Y. 321, 113 
 N. E. 257 
 
 Bouker ads. Asphalt Construction 
 Co., 150 A. D. 691, 135 Supp. 
 714; aff'd 210 N. Y. 643, 105 
 N. E. 1098 
 
 Boughton V. Otis, 21 N". Y. 26i . . . 
 
 Bowers v. Male, 186 N. Y. 28, 78 
 N". E. 577 
 
 Bowers v. Ocean Accident & 
 Guarantee Corp., Ltd., 110 A. 
 D. 691, 97 Supp. 485; aff'd 
 187 N. Y. 661, 80 N. E. 1105.. 
 
 Bowery Bank ads. Eichner, 24 
 A. r>. 63, 48 Supp. 978 
 
 Bowery National Bank, The, ads. 
 Spring, 63 Hun 505, 18 Supp. 
 574 
 
 Bowler v. American Box Strap 
 Co., 22 Misc. 335, 49 Supp. 153 
 
 Bowles ads. Witherbee, 201 N. Y. 
 427, 95 N. E. 27 108, 203, 
 
 Box Board & Lining Co. v. Vin- 
 cennes Paper Co., 45 Misc. 1, 
 90 Supp. 836; aff'd 98 A. D. 
 623, 90 Supp. 1105 
 
 Boyen ads. Mitchell, 160 A. D. 
 565, 145 Supp. 715 
 
 Boyle ads. Elger, 69 Misc. 273, 
 126 Supp. 946 
 
 Boynton v. Andrews, 63 N. Y. 93. 
 
 103, 
 
 Boynton ads. Coney Island Auto- 
 mobile Co., 87 A. D. 251, 84 
 Supp. 347 
 
 Boynton v. Hatch, 48 N. Y. 225 . . 
 
 Boynton v. Sprague, 100 A. D. 
 443, 91 Supp. 839; aff'd 183 
 N. Y. 505, 76 N. E. 1089.... 
 
 Boynton Furnace Co. v. Trohn, 
 145 A. D. 773, 126 Supp. 695. . 
 
 ii ■ 
 
 551 
 
 873 
 409 
 422 
 403 
 
 216 
 
 427 
 626 
 
 35Si 
 391 
 
 413 
 
 462 
 510 
 
 624 
 355 
 206 
 
 881 
 127 
 179 
 223 
 
 431 
 224 
 
 385 
 
 S35 
 
 Bozer ads. Oswego Gas. Light ' 
 
 Co., Ill A. D. 140, 96 Supp.. 
 
 48') 257 
 
 Brackett v. Griswold, 103 N. Y. 
 
 425, 9 N. E. 438 400 
 
 Bradburn v.. Solvay Process Co., 
 
 18 A. D. 542, 46 Supp. 161.. 430 
 Bradley v. Certigue Mining & 
 
 Dredging Co., 93 Misc. 519, 157 
 
 Supp. 275 534 
 
 Bradley Fertilizer Co. v. South 
 
 Polishing Co., 4 Misc. 172 
 
 Bradt v. Benedict, 1? N. Y. 93. 
 
 12 
 570 
 586 
 
 Brady ads. Close, 4 Misc. 474, 24 
 
 Supp. 567; aff'd 144 N. Y. 648, 
 
 39 N. E. 493 217 
 
 Brady v. The Mayor, etc., of 
 
 Brooklyn, 1 Barb. 584 449 
 
 Brady v. Mt. Morris Bank, 65 
 
 A. D. 212,. 73 Supp. 532 362 
 
 Brady ads. Woods Motor Vehicle 
 
 Co., 181 N. Y. 145, 73 N. E. 674 80 
 Brainerd v. N. Y. Harlem R. R. 
 
 Co., 25 N. Y. 496 275 
 
 Bramhall ads. Stewart, 11 Hun 
 
 139; aff'd 74 N.Y. 85 469 
 
 Brandt-Dent Co. ads. Strawn, 71 
 
 A. D. 234, 75 Supp. 698; aff'd 
 
 175 >f. Y. 463, 67 N. E. 1090. . 873 
 Brantingham adS. American Press 
 
 Assn., 57 A. D. 399, 68 Supp. 
 
 285 122 
 
 Brantingham ads. American Press 
 
 Assn., 75 A. D. 435, 78 Supp. 
 
 305 122 
 
 Brayton v. N. Y., Lake Erie & 
 
 Western E. E. Co., 72 Hun 602, 
 
 25 Supp. 264 436 
 
 Brayton ads. Pilcher, 17 Hun 429 248 
 Breck v. Brewster, 150 A. D. 202, 
 
 134 Supp. 697 218 
 
 Breck v. Brewster, 153 A. D. 800, 
 
 138 Supp. 821 214 
 
 Breen v. Northwestern Eealty Co., 
 
 52 Misc. 528, 102 Supp. 473 . . 914 
 Brentwood Hotel Co. ads. Wilson, 
 
 16 Misc. 48, 37 Supp.. 655. .. . 538 
 Brevoort Petroleum Co. ads. Ot- 
 ter, 50 Barb. 247 138 
 
 Brewers' Fire Ins. Co. v. Burger, 
 
 10 Hun 56 , 90 
 
 Brewing Co., People ex rel v. 
 
 Eoberts, 22 A. D. 282, 47 Supp. 
 
 949 842 
 
 Brewster ads. Breck, 150 A. D. 
 
 202, 134 Supp. 697 218 
 
 Brewster ads. Breck, 153 A. D. 
 
 800, 138 Supp. 821 ; .■ 214 
 
XVIU 
 
 TABLE OF CASES 
 
 Beferences are to pages. 
 
 Brewster v. Brewster Co., 138 
 A. D. 139, 122 Supp. 1019.... 199 
 
 Brewster v. Hatch, 122 N. Y. 349, 
 25 N. iV 505 6 
 
 Bradstreet's Collection Bureau 
 ads. Hanauer, 95 Misc. ^11, 158 
 Supp. 918 312 
 
 Brewster Co. ads. Brewster, 138 
 A. D. 139, 122 Supp. 1019 199 
 
 Brewster & Co. ads. Home Bank, 
 17 Misc. 442, 41 Supp. 203... 470 
 
 Brewster & Co. ads. Home Bank, 
 15 A. D. 338, 44 Supp. 54 490 
 
 Bridgeport City Bank v. Empire 
 Stone Dressing Co., 30 Barb. 
 421 : 508 
 
 Bridgeport Savings Bank, People 
 ex rel. v. Feitner, 191 N. Y. 88, 
 83N. E. 593 763 
 
 Bridges v. Wade, 113 A. D. 350, 
 99 Supp. 126 921, 923 
 
 Briggs V. Easterly, 62 Barb. 51 . . dHZ 
 
 Brinckerhoff v. Bostwick, 88 N. 
 Y. 52 337, 409 
 
 Brinckerhoff v. Bostwick, 99 N. 
 Y. 185, 1 N. E. 663 422 
 
 Brinckerhoff v. Bostwick, 105 N. 
 Y. 567, 12 N. E. 58 403 
 
 Brisay v. Star Co., 13 Misc. 349, 
 
 35 Supp. 99 453, 454 
 
 Brisbane ads. Considerant, 22 N. 
 Y. 389 434 
 
 Brisbane v. Delaware, Lacka- 
 wanna & Western R. E. Co., 
 94 N. Y. 204 61,129, 167 
 
 Bristow V. Smith, 158 N. Y. 157, 
 53 N. E. 42 248 
 
 British Commercial Life Ins. Co. 
 V. Comm'rs of Taxes, 31 N. Y. 
 32 858 
 
 Britton ads. Brown, 41 A. D. 57, 
 58 Supp. 353 143, 181 
 
 Britton, People ex rel. v. Ameri- 
 can Press Assn., No. 1, 148 A. 
 D. 651, 133 Supp. 216 38 
 
 Broads Manufacturing Co. ads. 
 Horowitz, 54 Misc. 569, 104 
 Supp. 988 5 
 
 Broadway Improvement Co., Peo- 
 ple ex rel. v. Barker, 14 A. D. 
 412, 43 Supp. 1015 763 
 
 Broadway Ins. Co., Matter of 23 
 A. D. 282, 48 Supp. 299. . ; . . . 580 
 
 Broadway Railway Co. ads. Van- 
 
 denburgh, 29 Hun 348 299, 300 
 
 302, 305 
 
 Broadway Realty Co., People ex 
 rel. V. Feitner, 61 A. D. 156, 
 70 Supp. 452; aff'd 168 N. Y. 
 661, 61 N. E. 1132 797 
 
 Broadway & Seventh Ave. R. R. 
 
 Co. ads. Mayor, 17 Hun 242. . . 
 Broadway Theatre Co. v. Dessau, 
 
 45 A. D. 475, 61 Supp. 335. .. . 
 Brock V. Poor, 216 N. Y. 387, 111 
 
 N. E. 229 204, 408, 
 
 Brock ads. Ruggles, 6 Hun 164. . . 
 Brockway ads. Raegener, 58 A. D. 
 
 166, 68 Supp. 712; aff'd 171 
 
 N. Y. 629, 63 N. E. 1121 
 
 Brokaw Bros., People ex rel. v. 
 
 Feitner, 44 A. D. 278, 60 Supp. 
 
 687 
 
 Bronner ads. National Knitting 
 
 Co., 20 Misc. 125, 45 Supp. 714. 
 Bronx Gas Co., People ex rel. v. 
 
 Barker, 22 A. D. 161, 47 Supp. 
 
 1020; 155 N. Y. 308 792 
 
 Bronx Gas Co., People ex rel. v. 
 
 Feitner, 43 A. D. 198, 59 Supp. 
 
 327 792, 798 
 
 Brookfield ads. Hay, 160 A. D. 
 
 277, 145 Supp. 543 415 
 
 Brookford Mills, Inc. v. Baldwin, 
 
 154 A. D. 553, 139 Supp. 195. 
 Brooklyn, City of. Matter of, 143 
 
 X. Y. 596, 26 L. R. A. 270, 38 
 
 X. E. 983 
 
 Brooklyn, City of, ads. Nassau 
 
 Gas-Light Co., 89 N. Y. 409.. 
 
 451 
 
 368 
 
 550 
 92 
 
 765 
 
 842 
 
 843 
 
 17 
 
 697 
 699 
 
 Brooklyn Bank ads. People, 64 
 Misc. 538, 118 Supp. 722 664 
 
 Brooklyn Bank ads. People, 12.j 
 A. D. 354, 109 Supp. 534 (i4.") 
 
 Brooklyn Bottle Stopper Co. ads. 
 Fungen, 132 A. D. 837, 117 
 Supp. 799 546 
 
 Brooklyn City E. R. Co. ads. 
 Board of Assessors of Brooklyn, 
 92 N. Y. 430 759 
 
 Brooklyn City R. R. Co. ads. 
 Brooklyn Height* R. R. Co. 
 151, A. D. 465, 135 Supp. 990. 492 
 
 Brooklyn City R. R. Co. ads. 
 Flynn, 158 N. Y. 493, 53 N. E. 
 520 199 
 
 Brooklyn Cross-Town R. R. Co. 
 ads. Strong, 93 N. Y. 426 113 
 
 Brooklyn Development Co., Peo- 
 ple ex rel. v. Purdy, 96 Misc. 
 10, 159 Supp. 778; aff'd 177 
 A. D. 936, 164 Supp. 1107 796 
 
 Brooklyn Distilling Co. v. Stand- 
 ard Distilling & D. Co., 193 N. 
 Y. 551, 86 N. E. 564 520 
 
 Brooklyn Elevated R. R. Co., Peo- 
 ple ex rel. v. Assessors, 10 A. D. 
 393, 41 Supp. 769 792 
 
TABLE OF CASES 
 
 Keferences are to pages. 
 
 Brooklyn Elevated E. E. Co., 
 People ex rel. v. Eoberts, 90 
 Hun 537, 36 Supp. 34 731 
 
 Brooklyn Heights E. E. Co. v. 
 Brooklyn City E. E. Co., 151 
 A. D. 465, 135 Supp. 990 492 
 
 Brooklyn Heights E. E. Co. v. 
 City of Brooklyn, 152 N. Y. 
 244, 46 N. B. 509 450 
 
 Brooklyn Heights E. E. Co. ads. 
 Haddam Granite Co., Inc., 131 
 A. D. 685, 116 Supp. 96 838 
 
 Brooklyn Heights E. E. Co. ads. 
 Henry, 43 Misc. 589, 89 Supp. 
 525 533 
 
 Brooklyn Heights E. E. Co., Peo- 
 ple ex rel. v. Tax Commission- 
 ers, 146 A. D. 372, 131 Supp. 
 49; aff'd 204 N. Y. 648, 97 N. 
 E. 1113 768 
 
 Brooklyn Hills Improvement Co. 
 ads. Woodhaven Bank, 69 A. D. 
 489, 74 Supp. 1023 62 
 
 Brooklyn Lumber Co. ads. Jacob- 
 son, 184 N. Y. 152, 76 N. E. 
 1075 207, 420 
 
 Brooklyn & N. Y. Ferry Co. ads. 
 Darcy, 127 A. D. 167, 111 Supp. 
 514; aff'd 196 N. Y. 99, 26 
 L. E. A. (N. S.) 267, 89 N. E. 
 461 334, 347, 425 
 
 Brooklyn Eapid Transit Co., Peo- 
 ple ex rel. v. Miller, 85 A. D. 
 178, 83 Supp. 96, aff'd 181 N. Y. 
 582, 74 N. E. 1123 718 
 
 Brooklyn Eapid Transit Co., Peo- 
 ple ex rel. v. Morgan, 57 A. D. 
 335, 68 iSiupp. 21, mod. 168 N. 
 Y. 672, 61 N. E. 1132 711, 723 
 
 Brooklyn Steam Transit Co. v. 
 City of Brooklyn, 78 N. Y. 524 
 
 14, 557 
 
 Brooklyn Union Gas Co., People 
 ex rel. v. Feitner, 82 A. D. 368, 
 81 Supp. 898 761 
 
 Brooklyn Union Gas Co., People 
 ex rel. v. Morgan, 114 A. D. 
 266, 99 Snpp. 711, aff'd 195 N. 
 y. 616, 89 N. E. 1108 724 
 
 Brooklyn v. Merchants' Savings 
 Bank, 31 Misc. 191, 65 Supp. 
 54 937 
 
 Brooks V. Dick, 135 N. Y. 652, 
 32 N. E. 230 619 
 
 Brouwer ads. Cotheal, 5 N. Y. 
 562 54 
 
 Brown v. A. B. C. Fence Co., 52 
 Hun 151, 5 Supp. 95 674 
 
 Brown ads. Alexander, 9 Hun 641 457 
 
 Brown v. Arbogast & Bastian Co., 
 162 A. D. 603, 147 Supp. 998. 122 
 
 Brown V. Britton, 41 A. D. 57, 58 
 
 Supp. 353 143, 181 
 
 Brown v. Buffalo, N. Y. & Erie 
 
 E. E. Co., 27 Hun 342 ... 206 
 
 Brown .V. Clark, 81 Hun 267, 30 
 
 Supp. 801 386 
 
 Brown ads. Cummings, 122 A. D. 
 
 505, 107 Supp. 498 200 
 
 Brown ads. Ericsson, 38 Barb. 
 
 390 249 
 
 Brown v. Ontario Talc Co., 81 A. 
 
 D. 273, 80 Supp. 837 ; 511 
 
 Brown ads. Eoosevelt, 11 N. Y. 
 
 148 61 
 
 Brown ads. Sigue Iron Co., 171 
 
 N. Y. 488, 64 N. E. 194. . . .63, 634 
 682, 847 
 Brown ads. U. S. Title Guarantee 
 
 Co., 166 A. D. 688; 152 Supp. 
 
 470; aff'd 217 N. Y. 628, 111 
 
 N. E. 828 518 
 
 Brown v. Utopia Land Co., No. 
 
 2, 118 A. D. 364, 103 Supp. 50 
 
 416, 417, 419 
 Brown ads. Veiller, 18 Hun 571. 219 
 Brown Seed Co. v. Eichardson, 53 
 
 Misc. 517, 103 Supp. 243 843 
 
 Browne, People ex rel v. Koenig, 
 
 756, 118 Supp. 136 23 
 
 Browne ads. Eochester Folding 
 
 Box Co., 55 A. D. 444, 66 Supp. 
 
 867; aff'd 179 N. Y. 542, 71 
 
 N. E. 1139 62 
 
 Brownell ads. Strobel, 16 Misc. 
 
 657, 40 Supp. 702 325 
 
 Bruce & Fox ads. City. Bank of 
 
 Columbus, 17 N. Y. 507. . . .63, 125 
 
 334 
 Bruce v. Piatt, 80 N. Y. 379. .. . 306 
 
 390, 389 
 Bruen v. Whitman Co., 106 A. D. 
 
 248, 94 Supp. 304 545 
 
 Bruere, Matter of, 174 A. D. 298 856 
 
 Bruff v. Meli, 36 N. Y. 200 441 
 
 Brush Electric Mfg. Co., People 
 
 ex rel. v. Wemple, 129 N. Y. 
 
 543, 14 L.E.A. 708, 29 N. E. 
 
 808 699, 788 
 
 Brush Electric Illuminating Co. 
 
 ads. Montgomery, 48 A. D. 12, 
 
 62 Supp. 606; aff'd 168 N. Y. 
 
 657, 61 N. E. 1131 213 
 
 Bryan, People ex rel. v. State 
 
 Board of Tax Commrs., 142 A. 
 
 D. 796, 127 Supp. 858 736, 776 
 
 Buchanan v. Prospect Park Hotel 
 
 Co., 14 Misc. 435, 35 Supp. 712 378 
 Buckingham ads. Isham, 49 N. Y. 
 
 216 130 
 
TABLE OF CASES 
 
 References- are to pages. 
 
 Bueklev v. Harrison, 10 Misc. 
 
 683, "31 Supp. 999 
 
 Buckley v. Stansfield, 155 A. D. 
 
 735, 140 Supp. 9'53; afF'd 214 
 
 N. Y. 679, 108 N. E. 1090.. 
 426, 
 
 Budd V. Munroe, 18 Hun 316 
 
 Bnell V. Baltimore & Ohio South- 
 western R. R. Co., 39 A. D. 236, 
 
 57 Supp. Ill 353, 
 
 Buell V. Rope, 6 A. D. 113, 39 
 
 Supp. 475 , 482, 
 
 Buffalo Amusement Co. ads. 
 
 Dohn, 66 A. D. 446, 73 Supp. 
 
 95 
 
 Buffalo and Allegheny R. R. Co., 
 
 The, V. Gary, 26 N. Y. 75 
 
 Buffalo, City of, ads. Union 
 
 Steamboat Co., 82 N. Y. 351 . . . 
 Buffalo City Gas Co. ads. Raffer- 
 
 ty, 37 A. D, 618, 56 Supp. 288 
 
 100, 102, 
 
 Buffalo City Mills ads. Persons, 
 
 29 A. D. 45, 51 Supp. 645 
 
 Buffalo Construction Co. ads. 
 
 Beels, 49 A. D, 589, 63 Supp. 
 
 035 84 95, 173, 
 
 Buffalo Creek R. R. Co. ads. 
 
 Blake, 56 N. Y. 485 
 
 Buffalo Crosstown Ry. Co. ads. 
 
 Bailey, 14 Hun 483 
 
 Buffalo Electro-Plating Co. v. 
 
 Day, 151 A. D. 237, 135 Supp. 
 
 1054 
 
 Buffalo Gas Co., People ex rel. v. 
 
 Commissioners, 55 A. D. 186, 
 
 67 Supp. 51 
 
 Buffalo Gas. Co., People ex rel. 
 
 V. Tax Commissioners, 199 N. 
 
 Y. 162, 92 N. E. 215 
 
 Buffalo Gas Co. v. Volz, 31 'Misc. 
 
 160, 64 Supp. 534 
 
 Buffalo Grape Sugar Co. v. Alber- 
 
 ger, 22 Him 349 
 
 Buffalo 4 Jamestown R. R. Co. 
 
 V. Gifford, 87 N. Y. 294 
 
 Buffalo & L. E. Traction, People 
 
 ex rel. v. Tax Commissioners, 
 
 .156 A. D. 466, 142 Supp. 116; 
 
 aff'd 209 X. Y. 502, 103 N. E. 
 
 778 771, 
 
 Buffalo & Lake Erie Traction Co., 
 
 People ex rel. v. Tax Commrs., 
 
 209 N. Y. 496, 103 N. E. 776 
 
 770, 
 
 Buffalo L. & T. & S. D. Co. ads. 
 
 MacDonnell, 193 N. Y. 92, 85 
 
 N. E. 801 
 
 Buffalo L., T. & S. D. Co. v. Me- 
 dina Gas Co., 162 N. Y. 67. 56 
 ' N. E. 505 10, 208, 
 
 932 
 
 425 
 429 
 128 
 
 902 
 
 484 
 
 580 
 
 12 
 
 755 
 
 494 
 
 437 
 
 184 
 321 
 
 355 
 
 303 
 
 795 
 
 794 
 767 
 
 125 
 
 18 
 
 800 
 
 772 
 
 272 
 
 359 
 
 77 
 206 
 
 436 
 
 23.-) 
 
 514 
 
 Buffalo & N. Y. City R. R .Co. v. 
 
 Dudley, 14 N. Y. 336 91, 
 
 Buffalo, N. Y. & Erie R. R. Co. 
 
 ads. Brown, 27 Hun 342 
 
 Buffalo Stone & Cement Co. ads. 
 
 People, 131 N. Y. 140, 15 
 
 L.R.A. 240, 29 N. E. 947 556 
 
 559, 560 
 Buffalo Union Furnace Co. ads. 
 
 Kramer, 132 A. D. 415, 116 
 
 Supp. 1101; app. dism'd 196 
 
 N. Y. 532, 89 N. E. 1103 
 
 Bulkley v. Whitcomb, 121 N. Y. 
 
 107, 24 N. E. 13 
 
 Bullard ads. Losee, 79 N. Y. 404 
 
 390, 512, 
 
 BuUis ads. O'Beirne, 158 N. Y. 
 
 466, 53 N. E. 211 6 
 
 Bunce ads. Booth, 24 N. Y. 592. , 75 
 Burden v. Burden, 8 A. D. 160, 
 
 40 Supp. 499 430 
 
 Burden v. Burden, 159 N. Y. 287, 
 
 54 N. E. 17.... 3 46, 183, 318, 
 
 492, 
 
 Burgen ads. Brewers' Fire Ins. 
 
 Co., 10 Hun 56 
 
 Burgess Gun Co. ads. Shelby 
 
 Steel Tube Co., 8 A. D. 444, 40 
 
 Supp. 871 882, 
 
 Burgweger ads. Kreitner, 174 A. 
 
 D. 48, 160 Supp. 256 
 
 Burke v. Galveston, Houston & 
 
 Henderson R. R. Co., 173 A. 
 
 D. 221, 159 Supp. 379 902 
 
 Burke, People ex rel. v. \Yells, 
 
 184 N. Y. 275, 12 L.R.A. (N. 
 
 S.) 905, 77 N. E. 19 858 
 
 Burke, Ltd., People ex rel. v. 
 
 O'Donnel, 62 Misc. 560, 115 
 
 Supp. 140 858 
 
 Burleigh ads. Shepard & Morse 
 
 Lumber Co., 27 A. D. 99, 50 
 
 Supp. 135 871 
 
 Burlington & Missouri River R. 
 
 R. Co. ads. Keller, 70 N. Y. 
 
 223 538 
 
 Burn ads. Janeway, 91 A. D. 165, 
 
 86 Supp. 628; aff'd 180 N. Y. 
 
 560, 73 N. E. 1125 577 
 
 Burr V. Wilcox, 22 N. Y. 551 
 
 88, 123, 131, 
 Burr Bros., Inc. ads. Jones, 142 
 
 A. D. 640, 127 Supp. 478 874 
 
 Burrell v. Bushwick R. R. Co., 
 
 75 N. Y. 211 73, 126, 
 
 Burrowes Co. v. Caplin, 127 A. D. 
 
 317, 111 Supp. 408 
 
 Burrow v. ilerceau, 132 A. D. 797, 
 
 117 Supp. 537 604 
 
 Busch Brewing Co., Matter of, 41 
 
 A. D. 204, 58 Supp. 812 479 
 
 457 
 494 
 
 90 
 
 926 
 
 320 
 
 912 
 
 67 
 173 
 
 133 
 
 845 
 
TABLE OF CASES 
 
 XXI 
 
 References are to pages. 
 
 . Buah ads. Fiaher, 35 Hun 641 143 
 
 ' Bush V. Gilmore, 45" A. D. 89', 
 
 ;, 61 Supp. 682 370 
 
 >, Bush V. New York Life Insur- 
 ance Co., 135 A. D. 447, 119 
 Supp. 796 18 
 
 Bushwick E. R. Co. ads. Burrall, 
 75 N. Y. 211 73, 126, 133 
 
 Bushwiek E. R. Co. ads. Jarvis, 
 134 N. Y. 83, 31 N. E. 251 115 
 
 Butchers' Hide & Melting Co., 
 People ex rel. v. Asten, 100 
 N. Y, 597, 3 N. E. 788. . . .750, 751 
 
 Butler V. Glen Cove Starch Co., 
 18 Hun 47 119 
 
 Butler ads. Jones, 146 X. Y. 55, 
 41 N. E. 633 225 
 
 Butler V. Smalley, 101 X. Y. 71, 
 
 ■\ 4 N. E. 104 399, 400 
 
 , Butler V. Standard Milk Flour 
 Co., 146 A. D. 735, 131 Supp. 
 451 934 
 
 Butler ads. Sullivan County Club, 
 26 Misc. 306, 56 Supp. 1 104 
 
 Butler Colliery Co. ads. Lalce 
 Shore National Bank, 51 Hun 
 63, 3 Supp. 771 522 
 
 Butterfield ads. Rosa, 33 N. Y. 
 665 469 
 
 Butterick Publishing Co., People 
 ex rel. v. Purdy, 153 A. D. 665, 
 138 Supp. 707, mod. 207 N. Y. 
 771, 101 N. E. 1116 753 
 
 Butterworth v. O'Brien, 23 N. Y. 
 275 469 
 
 Butts v. Wood, 38 Barb. 181; 
 aff'd 37 N. Y. 317 327, 410 
 
 Bystrom v. Willard, 175 A. D. 
 433, 162 Supp. 100; dism'd 220 
 N. Y. 765, 116 N. E. 1,038. ... 149 
 
 Caesar v. Bernard, 156 A. D. 724, 
 
 141 Supp. 659; affg 209 N. Y. 
 
 570, 103 N. E. 1122 396, 476 
 
 485, 489 
 Cagger ads. Trustees of St. 
 
 Mary's Church, 6 Barb. 576 .. . 448 
 Caldwell ads. Workum, 27 Misc. 
 
 72, 58 Supp. 175 470 
 
 Calender Water-Proofing Co. ads. 
 
 Barril, 50 Hun 257, 2 Supp. 
 
 758 354 
 
 Calkins ads. Kohlmetz, 16 A. D. 
 
 518, 44 Supp. 1031 95 
 
 Callaghan ads. Central Park Fire 
 
 Ins. Co., 41 Barb. 448 257 
 
 Cillahan Co. ads. Matter of 
 
 Boucker Co., 218 N. Y. 321, 
 
 113 N. E. 257 626 
 
 Callan ads. Hendrickson, 147 A. 
 
 D. 480, 131 Supp. 839; aff'd 
 
 210 N. Y. 543, 103 N. E. 1124. 141 
 
 530 
 
 605 
 
 893 
 152 
 
 725 
 
 Callanan, People ex rel. v. Keese- 
 ville, Ausable Chasm, & Lake 
 Champlain E. R. Co., 106 A. 
 D. 349, 94 Supp. 555 51 
 
 Camacho v. Hamilton Bank Note 
 & Engraving Co., 2 A. D. 369, 
 37 Supp. 7'25; dism'd 158 N. Y. 
 663, 52 N. E. 1123 4.32 
 
 Camden & Amboy E. R. & T. Co. 
 V. Remer, 4 Barb. 127 
 
 Cameron v. N. Y. & Mt. Vernon 
 Water Co., 133 N. Y. 336, 31 
 N. E. 104 
 
 Cameron v. Seaman, 69 N. Y. 396 
 
 305, 513 
 
 Cammann ads. Whitney, 137 N. 
 Y. 342, 33 N. E. 305 387 
 
 Camp ads. Holmes, 176 A. D. 771, 
 162 Supp. 1014 201 
 
 Camp ads. Holmes, 180 A. D. 409, 
 167 Supp. 840 196 
 
 Camp ads. Holmes, 219 N. Y. 359, 
 114 N. E. 841 873, 877, 
 
 Camp V. IngersoU, .86 N. Y. 433. . 
 
 Campbell ads. People ex rel. 
 American Surety Co., 64 Hun 
 417, 19 Supp. 652 734 
 
 Campbell ads. People ex rel. 
 American Surety Co. of N. Y., 
 74- Hun 101, 26 Supp. 462, aff'd 
 143 N. Y. 625, 37 N. E. 827. . 
 
 Campbell v. American Zylonite 
 Co., 122 N. Y. 455, 11 L. E. A. 
 596, 25 X. E. 853 . . . 
 
 Campbell v. Cypress Hills Ceme- 
 tery, 41 N. Y. (2 Hand) 34.. 
 
 Campbell ads. People ex rel. 
 Davis-Colby Co., 66 Hun 146, 
 21 Supp. 7 738 
 
 Campbell ads. People ex rel. 
 Edison Co., No. 1, 88 Hun 527, 
 34 Supp. 711 800 
 
 Campbell ads. People ex rel. Edi- 
 son Electric Light Co., 138 
 N. y. 543, 20 L. E. A. 453, 34 
 N. E. 370 726 
 
 Ckmpbell ads. People ex rel. Har- 
 lan & HoUingsworth Co., 139 
 N. Y. 68, 34 N. E. 753 844 
 
 Campbell ads. Lopez, 163 N. Y. 
 340, 57 N. E. 50.1 480 
 
 Campbell ads. Phillips, 43 N. Y. 
 (4 Hand) 271 376 
 
 Campbell ads. People ex rel. Pos- 
 tal Telegraph-Cable Co., 70 
 Hun 507, 24 Supp. 208. . . .714, 725 
 726, 808 
 
 Campbell v. Texas Central E. R. 
 Co., 15 Misc. 442. 37 Supp. 213 917 
 
 Campbell ads. People ex rel. Tif- 
 fanv & Co., 144 N. Y. 166, 38 
 N. E. 990 696 
 
 .69, 137 
 
 281 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Campbell ada. People ex rel. 
 
 Western Electric Co., 80 Hun 
 
 466, 30 Supp. 472; aff'd 145 
 
 N. Y. 587, 40 N. E. 239 696, 700 
 
 807 
 Canada Fertilizer Co. ads. , 
 
 152 A. D. 391, 136 Supp. 914; 
 
 mod. 208 N. Y. 607, 102 X. E. 
 
 1102 4 
 
 Canandaigua Academy v. JIc- 
 
 Keehnie, 19 Hun 62 49, 529 
 
 Canadian Car & Foundry Co., 
 
 Ltd., ads. Doller Co., 220 N. Y. 
 
 270, 115 ]Sr. E. 711 901, 906 
 
 Cananea Con. Copper Co. ads. 
 
 Grant, 189 N. Y. 241, 82 N. E. 
 
 191 , 904 
 
 Cannebis Mfg. Co. ads. Davidson, 
 
 113 A. D. 664, 99 Supp. 1018; 
 
 app. dism'd 187 N. Y. 576, 80 
 
 N. E. 1121 461 
 
 Canton Marble Co. ads. Nicker- 
 
 son, 35 A. D. Ill, 54 Supp. 
 
 705 918 
 
 Capitelli ads. Lederweke, 92 
 
 Misc. 260, 155 Supp. 651 841 
 
 Caplin ads. Burrowes Co., 127 A. 
 
 D. 317, HI Supp. 498 845 
 
 Card V. Groesbeck, 204 N. Y. 301, 
 
 97 N. R. 728 229, '247 
 
 Carey Mfg. Co., People ex rel. v. 
 
 Commissioners, 39 Misc. 282, 
 
 79 Supp. 485 840 
 
 Carhart ads. New York, Lake 
 
 Erie & Western R. R. Co., 36 
 
 Hun 288 543 
 
 Carlaftes v. Goldmeyer Co., 72 
 
 Misc. 75, 129 Supp. 396 508 
 
 Carpenter v. Black Hawk Gold 
 
 Mining Co., 65 N. Y. 43. . .257, 258 
 259, 260, 276 
 Carpenter v. Chicago, Milwaukee 
 
 & St. Paul R. Co., 119 A. D. 
 
 169, 104 Supp. 152; aff'd 192 
 
 N. Y. 586, 85 N. E. 1107 273 
 
 Carpenter v. Danforth, 52 Barb. 
 
 581 139 
 
 Carr v. Kimball, 153 A. D. 825, 
 
 139 Supp. 253; aff'd 215 IST. Y. 
 
 634, 109 N. E. 1068 356 
 
 Carr ads. People ex rel. Eden 
 
 Musee American Co., 36 Hun 
 
 488 113 
 
 Carr v. Riocher, 119 N. Y. 117, 
 
 23 jST. E. 296 388 
 
 Carroll v. Cone, 40 Barb. 220; 
 
 aff'd 41 N. Y. 216 376, . 504 
 
 Carson v. New York Terminal Ex- 
 press Co., 74 Hun 536, 26 Supp. 
 
 639 894 
 
 Carter v. H. Booth King & Bro. 
 Pub. Co., 26 Misc. 652, 56 
 Supp. 382 917 
 
 Carter ads. Hurlburt, 21 Barb. 
 221 470 
 
 Carthage, W. & S. H. R. R. Co. 
 V. Bagley, 165 N. Y. 179, 58 
 N. E. 895 319, 354 
 
 Caruso ads. Milliken, 205 N. Y. 
 
 559, 98 N. E. 493 S7 
 
 Gary ads. The Buffalo and Alle- 
 gheny R. R. Co., 26 N. Y. 75. . 12 
 Ads. Flaherty, 62 A. D. 116, 70 
 Supp. 951; aff'd 174 N. Y. 550, 
 67 N. E. 1082 2 
 
 Cary v. Schoharie Valley Machine 
 Co., 2 Hun 110 61ii 
 
 Casco Nat. Bank v. Clark, 139 
 N. Y. 307, 34 N. E. 908. .369, 371 
 
 Case V. N. Y. Mutual Savings & 
 Loan Assn., 88 A. D. 538, 85 
 Supp. 104 203 
 
 Caswell ads. Remington & Son 
 Pulp & Paper Co., 126 A. D. 
 142, 110 Supp. 556 461 
 
 Casey Machine & Supply Co. ads. 
 Strauss, 68 Misc. 474, 124 
 Supp. 32 932 
 
 Cass V. Realty Securities Co., 148 
 A. D. 96, 132 Supp. 1074; aff'd 
 206 N. Y. 649 255, 
 
 Cassagne v. Marvin, 143 N. Y. 
 292, 25 L. R. A. 670, 38 N. E. 
 285 
 
 Cassidy's Ltd. v. Rowan, 99 Misc. 
 274, 163 Supp. 1079 879, 
 
 Castle V. Lewis, 78 N. Y. 131 
 
 Castner v. Duryea, 16 A. D. 249, 
 44 Supp. 708 232 
 
 Cataract Bank ads. People, 5 
 Misc. 14, 25 Supp. 129 595 
 
 Gate V. Fisk, 175 A. D. 235, 161 
 Supp. 441 535 
 
 Catholic Foreign Mission Soc. of 
 America v. Oussani, The, 215 
 N. Y. 1, 109 N. E. 80 376 
 
 Catlin V. Green, 120 N. Y. 441, 24 
 
 , N. E. 941 615 
 
 Cattaraugus Water Co. ads. 
 Oakes, 143 N. Y. 430, 26 L. R. 
 A. 544, 38 N. E. 461 363, .500 
 
 Cauldwell ads. Alexander, 83 N. 
 Y. 480 430 
 
 Cawthra v. Stewart, 59 Misc. 38, 
 109 Supp. 770 147 
 
 Caylus V. N. Y., Kingston & Syra- 
 cuse R. R. Co., 10 Hun 295; 
 aff'd 76 N. Y. 609 274 
 
 Cayuga Lake R. R. Co. v. Kyle, 
 64 N. Y. 185 91 
 
 336 
 
 195 
 
 882 
 468 
 
TABLE OF CASES 
 
 Beferences are to pages. 
 
 Ceballos ads. Havana City Ry. 
 
 Co., 25 Misc. 660, 56 Siupp. 360. 884 
 Cecil V. Warner, 84 Misc. 21, 145 
 
 Supp; 902 156 
 
 Center v. Hoosick River Pulp Co., 
 
 43 Misc. 247, 88 Supp. 548 540 
 
 Central Bank v. Empire Stone 
 
 Dressing Co., 26 Barb. 23 375 
 
 Central Fish Co. ads. People ex 
 
 rel. Leach, 117 A. D. 77, 101 
 
 Supp. 1108 51 
 
 Central N. Y. Telephone & Tele- 
 graph Co. V. Averill, 55 Misc. 
 
 346, 105 Supp. 378 500 
 
 Central Park Fire Ins. Co. v. 
 
 Callaghan, 41 Barb. 448 257 
 
 Central E. R. & Banking Co. of 
 
 Ga. ads. Scott, 52 Barb. 45 . 159, 161 
 Central R. ■ R. Co. ads. Robeson, 
 
 76 Hun 444, 26 Supp. 384.896, 898 
 Central R. R. - of N. J. ads. 
 
 Lehigh Coal & Navigation Co., 
 
 43 Hun 546 623 
 
 Central R. R. Co. of N. J. ads. 
 
 Rubel, 171 A. D. 456, 156 Supp. 
 
 1094 898 
 
 Central Savings Bank v. Walker, 
 
 66 N. Y. 424 .' 213 
 
 Central Trust Co. of N. Y. ads. 
 
 McCaddon, 167 A. D. 897, 151 
 
 Supp. 646 278 
 
 Central Trust Co. ads. McClure, 
 
 165 N. Y. 108, 53 L. R. A. 153, 
 
 58N. E. 777 , 438 
 
 Central Trust Co. v. N. Y. City & 
 
 Northern R. R. Co., 110 N. Y. 
 
 250, 1 L. R. A. 260, 18 N. E. 
 
 92 712 
 
 Cerbat Mining Co. v. State, 29 
 
 Hun 81 734 
 
 Certigue Mining & Dredging Co. 
 
 ads. Bradley, 93 Misc. 519, 157 
 
 Supp. 275 534 
 
 Chadwick ads. Rose, 9 A. D. 311, 
 
 41 Supp. 190 386 
 
 Chamberlaine v. Rochester Seam- 
 less Paper Vessel Co., 7 Hun 
 
 557 628 
 
 Chambers v. Lancaster, 160 N. Y. 
 
 342, 54 N. E. 707 363 
 
 Chambers v. Lewis, 28 N. Y. 454 
 
 242, 392 
 Chandler v. Hoag, 2 Hun 613; 
 
 aff'd 63 N. Y. 624 306 
 
 Chapman v. Lynch, 156 N. Y. 
 
 551,- 51 N. E. 275 386 
 
 Chapman ads. Wesson, 77 Hun 
 
 144, 28 Supp. 431 672 
 
 Chas. H. Pleasants Co. ads. Lodi 
 
 Chemical Co., 25 Misc. 97, 51 
 
 Supp. 668 481 
 
 Charles J. Higgins Co. v. Higgins 
 
 Soap Co., 144 N. Y. 462, 27 
 
 L. R. A. 42, 39 N. E. 490 35 
 
 Charron, Matter of, v. Hale, 25 . 
 
 Misc. 34, 54 Supp. 411 675 
 
 Chartered Co. ads. Heney, 71 
 
 Misc. 237, 128 Supp. 436 
 
 Chase ads. Ford, 118 A. D. 605, 
 
 103 Supp. 30; aff'd 189 N. Y. 
 
 500 
 
 Chase v. Lord, 77 N. Y. 1. .6, 207, 
 Chase v. Vanderbilt, 62 N. Y. 
 
 307 
 
 Chase National Bank v. Faurot, 
 
 72 Hun 373, 26 Supp. 447, aff'd 
 
 149 N. Y. 532, 35 L. R. A. 605, 
 
 44 N. E. 164 
 
 Chase, Talbot & Co., ads. City 
 
 of New York, 206 N. Y. 1, 99 
 
 N. E. 143 738, 766 
 
 Chasman & Co., Matter of, 22 
 
 Misc, 680, 50 Supp. 1065 
 
 Chatham Nat. Bank ads. Sher- 
 idan Electric Light Co. of N. 
 
 Y., 127 N. Y. 517, 28 N. E. 
 
 467 
 
 Cheever v. Pittsburgh, S. & L. E. 
 
 R. R. Co., 150 N. Y. 59, 34 L. 
 
 R. A. 69, 44 N. E. 701 
 
 Chelsea, The, ads. Compton, 128 
 
 N. Y. 537, 28 N. E. 662 
 
 Chemical Nat. Bank v. Colwell, 
 
 132 N. Y. 250, 30 N. E. 644.. 
 Chenango Bridge Co. v. Lewis, 
 
 63 Barb. Ill 60, 
 
 Chesebrough iMf'g. Co. v. Coleman, 
 
 44 Hun 545 
 
 Chevra Bikun Cholim ads. Chevra 
 
 Bnai Israel, 24 Misc. 189, 52 
 
 Supp. 712 605 
 
 Chevra Bnai Israel v. Chevra 
 
 Bikur Cholim, 24 Misc. 189, 62 
 
 Supp. 712 605 
 
 Chese ads. Ford, 118 A. D. 605, 
 
 103 Supp. 30; aff'd 189 N. Y. 
 
 504, 81 N. E. 1164 
 
 Chester County Guarantee Trust 
 
 & Safe Deposit Co. v. Securities 
 
 Co., 165 A. D. 329, 150 Supp. 
 
 1010 
 
 Chicago & Alton R. R. Co. ads. 
 
 Tuchband, 115 N. Y. 437, 22 
 
 N. E. 360 435 
 
 Chicago Crayon Co. v. Slattfery, 
 
 68 Misc. 148, 123 Supp. 987. . . 886 
 Chicago & Eastern Illinois R. R. 
 
 Co. ads. Kissel, 126 A. D. 852, 
 
 HI Supp. 937 192 
 
 Chicago Evening Post Co. ads. 
 
 Palmer, 85 Hun 403, 32 Supp. 
 
 992 915 
 
 892 
 
 204 
 208 
 
 414 
 
 506 
 
 661 
 
 329 
 
 371 
 
 189 
 
 304 
 
 61 
 
 755 
 
 233 
 
 276 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Chicago Glycerine Co. ads. 
 Straus, 46 Hun 216; aff'd 108 
 N. Y. 654, 15 N. E. 444 923 
 
 Chic-ago Junction Kys., People ex 
 rel. V. Roberts, 154 N. Y. 1, 
 47 N. E. 974 725, 864 
 
 Chicago & Lake Huron R. R. Co. 
 ads. Barnett, 4 Hun 114 905 
 
 Chicago, Milwaukee & St. Paul R. 
 Co. ads. Carpenter, 119 A. D. 
 169, 104 Supp. 152; aff'd 192 
 N. Y. 586, 85 N. E. 1107 273 
 
 Chicago Northern Pacific Con- 
 struction Co. ada. Cofiin, 67 
 Barb. 337 896 
 
 Chicago & Northwestern Ry. Co. 
 
 ads. Howell, 51 Barb. 378 107 
 
 108, 892 
 
 Chicago, Rock Island & Pacific R. 
 R. Co. ads. Fisk, 53 Barb. 472. 907 
 
 Chicago Title & Trust Co. v. 
 German Ins. Co.. 119 A. D. 
 347, 104 Supp. 253 931 
 
 ■Childs V. Harris Mfg. Co., 104 
 N. Y. 477, 11 N. E. 50 912 
 
 Childs ads. Stem, 26 Misc. 419, 
 56 Supp. 192 891 
 
 Childs V. WTiite, 158 A. D. 1, 
 142 Supp. 732 443 
 
 Chittenden v. San Domingo Im- 
 provement Co., 132 A. D. 169, 
 116 Supp. 829 544 
 
 Christensen v. Colby, 43 Hun 
 362 235 
 
 Christensen v. pno. 106 X. Y. 97, 
 12 N. E. 648 73, 77, 86 
 
 Christensen v. Illinois & St. Louis 
 Bridge Co., 52 Hun 478, 5 
 Supp. 925 282 
 
 Christien Jensen Co., Matter of, 
 128 N. Y. 550, 28 N. E. B65. . 594 
 623, 636 
 
 Chrome Steel Co., The, ads. 
 Paulding, 94 N. Y. 334 . . , , 266, 480 
 
 Chuman ads. Truesdell, 75 Hun 
 416, 27 Supp. 87 251 
 
 Church ads. Perkins, 31 Barb. 84. 236 
 
 Church ads. Snow, 13 A. D. 108, 
 42 Supp. 1072 189 
 
 Churchill v. St. George Develop- 
 ment Co., 174 A. D. 1, 160 
 Supp. 357 148 
 
 Ciancimrno v. Man, 1 Misc. 121, 
 20 Supp. 702 310 
 
 Cincinnati Cooperage Co. v. 
 O'Keefe, 44 Hun 64; aff'd 120 
 X. Y. 603, 24 N. E. 993 513, 760 
 
 Citizens' Bank of Buffalo v. Wein- 
 berg, 26 Misc. 518. 57 Supp. 
 495 239, 241 
 
 Citizens' Illuminating Co., People 
 
 ex rel. v. Neff, 26 A. D. 542, 50 
 
 Supp. 680 748 
 
 Citizens' Nat. Bank ads. Weston, 
 
 64 A. D. 145, 71 Supp. 827 ... . 906 
 Citizens' Savings Bank ads. Jem- 
 
 ison, 44 Hun 412, 122 N. Y. 
 
 135, 9 L. R. A. 708, 25 N. E. 
 
 264 450, 460, 893 
 
 City Bank of Columbus v. Bruce 
 
 & Pox, 17 N. Y. 507.. 63, 125, 334 
 City of Brooklyn ads. Brooklyn 
 
 Heights R. R. Co., 152 N. Y. 
 
 244, 46 X'. E. 509 450 
 
 City of Brooklyn ads. Brooklyn 
 
 Steam Navigation Co., 78 X. Y. 
 
 524 557 
 
 City of Brooklyn ads. Brooklyn 
 
 Steam Transit Co., 78 X. Y. 
 
 524 14 
 
 City of Buffalo ads.' Economic 
 
 P. & C. Co., 195 N. Y. 286, 88 
 
 N. E. 389 14, 16 
 
 City of Buffalo ads. Union 
 
 Steamboat Co., 82 N. Y. 351. . 787 
 City Investing Co., People ex rel. 
 
 V. Saxe, J77 A. D. 16, 163 Supp. 
 
 942, aff'd 221 N. Y. 585, 117 X. 
 
 E. 1080 732 
 
 City of New York (Avenue A., 
 
 etc.), Matter of, 144 A. D. 107, 
 
 128 Supp. 999 518 
 
 City of Xew York v. Eppinger & 
 
 Russell Co., 170 A. D. 747, 156 
 
 Supp. 662 620 
 
 City of New York ads. Fifth Ave. 
 
 Coach Co., 58 Misc. 401, 111 
 
 Supp. 759; aff'd 126 A. D. 
 
 657, 110 Supp. 1037 449, 4.o:5 
 
 City of New York v. Interborough 
 
 Rapid Transit Co., 53 Misc. 
 
 126, 104 Supp. 157 456 
 
 City of New York v. Montague, 
 
 145 A. D. 172, 129 Supp. 1084. 5.59 
 City of Xew York ads. N. Y. 
 
 Railways Co., 218 N. Y. 483, 
 
 113 N. E. 501 784 
 
 City Trust Co. ads. Dunham, 115 
 
 A. D. 584, 101 Supp. 87; aff'd 
 
 193 N. Y. 642, 86 N. E. 1123. . 135 
 City Trust Co. ada. Tschetenian, 
 
 186 N. Y. 432, 79 N. E. 401. . 280 
 Citv Trust Co. ads. Ward, 192 X. 
 
 Y. 61, 84 X. E. 585 212. 372 
 
 City Trust, Safe Deposit & Surety 
 
 Co. ads. Stratton, 86 A. D. 55.1, 
 
 83 Supp. 780 6.36 
 
 City Water Power Co. ads. Dono- 
 
 hue, 159 A. D. 776, 144 Supp. 
 
 923 912 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Claffy ads. Bath Gas Light Co., 
 151 N. Y. 24, 36 L. R. A. 6.64, 
 45 N. B. 390 503 
 
 Claflin Co., People ex rel. v. Feit- 
 ner, 58 A. D. 468, 69 Supp. 410. 855 
 
 Glancey v. Onondaga Fine Salt 
 Mfg. Co., 62 Barb. 395 559 
 
 Clapp ads. People ex rel. Dela- 
 ware, Lackawanna & Western 
 R. Co., 64 Hun 547, 19 Supp; 
 531 759 
 
 Clapp adg. South Baptist Society 
 of Albany, 18 Barb. 35 148 
 
 Clark ads. Allen, 108 N. Y. 269, 
 15 N. E. 387 387 
 
 Clark ads. Brown, 81 Hun 267, 30 
 Supp. 801 386 
 
 Clark ads. Casco Nat. B'k, 139 
 N. Y. 307-, 34 N. E. 908. . .369, 371. 
 
 Clark V. Myers, 11 Hun 608 246 
 
 Clark ads. NicoU, 13 Misc. 128, 
 
 34 Supp. 159 889 
 
 Clark V. Titcomb, 42 Barb. 12.2 . . 372 
 Clark ads. Van Wagenen, 22 Hun 
 
 497 241 
 
 Clark V. Wilcklow, 75 Hun 290, 
 
 27 Supp. 43 543 
 
 Clarke ads. Black River & Utioa 
 
 R. R. Co., 25 N. Y. 208 184 
 
 Clarkson Home v. Missouri, K. & 
 
 T. R. Co., 182 N. Y. 47, 70 L. 
 
 R. A. 787, 74 N. E. 571 276 
 
 Clason, People ex rel. v. Nassau 
 
 Ferry Co., 68 Hun 128, 33 Supp. 
 
 244 52 
 
 Claus Lipsius Brewing Co. ads. 
 
 Holm, 21 A. D. 204, 47 Supp. 
 
 518 .'. 458 
 
 Clearing House, People ex rel. v. 
 
 Barker, 31 A. D. 3L5, 51 Supp. 
 
 1102, affd. 158 N. Y. 709, 53 
 
 N. E. 1130, afif'd 171 U. S. 276 
 
 and 179 U. S. 287 749 
 
 Clements ads. Marine B'k of N. 
 
 Y., 31 N. Y. 33 372 
 
 Clements v. Sherwood-Dunn, 108 
 
 A. D. 327, 95 Supp. 766 154 
 
 Clemes ads. Hamilton Trust Co., 
 
 163 N. Y. 423, 57 N. E. 614... 273 
 297, 303 
 Cleveland Co. ads. New Britain 
 
 Nat. B'k, 91 Hun 447, 36 Supp. 
 
 387, aflf'd 158 N. Y. 722, 53 
 
 N. E. 1128. .258, 261, 271, 483, 489 
 Cleveland, C. & C. & St. L. Ry. 
 
 Co. ads. Stone, 202 N. Y. 352, 
 
 35 L. R. A. (N. S.) 770, 95 
 
 X. E. 816 188 
 
 Cleveland, Lorain & Wheeling Ry. 
 Co. V. KeJtit, 87 Hun 3.29, 34 
 Supp. 427 937 
 
 Climax Specialty Co. v. Smith & 
 
 Sons, 31 Misc. 275, 64 Supp. 42. 533 
 Clokey v. Evansville & Terre 
 
 Haute R. R. Co., 16 A. D. 304, 
 
 44 Supp. 631 270 
 
 Clokey v. International Rubber 
 
 Clothing Co., 28 Misc. 326, 59 
 
 Supp. 878 897 
 
 Close V. Brady, 4 Misc. 474, 24 
 
 Supp. 567, aff'd 144 N. Y. 648, 
 
 39 N. E. 493 217 
 
 Close V. Potter, 2 Misc.' 1, 21 
 
 Supp. 1086; and 5 Misc. 543, 
 
 25 Supp. 972 211 
 
 Close V. Potter, 5 Misc. 543, 25 
 
 Supp. 972 ,. 334 
 
 Close V. Potter, 155 N. Y. 145, 49 
 
 N. E. 686.. 223, 226, 231, 232, 234 
 Closer V. Noye, 147 N. Y. 597, 41 
 
 N. E. 570 225 
 
 Chubb V. Cook, 161 A. D. 775, 
 
 147 Supp. 94 205 
 
 Clyde ads. Lorillard, 86 N. Y. 
 
 384 2 
 
 Clyde ads. Lorillard, 142 N. Y. 
 
 456, 24 L. R. A. 113, 37 N. E. 
 
 489 598 
 
 Clyne ads. Gold, 134 N. Y. 262, 
 
 17 L. R. A. 767, 31 N. E. 980. . 387 
 Coats, Matter of, 73 A. D. 179, 
 
 76 Supp. 730 57, 60 
 
 Coats, Matter of, 75 A. D. 469, 
 
 78 Supp. 425 120 
 
 Coats, Matter of, 75 A. D. 567, 
 
 78 Supp. 429 46 
 
 Cobb V. Sweet, 46 A. D. 375, 61 
 
 Supp. 545 640,641, 685 
 
 Cobre Grande Copper Co. ads. 
 
 Grant, 193 N. Y. 306, 86 N. E. 
 
 34 505 
 
 Coburn v. Wheelock, 34 N. Y. 
 
 440 208 
 
 Cochran v. A. S. Baker Co., 30 
 
 Misc. 48, 61 Supp. 724 674 
 
 Cochrane ads. Kiendl, 153 A. D. 
 
 802, 138 Supp. 630 395 
 
 Cochran v. Wiechers, 119 N. Y. 
 
 399, 7 L. R. A. 553, 23 N. B. 
 
 803 
 
 Coddington v. Gilbert, 17 N. Y. 
 
 489 
 
 Coe ads. Walton, 110 N. Y. 109, 
 
 17 N. E. 676 227 
 
 Coffin V. Chicago Northern Pacific 
 
 Construction Co., 67 Barb. 337. 
 Coffin V. Reynolds, 37 N. Y. 640. . 
 
 250, 252 
 Cohn & Co., People ex rel. v. Mil- 
 ler, 180 N. Y. 16, 72 N. B. 525 . 70 
 96, 255, 723 
 
 209 
 
 922 
 
 S96 
 245 
 
XXVI 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Colby ads. Christensen, 43 Hun 
 
 362 
 
 Cole V. Knickerbocker Life Ins. 
 
 Co., 23 Hun 255, dism'd 91 N. 
 
 Y. 255 
 
 Cole ads. Maroney, 52 Misc. 451, 
 
 103 Supp. 560 
 
 Cole V. Millerton Iron Co., 133 
 
 N. Y. 164, 30 N. E. 847.... 75, 
 Coleman, Matter of, 174 N. Y. 
 
 373, 66 X. E. 983 567, 585, 
 
 Coleman ads. Belmont, 21 N. Y. 
 96 
 
 Coleman ads. Chesebrough. Mfg. 
 Co., 44 Hun 545 
 
 Coleman ads. People ex rel. Fair- 
 child Cliemical Co., 115 N. Y. 
 178, 21 N. E. 1056 
 
 Coleman ads. Knickerbocker Fire 
 Ins. Co., 44 Hun 410 
 
 Coleman ads. People ex rel. 
 Knickerbocker Fire Ins. Co., 
 107 N. Y. 541, 14 X. E. 431.. 
 
 Coleman ads. Eudiger, 112 A. D. 
 279, 98 Supp. 461 
 
 Coleman ads.. People ex rel. Sav- 
 ings Bank of New London, 135 
 N. Y. 231, 31 X. E. 1022. .738, 
 
 Coleman ads. People ex rel. Union 
 Trust Co. 126 N. Y. 433. 12 
 L. R. A. 762, 27 N. E. 818.742, 
 
 Coleman ads. People ex rel. Win- 
 chester, 133 N. Y. 279, 16 L. 
 E. A. 183, 31 N. E. 96 465, 
 
 Coleman Stable Co. ads. London 
 Eealty Co., 140 A. D. 495, 125 
 Supp. 410 
 
 Coler V. Pittsburgh Bridge Co., 
 146 N. Y. 281, 40 N. E. 779... 
 
 Collar Co., People ex rel. v. Feit- 
 ner, 31 Misc. 553, 65 Supp. 518. 
 
 Colles V. Trow City Directory Co., 
 1 1 Hun 397 
 
 Collier Co. ads. Berner, 179 A. D. 
 732, 167 Supp. 39 
 
 Collier, Inc., ads. Kharas, 171 
 A. D. 388, 157 Supp. 410.. 510, 
 
 Colonial Trust Co., People ex rel. 
 V. Morgan, 47 A. D. 126, 62 
 Stipp. 191, aff'd 162 N, Y. 654, 
 57 N. E. 1116 
 
 Colorado Coal & Iron Co. ads. 
 Copp, 29 Misc. 109, 60 Supp. 
 293 
 
 Colorado Fuel & Iron Co. ads. 
 Townsend, 16 A. D. 314, 44 
 Supp. 849 
 
 235 
 
 589 
 
 470 
 
 605 
 
 597 
 640 
 
 211 
 
 755 
 
 750 
 
 747 
 
 743 
 
 747 
 
 752 
 859 
 
 745 
 
 738 
 
 272 
 
 914 
 
 840 
 
 501 
 
 905 
 
 611 
 
 731 
 
 612 
 
 281 
 
 Colton, Matter of, 26 Misc. 571, 
 
 57 Supp. 556 584 
 
 Colton Improvement Company v. 
 Richter, 26 Misc. 26, 55 Supp. 
 
 486 3 
 
 Columbia Co., People ex rel. v. 
 O'Brien, 101 A. D. 296, 91 
 
 Supp. 649 16, 25, 26, 38 
 
 Columbia Bag Co. ada. People ex 
 rel. Mclnness, 103 A. D. 208, 
 
 92 Supp. 1084 57 
 
 Columbia Gas & Electric Co. v. 
 Knickerbocker Trust Co., 152 
 A. D. 5, 136 Supp. 840 274 
 
 Colimibian Insurance Co., Matter 
 of, 30 Hun 342, aff'd 94 N. Y. 
 636 680 
 
 Colwell, Matter of, 76 A. D. 615, 
 • 78 Supp. 607 56, 60 
 
 Colwell ads. Chemical Nat. B'k, 
 132 N. Y. 250, 30 N. E. 644. . 304 
 
 Comez V. United Surety Co., 217 
 N. Y. 268, HI N. E. 832 899 
 
 Commercial Alliance Ins. Co. ads. 
 People, 91 Hun 389, 36 Supp. 
 248, aff'd 148 N. Y. 563, 43 
 N. E. 988 661 
 
 Commercial Alliance Life Ins. Co. 
 ads. People, 5 A. D. 273, 39 
 Supp. 117, aff'd 151 N. Y. 640, 
 45 N. E. 1133 597 
 
 Commercial Alliance Life Ins. Co. 
 ads. People, 148 N. Y. 563, 43 
 N. E. 988 646 
 
 Commercial Cable Co. ads. Dillon, 
 87 Hun 444, 34 Supp. 370.. 3, 4 
 
 Commercial Cable Co., People ex 
 rel. V. Morgan, 178 X. Y. 433'. . 709 
 716, 717, 808 
 
 Commercial Coal &, Ice Co. v. Pol- 
 hemus, Nos. 1, 2, 128 A. D. 
 247, 112 Supp. 566 882 
 
 Commercial Nat. B'k of Cleveland 
 v. Syracuse Rapid Transit Ry. 
 Co., 25 Misc. 36, 54 Supp. 429. 160 
 
 Commercial Travelers' Ass'n ads. 
 First Nat. B'k, 108 A. D. 78, 95 
 Supp. 454, aff'd 185 N. Y. 575, 
 78 N. E. 1103 328 
 
 Commercial Travelers' Ass'n ads. 
 First Nat. B'k, 108 A. D. 78, 95 
 Supp. 454, aff'd 185 N. Y. 275, 
 78 N. E. 1103 360 
 
 Commercial Warehouse Co. ads. 
 Merchants' Exchange National 
 Bank, 49 N. Y. 635 468 
 
 Commercial Wood & Cement Co. 
 V. Northampton Portland Ce- 
 ment Co., 41 Misc. 242, 84 
 Supp. 38 924 
 
TABLE OF CASES 
 
 XXVll 
 
 References are to pages. 
 
 Commercial Wood & C. Co. v. 
 Northampton Portland C. Co., 
 190 N. Y. 1, 82 Ni E. 730 329 
 
 Commissioners ads. People ex rel. 
 Buffalo Gas Co., 55 A. D. 186, 
 67 Supp. 51 795 
 
 Commissioners ads. People ex rel. 
 Cady Mfg. Co., 39 Misc. 282, 
 79 Supp. 485 840 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Bank of Montreal, 
 59 N. Y. 40 857 
 
 Commissioners of Taxes ads. Brit- 
 ish Commercial Life Ins. Co., 
 31 N. Y. 32 858 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Edison Co., 58 Misc. 
 249, 110 Supp. 833 772 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Mutual Union Tele- 
 graph Co., 99 N. Y. 254, 1 N. E. 
 773 790 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. New York Elevated 
 E. E., 82 N. Y. 459 737 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Pacific Mail Steam- 
 ship Co., 64 N. Y. 541 859 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Panama R. R. Co.. 
 104 N. Y. 240, 10 N. E. 437 . .' 742 
 747, 748, 750 
 
 Comm^issioners of Taxes ads. Peo- 
 ple ex rel. Twenty-third St. 
 E. E. Co., 95 N. Y. 554.. 742, 749 
 
 759 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. West Side & Yonkers 
 Ey. Co., 31 Hun 32 . . .' 752 
 
 Commissioners of Taxes ads. Peo- 
 ple ex rel. Zulie Steam Navi- 
 gation Co., 51 Hun 312, 3 Supp. 
 885 738 
 
 Commonwealth Fire Ins. Co., 
 Matter of, 32 Hun 78 642, 661 
 
 Commonwealth Trust Co. ads. 
 Cause, 196 N. Y. 134, 24 L. E. 
 A. (N. S.) 967, 89 N. E. 476. . 49 
 
 Commonwealth Trust Co. ads. 
 Kavanaugh, 103 A. D. 95, 92 
 Supp. 543 419 
 
 Commonwealth Trust Co. ads. 
 Kavanaugh, 181 N. Y. 121, 73 
 N. E. 562 418 
 
 Comptoir National D'Escompte 
 de Paris ads. U. S. Asphalt Ee- 
 fining Co., 166 A. D. 64, 151 
 Supp.. 604 872 
 
 Compton V. The Chelsea, 128 N. 
 Y. 537, 28 N. E. 662 189 
 
 Compton ads. ftreen, 41 Misc. 21, 
 83 Supp. 588 421 
 
 Conant v. American Eubher Tire 
 Co., 48 A. D. 327, 62 Supp. 974. 523 
 
 Concordia Savings & Aid Assn. v. 
 Eead, 93 N. Y. 474 531 
 
 Condouris v. Imperial Turkish, 
 etc., Co., 3 Misc. 66, 22 Supp. 
 695 68 
 
 Cone ads. Carroll, 40 Barb. 220, 
 aff'd 41 N. Y. 216 376, 504 
 
 Cone V. Empire Plaid Mills, 12 
 A. D. 314, 42 Supp. 160 45 
 
 Coney Island Automobile Co. v. 
 Boyton, 87 A. D. 251, 84 Supp. 
 347 431 
 
 Coney Island & B'klyn E. R. Co. 
 ads. Flynn, 26 jx. D. 416, 50 
 Supp. 74 .-. . 261 
 
 Coney Island Jockey Club, Peo- 
 ple ex rel. v. Sohmer, 155 A. D. 
 842, 140 Supp. 507, aff'd 210 N. 
 Y. 549, 104 N. E. 1137 719, 721 
 
 Coney Island E. E. Co., People 
 ex rel. v. Neff, 15 A. D. 585, 44 
 Stupp. 810 753 
 
 Conger ads. Knickerbocker, 110 
 A. D. 125, 97 Supp. 127...... 204 
 
 Congregation Anshe Yosher v. 
 First United Eoyatiner Sokolo- 
 wer Verein, 32 Misc. 269, 66 
 Supp. 356 605 
 
 Congress & Empire Spring Co. 
 ads. Knowlton, 57 N. Y. 518. . . 83 
 
 Conklin v. Federal Trust Co., 176 
 A. D. 572, 163 Supp. 570 903 
 
 Conklin v. Furman, 57 Barb. 484", 
 aff'd 48 N. Y. 527 230, 232 
 
 Conklin v. United Construction 
 Supply Co., 166 A. D. 284, 151 
 Supp. 624, aff'd 219 N. Y. 555, 
 114 N. E. 1063 100 
 
 Conlon Electric Washer Co., Inc., 
 Matter of, 169 A. D. 192, 154 
 Supp. 366 179 
 
 Connecting Terminal E. E. Co., 
 People ex rel. v. Miller, 178 
 N. Y. 194, 70 N. E. 472 729 
 
 Connell ads. Murphy Varnish 
 Co., 10 Misc. 553, 32 Supp. 492. 841 
 
 Connell ads. Novelty Mfg. Co., 88 
 Hun 254, 34 Supp. 717 836 
 
 Connell ads. Providence Steam 
 Co., 86 Hun 319, 33 Supp. 482. 
 
 Connelly ads. International Text 
 Book Co., 67 Misc. 49, 124 
 Supp. 603, aff'd 140 A. D. 939, 
 125 Supp. 1125 835, 839, 
 
 Conover ads. Powell, 75 Hun 11, 
 26 Supp. 1028 336 
 
 881 
 
 881 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Conro y. Port Henry Iron Co., 12 
 
 Barb. 27 1, 175, 449, 
 
 Considerant v. Brisbane, 22 N. Y. 
 
 389 
 
 Consolidated Fire Alarm Co. ads. 
 
 People ex rel. Lehman, 142 A. 
 
 D. 753, 127 Supp. 348 
 
 Consolidated Fruit Jar Co. ads. 
 
 Booth, 62 Misc. 252, 114 Supp. 
 
 1000 53, 
 
 Consolidated Fruit Jar Co. v. 
 
 Eisner, 103 A. D. 453, 93 Supp. 
 
 128 
 
 Consolidated Gas Co., Matter of, 
 
 56 Misc. 49, 106 Supp. 407, aff'd 
 
 124 A. D. 401, 108 Supp. 823. 
 
 Consolidated Gas Co. ads. Duflfy, 
 59 A. 'D. 580, 69 Supp. 635. . . 
 
 Consolidated Gas Co. ads. People, 
 130 A. D. 626, 115 Supp. 393. . 
 
 Consolidated Gas Co., People ex. 
 rel. V. Feitner, 78 A. D. 313, 79 
 Supp. 975 762, 
 
 Consolidated Ginseng Co. of 
 Amerca, People ex rel. v. Kel- 
 sey, 105 A. D. 175, 93 Supp. 
 369, aff'd 182 N. Y. 526, 74 
 N. E. 1123 
 
 Consolidated Ice Co. ads. Matter 
 of Mever, 196 N. \'. 471, 90 
 N. E. "54 
 
 Consolidated National Bank ads. 
 People ex rel. Lorge, 105 A. D. 
 409, 94 Supp. 173 54, 
 
 Consolidated Ry., L. & R. Co. ads. 
 Lawyers' Ad. Co., 187 N. Y. 
 395, "80 N. E. 199 
 
 Consolidated Telegraph, etc., Co., 
 People ex rel. v. Barker, 7 A. 
 D. 27, 39 Supp. 776,' aff'd 151 
 N. Y. 639, 45 N. E. 1133. .737, 
 
 Consolidated Telegraph & Elec- 
 trical Subway Co., Matter of, 
 119 A. D. 835, 104 Supp. 922, 
 aff'd 189 N. y. 549, 82 N. E. 
 1125 
 
 Consolidated Water Co., People 
 ex rel. v. Woodbury, 67 Misc. 
 
 503, 122 Supp. 904. 
 lal 
 
 Consumers' Coal Co. ads. Merrill, 
 114 N. Y. 216,21 N. E. 155.!. . 
 
 Consumers' Park Brewing Co. 
 ads. Haule, 150 A. D. 582, 135 
 Supp. 900, app. dism'd 2il N. 
 Y'. 578, 105 N. E. 1086 448, 
 
 Content, People ex rel. v. Metro- 
 politan Elevated Ry. Co., 26 
 Hun 82 
 
 506 
 434 
 
 58 
 
 167 
 
 360 
 
 449 
 554 
 
 543 
 
 557 
 
 797 
 
 869 
 903 
 851 
 502 
 
 741 
 761 
 
 785 
 
 800 
 368 
 
 528 
 72 
 
 Continental Construction & Im- 
 provement Co. ads. Wellington, 
 52 Hun 408, 5 SUpp. 587 237 
 
 Continental Ins. Co. ads. Attor- 
 ney-General, 32 Hun 22.3 663 
 
 Continental Ins. Co. v. N. Y'. & 
 Hudson River R. R. Co., 187 
 X. Y. 225, 79 N. E. 1020 333 
 
 Continental Life Ins. Co. ads. 
 Attorney-General,- 27 Hun IH.J, 
 disiri'd 90 N. Y. 45 551 
 
 Continental Life Ins. Co. ads. 
 Attorney-General, 27 Hun 524, 
 dism'd 93 N. Y. 45 663 
 
 Continental Life Ins. Co. ads. 
 Attorney-General, 28 Hun 360, 
 aff'd 93 X. Y. 630 671 
 
 Continental Securities Co. v. Bel- 
 mont, 168 A. D. 483, 154 Supp. 
 
 54 1H2 
 
 Continental Securities Co. v. Bel- 
 mont, 206 N. Y. 7, 51 L. R. A. 
 
 (X. S.) 112, 99 X. E. 138.. 174, 196 
 201, 332, 418, 419, 420 
 Continental Securities Co. v. N. 
 
 Y. Central R. R. Co., 179 A. D. 
 
 355, 166 Supp. 499 206 
 
 Continental Trust Co. ads. Mac- 
 
 Veagh, 10 Misc. 600, 32 Supp. 
 
 198 150 
 
 Continental Trust Co. ads. Stokes, 
 
 186 N. Y. 285, 12 L. R. A. (N. 
 
 S.) 969, 78 N. E. 1090.. 10, 109, 174 
 Contracting Co., People ex rel. 
 
 V. Roberts, 27 A. D. 400, 50 
 
 Supp. 302, aff'd 158 N. Y. 666, 
 
 52 X. E. 1125 864 
 
 Converse v. Sharpe, 37 A. D. 399, 
 
 55 Supp. 1080, aff'd 161, N. Y'. 
 
 571, 56 N. E. 69 327, 929 
 
 Cook & Bernheinler Co. v. Haan, 
 
 21 Misc. 346, 47 Supp. 131... 434 
 Cook & Bernheimer Co. ads. Spel- 
 
 lessy, 58 A. D. 283, 68 Supp. 
 
 •995 129 
 
 Cook ads. Chubb, 161 A. D. 775, 
 
 147 Supp. 94 205 
 
 Cook ads. People ex rel. N. Y- 
 
 Central & H. R. R. R. Co., 62 
 
 Hun 303, 17 Supp. 546 798 
 
 Cook ads. People ex rel. Schurz, 
 
 110 N. Y. 443, 18 X. E. 113. . . 693 
 Cooke V. State Nat. B'k of Bos- 
 ton, 52 N. Y. 96 534 
 
 Cooley V. Curran, 54 Misc. 221, 
 
 104 Supp. 424 132 
 
 Coolidge V. American Realty 
 
 Co., 91 A. D. 14, 86 Supp. 318. 895 
 Cooper ads. House, 30 Barb. 157. 895 
 
TABLE OF CASES 
 
 XXIX 
 
 References are to pages. 
 
 Cooper Union, People ex rel. v. 
 
 Gass, 190 N. Y. 323, 83 N. E. 
 
 64 18 
 
 Co-operative Law Co., Matter of, 
 
 198 N. Y. 479, 32 L. R.A. (N. 
 
 S.) 55, 92 N. E. 15 518 
 
 Copeland v. Johnson Mfg. Co., 47 
 
 Hun 235 324 
 
 Copp V. Colorado Coal & Iron 
 
 Co., 29 Misc. 109, 60 Supp. 
 
 293 _ 612 
 
 Corcoran v. Kellogg Structural 
 
 Co., 179 A. D. 396, 166 Supp. 
 
 269 802 
 
 Cord Meyer Co., People ex rel. v. 
 
 Feitner,' 39 Misc. 467, 80 Supp. 
 
 152 748, 797 
 
 Cornell ads. First National Bank, 
 
 8 A. D. 427, 40 Supp.' 850 77 
 
 Cornell v. Eoach, 101 N. Y. 373, 
 
 5 N. E. 52 389, 514 
 
 Cornell S. Co., People ex rel. v. 
 
 Dederick, 161 N. Y. 195, 55 
 
 N. E. 927 742,745,751, 754 
 
 Corning v. Barrett, 22 Misc. 241, 
 
 48 Supp. 1013 420 
 
 Corning v. McCullouglx, 1 N. Y. 
 
 47 233 
 
 Corning Cut Glass Co. a^s. Corn- 
 ing Glass Works, 197 N. Y. 
 
 173, 90 N. E. 449 36 
 
 Corning Glass Works v. Corning 
 
 Gut Glass Co., 197 N. Y. 173, 
 
 90 N. E. 449 36 
 
 Corporation Liquidating Co. ads. 
 
 Seydel, 46 Misc. 576, 92 Supp. 
 
 225 847 
 
 Corporation Trust Co. ads. Tyng, 
 
 104 A. D. 486, 93 Supp. 928. . 853 
 Cosgray v. New England Piano 
 
 Co., 22 A. D. 455, 48 Supp. 7. 433 
 Costello V. Outterson, 112 A. D. 
 
 680, 98 Supp. 880 386 
 
 Costikyan ads. Zirbelkian, 126 A. 
 
 D. 812, 111 Supp. 243. 236 
 
 Cotheal v. Brouwer, 5 N. Y. 562 . 54 
 Cotterill ads. Scruggs, 67 A. D. 
 
 583, 73 Supp. 882 144 
 
 Cotton Oil Co., People ex rel. v. 
 
 Roberts, 25 A. D. 13, 48 Supp. 
 
 1028 843 
 
 Coughlin ads. Acker, 103 A. D. 
 
 1, 92 Supp. 700 936 
 
 Coughlin-Sandford Switch Co. 
 
 ads. Fay, 47 Misc. 687, 94 Supp. 
 
 628 : 853 
 
 Coulter Dry Goods Co. v. Rosen- 
 
 baum, 74 Misc. 579, 134 Supp. 
 
 487 244 
 
 Council Bluffs Water Works Co. 
 
 ads. Perry, 67 Hun 456, 22 
 
 Supp. 151, aff'd 143 N. Y. 637, 
 
 37 N. E. 826 374 
 
 Council Grove Water Co. ads. 
 
 Batchelder, 131 N. Y. 42, 29 
 
 N. E. 801 275 
 
 County of Buchanan ads. Bailey, 
 
 115 N. Y. 297, 6 L. R. A. 562, 
 
 22 N. E. 155..... 271 
 
 Courtright v. V-reeland, 64 Misc. 
 
 46, 117 Supp. 952 , 926 
 
 Covert ads. Locke, 42 Hun 484. . 661 
 Cowan ads. Stevenson, 84 A. D. 
 
 135, 82 Supp. 78 385 
 
 Cowdrey ads. Vose, 49 N. Y. 336. 466 
 Cowing ads. James, 82 N. Y. 449 . 278 
 
 279 
 Cox V. Stokes, 156 N. Y. 491, 51 
 
 N. E. 316 615, 617, 619 
 
 Coxe V. State, 144 N. Y. 396, 39 
 
 N. E. 400. ■! 13, 451 
 
 Coykendall ads. Tilley, 69 A. D. j 
 
 92, 74 Supp. 631, aff'd 172 N. 
 
 Y. 587, 65 N. E. 574 219 
 
 Craig V. James, 71 A. D. 238, 75 
 
 Supp. 81,3 403 
 
 Craig V. James, 89 A. D. 541, 85 
 
 Supp. 583, aff'd 181 N. Y. 538, 
 
 73 N. E. 1121 651 
 
 Craig Medicine Co. v. Merchants' 
 
 Bank, 59 Hun 561, 14 Supp. 16. 316 
 
 522 
 
 Crandell & Godley Co. ads. God- 
 ley, 212 N. Y. 121, L. E. A. 
 1915D, 632, 105 N. E..818... 159 
 , 190, 191, 392, 571 
 
 Crane Co., People ex rel. v. Feit- 
 ner, 49 A. D. 108, 62 Supp. 
 1107 857 
 
 Crawford ads. Hapgoods, 125 A. 
 D. 856, 110 Supp. 122 510 
 
 Crawford ads. People ex rel. Dan- 
 iels, 68 Hun 547, 22 Supp. 1025. 852 
 
 Creteau v. Foote & Thome Glass' 
 Co., 54 A. D. 168, 66 Supp. 
 370 477 
 
 Crystal Film Co. ads. Greater 
 
 Pictures Corps., — Misc. , 
 
 N. Y. L. J. Jan. 21, 1918 o26 
 
 Crystal Water Co. ads. Atlantic 
 Trust Co., 72 A. D. 539, 76 
 Supp. 647 264, 275, 278 
 
 CroU v. Empire State Knitting 
 Co., 17 A. D. 282, 45 Supp. 680. 470 
 
 Crook V. Scott, 65 A. D. 139, 72 
 Supp. 516, aff'd 174 N. Y. 520, 
 66 N. E. 1106 169, 201 
 
 Crooked Lake Navigation Co. v. 
 Keuka Navigation Co., 37 Hun 
 9 377 
 
XXX 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Croome ads. Osborne & Chees- 
 man, 14 Hun 164, aff'd 77 X. Y. 
 629 
 
 Crosby ads. Bolen, 49 N. Y. 183 . . 
 
 Crosby ads. Lummis, 176 A. D. 
 
 315, 162 Supp. 444 
 
 Crosby ads. Minor, 76 A. D. 561, 
 
 78 Supp. 594 
 
 Crowley ads. Blumenthal & Bick- 
 
 art. No. 2, 138 A. D. 845, 123 
 
 Supp. 520 
 
 Crown Perfumery Co., 125 A. D. 
 
 881, 110 Supp. 806 
 
 Culgin Pace Contracting Co. ads. 
 
 Title Guaranty & Surety Co., 
 
 66 Misc. 157, 121 Supp. 226. . . 
 Cullen V. Friedland, 152 A. D. 
 
 124, 136 Supp. 659 408, 
 
 Culver ads. Barclay, 30 Hun 1 . . . 
 
 Culver ads. Reno Oil Co'., 60 A. 
 D. 129, 69 Supp. 969 
 
 Culver ads. Sage. 147 N. Y. 241, 
 41 N. E. 573 
 
 Cumberland Coal & Iron Co. v. 
 Hoffman Steam Coal Co., 30 
 Barb. 159 
 
 Cummer Lumber Co. v. Associ- 
 ated Manufacturers' Ins. Co., 
 
 67 A. D. 151, 73 Supp. 668, 
 aff'd 173 N. Y. 633, 66 N. E. 
 1106 ; . . . . 
 
 ' Gumming v. Middletown, Union- 
 ville & Water Gap R. R. Co., 
 
 , 147 A. D. 105, 31 Supp. 710. . . 
 
 Cummings v. American Gear & 
 
 ' Spring Co., 87 Him 598, 34 
 Supp. 541 
 
 Cummings v. Brown, 122 A. D. 
 505, 107 Supp. 498 
 
 Cummings ads. People ex rel. Mil- 
 ler, 72 N. Y. 433 
 
 Cunningham v. Glauber, 61 Misc. 
 443 
 
 Cunningham v. Glauber, 133 A. D. 
 10, 117 Supp. 866... 
 
 Cunningham v. Messena Springs 
 & Fort Covington R. R. Co., 63 
 Hun 439, 18 Supp. 600, aff'd 
 138 N. Y. 614, 33 N. E. 1082.. 
 
 Curie ads. Mann, 2 Barb. 294. . . 
 Curran ads. Cooley, 54 Misc. 221, 
 
 104 Supp. 424 
 
 Curran v. Oppenheimer, 164 A. D. 
 
 746, 150 Supp. 369 
 
 Currie v. White, 45 N. Y. 822. . . 
 Currier v. N. Y., West Shore & 
 
 Buffalo R. E. Co., 35 Hun 355. 
 
 Currier v. Poor, 155 X. Y. 344, 
 49 X. E. 937 
 
 312 
 388 
 391 
 
 466 
 
 61 
 
 823 
 204 
 
 545 
 
 465 
 175 
 
 115 
 
 492 
 
 875 
 
 837 
 
 278 
 
 291 
 200 
 300 
 595 
 596 
 
 461 
 503 
 
 87 
 
 132 
 
 408 
 166 
 
 420 
 491 
 
 280 
 
 Curtis v. Avon, Geneseo & Mt. 
 
 Morris Co., 49 Barb. 148 
 
 Curtis ads. Fennig, 23 Hun 384. . 
 Curtis V. Leavitt, 15 N. Y. 2 . . 431, 467 
 
 468, 483 
 
 Curtis ads. Manson, — N. Y. 
 
 (1918), N. Y. L. J., May 14, 
 
 p. 533 181, 182, 
 
 Curtis V. Natalie Anthracite Coal 
 
 Co., 89 A. D. 61, 85 Supp. 413, 
 
 aff'd 181 N. Y. 543, 73 N. E. 
 
 1126 
 
 Curtiss ads. Hutchinson, 45 Misc. 
 
 484, 92 Supp. 70 162, 163, 
 
 Cushman v. Thayer Mfg. Jewelrv 
 
 Co., 76 N. Y. 365.... 130, 132, 
 Cutter V. Gudebrod Brothers Co., 
 
 36 A. D. 362, 55 Supp. 298 
 
 Cutter V. Gudebrod Brothers Co., 
 
 44 A. D. 605, 61 Supp. 225, aff'd 
 
 168 N. Y. 512, 61 N. E. 887... 
 Cutting V. Baltimore & Ohio R. 
 
 R. Co., 65 A. D. 414, 73 Supp. 
 
 21, dism'd 177 N. Y. 552, 69 
 
 N. E. 1122 
 
 Cutting V. Damerel, 88 N. Y. 410. 
 
 130, 219 
 C. T. Segar Mfg. Co. ads. Morrill, 
 
 32 Hun 543 
 
 Cuykendall v. Douglas, 19 Hun 
 
 577, dism'd 95 N. Y. 314.. 104, 
 Cypress Hills Cemetery ads. 
 
 Campbell, 41 N. Y. (2 Hand) 
 
 34 
 
 Cypress Hill Cemetery ads. 
 
 Palmer, 122 N. Y. 429, 25 N. E. 
 
 983 
 
 538 
 6 
 
 330 
 
 620 
 
 936 
 
 502 
 
 38 
 
 42 
 
 285 
 
 127 
 
 369 
 
 lOS 
 
 281 
 
 503 
 
 Daily v. N. Y., Ontario & West- 
 ern Ry. Co., 26 Misc. 539, 57 
 Supp. 485 899 
 
 Daily Credit Service Corp., Peo- 
 ple ex rel. v. May, 162 A. D. 
 215, 147 Supp. 487, aff'd 212 
 N. Y. 561, 106 N. E. 1039. . . '. 15 
 
 Dain's Sons Co. v. McNally Co., 
 137 A. D. 857, 122 Supp. 964. . 925 
 
 Dalley ads. Wakeman, 51 N. Y. 
 27 68, 398 
 
 Damerel ads. Cutting, 88 N. Y. 
 410 127, 130, 219 
 
 Damon ads. N. Y. Milk Products 
 Co., 57 A. D. 261, 68 Supp. 
 183, aff'd 172 N. Y. 661, 65 
 N. E. 1119 856 
 
 Danahy ads. Armstrong, 75 Hun 
 405, 27 Supp. 60 93 
 
 Dane ads. Jonps, 24 Barb. 395 . . 551 
 
 Danforth ads. Carpenter, 52 Barb. 
 581 139 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Daniels, People ex rel. v. Craw- 
 ford, 68 Hun 547, 22 Supp. 
 
 1025 
 
 Dansville & Mt. Morris E. R. 
 Co. ads. Passage, 41 A. D. 
 
 182, 58 Supp. 770- 629, 
 
 Darcy v. Brooklyn & N. Y. Perry 
 
 Co., 127 A. D. 167, 111 Supp. 
 
 514, aff'd 196 N. Y. 9, 26 L. R. 
 
 A. (N. S.) 267, 89 N. E. 461.. 
 
 347, 
 
 Darling j^ds. Barstow Stove Co., 
 
 81 Hun 564, 30 Supp. 1633 
 
 Darrin ads. Whittingham, 45 
 
 Misc. 478, 92 Supp. 752 
 
 Dart V. Farmers' Bank at Bridge- 
 port, 27 Barb. 337 
 
 Davenport, People ex rel. v. Rice, 
 
 68 Hun 24, 22 Supp. 631 
 
 David ads. Republican Art Print- 
 ery. Inc., 173 A. D. 726, 159 
 
 Supp. 1010 
 
 David Jones Co., Matter of, 67 
 
 Hun 360, 22 Supp. 318. .. .134, 
 
 David Mayer Brewing Co. ads. 
 
 Aaronson, 29 Misc. 289, 60 
 
 Supp. 523 
 
 Davids v. Bauer, 155 A. D. 97, 
 140 Supp. 55, aflf'd 209 N. Y. 
 
 539, 102 N. E. 1101 
 
 Davids v. Davids, 135 A. D. 206, 
 
 120 Supp. 350 
 
 Davidson v. Cannabis Mfg. Co., 
 113 A. D. 664, 99 Supp. 1018, 
 app. dism'd 187 N. Y. 576, 80 
 
 isr. E. 1121 
 
 Davidson ads. MeMaster, 29 Hun 
 
 542 
 
 Davies v. Harvey Steel Co., 6 A. 
 
 D. 166, 39 Supp. 791 
 
 Davies ads. New York, Lake Erie 
 & Western R. R. Co., 38 Hun 
 
 477 
 
 Davis ads. Battershall, 31 Barb. 
 
 323 
 
 Davis ads'.'Han,'95 Misc. 315, 159 
 
 Supp. 60 
 
 Davis V. Levering, 168 A. D. 78, 
 
 153 Supp. 772 
 
 Davis ads. Mutual Benefit Life 
 
 Ins. Co.. 12 N. Y. 569 
 
 Davis V. Smith, 42 A. D. 333, 59 
 
 Supp. 120 
 
 Davis ads. Townsend, 153 A. D. 
 
 599, 138 Supp. 758 
 
 Davis V. Wilson, 150 A. D. 704, 
 
 135 Supp. 825 
 
 Davis Prov. Co. ads. Anglo-Ameri- 
 can Prov. Co., 169 N. Y. 506, 
 62 N. E. 587 
 
 852 
 
 334 
 
 425 
 
 473 
 
 189 
 
 892 
 
 26 
 
 506 
 301 
 
 366 
 
 421 
 190 
 
 461 
 217 
 
 363 
 
 157 
 95 
 815 
 154 
 876 
 38 
 186 
 425 
 
 872 
 
 Davis-Colby Co., People ex rel. v. 
 
 ' Campbell, 66 Hun 146, 21 Supp. 
 7 73S 
 
 Day ads. Buffalo Electro-Plating 
 Co., 151 A. D. 237, 135 Supp. 
 1054 303 
 
 Day V. Griggs, 158 N". Y. 1, 52 
 N. B. 692 158 
 
 Dean v. Biggs, 25 Hun 122, aff'd 
 93 N. Y. 662 88 
 
 Dean v. De Wolf, 16 Hun 186, 
 aff'd 82 N. Y. 626 674 
 
 Dean v. Gilbert, 92 Hun 427, 36 
 Supp. 1004 531 
 
 Dean v. Mace, 19' Hun 391 251 
 
 Dean v. Whiton, 16 Hun. 203 252 
 
 Deering v. McKinnon Sash & 
 Hardware Co., 165 N". Y. 78, 58 
 N. E. 773 922 
 
 De Bemen v. Drew, 57 Barb. 438. 927 
 
 De Bost V. Albert Palmer Co., 36 
 
 Hun 386 367 . 
 
 Decker v. Gardner, 124 N. Y. 334, 
 11 L. R. A. 480, 26 N. E. 814.. 641 
 
 Decker v. Gutta Percha & Rubber 
 Co., 61 Hun 516, 16 Supp. 352. 521 
 
 Dederick ads. People ex rel. Cor- 
 nell S. Co., 161 N. Y. 195, 55 
 N. E. 927 742, 745, 751, 754 
 
 De Forest Wireless Telegraphic 
 Co. ads. Snyder, 113 A. D. 840, 
 99 Supp. 644 545 
 
 De Freest ads. Spotten, 140 A. D. 
 792, 125 Supp. 497 153 
 
 De Grauw ads. People, 133 N. Y. 
 254, 30 N. E. 1006 42 
 
 De Groff v. American Linen 
 Thread Co., 21 N. Y. 124 460 
 
 De Kay ads. Martindale, 101 
 Misc. 728, 166 Supp. 405 371 
 
 Delaney ads. Whittlesey, 73 N. Y. 
 571 684 
 
 Delano v. Rice, 23 A. D. 327, 48 
 Supp. 295 131 
 
 Delaware & Hudson Co., People 
 ex rel. v. Feitner, 61 A. D. 129, 
 70 Supp. 500, aff'd 171 N. Y. 
 641, 63 N. E. 786 744, 752 
 
 Delaware & Hudson Co. ads. Rens- 
 selaer &, Saratoga R. R. Co., 
 168 A. D. 699, 154 Supp. 739, 
 aff'd 217 N. Y. 692, 112 N. E. 
 1072 50* 
 
 Delaware & Hudson Canal Co., 
 People ex rel. v. Barker, 23 
 Misc. 188, 51 Supp. 1105 750 
 
 Delaware & Hudson Canal Co. 
 ads. People, 54 Hun 59, 87 
 Supp. 890, aff'd 121 N. Y.,666, 
 24 N. E. 1093 451, 730 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Delaware, Lackawanna & West- 
 em E. E. Co. ads. Brisbane, 94 
 K. Y. 204 61, 129, 167 
 
 Delaware, Lackawanna & Western 
 E. R. Co., People ex rel. v. 
 Clapp, 64 Hun 547, 19 Supp. 
 531 _ 759. 
 
 Delaware, Lackawanna & Western 
 E. E. Co., People ex rel. v. Tax 
 Commissioners, 134 A. D. 765, 
 119 Supp. 260 800 
 
 Delaware Valley Telephone Co. v. 
 Tiffany, 131 A. D. 343, 115 
 Supp. 867 104 
 
 Delahunty v. Hake, 10 A. D. 230, 
 41 Supp. 896 141 
 
 Delaney ads. Whittlesey, 73 N. Y. 
 571 339 
 
 Delevan v. N. Y., New Haven & 
 Hartford E, E. Co., 154 A. D. 
 .8, 139 Supp. 17 194, 195 
 
 Del Mar, People ex rel. v. St. 
 Louis & San Francisco Ey. Co., 
 44 Hun 552 552 
 
 De Long Hook & Eye Co. ads. 
 Hooey, 211 N. Y. 420, 105 N. E. 
 667 848 
 
 Dcmareat v. Flack, 128 X. Y. 205, 
 13 L. E. A. 854, 28 N. E. 645. . 243 
 
 870 
 
 Demarest Pattern Co. ads. Harris 
 Press Co., 47 Misc. 624, 94 
 Supp. 462 889 
 
 De Martini v. McCaldin, 101 
 Misc. 304, 167 Supp. 596 348 
 
 De Martini v. McCaldin, 176 A. 
 D. 541, ie3 Supp. 484 206 
 
 Deminps v. Supreme Lodge, K. of 
 P., 131 N. Y. 522, 30 N. E. 572. 448 
 
 De Moltke-Huilfeldt v. Garner & 
 Co., 145 A. D. 766, 130 Supp. 
 558 469 
 
 Dempsey ads. Fenlon, 50 Hun 131, 
 2 Supp. 763 ,381 
 
 Dempsey v. Willett, 16 Hun 264. 252 
 
 Deuel ads. Howe, 43 Barb. 504 . . 427 
 
 Denike v. X. Y. & Eosendale Lime 
 & Cement Co., 80 N. Y. 599 .. . 264 
 485, 578, 588 
 
 Dennen ads. Thompson, 16 A. D. 
 160, 44 Supp. 723 637 
 
 Dennin v. Powers, 96 Misc. 252, 
 160 Supp. 636 155 
 
 Dennis ads. International Society, 
 76 A. D. .')27, 78 Supp. 497. .. . 889 
 
 Dennis v. Stock, Grain & Pro- 
 vision Co. of X. Y., Ltd., 144 
 A. D. 585, 129 Supp. 760 543 
 
 Dent V. North American Steam- 
 ship Co., 49 N. Y. 390 432 
 
 Dentz Lithographing Co. v. Inter- 
 national Eegistrv Co., 32 Misc. 
 
 687,_ 66 Supp. 540 365, 
 
 Denver & Rio Grande E. Co. ads. 
 
 Sterett, 17 Hun 316 
 
 De Palo ads. Scharmann & Sons, 
 
 66 A. D. 29, 72 Supp. 1008 
 
 De Peyster ads. Emery, 77 A. D. 
 
 65, 78 Supp. 1056 
 
 De Raismes v. U. S. Lithograph 
 
 Co., 161 A. D. 781, 146 Supp. 
 
 813 
 
 de Eieasthel ads. Milbank, 82 
 
 Hun 537, 31 Supp. 522 
 
 De Eeyter v. St. Peter's Church, 
 
 3 N. Y. 238 
 
 Dessau ads. Broadway Theatre 
 
 Co., 45 A. D. 475, 61 Supp. 
 
 335 
 
 Devoe Co., People ex rel. v. Rob- 
 erts, 51 A. D. 77, 64 Supp. 
 
 494 
 
 De Witt v. Hastings, 69 N. Y, 
 
 578 
 
 De Wolf ads. Dean, 16 Hun 186, 
 
 aff'd 82 X\ Y. 626 
 
 Diamond Match Co. v. Eoeber, 
 
 106 N. Y. 473, 13 N. E. 419. . 
 
 499, 500, 
 
 Diamond Soda Water JIfg. Co. 
 
 ads. Jacobus, 94 A. D. 366, SS 
 
 Supp. 302 174, 
 
 Dibblee v. Metcalf, 13 Misc. 136, 
 
 34 Supp. 122 
 
 Dick ads. Brooks, 135 X. Y. 652, 
 
 32 N. E. 230 
 
 Dickev v. Bates, 13 Misc. 489, 35 
 
 Supp. 525 
 
 Dickey v. Findeisen & Kropf Mf^. 
 
 Co., 177 A. D. 861, 164 Supp. 
 
 989 
 
 Diehl ads. German-American Cof- 
 fee Co.. 86 Misc. 547, 149 Supp. 
 
 413. aff'd 168 A. D. 913. . .403. 
 
 Diehl ads. German-American Cof- 
 fee Co., 216 N. Y. 57, 109 X. E. 
 875 
 
 Dietz Co. ads. Bankers' Trust Co., 
 157 A. D. 594, 142 Supp. 847. 
 
 Digester Co., People ex rel. v. 
 
 Knight, 67 A. D. 365, 73 Supp. 
 
 743 
 
 Dill & Collins Co. v. Morison, 
 
 159 A. D. 583, 144 Sufpp. 894. . 
 
 Dillingham ads. National Bank, 
 147 N. Y. 603, 42 N. E. 338... 
 
 531 
 915 
 
 S9T 
 551 
 
 936 
 4S1 
 470 
 
 MS 
 
 S46 
 390 
 674 
 
 461 
 
 S70 
 
 403 
 632 
 610 
 634 
 
 473 
 
 426 
 936 
 
 mr, 
 
 160 
 302 
 
 698 
 
 484 
 .'324 
 
 344 
 
TABLE OF CASES 
 
 XXXIU 
 
 Eeferences are to pages. 
 
 Dillon V. Commercial Cable Co., 
 87 Hun 444, 34 Supp. 370. . .3, 4 
 
 Dillon V. Pan-American Theatri- 
 cal Co., 96 Misc. 501, 160 Supp. 
 549 198 
 
 Dilltown Smokeless Coal Co. ads. 
 Makepeace, 179 A. D. 662, 167 
 Supp. 83 924 
 
 Dimmick ads. Washington Light- 
 ing Co., 41 A. D. 596, 58 Supp. 
 682 .^. 934 
 
 Direct U. S. Cable Co. v. Domin- 
 ion Telegraph Co., 84 N. Y. 
 153 874 
 
 Dittenfass v. Horsley, 171 A. D. 
 507, 157 Supp. 632 154 
 
 Dittman, Matter of, 65 A. D. 343, 
 72 Supp. 886 380 
 
 Dives-Pelican Co., People ex rel. 
 V. Feitner, 77 A. D. 189, 78 
 Supp. 1017 839 
 
 Dixon ads. N. Y., Providence & 
 Boston R. R. Co., 114 N. Y. 80, 
 21 N. E. 110 433 
 
 Dodge ads. Elwell, 33 Barb. 336. 362 
 
 Dodge ads. Miller, 28 Misc. 640, 
 59 Supp. 1070 284 
 
 Dodge V. Woolsey, 18 How. (U. 
 S.) 331 198 
 
 Dohn V. Buffalo Amusement Co., 
 66 A. D. 446, 73 Supp. 95 580 
 
 Dolgeville El. L. & P. Co., Matter 
 of, 160 N. Y. 500, 55 N. E. 
 287 305, 315, 578 
 
 Dollen Co. v. Canadian Car & 
 Foundry Co., Ltd., 220 N. Y. 
 270, 115 N. E. 711 901, 906 
 
 Dolloway ada. Oswego Starch Fac- 
 tory, 21 N. Y. 449 746, 756 
 
 Dolphin ads. Hey, 92 Hun 230, 36 
 Supp. 627 143 
 
 Dominion Telegraph Co. ads. Di- 
 rect U. S.' Cable Co., 84 N. Y. 
 153 874 
 
 Donnell ads. The Phoenix Bank, 
 40 N. Y. (1 Hand) 410 530 
 
 Donnelly v. Pancoast, 15 A. D. 
 323, 44 Supp. 104 386 
 
 Donohoe v. Meeker, 35 A. D. 43, 
 54 Supp. 286 471 
 
 Donohue ads. Alexander, 143 N. 
 Y. 203, 38 N. E. 263 207 
 
 Donohue v. City Water Power 
 Co., 159 A. D. 726, 144 Supp. 
 923 912 
 
 Dorria v. French, 4. Hun 292 78 
 
 Dorris v. Sweeney, 64 Barb. 636. 13 
 
 88 
 
 Dorris v. Sweeney, 60 N. Y. 463. 79 
 
 Doscher v. Phelps Guerdant Time 
 Lock Co., 89 Mine. 561, 153 
 
 Supp. 710, aff'd 172 A. D. 954, 
 
 157 Supp. 1123 435 
 
 Dougan v. Evansville & Terre 
 
 Haute R. R. Co., 15 A. D. 483, 
 
 44 Supp. 503 275, 281, 822 
 
 Douglas ads. Cuykendall, 19 Hun 
 
 677, dism'd 95 N. y. 314 .. . 104, 108 
 Douglass V. Ireland, 73 N. Y. 100. 103 
 
 222 
 Douglas V. Merchants' Ins. Co., 
 
 118 N. Y. 484, 7 L. R. A. 822, 
 
 23 N. E. 806 357 
 
 Douglas V. Phoenix Ins. Co., 138 
 
 N. Y. 209, 20 L. R. A. 118, 33 
 
 N. E. 938 472 
 
 Dow V. Iowa Central Ry. Co., 144 
 
 N. Y. 426, 39 N. E. 398 284 
 
 Downey v. Finucane, 205 N. Y. 
 
 251, 40 L. R. A. (N. S.) 307, 
 
 98 N. E. 391 6, 148, 149, 441 
 
 Doyle V. Peerless Petroleum Co., 
 
 44 Barb. 239 559 
 
 Drake v. New York Suburban 
 
 Water Co., 26 A. D. 499, 50 
 
 Supp. 826 460 
 
 Drake ads. Young, 8 Hun 61 409 
 
 Draper ads. Handy, 89 N. Y. 
 
 334 226, 234 
 
 Draper ads. Hackley, 60 jST. Y. 
 
 88 629 
 
 Drew ads. Bartlett, 57 N. Y. 587. 240 
 Drew ads. DeBemer, 57 Barb. 
 
 438 927 
 
 Drew ads. Hastings, 76 N. Y. 9 
 
 74, 137 
 Drew V. Longwell, 81 Hun 144, 
 
 30 Supp. 733 ., 348 
 
 Drexel ads. Lake Superior Iron 
 
 Co., 90 N. Y. 87 222 
 
 Dreyfuss v. Seals, IS Misc. 551, 
 
 41 Supp. 875 928 
 
 Dreyfus & Co. v. Seale & Co., 37 
 
 A. D. 351, 55 Supp. llll.... 826 
 Driscoll V. West Bradley & Cary 
 
 Mfg. Co., 59 N. Y. 96 46 
 
 Drueker ads. Dyer, 108 A. D. 238, 
 
 95 Supp. 749 242 
 
 Drucklieb v. Harris, 84 Misc. 291, 
 
 147 Supp. 298 190 
 
 Drucklieb v. Harris, 209 N. Y. 
 
 211, 102 ST. E. 599 10,144, 325 
 
 Duckworth V. Roach, 81 N. Y. 49. 389 
 Dudensing v. Jones, 27 Misc. 69, 
 
 58 Supp. 178 474 
 
 Dudley v. Armenia Insurance Co., 
 
 115 A. D. 380, 100 Supp. 818. . 197 
 Dudley ads. Buffalo & N. Y. City 
 
 R. R. Co., 14 N. Y. 336. . . .77, 91 
 Duffy V. Consolidated Gas Co., 59 
 
 A. D. 580, 69 Supp. 635 543 
 
 Duffy ads. Knowles, 40 Hun 485. 220 
 
XXXIV 
 
 TABLE or CASES 
 
 References are to pages. 
 
 Duffy-Mclnnerney Co. ads. People, 
 
 122 A. D. 336, 106 Supp. 878; 
 
 aff'd 193 N. Y. 636, 86 N. E. 
 
 1129 813 
 
 Duffy ads. Thurston, 38 Hun 327. 220 
 Duke ads. Elmas, 39 Misc. 244, 
 
 79 Supp. 421 
 
 Duke V. Mt. Morris Construction 
 
 Co., 127 A. D. 39, 111 Supp. 
 
 313 540 
 
 Duke ads. People, 19 Misc. 292, 
 
 44 Supp. 336 379 
 
 Duncan ads. King, 38 Hun 461 . . 224 
 Duncan v. Treadvvell Co., 82 Hun 
 
 376, 31 Supp. 340 676 
 
 Duncan Co., Inc., ads. Helmsley 
 
 & Co., Ltd., 98 Misc. 338, 164 
 
 Supp. 282 395, 412 
 
 Duncomb v. N. Y., Housatonic & 
 
 Northern E. K. Co., 84 N. Y. 
 
 190 260, 281, 321 
 
 Duncomb v. N. Y., Housatonic & 
 
 Northern R. K. Co., 88 N. Y. 
 
 I 329 
 
 Dunham ads. Archer, 89 Hun 387, 
 
 35 Supp. 387 117 
 
 Dunham v. City Trust Co., 115 
 
 A. D. 584, 101 Supp. 87; aff'd 
 
 193 N. Y. 642, 86 N. E. 1123. . 135 
 Dunham v. Troy Union R. R. Co., 
 
 42 N. Y. (3 Keyes) 543 336 
 
 Dunlap's Express Co., People ex 
 
 rel. V. Raymond, 54 Misc. 330, 
 
 105 Supp. 1007 858 
 
 Dupignec v. Bernstrom, 76 A. D. 
 
 105, 78 Supp. 705 504 
 
 Duquesne Club v. Penn Bank of 
 
 Pittsburgh, 35 Hun 391 873 
 
 Durant ads. McManus, 168 A. 
 
 D. 643, 154 Supp. 580 191 
 
 Durbrow v. Swedish Iron & Steel 
 
 Corp., 95 Misc. 160, 158 Supp. 
 
 701 509 
 
 Duryea ads. Castner, 16 A. D. 
 
 249, 44 Supp. 708 232 
 
 Duryea ads. Hamerschlag, 58 A. 
 
 D. 288, 68 Supp. 1061; aff'd 172 
 
 N. Y. 622, 65 N. E. 1117 62 
 
 Duryea ads. Herbert, 34 A. D. 
 
 478. 54 Supp. 311; aff'd 164 
 
 X. Y. 595 100, 223 
 
 Duryea v. Zimmerman, 121 A. D. 
 
 560, 106 Supp. 237 145 
 
 Duryea, Watts & Co. v. Rayner, 
 
 II Misc. 294, 32 Supp. 247 533 
 
 Dusenberry v. Sagamore Develop- 
 ment Co., 157 A. D. 485, 142 
 Supp. 595 39, 203 
 
 Dusenberry v. Sagamore Develop- 
 ment Co., 164 A. D. 573, 150 
 Supp. 229 63, 110 
 
 Dutchess & Columbia Co. E. E. 
 
 Co. V. Mebbett, 58 N. Y. 397. . 25 
 Dutilh-Smith & Co., People ex 
 
 rel. V. MiUer, 90 A. D. 545, 85 
 
 Supp. 849 845, 866, 868 
 
 Dwight ads. Sherman, 138 A. D. 
 
 595, 123 Supp. 89 45 
 
 Dwight ads. Sinclair, 9 A. D. 297, 
 
 41 Supp. 193; aff'd 158 N. Y. 
 
 607, 53 N. E. 510 219 
 
 Dwight V. Williams, 25 Misc. 667, 
 
 55 Supp. 201 336, 356 
 
 Dwindle ads. Kincaid, 59 N. Y. 
 
 548 229, 596, 632 
 
 Dyer v. Drucker, 108 A. D. 238, 
 
 95 Supp. 749 242 
 
 Dykman v. Keeney, 154 N. Y. 
 
 483, 48 N. E. 894 406 
 
 Eadie ads. People ex rel. Stobo, 
 63 Hun 320, 18 Supp. 53; aff'd 
 133 N. Y. 573, 30 N. E. 1147. . 57 
 
 Earle ads. Taylor, 8 Hun 1 200 
 
 East N. Y. & Jamaica R. E. Co. v. 
 Elmore, 5 Hun 214 358, 421 
 
 East River Bridge Co. ads. 
 O'Brien, 161 N. T. 539, 48 
 L. E. A. 122, 56 N. E. 74. .476, 486 
 
 East River Electric Light Co. ads. 
 Klein, 33 Misc. 596, 67 Supp. 
 922 270 
 
 East River Electric Light Co. ads. 
 Klein, 37 Misc. 490, 75 Supp. 
 1000 604, 612 
 
 East River National Bank ads. 
 Longworth, 160 A. D. 737, 145 
 Supp. 1051 122 
 
 East River T. R. Co., People ex 
 rel. V. Board of Tax Commis- 
 sioners, 160 A. D. 771, 146 
 Supp. 112 770 
 
 Easterly V. Barber, 65 N. Y. 252. 390 
 
 Easterly ads. Briggs, 62 Barb. 
 51 392 
 
 Eastern Products Corpn. v. Ten- 
 nessee Coal & Iron R. R. Co., 
 102 Misc. 557 909 
 
 Eastern Products Corpn. v. Ten- 
 nessee Coal & Iron R. R. Co., 
 — Misc. — , N. Y. L. J. Feb. 
 27, 1918 892 
 
 Eastham v. York State Telephone 
 Co., 86 A. D. 562, 83 Supp. 
 1019 532 
 
 Easton ads. Green, 74 Hun 329, 
 26 Sup. 553 392 
 
 Eaton V. Aspinwall, 19 N. Y. 119. 207 
 
 Eberlin ads. St. John, 23 Misc. 
 585, 51 Supp. 998 187 
 
 Ebling V. Nekarda, 148 A. D. 193, 
 132 Supp. 309; aff'd 210 JST. Y. 
 566, 104 N. E. 1129 204 
 
TABLE OF CASES 
 
 References are to pages. 
 
 XXXV 
 
 Eekman v. Lindbeck, 178 A. D. 
 720, 165 Supp. 145 421 
 
 Eclipse Silk Mfg. Co. v. Hiller, 
 145 A. D. 568, 129 Supp. 879 
 
 835, 885 
 
 Economic P. & C. Co. v. City of 
 Buffalo, 195 N. Y. 286, 88 N. E. 
 389 14, 16 
 
 Ecuador Development Co. ads. 
 Eobinson, 32 Misc. 106, 65 
 Supp. 427 533 
 
 Eden Musee Co., People ex rel. 
 V. Feitner, 60 A. D. 282, 70 
 'Supp. 120 747 
 
 Eden Musee Co. ads. Knox, i48 
 N. Y. 441, 31 L. E. A. 779, 42 
 N. E. 988 115, 117, 127, 128 
 
 Eden Musee American Co., People 
 ex rel. v. Carr, 36 Hun 488 113 
 
 Eden Musee American Co. ads. 
 Knox, 17 A. D. 365, 45 Supp. 
 255 118, 156 
 
 Edenborn ads. Heckscher, 203 
 N. Y. 210, % N. E. 441..6, 146, 147 
 
 Edison Co., People ex rel. v. 
 Campbell, No. 1, 88 Hun 527/ 
 34 Supp. 711 806 
 
 Edison Co., People ex rel. v. Com- 
 missioners of Taxes, 58 Misc. 
 249, 110 Supp. 833 772 
 
 Edison Electric Co., People ex rel. 
 v. Barker, 91 Hun, 594, 36 
 Supp. 844 23, 734 
 
 Edison Electric Co., People ex 
 rel. V. Wemple, 69 Hun 367, 23 
 Supp. 661 734 
 
 Edison Electric Illuminating Co., 
 People ex rel. v. Assessors, 156 
 N. Y. 417, 42 L. R. A. 290, 51 
 ISr. E. 269 726 
 
 Edison Electric Illuminating Co., 
 People ex rel. v. Barker, ' 139 
 N. Y. 55, 34 N. E. 722 761 
 
 Edison Electric Illuminating Co. 
 ads. Miner, 22 Misc. 543, 50 
 Supp. 218; aff'd 26 Misc. 712, 
 56 Supp. 801 434 
 
 Edison Electric Illuminating Co. 
 ads. Phelan, 24 Misc. 109, 53 
 Supp. 305 494 
 
 Edison Electric Illuminating Co., 
 People ex rel. v. Wemple, 129 
 N. Y. 664, 29 N. E. 812 696 
 
 Edison Electric Illuminating Co., 
 People ex rel. v. Wemple, 133 
 N. Y. 617, 30 N. E. 1002 734 
 
 Edison Electric Light Co., People 
 ex rel. v. Cajnpbell, 138 N. Y. 
 543, 20 L. R. A. 453, 34 N. E. 
 370 726 
 
 Edison Electric Light Co., People 
 ex rel. v. Wemple, 148 N. Y. 
 690, 43 N. E. 176 718 
 
 Edison Light & Power Installa- 
 tion Co., People ex rel. v. 
 Kelsey, 101 A. D. 205, 91 Supp. 
 709 ; .!". 865 
 
 Edison General Electric Co., 
 People ex rel. v. Barker, 141 N. 
 Y. 251, 36 N. E. 196 164 
 
 Edison United Phonograph Co. 
 ads. Guaranty Trust Co., 128 
 A. D. 591, 112 Supp. 929 630 
 
 Egberts Woolen Mill Co. ads.. 
 Fallon, 24 Misc. 304, 53 Supp. 
 672; aff'd 46 A. D. 630, 61 
 Supp. 1136 627 
 
 Egberts Woolen Mills Co. ads. 
 
 . Fallon, 56 A. D. 585, 67 Supp. 
 347 651 
 
 Ehmer v. Title Guarantee & Trust 
 Co., 156 N. Y. 10, 50 N. E. 420. 519 
 
 Ehrlich, Inc. v. Leyine, 83 Misc. 
 136, 144 Supp. 818 361 
 
 Ehrlieher ads. Bagley & Sewall 
 Co., 8 A. D. 581, 40 Supp 922 571 
 
 Eichner v. Bowery Bank, 24 A. 
 D. 63, 48 Supp. 978 510 
 
 Eicke v. Wittemann Co., 157 A. 
 D. 412, 412 Supp. 190.... 355, 357 
 
 Eickemeyer Hat Blocking Ma- 
 chine Co. ads. Sheldon Hat 
 Block Co., 90 N. Y. 607 184 
 
 Einstein v. Rochester Gas & Elec- 
 tric Co., 146 N. Y. 46, 40 N. E. 
 631 107 
 
 Eisenhofer v. New Yorker Zei- 
 tung Pub. Co., 91 A. D. 94, 86 
 Supp. 438 910 
 
 Eisner ads. Consolidated Trust 
 Jar Co., 103 A. D. 453, 93 Supp. 
 128 
 
 Eisner ads. United Growers Co., 
 
 22 A. D. 1, 47 Supp. 906. . .63, 
 
 82, 90, 92, 304, 
 
 Eiswald ads. Hovey, 189 A. D. 
 433, 124 Supp. 130 854 
 
 El Arco Mines Co. ads. Holla- 
 man, 137 A. D. 862, 122 Supp. 
 852 853 
 
 Eldredge ads. Nobel, 175 A. D. 
 803, 162 Supp. 503 72 
 
 Electric Construction Co. ads. 
 Bennett, 8 A. D. 301, 40 Supp. 
 1139 921 
 
 Electric Fireproofing Co. v. 
 Smith, 113 A. D. 615, 99 Supp. 
 37 1 
 
 Elger V. Boyle, 69 Misc. 273, 126 
 Supp. 946 179 
 
 360 
 
 80 
 317 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Elias, Matter of, 17 Misc. 718, 
 
 40 Supp. 910 303 
 
 Ellicott-Fisher Co., People ex rel. 
 
 V. Sohmer, 148 A. D. 514, 132 
 
 Supp. 789'; aflPd 206 N. Y. 634, 
 
 99N. E.. 1115 869 
 
 Ellis ads. Black, 197 N. Y. 402, 
 
 90 N. E. 958 271, 479 
 
 Elmendorf ads. Lambert, 124 A. 
 
 D. 758, 109 Supp. 574 145 
 
 Elmes V. Duke, 39 Misc. 244, 79 
 
 Supp. 421 
 
 Elmira Municipal Improvement 
 
 Co. ads. Ernst, 24 Misc. 583, 54 
 
 Supp. 116 98, 133, 916 
 
 Elmore ads. East N. Y. & Jamaica 
 
 R. E. Co., 5 Hun 214 358, 421 
 
 Elsworth V. St. Louis, Alton & 
 
 Terre Haute R. R. Co., 33 Hun 
 
 7, aff'd 98 N. Y. 553 28i 
 
 Elwell V. Dodge, 33 Barb. 336 . . 362 
 Elwell V. Grand St. & Newtown R. 
 
 R. Co., 67 Barb. 83 260 
 
 Elyea v. Lehigh Salt Mining Co., 
 
 169 N. Y. 29, 61 N. E. 992.. .. 
 
 136, 176 
 E. M. Boynton Saw & File Co., 
 
 Matter of, 34 Hun 369 584, 628 
 
 Emerson v. Auburn & Owasco 
 
 Lake R. R., 13 Hun 150 436 
 
 Emerson ads. Baker, 4 A. D. 348, 
 
 ' 38 Supp. 576 484 
 
 Emery v. De Peyster, 77 A. D. 65, 
 
 78 Supp. 1056 551 
 
 Emery v. N .Y., Lake Erie & 
 
 Western R. R. Co., 9 Misc. 310, 
 
 30 Supp. 306 283 
 
 Emery ads. Petty, 96 A. D. 35, 
 
 88 Supp. 823 202 
 
 Emmerich v. Sloane, 108 A. D. 
 
 330, 95 Supp. 39 879, 888 
 
 Emmet v. Northern Bank of N. 
 
 Y., 173 A. D. 840, 160 Supp. 
 
 183, aff'd 221 N. Y., mem. 26. 375 
 Empire Plaid Mills ads. Cone, 12 
 
 A. D. 314, 42 Supp. 160. . .'. . . 45 
 Empire Self-Lighting Oil Lamp 
 
 Co. ads. Pecknegel, 24 Misc. 
 
 193, 52 Supp. 635 853 
 
 Empire State Knitting Co. ads 
 
 Croll, 17 A. D. 282, 45 Supp. 
 
 680 470 
 
 Empire State Supreme Lodge, 
 
 Matter of, 53 Misc. 344, 103 
 
 . Supp. 465 307, 308, 314 
 
 Empire Stone Dressing Co. ads. 
 Bridgeport City B'k, 30 Barb. 421 508 
 Empire Stone Dressing Co. ads. 
 
 Central B'k, 26 Barb. 23 375 
 
 Empire Tinware Co. ads. Kea- 
 sel, 178 A. D. 76, 164 Supp. 
 1033 161 
 
 Ennis, Matter of, v. Federal 
 Brewing Co., 123 A. D. 691, 108 
 Supp. 230; aff'd 192 N. Y. 570, 
 85 N. E. 1109 602 
 
 Eno ads. Christensen, 106 N. Y. 
 97, 12 N. E. 648 73, 77, 86 
 
 Ensign ads. Salt, 79 Hun 107, 29 
 Supp. 659 477 
 
 Episcopal Church History Co. 
 ads. Stevens, 140 A. D. 570, 
 
 125 Supp. 573 13, 78, 101 
 
 221 
 
 Eppinger & Russell Co. ads. City 
 of New York, 170 A. D. 747, 
 156 Supp. 662 620 
 
 Equitable Gas-Light Co., People 
 ex rel. v. Barker, 66 Hun 21, 
 20 Supp. 797; aff'd 137 N. Y. 
 544, 33 N. E. 336 749, 793 
 
 Equitable Gas Light Co., People 
 ex rel. v. Barker, 144 N. Y. 94, 
 39 N. E. 13 748, 751 
 
 Equitable Life Ass. See. ads. 
 Hyde, 61 Misc. 518, 116 Supp. 
 219 326 
 
 Equitable Life Assurance Society 
 ads. Lord, 57 Misc. 417, 108 
 Supp. 67; aff'd 126 A. D. 937, 
 HO' Supp. 1135 18 
 
 Equitable Life Ass. Soc. ads. 
 Lord, 194 N. Y. 212, 22 L.R.A. 
 
 (N.S.) 420, 87 N. E. 443 14 
 
 17, 19, 767 
 
 Equitable Life Ass. Soc. ads. Peo- 
 ple, 51 Misc. 339, 101 Supp. 354 
 
 407, 426 
 
 Equitable Life Ass. Soc. ads. Peo- 
 ple, 124 A. D. 714, 109 Supp. 
 
 453 337, 403, 407, 410 
 
 422, 424, 425, 426 
 
 Equitable Life Assurance Soc. v. 
 Union Pacific R. R. Co., 212 
 N. Y. 360, L.R.A. 1915D, 1052, 
 106 N. E. 9'2 73,162,163 168 
 
 Equitable Life Ass. Soc. ads. 
 Young, 49 Misc. 347, 99 Supp. 
 446; aff'd 112 A. D. 760. 98 
 Supp. 1052 420 
 
 Equitable Trust Co. ads. People, 
 
 ■ 96 N. Y. 387 863 
 
 Equitable Trust Co. ads. Wads- 
 worth, 153 A. D. 737, 138 Supp. 
 842 848, 849 
 
 Equity Gas Light Co. ads. .Farm- 
 er's Loan & Trust Co., 84 Hun 
 373, 32 Supp. 385 267 
 
TABLE OF CASES 
 
 Keferenoes are to pages. 
 
 XXXVU 
 
 Equity Gas Light Co. ads. Peo- 
 ple, 141 N. Y. 232, 36 N. E. 
 194 
 
 Ericsson v. Brown, 38 Barb. 390 
 
 Erie & N. Y. City R. R. v. Pat- 
 rick, 41 N. Y. (2 Keyes) -256. 
 
 Erie Ry. Co. ads, Arnot, 67 N. Y. 
 
 Erie Ry. Co. ads. Belmont, 52 
 Barb. 637 
 
 Erie R. R. Co. ads. Minor, iii 
 N. Y. 366, 64 N. E. 454 
 
 Erie R. R. Co. ads. Stanton, 131 
 A. D. 879, 116 Supp. 375; app. 
 dism'd 199 2Sr. Y. 529, 92 N. E. 
 1100 
 
 Brie R. R. Co., People ex rei. v. 
 Supervisors, 19? N. Y. 127, 80 
 N.'E. 348 
 
 Erie R. R. Co. ads. Thompson, 45 
 N. Y. 468 
 
 Erie Railway Co. v. Vanderbilt, 
 5 Hun 123 
 
 Erie R. R. Co., People ex rel. v. 
 Webster, 49 A. D. 556, 63 Supp. 
 574 763, 
 
 Erie Telegraph & Telephone Co., 
 The, ads. McLeavy, 38 Misc. 3, 
 76 Supp. 712 
 
 Erlanger ads. Riker, 87 A. D. 137, 
 84 Supp. 69 
 
 Ernest v. Elmira Municipal Im- 
 provement Co., 24 Misc. 583, 54 
 Supp. 116 98, 133, 
 
 Ernst V. Rutherford & Boiling 
 Springs Gas Co., 38 A. D. 388, 
 56 Supp. 403 
 
 Ersfeld v. Exner, 128 A. D. 13S, 
 112 Supp. 561 
 
 Erwin v. Oregon Ry. & Naviga- 
 tion Co., 28 Hun 269 875, 
 
 Erwin v. Oregon Steam Naviga- 
 tion Co., 35 Hun 544 
 
 Erwin v. Oregon Steam Naviga- 
 tion Co., 22 Hun 598 594, 
 
 E. S. Dairy Co., People ex rel. 
 
 V. Sohmer, 218 N. Y. 199, L. 
 
 R. A. 1917A, 48, 112 N. E. 755. 
 
 700, 728, 
 
 Esler ads. Weeks, 143 N. Y. 374, 
 38 N. E. 377 '. 
 
 Ettlinger v. Persian Rug & Car- 
 pet Co., 142 N. Y. 189, 36 N. 
 E. 1055 
 
 Eulen ads. Noble, 20 A. D. 548, 
 47 Supp. 302 
 
 Eureka Mower Co. ads. Mather, 
 44 Hun 333, aflf'd 118 N. Y. 
 629, 23 N. E. 993 354, 
 
 Eustace, Matter of, v. N. Y. 
 Building-Loan Co., 98 A. D. 97, 
 90 Supp. 784 ; 
 
 509 
 249 
 
 8b 
 315 
 
 625 
 
 289 
 
 462 
 
 80tl 
 170 
 471 
 
 764 
 
 193 
 528 
 
 916 
 
 936 
 97 
 895 
 874 
 906 
 
 676 
 730 
 
 48 
 
 289 
 
 514 
 
 355 
 
 655 I 
 
 Evansville & Terrs Haute R. R. 
 Co. ads. Dongan, 15 A. D. 483, 
 44 Supp. 503 275, 281, 822 
 
 Evansville & Terre Haute R. R. 
 Co. ads. Clokey, 16 A. D. 304, 
 44 Supp. 631 270 
 
 Evertson v. National B'k of New- 
 port, 66 N. Y. 14 270 
 
 Ewart ads, Berwind-White Coal 
 Mining Co., ^0 Hun 60, 35 
 Supp. '573 226 
 
 E. W. Bliss Co. V. Opera Glass 
 Supply Co., 60 Hun 438, 15 
 Supp. 6 473 
 
 Excelsior Petroleum Co. v. Lacey, 
 63 N. Y. 422 452 
 
 Exchange Fire Ins. Co. ads. La 
 Forge, 22 N. Y. 352 544 
 
 Exner ads. Ersfeld, 128 A. D. 135, 
 112 Supp. 561 97 
 
 Faber ads. Bank of the Metrop- 
 olis, 38 A. D. 159, 56 Supp. 
 542 . 
 
 Faber ads. Bank of Metropolis, 
 150 N. Y. 200, 44 N. E. 779.. 
 
 Fairchild ads. Tripler, 167 A. D. 
 195, 152 Supp. 624 153 
 
 Fairchild Chemical Co., People ex 
 reLv. Coleman, 115 N. Y. 178, 
 21 N. E. 1056 
 
 Fairclough v. Southern Pacific 
 Co., 171 A. D. 496, 157 Supp. 
 
 312 
 
 453 
 
 750 
 
 872 
 
 Fallon V. Egberts Woolen Mill 
 
 Co., 24 Misc. 304, 53 Supp. 672, 
 
 afF'd 46 A. D. 630, 61 Supp. 
 
 1136 ;.. 627 
 
 Fallon V. Egberts Woolen Mills 
 
 Co.; 56 A. D. 585, 67 Supp. 
 
 347 651 
 
 Fallon V. U. S. Directory Co., 86 
 
 A. D. 29', 83 Supp. 359 625 
 
 Faltiske v. New York, Lake Erie 
 
 Western R. R. Co., 12 Misc. 
 
 478, 33 Supp. 679, aflf'd 151 N. 
 
 Y. 650, 46 N. E. 1146 437 
 
 Fangel ads. Horrocks Desk Co., 
 
 71 A. D. 313, 75 Supp. 967. .. . 384 
 Farcy & Oppenheim Co., People 
 
 ex rel. v. Wells, 42 Misc. 423, 
 
 87 Supp. 84, aflPd 104 A. D. 
 
 629, 93 Supp. 1143 858 
 
 Fargo ads. Wakefield, 90 N. Y. 
 
 213 248, 250 
 
 Farish-Stafford Co. ads. StrodI, 
 
 145 A. D. 406, 130 Supp. 35. 503 
 Farmer v. Farmer & Son Type 
 
 Foundry Co., 83 A. D. 218, 82 
 
 Supp. 228 309 
 
XXXVlll 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Farmer & Son Type Foundry Co. 
 ads. Farmer, 83 A. D. 218, 82 
 Supp. 228 309 
 
 Farmers' Bank at Bridgeport 
 ads. Dart, 27 Barb. 387 892 
 
 Farmers' Loan & Trust Co. v. 
 Baker, 20 Misc. 387, 46 Supp. 
 266 683 
 
 Farmers' Loan & T. Co. v. Bank- 
 ers' & Merchants'. Telegraph 
 Co., 119 N. Y. 15, 23 IST. E. 
 173 284, 290 
 
 Farmers' Loan & T. Co. v. Bank- 
 ers' & Merchants' Telegraph 
 Co., 148 N. Y. 315, 31 L. R. A. 
 403, 42 N. E. 707 282, 478 
 
 Farmers' Loan & Trust Co. v. 
 Equity Gas Light Co., 84 Hun 
 373, 32 Supp. 385 267 
 
 Farmers' Loan & T. Co. ads. 
 Fleisher, 58 A. D. 473, 69 Supp. 
 437 273, 280 
 
 Farmers' Loan & T. Co. v. Housa- 
 tonic B,. R. Co., 152 N. Y. 251, 
 46 N. E. 504 354, 374 
 
 Farmers' Loan & T. Co. ads. Mer- 
 rill, 24 Hun 297 280 
 
 Farmers' Loan & Trust Co. ads. 
 Ni J. Construction Co., 39 Misc. 
 672, 80 Supp. 622 847 
 
 Farmers' Loan & Trust Co. v. 
 N. Y. & N. R. R. Co., 150 N. Y. 
 410, 34 L. R. A. 76, 44 N. E. 
 1043 279, 494 
 
 Farmers' Loan & T. Co. ads. 
 Rhinelander, 172 N. Y. 519, 65 
 N. E. 499 279 
 
 Farnsworth v. Wood, 91 N. Y. 
 308 237 
 
 Farnum v. Harrison, 167 A. D. 
 704, 152 Supp. 835, aff'd 218 
 N. Y. 672, 113 N. E. 1055. ... 250 
 
 Farrington, People ex rel v. Men- 
 sching, 187 N. Y. 8, 10 L. R. 
 A. (N. S.) 625, 79 N. E. 884. 809 
 
 Faurot ads. Chase Nat. B'k, 72 
 Hun 373, 26 Supp. 447, aff'd 
 149 N. Y. 532, 35 L. R. A. 605, 
 44 N. E. 164 , 506 
 
 Fay V. Coughlin-Sandboro Switch 
 Co., 47 Misc. 687, 94 Supp. 628. 853 
 
 Federal Brewing Co. ads. Matter 
 of Ennis, 123 A. D. 691, 108 
 Supp. 230, aff'd 192 N. Y. 570, 
 85 N. E. 1109 602 
 
 Federal Mining & Smelting Co. 
 ads. Norman, 180 A. D. 325, 
 167 Supp. 794 191, 198, 409 
 
 Federal Storage Battery Con. Co. 
 ads. Roebling & Sons Co., — 
 
 Misc. — (1918), N. Y. L. J. 
 Feb. 27, Sp. T. N. Y. Co. . .215, 227 
 
 Federal Trust Co. ads. Conklin, 
 176 A. D. 572, 163 Supp. 570. 903 
 
 Federman v. Standard Churn 
 Mfg. Co., 128 Ad. D. 493, 112 
 Supp. 834 , 627 
 
 Feitner ads. People ex rel. Amer- 
 ican Thread Co., 30 Misc. 641, 
 64 Supp. 321 787, 792 
 
 Feitner ads. People ex rel. Bridge- 
 port Savings Bank, 191 N. Y. 
 88, 83 N. E. 593 763 
 
 Feitner ads. People ex rel. Broad- 
 way Realty Co., 61 A. D. 156, 
 70 Supp. 452, aff'd 168 N. Y. 
 661, 61 N. E. 1132 797 
 
 Feitner ads. People ex rel. Bro- 
 kaw Bros., 44 A. D. 278, 60 
 Supp. 687 765 
 
 Feitner ads. People ex rel. Bronx 
 Gas Co., 43 A. D. 198, 59 Supp. 
 327 792, 798 
 
 Feitner ads. People ex rel. Brook- 
 lyn Union Gas Co., 82 A. D. 
 368, 81 Supp. 898 761 
 
 Feitner ads. People ex rel. Claf- 
 lin Co., 58 A. D. 468, 69 Supp. 
 410 855 
 
 Feitner ads. People ex rel. Collen 
 Co., 31 Misc. 553, 65 Supp. 
 518 840 
 
 Feitner ads. People ex rel. Con- 
 solidated Gas Co., 78 A. D. 
 313, 79 Supp. 975 762, 797 
 
 Feitner ads. People ex rel. Cord 
 Meyer Co., 39 Misc. 467, 80 
 Supp. 152 748, 797 
 
 Feitner ads. People ex rel. Crane 
 Co., 49 A. D. 108, 62 Supp. 
 1107 857 
 
 Feitner ads. People ex rel. Davis- 
 Pelican Co., 77 A. D. 189, 78 
 Supp. 1017 839 
 
 Feitner ads. People ex rel. Dela- 
 ware & Hudson Co., 61 A. D. 
 129, 70 Supp. 500, aff'd 171 
 N. Y. 641, 63 N. E. 786. . .744, 752 
 
 Feitner ads. People ex rel. Eden 
 Musee Co., 60 A. D. 282, 70 
 Supp. 120 747 
 
 Feitner v. ads. People ex rel Lang- 
 don, 30 Misc. 646, 64 Supp. 269. 789 
 
 Feitner ads. People ex rel. Na- 
 tional Surety Co., 166 N. Y. 
 129, 59 N. E. 731 742, 752 
 
 Feitner ads. People ex rel. N. Y. 
 Edison Co., 39' Misc. 474, 80 
 Supp. 138 790 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Feitner ads. People ex rel. N. Y. 
 & Q.ueens Gas Co., 58 A. D. 
 
 555, 69 Supp. 27 743, 754 
 
 Feitner ads. People ex rel. Roch- 
 ester Lamp Co., 65 A. D. 224, 
 
 72 Supp. 641... 795 
 
 Feitner ads. People e xrel. Seiden- 
 berg Co., 41 A. D. 571, 58 Supp. 
 713 752 
 
 Feitner ads. People ex rel. Sicil- 
 ian Asphalt Co., 30 Misc. 665, 
 64 Stipp. 298 797 
 
 Feitner ads. People ex rel. 
 Twenty -third St. R. R. Co., 92 
 A. D. 518, 87 Supp. 304.. 745, 762 
 787, 798 
 
 Feitner ads. People ex rel. United 
 States Verde Copper Co., 54 
 A. D. 217, 66 Supp. 769, afif'd 
 165 N. Y. 645, 59 N". B. 1129. . 740 
 
 Felthousen ads. Townsend, 156 N. 
 Y. 618, 51 N. E. 279 152 
 
 F. E. McAlister Co. ads. Walter, 
 21 Misc. 747, 48 Supp. 26 928 
 
 Fenkert v. Bodenmann, 64 Misc. 
 140, 118 Supp. 1 873 
 
 Fenlon v. Dempsey, 50 Hun 131, 
 2 Supp. 763 381 
 
 Fenn v. Curtis, 23 Hun 384 6 
 
 Fenn v. Ostrander, Inc., 132 A. 
 D. 311, 116 Supp. 1083 625 
 
 Fennessy v. Ross, 5 A. D. 342, 39 
 Supp. 323 140 
 
 Ferguson v. Ann Arbor R. R. Co., 
 17 A. D. 336, 45 Supp. 172.. 290 
 
 Ferguson v. Gill, 64 Hun 284, 19 
 Supp. 149 400 
 
 Ferguson v. Gill, 74 Hun 566, 26 
 Supp. 596 399' 
 
 Ferguson, People ex rel. v. Rear- 
 don, 197 N. Y. 236, 27 L. R. A. 
 (N. S.) 141, 90 N. E. 829 810 
 
 Fernschild v. Yuengling Brewing 
 Co., 15 A. D. 29, 44 Supp. 106, 
 aflf'd 154 N. Y. 667, 49 N. E. 
 151 282, 619 
 
 Fidelity & Deposit Co. ads. 
 Youngman, 87 Misc. 456, 150 
 Supp. 788, aff'd 153 Supp. 1151. 921 
 
 Fidelity-Phenix Fire Ins. Co. 
 ads. Logan, 161 A. D. 404, 146 
 Supp. 678 157 
 
 Fifth Ave. B'k of N. Y. v. Forty- 
 second St. & Grand St. Ferry 
 R. R. Co., 137 N. Y. 231, 19 
 L. R. A. 331, 33 N. E. 378.. 114 
 116, 373 
 
 Fifth Avenue Building Co., Peo- 
 ple ex rel. v. Williams, 198 N. 
 Y. 238, 91 N. E. 638. .716, 720, 731 
 
 Fifth Ave. Coach Co. v. City of 
 New York, 58 Misc. 401, 111 
 Supp. 759, aff'd 126 A. D. 657, 
 110 Supp. 1037 449, 453 
 
 Fifth Ave. Ry. Co. ads. Mengis, 
 87 Hun 480, 30 Supp. 990 63 
 
 Finch ads. Gilbert, 173 N. Y. 455, 
 61 L. R. A. 807, 66 N. E. 133. 413 
 
 Finck V. Canadaway Fertilizer 
 Co., 152 A. D. 391, 136 Supp. 
 914, mod. 208 N. Y. 607, 102 
 N. E. 1102 4 
 
 Findeisen & Kropf Mfg. Co. ads. 
 Dickey, 177 A. D. 861, 164 
 Supp. 989 473 
 
 Finucane ads. Downey, 205 N. Y. 
 251, 40 L. R. A. (N. S.) 307, 
 98 N. E. 391 6, 148, 149, 441 
 
 Firemen's Ins. Co. ads. McKenna, 
 
 28 Misc. 173, 59 Supp. 41 897 
 
 Firestone Tire & Rubber Co. v. 
 
 Agnew, 194 N. Y. 165, 24 L. 
 
 R. A. (N. S.) 628, 86 N. E. 
 
 1116 228 
 
 First Baptist Church in Schenec- 
 tady V. Troy R. R. Co., 5 Barb. 
 
 79 509 
 
 First Nat. B'k v. Commercial 
 
 Travelers' Ass'n, 108 A. D. 78, 
 
 95 Supp. 454, aff'd 185 N. Y. 
 
 275, 78 N. E. 1103 328, 360 
 
 First National Bank v. Cornell, 
 
 8 A. D. 427, 40 Supp. 850 77 
 
 First Nat. B'k ads. Graham, 84 
 
 N. Y. 393 168 
 
 First Nat. B'k v. Rock City Falls 
 
 Paper Co., 22 Misc. 599, 50 
 
 Supp. 746 825 
 
 First Nat. B'k v. Nellis, 84 Hun 
 
 376, 32 Supp. 382, aff'd 156 
 
 N. Y. 663, 50 N. E. 1117 369 
 
 First Nat. B'k of Bath ads. 
 
 Kingsley, 31 Hun 329 482 
 
 First National Bank of Jersey 
 
 City V. Lamon, 130 N. Y. 366, 
 
 29 N. E. 321 306,513, 599 
 
 First National Bank of Selma 
 
 ads. Tracy, 37 N. Y. 523 681 
 
 Fifst Nat. Exhibitors' Circuit, 
 Inc., ads. Manuet Amusement 
 Corp., — Misc. — , N. Y. L. J., 
 May 9, 1918 913 
 
 First United Royatiner Sokoloner 
 Verein ads. Congregation Aushe 
 Yoshen, 32 Misc. 269;, 66 Supp. 
 356 605 
 
 Fischer v. Motor Boat Club, 61 
 Misc. 66, 113 Supp. 56 378 
 
 Fisher v. Bush, 35 Hun 641 143 
 
xl 
 
 TABLE OF CASES 
 
 Keferences are to pages. 
 
 Fisher v. Independent Brothers 
 
 of Xieshweiser, 84 ilisc. 382., 
 
 147 Supp. 390 676 
 
 Fisher v. Mechanics & Metals 
 
 Nat. Bank, 8» Misc. 587, 153 . 
 
 Supp. 786 126 
 
 Fishkill & Matteawan Gas Co. 
 
 ads. Hinds, 96 A. D. 14, 88 
 
 Supp. 954 194 
 
 Fishkill Savings Institution v. 
 
 National Bank, 80 N. Y. 162. . 520 
 Fisk ads. Gate, 175 A. D. 235, 
 
 161 Supp. 441 535 
 
 Fisk V. Chicago, Rock Island & 
 
 Pacific R. R. Co., 53 Barb. 472. 907 
 Fisk ads. Kinsman, 83 Hun 494, 
 
 31 Supp. 1045 156 
 
 Fisk ads. Kinsman, 37 A. D. 443, 
 
 56 Supp. 33 632 
 
 Fister v. La Rue, 15 Barb. 323. . 430 
 Fitchburg R. R. Co. ads. Pol- 
 
 hemus, 113 N. Y. 617, 20 N. E. 
 
 601 540 
 
 Fitchburg R. R. Co. ads. Pol- 
 
 hemus, 123 N. Y. 502, 26 N. E. 
 
 31 255, 611 
 
 Fitchett v. Murphy, 46 A. D. 181, 
 
 61 Supp. 182 189, 190, 356 
 
 Fitzgerald, Matter of, 21 Misc. 
 
 226, 45 Supp. 630 675 
 
 Fitzgerald ads. O'Brien, 6 A. D. 
 
 509, 39 Supp. 707, aff'd 150 N. 
 
 Y. 572, 44 N. E. 1126 417 
 
 Fitzgerald ads. O'Brien, 143 N. Y. 
 
 377, 38 N. E. 371 417 
 
 Flack ads. Demerest, 128 N. Y. 
 
 205, 13 L. R. A. 85, 28 N. E. 
 
 645 243, 879 
 
 Flack ads. Stover, 30 N. Y. 64. . 215 
 Flaherty v. Cary, 62 A. D. 116, 
 
 70 Supp. 951, aff'd 174 N. Y. 
 
 550, 67 N. E. 1082 2 
 
 Flaherty v. Murray, 60 A. D. 92, 
 
 69 Supp. 675, dism'd 172 N. Y. 
 
 646, 65 N. E. 1116 523 
 
 Flammer ads. Groh, 100 A. D. 
 
 305, 91 Supp. 423 150, 151. 
 
 Flanagan v. Lyon, 54 Misc. 372, 
 
 105 Supp. 1049 613 
 
 Flaum V. Keiser Bros. Co., 66 
 
 Misc. 586, 122 Supp. 100, aff'd 
 
 144 A. D. 897, 129 Supp. 1122. 395 
 Fleisher v. Farmers' Loan & T. 
 
 Co., 58 A. D. 473, 69 Supp. 437. 273 
 
 280 
 Fleitmann v. United Gas Im- 
 provement Co., 174 A. D. 781, 
 
 161 Supp. 650 203 
 
 Fletcher ads. Washington Sav- 
 ings B'k, 55 A. D. 580, 67 Supp. 
 
 365 619 
 
 Flike V. Boston & Albany R. R- 
 
 Co., 53 N. Y. 549 519 
 
 Flint ads. American Grocery Co., 
 
 5 A. D. 263, 39 Supp. 1 344 
 
 Flint ads. Bean, 204 N. Y. 153, 
 
 97 N. E. 490....; 151 
 
 Floersheimer, People ex rel. v. 
 
 Purdy, 174 A. D. 694, I62 Supp. 
 
 70, rev'd 221 N. Y. 481, 483, 
 
 116 N. E. 390 179, 789 
 
 Florida East Coast Ry. Co. ads. 
 
 Zlikus, 144 A. D. 91, 128 Supp. 
 
 933 896 
 
 Flower City Nat. B'k v. Shire, 88 
 
 A. D. 401, 84 Supp. 810 217 
 
 Flynn v. B'klyn City R. R. Co., 
 
 158 N. Y. 493, 53 N. E. 520. . . ISD 
 Flynn v. Coney Island & B'klyn 
 
 R. R. Co., 26 A. D. 416, 50 
 
 Supp. 74 261 
 
 Flynn v. Union Surety & Guar- 
 anty Co., 170 N. Y. 145, 63 N. 
 
 E. 61 903 
 
 Flynn v. White, 122 A. D. 780, 
 
 107 Supp. 860 923 
 
 Foehrenbach ads. Vinegar Co., 
 
 148 X. Y. 58, 42 N. E. 403. .. . 70 
 Fontene, Matter of, 85 Hun 219, 
 
 32 Supp. 956 286 
 
 Fontene v. Post Printing & Pub. 
 
 Co., 87 A. D. 233, 84 Supp. 
 
 308 
 
 Fontene ads. Trustees of Masonic 
 
 Hall, 99 Misc. 497, 164 Supp. 
 
 370 
 
 Foote V. Thome Glass Co. ads. 
 
 Creteau, 54 A. D. 168, 66 Supp. 
 
 370 
 
 Ford V. Chase, 118 A. D. 605, 
 
 103 Supp. 30, aff'd 189 N. Y. 
 
 504, 81 N. E. 1164 204, 232, 
 
 Forrest ads. People ex rel. Mills 
 
 Water-works Co., 97 N. Y. 97. 
 Fort George Realty Co., People 
 
 ex r€l. V. Miller, 179 N. Y. 49, 
 
 71 N. E. 463:.... 
 
 Forty-second St. & Grand St. 
 
 Ferry R. R. Co. ads. Fifth Ave. 
 
 B'k of N. Y., 137 N. Y. 231, 19 
 
 L. R. A. 331, 33 N. E. 378... 
 
 116, 
 
 Forty-second St. & Grand St. 
 
 Ferry R. R. Co. ads. Manhat- 
 tan Life Insurance Co., 139 
 
 N. Y. 146, 34 N. E. 776 117 
 
 Forty-second St. R. R. Co. ads. 
 
 Mutual Life Insurance Co., 74 
 
 Hun 505, 26 Supp. 545 110 
 
 Forty-second St., M. & St. N. Ave. 
 
 Ry. Co. ads. Kinman, 140 N. 
 
 Y. 183, 35 N. E. 498 117, 121 
 
 915 
 
 395 
 
 477 
 
 233 
 784 
 
 717 
 
 114 
 373 
 
TABLE OF CASES 
 
 xli 
 
 References are to pages. 
 
 Forty-second St. E. R. Co. ads. 
 
 Hellman, 74 Hun 529, 26 Supp. 
 
 nn3, aff'd 148 N. Y. 727, 42 N. 
 
 E. 723 116 
 
 Forty-second St. R. Co. ads. 
 
 Kelly, 37 A. D. 500, 55 Supp. 
 
 1096 271 
 
 Fourteenth St. Realty Co., People 
 
 ex rel. v. Kelsey, 110 A. D. 
 
 797, 97 Supp. 197, aff'd 184 
 
 N. Y. 572, 77 N. E. 1194 720 
 
 Fox V. Rural Home Co., 90 Hun 
 ■ 365, 35 Supp. 896, aff'd 157 
 
 N. Y. 684, 51 N. E. 1090 508 
 
 Fox ads. Stephens, 83 N. Y. 313. 230 
 Fraker v. Hyde & Sons, 127 A. D. 
 
 620, 11 Supp. 757 63 
 
 Francis v. New York & Brooklyn 
 
 El. R. R. Co., 108 N. Y. 93, 15 
 
 N. E. 192 121, 138 
 
 Franco-American Tenement Co. 
 
 ads. Stanley, 97 Misc. 401, 161 
 
 Supp. 365 366 
 
 Frank St. M. E. Church ads. 
 
 Landers, 114 N. Y. 626, 21 N. 
 
 . E. 420 331 
 
 Franklin ads. N. Y. Automobile 
 
 Co., 49 Misc. 8, 97 Supp. 781. 323 
 Franklin's, Incorporated, ads. 
 
 Otto, 90 Misc. 311, 153 Supp. 
 
 107 852 
 
 Frantz ads. Whittlesey, 74 N. Y. 
 
 456 92, 633 
 
 Fraser v. Granite State Provi- 
 dent Assn., 8 Misc. 7, 28 Supp. 
 
 65 884 
 
 Frazier v. Trow's Printing and 
 
 Bookbinding Co., 24 Hun 281, 
 
 aff'd 90 N. Y. 678 468 
 
 Freeman v. Hartfield, 172 A. D. 
 
 164, 158 Supp. 350 2 
 
 Freeman ads. Reilly, 84 A. D. 
 
 433, 82 Supp. 929 62 
 
 Freeman ads. Rock Island Butter 
 
 Co., 83 Misc. 7, 144 Supp. 317. 671 
 Freifeld ads. Order der Herr- 
 
 menn's Sohue, 20 Misc. 276, 
 
 45 Supp. 420 357 
 
 French v. Andrews, 81 Hun 272, 
 
 30 Supp. 796, aff'd 145 N. Y. 
 
 441, 40 N. E. 214 475,481, 484 
 
 French ads. Dorris, 4 Hun 292 . . 78 
 French v. McMillan, 43 Hun 188. 187 
 French *Mfg. Co. Matter of, 12 
 
 Hun 488 466 
 
 Fresno Home Packing Co. v. 
 
 Turle Skidmore, 60 Misc. 79, 
 
 111 Supp. 839, aff'd 132 A. D. 
 
 030, 117 Supp. 1134 877 
 
 Frick Co. v. Pultz, 162 A. D. 209, 
 
 147 Supp. 732 888 
 
 Fridenberg v. Lee Construction 
 
 Co., 27 Misc. 651, 58 Supp. 391. 378 
 Friedland ads. Cullen, 152 A. D. 
 
 124, 136 Supp. 659 408, 405 
 
 Friedman, Matter of, 177 A. D. 
 
 755, 164 Supp. 892 346, 552 
 
 Friendship Assn. ads. Matter of 
 
 Biglin, 46 Hun 223 120 
 
 Fritz ads. St. George Vineyard 
 
 Co., 48 A. D. 233, 62 Supp. 775. 64 
 Fruin-Bambrick Construction Co. 
 
 V. Merks, 48 A. D. 51, 62 Supp. 
 
 621 916 
 
 Frye, Matter of, 75 Hun 402, 27 
 
 Supp. 14 213 
 
 Fuller ads. Gray, 17 A. D. 29, 44 
 
 Supp. 883 405, 822 
 
 Fuller V. O'Connor, 61 Misc. 279, 
 
 113 Supp. 684 850 
 
 Fuller V. Rowe, 57 N. Y. 23 10 
 
 Fuller ads. Sinclair, 158 N. Y. 
 
 607, 53 N. E. 510. . . .306, 385, 475 
 Fuller & Co. v. Schrenk, 58 A. 
 
 D. 222, 68 Supp. 781, aff'd 171 
 
 N. Y. 671, 64 N. E. 1126 880 
 
 Fulton Fire Ins. Co. v. Baldwin, 
 
 37 N. Y. 648 530 
 
 Funger v. Brooklyn Bottle Stop- 
 per Co., 132 A. D. 837, 117 
 
 Supp. 799 540 
 
 Funk ads. Gerding, 48 A. D. 603, 
 
 64 Supp. 423, aff'd 169 N. Y. 
 
 572, 61 N. E. 1129 618 
 
 Furman ads. Conklin, 57 Barb. 
 
 484, aff'd 48 N. Y. 527 .. . .230, 232 
 
 Gadsden v. Woodward, 103 N. Y. 
 
 242, 8 N. E. 653 388 
 
 Gage ads. Playa de Ora Mining 
 
 Co., 60 A. D. 1, 69 Supp. 702, 
 
 aff'd 172 N. Y. 630 404 
 
 Gaitley v. Albany Foundry Co., 
 
 157 A. D. 10, 141 Supp. 676, 
 
 aff'd 216 N. Y. 693, 110 N. E. 
 
 1041 505 
 
 Galdieri & Co., Inc. v. Waist Co., 
 
 98 Misc. 612, 163 Supp. 154.. 529 
 Gales, People ex rel. v. McDon- 
 
 ough, 28 Misc. 652, 60 Supp. 40 24 
 Gallagher v. Ashby, 26 Barb. 143. 249 
 Gallogly V. Whitmore, 172 A. D. 
 
 381, 158 Supp. 830 94, 256 
 
 Galveston, Houston & Henderson 
 
 R. R. Co. ads. Burke, 173 A. D. 
 
 221, 159 Supp. 379 902 
 
 Gamble v. Queens Co. Water Co., 
 
 123 N. Y. 91, 9 L. R. A. 527, 
 
 25 N. B. 201 178, 192, 261, 324 
 
slii 
 
 TABLE OF CASES 
 
 Beferences are to pages. 
 
 Gamewell Fire Alarm Telegraph 
 
 Co. ads. Stover, 164 A. D. 155, 
 
 149 Supp. 650 357 
 
 Gans ads. People ex rel. N. Y. 
 
 Mail & N. T. Co., 198 N. Y. 
 
 250, 91 X. E. 634 722, 731 
 
 Gans ads. N. Y. C. & H. E. R. R. 
 
 Co., 200 N. Y. 328, 93 N. E. 988 723 
 Gans ads. N. Y. Terminal Co., 204 
 
 N. Y. 512, 98 N. E. 11 285 
 
 Gams ads. Tilton, 90 Miac. 84, 152 
 
 Supp. 981, aff'd 168 A. D. 910, 
 
 152 Supp. 1146 320, 35S 
 
 Gans ads. Tilton, 155 A. D. 612, 
 
 140 Supp. 782 404 
 
 Ganse v. Commonwealth Trust 
 
 Co., 196 N. Y. 134, 24 L. R. A. 
 
 (N. S.) 967, 89 N. E. 476.... 49 
 Gansevoort B'k ads. Wright, 118 
 
 A. D. 281, 103 Supp. 548. .476, 483 
 Garabrant ads. Little, 90 Hun 
 
 404, 35 Supp. 689, aff'd 153 
 
 N. Y. 661, 48 N. E. 1105 683 
 
 Garden ads. Nason Mfg. Co., 52 
 
 Ad. D. 363, 65 Supp. 147 644 
 
 Garden ads. Sehreiber, 152 A. D. 
 
 817, 137 Supp. 747 512 
 
 Gardner ads. Decker, 124 N. Y. 
 
 334, 11 L. R. A. 480, 26 N. E. 
 
 814 641 
 
 Garfield Nat. B'k ads. Standard 
 
 Nat. B'k, 56 A. D. 43, 67 Supp. 
 
 472 474 
 
 Garner & Co. ads. De Moltke- 
 
 Huilfeldt, 145 A. D. 766, 130 
 
 Supp. 558 469 
 
 Garrett Co. v. Appleton, 101 A. 
 
 D. 507, 92 Supp. 136, aflF'd 184 
 
 N. Y. 557, 76 N. E. 1099 208 
 
 Garrett Co. v. Astor, 67 A. D. 
 
 595, 73 Supp. 966 151 
 
 Garrett Co. v. McComb, 58 A. D. 
 
 419, 68 Supp. 996 443 
 
 Garrison v. Howe, 17 N. Y. 458 . . 241 
 
 392 
 Garth ads. Glenn, 133 N. Y. 18, 
 
 30 N. E. 649, 31 N. E. 344 137 
 
 Gas Engine & Power Co. ads. Mc- 
 Coy, 135 A. D. 771, 119 Supp. 
 
 864 202 
 
 Gaskell v. Beard, 58 Hun 101, 11 
 
 Supp. 399 452 
 
 Gass ads. People ex rel. Cooper 
 
 Union, 190 N. Y. 323, 83 N. 
 
 E. 64 18 
 
 Gaul V. Kiel & Arthe Co., 199 N. 
 
 Y. 472, 92 N. E. 1069 893 
 
 Gazley ads. Barber Asphalt Pav- 
 ing Co. — Misc. — , (1918) 
 N. Y. L. J., Feb. 28, Sp. T. 
 N. Y. Co 238, 538 
 
 Gebbie ads. Seerles, 115 A. D. 778, 
 101 Supp. 199, aff'd 190 N. Y. 
 533, 83 N. E. 1131 205 
 
 Gebhardt ads. Mulheran, 93 A. 
 D. 98, 86 Supp. 941 157 
 
 Geddes ads. Moss, 28 Misc. 291, 
 59 Supp. 867 286 
 
 General Electric Co., People ex 
 rel. V. Barker, 91 Hun 590, 36 
 Supp. 842, aff'd 149 N. Y. 589, 
 44 N. E. 1127 755 
 
 General Electric Co. v. Wright- 
 man, 3 A. D. 118, 39 Supp. 420. 
 
 16 
 79 
 
 405 
 
 889 
 
 520 
 
 489 
 
 General Rubber Co. v. Benedict, 
 215 N. Y. 18, L. R. A. 1915F, 
 617, 109 N. E. 9« 
 
 General Supply & Construction 
 Co. ads. Woodward Lumber Co., 
 60 Misc. 367, 113 Supp. 628. . . 
 
 Genesee Falls Sav. Assn. ads. Van 
 Wagenen, 88 Hun 43, 34 Supp. 
 491 
 
 Genesee Iron & Brassworks ads. 
 Munson, 37 A. D. 203, 56 Supp. 
 139 
 
 Genesee Light & Power Co., Peo- 
 ple ex rel. v. Sohmer, 162 A. D. 
 207, 147 Supp. 726, aff'd 212 
 N. Y. 598, 106 N. E. 1040 725 
 
 Genesee Valley Ry. Co. v. Retsof 
 Mining Co., 15 Misc. 187, 36 
 Supp. 896 334 
 
 Geneva Basket Co., Matter of, 
 71 Misc. 156, 127 Supp. 943.. 
 
 Geneva Mineral Springs Co., Ltd. 
 V. Steele, 111 A. D. 706, 97 
 Supp. 996 62, 
 
 George ads. Pier, 86 N. Y. 613. . . 
 
 Gerard ads. Ball, 160 A. D. 619, 
 146 Supp. 81 152 
 
 Gerard ads. Rensens, 160 A. D. 
 625, 146 Supp. 86 148 
 
 Gere ads. Syracuse, Ph<Enix & 
 Oswego E. R. Co., 4 Hun 392.6, 81 
 
 Gerding v. Funk, 48 A. D. 603, 
 64 Supp. 423, aff'd 169 N. Y. 
 572, 61 N. E. 1129 618 
 
 Gerken ads. Raab, 127 A. D. 42, 
 111 Supp. 319 307 
 
 German-American Button Co. v. 
 Helmsfeld, Inc., 170 A. D. 416, 
 156 Supp. 223 51 
 
 German-American Coffee Co. 'v. 
 Johnston, No. 1, 168 A. D. 31, 
 153 Supp. 866 342 
 
 German-American Coffee Co. v. 
 Diehl, 86 Misc. 547, 149 Supp. 
 413, aff'd 168 A. B. 913, 152 
 Supp. 1113 403,426, 936 
 
 582 
 
 153 
 
 388 
 
TABLE or CASES 
 
 xliii 
 
 References are to pages. 
 
 GeriBan-American Coffee Co. v. 
 
 Diehl, 216 N. Y. 57, 109 N". E. 
 
 875 930 
 
 German-American Mutual W. & 
 
 S. Co. ads. National Park B'k, 
 
 116 N. Y. 281, 5 L. R. A. 673, 
 
 22 N. E. 567 448, 508 
 
 German-American Real Estate 
 
 Co. ads. Schultz, 21 A. D. 163, 
 
 47 Supp. 500 200 
 
 German Ins. Co. ads. Chicago 
 
 Title & Trust Co., 119 A. D. 
 
 347, 104 Supp. 253 931 
 
 German Looking Glass Plate Co., 
 
 People ex rel. v. Barker, 75 
 
 Hun 6, 26 Supp. 971 761 
 
 German Theatre ads. Matter of 
 
 Howell, 64 Misc. 110, 117 Supp. 
 
 1124 '. 632 
 
 German Union Fire Ins. Co. ads. 
 
 Kline Bros. & Co., 147 A. D. 
 
 790, 132 Supp. 181, aff'd 210 
 
 N. Y. 534, 103 N. E. 1125 836 
 
 Germania Ins. Co. ads. Hanover 
 
 Ins. Co., 46 Hun 308, dism'd 
 
 109' .N. Y. 663, 17 N. E. 868.. 663 
 Germicide Co., Matter of, 65 Hun 
 
 606, 20 Supp. 495 182 
 
 Gibbs ads. Babbitt, 150 N. Y. 
 
 281, 44 N. E. 952 616 
 
 Gibbs V. Queen Ins. Co., 63 N. Y. 
 
 114 900, 903 
 
 Gibson v. American Loan & Trust 
 
 Co., 58 Hun 443, 12 Supp. 444. 277 
 Gibson ads. Hamilton, 145 A. D. 
 
 825, 130 Supp. 684 413 
 
 Gideon v. Hinds, Noble & Eld- 
 
 redge, 172 A. D. 478, 158 Supp. 
 
 774 142 
 
 Giebler Mfg. Co. v. Kranenberg, 
 
 102 A. D. 471, 92 Supp. 843.. 377 
 Gifford ads. Buffalo & Jamestown 
 
 R. R. Co., 87 N. Y. 294 78 
 
 Gilbert ads. Coddington, 17 N. Y. 
 
 489 922 
 
 Gilbert ads. Dean, 92 Hun 427, 
 
 36 Supp. 1004 531 
 
 Gilbert v. Finch, 173 N. Y. 455, 
 
 61 L. R. A. 807, 66 N. E.' 133. 413 
 Gilbert Elevated R. R. Co. ads. 
 
 New England Iron Co., 91 N. 
 
 Y. 153 49 
 
 Giles, People ex rel. v. Klauder- 
 
 Weldon Dyeing Machine Co., 
 
 179 A. D. 149, 167 Supp. 429. . 157 
 GilfiUan ads. National Tube 
 
 Works Co., 124 N. Y. 302, 26 
 
 >?. E. 538 96 
 
 CrilfiUan ads. Nat. Tube Works 
 
 Co., 124 N. Y. 302, 26 N. E. 
 
 538 212 
 
 Gilhooly ads. Schlesinger, 111 A. 
 D. 158, 97 Supp. 606 680 
 
 Gill V. N. Y. Cab Co., 48 Hun 
 524, 1 Supp. 202 319 
 
 Gill ads. Ferguson, 74 Hun 566, 
 26 Supp. 596 399 
 
 Gill ads. Ferguson, 64 Hun 284, 
 19 Supp. 149 400 
 
 Gill ads. State Bank of Syra- 
 cuse, 23 Hun 410 237 
 
 Gilleran v. Springfield, L. I. Cem- • 
 etery Soc, 161 A. D. 597, 146 
 Supp. 828 317 
 
 Gillette v. Nozes, 92 A. D. 313, 86 
 Supp. 1062 188 
 
 Gillig V. Treadwell Co., 151 N. Y. 
 552, 45 N. E. 1035 641 
 
 Gilman v. Green Point Sugar 
 Co., 61 Barb. 9 555 
 
 Gilman ads. Tucker, 121 N. Y. 
 189, 24 N. E. 302 219 
 
 Gilmore ads. Bush, 45 A. D. 89, 
 61 Supp. 682 370 
 
 Ginsberg v. Automobile Coaching 
 Co., 151 A. D. 627, 136 Supp. 
 354 479 
 
 Ginsburg v. Union Cloak & Suit 
 Co., 35 Misc. 389, 71 Supp. 
 1030 ; . 491 
 
 Gippert ads. Woodbridge Heights 
 Construction Co., 92 Misc. 204, 
 155 Supp. 363 838 
 
 Girbekian v. Costikyan, 126 A. 
 D. 812, 111 Supp. 243 236 
 
 Giroux Consolidated Mines Co. 
 ads. People ex rel. Althouse, 
 122 A. D. 617, 107 Supp. 188.54, 58 
 
 Giroux Consolidated Mines Co. 
 ads. Althouse, 150 A. D. 580, 
 135 Supp. 500 848 
 
 Giroux ads. Althouse, No. 2, 56 
 Misc. 511, 107 Supp. 193 853 
 
 Gladstone ads. Augldile Comput- 
 ing Scale Co., 164 A. D. 370, 
 149 Supp. 807. . .836, 838, 888, 889 
 
 Glauben ads. Cunningham, 61 
 Misc. 443 595 
 
 Glauber ads. Cunningham, 133 A. 
 D. 10, 117 Supp. 866 596 
 
 Gleason, People ex rel. v. Purdy, 
 223 N. Y. 88 79« 
 
 Gleason Mfg. Co. ads. Billingham, 
 43 Misc. 681, 88 Supp. 398 55 
 
 Gleason Mfg. Co. ads. Billingham, 
 101 A. D. 476, 91 Supp. 1046, 
 aff'd 185 N. Y. 571, 78 N. E. 
 1099 169 
 
 Glenn v. Garth, 133 N. Y. 18, 
 30 N. E. 649, 31 N. E. 344. .. . 137 
 
 Glen Cove Starch Co. ads. But- 
 ler, 18 Hun 47 119 
 
xliv 
 
 TABLE OF CASES 
 
 Keferences are to pages. 
 
 Glen Salt Co., Matter of, 17 A. 
 D. 234, 45 Supp. 568, aflf'd 153 
 N. Y. 688, 68 N. E. 1104.. 177. 181 
 
 Glen Salt Co., Matter of, 17 A. 
 
 D. 234, 45 Supp. 568, aff'd 153 
 
 N. Y. 688, 48 N. E. 1104 133 
 
 Glen Telephone Co., People ex rel. 
 
 V. Hall, 130 A. D. 360, 114 
 
 Supp. 511 765 
 
 Globe Gas Light Co. v. Metropoli- 
 tan Investment Co., 10 A. D. 
 
 342, 41 Supp. 797 367 
 
 Globe R. F. Ins. Co. ads. Quack- 
 
 enboss, 177 N. Y. 71, 69 N. E. 
 
 223 49 
 
 Globe Woolen Co. v. Utica Gas 
 
 & Electric Co., 151 A. D. 184, 
 
 136 Supp. 24 360 
 
 Globe Yarn Mills v. Bilbrough, 
 
 2 Misc. 100, 21 Supp. 2 876 
 
 Globe & Rutgers Fire Ins. Co. 
 
 ads. Quackenboss, 106 A. D. 
 
 466, 94 Supp. 723 49 
 
 Clynn ads. People ex rel. Pullman 
 
 Co., 130 A. D. 332, 114 Supp. 
 
 460, aflF'd 198 N. Y. 605, 92 N. 
 
 E. 1097 158, 715, 728 
 
 Glynn ads. People ex rel. Union 
 
 Sulphur Co., 125 A. D. 328, 
 
 109 Supp. 868, 862 
 
 Glynn ads. People ex rel. ^'ander- 
 
 voort R. Co., 194 X. Y. 387. S7 
 
 N. E. 434 709, 716, 719 
 
 Godfrey Co. ads. Golstein, 70 
 
 Misc. 235, 126 Supp! 622 431 
 
 Godley v. Crandall & Godley Co., 
 
 212 N. Y. 121, L. R. A. 1915D, 
 
 632, 105 N. E. 818... 159, IflO, 191 
 319 392 ' 571 
 Godley v. Godley & Crandall Co'.', 
 
 181 A. D. 75 (1917) 198, 199 
 
 Godwin ads. Torbett, 62 Hun 407, 
 
 n Supp. 46 398 
 
 Goetz Silk Mfg. Co., People ex 
 
 rel. V. Wells, 42 Misc. 86, 85 
 
 Supp. 533, aff'd 93 A. D. 613, 
 
 87 Supp. 1144 836, 844 
 
 Gold V. Clyne, 134 N. Y. 262, 17 
 
 L. R. A. 767, 31 N. E. 980 387 
 
 Gold Stock Telegraph Co. ads. 
 
 People, 8 N. Y. 67 710 
 
 Goldmark v. Magnolia Metal Co., 
 
 28 A. D. 264, 51 Supp. 68... 620 
 Goldmark v. Magnolia Metal Co., 
 
 44 A. D. 35, 60 Supp. 425, 
 
 aff'd 170 N. Y. 579, 63 N. E. 
 
 1117 620 
 
 Goldmeyer Co. ads. Carlaftes, 72 
 
 •Misc. 75, 129 Supp. 396 508 
 
 Goldsheer v. Barron, 42 Misc. 198, 
 
 85 Supp. 395 323 
 
 Goldsmith v. Swift, 25 Hun 201 . . 
 Goldsmith v. Wells Co., 86 Hun 
 
 489, 33 Supp. 727 
 
 Goldstein v. Godfrey Co., 70 Misc. 
 
 235, 126 Supp. 622 
 
 Goldstein ads. Gunst, 30 Misc. 44, 
 
 61 Supp. 707 
 
 Goldstein ads. People ex rel. 
 
 Gunst, 37 A. D. 550, 56 Supp. 
 
 306 
 
 Goldstein ads. 'Weston, 26 Misc. 
 
 171, 56 Supp. 755, aff'd 39 A. 
 
 D. 661, 57 Supp. 311 
 
 Goodman ads. Barkin Construc- 
 tion Co., 221 N. Y. 156, 116 
 N. E. 770 
 
 Goodrich v. Sanderson, 35 A. D. 
 
 546, 55 Supp. 881 
 
 Goodwillie-Wyman Oo. ads. Grea- 
 
 son, 38 Hun 138 
 
 Gordon v. House of Childhood, 
 
 Inc., 83 Misc. 74, 144 Supp. 
 
 685 •. 
 
 Gordon v. Southgate Building 
 
 Co., 109 A. D. 838, 96 Supp. 
 
 717 ; 
 
 Gorman ads. Vanderpoel, 140 N. 
 Y. 563, 24 L. R. A. 548, 3.5 N. 
 
 E. 932 
 
 Goss & Co. V. Goss, No. 2, 147 A. 
 
 D. 698, 132 Supp. 76, aff'd 207 
 N. Y. 742, 101 N. E. 1099 
 
 Goss ads. Goss & Co., No. 2, 147 
 
 A. D. 698, 132 Supp. 76, aff'd 
 
 207 N. Y. 742, 101 N. E. 1099. 
 Gould ads. Jones, 209 N. Y. 419, 
 
 103 N. E. 720. 
 
 Gould V. Olympic Mining Co., 40 
 
 Misc. 612, 96 Supp. 455 851, 
 
 Gould ads. PoUitz, 202 N. Y. 1 1 , 
 
 38 L. R. A. (N. S.) 988, !U 
 
 X. E. 1088 )!)(i, 
 
 Gould V. Texas & Pacific Ry. Co.. 
 
 176 A. D. 818, 163 Supp. 479 . 
 Gould V. Town of Oneonta, 71 
 
 X. Y. 298 
 
 Gouze ads. Greaves, 69 N. Y. l.'>4. 
 Grace v. Repose Mausoleums, Inc., 
 
 78 Misc. 213, 139 Supp. 300. . 
 Grace ads. Troughton, 151 A. 1). 
 
 655, 136 Supp. 200 18ti. 
 
 Graham v. First Nat. Bank, S4 
 
 X. Y. 393 
 
 Gramercy Co., People ex rel. v. 
 
 Roberts, 91 Hun 146. 36 Supp. 
 
 277, aff'd 158 N. y. 709, 53 N. 
 
 E. 1130 
 
 Grand Belt Copper Co., The, ads. 
 
 Walton, 56 Hun 211, 9 Supp. 
 375 
 
 160 
 531 
 431 
 . 54 
 
 , 51 
 125 
 
 468 
 931 
 679 
 
 477 
 
 475 
 
 358 
 
 ■:!.-)8 
 11 
 
 854 
 
 197 
 921 
 
 141 
 
 417 
 
 453 
 
 187 
 168 
 
 728 
 683 
 
TABLE OF CASES 
 
 xlv 
 
 RefereBces are to pages. 
 
 Grand St. & Newtown E. R. Co. 
 
 ads. Elwell, 67 Barb 260 
 
 Grand Trunk Ky. Co. ads. Guffey, 
 
 67 Misc. 553, 122 Supp. 947 . . 892 
 .Granite State Provident Assn. 
 
 ads. Fraser, 8 Misc. 7, 28 Supp. 
 
 65 884 
 
 Granite State Provident Assn. 
 
 ads. Lowey, 8 Misc. 319, 2R 
 
 Supp. 560 528 
 
 Granite State Provident Assn. 
 
 ads. People, 161 N. Y. 492, 55 
 
 N. B. 1053 668, 672 
 
 Grant v. Cananea Con. Copper 
 
 Co., 189 N. Y. 241, 82 N. E. 
 
 191 904 
 
 Grant v. Cobre Grande Copper 
 
 Co., 193 N. Y. 306, 86 N. E. 
 
 34 506 
 
 Grant v. Greene Consolidated 
 
 Copper Co., 169 A. D. 206, 154 
 
 Supp. 596 874, 893 
 
 Grant v. Treadwell Co., 82 Hun 
 
 591, 31 Supp. 702 370 
 
 Grant v. Treadwell Co., 1 A. D. 
 
 367, 37 Supp. 393 373 
 
 Graville v. N. Y. Central & Hud- 
 son R. R. R. Co., 34 Hun 224. . 64 
 Grassi Contracting Co., Inc. ads, 
 
 American' Can Co., 102 Misc. 
 
 230, 168 Supp. 689 891 
 
 Gray v. Fuller, 17 A. D. 29, 44 
 
 Supp. 883 405, 822 
 
 Gray v. N. Y. & Va. Steamship 
 
 Co., 3 Hun 383 410 
 
 Gray v. Oxnard Brothers Co., 59 
 
 Hun 387, 13 Supp. 86 682 
 
 Greater Pictures Corp. v. Crystal 
 
 Film Co. — Misc. — , N. Y. 
 
 L. J., Jan. 21, 1918 526 
 
 Great Northern Construction Co., 
 
 Matter of, 50 ilisc. 467, 100 
 
 Supp. 564 847 
 
 Great Northern Moulding Co. v. 
 
 Bonewur, No. 1, 128 A. D. 
 
 831', 113 Supp. 60 886 
 
 Great Northern Trading Co., Mat- 
 ter of, 168 A. D. 536, 153 
 
 Supp. 213 583, 584 
 
 Great Western Turnpike Road, 
 
 President, Directors and Trust 
 
 Co. of, ads. Titus, 61 N. Y. 
 
 237 115 
 
 Greaves v.Gouge, 69 N. Y. isi. . 417 
 Green ads. Catlin, 125 N. Y. 441, 
 
 24 N. E. 941 615 
 
 G'reen v. Compton, 41 Misc. 21, 
 
 83 Supp. 588 421 
 
 Green v. Easton, 74 Hun 329, 26 
 
 Supp. 553 . . ; 392 
 
 Green ads. Griffith, 129 N. Y. 517, 
 
 29 N. E. 838 218 
 
 Green v. Grigg; 98 A. D. 445, 
 90 Stipp. 565 12 
 
 Green ads. O'Reilly, Skelly & 
 Fogarty Co., 18 Misc. 423 . . 883, 887 
 
 888 
 
 Green v. Shain, 22 Misc. 720, 49 
 Supp. 1061 854 
 
 Green Point Sugar Co. ads. Gil- 
 man, 61 Barb. 9 555 
 
 Greene ads. Hallenborg, 66 A. D. 
 590, 73 Supp. 403 929 
 
 Greene Consolidated Copper Co. 
 ads. Grant, 169 A. D. 206, 154 
 Supp. 096 874, 893 
 
 Greene Consolidated Gold Mining 
 Co. ads. Pelletreau, 49 Misc. 
 233, 97 Siupp. 391 850, 852 
 
 Greenpoint Sugar Co. v. Whiten. 
 69 N. Y. 328... 256, 257, 264, 265 
 
 267 
 
 Grifenhagen ads. People ex rel. 
 Wynn, 167 A. D. 572, 152 
 Supp. 679 922 
 
 Griffith v. Green, 129 N. Y. 517, 
 29'N. E. 838 218 
 
 Griffith V. Goodwillie-Wyman Co., 
 38 Hun 138 679 
 
 Griffon Co. ads. Kraft, 82 A. D. 
 29, 81 Supp. 438 896 
 
 Grigg ads. Green, 98 A. D. 445, 
 
 90 Supp. 565 12 
 
 Griggs V. Day, 158 N. Y. 1, 52 
 
 N. E. 692 ; 158 
 
 Grigsby ads. Schnaier & Co., 132 
 
 A. D. 854, 117 Supp. 455, aff'd 
 
 199 N. Y. 577, 93 N. E. 1125. . 527 
 Griswold ads. American Case & 
 
 Register Co., 143 A. D. 807, 128 
 
 Siapp. 20« 841 
 
 Griswold ads. American Case & 
 
 Register Co., 143 A. D. 807, 
 
 128 Supp. 206 841 
 
 Griawold ads. Arthur, 55 N. Y. 
 
 400 441 
 
 Griswold ads. Blake, 103 N. Y. 
 
 429, 9 N. E. 434 400 
 
 Griswold ads. Blake, 104 N. Y. 
 
 613, 11 N. E. 137 514 
 
 Griswold ads. Bonnell, 80 N. Y. 
 
 128 389, 397, 399, 513 
 
 Griswold ads. Bl-ackett, 103 N. Y. 
 
 425, 9 N. E. 438 400 
 
 Groesbeck ads. Card, 204 N. Y. 
 
 301, 97 N. E. 728 247 
 
 Groesbeck ads. Ord, 204 N. Y. 
 
 301, 97 N. E. 728 229 
 
 Groh V. Flammer, 100 A. D. 305, 
 
 91 Supp. 423 150, 151 
 
 Groshut V. Kinetophone Corp., 
 
 93 Misc. 558, 157 Supp. 512. .. . 534 
 Grosvenor ads. West, 102 A. D. 
 266, 92 Supp. 429 854 
 
xlvi 
 
 TABLE OF CASES 
 
 Eefirences are to pages. 
 
 Groton Bridge & Mfg. Co. ads. 
 Knickerbocker, 111 A. D. 145, 
 97 Supp. 595 571, 587, 588 
 
 Groat ads. Matter of Nassau 
 Electric R. R. Co., 119 A. D. 
 130, 103 Supp. 975, ail'd 189 
 N. Y. 510, 81 N. E. 1173. .774, 785 
 
 Guaranty Trust Co. ads. Alt- 
 house, 78 Misc. 181, 137 Supp. 
 945 848 
 
 Guaranty Trust Co. ads. St. Louis 
 & San Francisco R. R. Co., 205 
 N. Y. 609, 98 X. E. 162 272 
 
 Guaranty Trust Co. v. Trov 
 Steel Co., 33 Misc. 484, 68 
 Supp. 915 272. 283 
 
 Guaranty Trust Co. ads. West, 
 162 A. D. 301, 147 Supp. 421 . . 141 
 
 644 
 
 Guardian Mutual Life Ins. Co. 
 ads. Attorney-General, 77 N. Y. 
 272 527 
 
 Guardian Trust Co. ads. Bene- 
 dict, 58 A. D. 302, 68 Supp. 
 1082 511 
 
 Guardian Trust Co. ads. The Mos- 
 ler Safe Co., 208 N. Y. 524, 101 
 N. E. 786 220, 236 
 
 Guardian Trust Co. ads. Patter- 
 son, 144 A. D. 863, 129 Supp. 
 807 280 
 
 Gudebrod Bros. Co. ads. Cutler, 
 
 36 A. D. 362, 55 Supp. 298 . . 38 
 Gudebrod Bros. Co. ads. Cutler, 
 
 44 A. D. 605, 61 Supp. 225, 
 
 aff'd 168 N. Y. 512, 61 N. E. 
 
 887 42 
 
 GuiTey v. Grand Trunk Ry. Co., 
 
 67 Misc. 553, 122 Supp. 947.. 892 
 Gunst V. Goldstein, 30 Misc. 44, 
 
 61 Supp. 707 54 
 
 Gunat, People ex rel. v. Goldstein, 
 
 37 A. D. 550, 56 Supp. 306 51 
 
 Gumey v. Atlantic & Great 
 
 AVestem Ry. Co., 58 N. Y. 358. 673 
 Gurnley ads. People ex rel. N. Y. 
 
 C. & H. R. R. R. Co., 64 Misc. 
 
 605, 118 Supp 777 
 
 Gursky v. Blair, 218 N. Y. 41, 
 
 L. R. A. 1916F 359, 112 N. E. 
 
 431 908, 913, 933 
 
 Gutta Percha & Rubber Co. ads. 
 
 Decker, 61 Hun 516, 16 Supp. 
 
 352 521 
 
 Ha an ads. Cook & Bernheimer 
 Co., 21 Misc. 346, 47 Supp. 
 131 434 
 
 Haas V. Universal Phonograph & 
 Record Co., 75 Misc. 119, 132 
 Supp. 767 320 
 
 Haase v. Michigan Steel Boat Co., 
 
 148 A. D. 298, 132 Supp. 1046, 
 
 app. dism'd 210 N. Y. 602, 104 
 
 N. E. 1131 903 
 
 Haberman, People ex rel. v. 
 
 James, 5 A. D. 412, 39 Supp. 
 
 313 553, 554 
 
 H. Booth King & Bro. Pub. Co. 
 
 ads. Carter, 26 Msc. 652, 56 
 
 Supp. 382 917 
 
 Hackett v. Northern Pacific Ry. 
 
 Co., 36 Misc. 583, 73 Supp. 
 
 1087 70, .334 
 
 Hackley v. Draper, 60 N. Y. S8 . . 029 
 Haddane Granite Co., Inc. v. 
 
 Brooklyn Heights R. R. Co.. 
 
 131 A. D. 685, 116 Supp. 96.. 838 
 Hagen ads. Baird, 143 A. D. 679, 
 
 128 Supp. 217 141 
 
 Haight V. Sahler, 30 Barb. 218. . 365 
 Haines v. Kinderhook & Hudson 
 
 Ry., 33 A. D. 154, 53 Supp. 
 
 368 179, 304, 618 
 
 Hake ads. Delahunty, 10 A. D. 
 
 230, 41 Supp. 896 141 
 
 Hale ads. Matter of Charron, 25 
 
 Misc. 34, 54 Supp. 411 675 
 
 Hale V. Mason, 86 Hun 499, 33 
 
 Supp. 789 637 
 
 Hale V. Mason, 160 N. Y. 561, 55 
 
 N. E. 202 337 
 
 Hale ads. Tower, 46 Barb. 361 . . 586 
 Hall V. Davis, 95 Misc. 315, 159 
 
 Supp. 60 815 
 
 Hall ads. People ex rel. Glen 
 
 Telephone Co., 130 A. D. 360, 
 
 114 Supp. 511 765 
 
 Hall V. Herter Brothers, 83 Hun 
 
 19, 31 Supp. 692 4 
 
 Hall V. Herter Bros., 90 Hun 280, 
 
 35 Supp. 769, aflf'd 157 N. Y. 
 
 694, 51 N. E. 1091 520 
 
 Hall V. Holland House Co., 9 
 
 Misc. 245, 30 Supp. 263 684 
 
 Hall V. Holland House Co., 12 
 
 Misc. 55, 33 Supp. 50 928 
 
 Hall V. Lag, 27 Misc. 602, 59 
 
 Supp. 638 333 
 
 Hall ads. Manufacturers' Nat. 
 
 B'k, 60 Hun 466, 15 Supp. 
 
 208, aff'd 129 N. Y. 663, 30 
 
 N. E. 65 473 
 
 Hall ads. Nash, 11 Misc. 468, 32 
 
 Supp. 901 409 
 
 Hall ads. Snow Church & Co., 
 
 19 Misc. 655, 44 Supp. 427 . . 449 
 518, 531 
 Hall ads. People ex rel. Troy 
 
 Gas Co., 143 A. D. 756, 128 
 
 Supp. 361, aff'd 203 N. Y. 312, 
 
 96 N. E. 933 774, 783 
 
TABLE OF CASES 
 
 xlvii 
 
 References are to pages. 
 
 Ball V. Grant Construction Co. 
 ads. Portland Co., 121 A. D. 
 
 779, 106 Supp. 649 836, 841 
 
 881, 883, 886 
 
 Hall V. Grant Construction Co. 
 ads. Portland Co., 123 A. B. 
 495, 108 Supp. 821 886 
 
 Hall Signal Co. ads. Nash, 90 
 
 • Hun , 354, 35 Supp. 940 414 
 
 Hallenborg v. Greene, 66 A. D. 
 590, 73 Supp. 403 929 
 
 Hallett V. Metropolitan Messen- 
 ger Co., 69 A. D. 258, 74 Supp. 
 639 212, 217, 221, 243 
 
 Halpin v. Mutual Brewing Co., 
 20 A. D. 583, 47 Supp. 412.. 395 
 
 407 
 
 Halsey v. Jewett Dramatic Co., 
 190 N. Y. 231, 83 N. E. 25.. 887 
 
 Halstead, Matter of, 42 A. D. 101, 
 58 Supp. 898 826 
 
 Hamilton v. Accessory Transit 
 Co., 26 Barb. 46 927 
 
 Hamilton v. Gibson, 145 A. D. 
 825, 130 Supp. 684 413 
 
 Hamilton ads. Vail, 85 N. Y. 
 
 453 264, 266 
 
 Hamilton Bank Note & Engrav- 
 ing Co. ads. Camacho, 2 A. 
 D. 369, 37 Supp. 725, dism'd 
 158 N. Y. 663, 52 N. E. 1123. . 432 
 
 Hamilton Pork Co., Matter of, 
 1 A. D. 375, 37 Supp. 310 480 
 
 Hamilton Trust Co. v. Clemes, 
 163 N. Y. 423, 57 N. E. 614 
 
 273, 297, 303 
 
 Hamerschlag v. Duryea, 58 A. D. 
 288, 68 Supp. 1061, aflf'd 172 
 N. Y. 622, 65 N. E. 1117 62 
 
 Hamlin ads. Sodus Bay & Corn- 
 ing R. E. Co., 24 Hun 390 92 
 
 Hammersehlag ads. Jenkins, 38 
 A. D. 209, 56 Supp. 534 327 
 
 Hammerstein ads. Metropolitan 
 Opera Co., 162 A. D. 691, 147 
 Supp. 532 457, 499 
 
 Hammond v. National Life Assn., 
 58 A. D. 453, 69 Supp. 585, 
 dism'd 168 N. Y. 262, 61 N. E. 
 244 • 894 
 
 Hammond Typewriter Co. ads. 
 Hannahs, 158 A. D. 620, 143 
 Supp. .939 121 
 
 Hampton v. Branchville E. E. 
 Co. ads. Sizer, 57 A. D. 390, 
 68 Supp. 232 906 
 
 Hanan ads. Sinnott, 214 N. Y. 
 454, 108 N. E. 858 894, 916 
 
 Hanauer v. Bradstreet's Collec- 
 tion Bureau, 95 Misc. 211, 158 
 Supp. 918 312 
 
 Hand ads. Hoboken Beef Co., 104 
 A. D. 390, 93 Supp. 384 384 
 
 Handy v. Draper, 89 N. Y. 334 
 
 226, 234 
 
 Hanfield ads. Hudson River & 
 Wash. Co. Midland R. R. Co., 
 36 A. D. 605, 55 Supp. 877.101, 367 
 
 Hank v. Consumers' Park Brew- 
 ing Co., 150 A. D. 582, 135 
 Supp. 900, app. dism'd 211 N. 
 Y. 578, 105 N. E. 1086 448 
 
 Hanking ads. People ex rel. N. Y. 
 Central & H. R. R. R. Co., 152 
 A. D. 488, 137 Supp. 365 737 
 
 Hanmore ads. Pier, 86 N. Y. 95 
 
 397, 399 
 
 Hanna v. Lyon, 179 N. Y. 107, 71 
 N. E. 778 409 
 
 Hannahs v. Hammond Type- 
 writer Co., 158 A. D. 620, 143 
 Supp. 939 121 
 
 Hanover Ins. Co. v. Germania 
 Ins. Co., 46 Hun 308, dism'd 
 109 N. Y. 663, 17 N. E. 868. . 663 
 
 Hanover Nat. B'k v. American 
 Dock Co., 75 Hun 55, 26 Supp. 
 1055, aflf'd 148 N. Y. 612, 43 
 N. E. 72 359 
 
 Hansan v. American Security & 
 Trust Co., 159 A. D. 801, 144 
 Supp. 839 912 
 
 Hapgoods V. Crawford, 125 A. D. 
 856, 110 Supp. 122 510 
 
 Hapgoods V. Lusoh, No. 1, 123 A. 
 D. 23, 107 Supp. 331 81 
 
 Harbeson Textile Co. ads. 
 Abbott, 162 A. D. 405, 147 
 Supp. 1031 333, 350 
 
 Harburgh v. Middlesex Securities 
 Co., 110 A. D. 633, 91 Supp. 
 350 546 
 
 Hard ads. Knickerbocker Trust 
 Go., 67 A. D. 463, 73 Supp. 
 979 . ; 155 
 
 Harden ads. Hargraves Mills, 25 
 Misc. 665, 56 Supp. 937 822 
 
 Harding ads. Royal Trust Co., 
 155 A. D. 104, 140 Supp. 9 932 
 
 Hardman v. Sage, 124 N. Y. 25, 
 26 N. E. 354 225, 229, 233 
 
 Hardt ads. Matthews, 79 A. D. 
 570, 80 Supp. 462 377 
 
 Hargraves Mills v. Harden, 25 
 Misc. 665, 56 Supp. 937 822 
 
 Harlan & HoUingsworth Co., 
 People ex rel. v. Campbell, 139 
 N. Y. 68, 34 N. E. 753 844 
 
 Harmon v. Vanderbilt Hotel Co., 
 79 Hun 392, 29 Supp. 783, 
 aff'd 143 N. Y. 665, 39 N. E. 
 20 530 
 
xlviii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Hanns Co. v. Michel Brewing 
 Co.. 176 A. D. 235, 162 Supp. 
 
 1071 503 
 
 Harpending v. ilunson, 91 N. Y. 
 
 651 290, 327 
 
 Harper v. Smith, 93 A. D. 608, 87 
 
 Supp. 516 179 
 
 Harriman National Banlc v. 
 Palmer, 93 ilise. 431, 15S 
 
 Supp. Ill 81 
 
 Harrington Parkvilla Sites ads. 
 Mahar, 204 N. Y. 231, 38 L. R. 
 A. (N. S.) 210, 97 N. E. 587.. 880 
 Harris ads. Drucklieb, 209 N. Y. 
 
 211, 102 N. E. 599 10, 144 
 
 190, 325 
 Harris ads. Littman, 157 A. D. 
 
 909, 142 Supp. 341 183 
 
 Harris Mfg. Co. ads. Childs, 104 
 
 N. Y. 477, 11 N. E. 50 912 
 
 Harris Press Co. v. Demerest 
 Pattern Co., 47 Misc. 624, 94 
 
 Supp. 462 889 
 
 Harris v. Thompson, 15 Barb. 
 
 62 487, 488 
 
 Harris v. Wells, 57 Misc. 172, 108 
 Supp. 1078, aff'd 126 A. D. 911, 
 
 110 Supp. 1131 : 9'4 
 
 Harrison ads. Buckley, 10 Misc. 
 
 683, 31 Supp. 999 932 
 
 Harrison ads. Farnum, 167 A. D. 
 704, 152 Supp. 835, aff'd 218 
 
 N. Y. 672, 113 N. E. 1055 250 
 
 Harrison ads. Troy Waist Mfg. 
 
 Co., 73 Hun 528, 26 Supp. 109 486 
 Harrison v. Union Trust Co., 144 
 
 N. Y. 326, 39 N. E. 353 277 
 
 Harrison v. Vermont Manga- 
 nese Co., 1 Misc. 402, 20 Supp. 
 
 894 7 
 
 Hart ads. Lands, 131 A. D. 6, 115 
 
 Supp. 337 '. ■ 324 
 
 Hart V. Odgensburg & Lake 
 Champlain E. R. Co., 89 Hun 
 
 319, 35 Supp. 566 193, 324 
 
 Hart V. Sickles, 45 Misc. 174, 91 
 
 Supp. 897 90 
 
 Hart ads. Varnum, 119 N. Y. 
 
 101, 23 N. E. 183 481 
 
 Hartfleld ads. Freeman, 172 A. D; 
 
 164, 158 Supp. 350 2 
 
 Hartley v. Pioneer Iron Works, 
 
 181 N. Y. 73, 73 N. E. 576'. 158 
 
 Harvard Co. v. Wicht, 99 A. D. 
 
 507, 91 Supp. 48 886 
 
 Harvey Steel Co. ads. Davies, 6 
 
 A. D. 166, 39 Supp. 791 363 
 
 Har\'ey v. West-Side El. R. Co., 
 
 13 Hun 392 358 
 
 Hasbrouck ads. People, 57 Misc. 
 130, 107 Supp. 257 622 
 
 Hastings Card & Paper Co. ads. 
 Linderman, 38 A. D. 488, 56 
 
 Supp. 456 ■ 
 
 Hastings, Matter of, 56 Jlisc. io, 
 
 106 Supp. 938 
 
 Hastings, Matter of, 120 A. D. 
 
 756, 105 Supp. 834 
 
 Hastings, Matter of, 128 A. T>. 
 
 516, 112 Supp. 800; aff'd 194 
 
 N. Y. 546, 87 N. E. 1120.. 53, 
 
 Hastings ads. DeWitt, 69 N. Y. 
 
 578 
 
 Hastings v. Drew, 76 N. Y'. 9 . . 74, 
 Hastings v. Tousey, 121 A. D. 
 
 815, 106 Supp. 639 623, 
 
 Hatch ads. Boynton, 48 N. Y. 
 
 225 
 
 Hatch ads. Brewster, 122 N. Y. 
 
 349, 25 N. E. 505 
 
 Hatch Lithographic Co. ads. 
 Throop, 58 Hun 149, 11 Supp. 
 532, aff'd 125 N. Y. 530, 26 
 
 N. E. 742 326, 
 
 Hatch, People ejf rel. v. Reardon, 
 184 N. Y. 431, 8 L.R.A.(N.S.) 
 
 314, 77 N. E. 970 
 
 Haule V. Consumers' Park Brew- 
 ing Co., 150 A. D. 582, 135 
 Supp. 900; app. dism'd 211 N. 
 
 Y. 578, 105 N. E. 1086 
 
 Havana City Ry. Co. v. Ceballos, 
 
 25 Misc. 660, 56 Supp. 360 
 
 Havana C. R. R. Co. v. Knicker- 
 bocker T. Co., 198 N. Y. 422, 
 L.R.A.1915B, 720, 92 N. E. 
 
 12 
 
 Hawes v. Oakland, 104 U. S. 450 
 Hawley ads. Hitch, 132 N. Y. 212, 
 
 30 N. E. 401 
 
 Hawley v. Kountze, 6 A. D. 217, 
 
 39 Supp. 897 
 
 Hawley Box Co., People ex rel. 
 v. Barker, 23 A. D. 532, 48 
 
 Supp. 557 
 
 Hay V. Brookfield, 160 A. D. 277, 
 
 145 Supp. 543 
 
 Hazard v. Wight, 201 N. Y. 399, 
 
 94 N. E. 855 
 
 Hearst, People ex rel. v. Ramapo 
 Water Co., 51 A. D. 145, 64 
 
 Supp. 532 
 
 Heath v. Barmore, 50 N. Y. 302. 
 
 Hebden ads. Sheridan, 165 A. D. 
 
 853, 856, 151 Supp. 346, rev'd 
 
 216N. Y. 728 
 
 Hecht ads. Lewin, 179 A. D. 106, 
 
 166 Supp. 116 
 
 Heckscher v. Edenborn, 203 N. Y. 
 210, 96 N. E. 441 6, 146, 
 
 488 
 
 186 
 
 53 
 
 54 
 
 390 
 137 
 
 625 
 
 224 
 
 6 
 
 487 
 809 
 
 528 
 884 
 
 507 
 198 
 
 570 
 
 470 
 
 754 
 
 415 
 
 14 
 
 559 
 594 
 
 822 
 152 
 147 
 
TABL'E OF CASES 
 
 xlix 
 
 References are to pages. 
 
 Heckscher ads. Manufacturers' 
 
 Commercial Co., 144 A. D. 601, 
 
 129 Supp. 556, aflf'd 203 N. Y. 
 
 560 240 
 
 Hedstrom ads. Morgan, 164 N. Y. 
 
 224, 58N. E. 26 385 
 
 Heenan v. New York, West Shore 
 
 & Buffalo Ey.'Co., 34 Hun 602 
 
 534, 535 
 Hegewisch v. Silver, 140 N". Y. 
 
 414, 35 N. E. 658 636 
 
 Hegmsfeld, Inc., ads. German- 
 American Button Co., 170 A. D. 
 
 416, 156 Supp. 223 
 
 Held Co., The S. J., ads. Timo- 
 
 let, 17 Misc. 556, 40 Supp. 692 . 306 
 Hellman v. Forty-second St. R. 
 
 R. Co., 74 Hun 529, 26 Supp. 
 
 553, aff'd 148 N. Y. 727, 42 
 
 N. E. 723 116 
 
 Helmsley & Co., Ltd. v. Bunean 
 
 Co., Inc., 98 Misc. 338, 164 
 
 Supp. 282 395, 412 
 
 Helvetia Swiss Fire Ins. Co. ads. 
 
 Tierney, 138 A. D. 469, 122 
 
 Supp. 869 893 
 
 Hend'rickson v. Callan, 147 A. D. 
 
 480, 131 Supp. 839, aff'd 210 
 
 N. Y. 543, 103 N. E. 1124.. .. 
 Heney v. Chartered Co., 71 Misc. 
 
 237, 128 Supp. 436 '. . . 892 
 
 Hennessy v. Muhleman, 40 A. D. 
 
 175, 57 Supp. 854 335 
 
 Henry v. Brooklyn Heights R. R. 
 
 Co., 43 Misc. 589, 89 Supp. 525 533 
 Henry v. Babcock & Wilcox Co., 
 
 196 N. Y. 302, 89 N. E. 942.. 
 
 850, 851 
 Henry ads. Mason, 83 Hun 546, 
 
 31 Supp. 1068, aff'd, 152 N. Y. 
 
 530, 46 N. E. 837 422, 684 
 
 Hepner v. Maybury, 23 Misc. 262, 
 
 51 Supp. 170 5 
 
 Hepworth v. Union Ferry Co., 62 
 
 Hun 257, 16 Supp. 692; app. 
 
 dism'd 131 N. Y. 645, 30 N. E. 
 
 867 554 
 
 Herbert v. Duryea, 34 A. D. 478, 
 
 54 Supp. 311, aff'd 164 N. Y. 
 
 595 100, 223 
 
 Herbert v. Mentena Diamond Co., 
 
 81 A. D. 212, 80 Supp. 717. .. . 917 
 Herkimer County Light & Power 
 
 Co. V. Johnson, 37 A. D. 257, 
 
 55 Supp. 924 737 
 
 Herkimer Mfg. Co. ads. Smell, 2 
 
 N. Y. 330 84 
 
 Heroy v. Kerr, 41 N. Y. (2 
 
 Keyes) 582 376 
 
 Herries v. Piatt, 21 Hun 132. .. . 253 
 
 iii 
 
 480 
 681 
 
 91 
 
 520 
 
 542 
 
 59 
 
 Herries v. Wesley, 13 Hun 492. . 246 
 Herring v. N. Y., Lake Erie & 
 
 Western R. R. Co., 105 N. Y. 
 
 340, 12 N. E. 763 286, 
 
 634, 641, 
 Herrman v. Tapley Co., 64 Misc. 
 
 466, 118 Supp. 803 542 
 
 Hersee ads. Union Hotel Co., 79 
 
 N. Y. 454 
 
 Herter Brothers, ads. Hall, 83 
 
 Hun 19, 31 Supp. 692 
 
 Herter Bros. ads. Hall, 90 Hun 
 
 280, 35 Supp. 769, aff'd 157 N. 
 
 Y. 694, 57 N. E. 1091 
 
 Herzig v. Washington Fire Ins. 
 
 Co., 144 A. D. 174, 128 Supp. 
 
 988 
 
 Herzog ads. Matter of Latimer, 
 
 75 A. D. 522, 78 Supp. 314.... 
 Hess V. Sloane, 66 A. D. 522, 73 
 
 Supp. 313, aff'd 173 N. Y. 616, 
 
 66 N. E. 1110 458 
 
 Hesse ads. Archer, 164 A. D. 493, 
 
 150 Supp. 296 109, 195 
 
 Hey V. Dolphin, 92 Hun 230, 36 
 
 Supp.-627 143 
 
 H. & H. Mfg. Co. ads. Katz, 109 
 
 A. D. 49, 95 Supp. 663, aff'd 
 
 183 N. Y. 578, 76 N. E. 1098, . 
 
 47, 314 
 Higginbotham v. International 
 
 Trust Co., 141 A. D. 535, 126 
 
 Supp. 366 94 
 
 Higgins V. Tefft, 4 A. D. 62, 38 
 
 Supp. 716 338, 427, 638 
 
 Higgins V. Worthington, 90 Hun 
 
 436, 35 Supp. 875 484 
 
 Higgins Soap Co. ads. Charles S. 
 
 Higgins Co., 144 N. Y. 462, 27 
 
 L.R.A. 42, 39 N. E. 49 
 
 Hill V. Lewichawanick Co., 8 Hun 
 
 459, aff'd 71 N. Y. 593 
 
 Hill ads. Robbins, Inc., 81 Misc. 
 
 441, 142 Supp. 637, aff'd 166 A. 
 
 D. 899, 150 Supp. 1074 321 
 
 Hill ads. Sands, 55 N. Y. 18. . . . 478 
 Hill V. Spencer, 61 N. Y. 274. , . . 249 
 Hill v. Troegerlith Title Co., 168 
 
 A. D. 639, 154 Supp. 635 369 
 
 Hill V. Weidenger, 110 A. D. 683, 
 
 97 Supp. 473 386 
 
 Hill Dryer Co. ads. Keystone 
 
 Publishing Co., 55 Misc. 625, 
 
 105 Supp. 894 825 
 
 Hiller v. Burlington & Missouri 
 
 River R. R. Co., 170 N. Y. 223 
 
 538, 912 
 Hiller ads. Eclipse Silk Mfg. Co., 
 145 A. D. 568, 129 Supp. 879 
 
 835, 885 
 
 35 
 
 166 
 
TABLE OF CASES- 
 
 Beferences are to pages. 
 
 Hiller ads. Eclipse Silk Mfg. Co., 
 
 145 A. D. 568, 129 Supp. 879. . 835 
 Hillside Coal & Iron Co. ads. 
 
 Voshefskey, 21 A. D. 168, 47 
 
 Supp. 386 504, 917 
 
 Hinckley v. Sehwarzschild & Sulz- 
 berger Co., 107 A. D. 470, 95 
 
 Supp. 357, app. dism'd 193 N. 
 
 Y. 599, 86 N. E. 1125 18, 9^8 
 
 Hinds V. Fishkill & Matteawan 
 
 Gas. Co., 96 A. D. 14, 88 Supp. 
 
 954 194 
 
 Hinds, Noble & Bldredge, Matter 
 
 of, 172 A. D. 140, 158 Supp. 
 
 249 38 
 
 Hinds, Noble & Eldredge ads. 
 
 Gideon, 172 A. D. 478, 158 
 
 Supp. 774 142 
 
 Hirsch v. Twelfth Ward Bank, 
 
 66 Misc. 290, 122 Supp. 1076. . 268 
 Hirschfeld v. Bopp, 5 A. D. 202, 
 
 39 Supp. 24 237 
 
 Hirschfeld v. Bopp, 145 N. Y. 84, 
 
 39 N. E. 817 212 
 
 Hirschfield v. Kalischer, 81 Hun 
 
 606, 30 Supp. 1027 -. . . 684 
 
 Hiscock V. Lacy, 9 Misc. 578, 30 
 
 Supp. 860 161, 202 
 
 Hitch V. Hawley, 132 N. Y. 212, 
 
 30 N. E. 401 570 
 
 Hitchcock, Matter of, 149 A. D. 
 
 S24, 134 Supp. 174 186 
 
 Hitchcock, Matter of, 157 A. D. 
 
 328, 142 Supp. 247 52 
 
 Ititchcock ads. Muck, 212 N. Y. 
 
 283, 106 N. E. 75 4.53, 824 
 
 Hitchcock Mfg. Co., Matter of, 1 
 
 A. D. 164, 37 Supp. 834 628 
 
 Hoag ads. Chandler, 2 Hun 613, 
 
 aff'd 63 N. Y. 624 306 
 
 Hoagland v. Bell, 36 Barb, 57. . 62, 230 
 Hoagland ads. Ziegler, 52 Hun 
 
 385, 5 Supp. 305 356 
 
 Hoboken Beef Co. v. Hand, 104 
 
 A. D. 390, 93 Supp. 384 389 
 
 Hocking Valley Ry. Co. ads. Pom- 
 
 eroy, 218 N. Y. 530, 113 N. E. 
 
 504 902, 904 
 
 Hoevel ads. Hoevel Sandblast Ma- 
 chine Co., 167 A. D. 548, 153 
 
 Supp. 35 879 
 
 Hoevel Sandblast Machine Co. v. 
 
 Hoevel, 167 A. D. 548, 153 
 
 35 879 
 
 Hoffman v. Van Nostrand, 42 
 
 Barb. 174 347 
 
 Hoffman House v. Jordan, 28 
 
 Misc. 193, 58 Supp. 1091 520 
 
 Hoffman House ads. Thalmenn, 28 
 
 Misc. 140, 58 Supp. 227 626 
 
 122 
 152 
 
 397 
 
 853 
 
 928 
 
 719 
 278 
 
 Hoffman Steam Coal Co. ads. 
 
 Cumberland Coal & Iron Co., 
 
 30 Barb. 159 875 
 
 Hoge ads. Redmond, 3 Hun 171 . . 927 
 Holbert ads. Tallapoosa Lumber 
 
 Co., 5 A. D. 559, 39 Supp. 432 842 
 Holbrook v. New Jersey Zine Co., 
 
 57 N. Y. 616 114, 
 
 124, 125, 127, 
 Holbrook ads. Sherwood, 178 A. 
 
 D. 462, 165 Supp. 514.... 396, 
 Hollaman v. El Areo Mines Co., 
 
 137 A. D. 862, 122 Supp. 852. . 
 
 Holland House Co. ads. Hall, 9 
 Misc. 245, 30 Supp. 263 684 
 
 Holland House Co. ads. Hall, 12 
 Misc. 55, 33 Supp. 50 
 
 Holland Trust Co. ads. People, 
 139 A. D. 353, 123 Supp. 935. . 
 
 Holland Trust Co. v. Sutherland, 
 177 N. Y. 327, 69 N. E. 647... 
 
 Holland Trust Co. v. Thomson- 
 Houston Co., 9 A. D. 473, 41 
 Supp. 457, aff'd 153 N. Y. 645, 
 47 N. E. 1108 284 
 
 Holland Trust Co. v. Thomson- 
 Houston El. Co., 170 N. Y. 68, 
 62 N. E. 1090 276 
 
 Hollingsheed v. Woodward, 107 
 N. Y. 96, 13 N. E. 621 231 
 
 Hollister ads. Bailey, 26 N. Y. 
 112 208 
 
 Holm V. Claus Lipsius Brewing 
 Co., 21 A. D. 204, 47 Supp. 518 458 
 
 Holmes v. Camp, 219 N. Y. 359, 
 
 114 N. E. 841 196, 201 
 
 873, 877, 893 
 
 Holmes v. St. Joseph Lead Co., 
 84 Misc. 278, 147 Supp. 104; 
 aff'd 163 A. D. 885, 147 Supp. 
 
 1117 158, 333 
 
 336, 406, 504 
 
 Holmes v. Willard, 125 N. Y.75, 
 11 L.R.A. 170, 25 N. E. 1083.. 
 
 458, 460 
 
 Holmes, Booth & Haydens, ads. 
 Willard, 142 N. Y. 492, 3/ N. 
 
 E. 480 511 
 
 Holmes & Griggs Mfg. Co. v. 
 
 Holmes & WesseU Metal Co., 
 127 N. Y. 252, 27 N. E. 831 . . 459 
 493, 600 
 
 Holmes Publishing Co. ads. Whit- 
 man, 33 Misc. 47, 68 Supp. 
 167 410 
 
 Holmes & WesseU Metal Co. ads. 
 Holmes v. Griggs Mfg. Co., 127 
 
 N. Y. 252, 27 N. E. 831 459' 
 
 493, 600 
 
TABLE OF CASES 
 
 Eeferences are to pages. 
 
 nolsinger v. Wood, — Misc. — 
 (1918), N. Y. L. J., March 23, 
 p. 2008 221, 214 
 
 Uolstein-Frlesian ads. People, 41 
 Hun 439 7 
 
 Home Bank v. Brewster & Co., 
 17 Misc. 442, 41 Supp. 203 470 
 
 Homo Bank v. Brewster & Co., 
 15 A. D. 338, 44 Supp. 54 490 
 
 Home Book Co., Matter of, 60 
 Misc. 560, 112 Supp. 1012 660 
 
 Home Insurance Co. ads. People, 
 92 N. Y. 328 710,721, 725 
 
 Home Provident Safety Fund 
 Assn., Matter of, 129 N. Y. 288, 
 29 N. E. 323 593 
 
 Hooper v. Auburn Water-Works 
 Co., 37 Hun 568, aff'd 109 N. Y. 
 635, 16 N. E. 681 63 
 
 Hoosick River Pulp Co. ads. Cen- 
 ter, 43 Misc. 247, 88 Supp. 
 548 540 
 
 Hope Mutual Life Ins. Co. v. 
 Perkins, 38 N. Y. 404 449 
 
 Hopper V. Sage, 112 N. Y. 530, 
 20 N. E. 350 165 
 
 H. R. & P. C. R. R. Co., People 
 ex rel. v. Tax Commrs., 215 
 N. Y. 507, L.R.A. 1916B, 1222, 
 109 N. E. 569 769, 771 
 
 Horn Silver Mining Co. ads. Peo- 
 ple, 105 N. Y. 76, 11 N. E. 155. 
 
 699, 700, 840, 855 
 
 Horner & Co. v. Lawrence, 86 
 Misc. 95, 149 Supp. 82, aff'd 166 
 A. D. 920, 150 Supp. 1105 603 
 
 Horowitz V. Broads Manufactur- 
 ing Co., 54 Misc. 569, 104 Supp. 
 988 5 
 
 Horrocks Desk Co. v. Fangel, 71 
 A. D. 313, 75 Supp. 967 384 
 
 Horsley ads. Dittenfass, 171 A. 
 D. 507, 157 Supp. 632 154 
 
 Horton v. McNeil Co., 155 A. D. 
 322, 140 Supp. 357 928, 929 
 
 Horton v. McNally Co., 155 A. D. 
 322, 140 Supp. 357 678 
 
 Horton v. McNally Co., 168 A. D. 
 248, 153 Supp. 429 656 
 
 Horton & Co. ads. Wamsley, 12 
 A. D. 312, 42 Supp. 767, aff'd 
 153 N. Y. 687, 48 N. E. 1105. . 894 
 
 Hotchkiss ads. Philadelphia & 
 Reading Coal & Iron Co., 82 
 N. Y. 471 389 
 
 Hotel Gotham Co. ads. Montague, 
 149 A. D. 687, 133 Supp. 9'54. 356 
 
 Hotel Gotham Co. ads. Montague, 
 208 N. Y. 442, 102 N.B. 513. . 485 
 
 374 
 895 
 
 848 
 
 852 
 
 229 
 
 Housatonic R. R. Co. ads. Farm- 
 ers' L. & T. Co., 152 N. Y. 251 
 354, 
 House V. Cooper, 30 Barb. 157.. 
 House of Childhood, Inc., ads. 
 
 Gordon, 83 Misc. 74, 144 Supp. 
 
 685 
 
 Hovey v. De Long Hook & Eye 
 
 Co., 211 N. Y. 420, 105 N. E. 
 
 667 
 
 Hovey v. Eiswald, 139 A. D. 433, 
 
 124 Supp. 130 854 
 
 Hovey v. Proctor & Gamble Co., 
 
 139 A. D. 521, 124 Supp. 128. . 
 Howard ads. Assets Realization 
 
 Co., 211 N. Y. 430, 105 N. E. 
 
 680 
 
 Howard ads. Shellington, 53 N. 
 
 Y. 371 228 
 
 Howarth v. Angle, 162 N. Y. 179, 
 
 47 L.R.A. 725, 56 N. E. 489. . . . 
 
 210, 244, 930 
 Howell V. Chicago & Northwest- 
 ern Ry. Co., 51 Barb. 378 108 
 
 Howell, Matter of, v. German 
 
 Theatre, 64 Misc. 110, 117 
 
 Supp. -1124 632 
 
 Howe V. Deuel, 43 Barb. 504. .. . 427 
 Howe ads. Garrison, 17 N. Y. 
 
 458 241. 
 
 Howe V. N. Y., New Haven & 
 
 Hartford R. R. Co., 142 A. D. 
 
 451, 126 Supp. 1090 892 
 
 Howell V. Chicago & North- 
 western Rv. Co., 51 Barb. 378 
 107, 
 Hoyt V. Thompson, 5 N. Y. 320 
 47, 49, 376, 
 Hoyt V. Thompson's Ex., 19 N. 
 
 Y. 207 328, 
 
 Hubbard v. Syenite-Trap Rock 
 
 Co., 178 A. D. 531, 156 Supp. 
 
 486 
 
 Hubbell V. Syracuse Iron Works, 
 
 42 Hun 182 683 
 
 Hubert Apartment Assn., People 
 
 ex rel. v. Kelsey, 110 A. D. 617, 
 ■ 96 Supp. 745; aff'd 184 N. Y. 
 
 573, 77 N. E. 1194 716, 
 
 Hudson & Manhattan R. R. Co. 
 
 V. State of New York, 180 A. 
 
 D. 81, 167 Supp. 515 813 
 
 H. R. & P. R. E. Co., People ex 
 
 rel. V. Tax Commissioners, 21'5 
 
 N. Y. 507, L.R.A. 1916B 1222, 
 
 109N. E. 569 709 
 
 Hudson River Telephone Co. ads. 
 
 Austen, 73 Hun 96, 25 Supp. 
 
 916 ■ 757 
 
 392 
 
 892 
 875 
 
 329 
 
 374 
 
 728 
 
lii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Hudson River & Washington 
 County Midland E. R. Co. v. 
 Hanfield, 36 A. D. 605, 55 
 Supp. 877 101, 367 
 
 Hudson River Water Power Co. 
 ads. Maloney, 133 A. D. 499, 
 17 Supp. 601 434 
 
 Hughes V. Vermont Copper Min- 
 ing Co., 72 N. Y. 207 200 
 
 Hugo ads. People ex rel. United 
 Verde Copper Co., 181 A. D. 
 149 829 
 
 Huie V. AUen, 87 Hun 516, 34 
 Supp. 577, aff'd 156 N. Y. 658, 
 50 N. E. 118 375 
 
 Humboldt Publishing Co. ads. 
 A. D. Farmer & Son Co., 27 
 Misc. 314, 57 Supp. 821 508 
 
 Hunter, People ex rel. v. 
 National Park Bank, 122 A. D. 
 635, 107 Supp. 369 58 
 
 Hunter ads. Strout Farm Agency, 
 85 Misc. 476, 148 Supp. 924 
 
 839, 886 
 
 Hunting v. Blun, 69 Hun 562, 23 
 Supp. 965, aff'd 143 N. Y. 511, 
 38 N. E. 716 ^1, 252 
 
 Huntington v. Attrill, 118 N. Y. 
 
 365, 23 N. E. 544 102, 103, 398 
 
 Huntington v. Sheehan, 206 X. 
 
 Y. 486, 100 X. E. 41 838 
 
 Huntington ads. Stewardt, 124 
 N. Y. 127, 26 X. E. 289.. 140, 151 
 
 Hurd V. N. Y. & C. Steam Laun- 
 dry Co., 167 N. Y. 89, 60 N. E. 
 327 466 
 
 Hurlburt v. Carter, 21 Barb. 221. 470 
 
 Hutchinson & Curtiss, 45 Misc. 
 484, 92 Supp. 70 162, 163, 936 
 
 Hutchinson v. Simpson, 92 A. 
 D. 382, 87 Supp. 369 85 
 
 Hutchinson v. Stadler, 85 A. D. 
 
 424, 83 Supp. 509 936 
 
 Hutchinson v. Young, 80 A. D. 
 
 246, 80 Supp. 259 400 
 
 Hutchinson v. Young, 93 A. D. 
 407, 87 Supp. 678 150 
 
 Hutkoff ads. Novelty Tufting 
 Machine Co., 56 Misc. 522, 107 
 Supp. 88 841 
 
 Hyatt V. Allen, 56 N. Y. 553 . 158, 170 
 
 Hyde V. Equitable Life Ass. 
 Soc, 61 Misc. 518, 116 Supp. 
 219 326 
 
 Hyde v. Lynde, 4 N. Y. 387 640 
 
 Hyde ads. People ex rel. N. Y., 
 Westchester & Boston Ry. Co., 
 143 A. D. 321, 128 Siipp. 115, 
 aff'd 204 N. Y. 666, 97 N. E. 
 1114 784 
 
 Hyde & Sons ads. Fraker, »127 
 A. D. 620, 11 Supp. 757 63 
 
 720 
 
 593 
 
 37 
 
 167 
 
 102 
 
 Hyde & Sons, People ex rel. y. 
 Miller, 90 A. D. 599, 85 Supp. 
 522; aff'd 179 N. Y. 564, 71 N. 
 E. 1136 729 
 
 Hydraulic Co., People ex rel. v. 
 Roberts, 30 A. D. 180, 57 Supp. 
 771; aff'd 157 N. Y. 676, 51 N. 
 1093 
 
 Hydrostatic Paper Co. ads. 
 People, 88 X. Y. 623 
 
 Hygeia Water Ice Co. v. New- 
 York Hygeia Ice Co., Ltd., 140 
 N. Y. 94, 135 N. E. 417 
 
 Hyman v. New York Urban Real 
 Estate Co., 79 Misc. 439, 140 
 Supp. 138 138 
 
 Ideal Gas & Electric Fixtures Co. 
 ads. Tepfer, 58 Misc. 396, 109 
 Supp. 664 162, 165, 
 
 Illinois Central R. R. Co. ads. 
 Van Alen, 41 N. Y. (2 Keyes) 
 673 
 
 Illinois & St. Louis Bridge Co. 
 ads. Christensen, 52 Hun 478, 
 5 Supp. 925 282 
 
 Imbrie v. Schlicht Combustion 
 Process Co., 130 A. D. 675, 
 115 Supp. 333 378 
 
 Imperial Engine Co. ads. Rose, 
 127 A. D. 885, 112 Supp. 8, 
 aff'd 195 N. Y. 515, 88 N. E. 
 
 1130 
 
 Imperial Turkish, etc., Co. ads. 
 
 Condouris, 3 Misc. 66, 22 Supp. 
 
 695 
 
 Importers' & Traders' Nat. B'k 
 
 ads. Welch, 122 N. Y. 177, 25 
 
 X. E. 269 266, 267, 323, 
 
 Improved B. P. 0. Elks ads. B. 
 
 P. 0. Elks, 205 X. Y. 459, L. R. 
 
 A. 1915B 1074, 98 N. E. 756. . 
 Independent Brothers of Xiesh- 
 
 weiser ads. Fisher, 84 Misc. 
 
 382, 147 Supp. 390 676 
 
 India Rubber Co. v. Katz, 65 A. 
 
 D. 349, 72 Supp. 658 .923 
 
 Industrial & G>eneral Trust v. 
 
 Tod, 170 N. Y. 233, 63 N. E. 
 
 285 616, 
 
 Industrial & General Trust, Ltd., 
 
 v. Tod, 180 N. Y. 215, 73 N. E. 
 
 7 286, 
 
 Industrial Information Co. ads. 
 
 Porter, 5 Misc. 262, 25 Supp. 
 
 328 
 
 Ingersoll ads. Camp, 86 N. Y. 
 
 433 
 
 Ingraham v. National Salt Co., 
 
 72 A. D. 582, 74 Supp. 388, 
 
 aff'd 179 N. Y. 556, 71 N. E. 
 
 1131 499 
 
 523 
 
 US 
 
 592 
 
 G 
 
 617 
 
 615 
 
 625 
 
 152 
 
TABLE OF CASES 
 
 liii 
 
 Eefcrences are to pages. 
 
 Institute of Educational Travel, 
 Inc., ads. Moore, 89 Misc. 369, 
 151 Supp. 929 55 
 
 Insurance itesa v. Montauk Wire 
 Co., 103 A. D. 472, 93 Supp. 
 134 193^ 197 
 
 Interborough Rapid Transit Co. 
 ads. City of New York, 53 
 Misc. 126, 104 Supp. 157 456 
 
 Interborough Rapid Transit Co. 
 ads. People, 169 A. D. 32, 154 
 Supp. 627 4«5 
 
 Interborough Rapid Transit Co., 
 People ex rel. v. Tax Commis- 
 sioners, 126 A. D. 610, 110 
 ■Supp. 577, aff'd 195 N. Y. 
 618 771 
 
 Interborough Rapid Transit Co., 
 People ex rel. v. Williams, 200 
 X. Y. 93, 93 N. E. 505 715 
 
 Interior Conduit & Insulation 
 Co. ads. Merz, 87 Hun 430, 34 
 Supp. 215, app. dism'd 151 N. 
 Y. 638, 45 N. E. 1133 160 
 
 Interior Conduit & Insulation Co. 
 ads. Merz, 20 Misc. 378, 46 
 Supp. 243 291 
 
 International Elevating Co., 
 People ex rel. v. Roberts, 116 
 A. D. 30, 101 Supp. 184., 862, 865 
 
 International Life Ins. Soc. ads. 
 Martine, 53 N. Y. 339 822 
 
 International Paper Co. ads. 
 Turnbloom, — Misc. — (1918) 
 N. Y. L. J. Feb. 7, Sp. T. 
 N. Y. Co 161 
 
 International Power Co. ads. 
 American & British Mfg. Co., 
 173 A. D. 319, 159 Supp. 582. . 931 
 
 International Registry Co. ads. 
 Dentz Lithographing Co., 32 
 Misc. 687, 66 Supp. 540... 365, 531 
 
 International Hubber Clothing 
 Co. ads. Clokey, 28 Misc. 326, 
 59 Supp. 878 89V 
 
 International Society v. Dennis, 
 76 A. D. 327, 78 Supp. 497.. 889 
 
 International Text Book Co. v. 
 Connelly, 67 Misc. 49, 124 
 Supp. 603, aff'd 140 A. D. 939, 
 125 Supp. 1125 835,839, 881 
 
 International Text Book Co. v. 
 Tone, 220 N. Y. 313, 115 X. E. 
 914 868, 878 
 
 International Trust Co. ads. Hig- 
 ginbotham, 141 A. D. 535, 126 
 Supp. 366 •:.. . 94 
 
 Interocean Forwarding Co. v. Mc- 
 Cormick & Co., — Misc. — , X. 
 Y. L. J. Dec. 28, 1917 891 
 
 Iowa Central Ry. Co. ads. Dow, 
 144 N. Y. 426, 39 N. E. 398.. 284 
 
 Ireland ads. Douglass, 73 N. Y. 
 
 100 103, 222 
 
 Irish Paper Corporation v. 
 
 White, 91 Misc. 261, 154 Supp. 
 
 778 216 
 
 Iron National Bank ads. Matter 
 
 of Tuttle, 170 N. Y. 9, 62 N. 
 
 E. 761 51 
 
 Irvine v. N. Y. Edison Co., 207 
 
 N. Y. 425, 101 N. E. 358. .603, 604 
 Irving Nat. B'k v. Moynihan, 84 
 
 A. D. 301, 82 Supp. 705 344 
 
 Irwin ads. Pame, 16 Hun 390. . . 505 
 Iselin ads. Knickerbocker Trust 
 
 Co., 185 N. Y. 54, 77 N. E. 
 
 877 245 
 
 Isham v. Buckingham, 49 N. Y. 
 
 216 130 
 
 laman ads. Steele, 164 A. D. 146, 
 
 149 Supp. 488 412 
 
 Ithaca, City of v. Ithaca St. R. 
 
 Co., 145 A. D. 675, 130 Supp. 
 
 359; aff'd 204 N. Y. 626 715 
 
 Ithaca Gas Light Co. v. Treman, 
 
 30 Hun 212 415 
 
 Ithaca St. R. Co. ads. City of 
 
 Ithaca; aff'd 204 N. Y. 626.. 715 
 Ives ads. Kimball, 30 Hun 568 .. . 684 
 
 Jackson v. Schuylkill Silk Mills, 
 
 92 Misc. 442, 156 Supp. 219 
 
 913, 914 
 Jacobs v. Blair, 157 A. D. 601, 
 
 142 Supp. 897 933 
 
 Jacobs ads. Lovell, 150 N. Y. 84, 
 
 44 N. E. 792 141 
 
 Jacobs V. Mexican Sugar Refining 
 
 Co., Ltd., 104 A. D. 242, 93 
 
 Supp. 776 200, 933 
 
 Jacobs V. Mexican Sugar Refin- 
 ing Co., Ltd., No. 1, 112 A. D. 
 
 655,' 98 Supp. 541 541 
 
 Jacobs V. Mexican Sugar Refining 
 
 Co., Ltd., No. 2, 112 A. D. 657, 
 
 98 Supp. 542 542 
 
 Jacobs V. Jamestown Mantel Co., 
 
 211 N. Y. 154, 105 N. E. 210. . 508 
 Jacobs V. Moneton R. I. Co., 212 
 
 N. Y. 48, 105 N. E. 968 456 
 
 467, 503 
 Jacobson . v. Brooklyn Lumber 
 
 Co., 184 N. Y. 152, 76 N. E. 
 
 1075 207, 420 
 
 Jacobus V. Diamond Soda Water 
 
 Mfg. Co., 94 A. D. 366, 88 
 
 Supp. 302 174, 403 
 
 Jacobus V. Jamestown Mantel 
 
 Co., 211 N. Y. 154, 105 N. E. 
 
 210 375, 509 
 
 Jacoby ads. Loaners' Bank, 10 
 
 Hun 143 530 
 
 Jagger Iron- \^o. v. Walker, 76 
 
 N. Y. 521 235 
 
Uv 
 
 TABLE OF CASES 
 
 Eeferences are to pages. 
 
 Jahn V. Reynolds, 115 A. D. 647, 
 101 Supp. 293 
 
 Jamaica W. S. Co., People ex rel. 
 V. Tax Commissioners, 19f6 N. 
 
 Y. 39, 89 N. E. 581 776, 
 
 77!l, 780, 782, 
 794, 796, 799, 
 
 Jamaica Water Supply Co., Peo- 
 ple ex rel. v. State Board of 
 Tax Commrs., 197 X. Y. 33, 90 
 X. E. 112 
 
 James v. Cowing, 82 N. Y. 449 . . 
 
 278, 
 
 James ads. Craig, 71 A. D. 238, 
 75 Supp. 813 : . . . 
 
 James ads. Craig, 89 A. D. 541, 
 
 85 Supp. 583, aflf'd 181 X". Y. 
 538, 573 X. E. 1121 
 
 James ads. People ex rel. Haber- 
 mau, 5 A. D. 412, 39 Supp. 313 
 554, 
 
 James ads. Lyon, 97 A. D. 385, 
 90 Supp. 28, aff'd 181 N. Y. 
 512, 73 N. E. 1126 
 
 Jamestown Mantel Co. ads. Ja- 
 cobus, 211 N. Y. 154, 105 N. 
 E. 210 375, 508, 
 
 Janeway v. Burn ,91 A. D. 165, 
 
 86 Supp. 628, aff'd 180 N. Y. 
 560, 73 N. E. 1125 
 
 Janvin ads. Rowell, 69 Hun 305, 
 23 Supp. 481, app. dism'd 138 
 X. Y. 656, 34 N. E. 514 
 
 Janvin ads. Rowell, 151 N. Y. 60, 
 45 N. E. 398 
 
 Jarvis v. Manhattan Beach Co., 
 53 Hun 362, 6 Supp. 703 
 
 Jarvis v. Manhattan Beach Co., 
 75 Hun 100, 2G Supp. 1061, 
 aff'd 148 X. Y. 652, 31 L.R.A. 
 776, 43 N. E. 68 
 
 Jauncey ads. Marine & Fire Ins. 
 Bank of Ga., 1 Barb. 486 
 
 Jefferson County Bank v. Town- 
 ley, 159 X. Y. 490, 54 N. E. 
 74 
 
 Jeffery v. Selwyn, 220 X. Y. 77, 
 115 N. E. 275 234, 
 
 Jemison v. Citizens' Savings 
 Bank; 44 Hun 412, 122 >f. Y. 
 135, 9 L.R.A. 708, 25 N. E. 
 264 
 
 Jenkins v. Auburn City Ry. Co., 
 27 A. D. 553, 50 Supp. 852... 
 
 Jenkins v. John Good Cordage & 
 Machine Co., 56 A. D. 573, 68 
 Supp; 239, aff'd 168 N. Y. 679, 
 61 X". E. 1130 
 
 Jenkins v. Hammerschley, 38 A. 
 D. 209, 56 Supp. 534..- 
 
 151 
 
 778 
 791 
 801 
 
 780 
 279 
 
 403 
 
 651 
 
 553 
 
 443 
 
 509 
 
 577 
 
 242 
 
 225 
 
 521 
 
 115 
 
 883 
 
 486 
 241 
 
 893 
 
 491 
 
 287 
 
 327 
 
 Jenkins v. John Good Cordage & 
 Machine Co., 56 A. D. 573, 
 68 Supp. 239, aff'd 168 N. Y. 
 
 679, 61 N. E. 1130 257 
 
 Jenkins ads. Petrolia Mfg. Co., 
 29 A. D. 403, 51 Supp. 1028 . . 
 
 376, 457 
 Jennison v. Citizens' Savings 
 B'k of Jefferson, 122 N. Y. 135, 
 
 9 L.R.A.708, 25 N. E. 264 
 
 450, 460 
 Jermain v. Lake Shore & Michi- 
 gan Southern Ry. Co., 91 X. Y. 
 
 483 165, 167 
 
 Jermyn v. Searing, 170 A. D. 707, 
 
 156 Supp. 718 256 
 
 Jerome Park Co., People ex rel. 
 V. Roberts, 41 A. D. 21, 58 
 Supp. 254; aff'd 169 N. Y. 
 
 582 727 
 
 Jersey City Contracting Co. ads. 
 Simpson, 165 N. Y. 193, 55 
 
 L.R.A. 796, 58 N. E. 896 134 
 
 Jersey City Improvement Co. ads. 
 Simpson, 165 N. Y. 193, 55 
 
 L.R.A. 796, 58 N. E. 896 134 
 
 Jersey Novelty Co. ads. Rosen- 
 blatt, 45 Misc. 59, 90 Supp. 816 873 
 Jetter ads. Shalek, 171 A. D. 364, 
 
 155 Supp. 975 407 
 
 Jewelers' Pub. Co., People ex rel. 
 V. Roberts, 155 N. Y. 1, 49 N. 
 
 E. 248 700, 730 
 
 Jewett Dramatic Co. ads. Hal- 
 sey, 190 N. Y. 231, 83 N. E. 
 
 25 887 
 
 Jewett ads. X. Y. & Western 
 Union Telegraph Co.; 115 X. Y. 
 
 166, 21 N. E. 1036 676 
 
 Jewett ads. -Woodruff, 115 N. Y. 
 
 267, 22 N. E. 156 076 
 
 Jewish World Pub. Co. ads. 
 Kram, 176 A. D. 840, 163 Supp. 
 
 261 916, 919 
 
 Joaehimson ads. Mount Vernon 
 Rattan Co., 119 A. D. 71, 103 
 
 Supp. 1045 471 
 
 John Good Cordage & Machine 
 Co. ads. Jenkins, 56 A. D. 573, 
 68 Supp. 239, aff'd 168 N. Y. 
 
 679, 61 N. E. 1130 257, 287 
 
 John Kress Brewing Co. ads. Ak- 
 berg, 65 Hun 182, 19 Supp. 
 656, aff'd 138 N. Y. 648, 34 N. 
 
 E. 513 521 
 
 John Stephenson Co. ads. Tend- 
 rup, 51 Hun 462, 3 Supp.. 882, 
 aff'd 121 N. Y. 681, 24 N. E. 
 
 1097 522 
 
 Johnson v. Albany & Susquehan- 
 na R. R. Co., 54 N. Y. 416 88 
 
/?ABLE OF CASES 
 
 Iv 
 
 References are to ^ages. 
 
 Johnson ads. Beardsley, 121 N. Y. 
 
 224, 24 N. E. 380 299, 304 538 
 
 Johnson ads. Herkimer County- 
 Light & Power Co., 37 A. D. 
 
 257, 56 Supp. 924 737 
 
 Johnson v. Morgan, 68 N. Y. 494 282 
 Johnson, People ex rel. v. N. Y. 
 
 Produce Exchange, 149 U. S. 
 
 401, 44 N. E. 84 502 
 
 Johnson ads. Parsons, 28 A. D. 
 
 1, 50 Supp. 780 387 
 
 Johnson v. K9,yner, 25 A. D. 598, 
 
 49 Supp. 959 651 
 
 Johnson v. Underhill, 52 N. Y. 
 
 203 131, 136, 246 
 
 Johnson v. Victoria Chief Cop- 
 per Mining & Smelting Co., 65 
 
 Misc. 332, 119 Supp. 639 875 
 
 Johnson v. Victoria Chief Copper 
 
 Mining & Smelting Co., 150 A. 
 
 D. 653, 135 Supp. 1070 875 
 
 Johnson ads. People ex rel. West 
 
 Shore R. R. Co., 29 A. D. 75, 
 
 61 Supp. 388 763 
 
 Johnson Mfg. Co. ads. Copeland, 
 
 47 Hun 235 324 
 
 Johnston ads. German— American 
 
 Cofifee Co., No. 1, 168 A. D. 31, 
 
 153 Supp. 866 342 
 
 Johnston v. Mutual Reserve Life 
 
 Ins. Co., 43 Misc. 251, 87 Supp. 
 
 438 902 
 
 Jones V. Barlow, 62 N. Y. 202 . . 390 
 Jones V. Blun, 145 N. Y. 333, 39 
 
 N. E. 954 488, 636 
 
 Jones V. Burr Bros., Inc., 142 A. 
 
 D. 640, 127 Supp. 478 874 
 
 Jones V. Butler, 146 N. Y. 55, 41 
 
 N. E. 633 225 
 
 Jones V. Dane, 24 Barb. 395 551 
 
 Jones ads. Dudensing, 27 Misc. 
 
 eg', 58 Supp. 178 474 
 
 Jones V. Gould, 209 N. Y. 419, 
 
 103 N. E. 720 11 
 
 Jones V. Keeler, 40 Misc. 221, 81 
 
 Supp. 648 523, 842 
 
 Jones ads. Market & Fulton Nat. 
 
 B'k, 7 Misc. 207, 27 Supp. 677, 
 
 afiF'd 90 Hun 605, 35 Siipp. 1109 264 
 Jones V. Nassau Suburban Home 
 
 Co., 53 Misc. 63, 103 Supp. 1089 298 
 Jones, Matter of, v. Standard 
 
 Plunger Elevator Co., 167 A. D. 
 
 178, 152 Supp. 910, aff'd 215 N. 
 
 Y. 692, 109 N. E. 1080 542 
 
 Jones V. Terre Haute & Richmond 
 
 R. R. Co., 29 Barb. 353 164 
 
 Jones V. Terre Haute & Richmond 
 
 R. R. Co., 57 N. Y. 196 ... . 167, 170 
 Jones ads. Van Vleet, 75 Hun 
 
 340, 26 Supp. 1082 224 
 
 754 
 
 224 
 
 Jones ads. White, Corbin & Co., 
 
 79 A. D. 373, 79 Supp. 583.... 
 Jones ada. White, Corbin & Co., 
 
 167 N. Y. 158, 60 N. E. 422... 
 Jones V. Woodin, 164 A. D. 79, 
 
 149 Supp. 377 932 
 
 Jordan ads. Hoffman House, 28 
 
 Misc. 193, 58 Supp. 1091 520 
 
 Joseph V. Raff, 82 A. D. 47, 81 
 
 Supp. 546, aff'd 176 N. Y. 611, 
 
 68 N. E. 1118 488 
 
 Josephy v. Kansas City, Mexico & 
 
 Orient Ry., 180 A. D. 313, 167 
 
 Supp. 273 915 ■ 
 
 Journal Co. ads. Batterman, 28 
 
 Misc. 375, 59' Supp. 965 511 
 
 Journal Publishing Club, Matter 
 
 of, 30 Misc. 326, 63 Supp. 465 50 
 Judson ads. Atkins, 33 A. D. 42, 
 
 53 Supp. 504 279 
 
 Judson ads. Veeder, 91 N. Y. 374 243 
 
 510 
 
 395 
 
 386 
 
 Kaighn ads. Kemble Mills, Inc., 
 131 A. D. 63, 115 Supp. 809.. 
 
 Kaiser Bros. Co. ads. Flaum, 66 
 Misc. 586, 122 Supp. 100, aff'd 
 144 A. D. 897, 129 Supp. 1122 
 
 Kaldenberg ads. Manhattan Co., 
 165 N. Y. 11, 58 N. E. 790.353, 
 
 Kaldenberg Mfg. Co., g,ds. Wil- 
 liam Wicke Co., 21 Misc. 79, 46 
 Supp. 937 524 
 
 Kalischer ads. Hirschfield, 81 
 Hun 606, 30 Supp. 1027 684 
 
 Kansas City, Mexico & Orient Ry. 
 ads. Josephy, 180 A. D. 313, 
 167 Supp. 273 915 
 
 Kansas City Smelting Co., Matter 
 of, 13 A. D. 50, 43 Supp. 51 . . 
 
 Kansas v. Susquehanna Coal Co., 
 172 A. D. 873, 158 Supp. 1021. 
 
 693 
 
 911 
 913 
 Katz V. The H. & H. Mfg. Co., 183 
 
 N. Y. 578, 76N. E. 1098....47, 314 
 Katz ads. India Rubber Co., 65 
 
 A. D. 349, 72 Supp. 658 923 
 
 Kavanaugh v. Commonwealth 
 
 Trust Co., 103 A. D. 95, 92 
 
 Supp. 543 419 
 
 Kavanamgh v. Commonwealth 
 
 Trust Co., 181 N. Y. 121, 73 
 
 N. E. 562 <. ... .418 
 
 Kearns v. N. Y. & College Point 
 
 Ferry Co., 19 Misc. 19, 42 Supp. 
 
 771 320 
 
 Keating v. American Brewing Co., 
 
 62 A. D. 501, 71 Supp. 95 462 
 
 Keeler ads. Jones, 40 Misc. 221, 
 
 81 Supp. 648 523, 842 
 
 Keeler v. Seeman, 47 Misc. 292, 
 
 95 Supp. 920 148 
 
Ivi 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Keene ads. McNamara, 49 Misc. 
 452, 98 Supp. 860 882 
 
 Keeney ada. Dykman, 154 N. Y. 
 483, 48 N. E. 894 406 
 
 ICeeseville, Ausable Chasm & Lake 
 Champlain E. R. Co. ads. Peo- 
 ple ex rel. Callanan, 106 A. D. 
 349, 94 Supp. 555 51 
 
 Keeseville, Ausable Chasm & 
 Lake Champlain R. R. Co., 
 People ex rel. v. Powers, 145 
 
 A. D. 693, 130 Supp. 529 50 
 
 .Keller, Matter of, 116 A. D. 58, 
 
 101 Supp. 133 299 
 
 Keller ads. Tapley Co., 133 A. D. 
 54, 117 Supp. 817 347 
 
 Kellogg ads. Owen, 56 Hun 455, 
 10 Supp. 75 685 
 
 Kellogg Co., People ex rel. v. Rob- 
 erts, 30 A. D. 150, 51 Supp. 
 686 839 
 
 Kellogg & Sons Co. ads. Utica 
 Trust & Deposit Co., 126 A. D. 
 176, 110 Supp. 1048 71 
 
 Kellner v. Shelley, 178 A. D. 657, 
 165 Supp. 833 849 
 
 Kellogg ads. Avon Springs Sani- 
 tarium Co., 125 A. D. 51, 109 
 Supp. 153, aflF'd 194 N. Y. 567, 
 88 N. E. 1132 125 
 
 Kellogg Structural Co. ads. Cor- 
 coran, 179 A. -D. 396, 166 Supp. 
 269 802 
 
 Kelly V. Forty-second St. .R. Co., 
 37 A. D. 500, 55 Supp. 1096.. 271 
 
 Kelly V. Mariposa Land & Mining 
 Co., 4 Hun 632 175 
 
 Kelsey ads. People ex rel. Con- 
 solidated Ginseng Co. of Amer- 
 ica, 105 A. D. 175, 93 Supp. 
 369, aff'd 182 N. Y. 526, 74 N 
 E. 1123 869 
 
 Kelsey ads. People ex rel. Edison 
 Light cfc Power Installation Co., 
 101 A. D. 205, 91 Supp. 709.. 865 
 
 Kelsey ads. People ex rel. Four- 
 teenth St. Realty Co., 110 A. 
 D. 797, 97 Supp. 197; aff'd 184 
 N. Y. 572, 77 N. E. 1194.... 720 
 
 Kelsey ads. People ex rel. Hubert 
 Apartment Assn., 110 A. D. 
 617, 96 Supp. 745; aff'd 184 N. 
 Y. 573, 77 X. E. 1194.... 716, 728 
 
 Kelsey ads. People ex rel. Knick- 
 erbocker Trust Co., 114 A. D. 
 319, 99 Supp. 852 802 
 
 Kelsey ads. People ex rel. Metro- 
 politan Securities Co., 101 A. 
 D. 24S, 91 Supp. 711 732 
 
 Kelsey v. Pfandler Process Fer- 
 mentation Co., 41 Hun 20 55 
 
 Kelsey v. Pfandler Process Co., 
 45 Hun 10 587 
 
 Kelsey v. Sargent, 40 Hun 150. 199 
 
 320, o-i.") 
 
 Kelsey ads. People ex rel. Spen- 
 cerian Pen Co., 105 A. D. 132, 
 93 Supp. 971, aff'd 185 N. Y. 
 546, 77 N. E. 1195 866, 869 
 
 Kelsey ads. People ex rel. Stein - 
 way & Sons, 108 A. D. 138, 96 
 Supp. 42 701, 717 
 
 Kelsey ads. People ex rel. Vend- 
 ing Co., 101 A. D. 325, 91 Supp. 
 955, aff'd 181 N. Y. 512, 73 N. 
 E. 1130 727, 869 
 
 Kemble Mills, Inc. v. Kaighn, 131 
 A. D. 63, 115 Supp. 809 510 
 
 Kemp V. Able Realty Maintenance 
 Co., Inc., 174 A. D. 242, 160 
 Supp. 1055 477 
 
 Kennedy, Matter of, 37 Misc. 317, 
 75 Supp. 457 54 
 
 Kennedy, Matter of, 75 A. D. 188, 
 77 Supp. 714 00 
 
 Kennedy ads. Kountze, 147 N. Y. 
 124, 29 L. R, A. 360, 41 N. E. 
 414 441 
 
 Kennedy v. Thompson, 97 A. D. 
 296, 89 Supp. 963 153 
 
 Kenney v. South Shore Natural 
 Gas & F. Co., 201 N. Y. 89, 94 
 N. E. 606 668 
 
 Keno ads. People ex rel. N. Y. 
 Central & H. R. R. R. Co., 61 
 
 Misc. 34.5. 114 Supp. 1094 775 
 
 791, 808 
 
 Kent ads. Cleveland, Lorain & 
 Wheeling Ry. Co., 87 Hun 329, 
 34 Supp. 427 937 
 
 Kent V. Quicksilver Mining Co., 
 78N. Y. 159..47, 67, 69, 70, 9'9, 407 
 
 Keppler, People ex rel. v. Barker, 
 22 A. D, 120, 47 Supp. 958, 
 aff'd 155 N. Y. 661, 49 N. E. 
 1102 753, 704 
 
 Kerr ads. Heroy, 41 N. Y. (2 
 Keyes) 582 376 
 
 Kersch v. Pettier & Stymus 
 Mfg. & Improvement Co., 82 
 A. D. 230, 81 Supp. 782 375 
 
 Kessel v. Empire Tinware Co., 
 178 A. D. 176, 164 Supp. 1033 101 
 
 Ketchum v. Alexander, 168 A. 
 D. 38, 153 Supp. 864 142 
 
 Keuke Navigation Co. ads. 
 Crooked Lake Navigation Co., 
 37 Hun 9 377 
 
 Keystone Gas Co., People ex rel. 
 V. Martin, 48 Hun 193 S.j!) 
 
 Keystone Publishing Co. v. Hill 
 Dryer Co., 55 Misc. 625, 105 • 
 Supp. 894 825 
 
TABLE OF CASES 
 
 Ivii 
 
 References are to pages. 
 
 Kharas v. Collier, Inc., 171 A. 
 
 D. 388, 157 Supp. 410 510, 
 
 Kiel V. Arthe Co. ads. Gaul, 199 
 N". Y. 472, 92 N. E. 1069 ...... 
 
 Kieley v. Barron & Cooke H. & 
 P. Co.-, 87 A. D. 317, 84 Supp. 
 
 306 
 
 Kiendl v. Cochrane, 153 A. D. 
 
 802, 138 Supp. 630 
 
 Kilbv ads. Whitaker, 55 Misc. 
 
 337, 106 Supp. 511 327, 
 
 500, 501, 
 Kille ads. Kirkland, 99 N. Y. 
 
 390, 20 N. E. 36 
 
 Kimball ads. Carr, 153 A. D. 
 
 82.5. 139 Supp. 253, aff'd 215 
 
 N. Y. 634, 109 X. E. 1068 
 
 Kimball v. Ives, 30 Hun 568 
 
 Kimbark ads. Sands, 27 N. Y. 
 
 147 
 
 Kincaid v. Dwindle, 59 X. Y. 
 
 548 229, 596, 
 
 Kinderhook & Hudson Ey. ads. 
 
 Haines, 33 A. D. 154, 53 Supp. 
 
 368 '..179, 304, 
 
 Kinetophone Corp. ads. Grosliut, 
 
 93 Misc. 558, 157 Supp. 512. . . 
 King, Matter of, 115 A. D. '751, 
 
 100 Supp. 1089, aff'd 188 N. Y. 
 
 626, 81 N. E. 1167 
 
 King \. Duncan, 38 Hun 461 
 
 King ads. Winters, 51 A. D. 80, 
 
 64 Supp. 496 
 
 Kingman v. Rome, Watertown & 
 
 Ogdensburg R. R. Co., 30 Hun 
 
 73 
 
 Kings Co. El. R. R. Co. ads. Wil- 
 son, 114 N. Y. 487, 21 N. E. 
 
 1015 
 
 Kingsley v. First Ifat. B'k of 
 
 Bath, 31 Hun 329 
 
 Kinman v. Forty-second St., M. 
 
 & St. N. Ave. Ry. Co., 140 N. Y. 
 
 183, 35 N. E. 498 117, 
 
 Kinman v. Sullivan County Club, 
 
 26 A. D. 213, 50 Supp. 95.. .. 
 Kinney v. Reid Ice Cream Co., 57 
 
 A. D. 206, 68 Supp. 325 
 
 Kinsman v. Fisk, 83 Hun 494, 31 
 
 Supp. 1045 
 
 Kinsman v. Fisk, 37 A. D. 443, 
 
 56 Supp. 33 
 
 Kirkland v. Kille, 99 N. Y. 390, 
 
 2 N. E. 36 
 
 Kissel V. Chicago & Eastern Illi- 
 nois R. R. Co., 126 A. D. 852, 
 
 HI Supp. 937 
 
 Klein v. East River Electric Light 
 
 Co., 33 Misc. 590, 67 Supp. 
 
 922 
 
 511 
 893 
 
 628 
 395 
 
 331 
 
 824 
 
 513 
 
 356 
 684 
 
 75 
 
 632 
 
 618 
 
 534 
 
 128 
 224 
 
 685 
 
 196 
 
 364 
 
 482 
 
 121 
 
 134 
 
 883 
 
 156 
 
 632 
 
 513 
 
 192 
 
 270 
 
 612 
 
 836 
 
 863 
 
 57 
 
 220 
 
 220 
 
 338 
 
 Klein v. East River Electric Light 
 Co., 37 Misc. 490, 75 Supp. 
 
 1000 604, 
 
 Klein ads. Selkin, 50 Misc. 194, 
 
 100 Supp. 449 605 
 
 Kline Bros. & Co. v. German 
 Union Fire Ins. Co., 147 A. D. 
 
 790, 132 Supp. 181, aff'd 210 
 
 N. Y. 534, 103 N.- E. 1125 
 
 Klipstein & Co., People ex rel. v. 
 
 Roberts, 36 A. D. 597, 55 Supp. 
 
 950, aff'd 167 N. Y. 617, 60 N. 
 
 E. 1117 
 
 Klauder-Weldon Dyeing Machine 
 
 Co. ads. People ex rel. Giles, 
 
 179 A. D. 149, 167 Supp. 429. 
 Knapp ads. Powers, 71 Hun 371, 
 
 25 Supp. 19 217, 
 
 Knapp ads. Powers, 85 Hun 38, 
 
 32 Supp. 622, aff'd 158 N. Y. 
 
 733, 53 N. E. 1131 
 
 Kneeland ads. Metropolitan El. 
 
 Ry. Co., 120 N. Y. 134, 8 L. R. 
 
 A. 253, 24 N. E. 381 
 
 Knickerbocker v. Conger, 110 A. 
 
 D. 125, 97 Supp. 127 204 
 
 Knickerbocker v. Groton Bridge 
 
 & Mfg. Co., Ill A. D. 145, 97 
 
 Supp. 595 571, 587, 588 
 
 Knickerbocker Fire Ins. Co. v. 
 
 Coleman, 44 Hun 410 747 
 
 Knickerbocker Fire Ins. Co., 
 
 People ex rel. v. Coleman, 107 
 
 N. Y. 541, 14 N. E. 431.. 743, 
 Knickerbocker Ice Co. ads. 
 
 People, 99 N. Y. 181, 1 N. E. 
 
 669 
 
 Knickerbocker Life Ins. Co. ads. 
 
 Cole, 23 Hun 255, dism'd 91 N. 
 
 Y. 255 
 
 Knickerbocker Life Ins. Co. ads. 
 
 People, 106 N. Y. 619, 13 N. E. 
 
 447 
 
 Knickerbocker Press, People ex 
 
 rel. V. Barker, 87 Hun 341, 
 
 34 Supp. 269; aff'd 147 N. Y. 
 
 715, 42 N. E. 725 
 
 Knickerbocker Safe Deposit Co., 
 
 People ex rel. v. Wells, 181 N. 
 
 Y. 245, 73 N. E. 961 
 
 Knickerboclcer Trust Co. ads. Col- 
 umbia Gas & Electric Co., 152 
 
 A. D. 5, 136 Supp. 840 274 
 
 Knickerbocker Trust Co. v. Hard, 
 
 67 A. D. 463, 73 Supp. 979 .... 
 Knickerbocker T. Co. ads. Havana 
 
 C. R. R. Co., 198 N. Y. 422, 
 
 L. R. A. 1915B, 720, 92 N. E. 
 
 12 
 
 Knickerbocker Trust Co. v. Iselin, 
 
 185 N. Y. 54, 77 N. E. 877.... 
 
 747 
 
 699 
 
 89 
 
 595 
 
 756 
 
 750 
 
 155 
 
 507 
 
 245 
 
Iviii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Knickerbocker Trust Co.. Peotile 
 ex rel. v. Kelsey, 114 A. D. 319, 
 99 Supp. 852 802 
 
 Knickerbocker Trust Co. v. One- 
 onta, C. & R. S. Ry. Co., 201 
 N. Y. 379, 94 N. E. 871 656 
 
 Knickerbocker Trust Co. v. Pack- 
 ard, 109 A. D. 421, 96 Supp. 
 412 526 
 
 Knickerbocker Trust Co. ads. Peo- 
 ple, 127 A. D. 215, 111 Supp. 
 2, app. dism'd 193 N. Y. 649, 
 86 N. E. 1129 660 
 
 Knickerbocker Trust Co. ads. Peo- 
 ple ex rel Ringer, 38 Misc. 446, 
 77 Supp. 1000 850, 852 
 
 Eaiickerbocker Trust Co. v. Tarry- 
 town, White Plains & Mama- 
 roneck Ry. Co., 133 A. D. 285, 
 117 Supp. 871 580, 623> 656 
 
 Knight ads; People ex rel. Di- 
 gester Co., 67 A. D. 365, 73 
 Supp. 743 698 
 
 Kright ads. People ex rel. New 
 York Central, etc., R. R. Co., 
 173 N. y. 25S, 65 N^. E. 1102. 718 
 722, 728, 729, 865 
 
 Knight ads. People ex rel. North 
 American Trust Co., 96 A. D. 
 120, 89 Supp. 72 727 
 
 Knight ads. People ex rel. Pav- 
 ing Co., 99 A. D. 62, 90 Supp. 
 537 698, 711 
 
 Knight ads. People ex rel. Stude- 
 baker Co., 66 A. D. 150, 72 
 Supp. 929 734 
 
 Knight ads. Thompson, 74 A. D. 
 316, 77 Supp. 599 208 
 
 Knight ads. People ex rel. U. S. 
 A. P. P. Co., 174 N. Y. 475, 63 
 L. R. A. 87, 67 N. E. 65. .691, 714 
 
 Knopf ads. Batchelder & Lincoln 
 Co., 54 A. D. 329', 66 Supp. 513. 835 
 
 Knowles v. Duffy, 40 Hun 485 . . 220 
 
 Knowlton v. Congress & Empire 
 Spring Co., 57 N. Y. 518 ..... . 83 
 
 Knowlton ads. Mayo, 134 N. Y. 
 250, 31 N. E. 985 147 
 
 Knox V. Baldwin, 80 N. Y. 610. 233 
 
 389, 392 
 
 Knox V. Eden Musee American 
 Co., 17 A. b. 365, 45 Supp. 
 255 118, 156 
 
 Knox V. Eden Musee Co., 148 N. 
 Y. 441, 31 L. R. A. 779, 42 N. 
 E. 988 115, 117, 127, 128 
 
 Knox ads. Metzger, 77 Misc. 271, 
 136 Supp. 681, aff'd 153 A. D. 
 911, 137 Supp. 1129, amd. 154 
 A. D. 953, 139 Supp. 1133... 326 
 
 934 
 
 489 
 
 489' 
 
 Knox Terpezone Co. ads. Travis, 
 215 N. Y. 259, L. R. A. 1916A, 
 542, 109 N. E. 250 896, 
 
 Koehl V. Leibinger & Oehm Brew- 
 ing Co., 24 Misc. 208, 52 Supp. 
 982 
 
 Koehl V. Leibinger & Oehm Brew- 
 ing Co., 26 A. D. 573, 50 Supp. 
 568 
 
 Koehl & Co., People ex rel. v. 
 Morgan, 96 A. D. 110, 88 
 Supp. 1066; aff'd 183 N. Y. 
 574, 76 N. E. 1105 725 
 
 Koehler & Co. v. Reinheimer, 26 
 A. D. 1, 49 Supp. 755 458 
 
 Koehler & Co. ads. Turk, 144 A. 
 D. 53, 128 Supp. 809 542 
 
 Koenig ads. People ex rel. 
 Browne, 133 A. D. 756, 118 
 Supp. 136 23 
 
 Kohlmetz v. Calkins, 16 A. D. 
 518, 44 Supp. 1031 95 
 
 Kolb V. Mortimer, 135 A. D. 542, 
 120 Supp. 543 419 
 
 Koster v. Pain, 41 A. D. 443, 58 
 Supp. 865 84 
 
 Kountze ads. Hawley, 6 A. D. 
 217, 39 Supp. 897 470 
 
 Kountze v. Kennedy, 147 N. Y. 
 124, 29 L. R. A. 360, 41 N. E. 
 414 
 
 Kreft v. Griffon Co., 82 A. D. 29, 
 81 Supp. 438 
 
 Krakowskl v. White Sulphur 
 Springs, Inc., 174 A. D. 440, 
 161 Supp. 193 
 
 Kram v. Jewish World Pub. Co., 
 176 A. D. 840, 163 Supp. 261. 
 
 441 
 
 896 
 
 901 
 
 916 
 919 
 
 Kramer v. Buffalo Union Fur- 
 nace Co., 132 A. D. 415, 116 
 Supp. 1101, app. dism'd 196 N. 
 Y. 532, 89' N. E. 1103 436 
 
 Kranenberg ads. Giebler Mfg. 
 Co., 102 A. D. 471, 92 Supp. 
 843 377 
 
 Krauser v. Ruckel, 17 Hun 463. 246 
 
 250 
 
 Kreitner v. Burgweger, 174 A. D. 
 48, 160 Supp. 256 320 
 
 Kreusler ads. Atlantic Construc- 
 tion Co., 40 A. D. 268, 57 Supp. 
 983 92, 529, 881 
 
 Kuney v. Amazon Ins. Co., 36 
 Hun 66 823 
 
 Kyle ads. Cayuga Lake R. R. Co., 
 64 N. Y. 185 91 
 
 Lacey ads. Excelsior Petroleum 
 Co., 63 N. Y. 422 452 
 
 Lacy ads. Hiscock, 9 Misc. 578, 
 30 Supp. 860 161, 202 
 
TABLE OF CASES 
 
 lix 
 
 References are to pages. 
 
 La Farge v. Excliange Fire Ins. 
 
 Co., 22 N. Y. 352 
 
 La Fayette Ins. Co. of Brook- 
 lyn V. Rogers, 30 Barb. 491 .. . 
 Laidler ads. Whitford, 94 N. Y. 
 
 145 
 
 Lake Geneva Ice Co. v. Selvage, 
 
 28 Misc. 581, 59 Supp. 544. .. . 
 Lake Mahopac Improvement Co. 
 ■ ads. Wilmersdoerffer, 18 Hun 
 
 387 
 
 Lake Shore & Michigan Southern 
 
 Ey. Co. ads. Boardman, 84 N. 
 
 Y. 157 70, 122, 161, 164, 
 
 168, 169, 207, 612, 
 Lake Shore & Michigan Southern 
 
 Ky. Co. ads. Jermain, 91 N. Y. 
 
 483 165, 
 
 Lake Shore National Bank v. 
 
 Butler Colliery Co., 51 Hun 63, 
 
 3 Supp. 771 
 
 Lake Superior Iron Co. v. Drexel, 
 
 90 N. Y. 87 
 
 Lambert v. Elmeudorf, 124 A. D. 
 
 758, 109 Supp. 574 '. 
 
 Lambie ads. Potts, 138 A. D. 144, 
 
 122 Supp. 935 
 
 Lamison Store-Service Co. ads. 
 
 Adams, 59 Hun 127, 13 Supp. 
 
 118 
 
 Lamon ads. First Nat. B'k of 
 
 Jersey City, 130 N. Y. 366, 29 
 
 N. E. 321 306,513, 
 
 Lampheer ads. Borough Bank, 
 
 154 A. D. 177, 138 Supp. 864. . 
 Lamphere v. Lang, 213 N. Y. 585, 
 
 108 N. E. 82 
 
 Lancaster v. Amsterdam. Improve- 
 ment Co., 140 N. Y. 576, 24 
 
 L. R. A. 322, 35 N. E. 964.824, 
 Lancaster ads. Chamb^s, 160 N. 
 
 Y. 342, 54 N. E. 707 
 
 Lancaster v. Spotswood, 41 Misc. 
 
 19, 83 Supp. 572 
 
 Landers v. Frank St. M. B. 
 
 Church, 114 N. Y. 626, 21 N. 
 
 E. 420 
 
 Landes v. Hart, 131 A. D. 6, 115 
 
 Supp. 337 
 
 Landon ads. The National Union 
 
 B'k of Watertown, 45 N. Y. 
 
 410 
 
 Lane v. Wheelvpright, 69 Hun 
 
 180, 23 Supp. 576, aff'd 143 
 
 N. y. 634,. 37 N. E. 826 
 
 Lang ads. Lamphere, 213 N. Y. 
 
 585, 108 N. E. 82 
 
 Lang v. Lutz, 180 N. Y. 254, 73 
 
 N. E. 24 211, 231, 237, 240, 
 
 Langdon, People ex rel. v. Feit-, 
 
 ner, 30 Misc. 646, 64 Supp. 
 
 26P 
 
 544 
 530 
 437 
 876 
 
 588 
 
 166 
 898 
 
 167 
 
 522 
 222 
 145 
 150 
 
 531 
 
 599 
 
 77 
 
 150 
 
 870 
 363 
 922 
 
 331 
 324 
 
 553 
 
 825 
 
 150 
 241 
 
 789 
 
 Lanning v. Trust Co. of America, 
 137 A. D. 722, 12^ Supp. 485. 359 
 
 L'Araldo Italiano Pub. Co. ads. 
 Palumbo, 150 A. D. 221, 134 
 Supp. 655 542 
 
 La Rue ads. Lister, 15 Barb. 323. 430 
 
 Lavy ads. Wood, 47 Hun 550, 
 dism'd 124 N. Y. 83, 26 N. E. 
 338 159, 169 
 
 Latham v. Boston, Hoosac Tunnel 
 & Western Ry. Co., 38 Hun 265. 551 
 
 Latimer, Matter of, v. Herzog " 
 Teleseme Co., 75 A. D. 522, 78 
 Supp. 314 59 
 
 Latimer v. Wonderland Amuse- 
 ment Co., 161 A. D. 554, 146 
 Supp. 779 ; .. 368 
 
 Latta ads. Mack, 178 N. Y. 525, 
 67 L. R. A. 126, 71 N. E. 97.. 
 
 Law ads. McClure, 161 N. Y. 78, 
 55 N. E. 388 
 
 Law ads. Smith, 21 N. Y. 296 . . 
 
 155 
 
 393 
 317 
 467 
 
 Lawrence ads. Hoover & Co., 86 
 
 Misc. 95, 149 Supp. 82, aff'd 
 
 166 A. D. 920, 150 Supp. 1105. 603 
 Lawrence v. McKelvey, 80 A. D. 
 
 514, 81 Supp. — 526 
 
 Lawrence v. Weber, 65 Misc. 603, 
 
 120 Supp. 289 •. 420 
 
 Lawshe v. Royal Baking Powder 
 
 Co., 54 Misc. 220, 104 Supp. 
 
 361 854 
 
 Lawyer v. Rosebrook, 48 Hun 
 
 453 230 
 
 Lavpyers' Ad. Co. v. Consolidated 
 
 Ry., L. & R. Co., 187 N. Y. 
 
 395, 80 N. E. 199 502 
 
 Lay ads. Hall, 27 Misc. 602, 59 
 
 Supp. 638 333 
 
 Layten ads. Osgood, 42 N. Y. 
 
 (3 Keyes) 521. . . .' . .162, 681, 682 
 Leach, People ex rel. v. Central 
 
 Fish Co., 117 A. D. 77, 101 
 
 Supp. 1108 51 
 
 Leach v. Weil, 129 A. D. 688, 114 
 
 Supp. 234 153 
 
 Leadbetter v. Leadbetter, 125 N. 
 
 Y. 290, 26 N. E. 265 286 
 
 Leary ads. Union Nat. B'k, 95 
 
 A. D. 381, 88 Supp. 652; aff'd 
 
 183 N. Y. 546, 76 N. E. 1111. 
 Leavitt ads. Curtis, 15 N. Y. 2 . . 
 
 467, 483 
 Leavitt ads. Leavitt, 15 N. Y. 2. 468 
 Ledewerke v. Capitelli, 92 Misc. 
 
 260, 155 Supp. 651 
 
 Lee Construction Co. ads. Friden- 
 
 berg, 27 Misc. 651, 58 Supp. 
 
 ggj gyg 
 
 Lefever v. Lefever, 30 N. Y. 27. 340 
 
 685 
 431 
 
 841 
 
Ix 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 he Fevre v. Matthews, 39 A. D. 
 232, 57 Supp. 128 932 
 
 Left V. Nachod, 64 Misc. 497, 119 
 Supp. 470 502 
 
 Lefferts ads. Sanborn, 58 N. Y. 
 
 179 215, 391 
 
 Legrand v. Manhattan Mercantile 
 Assn., 80 N. Y. 638 502 
 
 Lehigh Coal & Xavigation Co. v. 
 Central R. R. of N. J., 43 Hun 
 546 623 
 
 Lehigh & K. Y'. R. R. Co., People 
 ex rel. v. Sohmer, 217 X. Y. 
 443, 112 N. E. 181 719 
 
 Lehigh Salt Mining Co. ads. 
 Elgea, 169 N. Y. 29, 61 X. E. 
 992 , 136, 176 
 
 Lehigh Valley R. R. Co. ads. 
 Polley, 138 A. D. 6.^6. 122 
 Supp. 708, aff'd 200 N. Y. 585, 
 94 N. E. 1098 876 
 
 Lehigh Valley R. R. Co., People 
 ex rel. v. Sohmer, 84 Misc. 518, 
 147 Supp. 636, aff'd 169 A. D. 
 430, 154 Supp. 1053 804 
 
 Lehigh Valley R. R. Co., Matter 
 of, V. Sohmer, 174 A. D. 732, 
 161 Supp. 557, aflf'd 220 N. Y. 
 689, 115 N. E. 1057 785 
 
 Lehigh Valley R. R. Co., People 
 ex rel. The, v. Woodbury, 199 
 X. Y^ 167, 92 X. E. 217 794 
 
 Lehman, People ex rel. v. Consoli- 
 dated Fire Alarm Co., 142 A. 
 D. 753, 127 Supp. 348 58 
 
 Lehman-Clierley v. Bartlett, 135 
 
 A. D. 674, 120 Supp. 501, aff'd 
 
 202 X. Y. 524, 95 N. E. 1125. 442 
 
 Leibinger & Oehm Brewing Co. 
 
 ads. Koehl, 24 Misc. 298, 52 
 
 Supp. 982 489 
 
 Leibinger & Oehm Brewing Co. 
 ads. Koehl, 26 A. D. 573, 50 
 
 Supp. 568 489 
 
 Leighton v. Leighton Lee Assn., 
 
 62 Mi.,c. 73, 114 Supp. 918... 221 
 Leigliton v. Leighton Lee Assn., 
 
 146 A. D. 255, 130 Supp. Kir,. 93 
 
 211 
 Leighton Lee Assn. ads. Leighton, 
 
 62 Misc. 73, 114 Supp. 918 221 
 
 Leighton Lee Assn. ads. Leighton, 
 146 A. D. 255, 130 Supp. 935. . 93 
 
 211 
 Lennig ads. Bagley & Sewall Co., 
 
 61 A. D. 26, 70 Supp. 242. .. . 527 
 Lenox Corporation, Matter of, 57 
 A. D. 515, 68 Supp. 103, aff'd 
 167 N. Y. 623, 60 N. E. 1115. . 486 
 Leonard v. Spencer, 108 N. Y. 
 338, 15 N. E. 397 509 
 
 Leslie v. Lorillard, 31 Hun 305 . . 409 
 Leslie v. Lorillard, 110 X. Y. 519, 
 
 1 L. R. A. 456, 18 N. E. 363. . 198 
 454, 456, 459, 500 
 Levering ads. Davis, 168 A. D. 
 
 78, 153 Supp. 772 154 
 
 Levett ads. United States Glass 
 
 Co., 24 Misc. 429, 53 Supp. 688. 228 
 Levin v. Mayer, 86 Misc. 116, 149 
 
 Supp. 112 316, 429 
 
 Levin ads. Perrine, 68 Misc. 327, 
 
 123 Supp. 1007 11 
 
 Levine ads. Ehrlich, Inc., 83 Misc. 
 
 136, 144 Supp. 818 361 
 
 Levis & Co. ads. Pennypaclier, 63 
 
 Misc. 384, 116 Supp. 771 540 
 
 Levy V. Swick Piano Co., 17 Misc. 
 
 145, 39 Supp. 409 547 
 
 Lewichawanick Co. ads. Hill, 8 
 
 Hun 459, aff'd 71 N. Y. 593. . . 166 
 Lewin v. Hecht, 179 A. D. 106, 
 
 166 Supp. 116 152 
 
 Lewis ads. Castle, 78 N. Y. 131.. 468 
 Lewis ads. Chambers, 28 N. Y. 
 
 454 242, 392 
 
 Lewis ads. Chenango Bridge Co., 
 
 63 Barb. Ill 60, 61 
 
 Lewis V. Matthews, 161 A. D. 
 
 107, 146 Supp. 424.... 190, 315, 410 
 Lewis V. Tindel-Morris Co., 109 
 
 A. D. 509, 96 Supp. 576 925 
 
 Lewisohn Bros. v. Anaconda Cop- 
 per Co., 29 A. D. 552, 51 Supp. 
 
 1089 415 
 
 Lexow ads. Merger, 1 A. D. 116, 
 
 37 Supp. 67 644 
 
 Liberty Ave. Theatre Co. ads. 
 
 Pearson, 152 A. D. 771, 137 
 
 Supp. 712 376 
 
 Licausi v. Ashworth, 78 A. D. 
 
 486, 79 Supp. •631 435 
 
 Lighthall Mfg. Co., Matter of, 47 
 
 Hiin 258 182, 297 
 
 Lighthouse ads. Lyell Ave. Lum- 
 ber Co., 137 A. D. 422, 121 
 
 Supp. 802 13, 216 
 
 Lighthouse ads. Vaughn Machine 
 
 Co., 64 A. D. 138, 71 Supp. 
 
 799 837 
 
 Lilienthal v. Betz, 185 N. Y. 153, 
 
 77 X. E. 1002 348, 685 
 
 Lindbeck ads. Eckman, 178 A. D. 
 
 720, 165 Supp. 145 421 
 
 Linderman v. Hastings Card & 
 
 Paper Co., 38 A. D. 488, 56 
 
 Supp. 456 488 
 
 Linkhauf v. Lombard, 137 X. Y. 
 
 417, 20 L. R. A. 48, 33 N. E. 
 
 472 459 
 
 Lippman ads. Stevens, 85 Misc. 
 
 347, 148 Supp. 419 88 
 
TABLE OF CASES 
 
 Ixi 
 
 References are to pages. 
 
 Lisman ads. Trotter, 209 N. Y. 
 174, 102 N. E. 575 
 
 Lispenaw Realty Co. ads. Bern- 
 stein, 53 Misc. 273, 103 Supp. 
 210 
 
 Little V. Garabranto, 90 Hun 
 404, 35 Supp. 689; aff'd 153 N. 
 Y. 661, 48 N. E. 1105 
 
 Little ads. Walcott, 46 Misc. 96, 
 91 Supp. 411 
 
 Littman v. Harris, 157 A. D. 909, 
 
 142 Supp. 341 
 
 Livingston ads. Merchants' 
 
 Bank, 74 N. Y. 223 
 
 Loaners' Bank v. Jacoby, 10 Hun 
 
 143 
 
 Locke V. Covert, 42 Hun 484 .... 
 Loder v. N. Y., Utica & Ogdens- 
 
 burgh R. R. Co., 4 Hun 22 
 
 Lodi Chemical Co. v. Chas. H. 
 Pleasants Co., 25 Misc. 97, 51 
 
 Supp. 668 
 
 Lodi Chemical Co. t. National 
 Lead Co., 41 A. D. 535, 58 Supp. 
 
 717 
 
 Logan V. Fidelity-Phenix Fire 
 Ins. Co., 161 A.- D. 404, 146 
 
 Supp. 678 
 
 Logan V. McCall Publishing Co., 
 140 N. Y. 447, 35 N. E. 655. . 
 Logan V. New York Sugar Refin- 
 ing Co., 176 A. D. 660, 163 
 
 Supp. 214 
 
 Lombard ads. Linkhauf, 137 N. 
 Y. 417,- 20 L. R. A. 48, 33 
 
 N. E. 472 
 
 London Realty Co. v. Coleman 
 Stable Co., 140 A. D. 495, 125 
 
 Supp. 410 
 
 Long Dock Mills & Elevator, 
 
 People ex rel. v. .Wilson, 121 
 
 A. D. 376, 106 Supp. 1, aff'd 
 
 193 N. Y. 671, 87 N. E. 1125. 
 
 Long Island City ads. Moran, 101 
 
 N. Y. 439, 5 N. E. 80 
 
 Long Island Ferry Co. v. Tier- 
 bell, 48 N. Y. 427 
 
 Long Island R. R. Co., Matter of, 
 
 143 N. Y. 67, 37 N. E. 636.... 
 
 Long Island R. R. Co., People ex 
 
 rel. V. Feitner, 53 A. D. 181, 65 
 
 Supp. 935 
 
 Long Island R. R. Co. ads. Smith, 
 102 N. Y. 190, 6 N. E. 397.... 
 Long Island R. R. Co., People ex 
 rel. V. Tax Commissioners, 148 
 A. D. 751, 133 Supp. 348, aff'd 
 207 N. Y. 683, 101 N. E. 1117. 
 Long Island R. R. Co., People ex 
 rel. V. Wolf, 152 A. D. 173, 136 
 Supp. 465 
 
 Longwell ads. Drew, 81 Hun 144, 
 
 30 Supp. 733 348 
 
 Longworth v. East River Na- 
 tional Bank, 160 A. D. 737, 
 
 145 Supp. 1051 122 
 
 Loomis -Manning Filter Co. ads. 
 Nooman, 123 A. D. 739, 108 
 
 Supp. 261 366 
 
 Looschen ads. Spellman, 162 N. 
 
 Y. 268, uG N. E. 741 , 481 
 
 Lopez V. Campbell, 163 N. Y. 340, 
 
 57 N. E. 501 480 
 
 Lord ads. Chase, 77 N. Y. 1 . . . . 6 
 
 207, 208 
 Lord V. Equitable Life Assurance 
 Society, 57 Misc. 417, 108 Supp. 
 67 (1908), aff'd 126 A. D. 937, 
 
 110 Supp. 1135 18 
 
 Lord V. Equitable Life Ass. Soc, 
 194 N. Y. 212, 22 L. R. A. 
 (N. S.) 420, S7 N. E. 443.... 14 
 
 17, 19, 767 
 Lord T. Yonkers Fuel Gas Co., 
 
 99 N. Y. 547, 2 N. E. 909. .258, 265 
 Lorge, People ex rel. v. Consoli- 
 dated Nat. B'k, 105 A. D. 409, 
 
 94 Supp. 173 54, 851 
 
 Lorillard- v. Clyde, 86 N. Y. 384. 2 
 Lorillard v. Clyde, 142 N. Y. 456, 
 
 24 L. R. A. 113, 37 N. E. 489. . 598 
 Lorillard ads. Leslie, 31 Hun 305. 409 
 Lorillard ads. Leslie, 110 N. Y. 
 519, 1 L. R. A. 456, 18 N. E. 
 
 363 198, 454, 456, 459, 500 
 
 Lorraine Co. ads. Orvis, — Misc. 
 — (1918), N. Y. L. J., March 
 
 9, p. 1843 133 
 
 Losee v. Bullard, 79 N. Y. 404. . 390 
 
 512, 514 
 Loughlin v. Wocker, 152 A. D. 
 
 466, 137 Supp. 257 364 
 
 Love ads. Weeks, 50 N. Y. 568 . . 222 
 
 239 
 Lovell v. Jacobs, 150 N. Y. 84, 44 
 
 N. E. 792 141 
 
 Low ads. Pocantico Water Works, 
 
 20 Misc. 484, 46 Supp. 633 ... . 461 
 Lowery v. Granite State Provi- 
 dent Assn., 8 Misc. 319, 28 
 Supp. 560 528 
 
 793 Lozier v. Saratoga Gas Co., 59 
 A. D. 300, 69 Supp. 247 55 
 
 354 Lozier Motor Co., The, v. Ball, 53 • 
 
 Misc. 375, 104 Supp. 771 325 
 
 Lubliner v. Tiffany & Co., 54 A. 
 
 D. 326, 66 Supp. 659. 524 
 
 768 Lubricating Oil Co. v. Standard 
 
 Oil Co., 42 Hun 153 510 
 
 Ludington v. Thompson, 153 N. Y. 
 
 794 499, 47 N. E. 903 655, 682 
 
 535 
 
 430 
 
 683 
 
 56 
 
 183 
 
 156 
 
 530 
 661 
 
 079 
 481 
 490 
 
 157 
 
 825 
 
 192 
 459 
 
 272 
 
 865 
 540 
 355 
 550 
 
Ixii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Ludwig ads. People ex rel. Lud- 
 
 wig, 126 A. D. 696, HI Supp. 
 
 94 
 
 Ludwig, People ex rel. v. Ludwig, 
 
 126 A. D. 696, 111 Supp. 94. . . 
 Luckens Iron & Steel Co. v. 
 
 Payne, 13 A. D. 11, 43 Supp. 
 
 376 
 
 Lum ads. Stoddard, 159 N. Y; 
 
 265, 45 L. R. A. 551, 53 N. E. 
 
 1108 
 
 Lummis v. Crosby, 176 A. D. 315, 
 
 162 Supp. 444 
 
 Lurie ads. Eitzwoller, 176 A. D. 
 
 100, 162 Supp. 475 
 
 Lurch ads. Hapgoods, No. 1, 123 
 
 A. D. 23, 107 Supp. 331 
 
 Lutz ads. Lang, 180 N. Y. 254, 
 
 73 N. E. 24. .211, 231, 237, 240, 
 Luxton & Black Co., Matter of, 
 
 35 A. D. 243, 54 Su,pp. 778.. 
 Lyell Ave. Lumber Co. v. Light- 
 house, 137 A. D. 422, 131 
 
 Supp. 802 13, 
 
 Lynch ads. Chapman, 156 N. Y. 
 
 551, 51 N. E. 275 
 
 Lynde ads. Hyde, 4 N. Y. 387 
 
 Lyon ads. Flanagan, 54 Misc. 372, 
 
 105 Supp. 1049 
 
 Lyon ads. Hanna, 179 N. Y. 107, 
 
 71 N. E. 778 
 
 Lyon V. James, 97 A. D. 385, 90 
 
 Supp. 28, aff'd 181 N. Y. 512, 
 
 73 N. E. 1120 
 
 Lyon ads. Pjeople, 119 A. D. 361, 
 
 104 Supp. 319, aff'd 189 N. Y. 
 
 544, 82 N. E. 1130 
 
 MacArdell v. Olcott, 189 N. Y. 
 
 368, 82 N. E. 161 
 
 MacBride ads. Sutton, 176 A. D. 
 
 362, 162 Supp. 1023 
 
 MacDonnell v. Buffalo, L. & T. & 
 
 S. D. Co., 193 X. Y.. 93, 85 N. 
 
 E. 801 
 
 MacMahon v. Stepney Spare 
 
 Wheel Agency, 140 A. D. 554, 
 
 125 Supp. 823 
 
 MacNebb v. Porter Air-Lighter 
 
 Co., 44 A. D. 102, 60 Supp. 
 
 694 927, 
 
 MacQuoid v. Queens Estates, 143 
 
 A. D. 134, 127 Supp. 867. .261, 
 MficVeagh v. Continental Trust 
 
 Co., 10 Misc. 600, 32 Supp. 198. 
 JIcAvov ads. Mutual Life Ins. 
 
 Co., No. 1, 118 A. D. 815, 103 
 
 Supp. 829 
 
 McAvov ads. Mutual Life Ins. 
 
 Co., 'Xo. 2, 118 A. D. 822, 103 
 
 Supp. 840 
 
 52 
 52 
 
 835 
 
 934 
 
 466 
 
 78 
 81 
 
 241 
 
 676 
 
 216 
 
 386 
 640 
 
 613 
 
 409 
 
 443 
 
 353 
 
 19'5 
 
 187 
 
 272 
 
 296 
 
 929 
 
 867 
 150 
 
 527 
 
 527 
 
 McCaddon v. Central Trust Co. 
 of N. Y., 167 A. D. 897, 151 
 Supp. 646 378 
 
 McCaldin ads. De Martini, 101 
 Misc. 304, 167 Supp. 596 348 
 
 McCaldin ads. De ilartini, 176 A. 
 
 D. 541, 163 Supp. 484 200 
 
 McCall ads. People ex rel. New- 
 comb, 94 N. Y. 587 663 
 
 McCall Publishing Co. ads. 
 
 Logan, 140 N. Y. 447, 35 N. E. 
 
 655 825 
 
 McCleve v. Thompson, 36 Hun 
 
 365 345 
 
 McCleve ads. Williams, 168 A. D. 
 
 192, 154 Supp. 38 100, 163 
 
 McClelland v. Norfolk Southern 
 
 R. R. Co., 110 N. Y. 469, 1 L. 
 
 E. A. 299, 18 N. E. 237 271 
 
 274, 281 
 McClenahan ads. McCrea, 114 A. 
 
 D. 70, 99 Supp. 689' 205 
 
 McClenahan ads. McCrea, 131 A. 
 
 D. 247, 115 Supp. 720 379 
 
 McCloskey v. Goldman, 62 Misc. 
 
 462, 115 Supp. 189 333 
 
 McClure v. Central Trust Co., 165 
 
 N. Y. 108, 53 L. R. A. 153, 58 
 
 N. E. 777 438 
 
 McClure v. Law, 161 N. Y. 78, 55 
 
 N. E. 388 393 
 
 McClure Publications, Inc., Peo- 
 ple ex rel. v. Purdy, 161 A. D. 
 
 541, 146 Supp. 646, aff'd 213 
 
 N. Y. 658, 107 N. E. 1084.724, 807 
 McComb ads. Garrett Co., 58 A. 
 
 D. 419, 68 Supp. 996 443 
 
 McCormick & Co. ads. Interocean 
 
 Forwarding Co., — Misc. — , 
 
 N. Y. L. J., Dec. 28, 1917 891 
 
 McCoy V. Gas Engine & Power 
 
 Co., 135 A. D. 771, 119 Supp. 
 
 864 202 
 
 McCrea v. Bedell, 9 Misc. 372, 29 
 
 Supp. 705 187, 188 
 
 McCrea v. McClenahan, 114 A. D. 
 
 70, 99 Supp. 689 205 
 
 McCrea v. McClenahan, 131 A. D. 
 
 247, 115 Supp. 720 379 
 
 McCrea v. Robertson, 192 N. Y. 
 
 150, 84 N. E. 960 414 
 
 McCullough ads. Corning, 1 N. Y. 
 
 47 • 233 
 
 McCullough ads. Moss, 7 Barb. 
 
 279 230, 506 
 
 McCullough v. Norwood, 58 N. Y. 
 
 562 598 
 
 McCurdy & McAvoy ads. Mutual 
 
 Life Ins. Co., 118 A. D. 827, 
 
 103 Supp. 837 526 
 
TABLE OF CASES 
 
 bdii 
 
 References are to pages. 
 
 McCurdy ads. Pierson, 33 Hun 
 520, afl'd 100 N. Y. 608, 2 N. 
 E. 615 495 
 
 McDonald ads. Riehmondville 
 Union Seminary, 34 N. Y. 
 379 78, 79 
 
 McDonough ads. People ex rel. 
 Gales, 28 Misc. 652, 60 Supp.. 
 40 24 
 
 McDougall ads. Eaegener, 33 A. 
 D. 231, 53 Supp. 484 551 
 
 McDowall V. Sheehan, 129 N. Y. 
 200, 29 N. E. 299 234 
 
 McElwain Co. v. Premiere, 180 A. 
 D. 288, 167 Supp. 815 605 
 
 McElwee, People ex rel. v. Prod- 
 uce Exchange Trust Co., 53 A. 
 D. 93, 65 Supp. 926 52 
 
 McElwee Mfg. Co. v. Trowbridge, 
 62 Hun 471, 17 Supp. 3 506 
 
 McGarrah ads. Milliken, 159 A. 
 D. 728, 144 Supp. 964 196 
 
 McGill Co. V. Underwood, 161' A. 
 D. 30, 146 Supp. 362 75 
 
 Mclnness, People ex rel. v. Col- 
 umbia Bag Co., 103 A. D. 208, 
 92 Supp. 1084 57 
 
 Mclntyre, Inc., ads. Westchester 
 Mtg. Co., 171 A. D. 518, 157 
 Supp. 725 370 
 
 Mclntyre, Inc., ads. Westchester 
 Mtg. Co., 174 A. D. 446, 161 
 Supp. 390 372 
 
 McKane ads. Sloan, 131 A. D. 244, 
 115 Supp. 648 153 
 
 McKechnie ads. Canandaigua 
 ' Academy, 19 Hun 62. 49, 529 
 
 McKeever ads. Penn Collieries 
 Co., 183 N. Y. 98, 2 L. R. A. 
 (N". S.) 127, 75 N. E. 935.... 835 
 
 McKelvey ads. Lawrence, 80 A. 
 D. 514, 81 Supp. 526 
 
 McKenna v. Fireman's Ins. Co., 
 28 Misc. 173, 59 Supp. 41 897 
 
 McKinnon Sash & Hardware Co. 
 ads. Bearing, 165 N. Y. 78, 58 
 N. E. 773 922 
 
 McLaughlin, Matter of, 176 A. D. 
 653, 163 Supp. 547 578 
 
 McLaughlin ads. Thompson, 138 
 A. D. 711, 123 Supp. 762 416 
 
 McLean, Matter of, 138 N. Y. 158, 
 20 L. R. A. 389, 33 N. E. 821 . . 765 
 
 McLean ads. People ex rel. Bay 
 State Shoe & Leather Co., 80 
 N. Y. 254 741, 756, 857 
 
 McLean Arms & Ordnance Co. 
 ads. Rudd, 54 Misc. 49, 105 
 Supp. 387 437 
 
 McLeary v. The Brie Telegraph 
 
 & Telephone Co., 38 Misc. 3, 
 
 76 Supp. 712 193 
 
 McMahon v. Macy, 51 N. Y. 155. 61 
 
 230, 237 
 McManus v. Durant, 168 A. D. 
 
 643, 154 Supp. 580. .• 191 
 
 McMaster v. Davison, 29 Hun 542 217 
 McMillan ads. French, 43 Hun 
 
 188 
 
 McMillan ads. Pittsburg Carbon 
 
 Co., 119 N. Y. 46, 7 L. R. A. 
 
 46, 23 N. E. 530 458, 640, 
 
 McNab V. McNab & Harlin Mfg. 
 
 Co., 62 Hun 18, 16 Supp. 448, 
 
 affd 133 N. Y. 687, 31 N. E. 
 
 627 161, 183, 184, 
 
 McNab y. Harlin Mfg. Co. ads. 
 
 McNab, 62 Hun 18, 16 Supp. 
 
 448, afif'd 133 N. Y. 687, 31 N. 
 
 E. 627 161, 183, 184, 
 
 McNally Co. ads. Dain's Sons Co., 
 
 137 A. D. 857, 122 Supp. 964.. 
 McNally Co. ads. Horton, 155 A. 
 
 D. 322, 140 Supp. 3&7 678 
 
 928 929 
 McNally Co. ads. Horton, 168 a! 
 
 D. 248, 153 Supp. 429 
 
 McNally Co. ads. Moe, 138 A. D. 
 
 480, 123 Supp. 71 368, 
 
 664, 
 McNamara v. Keene, 49 Misc. 
 
 452, 98 Supp. 860 882 
 
 McNamara ads. Smith, 15 Hun 
 
 447 
 
 McNeil V. Tenth Nat. B'k, 46 
 
 N. Y. 325 127, 128, 
 
 McNelas v. Stillman, 172 A. D. 
 
 307, 158 Supp. 428 82, 94, 
 
 McQueen v. New, 45 A. D. 579, 
 
 61 Stupp. 464 
 
 McShane Mfg. Co., People ex rel. 
 
 V. Barker, 23 A. D. 530, 48 
 
 Supp. 558, afif'd 155 N. Y. 665, 
 
 49 N. E. 1103 856 
 
 McVitz V. Albro Co., 90 A. D. 109, 
 
 86 Supp. 144, afif'd 180 N. Y. 
 
 554, 73 N. E. 1126 461 
 
 Maas V. Missouri, Kansas & 
 
 Texas Ry. Co., 83 N. Y. 223.. 268 
 Mabon v. Miller, 81 A. D. 10, 80 
 
 Supp. 979., 331 
 
 Mabon v. Ongley Electric Co., 
 
 No. 2, 24 A. D. 50, 48 Supp. 
 
 973 
 
 Mabon v. Ongley Electric Co., 156 
 
 N. Y. 196, 50 N. E. 805 
 
 Mace ads. Dean, 19 Hun 391. . . . 
 Mack V. Latta, 178 N. Y. 525, 67 
 
 L. R. A. 126, 71 N. E. 97 155 
 
 187 
 
 651 
 
 355 
 
 355 
 
 925 
 
 656 
 
 623 
 932 
 
 897 
 
 134 
 
 923 
 683 
 
 535 
 
 ,930 
 251 
 
Ixiv 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Mackaye ads. Von Hesse, 55 Hun 
 365, 8 Supp. 894, aff d 1-1 X. 
 Y. 694, 24 N. E. 1099 256 
 
 Mac-key, People ex rel. v. Ameri- 
 can Union Life Ins. Co., 31 
 Misc. 617, 64 Supp. 916 59 
 
 Mackin ads. Van Scheiek, 129 A. 
 
 D. 335, 113 Supp. 408 80 
 
 Miicy ads. McMahon, 51 N. Y. 
 
 155 61, 230, 237 
 
 Magenheimer ads. Von Au, 115 
 A. D. 84, 100 Supp. 659; aflf'd 
 196 X. Y. 510, 89 N. E. 1114. . 754 
 
 Magenheimer ads. Von Au, 120 
 A. D. 257, 110 Supp. 629, aff'd 
 196 X. Y. 510, 89 N. E. 1114. 146 
 
 Mager ads. Levin, 86 Misc. 116, 
 149 Supp. 112 316 
 
 ilagnolia Metal Co. ads. Gold- 
 mark, 28 A. D. 264, 51 Supp. 
 68 620 
 
 Magnolia Metal Co. ads. Gold- 
 Mark, 44 A. D. 35, 60 Supp. 
 425, aff'd 170 N. Y. 579, 63 N. 
 
 E. 1117 620 
 
 Mahaney v. Walsh, 16 A. D. 601, 
 
 44 Supp. 969 129, 155 
 
 Maher v. Harrington Park Villa 
 
 Sites, 204 N. Y. 231, 38 L. R. 
 
 A. (N. S.) 210, 97 N. E. 587 . . 880 
 ilahon V. Miller, 81 A. D. 10, 80 
 
 Supp. 979 413 
 
 ilnine Products Co. v. Alexander, 
 
 Xo. 1, 115 A. D. 109, 100 Supp. 
 
 709 97 
 
 Maine Products Co. v. Alexander, 
 
 Xo. 2, il5 A. X>. 112, 100 Supp. 
 
 711 154 
 
 !Maine Products Co. v. Alevander, 
 
 Xo. 3, 115 A. D. 475, 101 Supp. 
 
 464 196 
 
 Major Amusement Co. ads. Mark 
 
 Realty Corp'n, — Misc. — - N. 
 
 Y. L. J., Jan. 9, 1918, A. D., 
 
 1 st Dept 35 
 
 Makepeace v. Dilltown Smokeless 
 
 Coal Co., 179 A. D. 662, 167 
 
 Supp. 83 924 
 
 Malcolm Brewing Co., flatter of, 
 
 78 A. D. 592, 79 Supp. 1057.. 651 
 ilalcomson v. Monaton Realty In- 
 vesting Corp., 154 A. D. 694, 
 
 139 Supp. 405, aff'd 214 N. Y. 
 
 077, 108 X^ E. 1100 522 
 
 -Alale ads. Bowers, 186 X. Y'. 28, 
 
 78 X. E. 577 413 
 
 Mali ads. Bruff, 36 X"^. Y. 200 441 
 
 Mali ads. Shotwell, 38 Barb. 445. 117 
 Malonev v. Hudson River Water 
 
 Power Co., 133 A. D. 499, 17 
 
 Supp. 601 434 
 
 Man ads. Ciancimino, 1 Misc. 121, 
 20 Supp. 702 310 
 
 Manhattan Beach Co. ads. Jarvis, 
 53 Hun 362, 6 Supp. 703 521 
 
 Manhattan Beach Co. ads. Jarvis, 
 75 Hun ion, 26 Supp. 1061, 
 aff'd 148 N. Y'. 652, 31 L. R. A.% , 
 776, 43 N. E. 68 115, . 132 
 
 Manhattan Co. v. Kaldenberg, 165" *■ 
 
 X'. Y. 1, 58 X. E. 790 353 
 
 386, 513, 514 
 
 Manhattan Co. ads. Moss, 48 A. 
 
 D. 561, 62 Supp. 936 129' 
 
 Manhattan Consumers' Brewing 
 
 Co. ads. Abrams, 142 A. D. 392, 
 
 126 Supp. 844 483, 485 
 
 Manhattan Life Insurance Co. v. 
 Forty-second St. & Grand St. 
 Ferry R. R. Cc, 139 X. Y. 146, 
 34 N. E. 776 117 
 
 Manhattan Mercantile Assn. ads. 
 
 Legrand, 80 X. Y. 638 502 
 
 Manhattan R. Co.. People ex rel. 
 V. Barker, 146 X. Y. 304, 40 
 X'. E. 996 744, 746, 752, 753 
 
 Manhattan R. Co., People ex rel. 
 V. Barker, 152 N. Y. 417, 46 X. 
 
 E. 875 753, 787 
 
 Manhattan Rv. Co., People ex 
 
 rel. V. BarKer, 165 X. Y. 305, 
 
 50 X. E. 151 740 
 
 Manhattan Ry. Co. ads. Mayor, 
 etc., of New York, 143 X. Y. 1, 
 37 N. E. 494 17, 450 
 
 Manhattan Ry. Co., People ex rel. 
 V. Woodbury, 203 N. Y. 231, 
 96 X^ E. 420 781 
 
 Manhattan Silk Co., People ex 
 rel. y. Miller, 125 A. D. 296, 109 
 Supp. 866, aff'd 197 N. Y. 577, 
 91 N. E. 1119 844, 865. 867 
 
 Manice, People ex rel. w Powell, 
 
 201 N. Y. 194, -94 N. E. 634. . 312 
 
 332 
 
 Mann v. Curie, 2 Barb. 294 87 
 
 Manne y. Siegel-Cooper Co., 20 
 Misc. .592, 46 Supp. 352 431 
 
 Manoca Temple Assn., Matter of, 
 128 A. D. 796, 113 Supp. 172. . 578 
 
 Manson v. Curtis, — ^ N. Y. — 
 (1918), N. Y. L. J., May 14, p. 
 533 181, 182, 330 
 
 Manthey y. Wyoming County Co- 
 operative Fire Ins. Co., 76 A. 
 D. 579, 78 Supp. 596 56 
 
 Manuet Amusement Corp. v. First 
 X"at. Exhibitors' Circuit, Inc., 
 — ilisc. — , N. Y. L. J., May 
 9, 1918 913 
 
 Manufacturers' Commercial Co. 
 V. Blitz, 131 A. D. 17, 115 Supp. 
 402 887, 89) 
 
TABLE OF CASES 
 
 Ixv 
 
 References are to pages. 
 
 Manufacturers' Commercial Co. 
 
 V. Heekscher, 144 A. D. 601, 129 
 
 Supp. 556, aff'd 203 N. Y. 560. 240 
 Manufacturers' Nat. B'k v. Hall, 
 
 00 Hun 466, 15 Supp. 208, aff'd 
 
 129 N. Y. 663, 30 N. E. 65.... 473 
 Manufacturing & Selling Co. ads. 
 
 Rensens, 99 A. D. 214, 90 Supp. 
 
 1010 929 
 
 Marbury v. Stone, 17 A. D. 352, 
 
 45 Supp. 184, aff'd 160 N. Y. 
 
 701, 57 N. E. 1116 126, 324 
 
 Marine B'k of N. Y. v. Clements, 
 
 31 N. Y. 33 372 
 
 Marine & Fire Ins. Bank of Ga. 
 
 V. Jauncey, 1 Barb. 486 883 
 
 Mariposa Land & Mining Co. ads. 
 
 Kelly, 4 Hun 632 175 
 
 Market & Fulton Nat. B'k v. 
 
 Jones, 7 Misc. 207, 27 Supp. 
 
 677, aff'd 90 Hun 605, 35 Supp. 
 
 1109 264 
 
 Marklove v. Utica, Clinton & 
 
 Binghamton R. R. Co., 48 Misc. 
 
 258, 96 Supp. 795 504 
 
 Mark Realty Corp'n v. Major 
 
 Amusement Co., — Misc. — , N. 
 
 Y. L. J., Jan. 9, 1918, App. Div. 
 
 1st Dept 35 
 
 Marks ads. Fruin-Bambrick Con- ' 
 
 struction Co., 48 A. D. 51, 62 
 
 Supp. 621 916 
 
 Maroney v. Cole, 52 Misc. 451, 
 
 103 Supp. 560 470 
 
 Marseilleise French Baking Co. 
 
 ads. Thompson, 85 Misc. 392, 
 
 147 Supp. 402 367 
 
 Marshall v. Sherman, 148 N. Y. 
 
 9, 34 L. R. A. 757, 42 N. E. 
 
 419 210, 244, 938 
 
 Marshall v. Wendell, 45 A. D. 
 
 120, 61 Supp. 13 539 
 
 Marstaller v. Mills, 143 N. Y. 398, 
 
 38 N. E. 370 347, 599 
 
 Martin, Matter of, 62 Hun 557, 
 
 17 Supp. 133 54, 60 
 
 Martin v. Niagara -Falls Paper 
 
 Mfg. Co., 122 N.'Y. 165, 25 N. 
 
 E. 303 182, 267, 372 
 
 Martin ads. People ex rel. Key- 
 stone Gas Co., 48 Hun 193 859 
 
 Martin v. Remington-Martin Co., 
 
 95 A. D. 18, 88 Supp. 573. . .4, 17 
 Martin Bros. Co., People ex rel. 
 
 V. Barker, 14 Misc. 382, 36 
 
 Supp. 76 858 
 
 Martin's Bank (Ltd.) v. 
 
 Amazones Co., 98 A. D. 146, 90 
 
 Supp. 7.34 919' 
 
 Martindale v. De Kay, 101 Misc. 
 
 728, 166 Supp. 405 371 
 
 Martine v. International Life Ins. 
 
 Soc, 53 N. Y. 339 822 
 
 Marvin ads. Cassagne, 143 N. Y. 
 
 292, 25 L. R. A. 670, 38 N. E. 
 
 285 195 
 
 Mase ads. Nichols, 94 N. Y. 160. 257 
 Mason ads. Hale, 86 Hun 499, 33* 
 
 Supp. 789 637 
 
 Mason ads. Hale, 160 N. Y. 561, 
 
 55 N. E. 202 337 
 
 Mason v. Henry, 83 Hun 546, 31 
 
 Supp. 1068, aff'd 152 N. Y. 530, 
 
 46 N. E. 837 422, 684 
 
 Mason v. N. Y. Silk Mfg. Co., 27 
 
 Hun 307 428 
 
 Mason- v. Standard Distilling & 
 
 Distributing Co., 85 A. D. 520, 
 
 83 Supp. 343 598 
 
 Masonic Hall, Trustees of, v. Fon- 
 
 tane, 99 Misc. 497, 164 Supp. 
 
 370 395 
 
 Massena Springs & Fort Coving- 
 ton R. R. Co. ads. Cunningham, 
 
 63 Hun 439, 18 Supp. 600, aff'd 
 
 138 N. Y. 614, 33 N. E. 1082. . 503 
 Masterton ads. Whitaker, 106 N. 
 
 Y. 277, 12 N. E. 604 313 
 
 Material Men's Assn., Ltd., v. 
 
 New York Material Men's Mer- 
 cantile Assn., Inc., 169 A. D. 
 
 843, 155 Supp. 706 37 
 
 Mather v. Eureka Movper Co., 44 
 
 Hun 333, aff'd 118 N. Y. 629, 
 
 23 N. E. 993 354, 355 
 
 Matheson & Co., People ex rel. v. 
 
 Roberts, 158 N. Y. 162, 52 N. 
 
 E. 1102 696, 710, 740 
 
 Mathey v. Neidig, 72 N. Y. 100. . 215 
 
 221, 241 
 " Matter of " — see initial of 
 
 name of party. 
 Matteson ads. Bliss, 45 N. Y. 22 . 337 
 Matthews v. Associated Press of 
 
 the State of N. Y., 136 N. Y. 
 
 333, 32 N. E. 981 501 
 
 Matthews v. Hardt, 79 A. D. 570, 
 
 80 Supp. 462 377 
 
 Matthews ads. Le Fevre, 39 A. D. 
 
 232, 57 Supp. 128 932 
 
 JIatthews ads. Lewis, 161 A. D. 
 
 107, 146 Supp. 424... 196, 315, 416 
 ilatthews Engineering Co. ads. 
 
 Swift, 178 A. D. 201, 165 Supp. 
 
 136 911 
 
 Matty ». Simpson, 64 A. D. 1, 71 
 
 Supp. 731 385 
 
 Maune v. Unity Press, 143 A. D. 
 
 94, 127 Supp. 1002 63 
 
 Maury v. American Motor Co., 25 
 
 Misc. 657, 56 Sup. 316, aff'd 38 
 
 A. D. 623, 57 Supp. 1142 926 
 
Ixvi 
 
 TABLE or CASES 
 
 References are to pages. 
 
 Mawhimman v. Bliss, 124 A. D. 
 
 609, 109 Supp. 332, app. dism'd 
 
 194 N. Y. 590, 88 N. E. 1125. . 613 
 Mawhinney v. Bliss, 117 A. D. 
 
 255, 102 Supp. 279, aff'd 189 
 
 ]^ Y. 501, 81 N. E. 1169 618 
 
 May ads. People ex rel. Daily 
 
 Credit Service Corp., 162 A. D. 
 
 215,. 147 Supp. 487, aflf'd 212 
 
 N. Y. 561, 106 N. E. 1039 15 
 
 Maybury ads. Hepner, 23 Misc. 
 
 262, 51 Supp. 170 5 
 
 May Co. ads. Birkenwald, 179 A. 
 
 D. 658, 166 Supp. 1G73 911 
 
 Mayer ads. Levin, 186 Misc. 116, 
 
 149 Supp. 112 429 
 
 Mayer v. Metropolitan Traction 
 
 Co., 165 A. D. 497, 150 Supp. 
 
 1026 289 
 
 Msyo V. Knowlton, 134 N. Y. 250, 
 
 31 N. E. 985 147 
 
 Mayor V. Broadway & Seventh 
 
 Ave. E. R. Co., 17 Hun 242. . . 451 
 Mayor, The, ads. Neuchetel 
 
 Asphalt Co., 155 N. Y. 373, 
 
 49 N. E. 1043 880 
 
 Mayor ads. U. S. Tr. Co., 77 Hun 
 
 182, 28 Supp. 342, aflf'd 144 N. 
 
 Y. 488, 39 N". E. 383. ...746, 787 
 Mayor, The, etc., of Brooklyn ads. 
 
 Brady, 1 Barb. 584 449 
 
 Mayor, etc., of New York v. Man- 
 hattan Ry. Co., 143 N. Y. 1, 
 
 37 N. E. 494 17, 450 
 
 Mebbett ads. Dutchess & Colum- 
 bia R. R. Co., 58 N. Y. 397 ... . 25 
 Mechanics' Bank v. N. Y., New 
 
 Haven R. R. Co., 13 N. Y. 599. 116 
 121, 136 
 Mechanics' Banking Assn. v. 
 
 Spring Valley Shot & Lead Co., 
 
 25 Barb. 419 540 
 
 Mechanics & Metals Nat. B'k ads. 
 
 Fisher, 89 Misc. 587, 153 Supp. 
 
 786 126 
 
 Mechanics' Nat. B'k ads. National 
 
 Shoe & Leather Bank, 89 N. Y. 
 
 467 453 
 
 Medberry ads. Short, 29 Hun 39. 248 
 
 250 
 Medberry v. Rochester Freer 
 
 Stone Co., 19 Hun 498 589 
 
 Medina Gas Co. ads. Buffalo L., 
 
 T. & S. D. Co., 162 N. Y. 67, 56 
 
 N. E. 505 10, 268, 359 
 
 Meeker ads. Donohoe, 35 A. D. 
 
 43, 54 Supp. 286 471 
 
 Meheney v. Walsh, 16 A. D. 601, 
 
 44 Supp. 969 137 
 
 Meisel & Co. v. National Jewelers 
 Board of Trade, 90 Misc. 19, 
 152 Supp. 913, aff'd 173 A. D. 
 889, 157 Supp. 1133 519 
 
 Menefee ads. Riverside & Dan 
 River Cotton Mills, 237 U. S. 
 
 189 906 
 
 is V. Fifth Ave. Ry. Co., 81 
 Hun 480, 30 Supp. 999 63 
 
 Menhaden Co. ads. Morrison, 37 
 Hun 522 631 
 
 Mensching ads. People ex rel. 
 Farrington, 187 N. Y. 8, 10 L. 
 R. A. (N. S.) 625, 79 N. E. 
 884 809 
 
 Mercantile Credit Guarantee Co. 
 ads. People, 65 A. D. 306, 72 
 Supp. 858 598 
 
 Mercantile Nat. B'k v. Mayor, 
 etc., of N. Y., 172 N. Y. 35, 64 
 N. E. 756 788, 791 
 
 Mercantile Safe Deposit Co., 
 People ex rel. v. Sohmer, 158 
 A. D. 110, 143 N. Y. Supp. 
 313, aff'd 217 N. Y. 605, 111 
 N. E. 1097 723, 727 
 
 Mercantile Trust Co. ads. Mis- 
 souri Pacific Ry., 76 Misc. 10, 
 134 Supp. 548 182 
 
 Merceau ads. Burrow, 132 A. D. 
 797, 117 Supp. 537 604 
 
 Merchants' Bank v. Bliss, 35 N. 
 Y. 412 391 
 
 Merchants' Bank ads. Craig Medi- 
 cine Co., 59 Hun 561, 14 Supp. 
 16 316, 522 
 
 Merchants' Bank v. Livingston, 
 74 N. Y. 223 156 
 
 Merchants' Bank ads. Middle- 
 brook, 42 N. Y. (3 Keyes) 135. 129 
 
 Merchants' Exchange National 
 Bank v. Commercial Warehouse 
 Co., 49' N. Y. 635 468 
 
 Merchants' Ins. Co. ads. Douglas, 
 118 N. Y. 484, 7 L.R.A. 822, 
 23N. E. 806 357 
 
 Merchants' Nat. B'k ads. Rey- 
 nolds Elevator Co., 55 A. D. 1, 
 67 Supp. 397 361 
 
 Merchants' Real Estate Co., 
 People ex rel. v. Wells, 110 A. 
 D. 194, 97 Supp. 47 749 
 
 Merchants' Savings B'k ads. 
 Brookman, 31 Misc. 191, 65 
 Supp. 54 937 
 
 Merchants' Trust Co. ads. People, 
 187 N. Y. 293, 79 N. E. 1004 
 
 634, 669 
 
 Meredith v. Art Metal Construc- 
 tion Co., 97 Misc. 69, 161 Supp. 
 1 203 
 
TABLE OF CASES 
 
 Ixvii 
 
 Beferences are to pages. 
 
 Merger v. Lexow, 1 A. D. 116, 37 • 
 Supp. 67 644 
 
 Merits ads. Theile, 85 Misc. 351, 
 147 Supp. 405 851 
 
 Merriam v. Wood & Parker Litho- 
 graphing Co., 19 A. D. 329, 46 
 Supp. 484 482 
 
 Merrick v. Santvoord, 34 N. Y. 
 208 822 
 
 Merrill v. Consumers' Coal Co., 
 114 N. Y. 216, 21 N. E. 155.. 368 
 
 Merrill v. Farmers' Loan & T. Co., 
 24 Huu 297 280 
 
 Merrill v. United Box Board & 
 Paper Co.,. 143 A. D. 833, 128 
 Supp. 959 325 
 
 Merritt Burial & Cremation Co. 
 V. Merritt Company, 155 A. D. 
 565, 140 Supp. 895; mod. 214 
 N. Y. 676, 108 N. E. 1108 35 
 
 Merritt Co. ads. Merritt Burial & 
 Cremation Co., 155 A. D. 565, 
 140 Supp. 895; mod. 214 N. Y. 
 676, 108 N.E. 1108 
 
 Merz V. Interior Conduit & In- 
 sulation Co., 87 Hun 430, 34 ' 
 Supp. 215; app. diam'd 151 
 N. Y. 638, 45 N. E. 1133 
 
 Merz V. Interior Conduit & In- 
 sulation Co., 20 Misc. 378, 46 
 Supp. 243 
 
 Mesinger v. Mesinger Bicycle 
 Saddle Co., 44 A. D. 26, 60 
 Supp. 431 5 
 
 Messena Springs & Fort Coving- 
 ton E. R. Co. ads. Cunningham, 
 63 Hun 439, 18 Supp. 600, aflf'd 
 138 N. Y. 614, 33 N. E. 1082. . 461 
 
 Metealf ads. Dihblee, 13 Misc. 
 136, 34 Supp. 122 , 632 
 
 Methodist Episcopal Union 
 Church V. Pickett, 19 N. Y. 482 12 
 
 Metropolitan Co. v. Hammerstein, 
 162 A. D. 691, 147 Supp. 532. . 457 
 
 Metropolitan Elevated Ry. Co. 
 ads. Content, 26 Huu 82 72 
 
 Metropolitan El. Ry. Co. v. Knee- 
 land, 120 N. Y. 134, 8 L.R.A. 
 253, 24 N. E. 381 338 
 
 Metropolitan El. Ry. Co. ads. Wil- 
 son, 120 N". Y. 145, 24 N. E. 
 384 371, 507 
 
 Metropolitan Investment Co. ads. 
 Globe Gas Light Co., 10 A. D. 
 342, 41 Supp. 797 367 
 
 Metropolitan Life Ins. Co. ads. 
 Morton, 34 Hun 366, afi'd 103 
 N. Y. 645 511 
 
 Metropolitan Life Ins. Co. v. 
 Reed, 168 A. D. 828, 154 Supp. 
 523 191 
 
 160 
 
 291 
 
 243 
 
 732 
 
 Metropolitan Messenger Co. ads. 
 Hallett, 69 A. D. 258, 74 Supp. 
 639 212, 217, 221, 
 
 Metropolitan Opera Co. v. Ham- 
 merstein, 162 A. D. 691, 147 
 Supp. 532 499 
 
 Metropolitan Securities Co., 
 People ex rel. v. Kelsey, 101 
 A. D. 248, 91 Supp. 711.... 
 
 Metropolitan St. Ry. Co. ads. No- 
 wack, 166 N. Y. 433, 54 L.R.A. 
 592, 60 N. E. 32 524 
 
 Metropolitan St. Ry. Co., Peo- 
 ple ex r.el. v. Tax Commrs., 174 
 N". Y. 417, 63 L.R.A. 884, 67 
 N. E. 69 767, 
 
 Metropolitan St. Ry. Co., People 
 ex rel. v. State Tax Commrs., 
 159 A. D. 136, 144 Supp. 74, 
 aflf'd 212 N. Y. 606, 607, 106 
 N. E. 1040 76, 778, 780, 
 
 Metropolitan St. Ry. Co. ads. . 
 Wormser, 184 N. Y. 83, 76, N. 
 E. 1036 408 
 
 Metropolitan Surety Co. ads. Peo- 
 ple, 158 A. D. 651, 144 Supp. 
 235 
 
 Metropolitan Surety Co. ads. Peo- 
 ple, 171 A. D. 15, 156 Supp. 
 1027 569, 
 
 Metropolitan Surety Co. ads. Peo- 
 ple, 205 N. Y. 135, 98 N. E. 412 
 
 Metropolitan Telephone Co. ads. 
 Sterne, No. 2, 33 A. D. 169, 53 
 Supp. 467 544 
 
 Metropolitan Telephone & Tele- 
 graph Co. V. Metropolitan Tele- 
 phone & Telegraph Co., 156 A. 
 D. 577, 141 Supp. 598 41, 
 
 Metropolitan Traction Co. ads. 
 Mayer, 165 A. D. 497, 150 Supp. 
 1026 
 
 Metzgen v. Knox, 77 Misc. 271, 
 136 Supp. 681, aiJ'd 153 A. D. 
 911, 137 Supp. 129 and 154 A. 
 
 D. 953, 139 Supp. 1133 326 
 
 Mexican Sugar Refining Co., Ltd. 
 
 ads. Jacobs, 104 A. D. 242, 93 
 
 Supp. 776 200, 
 
 Mexican Sugar Refining Co., Ltd. 
 
 ads. Jacobs, No. 2, 112 A. D. 
 
 657, 98 Supp. 542 541, 
 
 Meyer, Matter of, v. Consolidated 
 
 Ice Co., 196 N. Y. 471, 90 N. 
 
 E. 54 
 
 Meyer v. Blair, 109 N. Y. 600, 17 
 
 N. E. 228 
 
 Meyer v. Page, 112 A. D. 625, 98 
 
 Supp. 739 206 
 
 Meyer ads. Wilson, 154 A. D. 300, 
 
 138 Supp. 1048 150 
 
 774 
 
 784 
 
 668 
 
 592 
 669 
 
 42 
 
 289 
 
 933 
 
 542 
 
 903 
 
 93 
 
Ixviii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Michel T. Betz, 108 A. D. 241. 95 
 
 Supp. 844 199, 404 
 
 Michel Brewing Co. ads. Harms 
 Co., 176 A. D. 235, 162 Supp. 
 1071 503 
 
 MicUelbacher ads. Weingreen, 139 
 
 A. D. 031, 124 Supp. 41 419 
 
 Michigan Steel Boat Co. ads. 
 Haase, 148 A. D. 298, 132 Supp. 
 1016, aff'd dism'd 210 X. Y. 
 602, 104 X. E. 1131 903 
 
 Michigan Southern & Northern 
 Indiana R. R. Co. ads. Bissell, 
 22 X. Y. 2.-)8 449, 455, 454 
 
 Michigan Southern & Northern 
 Indiana R. R. Co. ads. Proutz, 
 1 Hun 655 71, 933 
 
 Michigan Southern & Northern 
 Indiana R. R. Co. ads. Rogers, 
 28 Barb. 539 896 
 
 Middlebrook v. Merchants' Bank, 
 
 42 N. Y. (3 Keyes) 135 129 
 
 Middlesex Securities Co. ads. 
 Harburgh, 110 A. D. 633, 97 
 Supp. 350 546 
 
 Middleton, Unionville & Water 
 Gap. R. R. Co. ads. Cumming, 
 147 A. D. 105, 31 Supp. 710.. 278 
 
 Milbank v. de Riesthel, 82 Hun 
 537, 31 Supp. 522 481 
 
 Milliank v. Welch, 74 Hun 497, 
 2U Supp. 705 487 
 
 Miles, People ex rel. v. Montreal 
 & Boston Copper Co., 40 Misc. 
 282, 81 Supp. 974 849 
 
 Jlilk Exchange, Ltd., ads. People, 
 133 N. Y. 565, 30 N. E. 850.. 559 
 
 Milk Exchange ads. People, 145 
 N. Y. 267, 27 L.R.A. 437, 39 
 N. E. 1062 500 
 
 Miller v. Barlow, 78 A. D. 331, 79 
 Supp. 964 413 
 
 Miller ads. People ex rel. Bank 
 for Savings, 177 N. Y. 461, 
 69 X. E. 1103 724 
 
 Miller ads. People ex rel. Brook- 
 lyn Rapid Transit Co., 85 A. 
 D. 17S, 83 Supp. 96, aff'd 181 
 N. Y. 582, 74 N. E. 1123.... 718 
 
 ililler ads. People ex rel. Cohn & 
 Co.-, 180 X. Y. 16, 72 N. E. 
 525 70, 96, 255, 723 
 
 Miller ads. People ex rel. Con- 
 necting Terminal R. R. Co., 
 178 N. Y. 194. 70 N. E. 472. . 729 
 
 Miller v. Crown Perfumery Co., 
 
 125 A. D. 881, 110 Supp. 806. . 204 
 
 Miller, People ex rel. v. Cum- 
 mings, 72 N. Y. 433 300 
 
 Miller v. Dodge, 28 Misc. 640, 59 
 Supp. 1070 284 
 
 Miller ads. People ex rel. Dutilh- 
 Smith & Co., 90 A. D. 545, 85 
 Supp. 849 845, 866, 868 
 
 Miller ads. People ex rel. Fort 
 George Realty Co., 179 N. Y. 
 49, 71 N. E. 463 717 
 
 Miller ads. People ex rel. Hyde 
 & Sons, 90 A. D. 599, 85 
 Supp. 522, aff'd 170 N. Y. 
 564, 71 N. E. 1136 72« 
 
 Miller ads. Mahon, 81 A. D. 10, 80 
 Supp. 979 331, 413 
 
 Miller ads. People ex rel. Man- 
 hattan Silk Co., 125 A. D. 296, 
 109 Supp. 866, aff'd 197 N. Y. 
 577, 01 N. E. 1119... ,-844, 865, 867 
 
 Miller ads. Morris Plan Co.. 
 102 Misc. 470 525 
 
 Miller ads. People ex rel. Mutual 
 Trust Co., 177 N. Y. 51, 69 
 N. E. 124 711 
 
 Miller ads. People ex rel. Nation- 
 al Enameling Co., 112 A. D. 
 880, 98 Supp. 751 864, 867, 809 
 
 Miller ads. People ex rel. Nesmith 
 & Constantine Co., 105 A. D. 
 326, 94 Supp. 193 869 
 
 Miller ads. People ex rel. N. Y. 
 Realty Corp. 92 A. D. 116, 87 
 Supp. 341 806 
 
 Miller ads. People ex rel. North 
 American Co., 90 A. D. 560, 86 
 Supp. .386, aff'd 182 N. Y. .521, 
 74 N. E. 1124 84.-) 
 
 Miller ads. Occidental Construc- 
 tion Co., 154 A. D. 437, 139 
 Supp. 166 338 
 
 Miller ads. People, 84 A. D. 166, 
 82 Supp. 607 734 
 
 Miller v. Quincy, 179 X. Y. 294, 
 72 N. E. 116 ., 413 
 
 Miller ads. People ex rel. Rees' 
 Sons, 00 A. D. 591, 86 Supp. 
 193 722, 729 
 
 Miller %. Reynolds, 02 Hun 400, 
 
 32 Supp. 660 373 
 
 Miller v. University Magazine 
 Co., 10 Misc. 311, 30 Supp. 
 069 102 
 
 Miller ads. People ex rel. Wall 
 & H. St. Rv. Co., 181 N. Y. 
 328, 73 X. E. 1102 716 
 
 Miller ads. Wheeler, 90 N. Y. 
 
 353 214, 216, 221, 234 
 
 Miller v. White, 50 N. Y. 137 ... . 391 
 
 Miller Transfer Co. ads. White 
 Furnace Co., 131 A. D. 559, 115 
 Supp. 625 845 
 
 Millerton Iron Co. ads. Cole, 133 
 N. Y. 164, 30 N. E. 847. . . .75, 605 
 
 Milliken v. Caruso, 205 N. Y. 559, 
 98 X. E. 493 97 
 
TABLE OF CASES 
 
 References are to pages. 
 
 llilliken v. McGarrah, 159 A. D. 
 728, 144 Supp. 964 196 
 
 Milling Co., People ex rel. v. Bar- 
 ker, 147 N. Y. 31, 29 L.R.A. 
 393, 41 N. E. 435 860 
 
 Mills ads. Adams, 60 N. Y. 533 . , 390 
 
 Mills ads Marstaller, 143 N. Y. 
 398, 38 N. E. 370 347, 599 
 
 Mills & Gibb v. Starin, 119 A. D. 
 336, 104 Supp. 230 876 
 
 Jlills Water-Work Co., People 
 ex rel. v. Forrest, 97 N. Y. 97 . . 784 
 
 Minor v. Crosby, 76 A. D. 561, 78 
 Supp. 594 61 
 
 Miner v. Edison Electric Illumin- 
 ating Co., 22 Misc. 543, 50 
 Supp. 218; aff'd 26 Misc. 712, 
 56 Supp. 801 434 
 
 Minor v. Erie R. R. Co., 171 N. 
 X- 566, 64 N. E. 4.54 289 
 
 Missouri, K. & T. R. Co. ads. 
 Clarkson, 182 N. Y. 47, 70 
 L.R.A. 787, 74 N. E. 571 276 
 
 Missouri, Kansas & Texas Ry. 
 Co. ads. Maas, 83, N. Y. 223 . . 268 
 
 Missouri, K. & T. R. Co. v. Union 
 Trust Co., 156 N. Y. 592, 51 
 N. E. 309 276 
 
 Missouri Pacific Ry. v. Mercantile 
 Trust Co., 76 Misc. 10, 134 
 Supp. 548 182 
 
 Mitchell, Matter of, v. Northern 
 Security Oil & Transportation 
 Co., 44 Misc. 514, 90 Supp. 60. 851 
 
 Mitchell V. Boyer, 160 A. D. 565, 
 145 Supp. 715 . . .• 127 
 
 Mitchell V. Vermont Copper Min- 
 ing Co., 67 N. Y. 280 363 
 
 Mobile & Northwestern R. R. Co. 
 ads. Barnes, 12 Hun 126 912 
 
 Moch Co. V. Security Bank, 166 
 A. D. 121, 151 Supp. 756 506 
 
 Moch Co. V. Security B'k, 176 
 A. D. 842, 163 Supp. 277 182 
 
 Moe V. MeNally Co., 138 A. D. 
 
 480, 123 Supp. 71 368, 623 
 
 664, 932 
 
 Moghabghah v. Sherman & Sons 
 Co., 161 A. D. 135, 146 Supp. 
 392 150 
 
 Moir V. Provident Savings Life 
 Assn. Soc, 127 A. D. 591, 112 
 Supp. 57 309 
 
 Monaton R. I. Co. ads. Jacobs, 
 212 N. Y. 48, 105 N. E. 698.. 456 
 467, 503 
 
 Monaton Realty Investing Corp. 
 ads. Malcomson, 154 A. D. 694, 
 139 Supp. 405, aff'd 214 N. Y. 
 677, 108 N. E. 1100 '.... 522 
 
 Monihan ads. Wicks, 130 N. Y. 
 
 232, 14 L.R.A. 243, 29 N. E. 
 
 139 450 
 
 Monroe Savings Bank v. City of 
 
 Rochester, 37 N. Y. 365 714 
 
 Montague ads. City of New York, 
 
 145 A. D. 172, 129 Supp. 1084. 559 
 Montague v. Hotel Gotham Co., 
 
 149 A. D. 687, 133 Supp. 954 . . 356 
 Montague v. Hotel Gotham Co., 
 
 208 N. Y. 442, 102 N. E. 513. . 485 
 
 Montana Diamond Co. ads. Her- 
 bert, 81 A. D. 212, 80 Supp. 717 917 
 
 Montauk Wire Co. ads. Insurance 
 Press, 103 A. D. 472, 93 Supp. 
 134 193, 197 
 
 Montelac Park ads. Osborn, 89 
 Hun 167, 35 Supp. 610, aff'd 
 153 N. Y. 672, 48 N. E. 1106 570 
 
 Montevil v. American Locomotive 
 Co., 173 A. D. 387, 159 Supp. 
 21 523 
 
 Montgomery v. Brush Electric Il- 
 luminating Co., 48 A. D. 12, 62 
 Supp. 606, aff'd 168 N. Y. 657, 
 61 N. E. 1131 213 
 
 Monticello & Port Jervis Ry. Co. 
 ads. Union Trust Co., 63 N. Y. 
 311 270 
 
 Montreal & Boston Copper Co. 
 ads. People ex rel. Miles, 40 
 Misc. 282, 81 Supp. 974 849 
 
 Moore v. Institute of Educational 
 Travel, Inc., 89 Misc. 369, 151 
 Supp. 929 55 
 
 Moore v. Moore Mica Paint Co., 
 
 150 A. D. 792, 135 Supp. 210. . 188 
 Moore Blind Stitcher & Over- 
 
 seamer Co. ads. Warth, 146 A 
 
 D. 28, 130 Supp. 748, aff'd 207 
 
 N. Y. 673, 100 N. E. 1128. .. . 240 
 Moore Mica Paint Co. ads. Moore, 
 
 150 A. D. 792, 135 Supp. 210. . 188 
 Moosebrugger v. Walsh, 89 Hun 
 
 564, 35 Supp. 550 108, 214 
 
 Moran v. Long Island City, 101 
 
 N. Y. 439, 5 N. E. 80 540 
 
 Moran v. Vreeland, 81 Misc. 664, 
 
 143 Supp. 522, aff'd 162 A. D. 
 
 907, 146 Supp. 1101 331, 405 
 
 Morgan v. Bon Bon Co., Inc., 
 
 165 A. D. 89, 150 Supp. 668.. 100 
 Morgan ads. People ex rel. 
 
 Brooklyn R. T. Co., 57 A. D. 
 
 335, 68 Supp. 21; mod. 168 
 
 N. Y. 672, 61 N. E. 1132. .711, 723 
 Morgan ads. People ex rel. Brookr 
 
 lyn Union Gas Co., 114 A. D. 
 
 266, 99 Supp. 711, aff'd 195 N. 
 
 Y. 616, 89 N. E. 1108 724 
 
Ixx 
 
 TABLE OF CASES 
 
 Eeferences are to pages. 
 
 [Morgan ads. People ex rel. 
 Colonial Trust Co., 47 A. D. 
 126, 62 Supp. 191, affd 162 
 N. Y. 654, 57 X. E. 1116 731 
 
 Morgan ads. People ex rel. Com- 
 mercial Cable Co., 178 N. Y. 
 433 709, 716, 717, 808 
 
 Morgan v. Hedstrom, 164 N. Y. 
 224, 58 N. E. 26 385 
 
 Morgan ads. Johnson, 68 N .Y. 
 494 282 
 
 Morgan ads. People ex rel. Koehl 
 & Co., 96 A. D. 110, 88 Supp. 
 1066, aff'd 183 N. Y. 574, 76 
 N. E. 1105 725 
 
 Morgan ads. People ex rel. Pav- 
 ing Co., 61 A. D. 373, 70 Supp. 
 516 698 
 
 Morgan v. Skiddy, 62 N. Y. 319. . 
 
 148, 442 
 
 Morgan ads. Southworth, 71 Misc. 
 214, 128 Supp. 598 93, 244 
 
 Morgan ads. Southworth, 205 N. 
 Y. 293, 51 L.R.A. (N. S.) 56 
 98 N. E. 490 86, 89, 933, 938 
 
 Morgan ads. Warner, 81 Misc. 
 865, 143 Supp. 516 429 
 
 Morgan ads. People ex rel. 
 Waterman Co., 48 A. D. 395, 
 63 Supp. 76 699 
 
 Morgan & Co. v. Quo Vadis 
 Amusement Co., 45 Misc. 130, 
 91 Supp. 882 627 
 
 Morison ads. Dill & Collins Co., 
 159 A. D. 583, 144 Supp. 894 
 
 484, 524 
 
 Morrison v. Baltimore & Ohio K. 
 R. Co., 177 A. D. 613, 164 Supp. 
 258 872 
 
 Morrill v. C. T. Segar Mfg. Co., 
 32 Hun 543 369 
 
 Morris Plan Co. v. Miller, 102 
 Misc. 470 525 
 
 Morrison v. Menhaden Co., 37 
 Hun 522 631 
 
 Morse ads. Bank of China, etc., 
 168 N. Y. 458, 56 L.R.A 139, 
 61 N. E. 774 83, 174 
 
 Morse Dry Dock & Repair Co., 
 People ex rel. v. Purdy, 100 
 Misc. 580, 167 Supp. 69 797 
 
 Morse Iron Works & D. &' D. Co., 
 ads. Washington Trust Co., 187 
 N. Y. 307, 79 N. E. 1022 260 
 
 Mortimer ads. Kolh, 135 A. D. 
 542, 120 Supp. 543 419 
 
 Morton t. Metropolitan Life Ins. 
 Co., 34 Hun 366, afif'd 103 N". 
 Y. 645 511 
 
 Moses v. Soule, 63 Misc. 203, 118 
 
 Supp. 410, aff'd 136 A. D. 904. 
 
 120 Supp. 1136 138, 143, 183 
 
 Moslen Safe Co., The, v. Guard- 
 ian Trust Co., 208 X. Y. 524, 
 
 101 N. E. 786 220, 236 
 
 Moss V. Averell, 10 N. Y. 449 . . 62 
 213, 230 235, 456, ."i05 
 Moss V. Geddes, 28 Misc. 291, 59 
 
 Supp. 867 286 
 
 Moss V. McCuUough, 7 Barb. 27!l 
 
 230, 506 
 Moss V. Manhattan Co., 48 A. D. 
 
 561, 62 Supp. 936 129 
 
 Mossen ads. Birmingham Nat. 
 
 Bank, 14 Hun 605 226 
 
 Motor Boat Club ads. Fischerj 61 
 
 Misc. 66, 113 Supp. 56 378 
 
 Mott Iron Work ads. Wood, 114 
 
 A. D. 108, 99 Supp. 677 .">43 
 
 Mount Morris Bank ads. Brady, 
 
 65 A. D. 212, 73 Supp. 532. . . 362 
 Mt. Morris Construction Co. ads. 
 
 Duke, 127 A. D. 39, 111 Supp. 
 
 313 .-)40 
 
 Mount Vernon Rattan Co. v. Joc- 
 
 himson, 119 A. D. 71, 103 Supp. 
 
 1045 471 
 
 Moyer ads. Villard, 123 A. D. 629, 
 
 107 Supp. 1054 142 
 
 Moynihan ads. Irving Nat. Bank, 
 
 84 A. D. 301, 82 Supp. 705... 344 
 Muck V. Hitchcock, 212 N. Y. 283, 
 
 106 N. E. 75 453, 824 
 
 Muckle ads. Wasp. 136 A. D. 241, 
 
 120 Supp. 976, aff'd 201 N. Y. 
 
 527, 94 N. E. 1100 341 
 
 Mudgett ads. Veeder, 95 N. Y. 
 
 295 107, 218, 223, 225 
 
 Muehfeld & Haynea Piano Co., 
 
 Matter of, 12 A. D. 492, 42 
 
 Supp. 802 484, 633, 636 
 
 Mulheran v. Gebhardt, 93 A. D. 
 
 98, 86 Supp. 941 157 
 
 Muhleman ads. Hennessy, 40 A. 
 
 D. 175, 57 Supp. 854 335 
 
 Municipal Gas Co., People ex rel. 
 
 V. Rice, 138 N. Y. 151, 33 N. 
 
 E. 846 21 
 
 Munroe ads. Budd, 18 Hun 316. . 128 
 Munson v. Genesee Iron &. Brass 
 
 Works, 37 A. D. 203, 56 Supp. 
 
 139 489 
 
 Munson ads. Harpending, 91 N. 
 
 Y. 651 290, 327 
 
 Munson v. Syracuse, Geneva & 
 
 Corning R. R. Co., 103 N. Y. 
 
 58, 8 N. E. 355 4, 324 
 
TABLE OF CASES 
 
 Ixxi 
 
 References are to pages. 
 
 Munzingen v. United Press, 52 
 
 A. D. 338, 65 Supp. 194 
 
 488, 
 Jifurphy ads. Fitchett, 46 A. D. 
 
 181, 61 Supp. 182 189, 190, 
 
 Murphy Varnish Co. v. Connell, 
 
 10 Misc. 553, 32 Supp. 492 
 
 Murray ads. Flaherty, 60 A. D. 
 92, 69 Supp. 675, dism'd 172 
 
 N. Y. 646, 65 N. E. 1116 
 
 Murray v. Smith, 166 A. D. 528, 
 
 152 Supp. 102 183, 185, 
 
 320, 326, 
 Murray v. Vanderbilt, 39 Barb. 
 
 140 
 
 Mutual Benefit Associates ads. 
 
 People, 39 Hun 49 
 
 Mutual Benefit Life Ins. Co. v. 
 
 Davis, 12 N. Y. 569 
 
 Mutual Benefit Life Ins. Co. ads. 
 People, 86 Hun 219, 33 Supp. 
 
 191 
 
 Mutual Brewing Co. ads. Halpin, 
 91 Hun 220, 36 Supp. 151, app. 
 dism'd 148 N. Y. 744, 42 N. E. 
 
 1093 
 
 Mutual Brewing Co. ads. Halpin, 
 
 20 A. D. 583, 47 Supp. 412.305, 
 
 Mutual Brewing Co. v. N. Y. & 
 
 College Point Ferry Co., 16 A. 
 
 D. 149, 45 Supp. 101 
 
 Mutual Gas Light Co., People 
 ex rel. v. Wells, 42 Misc. 606, 
 
 87 Supp. 595 
 
 Mutual Life Insurance Co. v. 
 Forty-second St. E. R. Co., 74 
 
 Hun 505, 26 Supp. 545 
 
 Mutual Life Ins. Co. v. McCurdy, 
 No. 1, 118 A. D. 815, 103 Supp. 
 
 829 
 
 Mutual Life Ins. Co. v. McCurdy, 
 No. 2, 118 A. D. 822, 103 
 
 Supp. 840 , 
 
 Mutual Life Ins. Co. v. McCurdy 
 & McCurdy, 118 A. D. 827, 103 
 
 Supp. 837 
 
 Mutual Life Ins. Co. v. Yates 
 County Nat. B'k, 35 A. D. 
 
 218, 54 Supp. 743 47, 363, 
 
 Mutual Eeserve Life Ins. Co. 
 ads. Johnston, 43 Misc. 251, 
 
 ■87 Supp. 438 
 
 Mutual Trust Co., People ex rel. 
 V. Miller, 177 N. Y. 51, 69 N. 
 
 E. 124 
 
 Mutual Union Telegraph Co., Peo- 
 ple ex rel. v. Comm'rs of Taxes, 
 
 99 N. Y. 254; 1 N. E. 773 
 
 Myers ads. Clerk, 11 Hun 608.. 
 
 298 
 
 62U 
 
 Myers v. Spangenberg & McLean 
 Co., 65 Misc. 475, 120 Supp. 
 
 174 ■ 883 
 
 Myers' V. Sturgis, 123 A. D. 470, 
 108 Supp. 526, aff'd 197 N. Y. 
 526, 90 N. E. 1162.... 77, 83, 212 
 Nachod ads. Lefi, 64 Misc. 497, 
 
 119 Supp. 470 .■ 502 
 
 Nash V. Hall, 11 Misc. 468, 32 
 
 Supp. 701 409 
 
 Nash V. Hall Signal Co., 90 Hun 
 
 354, 35 Supp. 940 414 
 
 Nason Mfg. Co. v. Garden, 52 
 
 A. D. 363, 65 Supp. 147 644 
 
 Nassau Electric E. E. Co., Mat- 
 ter of, V. Grout, 119 A. D. 
 130, 103 Supp. 975, aff'd 189 
 N. Y. 510, 81 N. E. 1173. .774, 785 
 Nassau Ferry Co. ads. People ex 
 rel. Clason, 68 Hun 128, 33 
 
 Supp. 244 52 
 
 Nassau Gas Light Co. v. City of 
 
 Brooklyn, 89 N. Y. 409.. 697, 699 
 Nassau Suburban Home Co. ads. 
 Jones, 53 Misc. 63, 103 Supp. 
 
 1089 
 
 Natalie Anthracite Coal Co. ads. 
 
 Curtis, 85 Supp. 413, aff'd 181 
 
 N. Y. 543, 73 N. E. 1126. ... 
 
 National Architects' Bronze Co. 
 
 ads. Bergen, 173 A. D. 680, 160 
 
 Sup. 331, 195 
 
 National Bank v. Dillingham, 147 
 
 N. Y. 603, 42 N. E. 338 344 
 
 National Bank ads. Fishkill Sav- 
 ings Institution, 80 N. Y. 162. 
 National Bank ads. Pollock, 7 
 
 N. Y. 274 
 
 National B'k v. Navassa Phos- 
 phate Co., 56 Hun 136, 8 Supp. 
 
 929 
 
 National B'k of Newport ads. 
 
 Eobinson, 95 N. Y. 637.. 130, 
 
 National B'k of Newport ads. 
 
 Evertson, 66 N. Y. 14 
 
 National B'k of Newport v. 
 Snyder Mfg. Co., 107 A. D. 
 
 95, 94 Supp. 982 370 
 
 National Bank of Newport v. 
 Snyder Mfg. Co., 117 A. D. 370, 
 
 102 Supp. 478 t)03 
 
 National Broadway Bank v. Wes- 
 sell Metal Co., 59 Hun 470, 
 
 13 Supp. 744 326 
 
 National Distilling Co. v. Van 
 Emden, 120 A. D. 746, 105 
 
 Supp. 657 ««5 
 
 National Enameling Co., People 
 7fl0 ex rel. v. Miller, 112 A. D. 
 246 880, 98 Supp. 751.... 864, 867, 869 
 
 485 
 489 
 
 356 
 
 841 
 
 523 
 
 204 
 471 
 
 927 
 
 664 
 
 876 
 
 596 
 
 428 
 
 407 
 
 633 
 
 761 
 
 116 
 
 527 
 
 527 
 
 526 
 
 503 
 
 902 
 
 711 
 
 520 
 135 
 
 373 
 162 
 
 270 
 
TABLE OF CASES 
 
 References are to pages. 
 
 National Fire Ins. Co. of Hart- 
 ford ads. People, 27 Hun 18S. 692 
 Kational Jewelers Board of Trade 
 ads. ileisel & Co., 90 Misc. 19," 
 1.52 Supp. 913, aff'd 173 A. D. 
 
 889, 157 Supp. 1133 519 
 
 Xational Knitting Co. \. Bronner, 
 
 20 Misc. 125, 45 Supp. 714.. 842 
 National Lead Co. ads. Lodi 
 Chemical Co., 41 A. D. 535, 58 
 
 Supp. 717 490 
 
 Xational Life Assn. ads. Ham- 
 mond, 58 A. D. 453, 09 Supp. 
 585, dism'd 168 X. Y. 262, 61 
 
 N. E. 244 894 
 
 National Macaroni Co. ads. 
 Bangs, 15 A. D. 522, 44 Supp. 
 
 546 374 
 
 Xational Nassau Bank ads. 
 Planten, 174 A. D. 254, 160 
 Supp. 297, aff'd 220 N. Y. 677, 
 
 116 N. E. 1070 202 
 
 Xational Park B'k v. ' German 
 American Mutual W. & S. Co., 
 116 N. Y. 281, 5 L. R. A. 673, 
 
 22 N. E. 567 448, 508 
 
 Xational Park Bank ads. People 
 ex rel. Hunter, 122 A. D. 635, 
 
 107 Supp. 369 58 
 
 National Park Bank v. Whitmore, 
 40 Hun 499, dism'd 104 N. Y. 
 
 297, 10 X. E. 524 473 
 
 Xational Salt Co. ads. Ingraham, 
 572 A. D. 582, 74 Supp. 388, 
 aff'd 179 N. Y. 556, 71 X. E. 
 
 1131 499 
 
 Xational Savings & lioan Co. ads. 
 Bloom, 152 X. Y. 114, 46 N. E. 
 
 166 402 
 
 Xational Shoe & Leather Bank v. 
 Mechanics' Nat. B'k, 89 X. Y. 
 
 467 453 
 
 Xational Shoe & Leather Bank 
 ads. Wilcox, 67 A. D. 466, 73 
 
 Supp. 900 634 
 
 Xational Spraker Bank v. Tread- 
 well Co., 80 Hun 363, 30 Sup. 
 
 77 505 
 
 National Starch Co., People ex 
 rel. V. Waldron, 26 A. D. 527, 
 
 50 Supp. 523 736 
 
 Xational Surety Co., People ex 
 rel. V. Feitner, 166 N. Y. 129, 
 
 59 N. E. 731 742, 752 
 
 Xational Surety Co. ads. Sterling 
 Mfg. Co., 94 Misc. 604, 159 
 
 Supp. 979 882 
 
 Xational Trust Co. ads. People, 
 
 S2 X. Y". 283 596. 644 
 
 Xational Tube Works Co. v. Gil- 
 flllan, 124 N. Y. 302, 26 X. E. 
 538 96, 212 
 
 National Union B'k of Water- 
 town. The, V. Landon, 45 N. Y". 
 
 410 553 
 
 Xavassa Phosphate Co. ads. 
 Xational B'k, 56 Hun 136, S 
 
 Supp. 929 373 
 
 Naylor ads. Schwanck, 102 N. Y. 
 
 683, 7 X. E. 788 145 
 
 Nealis v. American Tube & Iron 
 Co., 150 N. Y. 42, 44 N. E. 
 
 944 639, 863 
 
 Neff ads. People ex rel. Citizens' 
 Illuminating Co., 26 A. D. 542, 
 
 50 Supp. 680 748 
 
 Xeff ads. People ex rel. Coney 
 Island R. R. Co., 15 A. D. 585, 
 
 44 Supp. 810 753 
 
 Neff ads. People ex rel. New ' 
 Y'ork, & New Jersey Telephone 
 Co., 15 A. D. 8, 44 Supp. 46, 
 aff'd 156 N. Y. 701, 51 N. E. 
 
 1093 753, 766 
 
 Neideg ads. Methey, 72 X. Y. 
 
 100 215, 221, 241 
 
 Nekarda ads. Ebling, 148 A. D. 
 
 193, 132 Supp. 309, aff'd 210 
 
 \. Y. 566, 104 N. E. 1129.. 204 
 
 Xelke Art Lithographic Co. ads. 
 
 Schmidt, 17 Misc. 124, 39 
 
 Supp. 353 530 
 
 Xe.^mith & Constantine Co., 
 People ex rel. v. Miller, 105 A. 
 
 D. 326, 94 N. Y. Supp. 193 869 
 
 Netherlands-American Steam 
 
 Navigation Co. ads. Thornton, 
 
 178 A. D. 604, 165 Supp. 682. 371 
 
 Neuchatel Asphalte Co. v. The 
 
 Mayor, 155 N. Y. 373, 49 N. E. 
 
 1043 880 
 
 New ads. McQueen, 45 A. D. 
 
 579, 61 Supp. 464 : .. . 683 
 
 Xewcomb ads. Barnes, 89 N. Y'. 
 
 108 336 
 
 Xewcomb, People ex rel. v. Mc- 
 
 Call, 94 N. Y. 587 663 
 
 Newman v. Newman, 160 A. D. 
 
 331, 145 Supp. 325 359 
 
 Newman ads. Stafford Mfg. Co., 
 
 75 Misc. 636, 133 Supp. 1073. . 887 
 New Britain Nat. B'k v. Cleve- 
 land Co., 91 Hun 447, 36 Supp. 
 387, aff'd 158 N. Y. 722, 53 
 N. E. 1128 . .758, 261, 271, 483, 489 
 New Brunswick, Amboy & N. Y. 
 Steamboat Co. ads. O'Reilly, 28 
 
 Misc. 112, 59 Supp. 261 917 
 
 New England Dressed Meat & W. 
 Co., People ex rel., 155 N. Y. 
 408, 41 L. R. A. 228, 50 N. E. 
 53 700, 729, 766 
 
TABLE OF CASES 
 
 Ixxiii 
 
 References are to pages. 
 
 New England Iron Co. v. Gilbert 
 Elevated R. R. Co., 91 N. Y. 
 
 153 
 
 Xew England Loan & Trust Co., 
 People ex rel. v. Roberts, 25 
 A. D. 16, 49 Supp. 10, aff'd 156 
 N. Y. 688, 50 N. E. 1120. . .845, 
 
 New England Piano Co. ads. Cos- 
 gray, 22 A. D. 455, 48 Supp. 7 . 
 
 New England Quartz Co. ads. Ai- 
 ling Co., 66 A. D. 473, 73 Supp. 
 347, aff'd 174 N. Y. 536, 66 N. 
 E. 1110 
 
 New England Telegraph Co., Peo- 
 ple ex rel. v. Woodbury, 63 
 Misc. 1, 116 Supp. 209 
 
 New Jersey Construction Co. v. 
 Farmers' Loan & Trust Co., 39 
 Misc. 672, 80 Supp. 622 
 
 New Jersey Zinc Co. ads. Hol- 
 
 brook, 57 N. Y. 616 114, 
 
 124 125 127 
 
 New Paltz & Wallkill ' Valley r! 
 R. Co., Matter of, 27 Misc. 451, 
 59 Supp. 247, aff'd 42 A. D. 622, 
 59 Sup. 1111 
 
 New York & Atlantic R. R. Co. 
 ads Whitney, 32 Hun 164 
 
 New York Assets Realization Co. 
 V. Pforgheimer, 158 A. D. 700, 
 143 Supp. 898 
 
 New York Automobile Co. v. 
 Franklin, 49 Misc. 8, 97 Supp. 
 781 
 
 New York & Brooklyn El. R. R. 
 Co. ads. Francis, 108 N. Y. 93, 
 15 N. E. 192 121, 
 
 New York Building-Loan Co. ads. 
 Matter of Eustace, 98 A. D. 97, 
 90 Supp. 784 
 
 New York Building-Loan Build- 
 ing Co. ads. People, .112 A. D. 
 166, 98 Supp. 290 
 
 New York Building-Loan Bank- 
 ing Co. ads. People, 119 A. D. 
 830, 104 Supp. 892, aff'd 189 
 N. Y. 547, 82 N. E. 1131.. 184, 
 
 New York Cab Co. ads. Gill, 48 
 Hun 324, 1 Supp. 202 
 
 New York Central R. R. Co., Peo- 
 ple ex rel. v. Block, 178 A. D. 
 251 
 
 New York Central R. R. Co. ads. 
 Continental Securities Co., 179 
 A. D. 355, 166 Supp. 499 
 
 New York Central R. R. Co., Peo- 
 ple ex rel. v. Woodbury, 203 N. 
 Y. 167, 96 N. E. 431 769, 
 
 New York Central & H. R. R. 
 R. Co., People ex rel., 200 N. 
 N. Y. 328, 93 N. E. 988.. 723, 
 
 49' 
 
 865 
 
 433 
 
 916 
 
 800 
 
 847 
 
 122 
 
 152 
 
 661 
 
 631 
 
 542 
 
 323 
 
 138 
 
 655 
 
 668 
 
 471 
 319 
 
 786 
 
 206 
 
 770 
 
 733 
 
 93 
 
 64 
 
 New York Central & H. R. R. R. 
 
 . Co., People ex rel. v. Cook, 62 
 
 Hun 303, 17 Supp. 546 
 
 New York Central & Hudson R. 
 R. R. Co. ads. Graville, 34 Hun 
 224 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Gurnley, 
 64 Misc. 605, 118 Supp 777 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Hanking, 
 152 A. D. 488, 137 Supp. 365. 737 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Keno, 6l 
 
 Misc. 345, 114 Supp. 1094 775 
 
 791, 808 
 
 New York Central, etc., R.. R. Co., 
 
 People ex rel. v. Knight, 173 
 
 N. Y. 255, 65 N. E. 1102.... 
 
 722, 728, 729, 
 
 New York Central & H. R. R. R. 
 Co. ads. Niles, 176 N. Y. 119, 
 68 N. E. 142 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Priest, 206 
 N. Y. 274, 99 N. E. 547... 769, 
 
 718 
 865 
 
 198 
 
 777 
 778 
 
 New York Central & Hudson -R. 
 
 R. R. Co. ads. Venner, 160 A. 
 
 D. 127, 145 Supp. 725, aff'd 217 
 
 N. Y. 615, 617, 111 N. E. 487. 
 
 494, 501, 
 
 New York Central & Hudson R. 
 R. R. Co. ads. Venner, 177 A. 
 D. 296, 164 Supp. 626 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Wood- 
 bury, 167 A. D. 428, 153 Supp. 
 537, aff'd 218 N. Y. 635, 112 
 N. E. 1070 769, 770, 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Woodbury, 
 167 A. D. 428, 153 Supp. 537, 
 aff'd 218 N. Y. 635, 112 N. E. 
 1070 
 
 New York Central, etc., R. R. Co., 
 People ex rel. v. Woodbury, 206 
 N. Y. 304, 99 N. E. 545 771 
 
 New York Central & H. R. R. R. 
 Co., People ex rel. v. Woodbury, 
 208 N. Y. 421, 102 N. E. 565, 
 566 452, 
 
 New York, Chicago & St. Louis 
 R. R. Co. ads. People, 129 N. 
 Y. 474, 15 L.R.A. 82, 29 N. E. 
 969 611, 693, 
 
 New York City & Northern R. 
 R. Co. ads. Central Trust Co., 
 110 N. Y. 250, 1 L. R. A. 260, 
 18 N. B. 92 712 
 
 449 
 709 
 
 500 
 
 776 
 
 769 
 
 772 
 
 694 
 
body 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 New York Commercial Co. ads. 
 Alden & Co., 157 A. D. 872, 142 
 Supp. 772 659 
 
 New York Citv Ry. Co. ads. Peo- 
 ple, 57 Misc. 114, 107 Supp. 
 247 629, 632 
 
 New York, City of, see also 
 '• City of New York." 
 
 New York, city of, y. Chase, Tal- 
 bot & Co., 206 N. Y. 1, 99 N. E. 
 
 143 738, 766 
 
 New York, Mayor (if, ads. Mercan- 
 tile Nat. B'k, 172 X. Y. 35, 64 
 
 N. E. 756 788, 791 
 
 New York, The Mayor, etc., of, 
 ads U. S. Trust Co.. of N. Y., 
 
 144 N. Y. 488, 39 N. E. 383. . 742 
 
 747, 787 
 
 New York & College Point Ferry 
 Co. ads. Kearns, 19 Misc. 19, 
 42 Supp. 771 320 
 
 New York & College Point Ferry 
 Co. ads. Mutual Brewing Co., 
 16 A, D. 149, 45 Supp. 101 633 
 
 New York & C. Steam Laundry 
 Co. ads. Hurd, 167 N. Y. 89, 
 60 N. E. 327 466 
 
 New York Edison Co., People ex 
 rel. V. Feitner, 39 Misc. 474, 80 
 Supp. 138 790 
 
 New York Edison Co. ads. Irvine, 
 207 N. Y. 425, 101 N. E. 358 . . 603 
 
 604 
 
 New York Edison Co., People 
 ex rel. v. Wells, No. 3, 135 
 A. D. 644, 119 Supp. 1057, 
 afT'd 198 N. Y. 607, 92 N. E. 
 1097 736 
 
 New York Edison Co., People ex 
 rel. V. Wells, Xo. 6, 135 A. D. 
 
 647, 119 Supp, 1060 737 
 
 New York Elevated R. E. Co. ads. 
 
 Beveridge, 112 N. Y. 1, 2 L.R.A.- 
 
 648, 19 N. E, 489' 170, 334 
 
 New York Elevated R. R., People 
 
 ex rel. v. Commr. of Taxes, 82 
 
 N. Y. 459 737 
 
 N. Y. & E. R, F. Co., People 
 
 ex rel. v. Roberts, 168 N. \. 
 
 14, 60 N. E. 1043 722 
 
 New York Express Co., Matter of, 
 
 23 Hun 615 298 
 
 New York Floating Dry Dock 
 
 Co. ads. People, 92 N. Y. 487 . 697 
 New York & Greenwood Lake Ry. 
 
 Co. ads. Thomas, 139 N. Y. 163, 
 
 34 N. E. 877 282, 281 
 
 New York & Hajlem R. R. Co. 
 
 ads. Brainerd, 25 N. Y, 496 275 
 
 New York Herald Co. ads. Stuart, 
 
 73 A. D. 459, 77 Supp. 216. . . . 917 
 
 New York, Housatonic & North- 
 ern R. R. Co. ads. Duncomb, 
 
 84 N. Y. 190 260, 281; 321 
 
 Xew York, Housatonic & North- 
 ern R. R. Co. ads. Duncomb, 
 
 85 N. Y, 1 329 
 
 New York & Hudson River R, R. 
 
 Co. ads. Continental Ins. Co., 
 
 187 X. Y. 225. 79 N. E. 1026. . 333 
 Xew York Hyglia lee Co., Ltd., 
 
 ads. Hyglia Water Ice Co., 140 
 
 X. Y. 94, 135 N. E. 417 37 
 
 New York Infant Asylum ads. 
 
 People ex rel. Nicholl, 122 N. 
 
 Y. 190, 10 L.R.A. 381, 25 N, 
 
 E. 241 297, 312 
 
 Xew York Infant Asylum ads. 
 
 Potter, 44 Hun 367 368 
 
 Xew York, Kingston & Syracuse 
 
 R. R. Co. ads. Caylies, 10 Hun 
 
 295, aff'd 76 N. Y. 609 274 
 
 Xew York, Lake Erie & Western 
 
 R. R. Co. ads. Barr, 96 N. Y. 
 
 444 202, 205 
 
 X'ew York, Lake Erie & Western 
 
 R. R. Co. ads. Barr, 125 N. Y. 
 
 263, 26 N. E. 145 200, 321 
 
 New York, Lake Erie & Western 
 
 R. R. Co. ads. Brayton, 72 Hun 
 
 602. 25 Supp. 264 43,6 
 
 Now York, Lake Erie & Western 
 
 R. R. Co. v, Carhart, 36 Hun 
 
 288 543 
 
 New York, Lake Erie & Western 
 
 R. R. Co. v. Davis, 38 Hun 477 157 
 New York, Lake Erie & Western 
 
 R. R. Co, ads, Emery, & Misc. 
 
 310, 30 Supp. 306 283 
 
 New York, Lake Erie & Western 
 
 R. R. Co. ads. Faltiske, 12 Misc. 
 
 478, 33 Supp. 679, aff'd 151 N. 
 
 Y. 650, 46 N. E. 1146 437 
 
 Xew York, Lake Erie & Western 
 
 R. R. Co. ads. Herring, 105 N, 
 
 Y. 340, 12 N, E. 763 286, 480 
 
 634, 641, 681 
 New York, Lake Erie & Western 
 
 R. R, Co. ads. Pondir, 72 Hun 
 
 384, 25 Supp. 560 198 
 
 New York, Lake Erie & Western 
 
 R. R, Co. ads. Rochester, Hor- 
 
 nellsville & Lackawanna R. R. 
 
 Co., 48 Hun 190 436 
 
 New York, Lake Erie & Western 
 
 R. R. Co. ads. Schmid, 32 Hun 
 
 335, aff'd 98 N.Y. 634 620 
 
 New York, Lake Erie & Western 
 
 R. R. Co. ads. Vatable, 96 N. Y. 
 
 49 285, .280 
 
TABLE or CASES 
 
 Ixxv 
 
 References are to pages. 
 
 New York Life Ins. Co. ads. 
 
 Beers, 66 Hun 75, 20 Supp. 788 
 
 New York Life Insurance Co. ads. 
 
 Bush, 135 A. D. 447, 119 Supp. 
 
 796 . 
 
 New York & Long Island Bridge 
 Co., Matter of, 148 N. Y. 540, 
 42 N. E. 1088 16, 
 
 New York & Long Island R. E. 
 Co. ads. Bogart, 118 A. D. 50, 
 102 Supp. 1093, afif'd 191 N. Y. 
 550, 85 N. E. 1106 355, 
 
 New York Mail & Newspaper 
 Transportation Co., People ex 
 rel. V. Tax Commissioners, 157 
 A. D. 686; 142 Supp. 758, aif'd 
 210 N. Y: 623, 104 N. E. 1138 
 
 New York Mail & N. T. Co., 
 People ex rel. v. Gans, 198 
 N. Y. 250, 91 N. E. 634. .722, 
 
 New York Material Men's Mer- 
 cantile Assn., Inc., ads. Mate- 
 rial Men's Assn., Ltd., 169 A. 
 D. 843, 155 Supp. 706 
 
 New York Milk Products Co. v. 
 Damon, 57 A. D. 261, 68 Supp. 
 183, aff'd 172 N. Y. 661, 65 
 N. E. 1119 
 
 New York & Mt. Vernon Water 
 Co. ads. Cameron, 133 N. Y. 
 336, 31 N. E. 104 
 
 New York Mutual Savings & 
 Loan Assn. ads. Case, 88 A. D. 
 538, 85 Supp. 104 
 
 New York & New Haven R. R. Co. 
 ads. Mechanics' Bank, 13 N. Y. 
 599 116, 121, 
 
 New York & New Haven R. R. 
 Co. V. Schuyler, 17 N. Y. 592 . . 
 
 New York & New Haven R. R. Co. 
 V. Schuyler, 38 Barb. 534, aflf'd 
 
 34 N. Y. 30 97, 107, 124, 
 
 134, 135, 
 
 New York, New Haven & Hart- 
 ford R. R. Co. ads. Delaware, 
 154 A. D. 8, 139 Supp. 17. .194, 
 
 New York, New Haven & Hart- 
 ford R. R. Co. ads. Howe, 142 
 A. D. 451, 126 Supp. 1090 
 
 New York, New Haven & Hart- 
 ford, R. R. Co. ads. Phelps, 17 
 A. D. 392, 45 Supp. 178 
 
 New York, New Haven & Hart- 
 ford R. R. Co. ads. Wehren- 
 herg, 124 A. D. 205, 108 Supp. 
 704 . : 
 
 New York & New Jersey Ry. Co. 
 ads. Peck, 85 N. Y. 246 
 
 357 
 
 18 
 
 555 
 
 363 
 
 800 
 
 731 
 
 New York & New Jersey Tele- 
 phone Co., People ex rel. v. 
 Neflf, 15 A. D. 8, 44 Supp. 46, 
 aff'd 156 N. Y. 701, 51 N. E. 
 1093 753. 
 
 New York & N. R. Co. ads. Farm- 
 ers' L. & T. Co., 150 N. Y. 410, 
 34 L.R.A. 76, 44 N. E. 1043.. 
 
 766 
 
 270 
 494 
 
 856 
 
 605 
 
 203 
 
 136 
 
 116 
 
 128 
 138 
 
 195 
 
 892 
 
 896 
 
 898 
 
 287 
 
 New York & Northern R. R. Co. 
 ads Oelbermann, 7 Misc. 352, 
 27 Supp. 945 185, 284 
 
 New York & Northern Ry. Co. 
 ads. Oelbermann, 14 Misc. 131, 
 36 Supp. 1096 189 
 
 New York Novelty Co. ads. Stie- 
 fel, 25 Misc. '221, 55 Supp. 
 90 683 
 
 New York Novelty Co. ads. Stie- 
 fel, 14 A. D. 371, 43 Supp. 1012 .490 
 
 New York, Ontario & Western 
 Ry. Co. ads. Daily, 26 Misc. 
 539, 57 Supp. 485 899 
 
 New York, Ontario & Western Ry. 
 Co., People ex rel. v. Tax Com-, 
 missioners, 132 A. D. 604, 117 
 Supp. 81 795 
 
 New York Phonograph Co., 
 People ex rel. v. Rice, 57 Hun 
 486, 11 Supp. 249, aff'd 128 
 N. Y. 591, 28 N. E. 251.. 693, 694 
 
 New York Produce Exchange ads. 
 People ex rel. Johnson, 149 N. 
 
 Y. 401, 44 N. E. 84 502 
 
 New York, Providence & Boston 
 R. R. Co. V. Dixon, 114 N. Y. 
 80, 21 N. E. 110 433 
 
 New York & Queens G-as Co., 
 People ex rel. v. Feitnei-, 58 
 A. D. 555, 69 Supp. 27 743, 754 
 
 New York Railways Co., Matter 
 of, 172 A. D. 128, 158 Supp. 237 
 
 771, 785 
 
 New York Railways Co. v. City of 
 New York, 218 N. Y. 483, 113 
 N. E. 501 784 
 
 New York Real Estate Assn., 
 People ex rel. v. Barker, 29 A. 
 D. 325, 51 Supp. 567 749 
 
 New York Realty Corp., People 
 ex rel. v. Miller, 92 A. D. 116, 
 87 Supp. 341 806 
 
 New York & Rockaway Beach Ry. 
 Co., People ex rel. v. Tax Com- 
 missioners, 157 A. D. 496, 140 
 Supp. 691, aff'.d 209 N. Y. 599, 
 
 103 N. B. 1130 777, 785 
 
 792, 799' 
 
Ixxvi 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 New York & Rosendale Lime & 
 Cement Co. ads. Denike, 80 N. 
 
 Y. 599 264, 485, 578, 
 
 New York & Sea Beach Ry. Co. 
 ads. Piatt, 170 N. Y. 451, 63 
 
 N. E. 532 
 
 New York Security Co. v. Sara- 
 toga Gas Co., 88 Hun 569, 34 
 Supp 890, aff'd 157 N. Y. 689, 
 
 51 N. E. 1092 217, 260, 
 
 New York Security Co. v. Sara- 
 toga G. & El. L. Co., 159 N. Y. 
 137, 45 L.R.A. 132, 53 N. E. 
 
 758 
 
 New York Silk Mfg. Co. ads. Ma- 
 sun, 27 Hun 307 
 
 New York & Staten Island Elec- 
 tric Co. ads. Robinson, 99 A. D. 
 
 509, 91 Supp. 153 
 
 New York Suburban Water Co. 
 ads. Drake, 26 A. D. 490, 50 
 
 Supp. 826 
 
 New York Sugar Refining Co. ads. 
 Logan, 176 A. D. 660, 163 Supp. 
 
 214 
 
 New York, Susquehanna & West- 
 ern R. R. Co. ads. Payne, 157 
 A. D. 302, 142 Supp. 241, app. 
 dism'd 211 N. Y. 557, 105 N. 
 
 E. 1092 
 
 New York Terminal Co. v. Gaus, 
 
 204 N. Y. 512, 98 N. E. 11.... 
 
 New York Terminal Express Co. 
 
 ads. Carson, 74 Hun .j3C, 26 
 
 Supp. 639 
 
 New York Terra-Cotta Co. v. Wil- 
 liams, 102 A. D. 1, 92 Supp. 
 808, aff'd 184 N. Y. 57!)', 77 N. 
 
 E. 1192 837, 
 
 New York Urban Real Estate Co. 
 ads. Hvman, 79 Misc. 439, 140 
 
 Supp. ]"38 
 
 New York, Utica & Ogdensburgli 
 R. R. Co. ads. Loder, 4 Hun 
 
 22 
 
 New York & Virginia Steamship 
 
 Co. ads. Gray, 3 Hun 383 
 
 New York, Westchester & Boston 
 Ry. Co., People ex rel. >. Hyde, 
 143 A. D. 321, 128 Supp. 115, 
 aff'd 204 N. Y. 666, 97 N. E. 
 
 1114 
 
 New York, Westchester & Boston 
 Rv. Co., ads. Robinson, 55 Misc. 
 
 516, 105 Supp. 897 
 
 New York, Westchester & Boston 
 R. Co. ads. Robinson, 123 A. D. 
 
 339, 108 Supp. 91 • 
 
 New York & Westchester Town 
 Site Co., No. r, ilatter of, 145 
 A. D. 623, 130 Supp. 414 
 
 New York & Westchester To^vn 
 
 Site Co., Matter of, No. 2. 14.5 
 
 588 A. D. 630, 130 Supp. 419. .103, 309 
 
 New York & Western Union 
 
 Telegraph v. Jewett, 115 N. Y. 
 
 285 166. 21 N. E. 1036 676 
 
 New York, West Shore & Buffalo 
 R. R. Co. ads. Currier, 35 Hun 
 
 355 42U, 491 
 
 279 New York, West Shore & Buffalo 
 Ry. Co. ads. Heenan, 34 Hvm 
 
 602 535, 534 
 
 New York, West Shore & Buffalo 
 273 Ry. Co., ads. U. S. Trust Co., 35 
 
 Hun 341 629 
 
 428 New York, West Shore & Buffalo 
 Ry. Co. ads. U. S. Trust Co., 
 
 101 N. Y. 478, 5 N. E. 316 lilU 
 
 638 New Yorker Zeitung Pub. Co. ads. 
 Eisenhofer, 91 A. D. 94, 86 
 
 Supp. 438 910 
 
 460 Niagara Bank ads. Remington & 
 Sherman Co., 54 A. D. 358, 66 
 
 Supp. 560 871 
 
 192 Niagara Falls Paper Mfg. Co. ads. 
 Marten, 122 N. Y. 165, 25 N. E. 
 
 303 182, 267, :!7'2 
 
 Niagara Falls, etc., Co., People 
 ex rel. v. Tax Commissioners, 
 875 202 N. Y. 426, 95 N. E. 754 . . . 797 
 Nicholas ads. Anderson, 28 N. Y. 
 
 285 600 118 
 
 Nicholl, People ex rel. v. N. Y. 
 Infant Asylum, 122 N. Y. 190, 
 894 10 L.R..A.. 381, 25 N. E. 241.. 297 
 
 312 
 Nichols V. Mase, 94 N. Y. 160. . . 2.-i7 
 Nickerson v. Canton Marble Co., 
 882 35 A. D. Ill, 54 Supp. 705. . . 918 
 Nicolai ads. Thompson, 21 Misc. 
 
 700, 49 Supp. 422 241 
 
 138 Nicoll V. Clark, 13 Misc. 128, 34 
 
 Supp. 159 889 
 
 Niles V. N. Y. Central & H. R. R. 
 679 R. Co., 176 N. Y. 119, 68 N. E, 
 
 142 198 
 
 410 Nixon ads. Phelps-Stokes Es 
 tates. Inc., 222 N. Y. 93, US 
 
 N. E. 241 814 
 
 Nixon ads. Wyllis-Co., 165 A. D. 
 
 373, 150 Supp. 944 157 
 
 784 Noble v. Eldredge, 175 A. D. 803, 
 
 162 Supp. 503 72 
 
 Noble V. Euler, 20 A. D. 548, 47 
 
 196 Supp. 302 514 
 
 Noll V. Archer-Pancoast Co., 60 
 
 A. D. 414, 69 Supp. 1007 431 
 
 192 Norfolk Southern R. R. Co. ads. 
 McClelland, 110 N. Y. 469, 1 
 
 L.R.A. 299, 18 N. E. 237 271 
 
 84 274, 281 
 
TABLE OF CASES 
 
 Ixxvii 
 
 References are to pages. 
 
 Non-Electric Fibre Mfg. Co. v. 
 Peabody, 21 A. D. 247, 47 Supp. 
 677 . 
 
 Norman v. Federal Mining & 
 Smelting Co., 180 A. D. 325, 167 
 Supp. 794 191, 198, 
 
 Norman v. Loomis-Manning Fil- 
 ter Co. 123 A. D. 739, 108 Supp. 
 261 . 
 
 Northampton Portland Cement 
 Co. ads. Commercial Wood & 
 Cement Co., 41 Misc. 242, 84 
 Supp. 38 
 
 Northampton Portland C. Co. 
 ads. Commercial Wood & C. Co., 
 190 N. Y. 1, 82 N. E. 730 
 
 North American Co., People ex 
 rel. V. Miller, 90 A. D. 560, 80 
 Supp. 386, aff'd 182 N. Y. 521, 
 74 N. E. 1124 
 
 North American Steamship Co. 
 ads. Dent, 49 N. Y. 390 
 
 North American Trust Co., Peo- 
 ple ex rel. v. Knight, 96 A. D. 
 120, 89 Supp. 72 
 
 Northern B'k of N. Y. ads. Em- 
 met, 173 A. D. 840, 160 Supp. 
 183, aflf'd 221 N. Y. mem. 26.. 
 
 Northern Central E,y. Co. ads. 
 Rathbun, 50 N. Y. 656 
 
 Northern Pacific Ky. Co. ads. 
 Hackett, 36 Misc. 583, 73 Supp. 
 1087 70, 
 
 Northern Security Oil & Trans- 
 portation Co. ads. Matter of 
 Mitchell, 44 Misc. 514, 90 
 Supp. 60 
 
 North Packing & Provision Co. 
 ads. Beck, 159 A. D. 418, 144 
 Supp. 602 913, 
 
 North River Construction Co. ads. 
 Phoenix Foundry, 33 Hun 156 
 
 North River Construction Co. ads. 
 Woerishoflfer, 99 N. Y. 398, 2 
 N. E. 47 
 
 North River Sugar Refining Co. 
 ads. People, 121 N. Y. 582, 9 
 L.R.A. 33, 24 N. E. 834 ... . 556, 
 
 Northwestern Realty Co. ads. 
 Breen, 52 Misc. 528, 102 Supp. 
 473 
 
 Norwich Gas & Electric Co. ads. 
 Welsbach Co., 96 A. D. 52, 89 
 Supp. 284, afif'd 180 N. Y. 533, 
 72 N. E. 1152 
 
 Norwood, Matter of, 32 Hun 
 196 
 
 Norwood ads. MoCullough, 58 N. 
 Y. 562 
 
 Novelty Mfg. Co., v. Connell, 88 
 Hun 254, 34 Supp. 717 
 
 176 
 409 
 366 
 
 924 
 329 
 
 845 
 432 
 
 727 
 
 375 
 898 
 
 334 
 
 851 
 
 915 
 893 
 
 629 
 
 605 
 
 914 
 
 680 
 598 
 836 
 
 Novcelty Tufting Machine Co. v. 
 
 HutkoflF, 56 Misc. 522, 107 
 
 Supp. 88 841 
 
 Nowack v. Metropolitan St. Ry. 
 
 Co., 160 N. Y. 433, 54 L.R.A. 
 
 592, 60 N. E. 32 524 
 
 Noye ads. Closer, 147 N. Y. 597, 
 
 41 N. E. 570 225 
 
 Noye Mfg. Co. v. Raymond, 8 
 
 Misc. 353, 28 Supp. 393 530 
 
 Noyes v. Gillette, 92 A. D. 313, 86 
 
 Supp. 1062 ,. . . 188 
 
 Oa^ Hill Cemetery Assn., People 
 
 ex rel. v. Pratt, 66 Hun 578, 21 
 
 Supp. 653, afif'd 138 N. Y. 655, 
 
 34 N. E. 513 801 
 
 Oakes v. Cattaraugus Water Co., 
 
 143 N. Y. 430, 26 L.R.A. 544, 
 
 38 N. E. 461 363, 500 
 
 Oakland ads. Hawes, 104 U. S. 
 
 450 198 
 
 Oakman ads. Schautz, 163 N. Y. 
 
 148, 57 N. E. 288 11 
 
 Oaks V. Taylor, 30 A. D. 177, 51 
 
 Supp. 775 142 
 
 O'Beirne v. Allegheny & Kinzua 
 
 R. R. Co., 151 N. Y. 372, 45 N. 
 
 E. 873 287 
 
 O'Beirne v. Bullis, 158 N. Y. 466, 
 
 53 N. E. 211 6 
 
 O'Brien ads. Butterworth, 23 N. 
 
 Y. 275 469 
 
 O'Brien ads. People ex rel. Colum- 
 bia Co., 101 A. D. 296, 91 Supp. 
 
 649 ■. 25, 26, 38 
 
 O'Brien v. East River Bridge Co., 
 
 161 N. Y. 539, 48 L.R.A. 122, 
 
 56 N. E. 74 476, 486 
 
 O'Brien v. Fitzgerald, 143 N. Y. 
 
 377, 38 N. E. 371 417 
 
 O'Brien v. Fitzgerald, 6 A. D. 509, 
 
 39 Supp. 707, afif'd 150 N. Y. 
 572, 44 N. E. 1126 417 
 
 O'Brien v, O'Connell, 7 Hun 228 . 526 
 O'Brien v. Peoria Water Co., 5 A. 
 
 D. 229, 39 Supp. 121 874 
 
 Occidental Construction Co. v. 
 
 Miller, 154 A. D. 437, 139 Supp. 
 
 166 338 
 
 Ocean Accident & Guarantee 
 
 Corp., Ltd. ads. Bowers, 110 A. 
 
 D. 691, 97 Supp. 485, afif'd 187 
 
 N. Y. 561, 80 N. E. 1105 462 
 
 O'Connell ads. O'Brien, 7 Hun 228 526 
 O'Connor ads. Fuller, 61 Misc. 
 
 279, 113 Supp. 684 850 
 
 O'Connor v. Virginia Passenger & 
 
 P. Co., 184 N. Y. 46, 76 N. E. 
 
 1082 201 
 
Ixsviii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 O'Connor v. Virginia Passenger & 
 Power Co., 46 Mise. 530, 92 * 
 Supp. 525 208 
 
 Odell ads. United Bldg. Material 
 Co., 67 Misc. 584, 123 Supp. 313 888 
 
 O'Donnel ads. People ex rel. 
 Bankers' Safe Deposit Co., 54 
 Misc. 5, 105 Misc. 457 748 
 
 O'Donnel ads. People ex rel. 
 Burke, Ltd., 62 Misc. 560, 115 
 Supp. 140 858 
 
 O'Dwyer v. Verdon, 115 A. D. 37, 
 100 Supp. 588, aff'd 190 N. Y. ^ 
 505, 83 N. E. 1128 121 
 
 Oelberlnann v. N. Y. & Northern 
 R. R. Co., 7 Misc. 352, 27 Supp. 
 945 185, 284 
 
 Oelbermann v. N. Y. & Northern 
 Ry. Co., 14 Misc. 131, 36 Supp. 
 1096 189 
 
 Ogden ads. Osgood, 43 N. Y. 
 (4 Keyes) 70 684 
 
 Ogdensburgh & Lake Champlain 
 R. R. Co. ads. Hart, 89 Hun 
 319, 35 Supp. 566 193, 324 
 
 Ogilvie Publishing Co. ads. Owen, 
 32 A. D. 465, 53 Supp. 1033. . . 570 
 
 Ohio German Fire Ins. Co. ads. 
 Rath, 132 A. D. 692, 117 Supp. 
 382 914 
 
 O'Keefe ads. Cincinnatti Cooper- 
 age Co., 44 Hun 64, aff'd 120 N. 
 Y. 603, 24 N. E. 993 513, 760 
 
 Olcott ads. Sutherland, 95 N. Y. 
 93 108, 113 
 
 Olcott V. The Tioga R. R. Co., 20 
 N. Y. 210 898 
 
 Olcott V. Tioga R. R. Co., 40 Barb. 
 
 179, aff'd 27 N. Y. 546 328 
 
 335, 337, 373, 374, 432 
 
 Oliver ads. Union Trust Co., 214 
 N. Y. 517, 108 N. E. 809 110 
 
 Olney v. Baird, 7 A. D. 95, 40 
 Supp. 202 478 
 
 Olpharts v. Smith, 54 A. D. 514, 
 66 Supp. 976, aff'd 173 N. Y. 
 593, 65 N. E. 1120 642 
 
 Olus Mfg. Co. ads. Stevens, 72 
 Misc. 508, 130 Supp. 22, aff'd 
 146 A. D. 951, 131 Supp. 1145 163 
 
 Olympic Mining Co. ads. Gould, 
 49 Misc. 612, 96 Supp. 455 851 
 
 Olcott ads. MacArdell, 189 N. Y. 
 
 368, 82 N. E. 161 195 
 
 Olmsted v. Rochester & Pitts- 
 burgh R. R. Co., 46 Hun 552 .. . 643 
 
 Olympic Mining Co. ads. Gould, 
 
 49 Misc. 612, 96 Supp. 455... 854 
 
 Omaha Water Co. ads. United 
 Water Works Co., 164 N. Y. 41, 
 58 N. E. 58 617 
 
 505 
 532 
 
 535 
 
 930 
 
 O'Neill, Matter of, 47 Misc. 495, 
 
 95 Supp. 964 56 
 
 Oneonta, C. & R. S. Ry. Co. ads. 
 
 Knickerbocker Trust Co., 201 
 
 N. Y. 379, 94 N. E. 871 636 
 
 Oneonta, Oooperstown & Rich- 
 field Springs Ry. Co. ads. 
 
 Townsend, 41 Misc. 298, 84 
 
 Supp. 119 679 
 
 Oneonta, Cooperstown & Rich- 
 field Springs Ry. Co. ads. 
 
 Townsend, 86 A. D. 604, 83 
 
 Supp. 1034 ' 679 
 
 Onandagua Annual Conference 
 
 ads. Stoddard, 12 Barb. 573. . . 
 
 529', 
 
 Ongley Electric Co. ads. Mabon, 
 
 No. 2, 24 A. D. 50, 48 Supp. 
 
 973 ; 
 
 Ongley Electric Co. ads. Mabon, 
 
 156 N. Y. 196, 50 N. E. 805... 
 Onondaga Fine Salt Mfg. Co. ads. 
 
 Clancey, 62 Barb. 395 559 
 
 Ontario Talc Co. ads. Brown, 81 
 
 A. D. 273, 80 Supp. 837 511 
 
 Opera Glass Supply Co. ads. E. 
 
 W. Bliss Co., 60 Hun 438, 15 
 
 Supp. 6 473 
 
 Oppenheimer ads. Curran, 164 A. 
 
 D. 746, 150 Supp. 369 408 
 
 Order der Herrmann's Sohne v. 
 
 Freifeld, 20 Misc. 276, 45 Supp. 
 
 420 357 
 
 Oregon Ry. Navigation Co. ads. 
 
 Ervin, 28 Hun 269 875, 895 
 
 Oregon Ry. Navigation Co. ads. 
 
 Ervin, 35 Hun 544 874 
 
 Oregon Steam Navigation Co. ads. 
 
 Ervin, 22 Hun 598 594, 906 
 
 O'Reilly, Skelly & Fogarty Co. v. 
 
 Green, 18 Misc. 423, 41 Supp. 
 
 1056 883, 887, 888 
 
 O'Reilly v. New Brunswick, Am- 
 
 boy & N. Y. Steamboat Co., 28 
 
 Misc. 112, 59 Supp. 261 917 
 
 Oriental Bank ads. People, 124 
 
 A. D. 741. 100 Simp. .50fl' 586 
 
 Oriental Bank ads. People, 129 A. 
 
 u. 8b.), 1 i-t bupp. *-iu tioa, 663 
 
 Orinoka Mills, People ex rel. v. 
 
 Barker, 84 A. D. 469, 83 Supp. 
 
 33 738, 740 
 
 Orr V. South Amboy Terra Cotta 
 
 Co., 113 A. D. 103, 98 Supp. 
 
 1026 334 
 
 Orvis V. Lorraine Co., — Misc. — 
 
 (1918), N. Y. L. J. Mch. 9, p. 
 
 1843 133 
 
 Orvis V. Warner & Co., 75 A. D. 
 
 463, 78 Supp. 328 507 
 
TABLE OF CASES 
 
 Ixxix 
 
 References are to pages. 
 
 Osborn v. Montelac Park, 89 Hun 
 
 167, 35 Supp. 610, aff'd 153 N. 
 
 Y. 672, 48 N. E. 1106 570 
 
 Osborne & Cheeseman v. Croome, 
 
 14 Hun 164, aff'd 77 N. Y. 629 312 
 Osgood V. Ogden, 43 N. Y. (4 
 
 Keyes) 70 684 
 
 Osgood V. Layten, 42 N. Y. (3 
 
 Keyes) 521 162, 682 
 
 Osteyee Bros. ads. Wisner, 23 
 
 Misc. 123, 50 Supp. 689 270 
 
 Ostrander ads. Ulster Co. Sav. 
 
 Instit., 163 N. Y. 430, 57 N. E. 
 
 627 358 
 
 Ostrander, Inc. ads. Fen, 132 A. 
 
 D. 311, 116 Supp. 1083 625 
 
 O'Sullivan ads. Whitehead, 12 
 
 Misc. 577, 33 Supp. 1098.. 316, 672 
 Oswego Gas Light Co. v. Bozer, 
 
 111 A. D. 140, 96 Supp. 486. . 257 
 Oswego Starch Factory v. Dollo- 
 
 way, 21 N. Y. 449 746, 756 
 
 Otis ads. Boughton, 21 N. Y. 261. 391 
 Otter V. Brevoort Petroleum Co., 
 
 50 Barb. 247 138 
 
 Ottinger v. Bennett, 144 A. D. 
 
 525, 129 Supp. 819, rev'd on 
 
 other point 203 N. Y. 554, 96 
 
 N. E. 1123 336 
 
 Ottmann v. Blanges Co., 171. A. 
 
 D. 197, 157 Supp. 413 442 
 
 Otto V. Franklin's, Incorporated, 
 
 90 Misc. 311, 153 Supp. 107. . . 852 
 Otto Gas Engine Works ads. Bo- 
 
 gert, 28 A. D. 463, 57 Supp. 
 
 118 • 917 
 
 Oussani, The, ads. Catholic For- 
 eign Mission Soc. of America, 
 
 215 N". Y. 1, 109 N. E. 80. . . . 376 
 Outterson ads. Costello, 112 A. 
 
 D. 680, 98 Supp. 880.-. 386 
 
 Owen ads. The B. & C. Electrical 
 
 Construction Co., 176 A. D. 
 
 399, 163 Supp. 31 100 
 
 Owen V. Kellogg, 56 Hun 455, 10 
 
 Siupp. 75 685 
 
 Owen V. Ogilvie Publishing Co., 
 
 32 A. D. 465, 53 Supp. 1033. . . 510 
 
 Owen V. Smith, 31 Barb. 641 348 
 
 Oxnard Brothers' Co. ads. Gray, 
 
 59 Hun 387, 13 Supp. 86 682 
 
 Ozank Cooperage Co. v. Quaker 
 
 City Cooperage Co., 112 A. D. 
 
 62, 98 Supp. 113. 837 
 
 Pace, Matter of, 170 A. D. 818, 
 
 156 Supp. 641 518, 519 
 
 Pacific Mail Steamship Co., Peo- 
 ple ex rel. v. Commrs. of Taxes, 
 
 64 N. Y. 541 859 
 
 Pacific Mail Steamship Co. ads. 
 
 People ex rel. Richmond, 50 
 
 Barb. 280 53 
 
 Packard ads. Knickerbocker 
 
 Trust Co., 109 A. D. 421, 96 
 
 Supp. 412 526 
 
 Packer & Prentice ads. Southern 
 
 Life Ins. & Trust Co., 17 N. Y. 
 
 51 469, 919 
 
 Padros v. Swarzenbach, 134 A. 
 
 D. 811, 119 Supp. 589' 251 
 
 Page V. American & British Mfg. 
 
 Co., 129 A. D. 346, 113 Supp. 
 
 734 113 
 
 Page ads. Meyer, 112 A. D. 625, 
 
 98. Supp. 739 206 
 
 Page V. Sheinwald, 169 N. Y. 246, 
 
 57 L. R. A. 173, 62 N. E. 356. 141 
 Page ads. Stevens, 4 Misc. 517, 
 
 24 Supp. 698 , 825 
 
 Page ads. "Vilas, 106 N. Y. 439, 
 
 13 N. E. 743 641, 660 
 
 Page & Co. V. Sherwood, 146 A. 
 
 D. 618, 13 Supp. 322 842 
 
 Pain ads. Koster, 41 A. D. 443, 
 
 58 Supp. 865 84 
 
 Paine v. Irwin, 16 Hun 390 505. 
 
 Palmer v. Chicago Evening Post 
 
 Co., 85 Hun 403, 32 Supp. 992. 915 
 Palmer v. Cypress Hill Cemetery, 
 
 122 N. Y. 429, 25 N. E. 983. . . 503 
 Palmer ads. Harriman National 
 
 Bank, 93 Misc. 431, 158 Supp. 
 
 Ill 81 
 
 Palmer v. Pennsylvania Co., 35 
 
 Hun 369, aff'd 99 N. Y. 679 ... . 914 
 Palmer v. Phoenix Mutual Life 
 
 Ins. Co., 84 N. Y. 63 895 
 
 Palmer V. Ring, 113 A. D. 643, 99 
 
 Supp. 290 175 
 
 Palmer v. Van Santvoord, 153 
 
 N. Y. 612, 38 L. R. A. 402, 
 
 47 N. E. 915 
 
 Palumbo v. L'Araldo Italiano 
 
 Pub. Co., 150 A. D. 221, 134 
 
 Supp. 655 542 
 
 Panama R. R. Co., People ex rel. 
 
 V. Commissioners of Taxes, 104 
 
 N. Y. 240, 10 N. E. 437 742 
 
 747, 748, 750 
 Pan-American Theatrical Co. ads. 
 
 Dillon, 96 Misc. 501, 160 Supp. 
 
 549 ■. 198 
 
 Pancoast ads. Donnelly, 15 A. D. 
 
 323, 44 Supp. 104 386 
 
 Pangborn ads. Powell, 161 A. D. 
 
 453, 145 Supp. 1073 378 
 
 Pangburn ads. People ex rel. 
 
 Thorn, 3 A. D. 456, 38 Supp. 
 
 248, aff'd 157 N. Y. 719 351 
 
 Parish v. Wheeler, 22 N. Y. 494. 460 
 Parke, Davis & Co., People ex rel. 
 
 V. Roberts, 91 Hun 158, 36 
 
 Supp. 368, aff'd 149 N. Y. 608, 
 
 44 N. E. 1127 846 
 
Ixxx 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Parker ads. People ex rel. Equi- 
 table Gas Light Co., 144 N. Y. 
 
 94, 39 N. B. 13 748. 751 
 
 Parkliurst v. Rochester Machine 
 
 Co., 65 Hun 489, 20 Supp. 395. 893 
 Parmelee v. Associated Physicians 
 
 & Surgeons, 9 Misc, 458, 30 
 
 Supp. 250 365 
 
 Parmelee v. Associated Physicians 
 
 & Surgeons, 11 Misc. 363, 32 
 
 Supp. 149 365 
 
 Parsons v. Johnson, 28 A. D. 11, 
 
 50 Supp. 780 387 
 
 Partridge v. Badger, 25 Barb. 146. 122 
 312. 505, 540 
 Passage v. Dansville & Mt. Jlor- 
 
 ris R. R. Co., 41 A. D. 182, 58 
 
 Supp. 770 629, 656 
 
 Patterson v. Guardian -Trust Co., 
 
 144 A. D. 863, 129 Supp. 807. 280 
 Patterson v. Robinson, 116 N. Y. 
 
 193, 22 N. E. 372 345, 366 
 
 Patrick ads. Erie & N. Y. Citv R. 
 
 R. Co., 41 N. Y. (2 Keyes) 256. 88 
 Paulding v. The Chrome Steel 
 
 Co., 94 N. Y. 334 266, 480 
 
 Paving Co., People ex rel. v. 
 
 Knight, 99 A. D. 62, 90 Supp. 
 
 537 698, 711 
 
 Paving Co., People ex rel. v. 
 
 Morgan, 61 A. D. 373. 70 
 
 Supp. 516 698 
 
 Pavroier ads. Rochester & Char- 
 
 lotta Turnpike Road Co., 164 
 
 N. Y. 281, 52 L. R. A. 790, 58 
 
 X. Y. 114 359 
 
 Pavne ads. Lukens Iron & Steel 
 
 Co., 13 A. D. 11, 43 Supp. 326. 835 
 Payne v. N. Y., Susquehanna & 
 
 Western R. R. Co., 157 A. D. 
 
 302, 142 Supp. 241, app. dism'd 
 
 211 N. Y. 557, 105 N. E. 1092. 875 
 P«iui.sylvania R. R. Co., People 
 
 ex rel. v. Wemple, 138 X. Y. 
 
 1. 19 L. R. A. 694, 33 N. E. 
 
 720 692, 710, 713 
 
 People V. Albany Insurance Co., 
 
 92 X. Y. 458'. 710, 728 
 
 People V. Albany & Susquehanna 
 
 R. R. Co., 55 Barb. 344 175 
 
 297, 301, 311 
 People V. American Bell Tele- 
 phone Co., 117 X. Y. 241, 22 
 
 N. E. 1057 844 
 
 People V. American Ice Co., 135 
 
 A. D. 180, 120 Supp. 41 823 
 
 People V. American Loan & Trust 
 
 Co., 150 X. Y. 117, 44 X. E. 
 
 949 681 
 
 People V. American Loan & Trust 
 
 Co., 172 N. Y. 371, 65 N. E. 
 
 200 667, 668, 669 
 
 People V. American Loan & Trust 
 Co., 177 X. Y. 467, 69 X. E. 
 1105 571, 592, 680 
 
 People V. Anglo-American Sav- 
 ings & Loan Assn., 60 A. D. 
 389, 69 Supp. 1054 259 
 
 People V. Atlantic Ave. R. K. Co., 
 57 Hun 378, 10 Supp. 907, 
 aff'd 125 X. Y. 513, 26 X. E. 
 022 .")58. 559. 587 
 
 People V. Ballard, 134 X. Y. 269, 
 17 L. R. A. 737, 32 X. E. 54. . 502 
 
 550 
 
 People V. Ballard, 136 X. Y. 639, 
 
 .•!2 X. E. 611 600 
 
 People V. Bank of Staten Island, 
 
 112 A. D. 791, 99 Supp. 486.. 645 
 
 People V. Beverioge Brewing Co., 
 91 Hun 313, 36 Supp. .525.... 673 
 
 People V. Bleecker St. & Fulton 
 Ferry R. R. Co., 140 A. D. 611, 
 125 Supp. 1045 560 
 
 People V. Boston, Hoosac Tunnel 
 & Western Ry. Co., 27 Hun 528. 560 
 
 People V. Brooklyn Bank, 64 
 
 Misc. 538, 118 Supp. 722 664 
 
 People V. Brooklyn Bank, 125 A. 
 
 D. 354, 109 Supp. 534 045 
 
 People V. Buffalo Stone & Cement 
 
 Co., 131 X. Y. 140, 15 L. R. A. 
 
 2411, 29 X. E. 947 556, 559, .560 
 
 People ex rel. Carvalho v. Warden 
 
 of City Prison, 144 A. D. 24, 
 
 128 Supp. 837, aff'd 212 X. Y. 
 
 012, 106 X. E. 1036 438 
 
 People V. Cataract Bank, 5 Misc. 
 
 14, 25 Supp. 129 595 
 
 People V. Commercial Alliance 
 
 Ins. Co., 91 Hun 389, 36 Supp. 
 
 248. aff'd 148 X. Y. 563, 43 X. 
 
 E. 988 646, 661 
 
 People V. Commercial Alliance 
 
 Life Ins. Co., 5 A. D. 273, 39 
 
 Supp. 117, aff'd 151 X. Y. 640, 
 
 45 X. E. 1133 597 
 
 People V. Consolidated Gas Co., 
 
 130 A. D. 626, 115 Supp. 393. . 557 
 People V. De Grauw, 133 X. Y. 
 
 254, 30 X. E. 1006 42 
 
 People V. Delaware & Hudson 
 
 Canal Co., 54 Hun 598, 7 Supp. 
 
 890, aff'd 121 X. Y. 666, 24 X. 
 
 E. 1093 451, 730 
 
 People V. Duffy-Mclnnerney Co., 
 
 122 A. D. 336, 106 Supp. 878, 
 
 aff'd 193 N. Y. 636, 86 X. E. 
 
 1129 813 
 
 People V. Duke, 19 Misc. 292, 44 
 
 Supp. 336 379 
 
 People V. Equitable Life Ass. Soc, 
 
 51 Misc. 339, 101 Supp. 354. . . 407 
 
 426 
 
TABLE OF CASES 
 
 Ixxxi 
 
 References are to pages. 
 
 People V. Equitable Life Ass. Soc, 
 
 124 A. D. 714, 109 Supp. 453. . 337 
 403, 407, 410, 422, 424, 425, 426 
 People V. Equitable Trust Co., 
 
 96 N. Y. 387 863 
 
 People V. Equity Gas Light Co., 
 
 141 N. Y. 232, 36 N. E. 194. . . 509 
 People V. ■ Gold & Stock Tele- 
 graph Co., 98 N. Y. 67, S X. Y. 
 
 67 710 
 
 People V. Granite State Provident 
 
 Assn., 161 N. Y. 492, 55 N. E. 
 
 1053 668, 672 
 
 People V. Hasbrouck, 57 Misc. 
 
 130, 107 Supp. 257 622 
 
 People V. Holland Trust Co., 139 
 
 A. D. 353, 123 Supp. 935 719 
 
 People V. Holstein-Friesian 
 
 Assn., 41 Hun 439 7 
 
 People V. Home Insurance Co., 
 
 92 N. Y. 328 710, 721, 725 
 
 People V. Horn Silver Mining Co., 
 
 105 N. Y. 76, 11 N. E. 155.. 699 
 700, 840, 855 
 People V. Hydrostatic Paper Co., 
 
 88 N. Y. 623 593 
 
 People V. Interborough Rapid 
 
 Transit Co., 169 A. D. 32, 154 
 
 Supp. 627- 465 
 
 People V. Knickerbocker Ice Co., 
 
 99 N. Y. 181, 1 N. E. 669 699 
 
 People V. Knickerbocker Life Ins. 
 
 Co., 106 N. Y. 619, 13 N. E. 
 
 447 595 
 
 People V. Knickerbocker Trust 
 
 Co., 127 A. D. 215, HI Supp. 
 
 2, app. dism'd 193 N. Y. 649, 
 
 86 N. E. 1129 660 
 
 People V. Lyon, 119 A. D. 361, 
 
 104 Supp. 319, aflf'd 189' N. Y. 
 
 544, 82 N. E. 1130 353 
 
 People V. Mercantile Credit Guar- 
 antee Co., 65 A. D. 306, 72 
 
 Supp. 858 ; 598 
 
 People V. Merchants' Trust Co., 
 
 187 N. Y. 293, 79 N. E. 1004. . 634 
 
 669 
 People V. Metropolitan Surety 
 
 Co., 158 A. D. 651, 144 Supp. 
 
 235 668 
 
 People V. Metropolitan Surety 
 
 Co., nv A. D. 15, 156 Supp. 
 
 1027 569, 592 
 
 People V. Metropolitan Surety 
 
 Co., 205 N. Y. 135, 98 N. E. 
 
 412 669 
 
 People V. Milk Exchange, Ltd., 
 
 133 N. Y. 565, 30 N. E. 850. . . 559 
 Pebple V. Milk Exchange, 145 
 
 N. Y. 267, 27 L. E. A. 437, 39 
 
 N. E. 1062 500 
 
 iv 
 
 People V. Miller, 84 A. D. 166, 
 82 Supp. 607 734 
 
 People V. Mutual Benefit Asso- 
 ciates, 39 Hun 49 664 
 
 People V. Mutual Benefit Life 
 Assn., 86 Hun 219, 33 Supp. 
 191 596 
 
 People V. National Fire Ins. Co. 
 of Hartford, 27 Hun 188 692 
 
 People V. National Trust Co., 82 
 
 N. Y. 283 596, 644 
 
 People V. N. Y. Building-Loan 
 Banking Co., 112 A. D. 166, 98 
 Supp. 290 668 
 
 People V. N. Y. Building-Loan 
 Banking Co., 119 A. D. 830, 104 
 Supp. 892, aff'd 189 N. Y. 547, 
 82 N. E. 1131 184, 471 
 
 People V. N. Y., Chicago & St. 
 Louis R. R. Co., 129 N. Y. 474, 
 15 L. R. A. 82, 29 N. E. 959. . 611 
 693, 694 
 
 People V. N. Y. City R. Co., 57 
 Misc. 114, 107 Supp. 247.. 629, 632 
 
 People V. N. Y. Floating Dry- 
 dock Co., 92 N. Y. 487 697 
 
 People V. North River Sugar Re- 
 fining Co., 121 N. Y. 582, 9 L. 
 R. A. 33, 24 N. E. 834 556, 605 
 
 People V. Oriental Bank, 124 A. 
 D. 741, 109 Supp. 509 
 
 People V. Oriental Bank, 129' A. 
 D. 865, 114 Supp. 440 659, 
 
 People V. People's Trust Co., — 
 A. D. — , N. Y. u. J., Dec. 14, 
 1917 
 
 People V. Remington, 45 Hun 329, 
 aff'd 109 N. Y. 631, 16 N. E. 
 680 670, 671, "672, 674, 
 
 People V. Remington, 121 N. Y. 
 328, 8 L. R. A. 458, 24 N. E. 
 793 
 
 People V. Remington & Sons, 54 
 Hun 480, 8 Supp. 31, aff'd 121 
 N. Y. 675, 24 N. E. 1095 592 
 
 People V. Republic Savings & 
 Loan Assn., 97 A. D. 31, §9 
 Supp. 582 325 
 
 People V. Republic Savings & 
 Loan Assn., 119 A. D. 502, 104 
 Supp. 1136 659 
 
 People V. Rochester Railv?ay & 
 Light Co., 59 Misc. 347, 112 
 Supp. 362, aff'd 129 A. D. 843, 
 144 Supp. 755 512 
 
 People V. Saint Nicholas Bank, 
 76 Hun 522, 28 Supp. 114.. .. 
 
 People V. St. Nicholas Bank, 3 
 A. D. 544, 38 Supp. 379, aff'd 
 151 N. Y. 592, 45 N. E. 1129.. 
 
 People V. St. Nicholas Bank, 44 
 A. D. 313, 60 Supp. 719 926 
 
 586 
 
 663 
 
 518 
 
 675 
 
 668 
 
 623 
 
 633 
 
Ixxxii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 People V. St. Nicholas Bank, 151 
 
 N. Y. 592, 45 N. E. 1129 
 
 People V. Seneca Lake Grape & 
 
 Wine Co., 52 Hun 174, 5 Supp. 
 
 136 571, 
 
 People V. Standard Plate Glass 
 
 & Salvage Co., Ltd., 174 A. D. 
 
 501, 156 Supp. 1012 
 
 People V. Stevens, 5 Hill 616 
 
 People V. Stilwell, 78 Misc. 96, 
 
 138 Supp. 693 
 
 People V. Stilwell, 157 A. D. 839, 
 
 142 Supp. 881 
 
 People V. Title, Guarantee & 
 
 Trust Co., — A. D. — , N. Y. 
 
 L. J., Dec. 22, 1917...- 
 
 People V. Troy Chemical Co., 118 
 
 A. D. 437, 103 Supp. 22. . .585, 
 People, The, v. Troy House Co., 
 
 44 Barb. 625 5.55, 
 
 People V. Troy Steel & Iron Co., 
 
 82 Hun 303, 31 Supp. 337 
 
 People V. Ulster & Delaware R. R. 
 
 Co., 128 N. Y. 240, 28 N. E. 
 
 635 
 
 People V. United States Law 
 
 Blank & Stationery Co., 24 
 
 Misc. 535, 53 Supp. 852... 470, 
 People V. Westchester Traction 
 
 Co., 123 A. D. 689, 108 Supp. 
 
 59 
 
 People V. Woodbury Dermatolog- 
 
 ical Institute, 192 N. Y. 454, 85 
 
 X. E. 697 
 
 Peabody ads. Non-Electric Fibre 
 
 Mfg. Co., 21 A. D. 247, 47 Supp. 
 
 677 
 
 Pearson v. Liberty Ave. Theatre 
 
 Co., 152 A. D. 771, 137 Supp. 
 
 712 : 
 
 Peck V. N. Y. & N. J. Ry. Co., 85 
 
 N. Y. 246 
 
 Peckham v. Van Wagenen, 83 
 
 N. Y. 40 
 
 Peekamose Fishing Club, Matter 
 
 of, 1.51 N. Y. 511, 45 N. E. 
 
 1037 
 
 Peerless Petroleum Co. ads. 
 
 Doyle, 44 Barb. 239 
 
 Pell ads. Rogers, 154 N. Y. 518, 
 
 49 X. E. 75 333, 377, 
 
 Pelletreau v. Greene Consolidated 
 
 Gold Mining Co., 49 Misc. 233, 
 
 97 Supp. 391 850, 
 
 Penn Bank of Pittsburg ads. 
 
 Duquesne Club, 35 Hun 391. . 
 Penn Collieries Co. v. !McKeever, 
 
 183 N. Y. 98, 2 L. R. A. (N. 
 
 S.) 127, 75 N. E. 935 
 
 Pennsylvania Co. ads. Palmer, 35 
 
 Hun 369, aff'd 99' N. Y. 679 . . . 
 
 640 
 
 580 
 
 559 
 312 
 
 554 
 
 554 
 
 518 
 
 587 
 
 586 
 
 595 
 
 556 
 
 649 
 
 555 
 
 519 
 
 176 
 
 376 
 287 
 
 199 
 
 584 
 
 559 
 
 825 
 
 852 
 873 
 
 835 
 914 
 
 S63 
 
 518 
 
 874 
 236 
 
 449 
 
 Pennsylvania R. E. Co., People ex 
 rel. V. Wemple, 138 X. Y. 1, 
 19 L. R. A. 694, 33 X. E. 720. . 
 
 Pennypacker v. Lewis & Co., 63 
 Misc. 384, 116 Supp. 771 540 
 
 " People ex rel." — see initial of 
 name of relator. 
 
 People's Trust Co. of N. Y., In re, 
 
 — Misc. — , N. Y. L. J., Feb. 
 
 15, 1918 646 
 
 People's Trust Co. ads. People, 
 
 — A. D. — , N. Y. L. J., Dec. 
 4, 1917 
 
 Peoria Water Co. ads. O'Brien, 
 5 A. D. 229, 39 Supp. 121 
 
 Perkins v. Church, 31 Barb. 84. . 
 
 Perkins ads. Hope Mutual Life 
 Ins. Co., 38 N. Y. 404 
 
 Perrine v. Levin, 68 Misc. 327, 
 123 Supp. 1007 . U 
 
 Perrine v. Ransom Gas Machine 
 Co., 60 A. D. 32, 69 Snpp. 698. 911 
 
 Perry, Matter of, 129 A. D. 587, 
 114 Supp. 246 121 
 
 Perry v. Council Bluffs Water- 
 works Co., 67 Hun 456, 22 
 Supp. 151. aff'd 143 N. Y. 637, 
 37 X. E. 826 ., 374 
 
 Perry v. Van Norden Trust Co., 
 192 N.Y. 189, 84 X. E. 804.... 
 
 Perry ads. Youngs, 42 A. D. 247, 
 59 Supp. 19 541 
 
 Persian Rug & Carpet Co. ads. 
 Ettlinger, 142 N. Y. 189, 36 X. 
 E. 1055 287 
 
 Persons v. Buffalo City Mills, 29 
 A. D. 45, 51 Supp. 645 437 
 
 Petrolia Mfg. Co. v. Jenkins, 29 
 A. D. 403, 51 Supp. 1028. .376, 457 
 
 Petty V. Emery, 96 A. D. 35, 88 
 Supp. 823 202 
 
 Pfaudler Process Fermentation 
 Co. ads. Kelsey, 41 Hun 20. . . 
 
 Pfaudler Process Co. ads. Kelsey, 
 45 Hun 10 
 
 Pfister Bookbinding Co. ads. 
 Worthington, 3 Misc. 418, 23 
 Sup. 295 826 
 
 Pfohl V. Simpson, 74 N. Y. 137. . 215 
 
 Pforgheimer ads. New York As- 
 sets Realization Co., 158 A. D. 
 700, 143 Supp. 898 542 
 
 Phelan v. Edison Electric Illu- 
 minating Co., 24 Misc. 109, 53 
 Supp. 305 494 
 
 Phelps ads. Behan, 27 Misc. 718, 
 .59 Sup. 713 436 
 
 "helps V. N. Y., New Haven & 
 Hartford R. R. Co., 17 A. D. 
 392, 45 Supp. 178 896 
 
 477 
 
 55 
 
 587 
 
TABLE OF CASES 
 
 Ixxxiii 
 
 References are to pages. 
 
 Phelps Guardaiit Time Lock Co. 
 
 ads. Doscher, 89' Misc. 561, 
 
 153 Supp. 710, aff'd 172 A. D. 
 
 954, 157 Supp. 1123 435 
 
 Phelps-Stokes Estates, Inc. v. 
 
 Nixon, 222 N. Y. 93, 118 N. E. 
 
 241 814 
 
 Philadelphia & Reading Co. ads. 
 
 Bagdon, 217 N. Y. 432, L. K. 
 
 A. 1916F, 407, 111 N. E. 1075. 908 
 Philadelphia & Reading Coal & 
 
 Iron Co. ads. Bagdon, 178 A. 
 
 D. 662, 165 Supp. 910 875 
 
 Philadelphia & Reading. Coal & 
 
 Iron Co. V. Hotchkiss, 82 N. Y. 
 
 471 389 
 
 Philadelphia & Reading Coal & 
 
 Iron Co. ads. Waisikoski, 173 
 
 A. D. 538, 159 Supp. 906 892 
 
 Phillips V. Campbell, 43 N. Y. (4 
 
 Hand) 271 876 
 
 Phillips V. Wortendyke, 31 Hun 
 
 192 ,.... 379 
 
 Phoenix Bank, The, v. Donnell, 
 
 40 N. Y. (1 Hand) 410 530 
 
 Phoenix Foundry v. North River 
 
 Construction Co., 33 Hun 156. 893 
 Phoenix Glass Co. ads. Beers, 14 
 
 Barb. 358 337, 471 
 
 Phoenix Ins. Co. ads. Douglas, 138 
 
 N. Y. 209, 20 L. R. A. 118, 33 
 
 N. E. 938 .■ . . 472 
 
 Phoenix Mutual Life Ins. Co. ads. 
 
 Palmer, 84 N. Y. 63 895 
 
 Phoenix Warehousing Co. v. 
 
 Badger, 6 Hun 293 78, 92 
 
 Phoenix Warehousiiig Co. v. 
 
 Badger, 67 N. Y. 294.. 78, 94, 184 
 Pickett ads. Methodist Episcopal 
 
 Union, 19 N. Y. 482 12 
 
 Pier V. George, 86 N. Y. 613 388 
 
 Pier V. Hanmore, 86 N. Y. 95 . . . 397 
 
 399 
 Pierson, Matter of, 44 A. D. 215, 
 
 60 Supp. 671 59 
 
 Pierson v. McCurdy, 33 Hun 520, 
 
 affd 100 N. Y. 608, 2 N. E. 
 
 615 49r. 
 
 Pilcher v. Brayton, 17 Hun 429. . 248 
 Pioneer Iron Works ads. Hart- 
 ley, 181 N. Y. 73, 73 N. E. 576. 158 
 Pioneer Iron Works ads. Roberts, 
 
 125 A. D. 207, 109 Supp. 230.. 887 
 Pittsburg Carbon Co. v. McMil- 
 
 len, 119 N. Y. 46, 7 L. R. A. 
 
 46, 23 N. E. 530 458, 640, 651 
 
 Pittsburgh Bridge Co. ads. Coler, 
 
 146 N. Y. 281, 40 N. E. 779 .. . 914 
 Pittsburgh Plate G-lass Co. v. 
 
 Ravitch, 58 Misc. 191, 108 
 
 Supp. 1103 890 
 
 202 
 682 
 
 285 
 
 713 
 
 922 
 
 461 
 
 Pittsburgh, S. & L. E. E. R. Co. 
 
 ads. Cheever, 150 N. Y. 59, 34 
 
 L. R. A. 69, 44 N. E. 701 371 
 
 Pittston & Elmira Coal Co. ads. 
 
 Arnot, 68 N. Y. 558 499, 501 
 
 Plant ads. Quee Drug Co., 55 A. 
 
 D. 87, 67 Supp. 10 361 
 
 Planter v. Nat. Nassau B'k, 174 
 
 A. D. 254, 160 Supp. 297, aff'd 
 
 220 N. Y. 677, 116 N. E. 1070. 
 Piatt V. Ashman, 32 Hun 230 . . 
 Piatt ads. Bauer, 72 Hun 326, 25 
 
 Supp. 426 339 
 
 Piatt ads. Bruce, 80 N. Y. 379. . 306 
 ■ 390, 389 
 Piatt ads. Harries, 21 Hun 132. 253 
 Piatt V. N. Y. & Sea Beach, Ry. 
 
 Co., 170 N. Y. 451, 63 N. E. 
 
 532 
 
 Piatt, People ex rel. v. Wemple, 
 
 117 N. Y. 136, 6 L.R.A. 303, 
 
 22 N. E. 1046 710, 
 
 Playa de Ora Mining Co. v. Gage, 
 
 60 A. D. 1, 69 Supp. 702, aff'd 
 
 172 N. Y. 630 404 
 
 Plimpton V. Bigelow, 93 N. Y. 
 
 592 900, 
 
 Pocantieo Water Works v. Low, 
 
 20 Misc. 484, 46 Supp. 633 
 
 Poerschke ads. South Amboy 
 
 Terra Cotta Co., 45 Misc. 358, 
 
 90 Supp. .333 880 
 
 Polhemus, Nos. 1-2, ads. Com- 
 mercial Coal & Ice Co., 128 A. 
 
 D. 247, 112 Supp. 566 882 
 
 Polhemus v. Fitehburg R. R. Co., 
 
 113 N. Y. 617, 20 N. E. 601 . . . 
 Polhemus v. Fitehburg R. R. Co., 
 
 123 N. Y. 502, 26 X. E. 31.255, 
 Polhemus v. Polhemus, 114 A. D. 
 
 781, 100 Supp. 263 338, 
 
 Policy V. Lehigh Valley R. R. Co., 
 
 138 A. D. 636, 122 Supp. 708, 
 
 aff'd 200 N. Y. 585, 9'4 N. E. 
 
 1098 
 
 Pollitz V. Gould, 202 N. Y. 11, 38 
 
 L. R. A. (N. S.) 988, 94 N. E. 
 
 1088 196, 
 
 Pollitz V. Wabash R. R. Co., 142 
 
 A. D. 755, 127 Supp. 782. .276, 
 Pollitz V. Wabash R. R. Co., No. 
 
 1, 150 A. D. 709, 135 Supp. 
 
 785 188, 196, 
 
 Pollitz V. Wabash R. R. Co., 167 
 
 A. D. 669, 152 Supp. 803 291 
 
 Pollitz V. Wabash R. R. Co., 207 
 
 N. Y. 113, 100 N. E. 721 182 
 
 184, 
 Pollock V. National Bank, 7 N. Y. 
 
 274 
 
 Pollock V. Shultze, 1 Hun 320. . . 
 
 540 
 611 
 
 419 
 
 876 
 
 197 
 
 291 
 
 416 
 
 422 
 
 135 
 364 
 
Ixxxiv 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Pomeroy v. Hocking Valley Ry. 
 Co., 218 N. y. 530, 113 N. E. 
 
 504 902, 
 
 Pond ad3. People ex rel. Roch- 
 ester R. Co., 37 A. D. 330, 57 
 
 Supp. 490 
 
 Pondir v. N. Y., Lake Erie & 
 Western R. R. Co., 72 Hun 384, 
 
 25 Supp. 560 
 
 Poole ads. Bard, 1 2 N. Y. 495 .. . 
 Poor ads. Brock, 216 N. Y. 387, 
 
 111 N. E. 229 204, 408, 
 
 Poor ads. Currier, L55 N. Y. 344, 
 
 49 N. E. 937 
 
 Pope V. Terre Haute Car & Mfg. 
 
 Co., 24 Hun 238 
 
 Pope T. Terre Haute Car Mfg. 
 
 Co., 87 N. Y. 137 
 
 Port Henry Iron Co. ads. Couro, 
 
 12 Barb. 27 7, 175, 449, 
 
 Porter v. Industrial Information 
 
 Co., 5 Misc. 262, 25 Supp. 328. 
 
 Porter Air Lighter Co. ads. Mac- 
 
 Nabb, 44 A. D. 102, 60 Supp. 
 
 694 927, 
 
 Portland Co. v. Hall & Grant 
 Construction Co., 121 A. D. 779, 
 
 106 Supp. 649 836, 841, 
 
 883, 
 
 Portland Co. v. Hall & Grant 
 
 Construction Co., 123 A. D. 
 
 495, 108 Supp. 821 
 
 Post Printing & Publishing Co. 
 ads. Fpntena, 87 A. D. 233, 84 
 
 Supp. 308 
 
 Postal Telegraph-Cable Co., Peo- 
 ple ex rel. v. Campbell, 70 Hun 
 
 507, 24 Supp. 208 
 
 725, 726, 
 Postal Telegraph-Cable Co., Peo- 
 ple ex rel. v. State Board of 
 Tax Commrs., — Misc. — , N. 
 
 Y. L. J., Feb. 25, 1918 
 
 Postal Telegraph-Cable Co. ads. 
 Wilderming, 118 A. D. 685, 103 
 Supp. 594, aff'd 192 N. Y. 580, 
 
 85 N. E. 1109 
 
 Potter ads. Close, 2 Misc. 1, 21 
 Supp. 1086; amd. 5 Misc. 543, 
 
 25 Supp. 972 
 
 Potter ads. Close, 5 Misc. 543, 25 
 
 Supp. 972 
 
 I'otter ads. Close, 155 N. Y. 145 
 
 49 N. E. 686 223, 226, 
 
 232, 
 Potter V. New York Infant Asy- 
 lum, 44 Hun 367 
 
 Potter Co. ads. Schwab, 194 N. Y. 
 409, 87 N. E. 670 491, 494, 
 
 904 
 
 741 
 
 198 
 468 
 
 550 
 
 280 
 
 905 
 
 901 
 
 506 
 
 625 
 
 929 
 
 881 
 
 915 
 
 714 
 806 
 
 770 
 
 521 
 
 211 
 
 334 
 
 Potter & Stymas Mfg. & Improve- 
 ment Co. ads. Kersch, 82 A. 
 D. 230, 81 Supp. 782 
 
 Potts V. Lambie, 138 A. D. 144, 
 122 Supp. 935 
 
 Powell V. Conover, 7.") Hun 11, 26 
 Supp. 1028 
 
 Powell V. Murray, 3 A. D. 273. 
 38 Supp. 233, 'aff'd 157 X. Y. 
 717, 53 N. E. 1130 
 
 Powell V. Pangborn, 161 A. D. 
 453, 145 Supp. 1073 
 
 Powell ads. People ex rel. Man ice. 
 201 N. Y. 194, 94 N. E. 6.34. .. 
 
 Powers ads. Dennin, 96 Misc. 252, 
 
 160 Supp. 636 
 
 Powers ads. People ex rel. Keese- 
 ville, Ausable Chasm & Lake 
 Champlain R. R. Co., 14.") A. 
 
 D. 693, 130 Supp. 529 
 
 Powers V. Knapp, 71 Hun 371, 25 
 
 Supp. la 217, 
 
 Powers V. Knapp, 85 Hun 38, 32 ' 
 Supp. 622, aff'd 158 N. Y. 733, 
 
 53 N. E. 1131 
 
 Powers V. Schlicht Heat & Power 
 Co., 23 A. D. 380, 48 Supp. 237, 
 aff'd 165 N. Y. 662, 59 N. E. 
 
 1129 
 
 Powers V. Universal Film Mfg. 
 Co., 162 A. D. 806, 148 Supp. 
 
 114 
 
 Pratt ads. American Grocery Co., 
 36 A. D. 152. r.5 Supp. 467, 
 aff'd 161 N. Y. 649, 57 N. E. 
 
 1103 
 
 Pratt ads. People ex rel. Oak Hill 
 Cemetery Assn., 66 Hun 578, 21 
 Supp. 653, aff'd 138 N. Y. 05.->. 
 
 34 N. E. 513 
 
 Pray v. Blanchard Co., 95 A. D. 
 
 423, 88 Supp. 650 
 
 Pray v. Todd, 71 A. D. 391, 75 
 
 Supp. 947 - 
 
 Premiere ads. McElwain Co., 180 
 
 A. D. 288, 167 Supp. 815 
 
 Presbyterian Society v. Beach, 74 
 
 N. Y. 72 
 
 Press Co. ads. Walsh, 48 A. D. 
 
 333, 62 Supp. 833 
 
 Press Publishing Co. v. Star Co., 
 33 A. D. 242, 53 Supp. 371.. 
 
 231 ' Preston ads. Socorro Mountain 
 
 375 
 150 
 336 
 
 4.-)7 
 378 
 
 312 
 
 :!:i2 
 
 155 
 
 50 
 220 
 
 220 
 
 46 
 132 
 
 512 
 
 801 
 
 379 
 
 186 
 
 605 
 
 !)4 
 
 546 
 
 175 
 543 
 
 234 
 
 368 
 
 502 
 
 Mining Co., 17 Misc. 220, 40 
 
 Supp. 1040 
 
 Price ads. White, 39 Hun 394, 
 aff'd 108 N. Y. 661, 15 N. E. 
 427 
 
 48 
 
 129 
 
TABLE OF CASES 
 
 Ixxx-v 
 
 References are to pages. 
 
 Priest ads. People ex rel. N. Y. 
 
 C. & H. R. R. R. Co., 206 N. Y. 
 
 274, 99 N. E. 547 769, 777, 778 
 
 Priest ads. People ex rel. Eetsof 
 Mining Co., 75 A. D. 131, 77 
 Supp. 382, aff'd 175 N. Y. 511, 
 
 67 N. E. 1088 768 
 
 Pric>.'=t ads. People ex rel. Roch- 
 ester Gas Co., 101 A. D. 334, 
 
 91 Supp. 772 692 
 
 Priest ads. People ex rel. Roches- 
 ter R. R. Co., 41 Misc. 545, 85 
 Supp. 235 798 
 
 Priest ads. People ex rel. Roches- 
 ter Telephone Co., 95 A. D. 44, 
 88 Supp. 11 793 
 
 Priest ads. People ex rel. United 
 Natural Gas Co., 152 A. D. 249, 
 136 Supp. 575 860 
 
 Prindle v. Washington Life Ins. 
 Co., 73 Hun 448, 26 Supp. 474, 
 aff'd 149 N. Y. 614, 43 N. E. 
 1124 524 
 
 Proctor ads. Sanders, 172 A. D. 
 713, 158 Supp. 433 72, 89, 140 
 
 Proctor V. Sidney Sash & Furni- 
 ture Co., 8 A. D. 42, 40 Supp. 
 454 566, 567 
 
 Proctor & Gamble Co. ads. 
 Hovey, 1 39' A. D. 521, 124 
 Supp. 128 852 
 
 Produce Exchange Trust Co. ads. 
 People ex rel. McElwee, 53 A. 
 
 D. 93, 65 Supp. 926 52 
 
 Prospect Park Hotel Co. ads. 
 
 Buchenen. 14 Misc. 435, 35 
 Supp. 712 378 
 
 Prouty V. Michigan Southern & 
 Northern Indiana R. R. Co., 
 1 Hun 655 71, 933 
 
 Providence Steam Co. v. Connell, 
 86 Hun 319, 33 Supp. 482. .. . 881 
 
 Provident Savings Life Ass. Soc. 
 ads. Moir, 127 A. D. 591, 112 
 Supp. 57 309 
 
 Pruyne \ . Adams Furniture & 
 Mfg. Co., 92 Hun 214, 36 Kupp. 
 361 256 
 
 Public Service Commission ads. 
 People ex rel. T. A. Ry. Co., 
 203 N. Y. 299, 96 N. E. 1011. . 289 
 
 Ptigh ads. Whitney, 58 A. D. 316, 
 
 68 Supp. 992 344 
 
 Pullman Co., People ex rel. v. 
 
 Glynn, 130 A. D. 332, 114 Supp. 
 460, aff'd 198 N. Y. 605, 92 N. 
 
 E. 1097 ...: 158, 715, 728 
 
 Pultz ads. Friek Co., 162 A, D. 
 
 209, 147 Supp. 732 888 
 
 Purcell Mfg. Co. ads. Seventy- 
 eighth St. & B'way Co., 92 
 Misc. 178, 155 Supp. 259 290 
 
 Purdy ads. People ex rel. Ameri- 
 can Exchange Nat. B'k, 196 N. 
 Y. 270, 89 N. E. 838 692, 789 
 
 Purdy ads. People ex rel. Brook- 
 lyn Development Co., 96 Misc. 
 10, 159 Supp. 778, aff'd 177 
 A. D. 936, 164 Supp. 1107.... 796 
 
 Purdy ads. Peojjle ex rel. But- 
 terick Publishing Co., 153 A. 
 D. 665, 138 Supp. 707, mod. 
 207 N. Y. 771, 101 N. E. 1116. 753 
 
 Purdy ads. People ex rel. Floers- 
 heimer, 174 A. D. 694, 162 
 Supp. 70, rev'd 221 N. Y. 481, 
 483, 116 N. E. 390 519, 789 
 
 Purdy ads. People ex rel. Gleason, 
 223 N. Y. 88 798 
 
 Purdy ads. People ex rel. McClure 
 Publications, Inc., 161 A. D. 
 541, 146 Supp. 646, aff'd 213 
 N. Y. 658, 107 N. E. 1084.. 724 
 
 807 
 
 Purdy ads. People ex rel. Morse 
 Dry Dock & Repair Co., 100 
 Misc. 580, 167 Supp. 69' 797 
 
 Purdy ads. People ex rel. Soleer- 
 bee, Inc., 179 A. D. 748, 167 
 Supp. 91 791 
 
 Purdy ads. People ex rel. Trojan 
 Realty Corp., 174 A. D. 702, 
 162 Supp. 56 519, 763, 789 
 
 Puritan Steamship Co., Ltd. ads. 
 Wilson, 58 Misc. 317, 110 Supp. 
 914 925 
 
 Putzel, People ex rel. v. Simon- 
 son, 61 Hun 338, 16 Supp. 
 118 308 
 
 Pyro-Gravure Co. v. Steber, 30 
 Misc. 658, 64 Supp. 520. . .321, 876 
 
 Pyro-Gravure Co. v. Steber, 30 
 Misc. 658, 64 Supp. 520 321 
 
 Pyrolusite Manganese Co., Mat- 
 ter of, 29 Hun 429 578, 582 
 
 585, 595 
 
 Quackenboss v. Globe & Rutgers 
 Fire Ins. Co., 106 A. D. 466, 94 
 ■ Supp. 723 49 
 
 Quackenboss v. Globe & R. F. 
 Ins. Co., 177 N. Y. 71, 69 N. E. 
 223 49 
 
 Quaker City Cooperage Co. ads. 
 Ozark Cooperage Co., 112 A. D. 
 62, 98 Supp. 113 837 
 
 Quele ads. Smith, 86 Misc. 259, 
 148 Supp. 448 235 
 
 Quee Drug Co. v. Plant, 55 A. D. 
 87, 67 Supp. 10 361 
 
 Queen City Cycle Co. v. Thomp- 
 son, 169 A. D. 522, 44 Supp. 
 1049 681 
 
 Queen Ins. Co. ads. Gibbs, 63 N. 
 Y. 114 900, 903 
 
Ixxxvi 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Queens Borough Gas & Electric 
 Co., People ex rel. v. Wood- 
 bury, 67 Misc. 481, 123 Supp. 
 592 766 
 
 Queens Co. Water Co. ads. Gam- 
 ble, 123 N. Y. 91, 9 L. R. A. 
 
 527, 25 N. E. 201 178, 192 
 
 261, 32^ 
 
 Queens Co. Water Co., People ex 
 rel. V. Travis, 171 A. D. 521, 
 157 Supp. 943 727 
 
 Queens Co. Water Co., People ex 
 rel. V. Woodbury, 67 Misc. 490, 
 123 Supp. 599, aff'd 143 A. D. 
 
 618. 128 Sunp. 522 726, 778 
 
 780, 782 
 
 Queens Estates ads. ilacQuoid, 
 143 A. D. 134, 127 Supp. 867. . 261 
 
 (^hiicksilver Mining Co. ads. Kent, 
 
 75 N. Y. 159. .47, 67, 69, 70, 99, 467 
 Quincy ads. Miller, 179 N. Y. 
 
 294, 72 N. E. 116 413 
 
 Quo Vadis Amusement Co. ads. 
 Morgan & Co., 45 Misc. 130, 91 
 
 Supp. 882 627 
 
 Rabbe v. Astor Trust Co., 61 
 
 Misc. 650, 114 Supp. 131 928 
 
 Radam Microbe Killer Co., Mat- 
 ter of, 110 A. D. 329, 97 Supp. 
 
 76 277 
 
 Raegener v. Brockway, 58 A. D. 
 
 166, 68 Supp. 712, aff'd 171 
 
 X. Y. 629, 63 N. E. 1121 4 
 
 Rafalskv ads. Walter, 113 A. D. 
 
 223, 98 Supp. 915, aff'd 186 N. 
 
 Y. 543, 79 N. E. 1118 142 
 
 Raff ads. Joseph, 82 A. D. 47, 81 
 
 Supp. 546, aff'd 176 N. Y. 611, 
 
 68 N. E. 1118 488 
 
 Rafferty v. Buffalo Citv Gas Co., 
 
 37 A. D. 018, 56 Supp. 288.. 100 
 102, 494 
 Raines & Co. ads. Schultz, Jr., 
 
 Co., Inc., Oil Misc. 626, 104 
 
 Supp. 4.")4, aff'd 100 Misc. 697, 
 
 160 Supp. 567 ■ . 534 
 
 Ramapo Water Cn. ads. People ex 
 
 rel. Hearst, 51 A. D. 145, 64 
 
 Supp. 532 559 
 
 Randall. Matter of, 87 A. D. 245, 
 
 !S4 Supp. 294 847 
 
 Randolph v. Susquehanna Water 
 
 Cci.. 12 A. D. 479, 42 Supp. 
 
 411 925 
 
 Ransom Gas Machine Co. ads. 
 
 Perrine, 60 A. D. 32, 69 Supp. 
 
 698 911 
 
 Rapid Transit Ferrv Co., Matter 
 
 of, 15 A. D. 530, 44 Supp. 539. 301 
 Rappleve, Matter of, 43 A. D. 
 
 84, 59 Supp. 338 851 
 
 Rateau Sales Co., Matter of, 201 
 
 N. Y. 420, 94 N. E. 869 583 
 
 Rath V. Ohio German Fire Ins. 
 
 Co., 132 A. D. 692, 117 Supp. 
 
 382 914 
 
 Rathbone v. Aver. No. 1, 84 A. D. 
 
 184, 82 Supp. 239 323 
 
 Rathbone v. Aver, No. 2, 84 A. 
 
 D. 186, 82 Supp. 235 81, 82 
 
 86, 211, 214, 237 
 Rathbun v. Northern Central Ry. 
 
 Co., 50 N. Y. 656 898 
 
 Rathbun ads. Smith, 22 Hun 150, 
 
 dism'd 88 N. Y. 60 414 
 
 Rathbun ads. Smith, 66 Barb. 
 
 402 414 
 
 Rathbun v. Snow, 123 N. Y. 343, 
 
 10 L. R. A. 355, 25 N. E. 379 . 45 
 
 433 
 Raub V. Gerken, 127 A. D. 42, 
 
 111 Supp. 319 307 
 
 Ravitch ads. Pittsburgh Plate 
 
 Glass Co., 58 Misc. 191, 108 
 
 Supp. 1103 890 
 
 Raymond ads. People ex rel. 
 
 Dunlap's Express Co., 54 Misc. 
 
 330, 105 Supp. 1007 858 
 
 Raymond ads. Noye Mfg. Co., 8 
 
 Misc. 353, 28 Supp. 693 530 
 
 Raymond ads. People ex rel. 
 
 Rooeevelt Hospital, 194 N. Y. 
 
 189, 87 X. E. 90 19 
 
 Raymond ads. Rochester & K. F. 
 
 Land Co., 158 N. Y. 576, 47 L. 
 
 R. A. 246, 53 N. E. 507. .83, 87, 90 
 Raymond v. Security Trust & 
 
 Life Ins. Co., 101 A. D. 546, 
 
 91 Supp. 1041 685 
 
 Raymond ads. Slayback, 93 A. D. 
 
 326, 87 Supp. 931 IH.'i 
 
 Rayner ads. Duryea, Watts & Co., 
 
 11 Misc. 294, 32 Supp. 247 533 
 
 Rayner ads. Johnson, 25 A. D. 
 
 598, 49 Supp. 9,59 651 
 
 Read ads. Concordia Savings & 
 Aid Assn., 93 N. Y. 474 531 
 
 Read ads. Metropolitan Life Ins. 
 Co., 168 A. D. 828, 154 Supp. 
 523 191 
 
 Rcaltv Securities Co. ads. Cass, 
 148 A. D. 96, 132 Supp. 1074, 
 aff'd 206 N. Y. 649 255, 336 
 
 Reardon ads. People ex rel. Fer- 
 guson, 197 N. Y. 236, 27 L. R. 
 A. (N. S.) 141, 90 N. E. 829. . 810 
 
 Reardon ads. People ex rel. 
 Hatch, 184 N. Y. 43r, 8 L. R. 
 A. (N. S.) 314, 77 N. E. 970. . 809 
 
 Receivership of Columbian Insur- 
 ance Co., In re, 42 N. Y. (3 
 Keyes) 123 671 
 
TABLE OF CASES 
 
 Ixxxvii 
 
 References are to pages. 
 
 Reoknagel v. Empire Self-Light- 
 ing Oil Lamp Co., 24 Misc. 193, 
 52 Supp. 635 853 
 
 Redmond v. Hoge, 3 Hun 171 927 
 
 Eeedy Elevator Co. v. American 
 Grocery Co., 24 Misc. 678, 53 
 Supp. 989 924 
 
 Eees' Sons, People ex rel. v. Mil- 
 ler, 90 A. D. 591, 86 Supp. 
 193 722, 729 
 
 Reformed Church of Gansevoort 
 ads. Van Buren, 62 Barb. 495. 532 
 
 Reid ads. Seagrist, 171 A. D. 755, 
 157 Supp. 979 415 
 
 Reid & Co. ads. Stannard, 114 A. 
 
 D. 135, 99 Supp. 567 643 
 
 Reid Ice Cream Co. ads. Kinney, 
 
 57 A. D. 206, 68 Supp. 325 ... . 883 
 Reilly v. Freeman, 84 A. D. 433, 
 
 82 Supp. 929 62 
 
 Reiners ads. Andrews, 112 A. D. 
 
 378, 98 Supp. 658 546 
 
 Reinheimer , ad's. Koehler & Co., 
 
 26 A. D. 1, 49 Supp. 755 . . 458 
 
 Reiss, Matter of, 30 Misc. 234, 
 
 62 Supp. 145 59 
 
 Eemer ads. Camden & Amboy R. 
 
 R. & T. Co., 4 Barb. 127 530 
 
 Remington ads. People, 45 Hun 
 
 329, aff'd 109 N. Y. 631, 16 N. 
 
 E. 680 670, 671, 672, 674, 675 
 
 Remington ads. People, 121 N. Y. 
 
 328, 8 L. R. A. 458, 24 N. E. 
 
 793 668 
 
 Remington-Martin Co. ads. Mar- 
 tin, 95 A. D. 18, 88 Supp. 
 573 4, 17 
 
 Remington & Sons ads. People, 
 54 Hun 480, 8 Supp. 31, aflf'd 
 121 N. Y. 675, 24 N. E. 1095. . 592 
 
 Remington & Son Pulp & Paper 
 Co. V. Casewell, 126 A. D. 142, 
 110 Supp. 556 461 
 
 Remington & Sherman Co. v. Ni- 
 agara Bank, 54 A. D. 358, 66 
 Supp. 560 871 
 
 Remsen ads. Sibell, 33 N. Y. 95. . 474 
 
 Reno Oil Co. v. Culver, 60 A. D. 
 129, 69 Supp. 969 115 
 
 Rensens v. Mfg. & Selling Co., 99 
 A. D. 214, 90 Supp. 1010 929 
 
 Rensselaer & Saratoga R. R. Co. 
 V. Delavifare & Hudson Co., 168 
 A. D. 699, 154 Supp. 739, aff'd 
 
 217 N. Y. 692, 112 N. E. 1072. . 504 
 
 Repose Mausoleums, Inc., ads. 
 Grace, 78 Misc. 213, 139 Supp. 
 300 453 
 
 Republic Savings & Loan Assn. 
 ads. People, 97 A. D. 31, 89 
 Supp. 582 325 
 
 Republic Savings & Loan Assn. 
 ads. People, 119 A. D. 502, 104 
 
 Supp. 1136 659 
 
 Republican Art Printery, Inc. v. 
 David, 173 A. D. 726, 159 Supp. 
 
 1010 506 
 
 Retsof Mining Co. ads. Genesee 
 Valley Ry. Co., 15 Misc. 187, 36 
 Supp. 896 334 
 
 Retsof Mining Co., People ex rel. 
 V. Priest, 75 A. D. 131, 77 
 Supp. 382, aff'd 175 N. Y. 511, 
 67 N. E. 1088 768 
 
 Reusens v. Gerard> 160 A. D. 625, 
 146 Supp. 86 148 
 
 Reynolds ads. Coffin, 37 N. Y. 640, 245 
 
 250, 252 
 
 Reynolds ads. Jahn, 115 A. D. 
 647, 101 Supp. 293 151 
 
 Reynolds ads. Miller, 92 Hun 400, 
 32 Supp. 660 373 
 
 Reynolds Elevator Co. v. Mer- 
 chants' Nat. B'k, 55 A. D. 1, 
 67 Supp. 39'7 301 
 
 Rhinelander v. Farmers' Loan & 
 T. Co., 172 N. Y. 519, 65 N. E. 
 499 279 
 
 Rhoads ads. Sanford, 113 A. D. 
 782, 99 Supp. 407 233, 232 
 
 Rice ads. People ex rel. Daven- 
 port, 68 Hun 24, 22 Supp. 631. 26 
 
 Rice ads. Delano, 23 A. D. 327, 
 48 Supp. 295 151 
 
 Rice ads. People ex rel. Munici- 
 pal Gas Co., 138 N. Y. 151, 33 
 N. E. 846 21 
 
 Rice ads. People ex rel. N. Y. 
 Phonograph Co., 57 Hun 486, 
 11 Supp. 249, aff'd 128 N. Y. 
 591, 28 N. E. 251 693, 694 
 
 Rice v. Rockefeller, 134 N. Y. 
 174, 17 L. R. A. 237, 31 N. E. 
 907 > 131 
 
 Richards v. Wells-Fargo Express 
 Co., 156 A. D. 268, 141 Supp. 
 306, aff'd 216 N. Y. 645, 110 
 N. E. 1048 128 
 
 Richards v. Wiener Co., 207 N. 
 Y. 59, 100 N. E. 592 134 
 
 Richardson v. Abendroth, 43 
 Barb. 162 236, 246 
 
 Richardson ads. Brown Seed Co., 
 53 Misc. 517, 103 Supp. 243. . . 843 
 
 Richardson ads. Sickles, 23 Hun 
 559 268, 283 
 
 Richardson Press v. Vandergrift, 
 165 A. D. 180, 150 Supp. 238. . 367 
 
 Richmond, People ex rel. v. Pa- 
 cific Mail Steamship Co., 50 
 Barb. 280 53 
 
Ixxxviii 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Kichmond Light & Power Co. 
 
 ads. Beebe, 3 A. C. 334, 38 
 
 Supp. 395 266 
 
 Richmond Turnpike Co. ads. Van- 
 
 derbilt, 2 N. Y. 479 521 
 
 Eichmondville Union Seminary v. 
 
 McDonald, 34 N. Y. 379. . . .78, 79 
 Richter ads. Colton Improvement 
 
 Company, 26 Misc. 26, 55 Supp. 
 
 486 3 
 
 Rickert v. White, 54 Misc. 114, 
 
 105 Supp. 653 358 
 
 Rider Life Raft Co., The, v. 
 
 Roach, 97 N. Y. 378 459 
 
 Ridgway v. Symons, 4 A. D. 98, 
 
 38 Supp. 895 362 
 
 Ridgewood Land & Improvement 
 
 Co., People ex rel. v. Saxe, 174 
 
 A. D. 344, 160 Supp. 752. aff'd 
 
 219 N. Y. 637, 114 N. E. 108. . 691 
 
 715 
 Riegel Sack Co. ads. American 
 
 Ink Co., 79 Misc. 421, 140 Supp. 
 
 107 883 
 
 Riker v Erlanger, 87 A. D. 137, 
 
 84 Supp. 69 528 
 
 Ring ads. Palmer, 113 A. D. 643, 
 
 99 Supp. 290 175 
 
 Ringler & Co., Matter of, 204 N. 
 
 Y. 30, 97 N. E. 593. . .296, 304, 307 
 Rinn v. Aston Fire Ins. Co., 59 
 
 N. Y. 143 638 
 
 Ripin V. U. S. Woven Label Co., 
 
 205 N. Y. 442, 98 V. S. Sr,r, 314 
 
 Riseher ads. Carr, 119 N. Y. 117, 
 
 23 isr. E. 296 388 
 
 Ritzwoller v. Lurie, 170 A. D. 
 
 100, 162 Supp. 475 78 
 
 Ri^verside & Dan River Cotton 
 
 Mills V. Menefee, 237 U. S. 189. 906 
 Roach ads. Bevan, 142 A. D. 541, 
 
 127 Supp. 68 152 
 
 Roach ads. Cornell, 101 N. Y. 373, 
 
 5 N. E. 52 389, 514 
 
 Roach ads. Duckworth, 81 N. Y. 
 
 49 389 
 
 Roach ads. The Rider Life Raft 
 
 Co., 97 N. Y. 378 459 
 
 Robbins, Inc., v. Hill, 81 Misc. 
 
 441, 142 Supp. 637, aff'd 166 
 
 A. D. 899, 150 Supp. 1074 321 
 
 Roberts ads. People ex rel. Adver- 
 tising Co., 4 A. D. 288, 39 Supp. 
 
 448, aff'd 151 N. Y. 621, 45 N. 
 
 E. 1135 864 
 
 Roberts ads. People ex rel. A. S. 
 
 Fountain Co., 158 N. Y. 168, 
 
 .52 X. E. 1104 710, 714 
 
 Roberts ads. People ex rel. Ba- 
 
 dische Fabrik, 152 N. Y. 59, 
 
 36 L. R. A. 756, 46 N. E. 761 . . 709 
 
 844 
 
 Roberts ads. People ex rel. Black- 
 ington Co., 4 A. D. 388. 38 
 Supp. 872, aff'd 151 N. Y. 651, 
 46 N. E. 1150 698 
 
 Roberts ads. People ex rel. Brew- 
 ing Co., 22 A. D. 282, 47 Supp. 
 949 842 
 
 Roberts ads. People ex rel. 
 Brooklyn Elevated R. R. Co., 
 90 Hun 537, 36 Supp. 34 731 
 
 Roberts ads. People ex rel. Chi- 
 cago Junction Rys., 154 N. Y. 
 1, 47 N. E. 974 725, 864 
 
 Roberts ads. People ex rel. Con- 
 tracting Co., 27 A. D. 400, 50 
 Supp. 302, aff'd 158 N. Y. 666, 
 
 52 N. E. 1125 864 
 
 Roberts ads. People ex rel. Cotton 
 
 Oil Co., 25 A. D. 13, 48 Supp. 
 
 1028 843 
 
 Roberts ads. People ex rel. Devoe 
 
 Co., 51 A. D. 77, 64 Supp. 494. 846 
 Roberts ads. People ex rel.- Gra- 
 
 mercy Co., 91 Hun 146, 36 
 
 Supp. 277, aff'd 158 X. Y. 709, 
 
 53 X. E. 1130 7-28 
 
 Roberts ads. People ox rel. Hy- 
 draulic Co., 30 A. D. 180, 57 
 Supp. 771, aff'd 157 X. Y. 
 
 676, 51 X. E. 1093 720 
 
 Roberts ads. People ex rel. Inter- 
 national Elevating Co., 116 A. 
 D. 30, 101 Supp. 184 862, 8(i.-> 
 
 Roberts ads. People ex rel 
 .lerome Park Co., 41 A. D. 
 21, 58 Supp. 254, aff'd 169 X. 
 Y. 582 727 
 
 Roberts ads. People ex rel. 
 .Tew€lers' Pub. Co.. 155 X. Y. 
 1, 49 X. E. 248 700, 7.30 
 
 Roberts ads. People ex rel. A. .1. 
 Johnson Co., 159 X. Y. 70, 4.1 
 
 L. R. A. 126, 53 X. E. 685 8.15 
 
 863, 866 
 
 Roberts ads. People ex rel. Kel- 
 logg Co., 30 A. D. 150, 51 Supp. 
 686 839 
 
 Roberts ads. People ex rel. Klip- 
 stein & Co., 36 A. D. 597, 55 
 Supp. 950, aff'd 167 X. Y. 617, 
 60 N. E. 1117 863 
 
 Roberts ads. People .ex rel. 
 Matheson & Co., 158 X. Y. 162, 
 52 X. E. 1102 696, 710, 740 
 
 Roberts ads. People ex rel.- New 
 England Dressed Meat & W. 
 Co., 155 X. Y. 408, 41 L. R. A. 
 228, 50 N. E. 53 729 
 
 Roberts ads. People ex rel. Xew 
 England Loan & Trust Co., 25 
 A. D. 16, 49 Supp. 10, aff'd 156 
 N. Y. 688, 50 X. E. 1120,. .845, -SG.") 
 
TABLE OF CASES 
 
 Ixxxix 
 
 References are to pages. 
 
 Eoberts ads. People ex rel. N. Y. 
 & E. R. T. Co., 168 N. Y. 14, 
 60 N. Y. 1043 722 
 
 Roberts ads. People ex rel. Parke, 
 Davis & Co., 91 Hun 158, 36 
 Supp. 368, aff'd 149 N. Y. 608, 
 44 N. E. 1127 846 
 
 Roberts v. Pioneer Iron VVorlcs, 
 125 A. D. 207, 109 Supp. 230. . 887 
 
 Roberts v. Roberts-Wicks Co., 184 
 N. Y. 257, 3 L. R. A. (N. S.) 
 1034, 77 N. E. 13 74, 163, 168 
 
 Roberts ads. People ex rel. 
 Schwarzschild Co., 11 A. D. 
 449, 42 Supp. 317, aff'd 156 
 N. Y. 690, 50 N. E. 1121 861 
 
 Roberts ads. People ex rel. Smith 
 Co., 27 A. D. 455, 50 Supp. 355. 842 
 
 Roberts ads. People ex rel. Stand- 
 ard Wood Co., 20 A. D. 514, 47 
 Supp. 122 718, 846 
 
 Roberts ads. People ex rel. Staten 
 Island R. T. R. R. Co., 4 A. D. 
 334, 38 Supp. 724 721 
 
 Roberts ads. People ex rel. Stokes 
 Co., 90 Hun 533, 36 Supp. 73. 700 
 
 Roberts ads. People ex rel. Union 
 Ferry Co., 66 A. D. 157, 72 
 
 : Supp, 950 7i7 
 
 Roberts ads. People ex rel. Union 
 
 I Pacific Tea Co., 145 N. Y. 375, 
 
 ' 40 N. E. 7 698, 699 
 
 Roberts ads. People ex rel. U. V. 
 Copper Co., 156 N. Y. 585, 51 
 N. E. 293 724 
 
 Roberts ads. People ex rel. Wash- 
 ington Mills Co., 8 A. D. 201, 
 40 Supp. 417, aff'd 151 N. Y. 
 619, 45 N. E. 1134 840 
 
 Roberts ads. People ex rel. 
 Western Union Telegraph Co., 
 30 A. D. 78, 51 Supp. 747; 
 aff'd 156 N. Y. 693, 51 N. E. 
 1093 711 
 
 Roberts ads. People ex rel. Wie- 
 basch & H. Co., 154 N. Y. 101, 
 47 N. E. 980 731 
 
 Roberts-Wicks Co. ads. Roberts, 
 184 N. Y. 257, 3 L. R. A. (N. 
 S.) 1034, 77 N. E. 13. .74, 163, 168 
 
 Robertson ads. McCrea, 192 N. Y. 
 150, 84 N. E. 960 414 
 
 Robertson ads. Roth, 64 Misc. 
 343, 118 Supp. 351 404, 420 
 
 Robinson ads. Billings, 94 N. Y. 
 415 82 
 
 Robeson v. Central R. R. Co., 76 
 Hun 444, 26 Supp. 384 896, 898 
 
 Robinson ads. Rudd, 126 N. Y. 
 113, 12 L. R. A. 473, 26 N. E. 
 1046 60, 208 
 
 Robinson v. Ecuador Development 
 Co., 32 Misc. 106, 65 Supp. 427. 533 
 
 Robinson v. National Bank of 
 Berne, 95 N. Y. 637 130, 162 
 
 Robinson v. N. Y. & Staten Is. 
 Electric Co., 99 A. D. 509, 91 
 Supp. 153 638 
 
 Robinson v. N. Y., Westchester 
 & Boston Ry. Co., 55 Misc. 516, 
 105 Supp. 897 196 
 
 Robinson v. New York, Westches- 
 ter & Boston R. Co., 123 A. D. 
 339, 108 Supp. 91 192 
 
 Robinson ads. Patterson, 37 Hun 
 341 345 
 
 Robinson ads. Patterson, 116 N. 
 Y. 193, 22 N. E. 372 366 
 
 Robinson v. Smith, 3 Pai. 222 . . 337 
 
 Robinson ads. White, 145 A. D. 
 751, 130 Supp. 388 88 
 
 Robinson ads. Wildes, 50 A. D. 
 192, 63 Supp. 811 153 
 
 Rochester, City of, ads. Monroe 
 Savings Bank, 37 N. Y. 365.. 714 
 
 Rochester & Charlotte Turnpike 
 Road Co. v. Paviour, 164 N. Y. 
 281, 52 L. R. A. 790, 58 N. Y. 
 114 359 
 
 Rochester District Telegraph Co., 
 Matter of, 40 Hun 172 177 
 
 Rochester Gas Co., People ex rel. 
 V. Priest, 101 A. D. 334, 91 
 Supp. 772 692 
 
 Rochester Gas & Electric Co. ads. 
 Einstein, 146 N. Y. 46, 40 N. E. 
 631 107 
 
 Rochester Folding Box Co. v. 
 Browne, 55 A. D. 444, 66 Supp. 
 867, aff'd 179 N. Y. 542, 71 
 N. E. 1139 62 
 
 Rochester Frear Stone Co. ads. 
 Medbury; 19 Hun 498 589 
 
 Rochester, Hornellsville & Lacka- 
 wanna R. R. Co. v. N. Y., Lake 
 Erie & Western R. R. Co., 48 
 Hun 190 436 
 
 Rochester & Irondequoit R. R. Co. 
 ads. Rochester Trust & Safe 
 Deposit Co., 29 Misc. 222, 60 
 Supp. 409 656 
 
 Rochester & Kettle Falls Law Co. 
 V. Roe, 7 A. D. 366, 40 Supp. 
 72 , . . . 87 
 
 Rochester & Kettle Falls Law Co. 
 ads. Wile & Briekner Co., 4 
 Misc. 570, 25 Supp. 794 317 
 
 Rochester & K. F. Land Co. v. 
 Raymond, 158 N. Y. 576, 47 
 L. R. A. 246, 53 N. E. 507. .83, 90 
 
xc 
 
 TABLE OF CASES 
 
 References are to pages. 
 
 Rochester Lamp Co., People ex 
 rel. \. Feitner, 65 A. D. 224, 
 72 Supp. 641 795 
 
 Rochester Land Co. v. Raymond, 
 4 A. D. 600, 39 Supp. 145, 
 aff'd 158 N. Y. 576, 47 L. R. A. 
 246, 53 N. E. 507 87 
 
 Rochester Machine Co. ads. Park- 
 hurst, 65 Hun 489, 20 Supp. 
 395 893 
 
 Rocliester & Pittsburgh R. R. Co. 
 ads. Olmsted, 46 Hun 552 643 
 
 Rochester R. Co., People ex rel. 
 V. Pond, 37 A. D. 330, 57 Supp. 
 490 741 
 
 Rochester R. R. Co., People ex 
 rel. V. Priest, 41 Misc. 545, 85 
 Supp. 235 798 
 
 Rochester Railway & Light Co. 
 ads. People, 59 "Misc. 347, 112 
 Supp. 362, aff'd 129 A. D. 843, 
 144 Supp. 755 512 
 
 Rochester Savings Bank v. Aver- 
 ell, 96 X. Y. 467 265, 267 
 
 Rochester Seamless Paper Vessel 
 Co. ads. Chamberlaine, 7 Hun 
 557 628 
 
 Rochester & State Line Rv. Co. 
 ads. Wilkie, 12 Hun 242 ." 362 
 
 Rochester Telephone Co., People 
 ex rel. v. Priest, 95 A. D. 44, 
 88 Supp. 11 793 
 
 Rochester Trust & Safe Deposit 
 Co. V. Rochester & Irondequoit 
 R. R. Co., 29 Misc. 222, 60 
 409 656 
 
 Rock City Falls Paper Co. ads. 
 First Nat. B'k, 22 ilisc. 599, 
 50 Supp. 746 825 
 
 Rock Island Butter Co. v. Free- 
 man, 83 Misc. 7, 144 Supp. 317. 671 
 
 Rockaway Beach Improvement 
 Co. ads. Attrill, 25 Hun 509.. 678 
 
 Rockefeller ads. Rice, 134 X. Y. 
 174, 17 L. R. A. 237, 31 N. E. 
 907 131 
 
 Rockv Mountain Xat. B'k v. 
 Bliss, 89 N. Y. 338 226 
 
 Rodbourn v. Utica, Ithaca & El- 
 mira Ry. Co., 28 Hun 369 627 
 
 Roe ads. Rochester & Kettle FalU 
 Land Co., 7 A. D. 366, 40 Supp. 
 72 87 
 
 Roeben ads. Diamond Match Co., 
 106 X. Y. 473, 13 X'. E. 419.. 461 
 499, 500, 870 
 Roebling's Sons Co. v. Federal 
 Storage Battery Car Co., — 
 
 Misc. (1918), X. Y. L. J.. 
 
 Feb. 27, Sp. T. X. Y. Co.. .215, 227 
 
 Roebling's Sons Co., People ex. rel. 
 V. Wemple, 138 N. Y. 582, 34 
 X. E. 386 846 
 
 Rogers v. Adriatic Fire Ins. Co., 
 
 148 N. y. 34, 42 X. E. 515 598 
 
 Rogers Construction Co., Matter 
 
 of, 79 A. D. 419, 79 Supp. 444, 
 
 aff'd 175 N. Y. 509, 67 X. E. 
 
 1089 476 
 
 Rogers ads. La Fayette Ins. Co. 
 
 of Brooklyn, 30 Barb. 491 530 
 
 Rogers v. Jlichigan Southern & 
 
 X^orthern' Indiana R. R. Co., 28 
 
 Barb. 539 896 
 
 Rogers v. Pell, 154 N. Y. 518. 49 
 
 N. E. 75 333, 377, 825 
 
 Rogers v. Wendell, 54 Hun 540, 
 
 7 Supp. 781 661 
 
 Romaine v. Van Allen, 26 N. Y. 
 
 309 158 
 
 Rome, Watertown & Ogdensburg 
 
 R. R. Co. ads. Kingman, 30 
 
 Hun 73 196 
 
 Romeike & Co., Inc., ads. Ro- 
 
 meike. Inc., 179 A. D. 712, 167 
 
 Supp. 235 35 
 
 Romeike. Inc., v. Romeike & Co., 
 
 Inc., 179 A. D. 712; 167 Supp. 
 
 235 35 
 
 Roome ads. Adriance, 52 Barb. 
 
 399 362 
 
 Roosevelt v. Brown, 11 N. Y. 148. 61 
 Roosevelt Hospital, People ex rel 
 
 v. Raymond, 194 N. Y. 189, 87 
 
 X. E. 90 19 
 
 Rope ads. Buell, 6 A. D. 113, 39 
 
 Supp. 475 482, 484 
 
 Rorke v. Thomes, 56 N. Y. 559. . 341 
 
 342 
 Rosa V. Butterfield, 33 N. Y. 665. 469 
 Rose V. Chadwick, 9 A. D. 311, 
 
 41 Supp. 190 386 
 
 Rose V. Imperial Engine Co., 127 
 
 A. D. 885, 112 Supp. 8, aff'd. 
 
 195 X. Y. 515, 88 N. E. 1130. . 523 
 Rose Co. ads. Studebaker Bros. 
 
 Co., 6.5 Misc. 322, 119 Supp. 
 
 970 523 
 
 Rosebrook ads. Lawyer, 48 Hun 
 
 453 230 
 
 Roscnbaum ads. Coulter Dry 
 
 Goods Co., 74 Misc. 579, 134 
 
 Supp. 487 244 
 
 Rosenberg ads. Van Xorden Trust 
 
 Co.. 62 Misc. 285, 114 Supp. 
 
 1025 504 
 
 Rosenblatt v. Jersey Xovelty Co., 
 
 45 Misc. 59, 90 Supp. 816.... 873 
 Rosenheimer v. Standard Gas 
 
 Light Co., 36 A. D. 1, 55 Supp. 
 
 192 \ 509 
 
 Rosenthal ads. Wentringham, 25 
 
 Hun 580 89 
 
 Ross ads. Fenuessey, 5 A. D. 342, 
 39 Supp. 323 140 
 
TABLE or CASES 
 
 References are to pages. 
 
 Rossie Iron Works v. Westbrook, 
 
 59 Hun 345, 13 Supp. 141 
 
 Rossman v. Seaver, 41 A. D. 603, 
 
 58 Supp. 677 
 
 Roth V. Robertson, 64 ilisc. 343, 
 
 118 Supp. 351 404, 
 
 Rothfield ads. \A'alIer, 36 Misc. 
 
 177, 73 Supp. 141 
 
 Rothmiller v. Stein, 143 N. Y. 
 
 581, 26 L. E. A. 148, 38 N. E. 
 
 718 146, 
 
 Rothschild ads. Terrv, 83 Hun 
 
 486, 31 Supp. illO." 
 
 Rottenberg, People ex rel. v. Utah 
 
 Gold & Copper Mines Co., 135 
 
 A. D. 418, 119 Supp. 852 
 
 Rowan ads. Cassidy's, Ltd., 99 
 
 iliso. 274, 163 Supp. 1079 
 
 Rowe ads. Fuller, 57 N. Y. 23 . . ; 
 Rowell V. Janvin, 69 Hun 305, 23 
 
 Supp. 481, app. dism'd 138 N. 
 
 Y. 656, 34 N. E. 514 
 
 Rowell V. Janvrin, 151 N. Y. 60, 
 
 45 N. E. 398 
 
 Royal Baking Powder Company 
 
 ads. Lawshe, 54 Misc. 220, 104 
 
 Supp. 361 
 
 Royal Baking Powder Co. ads. 
 
 Solar Baking Powder Co., 128 
 
 A. D. 550, 112 Supp. 1013. .. . 
 Royal Trust Co. v. Harding, 155 
 
 . A. T). 104, 140 Supp. 9 
 
 Eubel V. Central R. R. Co. of N. 
 
 J., 171 A. D. 456, 156 Supp. 
 
 1094 
 
 Ruckel ads. Krauser, 17 Hun 463. 
 
 Eudd V. McLean Arms & Ord- 
 nance Co., 54 Misc. 49, 105 
 Supp. 387 
 
 Eudd V. Robinson, 126 N. Y. 113, 
 12 L. R. A. 473, 26 X. E. 1046 . 
 
 Rudiger v. Coleman, 112 A. D. 
 279, 98 Supp. 461 
 
 Ruggles V. Brock, 6 Hun 164 .j. . . 
 
 Rural Home Co. ads. Fox, 90 Hun 
 365, 35 Supp. 896, aflf'd. 157 
 X. Y. 684, 51 N. E. 1090 
 
 Rusling V. Union Pipe & Con- 
 struction Co., 5 A. D. 448, 39 
 Supp. 216, 158 N. Y. 737, 53 
 N. E. 1131 
 
 Russell V. American Gas & Elec- 
 tric Co., 152 A. D. 136, 136 
 Supp. 602 104, 
 
 Russell Coe Fertilizer Co. ads. 
 Snow, 58 Hun 134, 11 Supp. 
 492 
 
 534 
 482 
 420 
 843 
 
 442 
 227 
 
 132 
 
 879 
 
 882 
 
 10 
 
 242 
 225 
 
 854 
 
 544 
 932 
 
 898 
 246 
 250 
 
 437 
 
 60 
 208 
 
 1 
 92 
 
 508 
 
 48 
 107 
 682 
 
 236 
 
 905 
 
 139 
 57 
 
 Russell V. Washington Life Ins. 
 
 Co., 62 Misc. 403, 115 Supp. 
 
 950 •. 906, 914 
 
 Rutenberg ads. Acorn Brass Mfg. 
 
 Co., 147 A. D. 533, 132 Supp. 
 
 600 838 
 
 Rutherford & Boiling Springs Gas 
 
 Co. ads. Ernst, 38 A. D. 388, 
 
 56 Supp. 403 93C 
 
 Ryan-Parker Construction Co. 
 
 ads. Sullivan, No. 1, 148 A. D. 
 
 243, 132 Supp. 344 919 
 
 Ryder v. Bushwick R. R. Co., 134 
 
 N. Y. 83, 31 N. E. 251 115 
 
 Sacchi ads. Aspinwall, 57 N. Y. 
 
 331 .'. ..235, 
 
 Sadler v. Boston & Bolivia Rub- 
 ber Co., ;i40 A. D. 367, 125 
 
 Supp. 407, aff'd 202 N. Y. 547, 
 
 95 N. E. 1139 
 
 Sagamore Development Co. ads. 
 
 Dusenberry, 157 A. D. 485, 142 
 
 Supp. 595 203 
 
 Sagamore Development Co. ads. 
 
 Dusenberry, 164 A. D. 573, 150 
 
 Supp. 229 63, 110, 
 
 Sage, Matter of, 70 N". Y. 220 . . 
 Sage v. Culver, 147 N. Y. 241, 41 
 
 N. E. 513 492 
 
 Sage ads. Hardman, 124 N. Y. 25, 
 
 26 N. E. 354 ■. .225, 229, 233 
 
 Sage ads. Hopper, 112 X. Y. 530, 
 
 20 N. E. 350 165 
 
 Sage ads. Straus, 5 Misc. 255, 25 
 
 Supp. 93 388 
 
 Sager Mfg. Co. v. Smith, 45 A. 
 
 D. 358, 60 Supp. 849, affd 167 
 
 N. Y. 600, 60 N. E. 1120 931 
 
 Sager Mfg. Co. v. Smith, 45 A. D. 
 
 358, 60 Supp. 849, aff'd 167 N. 
 
 Y. 6O0, 60 N. E. 1120 644 
 
 Sahler ads. Haight, 30 Barb. 218. 365 
 St. Albans Beef Co. v. Aldridge, 
 
 112 A. D. 803, 99 Supp. 398, 
 
 841, 885 
 St. George Development Co. ads. 
 
 Churchill, 174 A. D. 1, 160 
 
 Supp. 357 148 
 
 St. George Vineyard Co. v. Fritz, 
 
 48 A. D. 233, 62 Supp. 775 64 
 
 St. John V. Eberlin, 23 Misc. 
 
 585, 51 Supp. 998 187 
 
 St. Joseph Lead Co. ads. Holmes, 
 
 84 Misc. 278, 147 Supp. 104, 
 
 aff'd 163 A. D. 885. 147 Supp. 
 
 1117 158,333, 504 
 
 St. Joseph Lead Co. ads. Holmes, 
 
 No. 1, 168 A. D. 685, 154 Supp. 
 
 517, aff'd 217 N. Y. 618, 111 
 
 N. E. 1088 336 
 
 St. Joseph Lead Co. ads. Holmes, 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Xo. 2, 168 A. D. 688, 154 Supp. 
 
 513, affd 217 N. Y. 619, 111 
 
 X. E. loss 336, 406 
 
 St. Louis, .Mton & Teire Haute 
 
 R. R. Co. ads. Elswortli, 33 
 
 Hun 7, afl d 9S X. Y. 553 281 
 
 St. Louis & San Francisco Ry. 
 
 Cb. ads. People ex rel. Del Mar, 
 
 44 Hun 552 852 
 
 St. Louis & San Francisco R. R. 
 
 Co. V. Guaranty Trust Co. of 
 
 X. Y., 205 X. Y. 609, 98 X. E. 
 
 162 272 
 
 Saint Nicholas Bank ads. People, 
 
 76 Hun 522, 28 Supp. 114 623 
 
 St. Nicholas Bank ads. People, 
 
 3 A. D. 544, 38 Supp. 379, aflf'd 
 
 151 X\ Y. 592, 45 N. E. 1129. . 633 
 Saint Nicholas Bank ads. People, 
 
 44 A. D. 313, 60 Supp. 719 926 
 
 St. Nicholas Bank ads. People, 
 
 151 N. Y. 592, 45 N. E. 1129. . 640 
 St. Peter's Church ads. De Ruy- 
 
 ter, 3 X. Y. 238 470 
 
 Solomon ads. American Silk 
 
 Works. 4 Hun 135 77 
 
 Salt V. Ensign, 79 Hun 107, 29 
 
 Supp. 659 477 
 
 Sanborn v. Lefferts, 58 X'. Y. 
 
 179 215, 391 
 
 San Domingo Improvement Co. 
 
 ads. Chittenden. 132 A. D. 169, 
 
 116 Supp. 829 544 
 
 Sanders v. Barnaljv, 166 A. D. 
 
 274, 151 Supp. .)'S0 79. 95 
 
 Sanders v. Barnaby, 173 A. D. 
 
 244. 159 Sup,p. .■i79 477 
 
 Sanders v. Proctor, 172 A. D. 
 
 713. 158 Supp. 433 12. S9, 140 
 
 Sanderson .uls. Goodrich, 35 A. D. 
 
 54li, .55 Supp. SSI 931 
 
 Sanford v. Rhoads, 113 A. D. 7S2. 
 
 99 Supp. 407 232, 233 
 
 Sanitary Security Co. ads. Tal- 
 
 madg'e, 31 A. D. 49S. ry2 Supp. 
 
 139 91 
 
 Sands, Matter of. 9S A. D. 148, 90 
 
 Supp. 749 541 
 
 Sands y. Hill. 55 X. Y. IS 478 
 
 Sands y. Kimbark, 27 X. Y. 147. . 75 
 Saranac Horse Xail Co. ads. 
 
 Shaw, 144 X*. Y. 220. 39 X". E. 
 
 73 4.34 
 
 Saranac & L. P. R. R. Co. v. 
 
 Arnold, 167 X. Y. 368. 60 X^. E. 
 
 647 10 
 
 Saratoga Gas Co. ads. Lozier, 59 
 
 A. D. 390, 69 Supp. 247 55 
 
 Saratoga Gas Co. ads. X. Y. 
 
 Security Co., 88 Ilun 569, 34 
 
 Supp. 890, aff'd 157 X. Y. 689, 
 
 31 N. E. 1092 260,277, 279 
 
 Saratoga G. & El. L. Co. ads. N. 
 Y. Security Co., 159 X. Y. 137, 
 45 L. R. A. 132, 53 X. E. 758. . 273 
 
 Sargent ads. Kelsey, 40 Hun 
 
 150 199, .320, 325 
 
 Sautter v. Atlantic & Paeitic Tea 
 Co., 92 Misc. 378, 156 Supp. 
 992 913 
 
 Savings Bank of Xew London, 
 People ex rel. y. Coleman. 135 
 
 X'. Y. 231, 31 X. E. 1022 73S 
 
 7.52. S.l!l 
 
 Saxe ads. People ex tel. City In- 
 vesting Co., 177 A. D. 16, 163 
 Supp. 942; aff'd 221 N. Y. 585, 
 117 N. E. 1O80 732 
 
 Sake ads. People ex rel. Ridge- 
 wood Land & Improvement Co., 
 174 A. D. 344, 160 Supp. 752; 
 aff'd 219 X. Y. 637, 114 N. E. 
 1080 691, 715 
 
 Saxe ads. People ex rel. Standard 
 Oil Co., 179 A. D. 721, 166 
 Supp. 887 722 
 
 Saxe ads. People ex rel. Tompkins 
 Cove Stone Co., 176 A. D. 1, 
 162 Supp. 408; aff'd 221 X. Y. 
 601, 117 N. E. 1081 (,<)» 
 
 Sayles y. White, 19 A. D. 590, 46 
 Supp. 385, aff'd 154 N. Y. 763. 416 
 
 Sayrc, Matter of, 70 A. D. 329, 
 75 Supp. 286 568 
 
 Schaefer v. Scott, 40 A. D. 
 438, 57 Supp. 1035 377 
 
 Schafuss y, Betts, 94 Misc. 463. 
 157 Supp. 608 146 
 
 Schantz y. Oakman, 163 X. Y. 
 
 148. 57 X. E. 288 11 
 
 Scharf v. Warran-Scharf Paving 
 Co., 15 A. D. 480, 44 Supp. 
 491 417 
 
 Scharmann & Sons y. De Palo, 
 66 A. D. 29, 72 Supp. 1008.. 897 
 
 Scheel, Matter of, 134 A. D. 442. 
 
 119 Supp. 295 SOS 
 
 Sclienck v. Andrews, 57' X. Y. 
 
 133 222 
 
 Schenectady & Saratoga Plank 
 Road Co. y. Thatcher, 11 X. 
 Y. 102 90, 297 
 
 Scheu ads. Western Transporta- 
 tion Co., 19 N. Y. 408 750 
 
 Schlegel ads. United States Vin- 
 egar Co.. 67 Hun 356. 22 Supp. 
 407, aff'd 143 X. Y. 537, 38 N. 
 E. 729 90, 531, 870, 890 
 
 Schlesinger y. Gilhooly, 111 A. D. 
 1.58. 97 Supp. 606 680 
 
 Schlicht Combustion Process Co. 
 ads. Imbrie, 130 A. D. 675, 115 
 Supp. 333 37S 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Schlicht Heat & Power Co. ads. 
 Powers, 23 A. D. 380, 48 Supp. 
 237, aff'd 165 N. Y. 662, 59 
 N. E. 1129 46 
 
 Schmid v. N. Y., Lake Erie & 
 Western R. R. Co., 32 Hun 
 335, aff'd 98 N. Y. 634 620 
 
 Schmidt v. Nelke Art Litho- 
 graphic Co., 17 Misc. 124, 39 
 Supp. 353 530 
 
 Schnaier & Co. v. Grigsby, 132 
 A. D. 854, 117 Supp. 455, aff'd 
 199 N. Y. 577, 93 N. E. 1125. . 527 
 
 Schoenherr v. Van Meter, 215 N. 
 Y. 548, 109 N. E. 625 335, 412 
 
 Schoharie Valley Machine Co. 
 ads. Cary, 2 Hun 110 612 
 
 Schratwieser Fireproof Construc- 
 tion Co. ads. Alphe Portland 
 Cement Co., 146 A. D. 571, 131 
 Supp. 142 885 
 
 Schreger v. Bailey & Co., 97 A. 
 D. 185, 89 Supp. 870 361 
 
 Schreiber v. Garden, 152 A. D. 
 817, 137 Supp. 747 512 
 
 Schrenk ads. Fullen & Co., 58 A. 
 D. 222, 68 Supp. 781, aff'd 171 
 N. Y. 671, 64 N. E. 1126 889 
 
 Schultz V. German-American Real 
 Estate Co., 21 A. D. 163, 47 
 Supp. 500 200 
 
 Schultz, Jr., Co., Inc., v. Raines & 
 Co., 99 Misc. 626, 104 Supp. 
 454, aff'd 100 Misc. 697, 166 
 Supp. 567 534 
 
 Schultze ads. Pollock, 1 Plun 320. 364 
 
 Schulze V. Sizer, 14 A. D. 274, 43 
 Supp. 463 626 
 
 Schurz, People ex rel. v. Cook, 
 110 N. Y. 443, 18 N. E. 113 693 
 
 Schuyler ads. New York & New 
 Haven E. R. Co., 38 Barb. 534, 
 
 aff'd 34 N. Y. 30 97, 107, 124 
 
 128, 134, 135, 138 
 
 Schuyler ads. New York & New 
 Haven R. R. Co., 17 N. Y. 592. 116 
 
 Schuyler's Steam Tow Boat Co., 
 Matter of, 136 N. Y. 169, 20 
 L. R. A. 391, 32 N. E. 623. .. . 630 
 
 Schuylkill & Lehigh Valley R. E. 
 Co. ads. Babcock, 133 N. Y. 420, 
 31 N. E. 30 612 
 
 Schuylkill Silk Mills ads. Jack- 
 son, 92 Misc. 442, 156 Supp. 
 219 913, 914 
 
 Schwab V. Potter Co., 194 N. Y. 
 409, 87 N. E. 670 491,494, 502 
 
 Schwank v. Naylor, 102 N. Y. 
 683, 7 N. B. 788 145 
 
 87 
 
 161 
 
 201 
 
 Schwartling v. Van Wie N. Y. 
 
 Grocery Co., 60 A. D. 475, 69 
 
 Supp. 978 511 
 
 Schwarzschild & Sulzbergen Co. 
 
 ads. Hinckley, 107 A. D. 470, 
 
 95 Supp. 357, app. dism'd 193 
 
 N. Y. 599, 86 N. E. 1 125 .... 18, 98 
 ScTiwarzschild Co., People ex rel. 
 
 V. Roberts, 11 A. D. 449, 42 
 
 Supp. 317, aff'd 156 N. Y. 690, 
 
 50 N. E. 1121 861 
 
 Schwarzwaelder ads. Uptegrove, 
 
 46 A. D. 20, 61 Supp. 623, aff'd 
 
 167 N. Y. 587, 60 N. E. 1121. . 
 Scott V. Central R. R. & Banking 
 
 Co. of Ga., 52 Barb. 45 159, 
 
 Scott ads. Crook, 65 A. D. 139, 
 
 72 Supp. 516, aff'd 174 N. Y. 
 
 520, 66 N. E. 1106. . . .' 169, 
 
 Scott ads. Schaefer, 40 A. D. 438, 
 
 57 Supp. 1035 377 
 
 Scott ads. Union Nat. B'k, 53 
 
 A. D. 65, 66 Supp. 145 62, 301 
 
 338, 386 
 Scruggs V. Cotterill, 67 A. D. 
 
 583, 73 Supp. 882 , . . 144 
 
 Seagrist v. Reid, 171 A. D. 755, 
 
 157 Supp. 979 415 
 
 Seaich, Matter of, 170 A. D. 686, 
 
 156 Sup. 579, aff'd 219 N. Y. 
 
 634, 114 N. E. 1083 608 
 
 Seale ads. Dreyf'uss, 18 Misc. 551. 
 
 41 Supp. 875 928 
 
 Seale & Co. ads. Dreyfus & Co., 
 
 37 A. D. 351, 55- Supp. 1111.. 
 Seaman ads. Cameron, 69 N. Y. 
 
 396 305. 
 
 Seaman ads. Sherin Special 
 
 Agency, 49 A. D. 33, 63 Supp. 
 
 407 ' 
 
 Searing ads. Jermyn, 170 A. D. 
 
 707, 156 Supp. 718 256 
 
 Searles v. Gebbie, 115 A. D. 778, 
 
 101 Supp. 199, aff'd 190 N. Y. 
 
 533, 83 N. E. 1131 
 
 Searles ads. York, 97 A. D. 331, 
 
 90 Supp. 37, aff'd 189 N. Y. 
 
 573, 82 N. E. 1134 
 
 Seaver ads. Rossman, 41 A. D. 
 
 603, 58 Supp. 677 482 
 
 Secayno v. Vulcan Steel Products 
 
 Co., — Misc. — . N. Y. L. J. 
 
 March 13, 1918 545 
 
 Second Ave. R. R. Co., People ex 
 
 rel. V. Barker, 141 N. Y. 196, 36 
 
 N. E. 184 ,751 
 
 Securities Co. ads. Chester County 
 
 Guarantee Trust & Safe De- 
 posit Co., 165 A. D. 329, 150 
 
 Supp. 1010 276 
 
 826 
 
 513 
 
 541 
 
 205 
 
 153 
 
XCIV 
 
 TABLE OF CASES 
 
 Eeforences are to pages. 
 
 Security Bank ads. Mocli Co., 166 
 
 A. D. .121, 151 Supp. 756.... 506 
 Security B'k ads. Moeh Co., 17B 
 
 A. D. 842, 163 Supp. 277.. 182, 361 
 Security Title & Trust Co. v. 
 Stewart, 154 A. D. 434, 139 
 
 Supp. 74 150 
 
 Security Trust &, life Ins. Co. 
 ads. Raymond, 101 A. D. 546, 
 
 91 Supp. 1041 685 
 
 Security Trust & Life Ins. Co. 
 ads. Stout, 82 A. D. 129, 81 
 
 Supp. 708 319 
 
 Sedgwick v. Seward Development 
 Co., 144 A. D. 455, 129 Supp. 
 
 209 a28 
 
 Seeraan ads. Keeler, 47 Misc. 292, 
 
 95 Supp. 920 148 
 
 Seidenberg Co., People ex rel. y. 
 Feitner, 41 A. D. 571, 58 Suipp. 
 
 713 ^.. 752 
 
 Selkin v. Klein, 50 llisc. 194, 100 
 
 Supp. 449 605 
 
 Selick & Ball ads. Wood, 114 A. 
 D. 743, 100 Supp. 119, aff'd 
 190 N. Y. 217, 83 N. E. 21 
 
 878, 887 
 Selvage ads. Lake Geneva Ice 
 Co., 28 Misc. 581, 59 Supp. 
 
 544 876 
 
 Selwyn ads. Jeffcry, 220 N. Y. 
 
 77, 115 N. E. 225 234, 241 
 
 Selwyn-Brown y. Superno Co., 
 Inc., 181 A. D. 420 (1918) 
 
 137, 138 
 Seneca Lake Grape & Wine Co. 
 ads. People, 52 Hun 174, 5 
 
 Supp. 136 571, 580 
 
 Seneca Oil Co., Matter of, 153 
 A. D. 594, 138 Supp. 78, aff'd 
 208 X. Y. 545, 101 N. E. 1121 
 
 70, 72, 103, 584 
 Sfth Thomas Clock Co., People 
 c.v rel. V. Wemple, 133 N. Y. 
 
 323, 31 N. E. 238 846, 861 
 
 Seventy-eighth St. & Broadway 
 Co. V. Pursell Mfg. Co., 92 
 
 Misc. 178, 155 Supp. 259 290 
 
 Seward Development Co. ads. 
 Ledgwick, 144 A. D. 455, 129 
 
 Supp. 209 928 
 
 Seydel v. Corporation Liquidat- 
 ing Co., 4U Misc. 576, 92 Supp. 
 
 225 _ 847 
 
 Seymour v. Spring Forest Ceme- 
 tery Assn., 144 N. Y. 333, 26 
 L. R. A. S.5fl. 39 N. E. 365. .. . 100 
 258, 322 
 Shain ads. Green,. 22 Misc. 720, 
 49 Supp. 1061 854 
 
 Shaenivald ads. Page, 169 N. Y. 
 246, 57 L. E. A. 173, 62 N. E. 
 
 356 141 
 
 Shalek v. Jetter, 171 A. D. 364, 
 
 155 Supp. 975 407 
 
 Shaler & Hall Quarry Co. v. Bliss 
 34 Barb. 309, aff'd 27 X. Y. 
 
 297 391, 392 
 
 Shaped Seamless Stocking Co. v. 
 Snow, Church & Co., 20 Misc. 
 
 319, 45 Supp. 849 682 
 
 Sharpe ads. Converse, 37 A. D. 
 399, 55 Supp. 1080, aff'd 161 
 
 N. Y. 571, 56 N. E. 69 327, 029 
 
 Shetzin ads. Agnelli. 68 Misc. 
 
 329, 123 Supp. 797 396 
 
 Shaw V. Ausaldi Co., Inc., 17S 
 A. D. 589, 165 Supp. 872.. 101 
 341, 345 
 Shaw ads. Billings, 209 N. Y. 
 
 265, 103 N. E. 142 322,337, 379 
 
 Shaw v. Saranac Horse Nail Co.. 
 
 144 N. Y. 220, 39 N. E. 73 434 
 
 Sheehan ads. Huntington, 206 N. 
 
 Y. 4S6, 100 N. E. 41 838 
 
 Sheehan ads. McDowall, 129 N. Y. 
 
 200, 29 N. E. 299 234 
 
 Shelby Steel Tube Co. v. Burgess 
 Gun Co., 8 A. D. 444, 40 Supp. 
 
 871 882, 920 
 
 Sheldon Hat Blocking Co. v. 
 Eickcmeyer Hat Blocking Ma- 
 chine Co., 90 N. Y. 607 184 
 
 Shelley ads. Kellner, 178 A. D. 
 
 657, 165 Supp. 833 S49 
 
 Shellington v. Howard, 53 N. Y. 
 
 371 22r; 
 
 Shepard & Morse Lumber Co. v. 
 Burleigh, 27 A. D. 99, 50 Sunp. 
 
 135 871 
 
 Sheppard ads. White, 41 A. D. 
 
 113, 58 Supp. 563 377 
 
 Sheridan v. Sheridan Electric 
 
 Light Co., 38 Hun 396. .200, 527 
 Sheridan v. Tucker, 145 A. D. 
 
 145, 129 Supp. 18 ^810, 816 
 
 Sheridan Electric Light Co. ads. 
 
 Sheridan, 38 Hun 396 200, 527 
 
 Sheridan Electric Light Co. of 
 N. Y. y. Chatham Nat. B'k, 127 
 
 N. Y. 517, 28 N. E. 467 329 
 
 Sherin Special Agency v. Seaman, 
 
 49 A. D. 33, 63 Supp. 407. .. . 541 
 Sherman v. Dwight, 138 A. D. 
 
 595, 123 Supp. 89 45 
 
 Sherman ads. Marshall, 148 N. Y. 
 9. 34 L. R. A. 757, 42 X. E. 
 
 419 210, 244, 938 
 
 Sherman & Sons Co. ads. Mogh- 
 abghat, 161 A. D. 135, 146 
 Supp. 392 150 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Sherwin Co., People ex rel. v. 
 
 Barker, 5 A. D. 246, 39 Supp. 
 
 151, affd 149 N. Y. 623, 44 
 
 N. E. 1128 860 
 
 Sherwood v. American Bible Soc, 
 
 40 N. Y. (1 Keyes) 561.. 457, 824 
 Sherwood v. Holbrook, 178 A. D. 
 
 462, 165 Supp. 514 397, 396 
 
 Sherwood ads. Page &, Co., 146 
 
 A. D. 618, 131 Supp. 322 842 
 
 Sherwood-Dunn ads. Clements, 
 
 108 A. D. 327, 95 Supp. 766 154 
 
 Shibley v. Angle, 37 N. Y. 626. . 89 
 Shields ads. People ex rel. Utica 
 
 & Black River R. R. Co., 6 
 
 Hun 556 751 
 
 Shipman v. Treadwell, 200 N. Y. 
 
 472, 93 N. E. 1104 938 
 
 Shipman v. Treadwell, 208 N. Y. 
 
 402, 102 N. E. 634 227, 244 
 
 Shire ads. Flower City Nat. 
 
 Bank, 88 A. D. 401, 84 Supp. 
 
 810 217 
 
 Shorer v. Times Printing & Pub- 
 lishing Co., 119 N. Y. 483, 23 
 
 N. E. 979 540 
 
 Short V. Medberry, 29 Hun 39 
 
 248, 250 
 Shotwell V. Mali, 38 Barb. 445.. 117 
 Shuler v. Birdsall Mfg. Co., 17 A. 
 
 D. 228, 45 Supp. 725 472 
 
 Sibell V. Remsen, 33 N. Y. 95 474 
 
 Sicilian Asphalt Co., People ex 
 
 rel. V. Feitner, 30 Misc. 665, 64 
 
 Supp. 298 797 
 
 Siekels ads. Union Trust Co., 125 
 
 A. D. 105, 109 Supp. 262.. 838, 890 
 Sickles ads. Hart, 45 Misc. 174, 
 
 91 Supp. 897 90 
 
 Sickles V. Richardson, 23 Hun 
 
 559 268, 283 
 
 Sidney Sash & Furniture Co. ads. 
 ■ Proctor, 8 A. D. 42. 40 Supp. 
 
 454 566, 567 
 
 Siegel-Cooper Co. ads. Manne, 20 
 
 Misc. 592, 46 Supp. 352 431 
 
 Siegel-Cooper Co. ads. Standard 
 
 Fashion Co., 44 A. D. 121, 60 
 
 Supp. 739 45 
 
 Sigue Iron Co. ads. Belmont, 12 
 
 A. D. 441, 42 Supp. 122 921 
 
 Sigua Iron Co. v. Brown, 171 N. 
 
 Y. 488, 64 N. E. 194.. 83, 634, 682 
 
 847 
 Silaski, Matter of, 175 A. D. 199, 
 
 161 Supp. 513 . 309 
 
 Silver ads. Hegewisch, 140 N. 
 
 Y. 414, 35 N. E. 658 636 
 
 Simmons v. Sisson, 26 N. Y. 
 
 264 175 
 
 Simmons v. Thompson, 29 A. D. 
 
 559, 51 Supp. 1018 375 
 
 Simonds Furnace Co., Matter of, 
 
 30 Misc. 209, 61 Supp. 974.. 823 
 Simonds Mfg. Co., Matter of, 39 
 
 A. D. 576, 57 Supp. 776.... 659 
 
 Simonson ads. People ex rel. 
 Putzel, 61 Hun 338, 16 Supp. 
 118 308 
 
 Simpson, Matter of, 36 A. D. 562, 
 55 Supp. 697, ail'd 158 N. Y. 
 720, 53 N. E. 1132 286 
 
 Simpson ads. Hutchinson, 92 A. 
 D. 382, 87 Supp. 369 85 
 
 Simpson v. Jersey City Contract- 
 ing Co., 165 N. Y. 193, 55 L. R. 
 A. 796, 58 N. E. 696 922 
 
 Simpson v. Jersey City Improve- 
 ment Co., 165 N. Y. 193, 55 
 L. R. A. 796, 58 N. E. 896. . . , 134 
 
 Simpson ads. Matty, 64 A. D. 1, 
 71' Supp. 731 385 
 
 Simpson ads. Pfohl, 74 N. Y. 
 137 215 
 
 Simpson ads. Wood, No. 1, 149 
 A. D. 471, 133 Supp. 1069 377 
 
 Sinclair v. Dwight, 9 A. D. 297, 
 41 Supp. 193, aff'd 158 N. Y. 
 607, 53 N. E. 510 219 
 
 Sinclair v. Fuller, 158 N. Y. 607, 
 53 N. E. 510 306, 385, 475 
 
 Singer, People ex rel. v. Knicker- 
 bocker Trust Co., 38 Misc. 446, 
 77 Supp. 1000 850, 852 
 
 Singer Mfg. Co., People ex rel. 
 v. Wemple, 150 N. Y. 46, 44 N. 
 E.-787 709, 724. 866 
 
 Sinnott v. Hanan, 214 N. Y. 454, 
 108 N. E. 858 894, 916 
 
 Sisson ads. Simmons, 26 N. Y. 
 264 175 
 
 Sixty-seventh St. Atelier Bldg. 
 ads. Vounoh, 55 Misc. 222, 105 
 Supp. 155 324 
 
 Sizer v. Hampton & Branchville 
 R. E. Co., 57 A. D. 390, 68 
 Supp. 232 906 
 
 Sizer ads. Schulze, 14 A. D. 274, 
 43 Supp. 463 626 
 
 Skiddy ads. Morgan, 62 N. Y. 
 319 148, 442 
 
 Skinner v. Smith, 134 N. Y. 240, 
 
 31 N. E. 911 323 
 
 Slater v. American Palace Car 
 
 Co., 146 A. D. 859, 131 Supp. 
 
 17 924 
 
 Slattery ads. Chicago Crayon Co., 
 
 68 Misc. 148, 123 Supp. 987 . . 886 
 Slayback v. Raymond, 93 A. D. 
 
 326, 87 Supp. 931 195 
 
 Slingerland ads. Adams, 87 A. D. 
 
 312, 84 Supp. 323 233 
 
 Sloan V. McKane, 131 A. D. 244, 
 115 Supp. 648 353 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Sloane, People ex rel. v . Barker, 
 76 Hun 454, 27 Supp. 1082 
 
 Sloane ads. Emmerich, 108 A. D. 
 330, 95 Supp. 39 879, 
 
 Sloane ads. Hess, 66 A. D. 522, 73 
 Supp. 313, aff'd 173 N. Y. 616, 
 66 N. E. 1110 
 
 Small V. Herkimer Mfg. Co., 2 X. 
 Y. 330 
 
 Smalley ads. Butler, 101 X. Y. 
 71, 4 N. E. 104 399, 
 
 Smith ads. Bristor, 158 N. V. 
 157, 53 N. E. 42 
 
 Smith ads. Davis, 42 A. D. 333, 
 59 Supp. 120 
 
 Smith ads. Electric Fireproofing 
 Co., 113 A. D. 615, 99 Supp. 
 37 
 
 Smith ads. United G-old & Plat- 
 inum Mines Co., 44 ilisc. 567, 
 90 Supp. 199 
 
 Smith ads. Harper, 93 A. D. 608, 
 87 Supp. 516 
 
 Smith ads. Skinner, 134 X. Y. 
 240, 31 N. E. 911 
 
 Smith V. Law, 21 N. Y. 296. .317, 
 
 Smith V. Long Is. R. R. Co., 102 
 X. Y. 190, 6 X. E. 397 
 
 Smith V. McXamara, 15 Hun 
 447 
 
 Smith ads. Murray, 166 A. ]). 
 
 528, 152 Supp. 102 183, 
 
 204, 320, 326, 
 
 Smith ads. Olpherts, 54 A. D. 
 514, 66 Supp. 976, aff'd 173 X. 
 Y. 593, 65 N. E. 1120 
 
 Smith ads. Owen, 31 Barb. 641. . 
 
 .Smith V. Quale, 86 Misc. 259, 148 
 Supp. 448 
 
 Smith V. Rathbun, 66 Barb. 402. . 
 
 Smith V. Rathbun, 22 Hun 150, 
 dism'd 88 X. Y. 60 
 
 Smith ads. Robinson. 3 Pac. 222. 
 
 Smith ads. Sager Mfg. Co., 45 A. 
 D. 358, 60 Supp. 849, aff'd 167 
 X. V. 600. 60 X. E. 1120. .644. 
 
 Smith ads. People ex rel." Ulster 
 & Delaware R. R. Co., 24 Hun 
 66, dism'd 85 ^T. Y. 628 
 
 Smith V. Union Milk Co., 70 Hun 
 348. 24 Supp. 79, aff'd 143 N. 
 Y. 622, 37 N. E. 827 
 
 .•^mith ads. United (Jold & Plat- 
 inum Mines Co., 44 Misc. 567, 
 90 Supp. 199 
 
 Smith V. Westchester-Bronxville 
 Realty Co., 7S Mi.sc. 75. 137 
 Supp.' 690, aff'd 156 A. D. 920, 
 141 Supp. 1147 173, 
 
 Smith V. Western Pacific Rv. 
 Co., 138 A. D. 244, 122 Supp. 
 888 
 
 741 
 
 888 
 
 458 
 
 84 
 
 400 
 
 248 
 
 38 
 
 1 
 
 326 
 
 179 
 
 323 
 467 
 
 354 
 
 S97 
 
 185 
 
 471 
 
 642 
 348 
 
 235 
 414 
 
 414 
 337 
 
 931 
 788 
 920 
 327 
 
 250 
 905 
 
 Smith V. Western Pacific Ry. Co., 
 154 A. D. 130, 139 Supp. 129, 
 app. dism'd 212 X. Y. 596, 106 
 X. E. 1042 
 
 Smith ads. Wing, 173 A. D. 57. 
 159 Supp. 454 
 
 Smith Co., Matter of, 31 A. D. 
 39, 52 Supp. 877 
 
 Smith Co., People ex rel. v. 
 Roberts, 27 A. D. 455, 50 Supp. 
 
 355 
 
 Smith & Sons ads. Climax 
 
 Specialty Co., 31 Misc. 275, 64 
 
 Supp. 42 
 
 Snow V. Church, 13 A. D. 108, 
 
 42 Supp. 1072 
 
 Snow V. Russell Coe Fertilizer 
 
 Co., 58 Hun 134, 11 Supp. 492. 
 Snow, Church & Co. v. Hall, 19 
 
 Misc. 655, 44 Supp. 427 
 
 51S, 
 Snow, Church & Co. ads. Shaped 
 
 Seamless Stocking Co.. 20 Misc. 
 
 319, 45 Supp. 849 
 
 Snow, Church & Co. v. Snow- 
 Church Co., SO A. D. 40. 80 
 
 Supp. 512 847, 
 
 Snow ads. Rathbun, 123 X. Y. 
 
 343, 10 L. R. A. 355, 25 X. E. 
 
 379 45, 
 
 Snyder, Matter of, 29 Misc. 1, 59 
 
 Supp. 993 
 
 Snyder ads. Biddle Purchasing 
 
 Co.,' 109 A. D. 679, 96 Supp. 
 
 356 
 
 Snyder v. De Forest Wirclosh 
 
 Telegraph Co., 113 A. D. 840, 
 99 Supp. 644 
 
 Snyder Mfg. Co. ads. National 
 B'k of Xewport, 107 A. D. O,'), 
 94 Supp. 982 
 
 Snyder Mfg. Co. ads. Xational 
 Bank of Newport, 117 A. D. 370, 
 M)2 Supp. 478 
 
 Socorro Mountain Mining Co. % . 
 Preston, 17 Misc. 220, 40 Supp. 
 1040 48, 
 
 Sodus Bay & Corning R. R. Co. 
 V. Hamlin, 24 Hun 390 
 
 Soeurbee, Inc., People ex rel. 
 Purdy, 179 A. D. 748, 167 
 Supp. 91 
 
 Sohmer ads. People ex rel. Ameri- 
 can Bank Note Co., 157 A. D. 1, 
 141 Supp. 635; aff'd 210 X. Y. 
 621, 104 N. E. 1137. .698, 710, 
 
 Stohmer ads. People ex rel. Coney 
 Island Jockey Club, 155 A. D. 
 842, 140 Supp. 507; aff'd 210 
 X'. Y. 549, 104 N. E. 1137 . . 719, 
 
 899 
 814 
 662 
 
 842 
 
 533 
 
 189 
 
 682 
 
 449 
 531 
 
 6S2 
 
 .S72 
 
 433 
 
 100 
 
 (lis 
 
 .-)45 
 370 
 i)0» 
 
 175 
 
 92 
 
 791 
 732 
 721 
 
TABLE OF CASES 
 
 xevu 
 
 References are to pages 
 
 Sohmer ads. People ex rel. Elli- 
 eott-Fislier Co., 148 A. D. 514, 
 132 Supp. 789, aff'd 206 N. Y. 
 634, 99 N. E. 1115 869 
 
 Sohmer ads. People ex rel. E. S. 
 Dairy Co., 218 N. Y. 199, L. R. 
 A. 1917A, 48, 112 N. E. 755.. 696 
 700, 728, 730 
 
 Sohmer adS. People ex rel. Gene- 
 see Light & Power Co., 162 A. 
 D. 207, 147 Supp. 726; aflf'd 
 212 X. Y. 598, 106 N. E. 1040. . 725 
 
 Sohmer v. Hebden, 165 A. D. 853, 
 856, 151 Supp. 346, rev'd 216 
 N. Y. 728 812 
 
 Sohmer ads. People ex rel. Lehigh 
 Valley E. R. Co., 84 Misc. 518, 
 147 Supp. 636, aff'd 169 A. D. 
 430, 154 Supp. 1053 804 
 
 Sohmer ads. People ex rel. Lehigh 
 & N. Y. R. R. Co., 217 N. Y. 
 443, 112 N. E. 181 719 
 
 Sohmer ads. JIatter of Lehigh 
 Valley E. R. Co., 174 A. D. 732, 
 116 Supp. 557, aff'd 220 N. Y. 
 689, 115 N. E. 1057 785 
 
 Sohmer ads. People ex rel. Mer- 
 cantile LiiEe Deposit Co., 158 A. 
 D. 110, 143 Supp. 313; aff'd 217 
 N. Y. 605, 111 N. E. 1097 . . 723, 727 
 
 Sohmer ads. People ex rel. Tetra- 
 gon Co., 162 A. D. 433, 147 
 Supp. 611, aff'd 213 N. Y. 702, 
 108 N. E. 1105 158, 720 
 
 Sohmer ads. People ex rel. Wil- 
 liams Co., 151 A. D. 764, 137 
 Supp. 23 866 
 
 Solar Baking Powder Co. v. 
 Royal Baking Powder Co., 128 
 A. D. 550, 112 Supp. 1013. ... 544 
 
 Solvay Process Co. ads. Bradburn, 
 18 A. D. 542, 46 Supp. 161 430 
 
 Sommer v. Armour Gas & Oil Co., 
 71 Misc. 211, 128 Supp. 382, 
 aff'd 147 A. D. 919, 131 Supp. 
 1144 109 
 
 Soule ads. Moses, 63 Misc. 203, 
 118 Supp. 410, aff'd 136 A. D. 
 904, 120 Supp. 1136.. 138, 143, 183 
 
 South Amboy Terra Cotta Co. 
 ads. Orr, 113 A. D. 103, 98 
 Supp. 1026 334 
 
 South Amboy Terra Cotta Co. v. 
 Poerschke, 45 Misc. 358, 90 
 Supp. 333 880 
 
 South ads. Bradley Fertilizer Co., 
 4 Misc. 172, 23 Supp. 675.... 12 
 
 South Baptist Society of Albany 
 V. Clapp, 18 Barb. 35 48 
 
 South Buffalo Natural Gas Co. v. 
 Bain, 9 Misc. 425, 30 Supp. 
 264 80 
 
 Southern Cotton Oil Co., People 
 ex rel. v. Wemple, 131 N. Y. 
 64, 29 N. E. 1002 862, 
 
 .Southern Life Ins. & Trust Co. v. 
 Packen & Prentice, 17 N. Y. 
 51 ■ 469, 
 
 Southern Pacific Co. ads. Fair- 
 clough, 171 A. D. 496, 157 
 Supp. 862 
 
 Southgate Building Co. ads. Gor- 
 don, 109 A. D. 838, 96 Supp. 
 717 
 
 South Shore Natural Gas & F. Co. 
 ads. Kenney, 201 N. Y. 89, 94 
 N. E. 606 
 
 Southworth v. Morgan, 71 Misc. 
 214, 128 Supp. 598 93, 
 
 Southworth v. Morgan, 205 N. 
 Y. 293, 51 L.R.A.(N.S.) 56, 98 
 N. E. 490 86, 89, 933, 
 
 Spangenberg & McLean Co. ads. 
 Myers, 65 Misc. 475, 120 Supp. 
 174 
 
 Speare v. Troy Laundry Ma- 
 chinery Co., 44 A. D. 390, 60- 
 Supp. 1080 
 
 Speir, Matter of, 69 A. D. 149, 74 
 Supp. 555 118, 
 
 Spellissy v. Cook & Bernheimer 
 Co., 58 A. D. 283, 68 Supp. 
 995 
 
 Spellman v. Looscher, 162 N. Y. 
 268, 56 N. E. 741 
 
 Spencer ads. Hill, 61 N. Y. 274. . 
 
 Spencer ads. Leonard, 108 N. Y. 
 338, 15 N. E. 397 
 
 Spencerian Pen Co., People ex rel. 
 V. Kelsey, 105 A. D. 132, 93 
 Supp. 971, aff'd 185 N. Y. 546, 
 77 N. E. 1195 866, 
 
 Sporborg ads. Baum, 146 A. D. 
 537, 131 Supp. 267 
 
 Spotswood ads. Lancaster, 41 
 Misc. 19, 83 Supp. 572 
 
 Spotten V. De Freest, 140 A. D. 
 792, 125 Supp. 497 
 
 Sprague ads. Boynton, 100 A. D. 
 443, 91 Supp. 839, aff'd 183 
 N. Y. 505, 76 N. B. 1089 
 
 Spring V. The Bowery National 
 Bank, 63 Hun 505, 18 Supp. 
 574 
 
 Spring Forest Cemetery Assn. 
 
 ads. Seymour, 144 N. Y. 333, 
 
 26 L. R. A. 859, 39 N. E. 365.. 
 
 258, 
 
 Springfield, L. I., Cemetery Soc. 
 ads. Gilleran, 161 A. D. 597, 
 146 Supp. 828 
 
 Spring Valley Shot & Lead Co. 
 ads. Mechanics' Banking Assn., 
 25 Barb. 419 
 
 863 
 919 
 872 
 477 
 
 668 
 
 244 
 
 938 
 
 883 
 
 534 
 120 
 
 129 
 
 481 
 249 
 
 509 
 
 86!) 
 196 
 922 
 153 
 
 385 
 
 624 
 
 100 
 322 
 
 317 
 540 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Staber ads. Pyro-Gravure Co., 30 
 
 Misc. 658, 64 Supp. 520 876 
 
 Stadler ads. Hutchinson, 85 A. 
 
 D. 424, 83 Supp, 509 936 
 
 Stafford Mfg. Co. v. Newman, 75 
 
 Misc. 636, 133 Supp. 1073 887 
 
 Standard Churn ilf'g. Co. ads. 
 Federman, 128 A. D. 493, 112 
 
 Supp. 834 • 627 
 
 Standard Distilling & Distribut- 
 ing Co. ads. ilason, 85 A. D. 
 
 520, 83 Supp. 343 520, 598 
 
 Standard Fashion Co. v. Siegel- 
 Cooper Co., 44 A. D. 121, 60 
 
 Supp. 739 45 
 
 Standard Gas Light Co. ads. 
 Rosenheimer, 36 A. D. 1, 55 
 
 Supp. 192 509 
 
 Standard Milk & Flour Co. ads. 
 Butler, 146 A. D. 735, 131 
 
 Supp. 451 934 
 
 Standard Nat. B'k v. Garfield 
 Nat. B'k, 56 A. D. 43, 67 Supp. 
 
 472 474 
 
 Standard Oil Co. ads. Lubricating 
 
 Oil Co., 42 Hun 153 510 
 
 Standard Oil Co., People ex rel. 
 V. Saxe, 179 A. D. 721, 166 
 
 Supp. 887 722 
 
 Standard Oil Co. ads. Talcntt, 
 
 149 A. D. 694, 134 Supp. 617. . 127 
 Standard Plate Glass & Salvage 
 Co., Ltd., ads. People, 174 A. 
 
 D. 501, 156 Supp. 1012 559 
 
 Standard Plunger Elevator Co. 
 ads. Matter of Jones, 167 A. 
 D. 178, 152 Supp. 910, aff'd 
 215 N. Y. 692, 109 N. E. 1080. 542 
 Standard Wood Co., People ex 
 rel. V. Roberts, 20 A. D. 514, 47 
 
 Supp. 122 716, 846 
 
 Stanley v. Franco-American Fer- 
 ment Co., 97 Misc. 401, 161 
 
 Supp. 365 366 
 
 Stanley ads. Thompson, 73 Hun 
 248, 25 Supp. 890, aff'd 147 
 
 N. Y. 713, 42 N. E. 726 125 
 
 Stannard v. Reid & Co., 114 A. D. 
 
 135, 99 Supp. 367 643 
 
 Stansfield ads. Buckley, 155 A. D. 
 735, 140 Supp. 953, aff'd 214 
 
 N. Y. 679, 108 N. E. 1090 425 
 
 426, 429 
 Stanton v. Erie R. R. Co., 131 
 A. D. 879, 116 Supp. 375, app. 
 dism'd 199 N. Y. 529, 92 X. E. 
 
 1100 462 
 
 Star Co. ads. Bresay, 13 Misc. 
 
 349, 35 Supp. 99 453, 454 
 
 Star Co. ads. Press Publishing 
 Co., 33 A. D. 242, 53 Supp. 371. 543 
 
 Starin ads. Mills & Gibb, 119 A. 
 
 D. 336, 104 Supp. 230 876 
 
 State ads. Cerbat .Mining Co., 29 
 
 Hun 81 734 
 
 State ads. Coxe, 144 N. Y. 396, 
 
 39 N. E. 400 13, 451 
 
 State Bank of Rock Valley v. Val- 
 drews, 2 Misc. 394, 21 Supp. 
 
 948 877 
 
 State Bank of Syracuse v. Gill, 
 
 23 Hun 410 237 
 
 State Board of Tax Commission- 
 ers ads. People ex rel. Jamaica 
 Water Supply Co., 197 N. Y. 
 
 33, 90N. E. 112 780 
 
 State Board of Tax Commission- 
 ers ads. People ex rel. Bryan, 
 142 A. D. 796, 127 Supp. 858. . 776 
 State Nat. B'k of Boston ads. 
 
 Cooke, 52 X. Y. 96 534 
 
 State of New York ads. Bonbright 
 & Co., 165 A. D. 640, 151 Supp. 
 
 35 813 
 
 State of New York ads. Hudson 
 & Manhattan R. R. Co., ISO A. 
 
 D. 81, 167 Supp. 515 813 
 
 State of N. Y. ads. U. S. Radia- 
 tor Co., 208 N. Y. 144, 4fi L. R. 
 A. (X. S.) 585, 101 N. E. 78.^. 68 
 809, 813 
 State of N. Y. ads. Van Ant- 
 werp, 218 N. Y. 422, 113 N. E. 
 
 497 809 
 
 State Tax Commissioners ads. 
 People ex rel. Bryan, 61 Misc. 
 508, 124 Supp. 711; aff'd 142 
 
 A. D. 79«, 127 Supp. 858 736 
 
 State Tax Commissioners ads. 
 People ex rel. Metropolitan St. 
 Ry. Co., 159 A. D. 136, 144 
 Supp. 74, aff'd 212 X. Y. 606, 
 607, 106 N. E. 1040.. 776, 778, 780 
 
 784 
 State Board of Tax Commission- 
 ers ads. People ex rel. Postal 
 Telegraph-Cable Co., — Misc. 
 
 , X. Y. L. J., Feb. 25, 1918. 770 
 
 Staten Island Rapid Transit R. R. 
 Co. ads. Winslow, 51 Hun 298, 
 
 4 Supp. 169 905 
 
 Staten Island R. T. R. R. Co., 
 People ex rel. v. Roberts, 4 A. 
 
 D. 334, 38 Supp. 724 721 
 
 Stauffer, People ex rel. v. Bon- 
 wit Bros., 69 Misc. 70', 125 
 
 S-upp. 958 51 
 
 Steber ads. Pyro-Gravure Co., 30 
 
 Misc. 658, 64 Supp. 520 321 
 
 Steele ads. Geneva Mineral 
 Springs Co., Ltd., Ill A. D. 
 706, 97 Supp. 996 62, 153 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Steele v. Isman, 164 A. D. 146, 
 
 149 Supp. 488 412 
 
 Steiger Trunk & Bag Co. v. 
 
 Wharnchffe, 62 Misc. 14, 114 
 
 Supp. 462 890 
 
 Stein ads. Eothmiller, 143 N. Y. 
 
 581, 26 L. R. A. 148, 38 N. E. 
 
 718 146, 442 
 
 Steinway, Matter of, 159 N. Y. 
 
 250, 45 L. K. A. 461, 53 N. E. 
 
 U03 50 
 
 Steinway v. Steinway, 2 A. D'. 
 
 301, 37 Supp. 742, aff'd 157 N. 
 
 Y. 710, 53 N. E. 1132 184, 402 
 
 Steinway v. Steinway & Sons, 17 
 
 Misc. 43, 40 Supp. 718 .• . 457 
 
 Steinway & Sons, People ex rel. 
 
 V. Kelsey, 108 A. D. 138, 96 
 
 Supp. 42 701 
 
 Steinway & Sons, People ex rel. 
 
 V. Kelsey, 108 A. D. 138, 96 
 
 Supp. 42 717 
 
 Steinway & Sons ads. Steinway, 
 
 17 Misc. 43, 40 Supp. 718. .. . 457 
 Stephens v. Fox, 83 N. Y. 313. . . 230 
 Stepney Spore Wheel Agency ads. 
 
 MacMahon, 140 A. D. 554, 125 
 
 Supp. 823 296 
 
 Sterett y. Denver & Rio Grande 
 
 E. Co., 17 Hun 316 915 
 
 Sterling Mfg. Co. v. National 
 
 Surety Co., 94 Misc. 604, 159 
 
 Supp. 979 882 
 
 Sterlingworth Ev- Supply Co. ads. 
 
 Boaz, 68 A. D. 1, 73 Supp. 
 
 1039 194 
 
 Stern v. Childs, 26 Misc. 419, 56 
 
 Supp. 192 891 
 
 Sterne v. Metropolitan Telephone 
 
 Co., No. 2, 33 A. D. 169, 53 
 
 Supp. 467 544 
 
 Stevens v. Episcopal Church His- 
 tory Co., 140 A. D. 570, 125 
 
 Supp. 573 13, 78, 101, 221 
 
 Stevens v. Lippman, 85 Misc. 347, 
 
 148 Supp. 419 88 
 
 Stevens v. 01ns Mfg. Co., 72 
 
 Misc. 508, 130 Supp. 22, aff'd 
 
 146 A. D. 951, 131 Supp. 1145. 163 
 Stevens v. Page, 4 Misc. 517, 24 
 
 Supp. 698 825 
 
 Stevens ads. People, 5 Hill 616. . 312 
 Stevenson v. Cowan, 84 A. D. 135, 
 
 82 Supp. 78 385 
 
 Stewart v. Bramhall, 11 Hun 139, 
 
 aff'd 74 N. Y. 85 469 
 
 Stewart ads. Cawthra, 59 Misc. 
 
 38, 109 Supp. 770 147 
 
 Stewart v. Huntington, 124 N. Y. 
 
 127, 26 N. E. 289 140, 151 
 
 Stewart ads. Security Title & 
 
 Trust Co., 154 A. D. 434, 139 
 
 Supp. 74 150 
 
 Stickney ads. Stokes, 96 N. Y. 
 
 323 . , 389 
 
 Stiefel V. isf. Y. Novelty Co., 14 
 
 A. D. 371, 43 Supp. 1012 490 
 
 Stiefel V. N. Y. Novelty Co., 25 
 
 Misc. 221, 55 Supp. 90 683 
 
 Stikeman ads. Warren, 84 A. D. 
 
 610, 82 Supp. 1003 158 
 
 Stiles ads. Swan, 94 A. D. 117, 87 
 
 Supp. 1089 271, 479 
 
 Stillman v. Associated Lace Mak- 
 ers' Co., 14 Misc. 503, 35 Supp. 
 
 1071 378 
 
 Stillman ads. McNebis, 172 A. D. 
 
 307, 158 Supp. 428 82, 94, 923 
 
 Stilwell ads. People, 78 Misc. 96, 
 
 138 Supp. 693 554 
 
 Stilwell ads. People, 157 A. D. 
 
 839, 142 Supp. 881 : 564 
 
 Stiner v. Tennessee Copper Co., 
 
 176 A. D. 209, 161 Supp. 9S6. . 925 
 Stobo, People ex rel. v. Eadie, 63 
 
 Hun 320, 18 Supp. 53, aff'd 133 
 
 N. Y. 573, 30 N. E. 1147 57 
 
 Stock, Grain & Provision Co. nf 
 
 N. Y., Ltd., ads. Dennis, 144 
 
 A. D. 585, 129 Supp. 760 543 
 
 Stoddard v. Lum, 159 N. Y. 265, 
 
 45 L. R. A. 551, 53 N. E. 1108. 93t 
 Stoddard v. Onondaga Annual 
 
 Conference, 12 Barb. 573. .505, 529 
 
 532 
 Stokes V. Continental Trust Co., 
 
 186 N. Y. 285, 12 L. E. A. 
 
 (N. S.) 969, 78 N. E. 1090. ... 
 
 109, 
 
 Stokes ads. Cox, 156 N. Y. 491, 
 
 51 N. E. 316 615, 617, 
 
 Stokes V. Stickney, 96 N. Y. 323. 
 Stokes V. Stokes, 87 Hun 152, 33 
 
 Supp. 1024 426 
 
 Stokes V. Stokes, 91 Hun 605, 36 
 
 Supp. 350 392, 408 
 
 Stokes V. Stokes, 23 A. D. 552. 
 
 48 Supp. 722 407 
 
 Stokes Company, People ex rel. 
 
 V. Eoberts, 36 Supp. 73 700 
 
 Stone & Cleveland; C. & C. v. St. 
 
 L. Ey. Co., 202 N. Y. 352, 35 
 
 L. E. A. (N. S.) 770, 95 N. E. 
 
 816 
 
 Stone ads. Marbury, 17 A. D. 352, 
 
 45 Supp. 184, affd 160 N. Y. 
 
 701, 57 N. E. 1116 126, 
 
 Stonebridge, Matter of, 57 Hun 
 
 441, 10 Supp. 727 684 
 
 10 
 
 174 
 
 619 
 389 
 
 188 
 
 324 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Stout V. Security Trust & Life 
 Ins. Co., 82 A. D. 129, 81 Supp. 
 708 319 
 
 Stover V. Flack, 30 N. Y. 64. . . . 215 
 
 Stover V. Gamewell Fire Alarm 
 Telegraph Co.. 164 A. D. 155. 
 149 Supp. 650 357 
 
 Stratton v. City Trust, Safe De- 
 posit & Security Co., 86 A. D. 
 551, 83 Supn. 780 636 
 
 Straus ads. Bateman, 86 A. D. 
 540, 83 Supp. 785 154 
 
 Straus V. Chicago Glycerine Co., 
 46 Hun 216, aff'd 108 X. Y. 654, 
 15 N. E. 444 923 
 
 Straus V. Sage, 5 Misc. 255, 25 
 Supp. 93 388 
 
 Strauss v. Casey Machine & Sup- 
 ply Co., 68 Misc. 474, 124 Supp. 
 32 932 
 
 Strawn v. Brandt-Dent Co., 71 A. 
 
 D. 234, 75 Supp. 698, aff'd 175 
 
 X. Y. 463, 67 N. E. 1090 S73 
 
 Strobel v. Brownell, 16 Misc. 657, 
 
 40 Supp. 702 325 
 
 Strodl V. Tavish-Stafford Co., 145 
 
 A. D. 406, 130 Supp. 35 503 
 
 Strong V. Brooklyn Cross-Town 
 
 E. R. Co., 93 N. Y. 426 113 
 
 Strong V. Wheaton, 38 Barb. 616. 246 
 
 251 253 
 
 Strong Co., Matter of, No. 1, 128 
 A. D. 208, 112 Supp. 557 580 
 
 Strout Farm Agency v. Hunter, 
 85 Misc. 476, 148 Supp. 924. . 839 
 
 886 
 
 Stryker, Matter of, 158 X. Y. 
 526, 53 N. E. 525 673, 674 
 
 Stuart V. New York Herald Co., 
 73 A. D. 459, 77 Supp. 216. . . 917 
 
 Siiudebaker Co., People ex rel. v. 
 Knight, 66 A. D. 150, 72 Supp. 
 929 734 
 
 Studebaker Bros. Co. v. Rose Co., 
 65 Misc. 322, 119 Supp. 970. . . 523 
 
 Studholme ads. Vio Chemical Co., 
 53 Misc. 470, 103 Supp. 463, 
 aff'd 121 A. D. 927 841 
 
 Sturges V. Vanderbilt, 73 X. Y. 
 384 306, 595 
 
 Sturgis ads. Myers, 123 A. D. 
 470, 108 Supp. 526, aff'd 197 
 
 N. Y. 526, 90 X. E. 1162 77, 83 
 
 212 
 
 Sullivan County Club v. Butler, 
 26 Misc. 306, 56 .Supp. 1 104 
 
 Sullivan Countv Club ads. Kin- 
 nan, 26 A. b. 213, 50 Supp. 
 95 l.'?4 
 
 Sullivan \ . Ryan-Parker Con- 
 struction Co., XV 1, 148 A. D. 
 243, 132 Supp. 344 919 
 
 Superno Co., Inc., ads. Selwyn- 
 Brown, 181 A. D. 420 (1918) . . 137 
 
 138 
 
 Supervisors ads. People ex rel. 
 
 Erie R. R. Co., 193 N. Y. 127, 
 
 86 N. E. 348 802 
 
 Supreme Lodge, K. of P., ads. 
 
 Demings, 131 N. Y. 522, 30 N. 
 
 E. 572 448 
 
 Susquehanna Coal Co. ads. Karo- 
 
 sas, 172 A. D. 873, 158 Supp. 
 
 1021 911, 913 
 
 Susquehanna Coal Co. ads. Tanza, 
 
 220 N. Y. 259, 115 N. E. 915. .. 891 
 901, 902, 914 
 Susquehanna Water Co. ads. Ran- 
 dolph, 12 A. D. 479, 42 Supp. 
 
 411 925 
 
 Sutherland ads. Holland Trust 
 
 Co., 177 N. Y. 327, 69 N. E. 
 
 647 27S 
 
 Sutherland v. Olcott, 95 N. Y. 
 
 93 108, 113 
 
 Sutton V. MacBride, 176 A. D. 
 
 362, 162 Supp. 1023 187 
 
 Suydam ads. Wiles, 64 X. Y. 
 
 173 223 242 243 
 
 Swan V. Stiles, 94 A. D. 117, 87 
 
 Supp. 1089 271, 479 
 
 Swarzenbach ads. Padros, 134 A. 
 
 D. 811, 119 Supp. 589 251 
 
 Swedish Iron & Steel Corp. ads. 
 
 Durbrow, 95 Misc. 160, 158 
 
 Supp. 701 509 
 
 Sweeney ads. Dorris, 64 Barb. 
 
 636 13, 88 
 
 Sweeney ads. Dorris, 60 N. Y. 
 
 463 79 
 
 Sweet ads. Cobb, 46 A. D. 375, 61 
 
 Supp. 545 640, 641, 685 
 
 Swick Piano Co. ads. Levy, 17 
 
 Misc. 145, 39 Supp. 409 ,547 
 
 Swift ads. Goldsmith, 25 Hun 
 
 201 160 
 
 .•^wift V. Matthews Engineering 
 
 Co., 178 A. D. 201, 165 Supp. 
 
 136 911 
 
 Syenite-Trap Rock Co. ads. Hub- 
 "bard, 178 A. D. .531, 156 Supp. 
 
 486 374 
 
 Sylvester ads. Auburn Button 
 
 Co., 68 Hun 401, 22 Supp. 891. 565 
 Symons ads. Ridgway, 4 A. D. 98, 
 
 38 Supp. 895 362 
 
 Syracuse, Binghamton & N. Y. 
 
 R. R. Co. ads. Westchester Fire 
 
 Ins. Co., 97 Misc. 471, 161 
 
 Supp. 759 193 
 
 Syracuse, Geneva & Corning R. R. 
 
 Co. ads. Munson, 103 N. Y. 58, 
 
 8 X*. E. 355 324 
 
TABLE OF CASES 
 
 References are to pageS. 
 
 Syracuse Iron Works ads. Hut- 
 bell, 42 Hun 182 683 
 
 Syracuse, Phoenix &; Oswego E. E. 
 Co. V. Gere, 4 Hun 392 5, 81 
 
 Syracuse Eapid Transit Ey. Co. 
 ads. Commercial Nat. B'k of 
 Cleveland, 25 Misc. 36, 54 Supp. 
 429 160 
 
 T. A. Ry. Co., People ex rel., v. 
 P. S. Comm., 203 N. Y. 299, 96 
 X. E. 1011 289 
 
 Talcott V. Standard Oil Co., 149 
 \. D. 694, 134 Supp. 617 127 
 
 Tallapoosa Lumber Co. v. Hol- 
 bert. 5 A. D. 559, 39 Supp. 432. 842 
 
 Talmadge v. Sanitary Security 
 Co., 31 A. D. 498, 52 Supp. 139. 91 
 
 Tanza v. Susquehanna Coal Co., 
 220 Ky. 259, 115 K. E. 915.. 891 
 901, 902, 914 
 
 Tapley Co. ads. Herrman, 64 
 Misc. 466, 118 Supp. 803 542 
 
 Tapley Co. v. Keller, 133 A. D. 
 54, 117 Supp. 817 347 
 
 Tapscott ads. Van Dam, 40 A. D. 
 36, 57 Supp. 534 155 
 
 Tarrytown, White Plains & Ma- 
 maroneck Ey. Co., Matter of, 
 133 A. D. 297, 117 Supp. 695. . 623 
 656, 580, 584 
 
 Tax Commissioners ads. People 
 ex rel. Brooklyn Heights E. R. 
 Co., 146 A. D. 372, 131 Supp. 
 49, aff'd 204 N. Y. 648, 97 X. 
 E. 1113 768 
 
 Tax Commissioners ads. People 
 ex rel. Buffalo Gas Co., 199 
 X. Y. 162, 92 N. E. 215 794 
 
 Tax Commissioner ads. People ex 
 rel. Buffalo & Lake Erie Trac- 
 tion Co., 156 A. D. 466, 142 
 Supp. 116, aff'd 209 N. Y. 502, 
 "103 N. E. 778... .770, 771, 772, 800 
 
 Tax Commissioners ads. People 
 ex rel. Delaware, Lackawanna 
 & Western E. R. Co., 134 A. D. 
 765, 119 Supp. 260 800 
 
 Tax Commissioners ads. People 
 ex rel. H. E. & P. C. E. E. Co., 
 215 N. Y. 507, L. E. A. 1916B, 
 1222, 109 N. E. 569.. 709, 769, 771 
 
 Tax Commissioners ads. People 
 ex rel. Interborough Eapid 
 Tr,ansit Co., 126 A. D. 610, 110 
 Supp. 577, aff'd 195 N. Y. 618. , 771 
 
 Tax Commissioners ads. People 
 ex rel. Jamaica W. S. Co., 196 
 
 XL Y. 39, 89 N. E. 581 776, 778 
 
 779, 780, 782, 791, 794, 796, 799 
 
 801 
 
 Tax Commissioners ads. People 
 ex rel. Long Island E. E. Co., 
 148 A. D. 751, 133 Supp. 348, 
 aff'd 207 X. Y. 683, 101 N. E. 
 1117 768 
 
 Tax Commissioners ads. People 
 ex rel. Metropolitan St. Ey. 
 Co., 174 X. Y. 417, 63 L. E. A. 
 884, 67 N. E. 69 767, 774 
 
 Tax Commissioners ads. People 
 ex rel. N. Y. Mai) & Newspaper 
 Transportation Co., 157 A. D. 
 686, 142 Supp. 758, aff'd 210 
 N. Y. 623, 104 N. E. 1138. . . . 800 
 
 Tax C!ommissioners ads. People . 
 ex rel. N. Y., Ontario & West- 
 ern Ey. Co., 132 A. D. 604, 117 
 Supp. 81 795 
 
 Tax Commissioners ads. People 
 ex rel. N. Y. & Eockaway 
 Beach Ey. Co., 157 A. D. 496, 
 140 Supp. 691, aff'd 209 N. Y. 
 599, 103 N. E. 1130., 777, 785, 792 
 
 799 
 
 Tax Commissioners ads. People 
 ex rel. Niagara Falls, etc., Co., 
 202 N. Y. 426, 95 X. E. 754.. 
 
 Tax Commissioners ads. People 
 ex rel. Third Ave. E. E. Co., 
 136 A. D. 155, 120 Supp. 528, 
 aff'd 198 N. Y. 608, 92 N. E. 
 1098 777, 781, 782, 
 
 Tax Commissioners ads. People 
 ex rel. Third Ave. E. E. Co., 
 212 N. Y. 472, 106 N. E. 325. . 
 
 779, 781, 782, 783 
 
 Taylor, Matter of, 117 A. D. 348, 
 
 101 Supp. 1039 
 
 Taylor v. Attrill, 31 Hun 132 . . 
 Taylor v. Blair, 59 Hun 347, 13 
 
 Supp. 154 143 
 
 Taylor v. Earle, 8 Hun 1 200 
 
 Taylor ads. Oaks, 30 A. D. 177, 
 
 51 Supp. 775 142 
 
 Taylor ads. Williams, 120 N. Y. 
 
 244, 24 N. E. 288 
 
 Taylor ads. Yonkers Gazette Co., 
 
 30 A. D. 334, 51 Supp. 969. .25, 
 
 91, 
 
 Tefft ads. Higgins, 4 A. D. 62, 
 
 38 Supp. 716 338, 427, 
 
 Tendrup v. John Stephenson Co., 
 
 51 Hun 462, 3 Supp. 882, aff'd 
 
 121 N. Y. 681, 24 N. E. 1097.. 
 Tennessee Coal & Iron E. E. Co. 
 
 ads. Eastern Products Corpn., 
 
 102 Misc. 557 .892, 
 
 Tennessee Copper Co. ads. Stiner, 
 
 176 A. D. 209, 161 Supp. 986. . 
 Tenth Nat. B'k ads. McNeil, 46 
 N. Y. 325 127, 128, 134 
 
 797 
 
 783 
 
 778 
 
 59 
 399 
 
 82 
 
 80 
 93 
 
 638 
 
 522 
 
 909 
 925 
 
TABLE OF CASES 
 
 Eeferences are to pages. 
 
 Tepfer v. Ideal Gas & Electric 
 
 Fixtures Co., 58 Misc. 396, 109 
 
 Supp. 664 162, 165, 
 
 Terra Haute Car & Mfg. Co. ads. 
 
 Pope, 24 Hun 238 
 
 Terre Haute Car Mfg. Co. ads. 
 
 Pope, 87 N. Y. 137 
 
 Terre Haute & Richmond E. E. 
 
 Co. ads. Jones, 29 Barb. 353 . . 
 Terre Haute & Eiehmond E. E. 
 
 Co. ads. Jones, 57 N. Y. 
 
 196 167, 
 
 Terry ^ . Rothschild, 83 Hun 486, 
 
 31 Supp. 1119 
 
 Tetragon Co., People ex rel. v. 
 
 Sohmer, 162 A. D. 433, 147 
 
 Supp. 611, aff'd 213 N. Y. 702, 
 
 108 N. E. 1105 158, 
 
 Texas Central E. E. Co. ads. 
 
 Campbell, 15 Misc. 442, 37 
 
 Supp. 213 
 
 Texas & Pacific Ry. Co. ads. 
 
 Gould, 176 A. D. 818, 163 
 
 Supp. 479 
 
 Thalraann v. Hoffman House, 27 
 
 Misc. 140, 58 Supp. 227 
 
 Thatcher ads. Schenectady & 
 
 Saratoga Plank Road Co., 11 
 
 X. Y. 102 , 90, 
 
 Thayer Mfg. Jewelry Co. ads. 
 
 Cushman, 76 N. Y. 365 
 
 132, 
 Theile v. Merlis, 85 Misc. 351, 
 
 147 Supp. 405 
 
 Thingvalle Steamship Co. ads. 
 
 Bengston, 31 Hun 96 
 
 Third Ave. E.. R. Co., People 
 
 ex rel. v. Tax Commissioners, 
 
 136 A. D. 155, 120 Supp. 528, 
 
 aff'd 198 X. Y. 608, 92 N. E. 
 
 1098 777, 781, 782, 
 
 Third Ave. R. R. Co., People 
 
 ex rel. v. Tax commissioners, 
 
 212 X. Y. 472, 106 N. E. 325. . 
 
 779, 781, 782, 
 
 Thomas v.. X. Y. & Greenwood 
 
 Lake Ry. Co., 139 X. Y. 163, 
 
 34 X. E. 877 
 
 Thomas v. Waite Co., 113 A. D. 
 
 494, 99 Supp. 297 '. . . 
 
 Thomas ads. Eorke, 56 N. Y. 
 
 559 341, 
 
 Thompson, Matter of, 95 A. D. 
 
 542, 89 Supp. 4 
 
 Thompson ads. American Optical 
 
 Co., 173 A. D. 123, 159 Supp. 
 
 412 
 
 Thompson v. Denner, 16 A. D. 
 
 160, 44 Supp. 723 
 
 Thompson v. Erie E. E. Co., 45 
 
 if. Y. 468 
 
 167 
 905 
 901 
 164 
 
 170 
 227 
 
 720 
 
 917 
 
 921 
 626 
 
 297 
 
 130 
 502 
 
 851 
 
 918 
 
 V83 
 
 778 
 783 
 
 282 
 546 
 342 
 545 
 
 510 
 637 
 170 
 
 Thompson ads. Harris, 15 Barb. 
 62 487, 
 
 Thompson ads. Hoyt, 5 X. Y. 
 320 47, 49, 376, 
 
 Thompson's Ex. ads. Hoyt, 19 
 N. Y. 207 32S. 
 
 Thompson ads. Kennedy, 97 A. 
 D. 296, 89 Supp. 963 
 
 Thompson v. Knight, 74 A. IX 
 316, 77 Supp. 599 
 
 Thompson ads. Ludington, 153 
 X. Y. 499, 47 N. E. 903. . .6.5.5. 
 
 Thompson ads. McClave, 36 Hun 
 365 
 
 Thompson v. McT.aughlin, 138 
 A. D. 711, 123 Supp. 762. .. .; 
 
 Thompson v. Marseillaise French 
 caking Co.," 85 Misc. 392, 1 47 
 Supp. 402 
 
 Thompson v. Nicolai, 21 ilisc. 
 700, 49 Supp. 422 
 
 Thompson v. Queen City Cycle 
 Co., 169 A. D. 522, 44 Supp. 
 1049 
 
 Thompson ads. Simmons, 29 A. 
 D. 559, 51 Supp. 1018 
 
 Tliompson v. Stanley, 73 Hun 
 248, 25 Supp. 890, aff'd 147 
 X. Y. 713, 42 X. E. 726 
 
 Thompson v. Tioga E. R. Co., 36 
 Barb. 79 
 
 Thompson ads. Thurber, 21 Hun 
 472 
 
 Thomson-Houston Co. ads. Hol- 
 land Trust Co., 9 A. t). 473, 
 41 Supp. 457, aff'd 153 N. Y. 
 645, 47 N. E. 1108 
 
 Thomson-Houston El. Co. ads. 
 Holland, 170 N. Y. 68, 62 N. E. 
 1090 
 
 Thorn, People ex rel. v. Pang- 
 burn, 3 A. D. 456, 38 Supp. 
 248, aff'd 157 N. Y. 719 
 
 Thorn v. Volunteer St. Gregory 
 Hospital, 59 Misc. 442, 110 
 Supp. 931 
 
 Thornton v. Wabash Ey. Co., 81 
 X. Y^ 462 
 
 Thornton v. Netherlands-Ameri- 
 can Steam Navigation Co., 178 
 A. D. 604, 165 Supp. 682 
 
 Throop V. Hatch Lithographic 
 Co., 58 Hun 149, 11 Supp. 
 532, aff'd 125 N. Y. 530, 26 
 X. E. 742 326, 
 
 Thurber v. Thompson, 21 Hun 
 472 
 
 Thurber, Wyland Co., People 
 ex rel. v. Barker, 141 N. Y. 118, 
 23 L.E.A. 95, 35 N. E. 1073 . . 
 
 488 
 S7o 
 329 
 153 
 
 •ms 
 
 t)82 
 345 
 416 
 
 367 
 241 
 
 nsi 
 
 375 
 
 125 
 373 
 100 
 
 284 
 276 
 .•151 
 
 012 
 
 2S4 
 
 371 
 
 487 
 100 
 
 859 
 
TABLE OF CASES 
 
 em 
 
 Keterences are to pages. 
 
 Thurston v. DuflFy, 38 Hun 327 . . 220 
 Tierbell ads. Long Is. Ferry Co. 
 
 48 N. Y. 427 355 
 
 Tierney v. Helvetia Swiss Fire 
 
 Ins. Co., 138 A. D. 469, 122 
 
 Supp. 869 893 
 
 Tiffany ads. Delaware Valley 
 
 Telephone Co., 131 A. D. 343, 
 
 115 Supp. 867 104 
 
 Tiffany & Co., Matter of Tax 
 
 against, 80 Hun 486, 30 Supp. 
 
 494 700, 804 
 
 Tiffany & Co. ads. Lubliner, 54 A. 
 
 D. 326, 66 Supp. 659 524 
 
 Tiffany & Co., People ex rel. v. 
 
 Campbell, 144 N. Y. 166, 38 
 
 N.E. 990 696 
 
 Tilley v. Coykendall, 69 A. D. 92, 
 
 74 Supp. 631, aff'd 172 N. Y. 
 
 587, 65 N". E. 574 219 
 
 Tilton V. Gans, 90 Misc. 84, 152 
 
 Supp. 981, aff'd 168 A. D. 910, 
 
 152 Supp. 1146 320, 358 
 
 Tilton V. Gans, 155 A. D. 612, 140 
 
 Supp. 782 404 
 
 Times Printing & Publishing Co. 
 
 ads. Shorer, 119 N. Y. 483, 23 
 
 N. E. 979 540 
 
 Timmermann ads. Zimmermann, 
 
 193 N. Y. 486, 86 N. E. 540 
 
 268, 273 
 Timmis, Matter of, 200 N. Y. 177, 
 
 9'3 N. E. 522 600 
 
 Timolat v. The S. J. Held Co., 17 
 
 Misc. 556, 40 Supp. 692 306 
 
 Tindel-Morris Co. ads. Lewis, 109 
 
 A. D. 509, 96 Supp. 576 925 
 
 Tinkham v. Borst, 31 Barb. 407. 596 
 Tioga R. R. Co. ads. Olcott, 40 
 
 Barb. 179, aff'd 27 N. Y. .546 
 
 328, 335, 337, 432 
 373, 374, 898 
 Tioga R. R. Co. ads. Thompson, 
 
 36 Barb. 79 373 
 
 Titcomb ads. Clerk, 42 Barb. 122. 372 
 Title Guaranty & Surety Co. v. 
 
 Culgin Pace Contracting Co., 
 
 66 Misc. 167, 121 Supp. 226.. 545 
 Title Guarantee & Trust Co. ads. 
 
 Ehmer, 156 N. Y. 10, 50 N. E. 
 
 420 519 
 
 Titla, Guarantee & Trust Co. ads. 
 
 People, — A. D. — , N. Y. L. J., 
 
 Dec. 22, 1917 518' 
 
 Titus V. President, Directors & 
 
 Trust Co. of the Great Western 
 
 Turnpike Road, 61 N. Y. 237. . 115 
 lod ads. Industrial & General 
 
 Trust, 170 N. Y. 233, 63 N. E. 
 
 285 616, 617 
 
 398 
 
 625 
 
 .586 
 
 840 
 
 486 
 
 191 
 
 Tod ads. Industrial & General 
 Trust, Ltd., 180 N". Y, 215, 73 
 N. E. 7 286, 615 
 
 Todd ads. Pray, 71 A. D. 391, 75 
 Supp. 947 . 180 
 
 Tompkins Cove Stone Co., People 
 ex rel. v. Saxe, 176 A. D. 1, 
 162 Supp. 408; aff'd 221 N. Y. 
 601, 117 N. E. 1081 698 
 
 Tone ads. International Text 
 Book Co., 220 N. Y. 313, 115 
 N. E. 914 868, 878 
 
 Torbett v. Godwin, 62 Hun 407, 
 17 Supp. 46 
 
 Tousey ads. Hastings, 121 A. D. 
 815, 106 Supp. 639 623, 
 
 Towan v. Hale, 46 Barb. 361 
 
 Towery, People ex rel. v. Wells, 
 98 A. D. 82, 90 Supp. 313, aff'd 
 182 N. Y. 553, 75 N. E. 1132.. 
 
 Town of Oneonta ads. Gould, 71 
 N. Y. 298 141 
 
 Townley ads. Jefferson County 
 B'k, 159 N. Y. 490, 54 N. E. 74 
 
 Townsend, Matter of, 24 Misc. 80, 
 53 Supp. 289 
 
 Townsend v. Colorado Fuel & Iron 
 Co.,. 16 A. D. 314, 44 Supp. 849 281 
 
 Townsend v. Davis, 153 A. D. 599, 
 138 Supp. 758 186 
 
 Townsend v. Felthousen, 156 N. 
 Y. 618, 51 N. E. 279 152 
 
 Townsend v. Oneonta, Coopers- 
 town & Riehfielil Springs Ry. 
 Co., 41 Misc. 298, 84 Supp. 119. 
 
 Townsend v. Oneonta, Coopers- 
 town & Richfield Springs Ey. 
 Co., 86 A. D. 604, 83 Supp. 
 1034 
 
 Tracy v. First Nat. B'k of Selma, 
 37 N. Y. 523 
 
 Tracy v. Yates, 18 Barb. 152 
 
 Tracy & Oppenheim Co., People 
 ex rel. v. Wells, 183 N. Y. 264, 
 76 N. E. 24 
 
 Trageser ads. Weleke, No. 1, 131 
 A. D. 731, 116 Supp. 166 429 
 
 Travis v. Knox Terpezone Co., 215 
 N. Y. 259, L.R.A. 1916A 542, 
 109 N. E. 250 896, 9.34 
 
 Travis ads. People ex rel. Queens 
 Co. Water Co., 171 A. D. 521, 
 157 Supp. 943 727 
 
 Travis v. Travis, 140 A. D. 191, 
 124 Supp. 1021 101 
 
 Treadwell Co. ads. Duncan, 82 
 Hun 376, 31 Supp. 340 676 
 
 Treadwell Co. ads. Gillig, 151 N. 
 Y. 552, 45 N. E. 1035 641 
 
 679 
 
 679 
 
 681 
 215 
 
 839 
 
TABLE OF CASES 
 
 Heferences are to pages. 
 
 Treadwell Co. ads. Grant, 82 Hun 
 
 591, 31 Supp. 702 370 
 
 Treadwell Co. ads." Grant, 1 A. D. 
 
 367, 37 Supp. 392 373 
 
 Treadwell Co. ads. National 
 
 Spraker Bank, 80 Hun 363, 30 
 
 Supp. 77 505 
 
 Treadwell ads. Shipman, 200 X. 
 
 Y. 472, 93 N. E. 1104 938 
 
 Treadwell ads. Shipmen, 208 N. 
 
 Y. 402, 102 N. E. 634 227, 244 
 
 Treadwell v. United ^'erde Copper 
 
 Co., 47 A. D. 613, 62 Supp. 708. 194 
 Treadwell v. United Verde Copper 
 
 Co., 134 A. D. 394, 119 Supp. 
 
 112 206 
 
 Treman ads. Ithaca Gas-Light 
 
 Co., 30 Hun 212 415 
 
 Trinity Church, Rector, etc., of, v. 
 
 Vanderbilt, 98 N. Y. 171 389 
 
 Tripler v. Fairchild, 167 A. D. 
 
 195, 152 Supp. 624 153 
 
 Troegerlith Title Co. ads. Hill, 
 
 168 A. D. 639, 154 Supp. 535. . 369 
 Trohn ads. Boynton Furnace Co., 
 
 145 A. D. 773, 126 Supp. 695. 885 
 Trojan Realty Corp., People ex 
 
 rel. V. Purdy, 174 A. D. 702, 162 
 
 Supp. 56 519, 763, 789 
 
 Trotter v. Lisman, 209 N. Y. 174, 
 
 102 N. E. 575 53.') 
 
 Troughton v. Grace, 84 Misc. 577, 
 
 147 Supp. 993 187 
 
 Troughton v. Grace, 151 A. D. 
 
 655, 136 Supp. 200 186 
 
 Trow City Directory Co. ads. 
 
 Colles, 1 1 Hun 397 501 
 
 Trow's Printing and Bookbinding 
 
 Co. ads. Frazier, 24 Hun 281, 
 
 aff'd 90 N. Y. 678 468 
 
 Trowbridge ads. McElwee Mfg. 
 
 Co., 62 Hun 471, 17 Supp. 3.. 506 
 Trov Chemical Co. ads. People, 
 
 118 A. D. 437, 103 Supp. 22 
 
 585, 587 
 Troy Gas Co., People ex rel. v. 
 
 Hall, 143 A. D. 756, 128 Supp. 
 
 361, aff'd 203 N. Y. 312, 96 N. 
 
 E. 933 774, 783 
 
 Troy House Co. ads. The People. 
 
 44 Barb. 625 555, 586 
 
 Troy Laundry Machinery Co. ads. 
 
 Speare, 44 A. D. 390, 60 Supp. 
 
 1080 534 
 
 Troy R. R. Co. ads. First Baptist 
 
 Church in Schenectady, 5 Barb. 
 
 79 ". 509 
 
 Troy Steel Co. ads. Guaranty 
 
 Trust Co., 33 Misc. 484, 68 
 
 Supp. 915 272, 283 
 
 Troy Steel & Iron Co. ads. Peo- 
 ple, 82 Hun 303, 31 Supp. 337. 595 
 
 Troy Union R. R. Co. ads. Dun- 
 ham, 42 N. Y. (3 Keyes) 543. 336 
 
 Troy Waist Mfg. Co. v. Harrison, 
 73 Hun 528, 26 Supp. 109 486 
 
 Truesdell v. Chumar, 75 Hun 416, 
 27 Supp. 87 251 
 
 Trumbull v. Ashley, 26 A. D. 
 356, 49 Supp. 786 243 
 
 Trust Co. of America ads. Lan- 
 ning, 137 A. D. 722, 122 Supp. 
 485 359 
 
 Trustees of St. Mary's Cliurch v. 
 Cagger, 6 Barb. 576 448 
 
 Tschetinian v. City Trust Co., 186 
 N. Y. 432, 79 N. E. 401 280 
 
 Tuchband v. Chicago & Alton R. 
 R. Co., 115 N. Y. 437, 22 N. E. 
 360 435 
 
 Tucker v. Gilman, 121 N. Y. 189, 
 24 N. E. 302 219 
 
 Tucker ads. Sheridan, 145 A. D. 
 
 145, 129 Supp. 18 810, 816 
 
 Turk V. Koehler & Co., 144 A. D. 
 
 53, 128 Supp. 809 542 
 
 Turle & Skidmore ads. Fresno 
 Home Packing Co., 60 Misc. 79, 
 111 Supp. 839, aff'd 132 A. D. 
 930, 117 Supp. 1134 877 
 
 Turner ads. Baker, 19 A. D. 223, 
 
 46 Supp. 25 638 
 
 Turner ads. Webster, 12 Hun 264 600 
 
 Turnbloom v. International Paper 
 
 Co., — Misc. (1918), N. 
 
 Y. L. J. Feb. 7, Sp. T. X. Y. 
 
 Co 161 
 
 Tuttle, Matter of, v. Iron Nat. 
 Bank, 170 N. Y. 9, 62 N. E. 761 57 
 
 Twelfth Ward B'k ads. Hirsch, 66 
 Misc. 290, 122 Supp. 1076.... 268 
 
 Twenty-third St. R. Co., People 
 ex rel. v. Feitner, 92 A. D. 518, 
 87 Supp. 304. . . .749, 762, 787, 798 
 
 Twenty-third St. R. R. Co., Peo- 
 ple ex rel. v. Commissioners of 
 Taxes, 95 N. Y. 554. .742, 749, 759 
 
 Tyng V. Corporation Trust Co., 
 
 104 A. D. 486, 93 Supp. 928. . 853 
 
 Ulster Co. Sav. Inst. i. Ostran- 
 der, 163 N. Y. 430, 57 N. E. 
 627 358 
 
 Ulster & Delaware R. R. Co., Peo- 
 ple ex rel. v. Smith, 24 Hun 66, 
 dism'd 85 N. Y. 628 788 
 
 Ulster & Delaware R. R. Co. ads. 
 People, 128 N. Y. 240, 28 N. E. 
 035 556 
 
TABLE OF CASES 
 
 cv 
 
 References are to pages. 
 
 Underhill ads. Johnson, 52 N. Y. 
 203 131, 136, 246 
 
 Underwood ads. McGill Co., 161 
 A. D. 30, 146 Supp. 362 75 
 
 Union Cloak & Suit Co. ads. Gins- 
 bei-g, 35 Misc. 389, 71 Supp. 
 1030 491 
 
 Union Estate Co. v. Adlow Con- 
 struction Co., 221 2Sr. Y. 183, 
 116 N. E. 284 469 
 
 Union Ferry Co. ads. Hepworth, 
 62 Hun 257, 16 Supp. eo^, app. 
 dism'd 131 N. Y. 645, 30 N. E. 
 867 554 
 
 Union Ferry Co., People ex rel. 
 V. Roberts, 66 A. D. 157, 72 
 ■Supp. 950 717 
 
 Union Hotel Co. v. Heraee, 79 N. 
 Y. 454 91 
 
 Union Milk Co. ads. Smith, 70 
 Hun 348, 24 Supp. 79, aff'd 143 
 N. Y. 622, 37 N. E. 827 920 
 
 Union Nat. B'k v. Leary, 95 A. 
 D. 381, 88 Supp. 652, aff'd 183 
 N. Y. 546, 76 N. E. 1111 685 
 
 Union Nat. B'k v. Scott, 53 A. D. 
 
 65, 66 Supp. 145. .62, 301, 338, 386 
 
 Union Nat. B'k v. Wheeler, 60 N. 
 Y. 612 469 
 
 Union Pacific R. R. Co. ads. Equi- 
 table Life Assurance Soc, 212 
 N. Y. 360, L.R.A. 1915D, 1052, 
 106 N. E. 92 73, 162, 163, 168 
 
 Union Pacific Tea Co., People ex 
 rel. V. Roberts, 145 N. Y. 375, 
 40 N. E. 7- 698, 699 
 
 Union Pipe & Construction Co. 
 ads. Rusling, 5 A. D. 448, 39 
 Supp. 216; 158 N. Y. 737, 53 
 N. E. 1131 48 
 
 Union Steamboat Co. v. City of 
 Buflfalo, 82 N. Y. 351 755, 787 
 
 Union Sulphur Co., People ex 
 rel. V. Glynn, 125 A. D. 328, 
 109 Supp. 86S 839, 862 
 
 Union Surety & Guaranty Co. 
 ads. Flynn, 170 N. Y. 145, 63 
 N. E. 61 903 
 
 Union Trust Co., People ex rel. v. 
 Coleman, 126 N. Y. 433, 12 L. 
 R. A. 762, 27 N. E. 818 742, 745 
 
 Union Trust Co. ads. Harrison, 
 144 N. Y. 326, 39 N. E. 353. . 277 
 
 Union Trust Co. ads. Missouri, K. 
 & T. R. Co., 156 N. Y. 592, 51 
 N. E. 309 276 
 
 Union Trust Co. v. Monticello & 
 Port Jervis Ry. Co., 63 N. Y. 
 311 270 
 
 228 
 
 327 
 
 82 
 
 Union Trust Co. v. Oliver, 214 N. 
 Y. 517, 108 N. E. 809 118 
 
 Union Trust Co. v. Sickels, 125 
 A. D. 105, 109 Supp. 262. .838, 890 
 
 United Box Board & Paper Co. 
 ads. Merrill, 143 A. D. 833, 128 
 Supp. 959 325 
 
 United Building Material Co. v. 
 Odell, 67 Misc. 584, 123 Supp. 
 313 888 
 
 United Construction & Supply 
 Co., 166 A. D. 284, 151 Supp; 
 624, aflt'd 219 N. Y. 555, 114 N. 
 E. 1063 109 
 
 United Gas Improvement Co. ads. 
 Fleitmann, 174 A. D. 781, 161 
 Supp. 650 203 
 
 United Glass Co. v. Vary, 152 N. 
 Y. 121, 46 N. E. 312 
 
 United Gold & Platinvun Mines 
 Co. V. Smith, 44 Misc. 567, 90 
 Supp. 199 326, 
 
 United Growers Co. v. Eisner, 22 
 A. D. 1, 47 Supp. 906. . .63, 80, 
 
 90, 92, 304, 317 
 
 United Natural Gas Co., People 
 ex rel. v. Priest, 152 A. D. 
 249, 136 Supp. 575 860 
 
 United Press ads. Munzinger, 52 
 
 A. D. 338, 65 Supp. 194. ! 485 
 
 488, 489 
 
 U. S. A. P. P. Co., People ex rel. 
 V. Knight, 174 N. Y. 475, 63 
 L. R. A. 87, 67 N. E. 65. .691, 714 
 
 U. S. Asphalt Refining Co. v. 
 Comptoir National IHE-scompte 
 de Paris, 166 A. D. 64, 151 
 Supp. 604 872 
 
 United States Directory Co. ads. 
 Fallon, 86 A. D. 29, 83 Supp. 
 359 
 
 United States Glass Co. v. Levett, 
 24 Misc. 420, 53 Supp. 688 .. . 
 
 United States Law Blank & Sta- 
 tionery Co. ads. People, 24 
 Misc. 535, 53 Supp. 852. .470, 
 
 United States Lithograph Co. 
 ads. De Raismas, 161 A. D. 
 781, 146 Supp. 813 
 
 United States Mercantile Report- 
 ing and Collecting Agency, 
 Matter of, 115 N. Y. 176, 21 
 N. E. 1034 
 
 U. S. Mtge & Trust Co. ads. 
 Young, 214 N. Y. 279, 108 N. E. 
 418 
 
 625 
 
 228 
 
 649 
 
 936 
 
 39 
 
 332 
 
TABLE OF CASES 
 References are to pages. 
 
 U. S. Radiator Corp. v. State of 
 N. Y., 208 K. Y. 144, 46 
 L.R.A.(X.S.) 585, 101 N. E. 
 783 68, 809, 813 
 
 United States Telegraph Co. v. 
 Western Union Telegraph Co., 
 56 Barb. 46 452 
 
 United States Title Guarantee 
 Co. V. Brown, 166 A. D. 688, 
 152 Supp. 470, aff'd 217 N. Y. 
 628, 111 N. E. 828 518 
 
 United States Trust Co., People 
 ex rel. v. Barker, S6 Hun 131, 
 33 Snpp. 388 754 
 
 United States Trust Co. v. Mayor, 
 77 Hun 182, 2S Supp. 344, aff'd 
 144 N. Y. 488, 39 N. E. 383. . . 746 
 
 United States Trust Co. of N. Y. 
 V. The Mayor, etc., of N. Y., 
 144 N. Y. 488, 39 X. E. 383. . 742 
 747, 787 
 
 United States Trust Co. v. N. Y., 
 West Shore & Buffalo Ey. Co., 
 35 Hun 341 629 
 
 United States Trust Co. v. N. Y., 
 West Shore & Buffalo Ey. Co., 
 101 N. Y. 478, 5 N. E. 316.. 604 
 
 United States Verde Copper Co., 
 People ex rei. v. Feitner, 54 A. 
 D. 217, 66 Supp. 769, aff'd 165 
 N. Y. 645, 59 N. E. 1129 740 
 
 United States Vinegar Co. v. 
 Schlegel, 67 Hun 356, 22 Supp. 
 407, aff'd 143 X. Y. 537, 38 
 X. E. 729 531, 870, 884, 890 
 
 United Surety Co. ads. Conjey, 
 217 N. Y. 268, 111 N. E. 832. . 899 
 
 United Verde Copper Co., People 
 ex rel. v. Hugo, 181 A. D. 149. 829 
 
 United Verde Copper Co., People 
 ex rel. v. Roberts, 156 N. Y. 
 585, 51 N. E. 293 724 
 
 United Verde Copper Co. ads. 
 Treadwell, 47 A. D. 613, 62 
 Sunn. 708 194 
 
 United Verde Copper Co. ads. 
 Treadwell, 134 A. D. 394, 119 
 Supp. 112 206 
 
 United Water Works Co. v. 
 Omaha Water Co., 164 N. Y. 
 41, 58 X. E. 58 617 
 
 U. S. Woven Label Co. ads. 
 Ripin. 205 X. Y. 442, 98 N. E. 
 855 314 
 
 Unitv Press ads. Maure, 143 A. 
 D."94, 127 Supp. 1002 63 
 
 Universal Film Mfg. Co. ads. 
 Powers, 162 A. D. 806, 148 
 Supp. 114 132 
 
 Universal Phonograph & Eecord 
 Co. ads. Haas, 75 Misc. 119, 
 132 Supp. 76f 320 
 
 University Magazine Co. ads. 
 Miller, 10 Misc. 311, 30 Supp. 
 969 102 
 
 Upper Kittaring Brick Co. ads. 
 Houghtaling, 92 Misc. 228. 155 
 Supp. 540 429 
 
 Uptegrove v. Schwarzwaelder, 46 
 A. D. 20, 61 Supp. 623, aff'd 
 167 X. Y. 587, 60 X. E. 1121. . 387 
 
 Usher v. Van Vranken, 48 A. D. 
 413, 63 Supp. 104 157 
 
 Utah Gold & Copper Mines Co. 
 ads. People ex rel. Pottenberg, 
 135 A. D. 418, 119 Supp. 852. . 132 
 
 Utiea & Black Eiver E. R. Co., 
 People ex rel. v. Shields, 6 Hun 
 556 751 
 
 Utiea, Clinton & Binghampton 
 E. E. Co. ads. Marklove, 48 
 Misc. 258, 96 Supp. 795 504 
 
 Utiea Fire Alarm "Telegraph Co., 
 Matter of, 115 A. D. 821, 101 
 Supp. 109 302, 308 
 
 Utiea Gas & Electric Co. ads. 
 Globe Woolen Co., 151 A. D. 
 184, 136 Supp. 24 360 
 
 Utiea, Ithaca & Elmira Ey. Co. 
 
 ads. Radbourn, 28 Hun 369.. 627 
 
 Utiea X'at. Brewing Co., Matter 
 of, 154 X'. Y. 268, 48 X. E. 
 .'521 611 
 
 Ut'fa Trust & Deposit Co. v. Kel- 
 logg & Sons Co., 126 A. D. 176, 
 110 Supp. 1048 71 
 
 Utopia Land Co. ads. Brown, 
 No. 2, 118 A. D. 364, 10? Supp. 
 50 416, 417, 419 
 
 Vail V. Hamilton, 85 N. Y. 453. 260 
 
 264 
 
 Van Alen v. Illinois Central R. 
 R. Co., 41 N. Y. (2 Keyes) 
 673 102 
 
 Van Allen ads. Romaine, 26 N. 
 Y. 309 158 
 
 Van Amburgh v. Baker, 81 N. Y. 
 
 46 : 305, 389 
 
 Van Antwerp v. State of X. Y., 
 218 X'. Y. 422, 113 X". E. 497. . 809 
 
 Van Brunt ads. Van Cott, 82 N. 
 Y. 535 223 
 
 Van Buren v. Reformed Church 
 of Gansevoort, 62 Barb. 495 . . 532 
 
 Van Cott V. Van Brunt, 82 N. 
 Y. 535 223 
 
 Van Dam v. Tapscott, 40 A. D. 
 36, .57 Supp. 534 155 
 
 Van Emden ads. National Dis- 
 tilling Co., 120 A. D. 746, 105 
 Supp. 657 885 
 
 Van Meter ads. .Schoenherr, 215 
 X. Y. .548, 109 N. E. 625 412 
 
TABLE OF CASES 
 
 References are to pages. 
 
 evil 
 
 Van Meter ads. Schoenherr, 215 
 X. Y. 548, 109 IS'. E. 625 
 
 Van Norden Trust Co. ads. 
 Peri-y, 192 N. Y. 189, 84 N. E. 
 804 
 
 \'an Norden Trust Co. v. Rosen- 
 berg, 62 Misc. 285, 114 Supp. 
 1025 _, 
 
 Van Nostrand ads. Hoffman, 42 
 Barb. 174 
 
 Van Santvoord ads. Merrick, 34 
 N. Y. 208 ..,, 
 
 Van Santvoord ads. Palmer, 153 
 X. Y. 612, 38 L. E. A. 402, 47 
 N. E. 915 
 
 VsLii Schaick v. Mackin, 129 A. D. 
 335, 113 Supp. 408 
 
 Van Slochem v. Villard, Xo. 1, 
 154 A. D. 161, 138 Supp. 852, 
 aff'd 207 N. Y. 587, 101 X. E. 
 467 145, 
 
 \ an Slyck v. Warner, 118 A. D. 
 40, 103 Supp. 1, aff'd 192 X. 
 Y. 547, 84 N. E. 724 
 
 \'an Vleet v. Jones, 75 Hun 340, 
 26 Supp. 1082 
 
 Van Vranken ads. Usher, 48 A. 
 D. 413, 63 Supp. 104 
 
 Van Wagenen v. Clark, 22 Hun 
 497 
 
 Van Wagenen v. Genesee Falls 
 Sav. Assn., 88 Hun 43, 34 
 Supp. 491 
 
 \an Wagenen ads. Peckham, 83 
 X. Y. 40 
 
 Van Wie N. Y. Grocery Co. ads. 
 Schwartling, 60 A. D. 475, 69 
 Supp. 978 
 
 \a«denburgh v. Broadway Kail- 
 way Co., 29 Hun 348 299, 
 
 302, 
 
 Vanderbilt ads. Chase, 62 X'. Y. 
 .307 
 
 Vanderbilt ads. Erie Railwav 
 Co., 5 Hun 123 ". 
 
 ^'anderbilt ads. Murray, 39 Barb. 
 140 
 
 \ anderbilt ads. Rector, etc., of 
 Trinity Church, 98 X. Y. 171 . . 
 
 Vanderbilt v. Richmond Turnpilce 
 Co., 2 N. Y. 479 
 
 Vanderbilt ads. Sturges, 73 N. Y. 
 384 306, 
 
 Vanderbilt Hotel Co. ads. Har- 
 mon, 79 Hun 392, 29 Supp. 783, 
 aff'd 143 X. Y. 665, 39 N. E. 
 20 
 
 Vandergrift ads. Eieliardson 
 Press, 165 A. D. 180, 150 
 SuTip. 238 
 
 Vanderpoel v. Gorman, 140 X. Y. 
 563, 24 L. R. A. 548, 35 X. E. 
 932 
 
 335 
 
 477 
 
 504 
 347 
 
 822 
 
 673 
 
 80 
 
 219 
 
 483 
 224 
 157 
 241 
 
 520 
 199 
 
 511 
 
 300 
 305 
 
 414 
 
 471 
 
 927 
 
 389 
 
 521 
 
 595 
 
 530 
 
 367 
 
 475 
 
 Vandervoort R. Co., People ex rel. 
 V. Glynn, 194 X. Y. 387, 87 
 N. E. 434 709, 716, 719 
 
 Varnum v. Hart, 119 N. Y. 101, 
 23 X. E. 183 481 
 
 Vary ads. United Glass Co., 152 
 
 X. Y. 121, 46 X. E. 312 228 
 
 Vatable v. N. Y., Lake Erie & 
 Western R. R. Co., 96 X. Y. 
 49 285, 290 
 
 Vaughn Machine Co. v. Ligiit- 
 house, 64 A. D. 138, 71 Supp. 
 799 837 
 
 Veeder v. Baker, 83 X. Y. 156 . . 400 
 
 Veeder v. Judson, 91 X. Y. 374. . 243 
 
 Veeder v. Mudgett, 95 X. Y. 
 29 J 107, 218, 223, 225 
 
 Veiller v. Brown, 18 Hun 571 ... . 219 
 
 Vending Co., People ex rel. v. 
 Kelsey, 101 A. D. 325, 91 Supp. 
 955, aff'd 181 X. Y. 512, 73 
 X. E. 1130 727, 869 
 
 Venner v. X. Y. Central & Hud- 
 son R. R. R. Co., 160 A. D. 127, 
 145 Supp. 725, aff'd 217 X. Y. 
 615, 617, 111» N. B. 487.... 449 
 494, 501, 709 
 
 Venner v. X. Y. Central & Hud- 
 son R. R. R. Co., 177 A. D. 296, 
 164 Supp. 626 500 
 
 Venus Silk Glove Mfg. Co., Inc., 
 ads. Wills, 170 A. D. 352, 156 
 Supp. 115 479 
 
 Verdon ads. O'Dwyer, 115 A. D. 
 37, 100 Supp. 588, aff'd 190 X. 
 Y. 505, 83 N. E. 1128 121 
 
 Vermont Copper Mining Co. ads. 
 Mitchell, 67 X. Y. 280 363 
 
 Vermont Copper Mining Co. ads. 
 Hughes, 72 X. Y. 207 200 
 
 Vermont Manganese Co. ads. 
 Harrison, 1 Misc. 402, 20 Supp. 
 894 7 
 
 Victoria Chief Copper Mining & 
 Smelting Co. ads. Johnson, 65 
 Misc. 332, 119 Supp. 639 875 
 
 Victoria Chief Copper Mining & 
 Smelting Co. ads. Johnson, 150 
 A. D. 653, 135 Supp. 1070. ... 875 
 
 Vilas v. Page, 106 N. Y. 439, 13 
 N. E. 743 641, 660 
 
 Villard v. Moyer, 123 A. D. 629, 
 107 Supp. 1054 142 
 
 Villard ads. Van Slochem, 154 
 A. D. 161, 138 Supp. 852, aff'd 
 207 N. Y. 587, 101 X. E. 467. 145 
 
 219 
 
 Vincennes Paper Co. v. Box Board 
 & Lining Co., 45 Misc. 1, 90 
 Supp. 836, aff'd 98 A. D. 623, 
 90 Supp. 1105 881 
 
 Vinegar Co. v. Foehrenbach, 148 
 X. Y. 58, 42 X. E. 403 90 
 
TABLE or CASES 
 
 References are to pages. 
 
 Vio Chemierfl Co. v. Stuillinlme, 
 53 Misc. 470, 103 Supp. 4B3, 
 
 aff'd 121 A. D. 927 S41 
 
 Virgil, Matter of, 2(j Misc. 320, 
 
 57 Supp. 58 175 
 
 Virgil V. Virgil Practice Clavier 
 
 Co., 33 Misc. 200, 68 Supp. 335. 456 
 Virgil V. Virgil Practice Clavier 
 
 Co., 33 Misc. 201, 68 Supp. 335. 456 
 Virgil Practice Clavier Co. ads. 
 Virgil, 33 Misc. 200, 68 Supp. 
 
 335 456 
 
 Virgil Practice Clavier Co. ads. 
 • Virgil, 33 Misc. 201, 68 Supp. 
 
 3'36 456 
 
 Virginia Passenger & Power Co. 
 ads. O'Connor, 46 Misc. 530, 92 
 
 Supp. 525 208 
 
 Virginia Passenger & P. Co. ads. 
 O'Connor, 184 N. Y. 46, 76 X. 
 
 E. 10S2 201 
 
 Vitolo V. Bee Publishing Co., 66 
 
 A. D. 582, 73 Supp. 273. . .911, 915 
 Volunteer St. Giognry Hospital 
 ads. Thorn, 59 Mis!'. 442, 110 
 
 Supp. 931 612 
 
 Volz ads. Buffalo Gas Co., 31 
 
 Misc. 160, 64 Supp. 534 767 
 
 Von Au V. Magenheinier, 115 A. 
 D. S4, 100 Supp. 659, aff'd 19-6 
 
 N. Y. 510, 89 X. E. 1114 7.54 
 
 Von \u V. Magenheinier, 126 A. 
 
 D. 2.57, 110 Supp. 629, aff'd 
 
 196 X. Y. 510, 89 X. E. 1114. . 146 
 
 Von Hesse v. Mackaye, 55 Hun 
 
 365, 8 Supp. 894, aff'd 121 X. 
 
 Y. 694, 24 N. E. 1099 256 
 
 Vose V. Cowdrey, 49 N. Y. 336 . . 466 
 \'o.shefskey v. Hillside Coal & 
 Iron Co., 21 A. D. 168, 47 Supp. 
 
 386 504, 917 
 
 Vounoh V. Sixtv-Seventh St. Ate- 
 lier Bldg., 55 Misc. 222. 105 
 
 Supp. 155 . .■ .■!24 
 
 Vreeland ads. Courtright, 64 
 
 Misc. 46, 117 Supp. 952 926 
 
 Vreeland ads. Moran, 81 Misc. 
 664, 143 Supp. 522, aff'd 162 
 
 A. D. 907, 146 Supp. 1101 331 
 
 405 
 Vulcan Steel Products Co. ad.s. 
 
 Secayno. — Misc. , X. Y. 
 
 L. J., Mar. 13. 1918 .545 
 
 Wabash E. R. Co. ads. Pollitz, 
 142 A. D. 755, 127 Supp. 782. 276 
 
 291 
 
 Wabash R. R. Co. ads. Pollitz, 
 No. 1. 150 A. D. 709, 135 Supp. 
 785 188, 196, 416 
 
 Wabash R. R. Co. ads. Pollitz. 
 
 167 A. D. 669. 152 Supp. 803. 
 Wabash R. R.. Co. ads. Pollitz. 
 
 207 X. Y. 113, 100 N. E. 721. . 
 
 184, 
 
 Wabash Ry. Co. ads. Thornton, 
 
 81 X. Y."462 
 
 \Aaclark R. Co., People ex rel. v. 
 
 Williams, 198 N. Y. 54, 28 L. 
 
 R. A. (X. S.) 371, 91 N. E. 
 
 266 
 
 Wade ads. Bridges, 113 A. D. 350, 
 
 99 Supp. 126 921, 
 
 Wadsworth ads. Bcrwind-White 
 
 Mining Co.. 27 A. D. 550, 50 
 
 Supp. 501 
 
 Wadsworth v. Equitable Trust 
 
 Co., 153 A. D. 737, 138 Supp. 
 
 842 848, 
 
 Wadsworth ads. Williamson, 49 
 
 Barb. 294 
 
 Waisikoski v. Phil. & Reading 
 
 Coal Iron Co., 173 A. D. 538, 
 
 159 Supp. 906 
 
 Waist Co. ads. Galdieri & Co., 98 
 
 Misc. 612, 163 Supp. 154 5, 
 
 Waite Co. ads. Thomas, 113 A. D. 
 
 494, 99 Supp. 297 
 
 Wakefield v. Fargo, 90 N. Y. 213. 
 
 W akeman v. Dalley, 51 X. Y. 27 
 
 Walcott V. Little, 46 Misc. 96. 
 91 Supp. 411 
 
 Waldron ads. People ex rel. Na- 
 tional Starch Co., 26 A. D. 527, 
 50 Supp. 523 
 
 Walker, People ex rel. v. Albany 
 Hospital, Board of Governor.^ 
 of, 61 Barb. 397 
 
 Walker v. Anglo-American Mtge. 
 & Trust Co., 72 Hun 334, 25 
 Supp. 4.32 2, 5. 
 
 Walker ads. Central Savings 
 Bank, 66 X". Y. 424 
 
 Walker ads. Jagger Iron Co., 76 
 X. V. 521 
 
 Wall & H. St. Rv. Co., People ex 
 rel. V. Miller, iSl X. Y. 328, 73 
 X. E. 1102 
 
 Wallace ads. Adams, 82 A. D. 
 117, 81 Supp. 848 
 
 Wallace v. Berdell, 24 Hun 379 . . 
 
 Waller v. Rothfield, 36 Misc. 177, 
 73 Supp. 141 
 
 Wallerstein ads. Weber, Xo. 1, 
 111 A. D. 693, 97 Supp. 846. . . 
 
 \^'allerstein ads. Weber, No. 2, 
 119 A. D. 700, 97 Supp. 852.. 
 
 291 
 
 1S2 
 422 
 
 284 
 
 717 
 
 923 
 
 226 
 
 849 
 249 
 
 SI12 
 529 
 
 546 
 24S 
 250 
 68 
 398 
 
 5(1 
 
 736 
 
 351 
 
 77 
 213 
 2.35 
 
 710 
 
 2:!2 
 156 
 
 S43 
 
 199 
 
 626 
 
TABLE or CASES 
 
 References are to pages. 
 
 Wallis ads. First Nat. B'k, 84 
 
 Hun 376, 32 Supp. 382, aff'd 
 
 150 N. Y. 663, 50 N. E. 1117. . 369 
 Walsh ads. Mahaney, 16 A. D. 
 
 601, 44 Supp. 969 129, 137, 155 
 
 Walsh ads. Moosbrugger, 89 Hun 
 
 564, 35 Supp. 550 108, 214 
 
 Walsh V. Press Co., 48 A. D. 333, 
 
 62 Supp. 833 546 
 
 Walter v. F. E. McAlister Co., 21 
 
 Misc. 747, 48 Supp. 26 928 
 
 Walter v. Rafalsky, 113 A. D. 
 
 223, 98 Supp. 915, aff'd 186 N. 
 
 Y. 543, 79 N E. 1118 142 
 
 Walton V. Coe, 110 N. Y. 109, 17 
 
 N. E. 676 227 
 
 Walton V. Grand Belt Copper Co., 
 
 The, 56 Hun 211, 9- Supp. 375.. 683 
 Wamsley v. Horton & Co., 12 A. 
 
 D. 312, 42 Siipp. 767, aff'd' 153 
 
 N. Y. 687, 48 N. E. 1105 g94 
 
 Ward V. City Trust Co., 192 N". 
 
 Y. 61, 84 N. E. 585 212, 372 
 
 Warner v. Cecil, 84 Misc. 21, 145 
 
 Supp. 902 156 
 
 Warner v. Morgan, 81 Misc. 865, 
 
 143 Supp. 516 429 
 
 Warner ads. Van Slyck, 118 A. D. 
 
 40, 103 Supp. 1, aff'd 192 N. 
 
 Y. 547, 84 N. E. 724 483 
 
 Warner v. Watson & Gibson, 4 
 
 Misc. 12, 23 Supp. 922 166 
 
 Warner & Co. ads. Orvis, 75 A. D. 
 
 463, 78 Supp. 328 507 
 
 Warren v. Bigelow Blue Stone 
 
 Co., 74 Hun 304, 26 Supp. 649, 
 
 app. dism'd 142 N. Y. 669, 37 
 
 N. E. 571 266 
 
 Warren v. Stikeman, 84 A. D. 610, 
 
 82 Supp. 1003 158 
 
 Warren-Scharf Paving Co. ads. 
 
 Scharf, 15 A. D. 480, 44 Supp. 
 
 491 417 
 
 Warth V. Moore Blind Stitcher & 
 
 Overseamer Co., 146 A. D. 28, 
 
 130 Suiop. 748, aff'd 207 N. Y. 
 
 673, 100 N. E. 1128 240 
 
 Washington Fire Ins. Co. ads. 
 
 Herzig, 144 A. D. 174, 128 
 
 Supp. 988 542 
 
 Washington Life Ins. Co. ads. 
 
 Prindle, 73 Hun 448, 26 Supp. 
 
 474, aff'd 149 N. Y. 614, 43 
 
 N. E. 112- 524 
 
 Washington Life Ins. Co. ads. 
 
 Russell, 62 Misc. 403, 115 Supp. 
 
 950 905, 914 
 
 Washington Lighting Co. v. Dim- 
 
 mick, 41 A. D. 596, 58 Supp. 
 
 682 934 
 
 Washington Mills Co., People ex 
 rel. V. Roberts, 8 A. D. 201, 40 
 Supp. 417, aff'd 151 N. Y. 619, 
 45N. E. 1134 840 
 
 Washington Savings B'k v. 
 Fletcher, 55 A. D. 580, 67 Supp. 
 365 619 
 
 Washington Trust Co. v. Morse, 
 Iron Works & D. & D. Co., 187 
 N. Y. 307, 79 N. E. 1022 260 
 
 Wasson ads. Aikin, 24 N. Y. 482. 249 
 
 Waterman Co., People ex rel. v. 
 Morgan, 48 A. D. 395, 63 Supp. 
 76 699 
 
 Waters v. Waters & Co.. 201 N. Y. 
 184, 94 N. E. 602 145 
 
 Waters & Co. ads. Waters, 201 
 N. Y. 184, 94 N. E. 602 145 
 
 Watertown Nat. B'k v. Bagley, 
 134 A. D. 831, 119 Supp. 592. . 384 
 
 Watertown Nat. B'k v. Westches- 
 ter Co. Water Works, 19 Misc. 
 685, 44 Supp. 1101 539 
 
 Watkins v. Watkins & Turner 
 Lumber Co., 11 A. D. 517, 43 
 Supp. 41 404 
 
 Watkins & Turner Lumber Co. 
 ads. Watkins, 11 A. D. 517, 43 
 Supp. 41 404 
 
 Watson V. Bennett, 12 Barb. 196. 522 
 
 Watson V. Boston Woven Cord- 
 age Co., 75 Hun 115, 26 Supp. 
 1101 873 
 
 Watson & Gibson ads. Warner, 4 
 Misc. 12, 23 Supp. 922 166 
 
 Waverley Co. v. Worthington Co., 
 41 Misc. 447, 24 Supp. 331 634 
 
 Weaver v. Barden, 49 N. Y. 286 . 121 
 
 125 
 
 Weber ads. Lawrence, 65 Misc. 
 603, 120 Supp. 289 420 
 
 Weber v. Wallerstein, No. 1, 111 
 A. D. 693, 97 Supp. 846 199 
 
 Weber v. Wallerstein, No. 2, 111 
 A. D. 700, 97 Supp. 852 626 
 
 Weber' Piano Co., People ex rel. 
 V. Wells, 180 N. Y. 62, 72 N. E. 
 626 748 
 
 Webster ads. People ex rel. Erie 
 R. R. Co., 49 A. D. 556, 63 
 Supp. 574 763, 764 
 
 Webster v. Turner, 12 Hun 264. . 600 
 
 Weeks v. Esler, 143 N. Y. 374, 38 
 N. E. 377 48 
 
 Weeks v. Love, 50 N. Y. 568 . 222, 239 
 
 Wehrenberg v. N. Y., New Haven 
 & Hartford R. R. Co., 124 A. D. 
 205, 108 Supp. 704 898 
 
 Weidinger ads. Hill, 110 A. D. 
 683, 97 Supp. 473 386 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Weil ads. Leach, 129 A. D. 688, 
 
 114 Supp. 234 133 
 
 Weinberg ads. Citizens' Bank of 
 
 Buffalo, 26 ilisc. 518, 57 Supp. 
 
 495 239, 241 
 
 Weingreen \. Michelbacher, 130 
 
 A. D. 931, 124 Supp. 41 419 
 
 Welch V. Importers' & Traders' 
 
 Xat. B'k, 122 N. Y. 177, 25 N. 
 
 E. 269 266, 323, 592 
 
 ^^■elch ads. ililbank, 74 Hun 497, 
 
 26 Supp. 705 487 
 
 Welcke v. Trageser, No. 1. 131 A. 
 
 D. 731, 116 Supp. 166 429 
 
 Wellington v. Continental Con- 
 struction & Improvement Co., 
 
 52 Hun 408, 5 Supp. 587 237 
 
 Wells ads. People ex rel. Bhum- 
 gare Co., 93 A. D. 212. 87 Supp. 
 543, aff'd 179 X. Y. 529, 71 N. 
 
 E. 1136 762 
 
 Wells ads. People ex rel. Bible 
 
 Mfg. Co., 84 A. D. 330, 82 Supp. 
 
 564 797 
 
 Wells ad.s. People ex rel. Burke, 
 184 N. Y. 275, 12 L. R. A. {X. 
 S.) 905, 77 X. E. 19 858 
 
 Wells ads. People ex rel. Farcy & 
 Oppenheim Co., 42 Misc. 423, 
 87 Supp. 84, aff'd 104 A. D. 
 629, 93 Supp. 1143 858 
 
 \A'eIls ads. People ex rel. Goetz 
 Silk Mfg. Co., 42 Misc. 86, 85 
 Supp. 533, aff'd 93 A.,D. 613, 
 87 Supp. 1144 '....836, 844 
 
 WcUs ads. Harris, 57 Misc. 172, 
 lOS Supp. 1078, aff'd 126 A. D. . 
 911, 110 Supp. 1131 94 
 
 Wells ads. People ex rel. Knick- 
 erbocker Safe Deposit Co., 181 
 ^' Y. 245. 73 N. E. 961 750 
 
 Wells ads. People ex rel. Mer- 
 chants' Real Estate Co., 110 
 A. D. 194, 97 Supp. 47 749 
 
 Wells ads. People ex rel. N. Y. 
 Edison Co., No. 3, 135 A. D. 
 644, 119 Supp. 1057, aff'd 198 
 X. Y. 607, 92 N. E. 1097 736 
 
 Wells ads. People ex rel. N. Y. 
 Edison Co., No. 6, 135 A. D. 
 r;-l7. 119 Supn. 1060 737 
 
 Wells ads. People ex rel. Mutual 
 Gas LiTht Co., 42 Misc. 606, 87 
 Pupp. 595 761 
 
 Wells ads. Pennle ex rel. Tower, 
 98 A. D. 82, 90 Supp. 313, 
 aff'd 182 X. Y. 553, 75 X. E. 
 1132 840 
 
 Wells ads. People ex rel. Tracy 
 & Oppenheim Co., 183 N. Y. 
 264, 73N. E. 24 839 
 
 48 
 
 888 
 
 Wells ads. People ex rel. Weber 
 Piano Co., 180 N. Y. 62, 72 
 X. E. 626 : 
 
 Wells Co. ads. Goldsmith, 86 Hun 
 4S9, 33 Supp. 727 S^il 
 
 Wells-Fargo- Express Co. ads. 
 Richards, 156 A. D. 268, 141 
 Supp. 306, aff'd 216 N. Y. 645, 
 110 N. E. 1048 123 
 
 Welsbach Light Co. ads. Young 
 & Fletcher Co., 55 A. D. 16, 66 
 Supp. 1024 436 
 
 Welsbach Co. v. Norwich Gas & 
 Electric Co., 96 A. D. 52, 89 
 Supp. 284, aff'd 180 X. Y. 533, 
 72 N. E. 1152 
 
 Welsh V. Importers' & Traders' 
 Xat. B'k, 122 N. Y. 177, 25 
 N. E. 269 267 
 
 Wemple ads. People ex rel. 
 American Contracting & 
 Dredging Co., 129 X. Y. 558, 
 29 N. E. 812 719 
 
 Wemple ads. People ex rel. Brush 
 Electric Mfg. Co., 129 X^. V. 
 543, 14 L. E. A. 708, 29 N. E. 
 808 699, 
 
 Wemple ads. Edison Electric Co., 
 69 Hun 367. 23 Supp. 661 
 
 Wemple ads. People ex rel. Edi- 
 son Electric Illuminating Co., 
 129 X". Y. 664, 29 N. E. 81ii. . . 
 
 Wemple ads. People ex rel. Edi- 
 son Electric Illuminating Co., 
 133 N. Y. 617, 30 N. E. 1002.. 
 
 Wemple ads. People ex rel. Edi- 
 son Electric Light Co., 148 N. 
 Y. 690, 43 X. E. 176 718 
 
 Wemple ads. People ex rel. Penn- 
 sylvania R. E. Co., 138 N. Y. 1, 
 19 L.R.A. 694, 33 N. E. 720. . 
 710, 713, 
 
 Wemple ads. People ex rel. 
 Piatt, 117 N. Y. 136, 6 L. R. 
 A. 303, 22 X. E. 1046 710, 713 
 
 Wemple ads. People ex rel. Roeb- 
 ling's Sons' Co., 138 N. Y. 582, 
 34 N. E. 386 846 
 
 Wemple ads. People ex rel. Seth 
 Thomas Clock Co., 133 N. Y. 
 323, 31 N. E. 238 846, 
 
 Wemple ads. People ex rel. Singer 
 Mfg. Co., 150 X^. Y. 46, 44 N. E. 
 787 709, 724, 
 
 Wemple ads. People ex rel. South- 
 ern Cotton Oil Co., 131 N. Y. 
 64. 29 N. E. 1002 862, 863 
 
 Wendell ads. Attleboro Nat. B'k, 
 64 Hun 208, 19 Supp. 45 526 
 
 Wendell ads. Marshall, 45 A. D. 
 120, 61 Supp. 13 539 
 
 78S 
 734 
 
 696 
 
 34 
 
 692 
 863 
 
 861 
 
 866 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Wendell ads. Eogers, 54 Hun .540, 
 
 7 Supp. 781 661 
 
 Wendler Machine Co., Matter of, 
 
 2 A. p. 16, 37 Supp. 444 285 
 
 Wentringham v. Rosenthal, 25 
 
 Hun 580 89 
 
 Wesley v. Beakes Bairy Co., 72 
 
 Misc. 260, 131 Supp. 212 436 
 
 Wesley ads. Herries, 13 Hun 492. 246 
 Wesp V. Muckle, 136 A. D. 241, 
 120 Supp. 976, aff'd 201 N. Y. 
 
 527, 94 N. E. 1100 341 
 
 Wessell Metal Co. ads. National 
 Broadway Bank, 59 Hun 470, 
 
 13 Supp. 744 326 
 
 Wesson V. Chapman, 77 Hun 144, 
 
 28 Supp. 431 672 
 
 West V. Grosvenor, 102 A. D. 266, 
 
 92 Supp. 429 854 
 
 West V. Guaranty Trust Co., 162 
 
 A. D. 301, 147 Supp. 421. .141, 644 
 West Bradley & Cary Mfg. Co. 
 
 ads. Driscoll, 59 N. Y. 96 46 
 
 West-Side El. E. Co. ads. Harvey, 
 
 13 Hun 392 358 
 
 Westbrook ads. Rossie Iron 
 Works, 59 Hun 345, 13 Supp. 
 
 141 ■ 534 
 
 Westchester Bronxville Realty Co. 
 ads. Smith, 78 Misc. 751, 137 
 Supp. 690, aff'd 156 A. D. 920, 
 
 141 Supp. 1147 173 
 
 Westchester Co. Water Works 
 ads. Watertown, 19 Misc. 685. 
 
 44 Supp. 1101 539 
 
 Westchester Fire Ins. Co. v. Syra- 
 cuse, Binghampton & N. Y. R. 
 R. Co., 97 Misc. 471, 161 Supp. 
 
 759 193 
 
 Westchester Gas-Light Co. ads. 
 
 Astor, 33 Hun 333 260 
 
 Westchester Mtge. Co. v. Mcln- 
 tyre. Inc., 171 A. D. 518, '157 
 
 Supp. 725 370 
 
 Westchester Mtge. Co. v. Mcln- 
 tyre. Inc., 174 A D. 446, 161 
 
 Supp. 390 372 
 
 Westchester Traction Co. ads. 
 People, 123 A. D. 689, 108 
 
 Snpp. 59 555 
 
 Westchester Trust Co.. Matter of, 
 
 186 N. Y. 215, 78 N. E. 875. . 315 
 Western Electric Co., People ex 
 rel. V. Campbell, 80 Hun 466, 
 30 Supp. 472, aff'd 145 N. Y. 
 
 587, 40 N. E. 239 696, 700, 807 
 
 Western Pacific Ry. Co. ads. 
 Smith, 138 A. t). 244, 122 
 
 Supp. 888 905 
 
 Western Pacific Ry. Co. ads. 
 Smith, 154 A. t). 130, 139 
 
 Supp. 129, app. dism'd 212 N. 
 
 Y. 596, 106 N. E. 1042 899 
 
 Western Transiporlation Co. v. 
 
 Scheu, 19 N. Y. 408 756 
 
 Western Union Telegraph Co., 
 People ex rel. v. Roberts, 30 
 A. D. 78, 51 Supp. 747, aff'd 
 156 N. Y. 693, 51 N. E. 1093. . 711 
 Western Union Telegraph Co. 
 ads. United States Telegraph 
 
 Co., 56 Barb. 46 452 
 
 Western Union Telegraph Co. 
 ads. Williams, 93 N. Y. 162. . . 74 
 107, 159, 160, 162, 163, 501 
 West Side & Yonkers Ry. Co., 
 People ex rel. v. Commissioners 
 
 of Taxes, 31 Hun 32 752 
 
 West Shore R. R. Co., People ex 
 rel. V. Johnson, 29 A. D. , 75, 
 
 51 Supp. 388 763 
 
 Weston V. Citizens' Nat. B'k, 64 
 
 A. D. 145, 71 Supp. 827 906 
 
 Weston V. Goldstein, 26 Misc. 
 171, 56 Supp. 755, aff'd 39 A. 
 
 D. 661, 57 Supp. 311 125 
 
 Whalen ads. Barney, 56 Misc. 
 
 278, 106 Supp. 434 600 
 
 Whalen ads. People ex rel. Bar- 
 ney, 119 A. D. 749, 104 Supp. 
 555, aff'd 189 N. Y. 560, 82 
 
 . N. E. 1131 20, 25 
 
 Wharncliffe ads. Steiger Trunk & 
 Bag Co., 62 Misc. 14, 114 Supp. 
 
 462 890 
 
 Wheaton ads. Barnes, 80 Hun 8, 
 
 29 Supp. 830 '. .. 210 
 
 Wheaton ads. Strong, 38 Barb. 
 
 616 246, 251, 253 
 
 Wheeler v. Miller, 90 N. Y. 353. . 214 
 216, 221, 234 
 Wheeler ads. Parish, 22 N. Y. 
 
 494 460 
 
 Wheeler ads. Union Nat. B'k, 60 
 
 N. Y. 612 469 
 
 Wheeler ads. Wheeler Syndicate, 
 Inc., 99 Misc. 291, 163 Supp. 
 
 817 36 
 
 \Mieeler Syndicate, Inc., v. 
 Wheeler, 99 Misc. 291, 163 
 
 Supp. 817 30 
 
 Wheelock ads. Coburn, 34 N. Y. 
 
 440 208 
 
 Wheelwright ads. Lane, 69 Hun 
 180, 23 Supp, 576, aff'd 143 
 
 N. Y. 034, 37 N. E. 826 825 
 
 Whitaker v. Kilby, 55 Misc. 337, 
 106 Supp. 511.. 327, 331, 500, 501 
 
 824 
 Whitalcer v. Masterton, 106 N. 
 Y. 277, 12 N. E. 604 513 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Whitcomb ads. Bulkley, 121 X. 
 
 Y. 107, 24 X. E. 13 235 
 
 White ads. Childs, 158 A. D. 1, 
 
 142 Supp. 732 443 
 
 White ads. Currie, 45 N. Y. S22. 166 
 White ads. Flynn, 122 A. D. 7S(i. 
 
 107 Supp. 860 923 
 
 White ads. Irish Paper Corpora- 
 tion, 91 Misc. 261, 134 Supp. 
 
 778 . 216 
 
 White ads. Miller, 50 X. Y. 137. 391 
 White V. Price, 39 Hun 394, aff'd 
 
 108 N. Y. 661, 15 X. E. 427. . . 129 
 Wliite ads. Rickert, 54 Misc, 114 
 
 105 Supp. 653 358 
 
 White V. Robmson, 145 .\. D. 
 
 751, 130 Supp. 388 SS 
 
 White ads. Savles, 19 A. D. 590, 
 
 46 Supp. 385, aff'd 154 N. Y. 
 
 763 416 
 
 White V. Sheppard, 41 A. D. 113, 
 
 58 Supp. 563 377 
 
 White V. WTiite, 160 A. D. 709, 
 
 145 Supp. 743 
 
 White V. Wood, 129 X. Y. .^27 
 
 29 N. E. 835 619 
 
 White, Corbin & Co. v. Jones. 
 
 167 N. Y. 158, 60 X. E. 422. . 224 
 White Furnace Co. v. Miller 
 
 Transfer Co., 131 A. D. 55!), 
 
 115 Supp. 625 S45 
 
 White Lead Co. ads. Banking 
 
 Assn., 35 X. Y. 505 375 
 
 White Sulphur Springs, Inc., 
 
 ads. Krakowski, 174 A. D. 440. 
 
 161 Supp. 193 901 
 
 White, Corbin & Co. v. Jones, 79 
 
 A. D. 373, 79 Supp. 583 754 
 
 Whitehead v. O'Sullivan, 12 Misc. 
 
 577, 33 Supp. 1098 316, 672 
 
 Wliiten ads. Greenpoint Sugar 
 
 Co., 69 N. Y. 32S. . . .256, 257, 264 
 265, 267 
 Whitford v. Laidler, 94 X. Y. 
 
 145 437 
 
 W hitman v. Holmes Publishing 
 
 Co.; 33 Misc. 47, 68 Supp. 167. 410 
 Whitman Co. ads. Bruen, 106 A. 
 
 D. 248, 94 Supp. 304 545 
 
 Whitmore ads. Gallogly, 172 A. 
 
 D. 381, 158 Supp. 830 94, 256 
 
 tt'hitmore ads. National Park 
 
 Bank, 40 Hun 499, dism'd 104 
 
 X. Y. 297, 10 X. E. 524 473 
 
 Whitney ads. Blum, 185 X. Y. 
 
 232, 77 N. E. 1159 495 
 
 Whitney v. N. Y. & Atlantic R. 
 
 R. Co., 32 Hun 164 631 
 
 \\Tiitnev v. Cammann, 137 X. Y. 
 
 .342, 33 X, E. 305 387 
 
 Whitney v. Pugh, 58 A. D. 316, 
 
 68 Supp. 992 344 
 
 \\Tiitnev v. Wilcox, 58 A. D. 57, 
 68 Supp. 667 
 
 Whitney Arms Co. v. Barlow, 63 
 N. Y. 62 339, 338, 459, 460, 
 
 Whitney Arms Co. v. Barlow, 08 
 
 X. Y. 34 
 
 \^Tiiton ads. Dean, IG Hun 203. . 
 Whittingham v. Darrin, 45 Jlisc. 
 
 478, 92 Supp. 752 
 
 Whittlesey v. Delanev, 73 X. Y. 
 
 571 " 339, 
 
 Whittlesey \. Frantz, 74 X". Y. 
 
 456 92, 
 
 Wicht ads. Harvard Co., 99 A. D. 
 
 507, 91 Supp. 48 
 
 Wicks ^^. Monihan, 130 X. Y. 232, 
 
 14 L. R. A. 243, 29 X. E. 139. 
 Wiebusch & H. Co.. People ex 
 
 rel. V. Roberts, 154 X. Y. 101, 
 
 47 X. E. 980 
 
 Wiecherts ads. Cochran, 119 X. Y. 
 
 399, 7 L. R. A. 553, 23 X. E. 
 
 803 
 
 Wiener Co. ads. Richards, 207 
 
 X. Y. 59, 100 X. E. 592 
 
 Wight ads. Hazard, 201 X. Y. 
 
 399, 94 X. E. 855 
 
 Wightman ads. General Electric 
 
 Co.. 3 A. D. 118, 39 Supp. 420. 
 
 Wikklow ads. Clark, 75 Hun 290, 
 27 Supp. 43 
 
 Wilcox, Matter of, 123 A. D. 86, 
 108 Supp. 483 
 
 Wilcox ads. Burr, 22 X. Y. 551. . 
 88, 123, 131, 
 
 Wilcox \. X'ational Shoe & 
 Leather Bank, 67 A. D. 466, 73 
 Supp. 900 
 
 Wilcox ads. Whitney, 58 A. D. 
 57, 68 Supp. 667 
 
 Wilderming v. Postal Telegraph- 
 Cable Co., 118 A. D. 685, 103 
 Supp. 594, aff'd. 192 X. Y. 580, 
 85 X. E. 1109 
 
 Wildes V. Robinson, 50 A. D. 192, 
 63 Supp. 811 
 
 Wile & Brickner Co. v. Rochester 
 & Kettle Falls Land Co., 4 
 Misc. 570, 25 Supp. 794 
 
 Wiles V. Suydam, 64 X. Y. 173. . 
 
 242, 
 
 Wilkie V. Rochester & State Line 
 Ry. Co., 12 Hun 242 
 
 Willard ads. Bystrom, 175 A. D. 
 433, 162 Supp. 100, dism'd 220 
 X. Y. 765, 116 X. E. 1038. ... 
 
 Willard ads. Holmes, 125 N. Y. 
 75, II L. R. A. 170, 25 N. E. 
 1083 458, 
 
 682 
 
 462 
 761 
 
 390 
 252 
 
 189 
 
 684 
 
 633 
 
 886 
 
 450 
 
 731 
 
 209 
 
 139 
 
 74 
 
 76 
 79 
 
 543 
 
 902 
 
 67 
 
 173 
 
 634 
 
 682 
 
 521 
 133 
 
 317 
 223 
 243 
 
 362 
 
 149 
 
 460 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Willard v. Holmes, Booth & Hay- 
 dens, 142 N. Y. 492, 37 N. E. 
 480 
 
 Willett ads. Dempsey, 16 Hun 
 264 
 
 William Wicke Co. v. Kaldenberg 
 Mfg. Co., 21 Misc. 79, 46 Supp. 
 937 
 
 Williams v. Billington, 150 A. D. 
 439, 135 Supp. 32, app. dism'd 
 211 N. Y. 527, 105 N. E. 823.. 
 
 Williams ads. People ex rel. Fifth 
 Ave. Bldg. Co., 198 N. Y. 238, 
 91 N. E. 638 716, 720, 
 
 Williams ads. Dwight, 25 Misc. 
 667, 55 Supp. 201 336, 
 
 Williams ads. People ex rel. In- 
 terborough Rapid Transit Co., 
 200 N". Y. 93, 93 N. E. 505 ... . 
 
 Williams v. McCleve, 168 A. D. 
 192, 154 oupp. 38 100, 
 
 Williams ads. N. Y. Terra Cotta 
 Co., 102 A. D. 1, 92 Supp. 808, 
 aff'd 184 N. Y. 579, 77 N. E. 
 1192 837, 
 
 Williams v. Taylor, 120 N. Y. 
 244, 24 N. E. 288 
 
 Williams' ads. People ex rel. Wac- 
 lark Realty Co., 198 N. Y. 54, 
 28 L. R. A. (N. S.) 371, 91 
 N. E. 266 
 
 Williams v. Western Union Tele- 
 graph Co., 93 N. Y. 162 74, 
 
 159 160, 161, 182, 163, 
 
 Williams Co., People ex rel. v. 
 Sohmer, 151 A. D. 764, 137 
 Supp. 23 , 
 
 Williamson v. Wadsworth, 49 
 Barb. 294 
 
 Wills V. Venus Silk Glove Mfg. 
 Co., Inc., 170 A. D. 352, 156 
 Supp. 115 • 
 
 Wilson V. ^olian Co., 64 A. D. 
 337, 73 Supp. 150, aflf'd 170 
 N. Y. 618, 63 N. E. 1123 
 
 Wilson V. American Ice Co., 206 
 Fed. 736 *. . . . 
 
 Wilson V. Brentwood Hotel Co., 
 16 Misc. 48, 37 Supp. 655 
 
 Wilson ads. Davis, 150 A. D. 704, 
 135 Supp. 825 
 
 Wilson v. Kings Co. El. R. R. 
 Co., 114 N. Y. 487, 21 N. E. 
 
 1015 
 
 Wilson ads. People ex rel. Long 
 Dock Mills & Elevator, 121 A. 
 D. 376, 106 Supp. 1, aff'd 193 
 
 N. Y. 671. 87 N. E. 1125 
 
 Wilson V. Metropolitan El. Ey. 
 Co., 120 N. Y. 145, 24 N. E. 
 384 371, 
 
 511 
 252 
 
 524 
 
 291 
 
 731 
 356 
 
 715 
 
 163 
 
 882 
 
 82 
 
 717 
 
 107 
 501 
 
 866 
 249 
 
 479 
 
 612 
 
 161 
 
 538 
 425 
 
 364 
 
 507 
 
 Wilson v. Meyer, 154 A. D. 300, 
 
 138 Supp. 1048 150 
 
 Wilson v. Puritan Steamship ' 
 
 Co., Ltd., 58 Misc. 317, 110 
 
 Supp. 914 925 
 
 Wilmersdoerffer v. Lake Mahopac 
 
 Improvement Co., 18 Hun 387. 588 
 Winchester, People ex rel. v. 
 
 Coleman, 133 N. Y. 279, 16 
 
 L.R.A. 183, 31 N. E. 96. ... 465 
 
 738 
 Wing V. Smith, 173 A. D. 57, 159 
 
 Supp. 454 814 
 
 Winslow V. Staten Island Rapid 
 
 Transit R. R. Co., 51 Hun 298, 
 
 4 Supp. 169 n05 
 
 Winters v. King, 51 A. D. 80, 64 
 
 Supp. 496 085 
 
 Wisner v. Osteyee Bros., 23 
 
 misc. 123, 50 Supp. 689 270 
 
 Witherbee v. Bowles, 201 N. Y. 
 
 427, 95 N. E. 27 108,203, 206 
 
 Witherbee v. Witherbee, 55 A. D. 
 
 151, 66 Supp. 1039 681 
 
 Wittemenn Co. ads. Eicke, 157 A. 
 
 D. 412, 412 Supp. 190.... 35.5, 357 
 Wocker ads. Loughlin, 152 A. D. 
 
 466, 137 Supp. 257 364 
 
 Woerishoffer v. No. River Con- 
 struction Co., 99 N. Y. 398, 2 
 
 N. E. 47 629 
 
 Wolf V. Armlmes Copper Mine 
 
 Co., 6 Misc. 562, 27 Supp. 042. 551 
 Wolf ads. People ex rel. Long 
 
 Island R. R. Co., 152 A. D. 173, 
 
 136 Supp. 465 794 
 
 Wolski V. Booth & Flynn, Ltd., 
 
 93 Misc. 651, 157 Supp. 294.. 908 
 Wonderland Amusement Co. ads. 
 
 Latimer, 161 A. D. 554, 146 
 
 Supp. 779 368 
 
 Wood ads. Butts, 38 Barb. 181, 
 
 aff'd 37 N. Y. 317 327, 410 
 
 Wood ads. Farnsworth, 91 N. Y. 
 
 308 237 
 
 Wood ads. Holsinger, Misc. 
 
 (1918), N. Y. L. J., Mch. 
 
 23, p. 2008 214, 221 
 
 Wood V. Lary, 47 Hun 550, dism'd 
 
 124 N. Y. 83, 26 N. E. 338.159, 169 
 Wood V. Mott Iron Work, 114 
 
 A. D. 108, 99 Supp. 677 543 
 
 Wood V. Seliek & Ball, 114 A. D. 
 
 743, 100 Supp. 119, aff'd 190 
 
 N". Y. 217, 83 N. E. 21.. 878, 887 
 Wood V. Simpson, No. 1, 149 A. 
 
 D. 471, 133 Supp. 1069 377 
 
 Wood ads. White, 129 N. Y. 527, 
 
 29 N. E. 835 619 
 
 Wood & Parker Lithographing 
 
 Co. ads. Merriam, 19 A. D. 
 
 329, 46 Supp. 484 482 
 
TABLE OF CASES 
 
 References are to pages. 
 
 Woodbf-idge Heights Construc- 
 tion Co. V. Gippert, 92 Misc. 
 204, 155 Supp. 363 
 
 Woodbury ads. People ex rel. 
 American District Telegraph 
 Co., 112 Supp. 165 
 
 Woodbury ads. People ex rel. 
 Consolidated Water Co., 67 
 Misc. 503, 122 Supp. 904 
 
 Woodbury Dermatogical Insti- 
 tute ads. People, 192 N. Y. 
 454, 85 N. E. 697 
 
 Woodbury ads. People ex rel. 
 The Lehigh Valley E. E. Co., 
 199 N. Y. 167, 92 X. E. 217. . 
 
 Woodbury ads. People ex rel. 
 Manhattan Ey. Co., 203 N. Y. 
 231, 96 N. E. 420 
 
 Woodbury ads. People ex rel. 
 New England Telegraph Co., 
 63 Misc. 1, 116 Supp. 209 
 
 Woodbury ads. People ex rel. 
 X. Y. Central & Hudson E. E. 
 E. Co., 167 A. D.- 535, 153 
 Supp. 541, aff'd 216 N. Y. 651, 
 110 N. E. 1047 
 
 Woodbury ads. People ex rel. 
 N. Y. C. & H. E. R. E. Co., 
 167 A. D. 428, 153 Supp. 537, 
 aflf'd 218 N. Y. 635, 112 N. E. 
 1070 769, 
 
 Woodbury ads. People ex rel. N. 
 
 Y. Central & H. E. E. E. Co., 
 
 203 N. Y. 167, 96 N. E. 431 
 
 769, 
 
 Woodbury ads. People ex rel. N. 
 Y. Central, etc., E. E. Co., 206 
 X. Y. 304, 99 N. E. 545 
 
 Woodbury ads. People ex rel. 
 -New York Central & Hudson 
 R. E. R. Co., 208 N. Y. 421, 
 102 X. E. 665, 566 
 
 Woodbury ads. People ex rel. N. 
 Y. Central & H. R. R. R. Co., 
 208 N. Y. 421, 102 N^. E. 565, 
 566 
 
 Woodbury ads. People ex rel. 
 Queens Borough Gas & Electric 
 Co., 67 Misc. 481, 123 Supp. 
 592 
 
 Woodbury ads. People ex rel. 
 
 Queens Co. Water Co., 67 Misc. 
 
 490, 123 Supp. 599, afif'd 143 A. 
 
 D. 618, 128 Supp. 522.... 726, 
 
 780, 
 
 Woodhaven Bank v. Brooklyn 
 Hills Improvement Co., 69 A. 
 D. 489, 74 Supp. 1023 
 
 Woodin ads. Jones, 164 A. D. 
 79, 149 Supp. 377 
 
 838 
 774 
 800 
 519 
 794 
 781 
 800 
 
 770 
 
 776 
 
 770 
 771 
 
 452 
 
 772 
 
 766 
 
 778 
 
 782 
 
 62 
 932 
 
 Woodruff V. Jewett, 115 N. Y. 
 
 267, 22 N. E. 156 
 
 Woodward ads. Gadsden, 103 N. 
 
 Y. 242, 8 N. E. 653 
 
 Woodward ads. Hollingshead, 107 
 
 N. Y. 96, 13 X. E. 621 231 
 
 Woodward Lumber Co. v. General 
 
 Supply & Construction Co., 
 
 60 Misc. 367, 113 Supp. 628.. 
 Woods Motor Vehicle Co. v. 
 
 Brady, 181 N. Y. 145, 73 X. E. 
 
 674 
 
 Woolsey ads. Dodge, 18 How. 
 
 (U. S.) 331 
 
 Workum v. Caldwell, 27 Misc. 
 
 72, 58 Supp. 175 470 
 
 Wormser v. Metropolitan St. 
 
 Ry. Co., 184 N. Y. 83, 76 X. E. 
 
 1036 
 
 Wortendyke ads. Phillips, 31 
 
 Hun 192 
 
 Worthington ads. Higgins, 90 
 
 Hun 431, 35 Supp. 815 484 
 
 Worthington v. Pfister Bookbind- 
 ing Co., 3 Misc. 418, 23 Supp. 
 
 295 
 
 Worthington v. \Vorthington, 
 
 100 A. D, 332, 91 Supp. 443. . 
 Worthington Co. ads. Waverley 
 
 Co., 41 Misc. 447, 24 Supp. 
 
 331 
 
 Woven Tape Skirt Co., Matter 
 
 of, 8 Hun 508 594 
 
 Woven Tape Skirt Co., In the 
 
 Matter of, 85 N. Y. 506 664 
 
 Wright V. Bank of the Metrop- 
 olis, 110 X. Y. 237, 1 L. E. A. 
 
 289, 18 X. E. 79 158 
 
 Wright V. Booth, 69 X. Y. 620. . 388 
 Wright V. Gansevoort B'k, 118 
 
 A. D. 281, 103 Supp. 548... . 
 Wright V. Gansevoort B'k, 118 
 
 A. D. 281, 103 Supp. '548 
 
 Wright, Peters & Co., Matter of, 
 
 73 A. D. 75, 76 Supp. 775 ... . 
 Wrightsville Hardware Co. v. 
 
 Assets Realization Co., 159 A. 
 
 D. 849,* 144 Supp. 991 873 
 
 Wyllis Co. V. Nixon, 165 A. D. 
 
 373, 150 Supp. 944 157 
 
 Wynn, People ex rel. v. Grifen- 
 
 hagen, 167 A. D. 572, 152 
 
 Supp. 679 922 
 
 Wyoming County Co-operative 
 
 Fire Ins. Co. ads. Manthey, 76 
 
 A. D. 579, 78 Supp. 596 56 
 
 Yates ads. Tracy, 18 Barb. 152. 215 
 Yates County Nat. B'k ads. 
 
 Mutual Life Ins. Co., 35 A. D. 
 
 218, 54 Supp. 743.... 47, 363, 503 
 
 676 
 
 388 
 
 889 
 
 SO 
 198 
 
 408 
 
 379 
 
 826 
 
 1S8 
 
 634 
 
 483 
 
 476 
 
 767 
 
TABLE OF CASES 
 
 Eeferences are to pages. 
 
 Yellow Pine Co., People ex rel. 
 V. Barker, 23 A. D. 524, 48 
 Supp. 553, afif'd 155 N. Y. 665, 
 49 N. E. 1103 
 
 Yonkers Fuel Gas Co. ads. Lord, 
 99 N. Y. 547, 2 N. E. 909. .258, 
 
 Yonkers Gazette Co. v. Taylor, 
 
 30 a: D. 334, 51 Supp. 969 
 
 25, SO, 91, 
 
 York V. Searles, 97 A. D. 331, 
 90 Supp. 37, affd 189 N. Y. 
 573, 82 N. E. 1134 
 
 York State Telephone Co. ads. 
 Eastham, 86 A. D. 562, 8b 
 Supp. 1019 
 
 YorkviUe Bank v. Zeltner Brew- 
 ing Co., 80 A. D. 578, 80 Supp. 
 839, app. dism'd 178 N. Y. 572, 
 70 N. E. 1111 378, 
 
 Young ads. Bostwick, 118 A. D. 
 490, 103 Supp. 607, aff'd 194 
 X. Y. 516, 87 N. E. 115.. 101, 
 
 Young V. Drake, 8 Hun 61 
 
 Young V. Equitable Life Ass. 
 Soc., 49 Misc. 347, 99 Supp. 
 446, aff'd 112 A. D. 760, 9 
 Supp. 1052 414, 418, 
 
 Young ads. Hutchinson, 80 A. D. 
 246, 80 Supp. 259 
 
 Young ads. Hutchinson, 93 A. D. 
 407, 87 Supp. 678 
 
 Young V. U. S. Mtge. & Trust Co., 
 214 N. Y. 279, 108 N. E. 418. 
 
 Young & Fletcher Co. v. Wels- 
 bach Light Co., 55 A. D. 16, 
 66 Supp. 1024 
 
 857 
 265 
 
 93 
 
 153 
 
 532 
 
 680 
 
 216 
 409 
 
 420 
 400 
 150 
 332 
 
 436 
 
 Youngman v. Fidelity & Deposit 
 Co., 87 Misc. 456, 150 Supp. 
 788, aff'd 153 Supp. 1151.... 921 
 
 Youngs V. Ferry, 42 A. D. 247, 
 59 Supp. 19 541 
 
 Yuengling Brewing Co. ads. 
 Fernschild, 15 A. D. 29, 44 
 Sup. 106, aff'd 154 N. Y. 667, 
 49 N. E. 151 282 
 
 Yuengling Brewing Co., Matter 
 of, 24 A. D. 223, 49 Supp. 12 . . 
 
 Yuengling Brewing Co., Matter 
 of, 24 A. D. 223, 49 Supp. 12. . 
 
 Yuengling Brewing Co. ads. 
 Fernschild, 154 N. Y. 667, 49 
 N. E. 151 
 
 539 
 
 539 
 
 619 
 
 Zeikus V. Florida East Coast 
 Ry. Co., 144 A. D. 91, 128 
 Supp. 933 896 
 
 Zeltner v. Zeltner Brewing Co., 
 174 N. Y. 247, 66 N. E. 810. . 353 
 
 Zeltner Brewing • Co. ads. York- 
 viUe B'k, 80 A. D. 578, 80 Supp. 
 839, app. dism'd 178 N. Y. 572, 
 70 X. E. 1111 378, 680 
 
 Zeltner Brewing Co. ads. Zeltner, 
 174 N. Y. 247, 66 N. E. 810 ... . 353 
 
 Ziegler v. Hoagland, 52 Hun 385, 
 5 Supp. 305 ... , 356 
 
 Zimmerman ads. Durjea, 121 A. 
 D. 560, 106 Supp. 237 195 
 
 Zimmermann v. Timmermann, 
 193 N. Y. 486, 86 N. E. 540 
 
 268, 273 
 
TABLE OF STATUTES 
 
 UNITED STATES STATUTES 
 
 Anti-Trust and Monopoly Acts. 
 
 2U Stat. L., 209, §§ 1-8, both in- 
 clusive 496, 497 
 
 28 U. S. Stat. L., 570, §§ 70 and 
 74 498 
 
 28 U. S. Stat. L. 570, § 75 498 
 
 37 Stat. L., 667, § 76 498 
 
 28 U. S. Stat. L.. .-.70, § 77 498 
 
 37 U. S. Stat. L., GOT, § 73 4!I8 
 
 War Finance Corporation Act, 
 
 S 203 97 
 
 NEW YORK STATE STATUTES 
 
 New York Constitution of 1894. 
 
 X. Y. Const, of 1894, art. 3, § 16 
 X. Y. Const, of 1894, art. 3, § 18 
 
 X. Y. Const, of 1894, art. 8, § 1 
 
 17, 
 X. Y. Const, of 1894, art. 8, § 2 
 X. Y. Const, of 1894, art. 8, § 3 
 
 15 
 
 15 
 
 735 
 
 15 
 
 26 
 
 2 
 
 9 
 
 15, 524 
 
 Greater New York Charter. 
 
 Greater X. Y. Charter, § 893 856 
 
 Greater N. Y. Charter, § 906 786 
 
 788, 789, 790, 793 
 
 Grt-atiT X. Y. Charter, § 021 856 
 
 Code of Civil Procedure. 
 
 C. C. P., § 73 516 
 
 C. C. P., § 74 516 
 
 C. C. P., § 7-).. 516 
 
 C. C. P., § 76 516 
 
 C. C. P., S 77 516 
 
 C. C. P., § 315 533 
 
 C. C. P., § 316 533 
 
 C. C. p., § 341 533, 535 
 
 C. C. P., § 391 525 
 
 C. C. P., § 399 536 
 
 C. ('. P., § 400 536 
 
 C. C. P., § 431 435 
 
 C. C. P., § 431, subd. 3 435 
 
 C. C. P., § 432 ..899, 904 
 
 907, 909, 910 
 
 C. C. P., § 433 899, 904 
 
 907, 909, 910' 
 
 C. C. P., § 435 .536 
 
 C. C. P., S 436 536 
 
 C. C. P., § 438 .537, 900 
 
 C. C. P., § 439 900 
 
 C. C. P., § 440 ....537, 900 
 
 C. C. p., § 52.-) 532, 884, 918 
 
 C. C. P., § 549, subd. 2 402 
 
 C. C. P., § 610 537 
 
 C. C. P., § 624.. 525 
 
 C. C. P.. § U.i.-. 920 
 
 C. C. P., § 646 026 
 
 C. C. P., § 648 .. 52.) 
 
 C. C. P., § 649 525 
 
 C. C. P., § 707 926 
 
 C. C. P., § 708.. 472 
 
 C. C. P., § 791, subd. 8 539 
 
 C. C. P., § 839 7, .546 
 
 C. C. P., § 869 545 
 
 C. C. P., § 872, subd. 7 541 
 
 C. C. P., § 906 472 
 
 C. C. P., § 929 871 
 
 C. C. P., § 930 . 871 
 
 C. C. P., § 931 871 
 
 C. C. P., § 931-a 899 
 
 C. C. P., § 931-a 899 
 
 C. C. P., § 1012 583, 022. 667 
 
 C. C. P., § 1216 920 
 
 C. C. P., § 1217 920 
 
 C. C. P., § 1370 920 
 
 C. C. P., § 1650 524, 680 
 
 C. C. P., § 1775 528, 884, 917 
 
 C. C. P., § 1776 528, 884, 918 
 
 C. C. P., § 1777 .-.28, 884, 918 
 
 C. C. P., § 1778 .539, 919 
 
 C. C. P., § W79 877 
 
 C. C. P., § 1780 872, 895 
 
 C. C. P., § 1879 547 
 
 C. C. P., § 1902 .525 
 
 C. C. P., § 1948 7, 311, 351 
 
 555, .557, 897 
 
 C. C. P., § 1949 311,351, 352 
 
 C. C. P., § 1950 7, 311, 352, 897 
 
 C. C. P., § 1951... 311, 352 
 
 C. C. P., § 1952 311, 352 
 
 C. C. P., § 1953 311, 352 
 
 C. C. P., § 1954 311, 352 
 
 C. C. P., § 1955 311, 3.52, 562 
 
 563, 897 
 
 C. C. P., § 1956...... 7, 311, 352, 897 
 
 C. C. P., § 1984 897 
 
 C. C. P., § 1986 402 
 
 C. C. P., § 2070 525 
 
 C. C. P., § 2071 525, 805 
 
 C. C. P., § 2127 803 
 
 C. C. P., § 2128 807 
 
TABLE or STATUTES 
 
 C. C. P., § 2129 804 
 
 C. C. P., § 2130 805 
 
 C. C. P., § 2131 804 
 
 C. C. P., § 2132 805 
 
 C. C. P., § 2133 805 
 
 C. C. P., § 2134 795, 806 
 
 C. C. P., § 2135 809 
 
 C. C. P., § 2136 809 
 
 C. C. P., § 2137 809 
 
 C. C. P., § 2138 806 
 
 C. C. P., § 2139 807, 809 
 
 C. C. P., § 2140 807 
 
 C. C. P., § 2141 808 
 
 C. C. P., § 2142 808 
 
 C. C. P., § 2143 808 
 
 C. C. P., § 2144 . 808 
 
 C. C. P., § 2145 808 
 
 C. C. P., § 2148-a 809 
 
 C. C. P., § 2240 537 
 
 C. C. p., § 2284 512 
 
 C. C. P., § 2389 916 
 
 C. C. P., § 2441 463 
 
 C. C. P., § 2444 463 
 
 C. C. P., S -440 464 
 
 C. C. P., § 24.J2 464 
 
 C. C. P., § :i459 464 
 
 C. C. P., § 2517 871 
 
 C. C. P., § 2.525 537, 871 
 
 C. C. P., § 2526 . 871 
 
 C. C. P., § 2588 9 
 
 C. C. P., § 2603 9 
 
 C. C. P., § 2865 533 
 
 C. C. P., § 2879 538 
 
 C. C. P., § 3203 534 
 
 C. C. P., § 3242 541 
 
 C. C. P., § 3268 885 
 
 C. C. P., § 3270 885 
 
 C. C. P., § 3304 ..32, 33 
 
 C. C. P., § 3305-a 31 
 
 C. C. P., § 3320 663 
 
 C. C. P., § 3343, subd. 18 9, 822 
 
 C. C. P., § 3358 9 
 
 C. C. P., § 3358 525 
 
 Session Laws. 
 
 L. 1918, ch. 240 330, 491 
 
 Business Corporations Law. 
 
 Bus. Corp. L., § 2 14, 20, 22, 23 
 
 24, 25, 75, 80. 315, 517, 550, 552 
 
 Bus. Corp. L., § 2-a 14, 20 
 
 Bus. Corp; L., § 3 462 
 
 Bus. Corp. L., § 4 614 
 
 Bus. Corp. L., § 5 96, 397 
 
 Bus. Corp. L., § 6 207 
 
 Bus. Corp. L., § 7 606 
 
 Bus. Corp. L., § 9 609 
 
 Bus. Corp. L., § 8 607, 608, 609 
 
 Bus. Corp. L., i 10 610 
 
 Bus. Corp. L., § 11 610 
 
 Bus. Corp. L., § 19 22 
 
 Bus. Corp. L., § 23 23 
 
 Bus. Corp. L., § 00 23 
 
 Executive Law. 
 
 Executive L., § 26 31, 32, 108, 288 
 
 604, 609, 652, 828 
 
 General Business Law. 
 
 Gen. Bus. L., § 341 ... 496 
 
 Gen. Bus. L., § 343 496 
 
 Gen. Bus. L., § 345 496 
 
 Gen. Bus. L., § 374 468 
 
 General Construction Law. 
 
 Gen. Const. L., § 45 47 
 
 General Corporation Law. 
 
 Gen. Corp. L., § 2 9 
 
 Gen. Corp. L., § 3 9,' 13 
 
 Gen. Corp. L., § 3, subd. 5 822 
 
 Gen. Corp. L., § 5 19, 25, 32, 33 
 
 Gen. Corp. L., § 6 33, 41 
 
 Gen. Corp. L., § 7 27, 28 
 
 Gen. Corp. L., § 8 26 
 
 Oen. Corp. L., § 9, subd. 1 .529 
 
 Gen. Corp. L., § 9, subd. 3 529 
 
 Gen. Corp. L., § 10 14, 20, 23 
 
 24, 173, 329, 448, 450, 451, 834 
 
 Gen. Corp. L., § 11 44, 47, 123 
 
 133, 176, 297, 298 
 
 315, 329, 350, .501, 550 
 
 Gen. Corp. L., § 15 829, 830 
 
 878, 880 
 
 Gen. Corp. L., § 16 828, 830 
 
 834, 907, 909 
 
 Gen. Corp. L., § 16-a 833, 910 
 
 Gen. Corp. L., § 20 823 
 
 Gen. Corp. L., § 21 824 
 
 Gen. Corp. L., § 22 506, 827 
 
 Gen. Corp. L., § 23 176, 177 
 
 178, 181, 637 
 
 Gen. Corp. L., § 24 176, 301 
 
 Gen. Corp. L., § 25 181 
 
 Gen. Corp. L., § 26 179 
 
 Gen. Corp. L., § 27 177, 181 
 
 Gen. Corp. L., § 28 305 
 
 Gen. Corp. L., § 29 299 
 
 Gen. Corp. L., § 30 ■ • . 291) 
 
 Gen. Corp. L., § 31 178, 302 
 
 Gen. Corp. L., § 32 307 
 
 Gen. Corp. L., § 34 24, 44 
 
 303, 316, 329 
 
 Gen. Corp. L., § 35 331, 346 
 
 Gen. Corp. L., § 36 554 
 
 Gen. Corp. L., § 37 24, 552 
 
 Gen. Corp. L., § 42 176 
 
 Gen: Corp. L., § 43 47, 316, 330 
 
 Gen. Corp. L., § 44 411, 439 
 
 515, 827 
 
 Gen. Corp. L., § 60 38 
 
 Gen. Corp. L., § 61 39 
 
 Gen. Corp. L., § 62 39 
 
 Gen. Corp. L., § 63 39, 40 
 
 Gen. Corp. L., § 64 40 
 
 Gen. Corp. L., § 65 41 
 
CXVIU 
 
 TABLE OF STATUTES 
 
 Gen. Corp. L., § 90 309, 352 
 
 401, 406, 411, 412, 423, 428 
 
 Gen. Corp. L., § 91 310, 352, 428 
 
 Gen. Corp. L., § 91-a 406, 411 
 
 412, 423 
 
 Gen. Corp. L., § 92 310 
 
 Gen. Corp. L., § 96 401 
 
 Gen. Cori . L., § 100 566 
 
 Gen. Corp. L., § 101 585, 586 
 
 Gen. Corp. L., § 102 ...585,587, 589 
 
 Gen. Corp. L., § 103 567, 590 
 
 Gen. Corp. L., § 104 622, 627 
 
 635, 639 
 
 Gen. Corp. L., § 105 639, 641 
 
 Gen. Corp. L., § 106 62, 637 
 
 Gen. Corp. L., § 107 ..057, 664, 665 
 
 678 
 
 Gen. Corp. L., § 108 629 
 
 Gen. Corp. L., § 109 238, 339 
 
 380, 569', 591 
 
 Gen. Corp. L., § 110 238, 339 
 
 380, 569, 591 
 
 Gen. Corp. L., § 111 238, 339 
 
 380, 569, 591 
 
 Gen. Corp. L., § 112 569 
 
 593, 665 
 
 Gen. Corp. L., § 113 238, 593 
 
 Gen. Corp. L., § 114 239, 339 
 
 380, 570, 593 
 
 Gen. Corp. L., § 115 567 
 
 570, 593 
 
 Gen. Corp. L., § 130 555, 557 
 
 Gen. Corp. L., § 131 558 
 
 Gen. Corp. L., § 132 558, 560 
 
 Gen. Corp. L., § 133 562 
 
 Gen. Corp. L., § 134 563, 626 
 
 Gen. Corp. L., § 135 564 
 
 Gen. Corp. L., § 136 564 
 
 Gen. Corp. L., § 170 577 
 
 Gen. Corp. L., § 171 577 
 
 Gen. Corp. L., § 172 577 
 
 Gen. Corp. L., § 174. 578, 579 
 
 Gen. Corp. L., § 175 578, 579 
 
 Gen. Corp. L., § 176 581 
 
 Gen. Corp. L., § 178 581 
 
 Geu. Corp. L., § 179 581 
 
 Gen. Corp. L., § 180 581 
 
 Gen. Corp. L., § 182 581, 582 
 
 Gen. Corp. L., § 184 582 
 
 Con. Corp. L., § 185 582 
 
 Gen. Corp. L., § 186 582 
 
 Gen. Corp. L., § 187 582 
 
 Gen. Corp. L., § 188 583 
 
 Gen. Corp. L., § 189 579 
 
 Gen. Corp. L., § 190 583 
 
 Gen. Corp. L., § 193 585 
 
 Gen. Corp. L., § 200 572, 626 
 
 830, 831, 832 
 
 Gen. Corp. L., § 201... 573, 574, 832 
 
 Gen. Corp. L., § 202 830 
 
 Gen. Corp. L., § 220 574 
 
 Gen. 
 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 Oen. 
 Gen. 
 Gen. 
 Gen. 
 Gen. 
 
 Corp. L., § 221 574, 575 
 
 576, 577, 601 
 
 Corp. L., § 227 659 
 
 Corp. L., § 230 637 
 
 Corp. L., § 231 63iV 
 
 Corp. L., § 232 636, 638 
 
 Corp. L., § 233 646 
 
 Corp. L., § 234 635 
 
 Corp. L., § 235 635, 642 
 
 Corp. L., § 236 635, 642 
 
 Corp. L., § 237 679 
 
 Corp. L., § 238 635 
 
 Corp. L., § 239 047, 652 
 
 Corp. L., § 239, subd. 1 . . . . 647 
 
 Corp. L., § 239, subd. 2. . . . 647 
 
 Corp. L., § 239, subd. 4 650 
 
 Corp. L., § 239, subd. 5 650 
 
 Corp. L., § 239, subd. 6 650 
 
 Corp. L., § 239, subd. 7 650 
 
 Corp. L., § 239, subd. 8 652 
 
 Corp. L,, § 240 647 
 
 648, 649 
 
 Corp. L., § 241 653, 654 
 
 Corp. L., § 242 64."> 
 
 Corp. L., § 243 650 
 
 Corp. L., § 244 640 
 
 Corp. L., § 245 639, 650 
 
 Corp. L., § 246 650 
 
 Corp. L., § 247 657 
 
 Corp. L., § 248 657 
 
 Corp. L., § 250 630, 631 
 
 0;i2, 652, 655 
 
 Corp. L., § 251 652 
 
 Corp. L., § 252 652 
 
 Corp. L., § 253 655 
 
 Corp. L., § 254 655 
 
 Corp. L., § 255 660 
 
 Corp. L., § 256 643, 054 
 
 Corp. L., § 257 654 
 
 Corp. L., § 258 654 
 
 Corp. L., § 259 655 ' 
 
 Corp. L., § 260 649 
 
 Corp. L., 8 261 665, 669 
 
 Corp. L., § 262 666 
 
 Corp. L., § 263 666 
 
 Corp. L., § 264 666 
 
 Corp. L., I 265 666 
 
 Corp. L., § 266 666 
 
 Corp. L., § 267 667 
 
 Corp. L., § 268 657, 658 
 
 Corp. L., § 269 658 
 
 Corp. L., § 270 659 
 
 Corp. L., § 271 659 
 
 Corp. L., § 272 659 
 
 Corp. L., § 273 678 
 
 Corp. L., § 274 679 
 
 Corp. L., § 275 677, 678 
 
 Corp. L., § 276 641 
 
 Corp. L., § 277 662 
 
 Corp. L., § 278 662, 663 
 
 Corp. L., § 301 423, 563 
 
 567, 589 
 
TABLE OF STATUTES 
 
 CXIX 
 
 Gen. Corp. L., § 302 424, 565 
 
 568, 590 
 
 Gen. Corp. L., § 303 424, 565 
 
 569, 591, 592 
 
 Gen. Corp. L., § 304 402, 562 
 
 566, 588 
 
 Gen. Corp. L., § 305 ' 310 
 
 352 448 
 
 Gen. Corp. L., § 306 625^ 630 
 
 Gen. Corp. L., § 307 310, 352 
 
 Gen. Corp. L., § -308 625 
 
 Gen. Corp. L., § 309 239 
 
 252 253 
 
 Gen. Corp. L., § 310 .' 649 
 
 Gen. Corp. L., § 311 65S, 678 
 
 Gen. Corp. L., § 312 580, 590 
 
 Gen. Corp. L., § 313 642 
 
 Gen. Corp. L., § 314 534 
 
 Gen. Corp. L., § 315 566, 589 
 
 Gen. Corp. L., § 316 680 
 
 Gen. Corp. L., § 320 26 
 
 Gen. Corp. L., § 321 451 
 
 Gen. Corp. L., § 331 451 
 
 Gen. Bus. L., § 342 496 
 
 Gen. Bus. L., § 344 496 
 
 Gen. Bus. L., § 346 496 
 
 Labor Law. 
 
 Labor L., § 2 670, 672 
 
 Labor L., § 9 • 670, 672 
 
 Labor L., § 10 448, 464 
 
 Labor L., § 11 465 
 
 Penal Law. 
 
 Penal L., § 660 429, 516 
 
 517, 518 
 
 Penal L., § 660 76 
 
 Penal L., § 661 - • 438 
 
 Penal L., § 662 116, 440 
 
 Penal L., § 664 340, 343 
 
 346, 393, 394 
 
 Penal L., § 665 439, 443 
 
 444, 445 
 
 Penal L., § 666 34 
 
 Penal L., § 667... 318, 319, 340, 341 
 
 343, 346, 393, 394, 440, 443, 445 
 
 Penal L., § 668 178, 181, 283 
 
 Penal L., § 882 ! 440 
 
 Penal L., § 890 440 
 
 Stock Corporation Law. 
 
 St. Corp. L., § 6 258, 260, 261 
 
 262, 265, 267, 269, 46C 
 
 St. Corp. L., § 7 26? 
 
 St. Corp. L., § 9 28f 
 
 St. Corp. L., § 13 27, 3f 
 
 St. Corp. L., § 14 495, 82C 
 
 St. Corp. L., § 15 604, 82P 
 
 St. Corp. L., § 16 601, 602, 60' 
 
 St. Corp. L., § 17 602, 603 
 
 St. Corp. L., § 18 27, 29 
 
 St. Corp. L., § 19 69, 70, 99, 345 
 
 St. Corp. L., § 20 345, 463 
 
 St. Corp. L., § 21 33 
 
 St. Corp. L., § 22. .106, 106, 110, 112 
 
 114, 690, 693, 694, 721, 733 
 
 St. Corp. L., § 24 110, 345, 615 
 
 St. Corp. L., § 24-a 615 
 
 St. Corp. L., § 24-b 345, 463, 615 
 
 St. Corp. L., § 24-c.20i9, 210, 463. 615 
 
 St. Corp. L., § 24-d •. . 371 
 
 St. Corp. L., § 25 24, 298 
 
 300, 303 
 
 St. Corp. L., § 26 24,27,300, 306 
 
 313 314 
 
 St. Corp. L., § 27 .45,' 330 
 
 St. Corp. L., § 28. . . 160, 162, 340, 342 
 
 St. Corp. L., § 29 394, 472 
 
 St. Corp. L., § 30 .'. .44, 350 
 
 353, 357, 362, 364, 433 
 
 St. Corp. L., § 31 44, 297 
 
 300, 301 
 
 St. Corp. L., § 32 49,53,54, 55 
 
 56, 61, 123, 131, 137, 218, 444 
 
 St. Corp. L., § 33 834, 848 
 
 849, 850, 851, 852 
 
 St. Corp. L., § 34 382, 512, 834 
 
 854, 855 
 
 St. Corp. L., § 35 , 398, 445 
 
 St. Corp. L., § 50.. 82, 114, 123, 134 
 
 St. Corp. L., i 51 123, 134 
 
 St. Corp. L., § 52 14, 139, 302 
 
 303, 492, 493 
 
 St. Corp. L., § 53 76, 80, 178 
 
 St. Corp. L., § 54.... 76, 81, 84, 96 
 
 St. Corp. L., § 55 87, 89 
 
 99, 258 
 
 St. Corp. L., § 56 85, 89, 209 
 
 212, 213, 215, 217, 220 
 
 3t. Corp. L., § 57 245, 246 
 
 247, 248, 263 
 
 St. Corp. L., § 58 209, 215, 245 
 
 246, 247, 248 
 
 St. Corp. L., § 59 209, 210, 213 
 
 225, 229, 231, 245, 246, 247, 248 
 
 St. Corp. L., § 60 23, 99, 474 
 
 St. Corp. L., § 61 23, 27, 68 
 
 69, 70, 98, 105 
 
 St. Corp. L., § 62 27, 110, 217 
 
 51. Corp. L., i 63 .27, 105 
 
 110, 111 
 
 St. Corp. L., § 64 27, 105, 106 
 
 110, 111, 112 
 
 St. Corp. L., § 65 27, 114 
 
 St. Corp. L., § 66. ...123, 140, 395, 474 
 
 486, 490, 670, 672 
 
 St. Corp. L., § 67 117 
 
 St. Corp. L., § 68 118, 119, 120 
 
 gt. Corp. L., § 69 185, 186, 187 
 
 it. Corp. L., § 70 934, 935 
 
TABLE OF STATUTES 
 
 Tax Law. 
 
 Tax L., § 2, subd. 6 736. 768 
 
 Tax L., § 2, subd. 7 736, 768 
 
 Tax L., § 2, subd. 8 739, 741 
 
 Tax L., § 3 689, 738 
 
 Tax L., i 4, subd. 5 739 
 
 Tax L., § 4, subd. 6 739 
 
 Tax L., § 4, subd. 12 739 
 
 Tax L., § 9, subd. 13 739 
 
 Tax L., § 4, subd. 16 739 
 
 Tax L., § 5 736 
 
 Tax L., § 6 740 
 
 Tax L., § 7 834, 856, 857 
 
 858, 859 
 
 Tax L., § 9 735 
 
 Tax L., § 11. 690, 737, 755. 857 
 
 Tax L., § 12 690,740,741. 751 
 
 Tax L., § 15 689, 757 
 
 Tax L., § 20 757 
 
 Tax L., S 21. 758, 767 
 
 Tax L., § 27 760 
 
 Tax L., S 2S 760 
 
 Tax L., § 29 757 
 
 Tax L., § .32 759. 773 
 
 Tax L., i 34 759 
 
 Tax L., § 36 762 
 
 Tax L., § 37 71)2. 764, 775 
 
 Tax L., § 39 767 
 
 Tax L., § -10 767 
 
 Tax L., § 41. . 767 
 
 Tax L., § 44 773 
 
 Tax L., § 4.) 774 
 
 Tax L., § 4.1-a 775 
 
 Tax L., § 45-b 776 
 
 Tax L., § 4.)-f 783 
 
 Tax L., § 45-d 783 
 
 Tax L., § 45-e 783 
 
 Tax L., § 45-f 783 
 
 Tax L., § 46 786 
 
 Tax L., § 48 783 
 
 Tax L., § 49 784 
 
 Tax h., i 180.33. 690, (i92, (193. 694 
 
 Tax L., § 181 834. SilT, 868, 869 
 
 S70, S7S. 883 
 
 Tax L., § 1S2 (i!:0, 721. 729. 730 
 
 731, 732. 733. 834, 862 
 
 Tax L., § 183 846 
 
 Tax L., § 184 690 
 
 Tax L., § 185 690 
 
 Tax L., § 186 690 
 
 Tax L., i 187 690 
 
 Tax L., § 188 690 
 
 Tax L., § 199 802. 803, 804, 805 
 
 806, 808 
 
 Tax L.. S 200 803 
 
 Tax L., § 207 834 
 
 Tax L., 
 
 § 
 
 208. .. 
 
 690, 
 
 696. 
 
 701 
 
 Tax L., 
 
 § 
 
 209... 
 
 ..690, 695, 
 
 696. 
 
 702. 
 
 1)97 
 834 
 
 Tax L., 
 
 § 
 
 210. .. 
 
 
 
 690 
 
 Tax L., 
 
 211... 
 
 703, 
 
 704. 
 
 705 
 
 Tax L., 
 
 § 
 
 212. .. 
 
 
 
 702 
 
 Tax L., 
 
 213... 
 
 
 .703, 
 
 705 
 
 Tax L., 
 
 s 
 
 214... 
 
 
 .701. 
 
 702 
 
 Tax L., 
 
 s 
 
 214-a . 
 
 
 .703. 
 
 705 
 
 Tax L., 
 
 s 
 
 215... 
 
 
 
 703 
 
 Tax L., 
 
 § 
 
 216... 
 
 
 
 705 
 
 Tax L., 
 
 § 
 
 217... 
 
 .703, 705, 
 
 706, 
 
 70S 
 
 Tax L., 
 
 § 
 
 218... 
 
 
 
 706 
 
 Tax L. 
 
 s 
 
 219.. 
 
 .707, 802, 
 
 803, 
 
 S04 
 
 
 
 
 805. 806, 
 
 807, 
 
 S08 
 
 Tax L., 
 
 § 
 § 
 
 219-a . 
 219-b . 
 219-c . 
 219-d 
 
 
 
 70S 
 
 Tax L , 
 
 
 
 705 
 
 Tax L., 
 
 
 
 70,8 
 
 Tax L., 
 
 
 .707, 
 
 708 
 
 Tax L., 
 
 
 219-e . 
 219-f . 
 219-g . 
 
 
 
 70S 
 
 Tax L 
 
 
 
 70S 
 
 Tax L., 
 
 
 
 70S 
 
 Tax L. 
 
 § 
 
 219-h . 
 219-i . 
 
 
 
 70S 
 
 Tax L., 
 
 
 
 70S 
 
 Tax L., 
 
 § 
 § 
 
 8 
 
 219-i . 
 219-k . 
 270... 
 
 
 
 690 
 
 Tax L., 
 
 
 
 70S 
 
 Tax L., 
 
 812, 
 
 814. 
 
 815 
 
 Tax L., 
 
 P 
 
 271... 
 
 
 
 SIO 
 
 Tax L., 
 
 §, 
 § 
 
 271-a.. 
 272... 
 
 
 
 816 
 
 Tax L., 
 
 
 
 S16 
 
 Tax L., 
 
 § 273... 
 
 
 .815, 
 
 816 
 
 Tax L., 
 
 § 
 
 274... 
 
 
 
 SIO 
 
 Tax L., 
 
 § 
 
 275... 
 
 
 
 817 
 
 Tax L., 
 
 S 
 
 275-a . 
 
 123, 
 
 124. 
 
 810 
 
 Tax L., 
 
 s 
 
 276... 
 
 
 
 SU 
 
 Tax L., 
 
 « 
 
 277... 
 
 
 .811, 
 
 S17 
 
 Tax L., 
 
 § 
 
 279... 
 
 
 
 811 
 
 Tax L., 
 
 § 
 
 290... 
 
 .786, 788, 
 
 789, 
 
 790 
 
 Tax L., 
 
 § 
 
 291... 
 
 
 .789. 
 
 793 
 
 Tax L., 
 
 § 
 
 292 .. . 
 
 
 
 794 
 
 Tax L , 
 
 
 293 . . 
 
 
 
 796 
 
 Tax L., 
 
 293-a . 
 
 
 
 799 
 
 Tax L., 
 
 s 
 
 294... 
 
 
 
 800 
 
 Tax L., 
 
 § 
 
 295... 
 
 
 
 SOO 
 
 Tax L., 
 
 s 
 
 296... 
 
 
 
 801 
 
 Tax L., 
 
 s 
 
 297... 
 
 
 
 801 
 
 Tax L., 
 
 § 
 
 298... 
 
 
 
 SOI 
 
 Tax L., 
 
 § 
 
 299 .. . 
 
 
 
 SOI 
 
 Tax L.^ 
 
 « 
 
 300. . . 
 
 
 
 801 
 
 Tax L., 
 
 § 
 
 301... 
 
 
 
 801 
 
 Tax L., 
 
 s 
 
 302 .. . 
 
 
 
 Sfll 
 
 Tax L., 
 
 § 
 
 303... 
 
 
 
 801 
 
 Tax L., 
 
 s 
 
 304... 
 
 
 
 801 
 
 Tax L., 
 
 § 
 
 305 .. . 
 
 
 
 801 
 
 Tax L., 
 
 8 
 
 306... 
 
 
 
 801 
 
 Tax L., 
 
 § 
 
 307... 
 
 
 
 801 
 
 Tax L., 
 
 8 
 
 371... 
 
 
 .... 
 
 762 
 
CYCLOPEDIC ANALYSES 
 
 CHAP. 
 
 I. Peomoters and Coepobatoes. 
 II. Incorpoeation and Name. 
 
 III. Organization, By-Laws, Seal and Books. 
 
 IV. Stock. 
 
 V. Stockholdees. 
 VI. Bonds and Mortgages. 
 VII. Directors, Officers and Agents. 
 VIII. PowBES, Duties and Liabilities op Coepoeations. 
 IX. Coeporate Existence and Change. 
 X. Receivers. 
 XI. Taxation. 
 XII. Foreign Coepoeations. 
 
 CHAPTER I. 
 PROMOTERS AND CORPORATORS. 
 
 L PROMOTERS: 
 
 A. Definitions and Distinctions, § 1. 
 
 B. Powers and Liabilities. 
 
 1. Under Agreements in General, § 2. 
 
 2. Under Agreements Inter Sese, § 3. 
 
 3. Under Secret Agreements for Personal Profit, § 4. 
 
 4. In Binding Corporation By Agreements, § 5. 
 
 5. Toward Subscribers for False Representations, § 5-a. 
 XL CORPORATORS, § 6. 
 
 CHAPTER II. 
 
 INCORPORATION AND NAME. 
 
 III. INCORPORATION: 
 
 A. Definitions, Distinctions and Nature of. 
 
 1. In General, § 7. 
 
 2. Partnership and Joint Venture, § 8. 
 
 3. De Facto and De Jure Corporations, § 9. 
 
 B. Certificate of, or Charter. 
 
 1. Definitions and Distinctions, § 10. 
 
 2. Governing Statutesi 
 
 a. In Genera], § 11. 
 
 b. Constitutional Limitations, § 12. 
 
 c. Legislative Control over Charters, § 13. 
 
 3. Contents. 
 
 a. In General, § 14. 
 
 b. Name, § 15.- 
 
 c. Purposes, § 16. 
 
 d. Stock, Capital and Stockholders, § 17. 
 
 e. Principal Business Office, § 18. 
 
cxxii C YCLOP^DIC ANALYSES 
 
 CHAPTER 11. B, 3 — Continued. 
 
 f. Duration, § 19. 
 
 g. Directors, § 20. 
 h. Subscribers, § 21. 
 
 4. ruing. Recording and Indexing, § 22. 
 
 5. Amendment of, and Addition to. 
 
 a. Governing Statutes, § 23. 
 
 b. For Informality, Unlawful Contents, or Defective 
 
 Proof or Acknowledgment, § 24. 
 
 c. To Correct or Add to Purposes of, § 25. 
 
 d. To Change Office and Place of Business, § 26. 
 8. To Change Number of Directors, § 27. 
 
 f. Preferred and Common and Non-par Value Stock; 
 
 and Classes of Preferred, § 28. 
 
 g. Increase or Reduction of Capital Stock, § 29. 
 
 h. Increase and Reduction of Number or Par Value of 
 Shares, § 30. 
 C. Fees and Taxes on Incorporation, § 31. 
 rV. NAME: 
 
 A. Governing Statutes, § 32. 
 
 B. Protection of, § 33. 
 
 C. Change of, § 34. 
 
 D. On Reincorporation, Reorganization, Consolidation, Sale of 
 
 Property or Franchises, Merger, Dissolution and Assign- 
 ment, § 35. 
 
 CHAPTER III. 
 
 ORGANIZATION, BY-LAWS, SEAL AND BOOKS. 
 
 V. ORGANIZATION — First Meeting of Incorporators and Directors, 
 
 § 36. 
 VL BY-LAWS: 
 
 A. Governing Statutes, § 37. 
 
 B. How Far Binding on Strangers, Stockholders and Employees, 
 
 §38. 
 
 C. Inspection of, § 39. 
 
 D. Amendment of, § 40. 
 VIL SEAL: 
 
 A. Governing Statutes, § 41. 
 
 B. In General, § 42. 
 
 C. Adoption of, § 43. 
 
 D. Affixation Presumed to be by Authority and to make Instru- 
 
 ment Binding on Corporation, § 44. 
 VIIL BOOKS AND RECORDS: 
 
 A. Adopting, Keeping and Compelling Delivery, § 45. 
 
 B. Inspection. 
 
 1. In General, § 46. 
 
 2. In Actions By and Against Corporations, § 47. 
 
 3. Stock Books. 
 
 a. Governing Statutes, § 48. 
 
 b. Who May Examine, § 49. 
 
 c. Demand, § 50. 
 
 d. Making Extracts, § 51. 
 
 e. Penalty for Refusing, § 52. 
 
CYCLOPEDIC ANALYSES cxxiii 
 
 CHAPTER III. B — Continued. 
 
 4. Practice In Enforcing. 
 
 a. In General, § 53. 
 
 b. By Mandamus. 
 
 aa. As to Books In General, § 54. 
 
 bb. As to Stock Transfer Book, § 55. 
 
 cc. Stockholder's' Motive In Seeking, § 56. 
 
 c. Pleading, Practice and Evidence, § 57. 
 C. As Evidence. 
 
 1. In General and Books of Account, § 58. 
 
 2. Stock Books, § 59. 
 
 3. Resolutions, Deeds and Records, § 60. 
 
 CHAPTEE IV. 
 
 STOCK. 
 IX. STOCK: 
 
 A. Definitions, Distinctions and Nature of, § 61. 
 
 B. Classes, Kinds and Rights of. 
 
 1. In General, § 62. 
 
 2. Changing Classification of Issued Stock, § 63. 
 
 3. Preferred Stock, § 64. 
 
 4. Unissued and Treasury Stock, § 65. 
 
 C. Capital Stock. 
 
 1. Definitions, Distinctions and Nature, § 66. 
 
 2. Is a Trust Fund for Creditors, § 67. 
 
 D. Subscriptions To. 
 
 1. Governing Statutes, § 68. 
 
 2. When Binding. 
 
 a. In General, § 69. 
 
 b. When Subscription is in- Certificate of Incorporation, 
 
 §70. 
 
 c. When Subscription is in Separate Agreement, § 71. 
 
 d. When Ten Per Cent Payment Necessary, § 72. 
 
 3. Calls. 
 
 a. Who May Make, § 73. 
 
 b. When No Call Necessary, § 74. 
 
 c. After Transfer of Stock, § 75. 
 
 d. Defenses Against Liability on, § 76. 
 
 e. Forfeiture for Nonpayment of, § 77. 
 
 4. Secret Profit to Subscriber, § 78. 
 
 5. Unpaid, Are Trust Fund for Creditors, § 79. 
 
 E. Payment for Stock or Subscriptions. 
 
 1. Governing Statutes, § 80. 
 
 2. The Person Liable, § 81. 
 
 3. Extent of Liability, § 82. 
 
 4. Defenses Against Liability. 
 
 a. In General, § 83. 
 
 b. Change in Charter or Name, § 84. 
 
 c. Defective Corporate Existence, § 85. 
 
 d. Defective Subscription Agreement, § 86. 
 
 e. Different Agreement with Other Subscribers, § 87. 
 
 f. Statute of Limitations, § 88. 
 
cxxiv CYCLOPEDIC ANALYSES 
 
 CHAPTER IV. E — Continued. 
 
 5. Enforcement of. 
 
 a. Who May Enforce, § 89. 
 
 b. Pleading, Practice and Evidence, § 90. 
 
 6. Corporation's Remedies on Failure of, § 91. 
 
 7. Certificate of Payment of Capital Stock, i; 92. 
 
 F. Issue of. 
 
 1. In General, § 93. 
 
 2. Common Stock, § 94. 
 
 3. Preferred Stock, § 95. 
 
 4. Partly Paid, § 96.' 
 
 5. Non-Par Value Stock, § 96-a. 
 
 6. For What, § 97. 
 
 7. Evidence of Value of Consideration for, § 98. 
 
 8. Of New Stock, § 99. 
 
 G. Assessments on Holders of and Subscribers to, § 100. 
 H. Exchange of Preferred for Common Stock, § 101. 
 
 I. Increase of. 
 
 1. Governing Statutes, § 102. 
 
 2. In General, § 103. 
 
 3. Certificate of, § 104. 
 
 4. Stockholders' Right to Subscribe to, § 105. 
 J. Decrease of, § 106. 
 
 K. Change of Number of Shares of Capital Stock, § 107. 
 L. Certificates of. 
 
 1. Issue and Reissue. 
 
 a. Governing Statutes, § 108. 
 
 b. In General, § 109. 
 
 c. Corporation's Liability for, by Agent, Officer, etc., 
 
 § 110. 
 
 d. Fraud or Forgery, In, § 111. 
 
 2. Loss, Destraction or Theft of. 
 
 a. Governing Statutes, § 112. 
 
 b. In General, § 113. 
 
 e. Indemnity Bond, § 114. 
 
 d. Pleading, Practice, Evidence and Proof, § 115. 
 
 3. As Evidence of Title, § 116. 
 
 4. Determination of Conflicting Claims to, J 117. 
 M. Transfer of. 
 
 1. Definitions, Distinctions and Nature, § 118. 
 
 2. Governing Statutes, § 119. 
 
 3. In General, § 120. 
 
 4. Consideration of and for, § 121. 
 
 5. By Power of Attorney, § 122. 
 
 6. Of Stock of Decedent, § 123. 
 
 7. Necessity and Effect of Corporation's Recognition of, 
 
 § 124. 
 
 8. On Corporation's Books. 
 
 a. Governing Statutes, § 125. 
 
 b. Who May Compel and How, § 126. 
 
 c. Who May Question, § 127. 
 
 d. Limitations by Charter, By-Law or Regulation, § 128. 
 
 e. Corporation's Liability for Wrongful or Delayed, 
 
 § 129. 
 
CYCLOPEDIC ANALYSES cxxv 
 
 CHAPTER IV. M— Continued. 
 9. Effect of. 
 
 a. In General, § 130. 
 
 b. On Books, § 131. 
 N. Purchase and Sale of. 
 
 1. By Corporation of Own Stock, § 132. 
 
 2. By Corporation of Another Corporation's Stock, § 133. 
 
 3. By Officer, Director or Stockholder of His Corporation's 
 
 Stock, § 134. 
 
 4. Agreements for. 
 
 a. In General, § 135. 
 
 b. Involving Questions of Time and Notice, § 136. 
 
 c. Conditional, § 137. 
 
 d. Involving Questions of Holding Stock in Escrow, 
 
 §138. 
 
 e. Joint and Several, § 138-a. 
 
 f. By Seller to Buy Back, § 139. 
 
 g. By Stockholders Inter Sese, § 140. 
 
 5. Fraud and Deceit In. 
 
 a. In General, § 141. 
 
 b. Through Prospectus, § 142. 
 
 c. Pleading and' Practice, § 143. 
 
 d. Evidence and Proof, § 144. 
 
 e. Measure of Damages, § 145. 
 
 6. Equitable Remedies, § 146. 
 0. Pledge and Conversion of. 
 
 1. What Constitutes Conversion, § 147. 
 
 2. Who May Be Pledgor or Pledgee, § 148. 
 
 3. Liability of Corporation for, § 149. 
 
 4. Actions and Practice, § 150. 
 
 5. Measure of Damages, § 151. 
 P. Dividends. 
 
 1. Definitions, Nature and Legality. 
 
 a. In General, § 152. 
 
 b. Property Dividend, § 153. 
 
 c. Stock Dividend, § 154. 
 
 d. Scrip Dividend, § 155. 
 
 2. Governing Statutes, § 156. 
 
 3. Declaration of. 
 
 a. By Directors Only, § 157. 
 
 b. By Court Compulsion, § 158. 
 
 c. From What, § 159. 
 
 4. Who Entitled to. 
 
 a. In General, § 160. 
 
 b. On Sale, Transfer or Assignment, § 161. 
 
 c. On Pledge, Death or Marriage, § 162. 
 
 d. Preferred or Guaranteed Stockholders, § 163. 
 
 e. Under Specific Contracts, § 164. 
 
 5. When Entitled To, § 165. 
 
 CHAPTER V. 
 
 STOCKHOLDERS. 
 X. STOCKHOLDERS: 
 
 A. Definitions, Distinctions and Nature, § 166. 
 
 B. Powers, Privileges and Duties. 
 
cxxvi CYCLOPEDIC ANALYSES 
 
 CHAPTER V. B — Continued. 
 
 1. In General. 
 
 a. Miscellaneous, § 167. 
 
 b. By Unanimous Consent Without Meeting, § 168. 
 
 c. To Vote at Meetings, § 169. 
 
 d. To Vote By Proxy or 'Voting Trust, § 170. 
 
 e. To Ratify Unauthorized Acts of Officers and Direct- 
 
 ors, § 171. 
 
 f. To Bind Successors, § 172. 
 
 g. To Deal With Their Corporation, § 173. 
 
 h. To Complain of Corporate Acts' of Which They 
 
 Knew or to Which They Assented, § 174. 
 i. To Demand and Receive Financial Statement from 
 Corporation's Treasurer. 
 
 aa. Governing Statutes, § 175. 
 
 bb. Who May Compel, § 176. 
 
 cc. How Often, § 177. 
 
 dd. What Statement Suffices, § 178. 
 
 ee. Suit for Penalty, § 179. 
 
 2. Of Majority. 
 
 a. In General, § 180. 
 
 b. Voting Salaries in Fraud of Minority, § 181. 
 
 e. Selling Corporate Property in Fraud of Minority, 
 §182. 
 
 3. Of Minority. 
 
 a. In General, § 183. 
 
 b. Invoking Court Protection Against Acts of Majority, 
 
 §184. 
 
 c. Preventing Sale of Corporate Assets by Majority, 
 
 §185. 
 
 d. Preventing Sale of Stock by Majority, § 186. 
 
 4. Actions By. 
 
 a. In General, § 187. 
 
 b. What Stocldiolders May Sue, § 188. 
 
 c. When Corporation Must Sue or Be Asked To, § 189. 
 
 d. Grounds for Suit By Stockholder, § 190. 
 
 e. Pleading, Practice and Evidence, § 191. 
 
 f. Objections To, § 192. 
 C. Liabilities of. 
 
 1. In General, § 193. 
 
 2. Of Representative of Deceased Stockholder, § 194. 
 
 3. For Debts. 
 
 a. Governing Statutes, § 195. 
 
 b. In General, § 196. 
 
 c. For What D'ebts, § 197. 
 
 d. Who May Enforce, § 198. 
 
 e. Who Liable. 
 
 aa. In General, § 199. 
 
 bb. Subscribers, § 200. 
 
 cc. One Becoming Stockholder After Debt Incurred, 
 
 § 201. 
 dd. On Increase or Reduction of Capital Stock, 
 
 § 202. 
 ee. After Disposal of Holdings By Sale, Transfer 
 
 on Books, etc., § 203. 
 
CYCLOPEDIC ANALYSES cxxvii 
 
 CHAPTER V. C, 3 — Contiaued. 
 
 f. To What Extent Liable, 
 aa. In General, § 204. 
 bb. When Stock Fully Paid, § 205. 
 g. Action, Judgment and Execution Against Corpora- 
 tion Condition Precedent to. 
 aa. Governing Statutes, § 206. 
 bb. In General, § 207. 
 
 cc. Not When Corporation Dissolved, Bankrupt, 
 etc., § 208. . 
 h. Judgment Against Corporation as Measure of Stock- 
 holder's Liability, § 209. 
 i. Statute of Limitations Against, § 210. 
 j. For Interest On, § 211. 
 k. Defenses of, and Contribution among Stockholders, 
 
 § 212. 
 1. Pleading, Practice and Evidence in Actions Against, 
 aa. In General, § 213. 
 bb. Making All Creditors or Any One Plaintiffs or 
 
 Plaintiff, § 214. 
 
 cc. In Equity, Making All Stockholders Ratably 
 
 Liable ; or In Law, Against Any Stockholder, 
 
 § 215. 
 
 dd. Sufficiency of Allegations in Complaint, § 216. 
 
 ee. Sufflciency of Answer; and Pleading Defenses, 
 
 § 217. 
 ff. Judgment and Execution Against Stockholder, 
 . § 218. 
 m. Under Foreign Statutes, § 219. 
 4. For Services of Corporate Laborers, Servants and Em- 
 ployees. 
 
 a. Governing Statutes, § 220. 
 
 b. In General, § 221. 
 
 c. Who Liable, § 223. 
 
 d. For What Liable, § 223. 
 
 e. Who Are Laborers, Servants and Employees, § 224. 
 
 f . Necessity and Effect of Judgment First Had Against 
 
 Corporation, § 225. 
 
 g. Pleading, Practice and Evidence, § 226. 
 
 CHAPTER VI. 
 BONDS AND MORTGAGES. 
 
 XL BONDS AND MORTGAGES: 
 
 A.' Definitions, Distinctions and Nature, § 227. 
 
 B. In General, § 228. 
 
 C. Subscriptions, § 229. 
 
 D. Issue and Making. 
 
 1. In General, § 230. 
 
 2. For What Purposes, § 231. 
 
 3. On What as Security, § 232. 
 
 4. No Limit to, § 233. 
 
 5. At Less than Par, § 234. 
 
cxxviii CYCLOPEDIC ANALYSES 
 
 CHAPTER VI. D — Continued. 
 
 6. Stockholders' Consent. 
 
 a. Governing Statutes, § 235. 
 
 b. In General, § 236. 
 
 e. What Consent Sufficient, § 237. 
 
 d. Filing and Recording of, § 238. 
 
 e. To What Mortgages Necessary, § 239. 
 
 E. When Effective, § 240. 
 
 F. Notice of Irregularity, § 241. 
 
 G. Conversion Into Stock, '§ 242. 
 li. Coupons, § 243. 
 
 I. Chattel Mortgages, g 244. 
 J. Construction of. 
 
 1. In General, § 245. 
 
 2. When Negotiable, § 246. 
 
 3. Principal Due on Default in Interest Payment, § 247. 
 K. Mortgage Registrars and Trustees. 
 
 1. Registrars and Transferors, § 248. 
 
 2. Mortgage Trustees. 
 
 a. In General, § 249. 
 
 b. Appointment, § 250. 
 
 c. Removal, !; 251. 
 
 d. Powers, §252. 
 
 e. Liabilities, § 253. 
 
 L. Actions, Remedies and Liabilities. 
 
 1. In General, § 254. 
 
 2. Of Bondholders in General, § 255. 
 
 3. Of Bond- and Stock-holders Inter Sese, § 256. 
 
 4. On Foreclosure. 
 
 a. In General, § 257. 
 
 b. Of Stockholders, § 258. 
 
 c. Of Creditors, § 259. • 
 
 d. Of Bondholders. 
 
 aa. In General, § 260. 
 
 bb. To Sue Direct Instead of Through Trustee, 
 S 261. 
 
 e. Of Purchaser to Form New Corporation, § 262. 
 
 f. Setting Sale Aside, § 263. 
 
 5. Practice, § 264. 
 
 CHAPTEE VII. 
 
 DIRECTORS, OFFICERS AND AGENTS. 
 
 Xn. DIRECTORS, OFFICERS AND AGENTS: 
 
 A. Directors. , 
 
 1. De Facto and De Jure, § 265. 
 
 2. Election. 
 
 a. Governing Statutes, § 266. 
 
 b. In General, § 267. 
 
 c. Time, Place and Notice of, § 268. 
 
 d. Method of, § 269. 
 
 e. Who May Vote, and How, § 270. 
 
 f. Who Mav Be Elected, § 27i. 
 
 g. New Election, § 272. 
 
CYCLOPAEDIC ANALYSES cxxix 
 
 CHAPTER VII. A— Continued. 
 
 3. ■ Acceptance, § 273. 
 
 4. Tenure of Office. 
 
 a. Holding Over, § 274. 
 
 b. Termination of Directorship, § 275. 
 
 c. Trying Out, and Proving, Title to Directorship, § 276. 
 
 5. Change in Number, § 277. 
 
 6. Meetings, § 278. 
 
 7. Salaries, §'279. 
 
 8. Personal Profit and Advantage. 
 
 a. In General, § 280. 
 
 b. Contracts with Corporation, § 281. 
 
 c. As Creditor, Stockholder or Purchaser, § 282. 
 
 9. Executive Committee, § 283. 
 
 10. Powers. 
 
 a. In General, § 284. 
 
 b. Contracts, § 285. 
 
 c. Real Estate, § 286. 
 
 d. Actions, Service of Process, Counsel Fees, § 287. 
 
 11. Liabilities. 
 
 a. In General, § 288. 
 
 b. For Unauthorized Dividends, § 289. 
 
 c. For Dividing, Withdrawing, Paying or Reducing 
 
 Capital Stock, § 290. 
 
 d. For Assenting to Indebtedness Beyond Capital, § 291. 
 
 e. For Permitting Payment for Corporation's Stock by 
 
 Unauthorized Means, § 292. 
 
 f. On Corporate Dissolution, § 293. 
 
 g. For Sale of Stock Which Does Not Own, § 294. 
 
 h. For Increasing Capital Stock Beyond Amount Au- 
 thorized, § 295. 
 i. For Loans to Stockholders, § 296. 
 j. For Transfer to Officers, Directors or Stockholders 
 of Property of Corporation Not Paying Due Obli- 
 gations, § 297. 
 k. For Omitting to Disclose Service on Himself of In- 
 junction Against Corporation, § 298. 
 1. For Fraudulent Issue of Stocks and Bonds, § 299. 
 m. For Political Contributions, § 300. 
 n. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entry in 
 
 Books, § 301. 
 bb. For Refusal or Neglect to Make Entries In, or 
 Allow Inspection Of, Stock Book, § 302. 
 o. With Regard to Making Certificates, Reports, State- 
 ments and Notices, 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement,. § 303. 
 bb. For Falsity of, or Omission In, Statement of 
 
 Corporate Affairs, § 304. 
 cc. For Failure of, or False, Certificate of Pay- 
 ment of Capital Stock, § 305. 
 dd. To One Becoming Creditor or Stockholder on 
 Faith of False Representation In, § 306. 
 p. For Misconduct and Mismanagement. § 307. 
 
cxxx ' CYCLOPEDIC ANALYSES 
 
 CHAPTER VII.— Continued. 
 B. Officers. 
 
 1. Election or Appointment. 
 
 a. In General, § 308. 
 
 b. Compelling, § 309. 
 
 2. Tenure of Office. 
 
 a. Trying Out, and Proving, Title to Office, § 310. 
 
 b. Holding Over, Removal and Resignation, § 311. 
 
 3. Salaries. 
 
 a. In General, § 312. 
 
 b. In Fraud of Creditors or Stockholders, § 313. 
 
 c. On Removal or Resignation, § 314. 
 
 4. Bond Of, § 315. 
 
 5. Personal Profit and Advantage. 
 
 a. In General, § 316. 
 
 b. Of President, § 317. 
 
 c. Of Treasurer, § 318. 
 
 6. Powers and Duties. 
 
 a. In General. 
 
 aa. Of all Officers, § 319. 
 bb. Of President, § 320. 
 cc. Of Other Officers, § 321. 
 
 b. To Contract. 
 
 aa. In General, § 322. 
 
 bb. Of President, § 323. 
 
 cc. Of Secretary and Treasurer, § 324. 
 
 c. Commercial Paper. 
 
 aa. To Sign and Indorse. 
 
 aaa. In General, § 325. 
 
 bbb. Of President, § 326. 
 
 ccc. Of Treasurer, § 327. 
 
 ddd. Of Others, § 328. 
 bb. Accommodation Paper. 
 
 aaa. In General, § 329. 
 
 bbb. Of Secretary and Treasurer, § 330. 
 
 d. To Buy, Sell, Assign, Mortgage, Pledge and Lease. 
 
 aa. In General, § 331. 
 bb. By President, § 332. 
 cc. By Other Officers, § 333. 
 
 e. Actions and Service of Process On, § 334. 
 7. Liabilities. 
 
 a. In General, § 335. 
 
 b. For Political Contributions, § 336. 
 
 c. For Omitting to Disclose Service on Himself of In- 
 
 junction Against Corporation, § 337. 
 
 d. Foj Fraudulent Issue of Stocks and Bonds, § 338. 
 
 e. For Fraud in Procuring Corporate Organization, 
 
 § 339. 
 
 f. On Corporate Dissolution, § 340. 
 
 g. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entry in 
 
 Books, § 341. 
 bb. For Refusal or Neglect to Make Entries In, or 
 
 Allow Inspection of. Stock Books, § 342. 
 
CYCLOPEDIC ANALYSES cxxxi 
 
 CHAPTER VII. B, 7 -Continued. 
 
 h. With Regard to Reports or Statements. 
 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement, § 343. 
 bb. For Falsity of, or Omission in, Statement of 
 
 Corporate Affairs, § 344. 
 cc. For Failure to Make and File Annual Report, 
 § 345. 
 8. Liabilities Common to Directors and Officers. 
 
 a. In General, § 346. 
 
 b. For Sale of Stock Which Do Not Own, § 347. 
 
 c. For Increasing Capital Stock Beyond Amount Au- 
 
 thorized, § 348. 
 
 d. For Loans to Stockholders, § 349. 
 
 e. For Transfer to Directors, Officers or Stockholders of 
 
 Property of Corporation Not Paying Due Obliga- 
 tions, § 350. 
 
 f. With Regard to Making Certificates, Reports, State- 
 
 ments and Notices. 
 
 aa. For Failure, or Falsity, of Certificate of Pay- 
 ment of Capital Stock, § 351. 
 
 bb. To One Becoming Creditor or Stockholder on 
 Faith of False Representations In, § 352. 
 
 g. For Misconduct and Mismanagement. 
 
 aa. Governing Statutes, § 353. 
 bb. In General, § 354. 
 cc. Grounds of Action. 
 
 aaa. In General, § 355. 
 . bbb. Under Statute, § 356. 
 dd. Who May Sue. 
 
 aaa.- In General, Stockholder, § 357. 
 bbb. Under Statute. 
 
 aaaa. Attorney-General, § 358. 
 bbbb. Corporation, § 359. 
 cccc. Creditor, § 360. 
 dddd. Director, Trustee, Receiver or 
 Other Officer, § 361. 
 ee. Practice in Actions. 
 
 aaa. In General, § 362. 
 bbb. Under Statute, § 363. 
 ff. Relief Obtainable in Actions, 
 aaa. In General, § 364. 
 bbb. Under Statute, § 365. 
 C. Agents. 
 
 1. Employment and Compensation, § 366. 
 
 2. Proof of Authority, § 367. 
 
 3. Powers in General, § 368. 
 
 4. Dealing with Corporation, § 369. 
 
 5. Service of Process Upon to Bind Corporation, 
 
 a. Governing Statutes, § 370. 
 
 b. In General, § 371. 
 
 e. As Managing Agent, § 372. 
 
 d. As Officer, § 373. 
 
 e. When Corporation in Receivership, § 374. 
 
 6. Liabilities In General, § 375. 
 
cxxxii CYCLOPEDIC ANALYSES 
 
 CHAPTER VII. C — Continued. 
 
 7. Liabilities Common to Officers and Agents, for Fraud in 
 
 Procuring Organization and Increasing Stock of Cor- 
 poration, § 376. 
 
 8. Liabilities Common to Directors, Officers and Agents. 
 
 a. For Political Contributions and Practicing Law, 
 
 § 377. 
 
 b. For Omitting to Disclose Service on Himself of In- 
 
 junction Against Corporation, § 378. 
 
 c. For Fraud in Issue and Sale of Stocks and Bonds, 
 
 § 379. 
 
 d. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entrv in 
 
 Books, § 380. 
 bb. For Refusal or Neglect to Make Entries In, and 
 
 Allow Inspection of, Stock Book, § 381. 
 
 e. With Regard to Reports or Statements. 
 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement, § 382. 
 bb. For Falsity of, or Omission in. Statement of 
 
 Corporate Affairs, § 383. 
 
 CHAPTER VIII. 
 
 POWERS, DUTIES AND LIABILITIES OF CORPORATIONS. 
 
 XIII. POWERS, DUTIES AND LIABILITIES OF CORPORATIONS. 
 
 A. In General, § 384. 
 
 B. Under Charter, § 385. 
 
 C. Under Statute, § 386. 
 
 D. Ultra Vires. 
 
 1. In General, § 387. 
 
 2. Specific Examples. 
 
 a. In General, § 388. 
 
 b. Helping Customers, § 389. 
 
 3. Plea of. No Defense to Corporation if not Subserve Jus- 
 
 tice or if Benefits Have Been Received. 
 
 a. In General, § 390. 
 
 b. When Corporation Estopped, § 391. 
 
 c. When Other Party Estopped, § 392. 
 
 4. Defense of, Must Be Pleaded, § 393. 
 
 E. Dealings Affecting Debtors and Creditors. 
 
 1. Governing Statutes, § 394. 
 
 2. In General, § 394-a. 
 
 3. Borrowing Money. 
 
 a. In General, § 395. 
 
 b. Usury, § 396. 
 
 4. Assigning and Distributing for Benefit of Creditors, § 397. 
 
 5. Debtors In General, § 398. 
 
 6. Loaning Money, § 399. 
 
 7. Execution, Attachment and Garnishment. 
 
 a. As to Creditors, § 400. 
 
 b. As to Debtors, § 401. 
 
 8. Transfer While Insolvent or After Failure to Pay Lia 
 
 bilities. 
 
CYCLOPEDIC ANALYSES cxxxiii 
 
 CHAPTER VIII. E, 8 — Continued. 
 
 a. Governing Statutes, § 402. 
 
 b. In General, § 403. 
 
 c. What Constitutes Preferential Transfer. 
 
 aa. In General, § 404. 
 bb. Mortgage, § 405. 
 
 CO. Judgment, § 406. 
 
 dd. Intent to Prefer, § 407. 
 
 ee. When Does Insolvency Exist, § 408. 
 
 ff. Transfer By What Persons Prohibited, § 409. 
 gg. Transfer To What Persons Prohibited, § 410. 
 
 d. Who May Question Transfer, § 411. 
 
 e. Who Liable to Account for Property Transferred, 
 
 § 412. 
 
 F. Dealings With Other Corporations. 
 
 1. In General, § 413. 
 
 2. Interlocking Directorates, § 414. 
 
 3. Acquiring and Disposing of Stocks and Bonds of Another 
 
 Corporation. 
 
 a. Governing Statutes, § 415. 
 
 b. In General, § 416. 
 
 4. Combinations in Restraint of Trade. 
 
 a. Governing Statutes, § 417. 
 
 b. In General, § 418. 
 
 c. What is Trade or Commerce, § 419. 
 
 d. What Constitutes Restraint or Combination, § 420. 
 
 G. Internal Management, § 421. 
 H. Contracts, § 422. 
 
 I. Commercial Paper. 
 
 1. In General, § 423. 
 
 2. Accommodation Paper, § 424. 
 J. Torts. 
 
 1. Nuisance, § 425. 
 
 2. Libel and Slander, § 426. 
 
 3. Trespass, § 427. 
 
 4. False Representation, § 428. 
 
 5. Malicious Prosecution, § 429. 
 K. Crimes and Contempt, § 430. 
 
 L. Annual Report, § 431. 
 M. Political Contributions, § 432. 
 N. Practising Law and Medicine, § 433. 
 0. Liability for Others' Acts. 
 
 1. In General, § 434. 
 
 2. For Torts Of, § 435. 
 
 3. For Contracts By, § 436. 
 
 4. For Crimes By, § 437. 
 
 5. When Corporation Retains Benefit of, § 438. 
 P. Actions By and Against Corporations. 
 
 1. Governing Statutes, § 439. 
 
 2. In General, § 439-a. 
 
 3. Averment and Proof of Corporate Existence, § 440, 
 
 4. Verification of Pleadings, § 441. 
 
 5. Jurisdictional Questions, § 442. 
 
 6. Service of Process On, § 443. 
 
 7. Cessation and Revivor, § 444. 
 
cxxxiv CYCLOPEDIC ANALYSES 
 
 CHAPTER VIII. P — Continued. 
 
 8. Actions on Notes, § 445. 
 
 9. Costs and Security for Costs, § 446. 
 
 10. Examination Before Trial, § 447. 
 
 11. Inspection of Corporate Books, § 448. 
 
 12. Witnesses, § 449. 
 
 13. Supplementary Proceedings, § 450. 
 
 CHAPTER IX. 
 
 XIV. CORPORATE EXISTENCE AND CHANGE: 
 
 [Existence, Expiration, Vacation, Annulment, Sequestration, Dissolution, 
 Forfeiture, Sale, Merger, Consolidation and Reorganization.] 
 
 A. Existence. 
 
 1. In General, § 451. 
 '2. Proof of, § 452. 
 
 B. Expiration and Extension. 
 
 1. By Charter Time-Limit, § 453. 
 
 2. By Failure for Two Years to Organize or Undertake 
 
 Duties, § 454. 
 
 C. Vacation, Annulment and Injunction. 
 
 1. Governing Statutes, § 455. 
 
 2. In General, § 456. 
 
 3. Grounds. 
 
 a. Procuring Incorporation on Fraudulent Suggestion 
 
 or Material Concealment, § 457. 
 
 b. Offending Against Law or Creating Act; Failure of, 
 
 or Unauthorized Exercise, or Surrender, of Rights, 
 § 458. 
 
 4. Leave of Court, § 459. 
 
 5. Who May Take Steps For, § 460. 
 
 6. Trial and Testimony, § 461. 
 
 7. Injunction, Receiver, Account, Distribution, Judgment 
 
 and Practice, § 462. 
 
 8. Creditors' Rights and Liabilities, § 463. 
 
 D. Sequestration, Dissolution and Forfeiture. 
 
 1. Distinctions, § 464. 
 
 2. Sequestration. 
 
 a. Governing Statutes, § 465. 
 
 b. In General, § 466. 
 
 c. Injunction and Receiver, § 467. 
 
 d. Trial and Testimony, § 468. 
 
 e. Creditors, § 469. 
 
 f. Practice, Judgment and Subsequent Proceedings, 
 
 § 470. 
 
 3. Dissolution and Forfeiture. 
 
 a. In General, § 471. 
 
 b. Forfeiture for Maintaining Nuisance, § 471-a. 
 
 c. Voluntary Dissolution. 
 
 aa. Before Payment of Capital Stock, § 472. 
 bb. By Unanimous Consent, § 473. 
 cc. By Court Proceedings. 
 
 aaa. Petition and Grounds, § 474. 
 
 bbb. Schedule and Affidavit, § 475. 
 
 cce. Practice : — Notice to Attorney-General ; 
 
CYCLOPAEDIC ANALYSES cxxxv 
 
 CHAPTER IX. D, 3, eec — Continued. 
 
 Order to Show Cause; Receivers, In- 
 junction, Referee, Hearing, Report, 
 Decision, Final Order, § 476. 
 ddd. In General, § 477. 
 
 d. Compulsory Dissolution. 
 
 aa. Governing Statutes, § 478. 
 
 bb. In General, § 479. 
 
 cc. Grounds, § 480. 
 
 dd. Who May Initiate, § 481. 
 
 ee. Where To Be Initiated, § 482. 
 
 ff. Trial and Testimony, § 483. 
 
 gg. Process; Injunction; Receiver; Keeping Attor- 
 ney-General Advised, § 484. 
 
 hh. Creditors, § 485. 
 
 ii. Judgment, Distribution and Subsequent Prac- 
 tice, § 486. 
 4. Effect of Dissolution. 
 
 a. In General, § 487. 
 
 b. On Actions, § 488. 
 
 e. On Creditors, § 489. 
 
 d. On Judgments, § 490. 
 
 e. On Contracts, § 491. 
 
 f. On Liabilities of Directors, Officers and Stockholders, 
 
 § 492. 
 
 E. Voluntary Sale of Property and Franchise. 
 
 1. In General, § 493. 
 
 2. To What Corporation, and of What, § 494. 
 
 3. Stockholders' Consent, § 495. 
 
 4. Stockholders' Dissent and Procedure Thereon, § 496. 
 
 5. Effect of Sale Pursuant to Statute, § 497. 
 
 F. Merger and Consolidation. 
 
 1. Distinction, § 498. 
 
 2. Merger, § 499. 
 
 3. Consolidation. 
 
 a. In General, § 500. 
 
 b. What Corporations May Consolidate, § 501. 
 
 c. The Agreement of Consolidation, § 502. 
 
 d. Stockholders' Consent, § 503. 
 
 e. Stockholders' Dissent or Failure to Surrender Stock, 
 
 and Procedure Thereon, § 504. 
 
 f. Filing, and Evidentiary Value, of Consolidation 
 
 Agreement and Proceedings, § 505. 
 
 g. Effect of, § 506. 
 
 G. Reorganization. 
 
 1. In General, § 507. 
 
 2. Under Business Corporations Law, § 507-a. 
 
 3. To Provide for Stock Without Nominal or Par Value, 
 
 § 507-b. 
 
 4. Reorganization Agreement. 
 
 a. Construction of, § 508. 
 
 b. Modification or Rescission of, § 509. 
 
 5. Rights, Powers and Liabilities of Parties. 
 
 a. Of Bondholders, § 510. 
 
 b. Of Reorganization Committee, § 511. 
 e. Of Old and New Corporation, § 512. 
 
cxxxvi CYCLOPEDIC ANALYSES 
 
 CHAPTER X. 
 
 RECEIVERS. 
 XV. RECEIVERS: 
 
 A. Definitions and Kinds, § 513. 
 
 B. Appointment. 
 
 1. In General, § 514. 
 
 2. When Appointed. 
 
 a. In General and in Supp. Pro., § 515. 
 
 b. On Vacation or Annulment, § 516. 
 
 c. On Sequestration and Dissolution, § 517. 
 
 d. On Foreclosure, § 518. 
 
 3. Where and By What Court Appointed and Controlled, 
 
 § 519. 
 
 4. Notice of Application and Appointment, § 520. 
 
 5. Effect of Appointment, § 521. 
 
 C. Qualification, § 522. 
 
 D. Powers, Duties and Liabilities. 
 
 1. Under Statute. 
 
 a. In General, § 523. 
 
 b. When Appointed on Application of Attorney-Gen- 
 
 eral, § 524. 
 
 c. On Sequestration and Dissolution, § 525. 
 
 2. In General, § 526. 
 
 3. Subject to Court Control, § 527. 
 
 4. When Only One and When More, § 528. 
 
 5. As to Moneys, Drafts, and Books, § 529. 
 
 6. As to Contracts and Agreements, § 530. 
 
 7. As to Leases, § 531. 
 
 8. As to Counsel, § 532. 
 
 9. As to Recoveiy of Stock Subscriptions, § 533. 
 
 10. As to Recovery of Assets and Penalties, § 534. 
 
 11. As to Appraisal of Property, § 535. 
 
 12. As to Holding Real Property in Trust, § 536. 
 
 13. As to Selling and Converting Property, § 537. 
 
 14. As to Debts and Credits, § 538. 
 
 15. As to Receivers' Certificates, § 539. 
 
 E. Reports, § 540. 
 
 F. Accountings, § 541. 
 
 G. Compensation and Expenses. 
 
 L In General, § 542. 
 
 2. Expenses, S 543. 
 
 3. Compensation. 
 
 a. Under Statute. 
 
 aa. Commissions on Voluntary Dissolution, § 544. 
 bb. Commissions In Other Cases, § 545. 
 cc. Additional Allowance, § 546. 
 dd. When More Than One Receiver, § 547. 
 
 b. In General. § 548. 
 
 c. On What Allowed, § 549. 
 H. Payments and Distribution. 
 
 1. Governing Statutes, § 550. 
 
 2. In General, ^ 551. 
 
 3. Preferred Claims. 
 
 a. Governing Statutes, § 552. 
 
 b. In General, § 553. 
 
 c. Who Are Laborers and Employees, § 554. 
 
CYCLOPEDIC ANALYSES cxxxvii 
 
 CHAPTER X — Continued. i 
 
 I. Tenure of Office. 
 
 1. In General, § 555. 
 
 2. Renouncing Trust, § 556. 
 
 3. Removal, § 557. 
 
 4. Filling Vacancy, § 558. 
 
 5. Survivor and Successor, § 559. 
 J. Court Proceedings. 
 
 1. In General, § 560. 
 
 2. By, § 561. 
 
 3. Against, § 562. 
 
 CHAPTER XI. 
 
 TAXATION. 
 XVI. TAXATION: 
 
 A. General Statement of Taxes to Which Corporations are Sub- 
 
 ject, § 563. 
 
 B. In General, § 564. 
 
 C. Organization Tax. 
 
 1. "What Corporations Must Pay, § 565. 
 
 2. Amount and Computation of Tax. 
 
 a. In General, § 566. 
 
 b. On Increase, Decrease, Consolidation or Change from 
 
 Par to Non-par, § 567. 
 
 c. When Due and Payable, § 568. 
 
 d. Effect of Failure to Pay, § 569. 
 
 D. State-Income and Franchise Taxes. 
 
 1. What Corporations Pay Which Taxes, § 570. 
 
 2. State-Income Tax. 
 
 a. In General, § 571. 
 
 b. What Corporations Subject To. 
 
 aa. In General, § 572. 
 
 bb. What Are Manufacturing Corporations, § 573. 
 cc. What Are Mercantile Corporations, § 574. 
 
 c. How To Ascertain Net Income to Be Taxed, § 575. 
 
 d. Amount of Tax, § 576. 
 
 e. Reports. 
 
 aa. Who To Make, When and To Whom, § 577. 
 bb. Contents and Form, § 578. 
 cc. Effect of Failure to Make or Fraudulent State- 
 ment In, § 579. 
 
 f . Notice of Tax, § 580. 
 
 g. Review and Revision of Tax. 
 
 aa. By Tax Commission. 
 
 aaa. On Application Within Year, § 581. 
 bbb. When Tax Based on Estimate By 
 
 Commission, § 582. 
 ccc. When United States Changes Its Tax, 
 § 583. 
 bb. By Certiorari, § 584. 
 h. When and To Whom Tax Payable, § 585. 
 i. Penalty and Lien on Nonpayment, § 586. 
 j. Audit, Apportionment, Collection and Deposit of 
 Tax, and Powers of Commission, § 587. 
 
cxxxviii CYCLOPAEDIC ANALYSES 
 
 CHAPTER XI. — Continued. 
 
 E. State-Franchise Tax. 
 
 1. In General, § 588. 
 
 2. What Corporations Subject To. 
 
 a. In General, § 589. 
 
 b. Capital Stock Employed in State, § 590. 
 
 c. Exercising Franchises or Doing Business in State, 
 
 §591. 
 
 3. How to Ascertain Tax. 
 
 a. Governing Statutes, § 592. 
 
 b. What and Where are Capital Stock, Assets, Earnings 
 
 Dividends, § 593. 
 
 4. Rate of Tax. 
 
 a. When Dividends Are 6 Per Cent, or More, § 594. 
 
 b. When No Dividends or Less Than 6 Per Cent., § 595. 
 
 c. When More Than One Kind of Capital Stock and 
 
 Dividends Are Declared, § 596. 
 
 d. When Stock Has No Par Value, § 597. 
 
 e. In All Other Cases, § 598. 
 
 5. Review, § 599. 
 
 F. Local Real Estate and Personal Property (Including Corporate 
 Capital) Taxes. 
 
 1. Real Property Tax. 
 
 a. In General, § 600. 
 
 b. What Corporations Subject To, § 601. 
 
 c. What is Taxable as Real Property and How Valued, 
 
 § 602. 
 
 d. Place of Taxation of Real Property, § 603. 
 
 2. Personal Property Tax Including Tax on Capital. 
 
 a. What Corporations Subject To, § 604. 
 
 b. What Is Taxable. 
 
 aa. Governing Statutes, § 605. 
 
 bb. Personal Property in General, § 606. 
 
 CO. Corporate Capital. 
 
 aaa. In General, § 607. 
 bbb. Not Share Stock, § 608. 
 ccc. At Actual Value. 
 
 aaaa. In General, § 609. 
 bbbb. Not Market Value of Shares, 
 § 610. 
 ddd. Exceptions and Exemptions, § 611. 
 eee. Surplus Profits or Reserve Funds, 
 
 § 612. 
 fff. Real Estate, § 613. 
 ggg. Stock In Other Corporations, § 614. 
 dd. Debts and Liabilities, § 615. 
 ee. Franchises, § 616. 
 ff. Patents, § 617. 
 gg. Good-Will, § 618. 
 hh. Dividends, § 619. 
 d. Place of Taxation of Personal Property Including 
 Corporate Capital, § 620. 
 
 3. Procedure of Assessing Real and Personal Property 
 
 (Including Capital Stock) Taxes. 
 a. Ascertainment of Property Exempt, § 621. 
 
CYCLOPEDIC ANALYSES cxxxix 
 
 CHAPTER XI. F, 3 — Continued. 
 
 b. Ascertainment of Property and Corporations Tax- 
 
 able, § 622. 
 
 c. Assessment on the Rolls, § 623. 
 
 d. Statements and Reports By Corporations. 
 
 aa. Governing Statutes, § 624. 
 
 bb. How Far Binding on Taxing Authorities, § 625. 
 
 e. Review by and Complaint to Assessors. 
 
 aa. Examination of Assessments and Complaints, 
 
 § 262. 
 bb. Hearing, § 627. 
 cc. Equalization and Cancellation of Assessments 
 
 and Levy and Cancellation of Tax, § 628. 
 
 f. Miscellaneous Statutory Provisions, § 629. 
 G. Local Special Franchise Tax. 
 
 1. In General, § 630. 
 
 2. What is Taxable as Special Franchise, § 631. 
 
 3. Place of Taxation on Special Franchise, § 632. 
 
 4. Reports By Corporations. 
 
 a. On Acquisition of Special Franchise, § 633. 
 
 b. Subsequent and Annual Reports, § 634. 
 
 c. Form and Verification, § 635. 
 
 d. Penalty for Failure to Make or for Disclosing, § 636. 
 
 5. Valuation and Equalization of Special Franchise. 
 
 a. Preliminarily By Tax Commission, § 637. 
 
 b. Notice of Hearing of Complaints, § 638. 
 
 c. Hearing, § 639. 
 
 d. Final Valuation By Tax Commission on Basis of Net 
 
 Earnings or Otherwise, § 640. 
 
 e. Filing, Entry, Notice of, Basis of All Taxation on 
 
 Franchise, Information As To, § 641. 
 6. How Far Taxation on Special Franchise Relieves 
 from Other Taxes, § 642. 
 7. Review By Certiorari, § 643. 
 H. Review By Certiorari. 
 
 1. Procedure in General Both in Real and Personal Prop- 
 
 erty (Including Capital Stock) and Special Franchise 
 Certiorari; and in Income-Tax and Franchise Tax 
 Certiorari, § 644. 
 
 2. Certiorari to Review Real and Personal Property (Includ- 
 
 ing Capital Stock) and Special Franchise Taxes, 
 a. Petition. 
 
 aa. Who Mav Make, § 645. 
 
 bb. Where and When Made, § 646. 
 
 cc. Form and Contents, § 647. 
 1). The Writ of Certiorari. 
 
 aa. When Allowed and Effect, § 648. 
 
 bb. Against Whom Issued, § 649. 
 
 cc. Form and Contents, § 650. 
 
 dd. Service of, § 651. 
 c. The Return to the Writ. 
 
 aa. When and Where Returnable, § 652. 
 
 bb. Form and Contents of Return, § 653. 
 
 ec. Filing of, § 654. 
 
cxl CYCLOPEDIC ANALYSES 
 
 CHAPTER XI. H, 2 — Continued. 
 
 d. Hearing, Reference, Striking Out or Cori-ecting, or 
 
 Reassessment, 
 aa. In General, § 655. 
 bb. In Special Franchise Certioraris, § 656. 
 
 e. Costs, § 657. 
 
 f. Appeals, § 658. 
 
 g. Refund; Apportionment of Mixed Assessments; Col- 
 
 lection After Removal from County; Collection B.v 
 Supp. Pro.; Contempt, Fines, Imprisonment; Dis- 
 missal of Proceedings; Cancellation For Lack of 
 Jurisdiction or of Personalty; Failure of Collector 
 to Pay Over; Sequestration of Corporation Not 
 Paying; Recovery of Surplus from Sale, § 659. 
 3. Certiorari to Review State-Income and Franchise Taxess. 
 
 a. In General, § 660. 
 
 b. Petition or Affidavit. , 
 
 aa. Who May Make, § 661. 
 
 bb. Where and When Made, g 662. 
 
 cc. Form, Contents and Grounds, § 663. 
 
 c. Notice, § 664. 
 
 d. Deposit of Tax and Filing of Undertaking, S 665. 
 
 e. The Writ of Certiorari. 
 
 aa. When Allowed and Effect, § 666. 
 bb. Against Whom Directed. S 667. 
 cc. Form and Contents, § 668. 
 dd. Service of, § 669. 
 
 f. The Return to the Writ. 
 
 aa. When and Where Returnable, § 670. 
 bb. Form and Contents, § 671. 
 cc. Filing of, § 672. 
 
 g. Hearing, § 673. 
 
 h. Final Order, S 674. 
 i. Costs, § 675. 
 ,i. Appeals, § 676. 
 
 k. Defective or Omitted Returns; When One Certio- 
 raried Out of Office, Dead, etc. ; Bringing In Inter- 
 ested Parties; Substitution of Mandamus for Cer- 
 tiorari, § 677. 
 I. Stock Transfer Tax. 
 
 1. In General, § 678. 
 
 2. On What Imposed, § 679. 
 
 3. Amount and Computation of Tax, § 680. 
 
 4. Stamps and Payment, § 681. 
 
 5. Bill, Memorandum or Agreement of Sale, § 682. 
 
 6. Penalties for Not Paying Tax, Not Cancelling or Not 
 
 Affixing or Illegally Using Stamps, § 683. 
 
 CHAPTER XII. 
 
 FOREIGN CORPORATIONS. 
 
 XVII. FOREIGN CORPORATIONS: 
 
 A. Definitions, § 684. 
 
 B. Rights, Powers and Liabilities under New York Laws. 
 
CYCLOPAEDIC ANALYSES cxli 
 
 CHAPTER XII. B — Continued. 
 
 1. In General, § 685. 
 
 2. As to Real Estate, § 686. 
 
 3. As to Proceedings Supplementary to Execution, § 087. 
 
 4. .A.S to Assignments, Preferential or Otherwise, § 688. 
 
 5. As to Monopoly, Merger and Sequestration, § 689. 
 
 6. As to Banking and Political Contributions, § 690. 
 
 C. License or Certificate To Do Business in New Yoric. 
 
 1. In General, § 691. 
 
 2. Papers to be Filed Before License or Certificate Issues, 
 
 § 692. 
 
 3. Form of License or Certificate, § 693. 
 
 4. What Corporations Entitled To, § 694. 
 
 5. When Corporation "Doing Business-" in New York so as 
 
 To Need License, § 695. 
 
 6. Penalty for Not Obtaining License or Making and Keep- 
 
 ing Alive Designation of Agent, § 696. 
 
 7. Revocation for Nuisance; and Voluntarv Surrender, 
 
 § 696-a. 
 
 D. Doing Business or Employing Capital in New York. 
 
 1. Governing Statutes, § 697. 
 
 2. In General, § 698. 
 
 3. When Business Must Be Done, § 699. 
 
 4. What Kind of " Business " is Meant by Statute, § 700. 
 
 5. Sporadic Transactions in New York, § 701. 
 
 6. When Has Office in New York. 
 
 a. In General, § 702. 
 
 b. Plus Something More, § 703. 
 
 7. Transactions in New York Through Agents or Salesmen, 
 
 § 704. 
 
 8. Transactions. Through Commission Merchants in New 
 
 York, § 705. 
 . 9. Miscellaneous Cases, § 706. 
 
 E. What Constitutes Doing a Manufacturing Business in New 
 
 York, § 707. 
 
 F. Books. 
 
 1. In General, § 708. • 
 
 2. Stock Book. 
 
 a. In General, § 709. 
 
 b. What Corporations Must Keep, § 710. 
 
 c. Where To Be Kept, § 711. 
 
 d. Form and Contents, § 712. 
 
 e. Inspecting and Making Extracts From, § 713. 
 
 f . Penalty for Refusing Inspection, § 714. 
 
 G. Annual Report to Secretary of State. 
 
 1. When To Be Made, § 715. 
 
 2. Contents and Form, § 716. 
 
 3. Filing of Report, § 717. 
 
 4. Penalty for Failure to Make and File, § 718. 
 H. Taxation. 
 
 1. Right to Tax Foreisrn Corporations, § 719. 
 
 2. Real and Personal Property Taxes. 
 
 a. In General, § 720. 
 
 b. Place of Taxation, § 721. 
 
 c. What Taxable, § 722. 
 
 d. Exemptions, § 723. 
 
cxlii CYCLOPEDIC ANALYSES 
 
 CHAPTER XII. H — Continued. 
 
 3. On Sums Invested in New York Business, § 72-1. 
 
 4. Special Franchise Tax, § 725. 
 
 5. Franchise Tax or Income Tax, § 726. 
 
 6. License Tax. 
 
 a. What Corporations Subject To, § 727. 
 
 b. To Whom Paid, § 728. 
 
 e. When To Be Paid, § 729. 
 
 d. For What Paid, § 730. 
 
 e. Amount and Computation of Tax, § 731. 
 
 f. Tax Commission Fixes Capital Taxable, Examines 
 
 Corporate Books, Records and Employees, and 
 Comptroller Collects Taxes, § 732. 
 
 g. Penalty for Failure To Pay, § 733. 
 
 7. Of Manufacturing Corporations, § 734. 
 I. Actions By and Against. 
 
 1. In General, § 735. 
 
 2. By One Foreign Corporation or a Non-Resident Against 
 
 Another Foreign Corporation, § 736. 
 
 3. By. 
 
 a. In General, § 737. 
 
 b. In What Court and County, § 738. 
 
 c. When May Bring. 
 
 aa. In General, § 739. 
 
 bb. When Have Not Obtained License to Do Busi- 
 ness and Paid Fee Therefor, 
 aaa. In General, § 740. 
 bbb. When Doing Business in New York, 
 
 §74L 
 ece. On Contract When No License Obtained, 
 aaaa. In General, § 742. 
 bbbb. What Contracts May Not Be 
 
 Sued On, § 743. 
 ecec. By Assignee, § 744. 
 ddd. On Any Cause When License Fee Not 
 Paid, § 745.. 
 
 d. Pleading, Practice and Evidence. 
 
 aa. In General, § 746. 
 
 bb. Verification of Pleadings, § 747. 
 
 ce. Statement and Proof of Corporate Name and 
 
 Incorporation, § 748. 
 dd. Security for Costs, § 749. 
 ee. Corporate Books, § 750. 
 
 ff. As to Obtaining License and Paying Fee for 
 Privilege of Doing Business in New 
 York, 
 aaa. In General, § 751. 
 bbb. As to Pleading or Proving Corporation 
 
 is a Stock Corporation, § 752. 
 ccc. When No License Fee Paid, § 753. 
 ddd. When Assignee Sues, § 754. 
 eee. Necessity and Manner of Pleading in 
 
 Complaint, § 755. 
 fff. Necessity and Manner of Pleading as 
 Defense, § 756. 
 
CYCLOPEDIC ANALYSES cxliii 
 
 CHAPTER XII. I, 3, d - Continued. 
 
 ggg. Necessity and Manner of Proof Of Com- 
 pliance or Non-Compliance witlj Stat- 
 . ute, § 757. 
 
 4. Against. 
 
 a. In General, § 758. 
 
 b. Who May Sue and For What. 
 
 aa. In General, § 759. 
 
 bb. Attorney-General, § 760. 
 
 c. In What Court and County, § 761. 
 
 d. When Barred By Statute of' Limitations, § 762. 
 
 e. Service of Process. 
 
 aa. Governing Statutes, § 763. 
 bb. In General, § 764. 
 
 cc. On President, Vice-President, Treasurer, Assist- 
 ant Treasurer, Secretary, Assistant 
 Secretary and Officers -with Corre- 
 sponding Fanctions. 
 aaa. In General, § 765. 
 
 bbb. On Officer Passing Through or Tempo- 
 rarily In State, | 766. 
 ccc. On Officer Who Has Resigned, § 767. 
 ddd. On Officer In State as Witness, § 768. 
 dd. On Agent Designated For Service of Process, 
 
 § 769. 
 ee. On Secretary of State, § 770. 
 ff. On Cashier, Director or Managing Agent.' 
 aaa. In General, § 771 
 bbb. On Director, § 772. 
 ccc. On Managing Agent. 
 
 aaaa. In General, § 773. 
 bbbb. Who Is " Managing Agent," 
 § 774. 
 
 f. Service of Notice of Sale on Foreign Corporate Mort- 
 
 gagor, § 775. 
 
 g. Pleading, Practice and Evidence. 
 
 aa. In General, § 776. 
 
 bb. What Law, Governs, § 777. 
 
 cc. Necessity and Manner of Alleging Corporate 
 
 Existence and Plaintiff's Residence, § 778. 
 dd. Necessity and Manner of Denying Corporate 
 
 Existence, § 779. 
 ee. Necessity and Manner of Proving Corporate 
 
 Existence, § 780. 
 ff. Verification of Pleadings, § 781. 
 gg. In Actions to Recover on Evidence of Debt, 
 
 § 782. 
 hh. Examination of Books, § 783. 
 ii. Pleading Usury, § 784. 
 jj. When Corporation Not Personally Served and 
 
 Does Not Appear, § 785. 
 h. Attachment. 
 
 aa. In General, § 786. 
 
 bb. What Attachable, § 787. 
 
 cc. Who May Attach, § 788. 
 
cxliv CYCLOPEDIC ANALYSES 
 
 CHAPTER XII. I, 4, h — Continued. 
 
 dd. Sufficiency of Moving Papers, § 789. 
 ee. On What and How Sheriff May Levy, § 790. 
 J. Receivers. 
 
 1. Appointment. 
 
 a. When New York Courts Will Appoint. 
 
 aa. In General, § 791. 
 bb. In Supp. Pro., § 792. 
 
 b. Kind of Receivers New York Courts Will Appoint, 
 
 § 793. 
 
 c. Revocation of Appointment, § 794. 
 
 d. Xotice of Appointment, § 795. 
 
 2. Powers of. 
 
 a. In general, § 796. 
 
 b. When Appointed In Another State, § 797. 
 
 c. Of Ancillary Receiver Appointed in New Yoi'k, § 798. 
 
 3. Accounting and Compensation, § 799. 
 
 4. Actions By and Against. 
 
 a. In General, § 800. 
 
 b. Service of Process On, § 801. 
 
 K. Officers, Directors and Stockholders of Foreign Corporations. 
 
 1. What Law Governs Contracts of, with Corporation, 
 
 § 802. 
 
 2. When New York Courts Will Entertain Actions By and 
 
 Against. 
 
 a. In General, g 803. 
 
 b. Testing Title to Office of, § 804. 
 
 3. Liabilities of. 
 
 a. In General, g 805. 
 
 b. Of n-rectors for Unauthorized Dividends, § 806. 
 
 c. Of Officers and Directors to Account for Injury to or 
 
 Loss of Corporate Property, § 807. 
 
 d. Of Stockholders for Corporate Debts, § 808. 
 
 c Of Stockholders for Unpaid Subscriptions, § 809. 
 
BUSINESS CORPORATIONS IN NEW YORK 
 
 CHAPTER I. 
 
 PROMOTERS AND CORPORATORS. 
 
 I. Promoters: 
 
 A. Definitions and Distinctions, § 1. 
 
 B. Powers and Liabilities : 
 
 1. Under Agreements in General, § 2. 
 
 2. Under Agreements Inter Sese, § 3. 
 
 3. Under Secret Agreements for Personal Profit, § 4. 
 
 4. In Binding Corporation by Agreements, § 5. 
 
 5. Toward Subscribers for False Representations, § 5a. 
 II. Corporators, § 6. 
 
 § 1. Promoters: Definitions and Distinctions,— A promoter 
 is one who, before the incorporation or organization of a com- 
 pany has started, works to bring about such incorporation. 
 He is distinguished from a corporator in that the latter does 
 not exist until the incorporation has begun. 
 
 § 2. Id.: Powers and Liabilities; Under Agreements in 
 General. — While it is true that ' * whenever a contract to form 
 a corporation contemplates as a necessary feature or con- 
 comitant of the scheme of organization that the directors of 
 the corporation when formed are to be deprived of their judg- 
 ment and discretion in matters which come within the scope 
 of their duty it will be declared void," yet an agreement to 
 form a corporation will be construed as meaning its formation 
 on a lawful and honest basis, and ' ' it will not be assumed as 
 matter of law that it was within the intention of the parties 
 to organize a corporation, and have its stock issued in 
 exchange for the property and rights of the plaintiff unless 
 the directors or stockholders of the corporation should 
 approve and ratify, after inquiry, the scheme as detailed in 
 the contract. ' ' ^ Equity will not compel specific performance 
 of a contract to form a corporation if the parties to the con- 
 tract are unable to agree upon the terms for the formation of 
 the company and are unfriendly.' The evidence admissible 
 
 ^ Electric Fireprooflng Co. v. generally, see notes in 25 L.R.A. 90 ; 
 
 Smith, 113 A. D. 615, 99 Supp. 37 18 L.R.A.(N.S.) 1106; L.R.A.19i6C, 
 
 (1906). 1000. 
 
 On the liability of promoters to ^ Rudiger v. Coleman, 112 A. D. 
 
 the corporation and its members, 279, 98 Supp. 461 (1906). 
 
2 BUSINESS CORPORATIONS IN NEW YORK § 3 
 
 to prove an agreement by one interested in the formation of a 
 corporation to pay an attorney in its stock for services in 
 launching it is discussed in the note case.^ 
 
 § 3. Id.: Under Agreements Inter Sese. — There is "no 
 objection on the score of public policy, to an agreement 
 between parties about to form a corporation, agreeing upon 
 the general plan, upon which it is to be organized and con- 
 ducted, so long as nothing is provided for inconsistent with 
 the provisions of the statute, or immoral in itself;" e. g. an 
 agreement vesting the management of the corporation in a 
 firm, selling part of the consideration for the issue of stock 
 to the corporation, " might not be binding upon the trustees 
 of the corporation when organized, but such an agreement 
 is not illegal. ' ' " There is "no principle of public policy, 
 which condemns an agreement between parties about to form 
 a corporation, because by the arrangement, the capital stock 
 is to be represented by property which they severally con- 
 tribute, at a valuation agreed upon between themselves. ' ' ° 
 A contract by which two people agree with a third to assist 
 him in forming a corporation and to preclude any one from 
 becoming a stockholder who would not agree in advance, in 
 •addition to paying cash for his hbldings, that such third per- 
 son should be employed as the corporation's sole general 
 agent so long as it lasted, subject to terminaton on six months' 
 notice, and should receive one third its gross receipts, is unen- 
 forceable as against public policy." Individuals who, under 
 their copartnership name, promote the organization of a cor- 
 poration, are severally liable for each others' misrepresenta- 
 tions and concealments made or done while engaged in such 
 promotion,' An agreement by one promoter to take, own and 
 hold one thousand shares, by another to take, own and hold 
 nine hundred and ninety-eight shares, and by a third to take, 
 own and hold two shares, and by the first, "if he shall at 
 any time sell or assign nine hundred and ninety-eight shares, ' ' 
 to transfer the other two shares to the second, does not mean 
 that the first must seU the nine hundred and ninety-eight 
 
 ^ Freeman v. Hartfleld, 172 A. D. basis only, a diflferent question 
 
 164, 158 Supp. 350 (1916). would be presented." 
 
 * Lorillard v. Clyde, 86 N. Y. 384 On liability of promoters inter se, 
 
 (1881). see note in 18 L.R.A.(N.S.) 1121. 
 
 = Lorillard v. Clyde, 86 N. Y. 384 « Flaherty v. Gary, 62 A. D. 116, 
 
 (1881). " If it had appeared, that 70 Supp. 951 (1901) ; aff'd 174 N. Y. 
 
 the oiganiization of the corporation 550, 67 N. B. 1082. 
 in this way was a device to defraud ' Walker v. Anglo- American 
 
 the public by putting valueless stock Mortgage & Trust Co., 72 Hun, 334, 
 
 on the market, having an apparent 25 Supp. 432 (1893). 
 
§§4,5 PROMOTERS 'AND CORPORATORS 3 
 
 shares, if at all, at one time, but that when the first, by one 
 sale or many, had disposed in the aggregate of nine hundred 
 and ninety-eight shares, then he would transfer the remaining 
 two shares to the second.^ 
 
 § 4. Id.: Under Secret Agreements for Personal Profit. — 
 A secret agreement whereby promoters of a corporation, on 
 surrender of their right to receive certain preferred stock 
 for their eiforts as such, are to get a percentage of the cor- 
 poration's annual profits, will not be enforced after stock of 
 the corporation has been bought by third parties without 
 notice of the secret arrangement." " Neither law nor equity 
 countenances the making of secret profits by a promoter or a 
 director of a corporation on the sale of property to the corpo- 
 ration. . . . It is only where the promoter informs every 
 subscriber or the director informs every fellow director and 
 stockholder that he is personally interested, and of the amount 
 of profit he expects to make on a sale to the corporation, that 
 the promoter or director will be permitted to make or retain a 
 profit on such a sale. . . . The burden is on the promoter 
 or director to show that his dealings were fair and that no 
 undue advantage has been taken of his fellow subscribers or 
 stockholders."^" A corporation itself may sue to make a 
 promoter account for secret profits made by him through a 
 sale of land to it." 
 
 § 5. Id.: In Binding Corporation by Agreements. — 
 " . . . • the promoters of a corporation are not the corpor- 
 ation. The legal body is distinct from the individuals who 
 compose it. The statute confers no authority upon the pro- 
 moters of a corporation to enter into preliminary contracts 
 binding, the corporation when it shall come into existence. 
 . . . But the corporation is at liberty to refuse to sanction 
 them, and if its sanction is obtained by the act or co-operation 
 of directors who have a private interest, . . . the corpora- 
 tion may . . . resist an action for specific performance, at 
 
 * Burden v. Burden, 159 N. Y. " Golton Improvement Company 
 
 287, 54 N. E. 17 (1899). v. Richter, 26 Misc. 26, 55 Supp. 
 
 » Dillon V. Commercial Cable Co., 486.(1899). 
 
 87 Hun, 444, 34 Supp. 370 (1895). On liability of promoters for se- 
 
 "Colton Improvement Co. v. cret profits, see notes in 25 L.R.A. 
 
 Richter, 26 Misc. 26, 55 Supp. 486 92; 18 L.R.A.(N.6.) 1119. 
 
 (1899). The fact that some of the Authorities discussing the ques- 
 
 stockholders and directors believed tion of secret dealings 'between ven- 
 
 and had some knowledge that the dor and one who promoted the 
 
 promoter was profiting by the sale organization of a corporate pur- 
 
 of land to it does not prevent the chaser as a ground for rescission 
 
 company from holding him to ae- of contract are collated in a note 
 
 count. in L.R.A.1916C, 1000. 
 
4 BUSINESS CORPORATIONS IN NEW YORK § 5 
 
 least in a case where it has not accepted the consideration 
 and taken the benefit." *^ "A subsequently formed corporation 
 is not bound by an agreement between its promoters (cita- 
 tions). It is only where such an agreement is ratified by the 
 corporation that it becomes binding upon it."" Promoters 
 can fetter the corporation they foster with no contracts, such 
 as the number of directors who shall manage the corpora- 
 tion's affairs." A promotion agreement resulting in fraud 
 on- the corporation formed in connection therewith may be 
 set aside by it upon discovery of the fraud." One giving his 
 note to promoters of a corporation pursuant to a proposal 
 made by them is not liable thereon to the corporation formed 
 fifteen months thereafter, if, long before incorporation, he 
 rescinded the proposal, sought to get back his note, and was 
 unable to do so solely because of false representations as to 
 its being misplaced or lost." Voluntary surrender by pro- 
 moters of their right to receive corporate stock for their ser- 
 vices precludes specific performance of a contract theretofore 
 made by the corporation with them to issue to them preferred 
 stock receiving a stipulated dividend from net earnings." 
 ' ' While a corporation is not bound by the engagements made 
 on its behalf by its promoters before its organization, it may, 
 after it is organized, make such engagements its contracts by 
 adopting them as its own. Less evidence tending to show 
 adoption will be required to establish it where the oifficers 
 were also the promoters, than where the officers and promot- 
 ers were different persons."" "... an agreement 
 made in behalf of a corporation about to be formed, although 
 not initially binding upon it, may, by the company's acts, 
 after it attains a legal existence, be so ratified as to become a 
 corporate obligation. This ratification may be effected by 
 the person who entered into the original agreement, if that 
 person, at the time of the ratification, has become an execu- 
 tive officer of the company, entitled in that capacity to bind it 
 
 ^^ Muiison V. Syracuse, Geneva & ^° Ea^ener v. Brockway, 58 A. D. 
 
 Corning R. R. Co., 103 N. Y. 58, 166, 68 Supp. 712 (1901) ; afE'd 171 
 
 8 N. E. 355 (1886). . N. Y. 629, 63 N. E. 1121. 
 
 ^^ Martin v. Remington-Martin " Dillon v. Commercial Cable Co., 
 
 Co., 95 A. D. 18, 88 Supp. 573 87 Hun, 444, 34 Supp. 370 (1895). 
 
 (1904). ^'Hall V. Herter Brothers, 83 
 
 "Bond V. Atlantic Terra Cotta Hun, 19, 31 Supp. 692 (1894). 
 
 Co., 137 A. D. 671, 122 Supp. 425 "... wh«n there are so few [five] 
 
 (1910). interested in the management of a 
 
 ■'^rinck V. Canadaway Fertilizer corporation-, ordinary business may 
 
 Co., 152 A. D. 391, 136 Supp. 914 be transacted without the formality 
 
 (1912) ; mod. 208 N. Y. 607, 102 of resolutions. It may be done by 
 
 N. E. 1102. conversation without formal votes. ' ' 
 
§ ^ PROMOTERS AND CORPORATORS 5 
 
 by such agreement."'' A contract made by one individual 
 with another cannot be considered that of a corporation there- 
 after formed because the former individual became its presi- 
 dent and stated to the latter that he was such corporation.'" 
 One seeking to recover from a corporation the value of ser- 
 vices rendered partly at least before its incorporation should 
 be, permitted to prove his contract with the promoter of the 
 corporation and its subsequent ratification thereof, and the 
 services rendered thereunder.' One engaged to procure sub- 
 scriptions to a corporation's capital stock, which is to be or- 
 ganized, cannot bind the corporation by his agreement to take 
 from a subscriber in payment of part of his subscription a 
 check on a bank in which the subscriber had no funds, so as 
 to preclude the corporation from suing on the check.'' One 
 accepting only as an officer of, and subscriber to stock of a cor- 
 poration, the work of another in organizing the company, and 
 this without knowledge that the latter claimed that he was 
 personally responsible for the value of such work, cannot be 
 held individually liable therefor.' Payments made by a com- 
 pany after incorporation in excess of a liability to an indi- 
 vidual incurred after incorporation constitute ratification of a 
 contract made with him prior to incorporation by the person 
 who became the corporation's president and treasurer.* 
 
 § 5a. Id.r Toward Subscribers for False Representations. — 
 Individuals promoting a corporation who make or conceal 
 material facts are liable to those subscribers who are damaged 
 by reliance thereon, whether such reliance is induced directly 
 by the promoters or the latters ' agents.** ' ' The promoter of 
 a company, whether he be a director or not, who knowingly 
 issues or sanctions the circulation of a false prospectus con- 
 taining untrue statements of material facts naturally tending 
 to mislead and to induce the public to purchase its stock or 
 
 ^'Mesinger v. Mesinger Bicycle Inc., 83 Misc. 74, 144 Supp. 685 
 
 Saddle Co., 44 A. D. 26, 60 Supp. (1913). 
 
 431 (1899) . A promoter made an ^ Syracuse, Phoenix & Oswego R. 
 
 agreement to hire plaintiff and pay R. Co. v. Gere, 4 Hun, 392 (1875). 
 
 him while away on a certain vaca- ^ Hepner v. Maybury, 23 Misc. 
 
 tion as well as while actually work- 262, 51 Supp. 170 (1898). 
 
 ing. When the promoter became * Galdieri & Co., Inc. v. Waist Co., 
 
 president he accepted plaintiff's 98 Misc. 612, 163 Supp. 154 (1917). 
 
 services pursuant to the agreement. On liability of corporation on 
 
 Held, an implied ratification binding contracts of promoters, see notes in 
 
 the corporation. 26 L.R.A. 544; 50 L.R.A.(N.S.) 979. 
 
 ^"Horowitz V. Broads Manufac- ^Walker v. Anglo-American 
 
 turing Co., 54 Misc. 569, 104 Supp. Mortgage & Trust Co., 72 Hun, 334, 
 
 988 (1907). 25 Supp. 432 (1893). 
 
 ' Grordon v. House of Childhood, 
 
6 BUSINESS CORPORATIONS IN NEW YORK § 6 
 
 Other securities is unquestionably responsible to those who 
 are injured thereby (citation). Where there are a number of 
 such promoters all the co-adventurers are held liable in dam- 
 ages for the fraud of an agent employed by them to effect the 
 sale of the corporate securities without reference to their own 
 moral guilt or innocence. "° Promoters of a corporation 
 occupy, before its organization, a position of trust and confi- 
 dence towards those whom they induce to invest in the enter- 
 prise, and if they do not disclose to such investors the price 
 they are to pay for the subject-matter of the incorporation, or 
 that they do not intend to exercise their options to purchase 
 such matter unless sufficient funds are furnished by others to 
 pay for the property and all the corporate organization ex- 
 penses, leaving for distribution among themselves a majority 
 of the stock, they are liable in damages for the loss sustained 
 by those whom they induce to invest in the shares.' A state- 
 ment by a promoter to one subscribing to a syndicate agree- 
 ment without solicitation that the former's subscription of 
 $500,000 then appearing on the agreement, would be paid in 
 cash does not amount to a fraudulent misrepresentation en- 
 titling the latter to rescind the agreement, if the subscription 
 was paid by turning in stock instead of cash, provided the 
 purchase by the syndicate managers of such stock was 
 proper.' One buying stock and receiving certificates therefor 
 pursuant to and in reliance upon circulars generally distrib- 
 uted reciting the organization of the corporation may recover 
 the amount paid for such certificates from the one responsible 
 for the purchase, certificates and circulars, if the corporation 
 was not in fact organized." Persons devising a fraudulent 
 scheme for the consolidation of certain railroads owned and 
 controlled by them and issuing bonds upon false representa- 
 tions as to the timber lands to be furnished as added security 
 under the mortgage to make the bonds secure and salable, 
 may be made liable to one injured thereby; and the corpora- 
 tion, too, if it was the instrumentality employed by them." 
 
 § 6. Corporators. — " Corporators exist before stockhold- 
 ers, and do not exist with them. When stockholders come in, 
 corporators cease to be."" Incorporators are liable from 
 
 ° Downey v. Finucape, 205 N. Y. ' Fenn v. Curtis, 23 Hun, 384 
 
 251, 40 L.R.A.(N.S.) 307, 98 N. E. (1881). 
 
 (1912). '"O'Beime v. Bullis, 158 N. Y. 
 
 'Brewster v. Hatch, 122 N. Y. 466, 53 N. E. 211 (1899). 
 
 349, 25 N. E. 505 (1890). " Chase v. Lord, 77 N. Y. 1 
 
 ^Heckseher v. Edenborn, 203 (1879). 
 N. Y. 210, 96 N. E. 441 (1911). 
 
§ 6 PROMOTERS AND CORPORATORS 7 
 
 the time of the granting of a charter to their corporation for 
 all acts whether it had a president or other officer, because 
 from that time it becomes a corporation for all intents and 
 purposes; and, as the officers are the only medium through 
 which it may act, the incorporators may delegate its power to 
 any of its members or require all to act together." A corpora- 
 tor is a competent witness in an action to which the corpora- 
 tion is a party." A corporation which has obtained from the 
 Legislature the single right of being a corporation and all the 
 powers of which might be exercised by individuals may de- 
 termine for itself who shall be admitted to be incorporators." 
 The Attorney-General may maintain an action upon either his 
 own information or the complaint of a private person 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.^^ The statute, hereinafter 
 quoted, provides that the action is triable as of right by a. 
 jury, and that the final judgment may do certain things." 
 
 ^^ Harrison v. Vermont Manga- ^* People v. Holstein-Friesian 
 
 nese Co., 1 Misc. 402, 20 Supp. 894 Assn., 41 Hun, 439 (1886). 
 (1892). 15 C. C. P. § 1948. 
 
 I'Couro V. Port Henry Iron Co., i« C. C. 'P. 5S 1950, 11956. 
 
 12 Barb. 27 (1851) ; Code of 1849, 
 §§ 397-8. See present C. C. P. 
 8 839. 
 
CHAPTER 11. 
 
 INCORPORATION AND NAME. 
 III. Incorporation: 
 
 A. Definitions, Distinctions and Nature of: 
 
 1. In General, § 7. 
 
 2. Partnership and Joint Venture, § 8. 
 
 3. De Facto and De Jure Corporations, § 9. 
 
 B. Certificate of, or Charter: 
 
 1. Definitions and Distinctions, § 10. 
 
 2. Governing Statutes: 
 
 a. In General, § 11. 
 
 b. Constitutional Limitations, § 12. 
 
 c. Legislative Control over Charters, § 13. 
 
 3. Contents: 
 
 a. /tc General, § 14. 
 
 b. JVam«, § 15. 
 
 c. Purposes, § 16. 
 
 d. Stock, Capital and Stockholders, § 17. 
 
 e. Principal Btisiness Office, § 18. 
 
 f. Duration, § 19. 
 
 g. Directors, § 20. 
 
 h. Subscribers, § 21. 
 
 4. Filing, Recording and Indexing, § 22. 
 
 5. Amendment of, and Addition to: 
 
 a. Governing Statutes, § 23. 
 
 b. For Informality, Unlawful Contents, or Defective Proof 
 
 or Acknowledgment, § 24. 
 
 c. To Correct or Add to Purposes of, § 25. 
 
 d. To Change Office and Place of Business, § 26. 
 
 e. To Change Number of Directors, § 27. 
 
 f. Preferred and Common and Non-par Value Stock, and 
 
 Classes of Preferred, § 28. 
 
 g. Increase or Reduction of Capital Stock, § 29. 
 
 h. Increase and Reduction of Number or Par Value of 
 Shares, § 30. 
 
 C. Fees and Taxes on Incorporation or Reorganization, § 31. 
 IV. Name: 
 
 A. Governing Statutes, § 32. 
 
 B. Protection of, § 33. 
 
 C. Change of, § 34. 
 
 D. On Reincorporation, Reorganization, Consolidation, Sale of Prop- 
 
 erty or Franchises, Merger, Dissolution an^ Assignment, § 35. 
 
 § 7. Incorporation: Definitions, Distinctions and Nature of, 
 In General. — The term corporation as used in the New York 
 State Constitution must be construed to include all associa- 
 tions and joint stock companies having any of the powers or 
 privileges of corporations not possessed by individuals or 
 
§ ^ INCORPORATION AND NAME 9 
 
 partnerships/ "A corporation shall be either, (1) a munic- 
 ipal 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 
 •^? t ^^^^^ corporation.'" The present treatise has to do 
 with business stock corporations. "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 on shares of the surplus profits of the 
 corpora,tion. A corporation is not a stock corporation because 
 of having issued certificates called certife^tes of stock, 
 but which are in fact merely certificates of membership, and 
 which is not authorized by law to distribute to its mem- 
 bers any dividends on shares of profits arising from the 
 operations of the corporation."^ " A ' domestic corpora- 
 tion ' 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 pur- 
 pose of construing such code. " * "A corporation is some- 
 what like a partnership, if one were possible, conducted 
 wholly by agents, where the copartners have power to appoint 
 the agents, but are not responsible for their acts. The power 
 to manage its affairs resides in the directors, who are its 
 agents, but the power to elect directors resides in the stock- 
 holders. The right to vote for directors and upon proposi- 
 tions to increase the stock or mortgage the assets, is about 
 all the power the stockholder has. So long as the manage- 
 ment is honest, within the corporate powers and involves 'no 
 
 ^ N. Y. Const, of 1894, art. 8, § 53. porations described in accordance 
 
 A corporation authorized to act as with this classification shall include 
 
 administrator is to be considered a all corporations theretofore formed 
 
 ' ' person ' ' in the statutes prescrib- belonging to such class. ' ' 
 ing who shall be entitled to letters ^ Gen. Corp. L. § 3 (L. 1909, 
 
 of administration. C. C. P. §§ 2588, c. 28). 
 
 2603. The term " person " used in *Gen. Corp. L. § 3 (L. 1909, 
 
 the provisions of the Code of Civil c. 28). See Code of Civil Proce- 
 
 Proeedure relating to proceedings dure, § 3343, subd. 18, which de- 
 
 for the condemnation of real prop- fines a " domestic corporation " as 
 
 erty includes a corporation. C. C. P. one «reated by or under the laws of 
 
 § 3358. New York State; or located in New 
 
 ^Gen. Corp. L. § 2 (L. 1909, York State, and created by or 
 
 c. 28) , which adds : ' 'A reference under the laws of the United States, 
 
 in a general law to a class of cor- or by or pursuant to the laws in 
 
10 BUSINESS CORPORATIONS IN NEW YORK ' § 8 
 
 waste, the stockholders cannot interfere, even if the adminis- 
 tration is feeble and unsatisfactory, but must correct such 
 evils through their power to elect other directors."" " The 
 title to the property of a company is in the fictitious entity 
 called the corporation, and if all the stock were owned by a 
 single person he could not by his conveyance affect the legal 
 title. ' ' * That officers of a corporation own about all its stock 
 does not permit them to appropriate its property as their 
 own ; and if they do, they are as liable as if they took the prop- 
 erty of an individual.' 
 
 § 8. Id.: Partnership and Joint Venture. — " It is said 
 . . . that the corporation here is in effect nothing more 
 than an incorporated partnership. This is true to a limited 
 extent, but I do not assent to that doctrine in its full scope 
 and entirety. Persons forming a corporation thereby gain 
 many immunities and privileges of which they are not pos- 
 sessed as members of a partnership. Their liability for the 
 debts and obligations of the business is limited and the death 
 of one of the members does not work a dissolution of the cor- 
 poration, as it does in the case of a partnership. For these 
 privileges the parties have to pay a price. They have not the 
 same unrestricted control and management of their enterprise 
 as they would have as partners, nor is the right of a single 
 party to the joint enterprise safeguarded either as against the 
 State or against the other parties in the case of a corporation 
 as in the case of a partnership. " * " . . . parties assum- 
 ing to act in a corporate capacity without a legal organization 
 as a corporate body, are liable as partners to those with 
 whom they contract . . . ; but when it is sought to charge 
 any one of them as a corporator or as a partner, the same rule 
 applies to each. If as a corporator, he must be shown to have 
 been such when the contract sued upon was made (citation). 
 If as a partner he must be shown to have been a member of 
 the firm when the contract sued upon was made. " ° Persons 
 receiving goods are liable as partners therefor if it develop 
 that the company through which they bought them was not a 
 
 force in the colony of New York Arnold, 167 N. Y. 368, 60 N. E. 
 
 before the 19th day of April, in the 647 (1901). 
 
 year 1775. At what stage in the proceeding 
 
 ^ Stokes V. Continental Trust Co., is an organization deemed to be 
 
 186 N. Y. 285, 12 L.R.A.(N.S.) 969, organized, see note in 18 L.R.A. 
 
 78 N. E. 1090 (1906). (N.S.) 748. 
 
 « Buffalo L., T. & S. D. Co. v. « Drucklieb v. Harris, 209 N. Y. 
 
 Medina Gas Co., 162 N. Y. 67, 56 211, 102 N. E. 599 (1913). 
 
 N. E. 505 (1900). "Fuller v. Eowe, 57 N. Y. 23 
 
 ^Saranac & L. P. R. R. Co. v. (1874). 
 
§ 9 INCORPORATION AND NAME 11 
 
 corporation (though they thought it was) because of defects 
 m organization." "A joint adventure between persons for 
 •the business of purchasing or selling property may create a 
 quasi partnership relation, which will subject him to the re- 
 sponsibility to account to whom, or by whom, property has 
 been intrusted, or received. Those, however, who engage in 
 the formation of a company or corporation, are not partners, 
 whatever their relations in the event of a successful termina- 
 tion. If the scheme prove abortive, the parties to it, certainly, 
 are remitted to their former situation." '' A syndicate agree- 
 ment by which a particular railroad is to be acquired, ex- 
 tended, another road built, coal properties along such roads' 
 routes acquired, and the sale or transfer thereof to a corpora- 
 tion and the division of the money or securities received 
 therefor among the syndicate subscribers accomplished, is 
 not strictly a partnership, though it has many of a partner- 
 ship 's features, but is what is now generally known as a joint 
 venture.'' A syndicate agreement under which the subscrib- 
 ers have no right, title or interest as such in properties to be 
 acquired, but only the right upon the termination or closing 
 out of the syndicate to their respective shares of the securities 
 or moneys received by the syndicate managers for the prop- 
 erties does not constitute the parties thereto partners as be- 
 tween themselves." 
 
 § 9. Id.: De Facto and De Jure Corporations. — " When it 
 " has fully complied with the law under which it is organized, it 
 is a corporation de jure; but where the persons desiring to 
 form such a corporation have made the attempt to comply 
 with the law and have failed in some essential matter, and 
 afterwards have done business under such defective organiza- 
 tion, then it is known as a corporation de facto. But it will 
 be observed in cases of de facto corporations there must have 
 been at least an attempt made to organize under some law. 
 If no such attempt has been made, and yet parties assume to 
 act as if there had, the concern is not even a de facto corpo- 
 ration, but a sham and a fraud, and all the parties connected 
 with it will be held liable as copartners and not as members 
 of a corporation. Thus it will be seen that two things are 
 necessary to be shown in order to establish the existence of a 
 
 ^"Perrine v. Levin, 68 Misc. 327, "Jones v. Gould, 209 N. Y. 419, 
 
 123 Supp. 1007 (1910). 103 N. E. 720 (1913). 
 
 ^^Schantz v. Oakman, 163 N. Y. As to partnership liability of 
 
 148, 57 N. E. 288 (1900). stockholders in case of corporations 
 
 ^^ Jones V. G«nld, 209 N. Y. 419, de facto, see note in 17 L.R.A. 551. 
 103 N.E. 720 (1913). 
 
12 BUSINESS CORPORATIONS IN NEW YORK § 9 
 
 corporation de facto: First, the existence of a charter or 
 some law under which a corporation with the powers assumed 
 might lawfully be created; second, a user by the party to the. 
 action of the rights claimed to be conferred by such charter 
 or law. " " " . . . as against all persons who have en- 
 tered into contracts with bodies assuming to act in a corpo- 
 rate capacity, it is sufficient for such bodies to show them- 
 selves to be corporations de facto. This cannot be done by 
 simply showing that they have acted as corporations for any 
 period of time, however long. Two things are necessary to be 
 shown, in order to establish the existence of a corporation 
 de facto, viz.: 1, The existence of a charter, or some law under 
 which a corporation with the powers assumed might be law- 
 fully created; and, 2, a user by the party to the suit, of the 
 rights claimed to be conferred by such charter or law. 
 . . . parties recognizing the existence of corporations by 
 dealing with them, have no right to object to any irregularity 
 in their organization or any subsequent abuse of their powers, 
 not connected with such dealing. As long as these are over- 
 looked or tolerated by the State, it is not for individuals to 
 call them in question. " " " . . . so long as upon the face of 
 the certificate [of incorporation] a corporation was appar- 
 ently organized, as to persons dealing in good faith upon 
 the strength of such organization it should be held that such 
 incorporation was. valid, and that until impeached in a direct 
 proceeding, or at least in some action where the fact was 
 alleged and an opportunity given to meet the issue, such 
 certificate would be conclusive. " " " . . . under . . . 
 general acts for the formation of corporations, if the papers 
 filed, by which the corporation is sought to be created, are 
 colorable, but so defective that, in a proceeding on the part 
 of the State a;gainst it, it would for that reason be dissolved, 
 yet by acts of user under such an organization it becomes 
 a corporation de facto, and no advantage can be taken of 
 such defect in its constitution, collaterally, by any person. ' ' " 
 A corporation organized by filing the requisite certificate in 
 the offices of the Secretary of State and County Clerk, which 
 has exercised its franchise, made calls on its stockholders, 
 
 "Bradley Fertilizer Co. v. South 90 Supp. 565 (1904). 
 Publishing Co., 4 Misc. 172, 23 " The Buffalo and Allegheny R. R. 
 
 Supp. 675 (1893). Co. v. Cary, 26 N. Y. 75 (1862). 
 
 ' ^^ Methodist Episcopal Union The quotation is from the opinion 
 
 Church V. Pickett, 19 N. Y. 482 below, printed in the Court of Ap- 
 
 (1859). peals, because no opinion was given 
 
 '* Green v. Grigg, 98 A. D. 445, by the latter. 
 
§ ^^ INCORPORATION AND NAME 13 
 
 erected a building and done other acts in exercise of 
 corporate rights is a valid de facto ar-i de jure corporation 
 as between its stockholders and all third persons until 
 the State shall question its existence.'' When. the proceed- 
 ings for the incorporation of a company are regular upon 
 their face and it, while in the actual exercise of all its corpo- 
 rate functions, is recognized by the law-making power of the 
 State as a corporation, it becomes by such recognition, ipso 
 facto, a legal corporation." A corporation organized under 
 a legislative enactment later found void and which has ex- 
 ercised corporate powers under the act is a corporation de 
 facto, if not de jure, and its existence can be terminated only 
 by the judgment of a competent court or an express act of the 
 legislature.^" The mere execution of a certificate of incorpo- 
 ration without any action taken towards filing it or any statu- 
 tory step taken to comply with the law does not make the cor- 
 poration a de facto corporation, but at most merely consti- 
 tutes an agreement by the signers of the certificate inter sese, 
 probably rendering them liable as partners in doing business 
 in the corporate name.' The filing of a certificate of incorpo- 
 ration signed by the incorporators above the attestation 
 clause, the execution of which is acknowledged by them, and 
 to which a certificate of acknowledgment is subjoined, when 
 followed by action by the incorporators as though the corpora- 
 tion were duly formed, is at least sufficient to constitute a 
 de facto corporation.^ 
 
 § 10. Id.: Certificate of Incorporation, Definitions and Dis- 
 tinctions. — " The term ' certificate of incorporation ' shall 
 include articles of association or any other written instru- 
 ment required by law to be filed, to effect the incorporation of 
 a corporation, including a certified copy of an original cer- 
 tificate of incorporation filed for such purpose in pursuance 
 of law. " ^ " The charter of a corporation is the law which 
 gives it existence as such. That is its general franchise, which 
 can be repealed at the will of the legislature. A special fran- 
 chise is the right, granted by the public, to use public property 
 for a public use, but with private profit, such as the right to 
 
 ^^Doiris V. S-weeney, 64 Barb. On right of de facto corporation 
 
 636 (1873) ; Aot of 1848. to exercise power of eminent domain, 
 
 "Black River & Utiea R. R. Co. see notes in 2 L.R.A.(N.S.) 144; 50 
 
 V. Barnerd, 31 Barb. 258 (1859). L.R.A.(N.S.) 236. 
 
 '"Coxe V. State, 144 N. Y. 396, ^Lyell Avenue Lumber Co. v. 
 
 39 N. E. 400 (1895). Lighthouse, 137 A. D. 422, 121 
 
 ^Stevens v. Episcopal Church Supp. 802 (1910). 
 
 History Co., 140 A. D. 570, 125 ^ Gen. Corp. L. § 3 (L. 1909, 
 
 Supp. 573 (1910). c. 28). 
 
14 BUSINESS CORPORATIONS IN NEW YORK § 11 
 
 build and operate a railroad in the streets of a city. Such a 
 franchise, when acted upon, becomes property and cannot be 
 repealed, unless power to do so is reserved in the grant, 
 although it may be condemned upon making compensation. ' ' * 
 § 11. Id.: Governing Statutes, In General. — The statute 
 (hereinafter given in full) permits three or more persons to 
 become a stock corporation, by making, signing, acknowledg- 
 ing and filing a prescribed certificate, for any lawful business 
 purpose except that of a moneyed corporation, of a corpora- 
 tion provided by the banking, insurance, railroad and trans- 
 portation corporations' laws, of an educational institution or 
 of a corporation which may be incorporated as provided in 
 the education law, or of conducting the practice of law.' The 
 certificate of incorporation of any corporation may contain 
 any provision for the regulation of the business and the con- 
 duct of the affairs of the corporation, and any limitation upon 
 its powers, which does not exempt its directors and stock- 
 holders from the performance of any obligation or the per- 
 formance of any duty imposed by law." If authorized so to 
 do by a provision in its certificate of incorporation, a domestic 
 or foreign stock corporation may purchase, acquire, hold and 
 dispose of the stocks, bonds and other evidences of indebted- 
 ness of any corporation, domestic or foreign, and issue in 
 exchange therefor its stock, bonds or other obligations.^ "A 
 corporation organized under a general law is upon precisely 
 the same footing as one constitutionally organized under a 
 special law which contains all the provisions of the general 
 law."' " Every act incorporating a company for private 
 gain and generally all acts relating to a single corporation are 
 private acts, while an act relating to all corporations would be 
 a public act. So far as we have been able to discover it has 
 never before been seriously contended that an act incorpo- 
 rating a company with private capital to be solely controlled 
 by a board of directors selected from the stockholders and the 
 profits of which are to be divided upon the capital stock is not 
 a private corporation. " ' A corporation having charter 
 
 *Lord V. Equitable Life Assur- « Gen. Corp. L. § 10 (L. 1909, 
 
 ance Soc., 194 N. Y. 212, 22 L.R.A. c. 28). 
 
 (N.S.) 420, 87 N. E. 443 (1909). ''St. Corp. L. § 52 (L. 1909, 
 
 = Bus. Corps. L. § 2 (L. 1909, c. 61). 
 
 c. 12), and § 2-a (L. 1909, c. 484). 'Brooklyn Steam Transit Co. v. 
 
 The text of these sections will be City of Brooklyn, 78 N. Y. 524 
 
 found in the back of this book where (1879). 
 
 all the sections of Business Corpora- ® Economic P. & C. Co. v. City 
 
 tions Law are printed in full and of Buffalo. 195 N. Y. 286, 88 N. E. 
 
 consecutively. 389 (1909). 
 
§ 12 INCORPORATION AND NAME 15 
 
 PO"^erto contract with a merchant that it would investigate 
 the financial condition of his customers, guaranteeing the 
 accuracy of its statements in material respects and providing 
 for liquidated damages, but not guaranteeing the solvency of 
 anyone, is not confined to incorporation under the Insurance 
 Law, but is entitled to incorporate under the Business Corpo- 
 rations Law." 
 
 § 12. Id.: Constitutional Limitations. — " No private or local 
 bill, which may be passed by the legislature, shall embrace 
 more than one subject, and that shall be expressed in the 
 title."" " The legislature shall not pass a private or local 
 till . . . granting to any corporation . . . the right 
 to lay down railroad tracks, granting to any private corpora- 
 tion . . . any exclusive privilege, immunity or franchise 
 whatever, granting to any . . . corporation, an exemp- 
 tion from taxation on real or personal property, providing 
 for buUding bridges, and chartering companies for such pur- 
 poses, except on the Hudson River below Waterford, and on 
 the East Eiver, or over waters forming a part of the boundar- 
 ies of the State. The legislature shall pass general laws pro- 
 viding for the cases enumerated in this section, and for all 
 other cases which in its judgment, may be provided for by 
 general laws." ^^ " Corporations may be formed under gen- 
 eral laws ; but shall not be created by special act, except for 
 municipal purposes, and in cases where, in the judgment of 
 the legislature, the objects of the corporation cannot be at- 
 tained under general laws. All general laws and special acts 
 passed pursuant to this section may be altered from time to 
 time or repealed. " ^* " Dues from corporations shall be se- 
 cured by such individual liability of the corporators and other 
 means as may be prescribed by law. " " " The term corpora- 
 tions as used in this article [of the State Constitution] shall 
 be construed to include all associations and joint-stock com- 
 panies having any of the powers or privileges of corpora- 
 tions not possessed by individuals or partnerships. And all 
 corporations shall have the right to sue and shall be subject 
 to be sued in all courts in like cases as natural persons."" 
 
 ^"People ex rel. Daily Credit "N. Y. Const, of 1894, art. 3, 
 
 Service Corp. v. May, 162 A. D. § 18. 
 
 215, 147 Supp. 487 (1914); aff'd "N. Y. Const, of 1894, art. 8, 
 
 212 N. Y. 561, 106 N. E. 1039; § 1. 
 
 Ins. L. § 170, subd. 2. "N. Y. Const, of 1894, art. 8, 
 
 ^^N. Y. Const, of 1894, art. 3,. § 2. 
 
 § 16. , '= N. Y. Const, of 1894, art. 8, § 3. 
 
16 BUSINESS CORPORATIONS IN NEW YORK § 12 
 
 A construction will be given to a statute incorporating a 
 company so as to make it constitutional, if possible, so that if 
 an original legislative enactment does not contravene the 
 constitutional mandates that only one subject be embraced in 
 legislative acts which must be expressed in the title and that 
 no private bill shall provide for building bridges, amend- . 
 ments thereto violating such constitutional provisions will be 
 divorced from the original act which will be permitted to 
 stand." "A title purporting that an act provides for pneu- 
 matic transportation would not be sufficient for an act author- 
 izing the construction and operation of a horse railway or a 
 steam railway;" and a title indicating only the transporta- 
 tion of passengers and property through pneumatic tubes by 
 atmospheric pressure is not sufficient for an act permitting the 
 creation of a railroad." The title "An act to incorporate the 
 Economic Power and Construction Company " to a legisla- 
 tive statute is not sufficiently specific to permit the insertion 
 in it of power to the company to use highways for the crea- 
 tion, transmission and utilization of power, under the consti- 
 tutional prohibition that ' ' no private or local bill, which may 
 be passed by the legislature, shall embrace more than one 
 subject, and that shall be expressed in the title. "^* " Per- 
 sons, or corporations even, may waive in some matters, and 
 upon some occasions, a constitutional or statutory provision 
 in their favor. . . . Although the provision as to a local 
 act containing but one subject, which shall be expressed in its 
 title, is of a public nature and was placed in the Constitution 
 for the purpose of preventing surprises as to the object and 
 purpose of any proposed legislation, yet when an act has 
 been so passed, and its enactments bear upon the private 
 rights of an individual, the constitutional provision then be- 
 comes as to him, one which is, within the meaning of the ex- 
 pression, enacted for his benefit, and it is then a matter which 
 such individual may, as to his private rights, waive the benefit 
 of, and consent to perform or submit to the requirements of 
 the act, the same as if the constitutional provision had not 
 been violated. And when once such waiver has been made and 
 such consent been given, the party so waiving and consenting 
 
 "Matter of New York & Long 594 (1889); N. Y. Constt, art. 3, 
 
 Island Bridge Co., 148 N. Y. 540, 42 § 16. 
 
 N E. 1088 (1896); N. Y. Const., "Economic P. & C. Co. v. City 
 
 art 3, § 16. of Buffalo, 195 N. Y. 286, 88 N. E. 
 
 "Astor V. Arcade Ry. Co., 133 389 (1909); N. Y. Const, art. 3, 
 
 N. Y. 93, 2 L.R.A. 789, 20 N. E. § 6. 
 
§ 13 INCORPOiRATION AND NAME 17 
 
 is forever concluded thereby. Especially should this be so 
 where the party takes benefits granted by the act."'" 
 
 § 13. Id.: Legislative Control over Charters.— The State 
 Constitution provides that all general laws and special acts 
 passed pursuant to its authorization to corporations to in- 
 corporate under general laws and special acts may be altered 
 from time to time or repealed.'" The Constitutional right to 
 alter or repeal general laws and special acts forming corpora- 
 tions applies also to the charters of corporations oganized 
 under such laws and acts.^ "A corporation is subject to the 
 general statutes of the State of its organization applicable to 
 its conduct and management as well as to the reservation of 
 the right on the part of the Legislature to alter its charter by 
 subsequent laws, and a stockholder must be regarded as con- 
 senting not only to the existing law but to such alterations as 
 may be made." ^ A charter secured by a corporation by com- 
 pliance with a statute couched in general terms does not 
 grant an exclusive privilege to do the things empowered by the 
 statute nor. preclude the grant of another charter for a similar 
 franchise.' " Equal protection of the law does not require a 
 State to grant to each corporation that it organizes the same 
 power to transact business or in relation to its business;" 
 so that a statute of the State which " regulates the method 
 of transacting business of certain corporations which it has 
 
 ^' Mayor, etc., of New York v. either directly, or by authorizing the 
 
 Manhattan Ey. Co., 143 N. Y. 1, 37 corporation to make the change." 
 N. E. 494 (1804) ; L. 1867, c. 489. On necessity of legislative sanc- 
 
 The act not constitutionally entitled tion of consolidation of corporation, 
 
 incorporated a company for railway see note in 52 L.R.A. 370. 
 purposes and provided for payment ^ Martin v. Remington-Martin Co., 
 
 of a percentage of income to the 95 A. D. 18, 88 Supp. 573 (1904). 
 
 municipality. Promoters agreed " that the capital 
 
 On charter limitations as to period ^^^^ °^ the company is to 
 
 of existence of corporation, see note «°°«st of $150,000 common stock " 
 
 o,o T -D A cTi! and certain preierred stock. The 
 in 33 L.B.A. 57o. -u j- j ■, ■ 
 
 N. Y. Const, of 1894, art 8., co^Pany when formed arranged m 
 
 , , good faith to issue additional com- 
 
 20 
 
 §1- 
 
 men stock. Plaintiff, one of the 
 
 '^o""^ \n^T^^^%.n'^<^ ^TT promoters, became a director of the 
 ance Soc, 194 N. Y. ^l^, £i L.R.A. company and participated in enact- 
 (N.S.) 420, 87 N. E. 443 (1909) ; New j„ent of by-law giving each stock- 
 York Coasts, of 1846 and 1894, art. holder the right to buy proportion- 
 8, § 1. " . . . both by the Consti- ately any increase of the capital 
 tution and the Revised Statutes the stock, when made. An injunction 
 legislature has the reserved power against issuing additional common 
 to s'o amend the law under which a stock was refused, 
 charter has been taken out as to ^ Matter of City of Brooklyn, 143 
 carry with it a corresponding N. Y. 596, 26 L.R.A. 270, 38 N. E. 
 amendment of the charter itself, 983 (1894). 
 B. C. N. Y.— 2 
 
18 BUSINESS CORPORATIONS IN NEW YORK § 13 
 
 organized and restricts them as to the amount of business 
 that they are authorized to do " is unobjectionable; and that 
 " another corporation is not so restricted is not a grant of an 
 exclusive privilege, immunity or franchise to the unrestricted 
 corporation."* "... Acts which do no more than 
 regulate and control the internal management of a corpora- 
 tion, so far as it has relation to the public and concerns the 
 policy of the State, are within the power [of the Legislature 
 under the State Constitution] to alter and repeal, even though 
 the exercise of the power adds to the burden of the stock- 
 holder by increasing his liability, or diminishes the value of 
 his stock, or changes the name, offices or proportion in man- 
 agement and control of the corporation. Within this power 
 under this rule must necessarily fall the right to change the 
 capital stock of the corporation as to amount, kind and classi- 
 fication. "° A reservation in the Legislature of power to 
 alter, amend or repeal all laws and charters of incorporation 
 gives it authority to amend the charter of a corporation so as 
 to take from stockholders of a corporation the vote for direct- 
 ors and give it to policyholders.* " The legislative power to 
 amend a corporate charter, where it exists at all — whether 
 by virtue of a State Constitution or a general law of the State 
 reserving such right — includes the right to repeal a provi- 
 sion exempting the property of the corporation from taxa- 
 tion. " ' " The right to amend a charter, however, does not 
 include the right to take away money invested in reliance 
 thereon, or property acquired thereunder. The power of 
 amendment reserved by the Constitution or statutes of a state 
 does not permit interference with property or property rights, 
 because they are protected by the Constitution of the United 
 States. ... As the property of stockholders cannot be 
 given away either in whole or in part, it follows that the gift 
 of any right so connected with their property as to be essen- 
 
 *Bush V. New York Life Insur- Supp. 67 (1908); aff'd 126 A. D. 
 
 ance Co., 135 A. D. 447, 119 Supp, 937, 110 Supp. 1136; N. Y. Const. 
 
 796 (1909); Ins. L. § 96; N. Y. of 1846, art. 8, § 1. 
 
 Const. §§ 16, 1&, art. 3. 'People ex rel. Cooper Union v. 
 
 ^Hinckley v. Sehwarzschild & Gass, 190 N. Y. 323, 83 N. E. 64 
 
 Sulzberger Co., 107 A. D. 470, 95 (1907); L. 1859, c. 279, founding 
 
 Supp. 357 (1905) ; app. dism'd 193 Cooper Union, exempted Peter 
 
 N. Y. 599, 86 N. E. 1125; N. Y. Cooper's endowments from taxation, 
 
 Const., art. 8, § 1; St. Corp. L. but the New York Constitution of 
 
 § 47 (L. 1892, c. 688, as amend'd 1848, art. 8, § 1, was then in force, 
 
 L. 1901, c. 354). and the Tax Law, § 292, making, all 
 
 ° Lord V. Equitable Life Assur- mortgages subject to tax, was held 
 
 ance Society, 57 Misc. 417, 108 constitutional as to Cooper Union. 
 
§ 14 INCORPORATION AND NAME 19 
 
 tial to its preservation and existence, would be a violation of 
 primary rights," e. g., the right of a stockholder to vote/ 
 The general rule that the right to alter, or to repeal a corpo- 
 rate charter becomes a part of the charter of every corpora- 
 tion, whether under a general, or a special statute, and that 
 the General Tax Law of 1896 must be presumed to have been 
 intended as a repeal of prior exemptions in the statutes, does 
 not apply when the transfer, of property, in endowment of a 
 charitable corporation, was directly induced by a promise of 
 an exemption from taxation, which was acted upon.° 
 
 § 14. Id. : Contents, In General.— Every certificate of incor- 
 poration must be in the English language." The certificate of 
 incorporation of a stock corporation must set forth: (1) Its 
 name; (2) its purposes; (3) as to its capital stock, if it have 
 nominal or par value: (a) the amount; (b) if any portion is 
 preferred, and, if so, the preferences; (c) the number of 
 shares, of not less than five nor more than one hundred dollars 
 each, of which the capital stock shall consist, and (d) the 
 amount of capital, not less than five hundred dollars, with 
 which it will begin business ; or, if it have no nominal or par 
 value, (a) the number of shares that may be issued by the 
 corporation; (b) if any of such shares be preferred stock, 
 the particular character of the preference thereof, and, if 
 any of such preferred stock shall have preference as to prin- 
 cipal, the amount of such preferred stock having preference 
 as to principal, and the amount of each share of such pre- 
 ferred stock, which must be five dollars or some multiple of 
 five dollars, but not more than one hundred dollars; (c) the 
 amount of capital, not less than the amount of preferred 
 stock (if any) authorized to be issued with a preference as to 
 principal plus a sum equivalent to five dollars or to some mul- 
 
 ^Lord V. Equitable Life Assur- ter in granting policyholders voting 
 
 ance Soc, 194 N. Y. 212, 22 L.R.A. powers as directors; but the court 
 
 (N.S.) 420, 87 N. E. 443 (1909) ; 1 held inoperative as to stockholders 
 
 E. S. (of 1827) 600, § 8; N. T. a change in the charter depriving 
 
 Consts. of 1846 and 1894, art. 8, them of the rig!(jt to vote for all 
 
 § 1. The old charter of the so- directors although it gave them ab- 
 
 ciety permitted its change so as to solute power to elect 24 out of 
 
 confer on policyholders the right to the 52. 
 
 vote for directors, and the court ° People ex rel. Roosevelt Hos- 
 
 held that the Insurance Law pital v. Raymond, 194 N. Y. 189, 
 
 "simply allowed an object, contem- 87 N. E. 90 (1909); L. 1896, c. 908 
 
 plated by the charter to be effected (General Tax L.) ; L. 1864, c. 4 
 
 by a method var3ring in unessential (incorporating Roosevelt Hospital), 
 details from that provided by the i" Gen. Corp. L. § 5 (L. 1913, 
 
 charter itself;" and approved the c. 479). 
 act of the directors under the char- 
 
20 
 
 BUSINESS CORPORATIONS IN NEW YORK §§ 15, 16 
 
 tiple of five dollars for every share authorized to be issued 
 other than such preferred stock, but in no event an amount of 
 capital less than five hundred dollars; (4) the city, village or 
 town in which its principal business ofiice is to be located, and, 
 if it is to be located in the city of New York, the borough 
 therein in which it is to be located; (5) its duration; (6) as 
 to its directors, (a) their number, not less than three, and (b) 
 that the meetings of their board are to be held only within 
 the state, if such be the case, unless such statement is put in 
 the by-laws; (7) as to the subscribers, (a) their names, (b) 
 their post-office addresses and (c) the number of shares of 
 stock which each agrees to take." The various points which 
 must be covered by the certificate of incorporation are herein- 
 after treated in detail, one by one. 
 
 § 15. Id.: Name. — The certificate of incorporation must 
 contain the name of the proposed corporation." The subject 
 of the corporate name is extensively discussed further on in 
 the present chapter." 
 
 § 16. Id.: Purposes. — The subject of the powers of cor- 
 porations is hereinafter " discussed at length. 
 
 The certificate of incorporation must contain the purpose 
 or purposes for which the corporation is to be formed.^^ The 
 certificate of incorporation of any corporation may contain 
 any provision for the regulation of the business and the con- 
 duct of the affairs of the corporation ; and any limitation upon 
 its powers which does not exempt its directors and stock- 
 holders from the performance of any obligation or the per- 
 formance of any duty imposed by law.^* A clause in a 
 certificate of incorporation authorizing the directors to dis- 
 pose of the whole of the property of the proposed corporation, 
 except its franchises, to a domestic or to a foreign corpora- 
 tion, on the consent of two-thirds of the capital stock issued 
 and outstanding, is illegal ; and the Secretary of State cannot 
 be mandamused to file it." A statement in a certificate of 
 
 "Bus. Corps. L. § 2 (L. 1909, "Bus. Corps. L. § 2 (L. 1909, 
 
 c. 484) ; and § 2-a'(L. 1909, c. 484) ; c. 484). 
 
 And § 19 (L. 1917, c. 500). The "Gen. Corp. L. § 10 (L. 1909, 
 
 full text of the Business Corpora- c. 28). 
 
 tions Law is printed at the end of " People ex rel. Barney v. 
 
 this book. Whalen, 119 A. D. 749, 104 Supp. 
 
 "Bus. Corps. L. § 2 (L. 1909, 556 (1907); aff'd 189 N. Y. 5«0, 82 
 
 c. 484). N. E. 1131; Bus. Corps. L. 82 (L. 
 
 " See §§ 32-35, infra. 1904, c. 446) ; Gen. Corp. L. § 10 
 
 "See the eighth chapter dealing (L. 1895, c. 672); St. Corp. L. § 33 
 
 with "Powers, Duties and Liabilities (L. 1901, c. 130). 
 of Corporations." 
 
S 16 INCORPORATION AND NAME 21 
 
 incorporation that the corporation's objects are " the min- 
 ing of gold, silver and lead " and that such mining was to 
 be carried on in a certain district of a certain territory 
 sufficiently complies with a statute providing for a statement 
 m such certificate of " the objects for which the company 
 shall be formed " and of " the names of the town and 
 county " in which the operations of the company are to be 
 carried on." " The words ' and ' and ' or ', when used in a 
 statute, are convertible as the sense may require," and, there- 
 fore, under a statute permitting persons to become a cor- 
 poration '* for manufacturing . . . gas . . . or for 
 manufacturing electricity," they may file a certificate author- 
 izing the corporation to do both " No corporation can be 
 organized or created under the provisions of the Business 
 Corporations Law for the purpose or purposes of (1) con- 
 ducting any branch of the practice of law or of retaining or 
 (2) _ employing 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 i^ compliance with 
 any contract of employment of the corporation or of the 
 attorney made by the corporation with any other person, per- 
 sons or corporation; and the statement of the purpose or 
 purposes of a corporation in any certificate of its incorpora- 
 tion filed under the provisions of the Business Corporations 
 Law, in whatsoever language it may be set forth, cannot be 
 held or construed to confer on the corporation the power to 
 transact any such law business as a purpose for which the 
 creation of a corporation under the Business Corporations 
 Law is provided; and, particularly, when the stated objects 
 of a corporation include the collection of debts or accounts, 
 in words or substance, they cannot 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.^" The power of a corporation to practice law is 
 fully discussed hereinafter, and to that discussion reference 
 is made.^ 
 
 " People ea; r-eZ. Belknap V. Beech, 846 (1893); Corporation Act (L. 
 
 19 Hun, 259 (1879); L. 1848, 1890, c. 506), § 60. 
 
 c. 40. '"Bus. Corps. L. § 2-a (L. 1909, 
 
 ^'People ex rel. Municipal Gas c. 484). 
 
 Co. V. Rice, 138 N. Y. 151, 33 N. E. ^ § 433, infra. 
 
22 BUSINESS CORPORATIONS IN NEW YORK § 17 
 
 § 17. Id.: Stock, Capital and Stockholders.— The suhjects 
 of stock, capital stock and stockholders are discusised at length 
 hereinafter.^ 
 
 What statements a certificate of incorporation must contain 
 with reference to its capital stock depends to some extent 
 upon whether the shares thereof have or do not have a 
 nominal or par value. If the shares have a nominal or par 
 value the certificate of incorporation must contain (1) the 
 number of shares of which the capital stock is to consist, each 
 of which must be not less than five nor more than one hundred 
 dollars, and (2) the amount of capital with which the cor- 
 poration will begin business, which must be not less than five 
 hundred dollars.' If the shares have no nominal or par value 
 the certificate of incorporation may provide for the issuance 
 of the shares of stock of the corporation, other than preferred 
 stock having a preference as to principal, without any nominal 
 or par value, by stating in such certificate, in lieu of any state- 
 ments as to the amount or the maximum amount of its capital 
 stock or the number of shares into which it is to be divided or 
 of the amount or the" par value of such shares, as follows: 
 (l)the number of Shares that may be issued by the corpora- 
 tion; (2) if any of such shares be preferred stock, the prefer- 
 ences thereof, and, if such preferred stock or any part thereof 
 have a preference as to principal, (a) the amount of such 
 preferred stock having such preference, (b) the particular 
 character of such preferences, and (c) the amount of each 
 share thereof (which must be five dollars or some multiple of 
 five dollars, but not more than one hundred dollars) ; (2) the 
 amount of capital with which the corporation wUl carry on 
 business, which amount must not be less than the amount of 
 preferred stock (if any) authorized to be issued with a prefer- 
 ence as to principal, plus a sum equivalent to five dollars or 
 to some multiple of five dollars for every share authorized 
 to be issued other than such preferred stock; but in no event 
 must the amount of such capital be less than five hundred 
 dollars.* The original or amended certificate of incorporation 
 of any stock corporation may contain a provision expressly 
 authorizing the issue of the whole or any part of the capital 
 stock as partly paid stock, subject to calls thereon until the 
 
 ^For stock and capital stock see ^ Bus. Corp. L. § 2 (L. 1909, 
 
 chapter Fourth on "Stock"; and c. 484). 
 
 for stockholders, see chapter Fifth *Bus. Corp. L. § 19 (L. 1917, 
 
 on "Stockholders." e. 5€0). 
 
§§ 18, 19 INCORPORATION AND NAME 23 
 
 whole thereof has been paid in.' Every business corporation 
 formed under the Business Corporations Law 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.' 
 
 Unless otherwise provided in the certificate of incorpora- 
 tion, every stockholder of record of a stock corporation is 
 entitled at every meeting of the corporation to one vote for 
 every share of stock standing in his name on the books of the 
 corporation.'' Our statutes permit the certificate of incor- 
 poration to provide what right to vote various classes of 
 stockholders shall possess, e. g., that preferred stockholders 
 shall be deprived of voting power.^ If the certificate of a 
 domestic stock corporation so provide, it may issue preferred 
 stock and common stock and different classes of preferred 
 stock." The certificate of incorporation of any corporation 
 may contain any limitation upon the powers of its stock- 
 holders which does not exempt them from the performance 
 of any obligation or the performance of any duty imposed by 
 law." 
 
 § 18. Id.: Principal Business Office.— For a discussion of 
 the subject of the residence of a corporation for purposes of 
 suit, taxation, and so forth, consult the references in the note.^^ 
 
 A stock corporation 's certificate of incorporation must con- 
 tain the city, village or town in which its principal business 
 office is to be located, and, if it is to be located in the City of 
 New York, the borough therein in which it is to be located.^^ 
 The statement as to a corporation's residence required by 
 .statute to be inserted in its certificate of incorporation cannot 
 be therein qualified." 
 
 § 19. Id.: Duration. — The full discussion of the duration 
 of a corporation's existence will be found hereinafter.^* The 
 
 see § 439 et seq., infra. Residence 
 for purpose of taxation, see § 603, 
 infra, as to real property tax; and 
 § 620, infra, as to personal prop- 
 erty tax; and § 632 infra, as to 
 special franchise tax. 
 * People ex rel. Browne v. Koe- "Bus. Corp. L. § 2 (L. 1909, 
 
 nig, 133 A. D. 756, 118 Supp. 136 c. 484). 
 
 (190O) ; Gen. Corp. L. § 23 (Cons. "People ex rel. Edison Electric 
 
 L c 23, 8 23). ' Co. v. Barker, 91 Hun, 594, 36 
 
 «St. Corp. L. § 61 (L. 1917, Supp. 844 (1895); L. 1848, c. 40, 
 c. 542). and L. 1892, c. 691, § 2. 
 
 ^"Gen. Corp. L. § 10 (L. 1909, "See Ninth Chapter on " Exist- 
 
 c. 28). enee and Change." 
 
 ^^ Residence for purpose of suit, 
 
 = St. Corp. L. § 60 
 
 (L. 
 
 1909, 
 
 c. 61). See § 96, infra. 
 
 
 
 ^Bns. Corp. L. § 6 
 
 (L. 
 
 1909, 
 
 c.'12). 
 
 
 
 ^Gen. Corp. L. § 23 
 
 (L. 
 
 1909, 
 
 c. 28). 
 
 
 
24 BUSINESS CORPORATIONS IN NEW YORK § 20 
 
 certificate of incorporation of a stock corporation must set 
 forth its duration.^^ The certificate of incorporation of any 
 corporation the duration of which is limited by such certificate 
 or by law may require that the consent of the stockholders 
 owning a greater percentage than two-thirds of the stock 
 shall be requisite to effect an extension of corporate existence 
 beyond the time specified in such certificate or by law, or in 
 any certificate of extension of corporate existence." 
 
 § 20. Id..: Directors. — A full treatment of "Directors" 
 V7ill be found further on in this book." 
 
 A stock corporation 's certificate of incorporation must con- 
 tain, with regard to its directors, (1) the names and post-office 
 addresses of the directors for the first year, and (2) the 
 number of its directors, not less than three.^* Unless other- 
 wise provided in the certificate of incorporation each director 
 nlust be a stockholder.^^ The certificate of incorporation of 
 any corporation may contain any limitation upon the powers 
 of its directors which does not exempt them from the perform- 
 ance of any obligation or the performance of any duty 
 imposed by law.^° The law permits the division in a certificate 
 of incorporation of the directors of the corporation into two 
 or more classes whose terms of office shall respectively expire 
 at different times.^ At least one of the directors of the cor- 
 poration must be a citizen of the United States and a resident 
 of New York State.' 
 
 ^=Bus. Corp. L. § 2 (L. 1909, v. McDonough, 28 Misc. 652, 60 
 
 c. 484). Supp. 40 (1899) under the provision 
 
 " Gen. Corp. L. § 37 (L. 1913, of section 29 of the General Corpo- 
 
 c. 306). ration Law, that "the affairs of 
 
 " See Seventh Chapter on " Di- every corporation shall be managed 
 
 rectors. Officers and Agents." by its board of directors, at least 
 
 '*Bus. Corp. L. § 2 (L. 1909, two of whom shall be residents of 
 
 e. 484). this state," had been repealed by 
 
 ^° St. Corp. L. § 25 (L. 1909, implication by the subsequent 
 
 c. 61). amendment of section 4 of the same 
 
 ^° Gen. Corp. L. § IQ (L. 1909, Law, that " a certificate of incoi^o- 
 
 c. 28). ration must be executed by natural 
 
 ^ St. Corp. L. § 26 (L. 1909, persons, who must be of full age 
 
 c. 421), stating that " if the original and at least two-thirds of them must 
 
 or amended certificate of incorpora- be citizens of the United States, and 
 
 tion of the corporation shall provide one of them a resident of this State," 
 
 that the directors shall be divided so that a certificate of incorpora- 
 
 into two or more classes, whose tion showing that only one of the 
 
 terms of office shall respectively ex- directors named for the first year 
 
 pire at different times," etc. resides in New York must be ac- 
 
 ' Gen. Corp. L. § 34 (L. 1917, cepted by the Secretary of State for 
 
 c. 538). filing. 
 
 It was held in People ex rel. Gales 
 
§§ 21, 22 INCORPORATION AND NAME 
 
 25 
 
 § 21. Id.: Subscribers.— A stock corporation's certificate of 
 incorporation must contain, as regards the subscribers 
 thereto: (1) Their names and post-office addresses, and (2) 
 a statement of the number of shares of stock which each 
 agrees to take in the corporation.' The statute requiring in 
 a certificate of incorporation the names and ' post-office 
 addresses of the subscribers to its stock does not require that 
 the certificate shall be signed by the individual subscriber, as 
 only the incorporators need sign it.* When a certificate of 
 incorporation is circulated in an incomplete state in order 
 to procure subscriptions, the mere signing of it " cannot be 
 regarded as binding the signer to abide by such filling up of 
 blanks and supplying of wanting provisions as any one may 
 choose to insert;" but his assent must be had to the completed 
 paper." 
 
 § 22. Id.: Filing, Recording and Indexing. — The fees and 
 taxes payable on incorporation are shortly treated.^ The 
 status of those signing a certificate of incorporation which is 
 defectively signed, filed, recorded, etc., is discussed in a pre- 
 vious section.' Every certificate of incorporation must be 
 filed (1) in the office of the Secretary of State, and be by him 
 duly recorded and indexed in books specially provided there- 
 for ; and either a certified copy of such certificate with a cer- 
 tificate of the Secretary of State of such filing and record or 
 a duplicate original of such certificate must be filed and 
 similarly recorded and indexed (2) in the office of the clerk 
 of the county in which the office of the corporation is to be 
 located.* " The filing of the proposed certificate of incor- 
 poration is to effect an incorporation. . . . It is upon 
 making, signing, acknowledging and filing the certificate that 
 a proposed corporation becomes a corporation. ' ' ° The Secre- 
 tary of State is not required to file a certificate of incorpora- 
 tion containing provisions unauthorized by law.^° The Sec- 
 retary of State has a right to pass on a question as to the 
 
 ^ Bus. Corp. L. § 2 (L. i909, " See § 31, infra. 
 
 c. 484) . ' § 9, supra. 
 
 *Yonkers (Gazette Co. v. Taylor, * Gen. Corp. L. § 5 (L. 1913, 
 
 30 A. D. 334, 51 Supp. 969 (1898) ; • e. 479). 
 
 Bus. Corp. L. § 2, subd. 9. "People ex rel. Columbia Co. v. 
 
 = Dutchess & Columbia Co. R. R. O'Brien, 101 A. D. 296, 91 Supp. 
 
 Co. V. Mebbett, 58 N. Y. 397 (1874) ; 649 (1906). 
 
 Gen. R. R. Act, L. 1850, c. 140. i" People ex rel. Barney v. Wha- 
 
 The action was to recover an alleged len, 119 A. D. 749, 104 Supp. 655 
 
 subscription. The names for direct- (1907) ; aff'd 189 N. Y. 560, 82 
 
 ors were blank in the certificate N. E. 1131. 
 when the defendant signed and were 
 later put in without his assent. 
 
26 BUSINESS CORPORATIONS IN NEW YORK § 23 
 
 form of a certificate of incorporation and as to whether or not 
 the applicant is entitled to have it filed under the statute 
 under which the company is sought to be organized, subject 
 to review in a proper proceeding." It seems that, the district 
 in which application should be made for mandamus to compel 
 the Secretary of State to file a certificate of incorporation is 
 not dependent on the location of his office but on the district 
 in which the material facts occurred." When a certificate of 
 incorporation is accepted and filed by the Secretary of State 
 with the same name as that of an existing corporation, or 
 M'hen the name so nearly resembles that of the existing cor- 
 poration as to be calculated to deceive, the action of the Sec- 
 retary of State is not conclusive and the courts may by judg- 
 ment in equity grant relief to the aggrieved prior corporation ; 
 but a writ of certiorari to review the Secretary of State's 
 action is not proper." It seems that if the Secretary of State 
 refuses to file a certificate of incorporation on the ground that 
 the name proposed for the company is the same as or deceit- 
 fully similar to that of an existing corporation, the only ade- 
 quate remedy to the established company would be by writ of 
 certiorari." 
 
 If either of the certificates of incorporation is 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 has 
 the same force and effect as the original certificate had when 
 filed."' 
 
 § 23. Id.: Amendment of and Addition to; Governing 
 Statutes. — ^All general laws and special acts passed pursuant 
 to the New York Constitution for the formation or creation 
 of corporations may be altered from time to time or repealed." 
 The charter of every corporation is subject to alteration, sus- 
 pension and repeal in the discretion of the Legislature." The 
 law permits amendments to and alterations of a certificate of 
 
 "People ex rel. Davenport v. ^'People ex rel. Columbia Co. v. 
 
 Rice, 68 Hun, 24, 22 Supp. 631 O'Brien, 101 A. D. 296, 91 Supp. 
 
 (1893). The Secretary refused to 649 (1905); Gen. Corp. L. § 6; 
 
 file a certificate of a club on the Bus. Corp. L. § 2.(L. 1904, e. 446). 
 
 ground that it embraced business "People ex rel. Columbia Co. v. 
 
 purposes, and the claim was that he O'Brien, 101 A. D. 296, 91 Supp. 
 
 had no option because it had been 649 (1906). 
 
 approved by a judge pursuant to i*»Gen. Corp. L. § 8 (L. 1909, 
 
 statute: c. 28). 
 
 "People ex rel. Davenport v. "N. Y. Const, of 1894, art. 8, § ]. 
 
 Rice, 68 Hun, 24, 22 Supp. 631 "Gen. Corp. L. § 320 (L. 1909, 
 
 (1893); C. C. P. §§ 2068, 2084. c. 28). 
 
§ ^ ' INCORPORATION AND NAME 27 
 
 incorporation by making and filing sometimes an amended 
 certificate of incorporation and sometimes a verified tran- 
 script of the proceedings producing the change; and some- 
 times by court proceedings. The statutes differ for accom- 
 plishing various things, such as curing informality, defective 
 proof or acknowledgment, and unlawful contents in a certifi- 
 cate of incorporation f or obtaining court authority for the 
 change ;'* or changing the corporate office and place of busi- 
 ness;" or including additional powers;^" or changing the 
 number of directors;^ or classifying the stock ;^ or increasing 
 or reducing the capital stock ;^ or the number of the shares 
 thereof.* These various changes are discussed separately in 
 the seven following sections, while the reorganization of a 
 corporation organized before the Business Corporations Law 
 was enacted so as to avail itself of that law and reincorporate 
 thereunder is treated in the five hundred and seventh*^ 
 section of this treatise; and the reorganization so as to pro- 
 vide for issuance of its shares of stock, other than stock pre- 
 ferred as to principal, without any nominal or par value 
 is discussed in the five hundred and seventh-k section of this 
 work.** 
 
 § 24. Id.: For Informality, Unlawful Contents or Defective 
 Proof or Acknowledgment. — The corporators or directors of 
 a corporation may make and file an amended certificate of its 
 incorporation; and the original, amended or supplemental 
 certificate of incorporation already on file is deemed to be 
 amended according to the newly made amended certificate as 
 of the date the latter is filed, and the corporation is then for 
 all purposes deemed to be a corporation from the time of the 
 filing of the original, amended or supplemental certificate on 
 file before the newly made amended certificate was filed; but 
 
 "Gen. Corp. L. § -7 (L. 1909, * St. Corp. L. § 65 (L. 1909, 
 
 c. 28). c. ei). 
 
 ^^Gen. Corp. L. § 7 (L. 1909, *» The governing statute is Bus. 
 
 c. 28). " Corps. L. § 4 (L. 19-09, c. 12). 
 
 ■ "St. Corp. L. § 13 (L. 1915, *''The governing statute is St. 
 
 c. 117). Corp. L. § 24, et seq. (L. 1917, 
 
 ™St. Corp. L. § 18 (L. 1909, e. 484). 
 
 e. 61), and Gen. Corp. L. § 7 (L. On reserved right to amend and 
 
 1909, e. 28). repeal charter of corporation as to 
 
 ^St. Corp. L. § 26 (L. 1909, taxation, see note in 60 L.R.A. 69. 
 
 c. 421). On right under reserved power to 
 
 ^ St. Corp. L. § 61 (L. 1917, » amend or repeal charter of corpora- 
 
 e. 542). tion to change the right of stock- 
 ist. Corp. L. §§ 62, 63, 64 (§ 62 holders as to voting the stock, see 
 
 and § 63, L. 1909, c. 61; § 64, L. note in 22 L.R.A. (N.S.) 420. 
 
 1913, c. 305). 
 
28 BUSINESS CORPORATIONS IN NEW YORK § 25 
 
 such a way to change a certificate of incorporation can only be 
 availed of in three classes of cases: When in the original, 
 amended or supplemental certificate of any corporation (1) 
 any informality exist, or (2) there be any matter not author- 
 ized by law to be stated therein, or (3). the proof or acknowl- 
 edgment thereof is defective. The amended certificate must 
 correct the informality or defect or strike out the unauthor- 
 ized matter. When an amended or supplemental certificate 
 is filed, an entry must 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 certificate. Such an amend- 
 ment of a certificate is without prejudice to any pending 
 action or proceeding, or to any rights previously accrued.'' 
 
 § 25. Id.: To Correct or Add to Purposes of. — The supreme 
 court may, (1) upon due cause shown, (2) and proof made, 
 and (3) upon notice (a) to the attorney-general, and (b) to 
 such other persons as the court may direct, and (4) upon such 
 terms and conditions as it may impose, amend any certificate 
 of incorporation which (5) 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 cer- 
 tificate is filed, an entry must 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 certificate. Such an 
 amendment is without prejudice to any pending action or pro- 
 ceeding or to any rights previously accrued." 
 
 Any domestic stock corporation may alter its certificate of 
 incorporation so as to include therein any purposes, powers 
 or provisions (a) which at the time of such alteration may 
 apply to corporations engaged in a business of the same gen- 
 eral character, or (b) which might be included in the certifi- 
 cate of a corporation organized under any general law of 
 New York State for a business of the same general character, 
 by filing (1) an amended certificate of incorporation (a) in 
 the manner provided for the original certificate of incorpora- 
 tion, (b) executed by the president and secretary of the cor- 
 poration, stating (c) the alteration proposed and (d) that it 
 has been duly authorized by a vote of a majority of the 
 
 ^Gen. Corp. L. § 7 (L. 1909, On right of officer of corporation 
 
 c. 28). to take acknowledgment of instru- 
 
 As to validity of acknowledgment • ment in which corporation is inter- 
 
 of corporate instrument before one ested, see note in 33 L.R.A. 337. 
 who is a stockholder or officer of "Gen. Corp. L. § 7 (L. 190fl, 
 
 corporation, see note in 23 L.R.A. c. 28). 
 (N.S.) 1075; 41 L.R.A.(N.S.) 375. 
 
§ 26 INCORPORATION AND NAME 
 
 29 
 
 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 
 m the sixty-third section of the Stock Corporation Law; and 
 (2) a copy of the proceedings of such meeting, verified by the 
 affidavit of one of the directors present thereat, with such 
 amended certificate/ 
 
 § 26. Id.: To Change Office and Place of Business.— Change 
 of its principal office and place of business from the city, town 
 or county either named in its certificate of incorporation or to 
 which it may have been previously changed under the law, to 
 any other city, town or county in New York State in which 
 it may desire actually to transact and carry on its regular 
 business from day to day, may be made by a domestic stock 
 corporation (except a moneyed one) at any time, provided 
 such change (1) has been authorized by unanimous consent of 
 the stockholders expressed in writing and duly acknowledged 
 and filed in the office of the Secretary of State, or (2) has 
 been authorized by a vote of the stockholders of such corpora- 
 tion at a special meeting of the stockholders called for that 
 purpose, or (3) has been effected by an act of the Legislature 
 creating a separate and distinct county wholly within the 
 limits and boundaries of a then existing county or counties. 
 In any of such cases (1) a certificate must be signed by (a) 
 the president and (b) secretary and (c) a majority of the 
 directors of such corporation, which (2) must be verified by 
 the oaths of all the persons signing it, and (3) must be filed, 
 when so signed and verified, in the office (a) of the Secretary 
 of State, and a duplicate thereof in the office (b) of the clerk 
 of the county from which such principal office and place of 
 business is about to be removed or changed, and another in 
 the office (c) of the clerk of the county to which such removal 
 or change is to be made, whereupon the principal office and 
 place of business of such corporation is changed as stated in 
 such certificate. The certificate must state (1) the name of 
 the corporation, (2) the city, town and county where its prin- 
 cipal office and place of business was originally located, and 
 to which it may have been subsequently changed, and (3) the 
 city, town and county to which it is desired to change such 
 principal office and place of business, and (4) that it is the 
 purpose of such corporation actually to transact and carry on 
 its regular business from day to day at such place, and (5) 
 that such change has been authorized according to the pro- 
 
 'St. Corp. L. § 18 (L. 1909, c. 61). 
 
30 BUSINESS CORPORATIONS IN NEW YORK §§ 27-31 
 
 visions of the statute, and (6) the names and respective 
 addresses of the directors of such corporation.' 
 
 § 27. Id.: Change in Number of Directors. — The subject of 
 change in the number of directors of a corporation is fully 
 treated in a subsequent section, to which reference is made." 
 
 § 28. Id.: Preferred and Common and Non-Par Value Stock, 
 and Classes of Preferred.— The method of issuing preferred 
 and common stock and different classes of preferred stock 
 when the certificate of incorporation either does or does not 
 provide therefor, is considered in subsequent sections, to 
 which reference is made." 
 
 § 29. Id.: Increase or Reduction of Capital Stock. — The 
 subject of increase or reduction of capital stock is discussed 
 in later sections to which reference is made." 
 
 § 30. Id. : Increase and Reduction of Number or Par Value 
 of Shares. — The change of the number or par value of shares 
 of capital stock is discussed in a later section, to which refer- 
 ence is made.^^ 
 
 § 31. Id.: Fees and Taxes on Incorporation.— The Secre- 
 tary of State charges twenty-five dollars for filing any original 
 certificate of incorporation of a private business stock cor- 
 poration ; and for recording a certificate, notice or other paper 
 in general which the law requires to be recorded twenty-five 
 
 * St. Corp. L. § 13 (L. 1915, As to when assets of corporatipn 
 
 c. 117). are consideration for increase of 
 
 ° See § 277, infra. The governing stock, see note in 50 L.R.A.(N.S.) 
 
 statute is St. Corp. L. §" 26 (L. 1909, 68. 
 
 c. 421). Generally as to power to increase 
 
 ^° See § 63 et seq., infra. The capital stock of corporation, see note 
 
 governing statute is St. Corp. L. in 38 L.R.A. 616. 
 
 § 61 (L. 1917, c. 542).. As to giv- For authorities discussing the 
 
 ing corporation with stock having right of existing stockholders to 
 
 par value stock without nominal or snbscrihe for increase, see note in 
 
 par value, see § 507-k, infra. The 12 L.R.A. (N.S.) 969. 
 
 governing statute is St. Corp. L. On right as between owner of 
 
 § 24, et seq. (L. 1917, c. 484). capital and income, to increased 
 
 On power of corporation to issue stock, see note in 16 L.R.A. 461. ■ 
 
 preferred, guaranteed, and interest " See § 102 et seq., infra. The 
 
 bearing stock, see notes in 27 L.R.A. governing statute is St. Corp. L. 
 
 136; 21 L.R.A.(N.S.) 228; 39 § 65 (L. 1909, c. 61). 
 
 L.R.A.(N.S.) 1007. On right of injunction -against 
 
 As to validity of guaranty of reduction of capital stock, ,see note 
 
 dividends of preferred stock, see in 1 L.R.A. (N.S.) 571. 
 
 note in 46 L.R.A. (N.S.) 637. On reduction of preferred, guar- 
 
 ^^ See § 102 et seq., infra. The anteed, and interest bearing stock, 
 
 governing statutes are St. Corp. L. see note in 27 L.R.A. 151. 
 « 62 (L. 1909, c. 61) ; § 63 (L. 1909, 
 c. 61) ; and § 64 (L. 1913, e. 305). 
 
§ 31 
 
 INCORPORATION AND NAME 
 
 31 
 
 cents per folio ; and for a certified or exemplified copy of any 
 paper fifteen cents per folio and one dollar additional for the 
 certificate under seal of his office, attached thereto." When- 
 ever there is presented to any public officer for certification 
 a previously prepared legibly typewritten or printed copy of 
 any document paper or record in his custody, his fees for 
 certification must be at the rate of three cents for each folio, 
 with a minimum total charge. for certification of twenty-five 
 cents." But this charge of three cents per folio for certifica- 
 tion of a previously prepared typewritten or printed copy of 
 a paper does not apply to a certified or exemplified, copy of 
 any paper when made by the Secretary of State, who is 
 authorized to charge fifteen cents per folio therefor (and one 
 dollar additional for the certificate under the seal of his office) 
 " whether such copy be made by the Secretary of State or 
 previously prepared and presented to him for certification, 
 
 "Executive L. § 26 (L. 1917, 
 c. 69 ) : " 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. Tor a copy of 
 any paper or record not required to 
 be certified or otherwise authenti- 
 cated 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 addi- 
 tional for the certificate under seal 
 of his office, attached thereto; and 
 this fee shall be the same whether 
 such copy be made by the secretary 
 of state or previously prepared and 
 presented to him for certification, 
 any other law to the contrary not- 
 withstanding. 5.' Eor a certificate 
 under the great seal of the state, 
 two dollars. 6. For recording a 
 certificate, notice or other paper re- 
 quired to be recorded, except as 
 otherwise provided by this section, 
 twenty-five cents per folio. . . . 
 10. For filing the original certificate 
 of incorporation of . . . any other 
 stock corporation [than a railroad 
 corporation] twenty-five dollars ; 
 . . . for filing a consent to, or 
 certificate of, increase of capital 
 stock, pursuant to either section six 
 
 or sixty-three or sixty-four of the 
 stock corporation law, ten dollars; 
 for filing a certificate of merger, 
 pursuant to section fifteen of the 
 stock corporation law, twenty-five 
 dollars; . . for filing an agree- 
 ment for the consolidation of two 
 or more corporations other than 
 railroad corporations, twenty-five 
 dollars; for filing an amended cer- 
 tificate of incorporation, pursuant 
 to either section seven of the gen- 
 eral corporation law or section eigh- 
 teen or twenty-two of the stock cor- 
 poration law, ten dollars; for filing 
 a certificate of change of number of 
 directors, pursuant to section 
 twenty-six of the stock corporation 
 law, ten dollars; for filing a certifi- 
 cate of reorganization pursuant to 
 section nine of the stock corporation 
 law, twenty-ifive dollars; for filing a 
 certificate of extension or revival of 
 corporate existence, twenty-five dol- 
 lars. 11. For filing the statement 
 and designation and copy of certifi- 
 cate of incorporation of a foreign 
 corporation desiring to do business 
 in this state, fifty dollars. . . . 
 15. For a certificate under subdi- 
 vision three of section nine of the 
 general corporation law, twenty-five 
 dollars. 
 "C. C. P. § 3305-a. 
 
32 BUSINESS CORPORATIONS IN NEW YORK § 31 
 
 any other law to the contrary notwithstanding. " " A county 
 clerk is entitled to eight cents for each folio of a copy of an 
 order, record or other paper entered or filed in his office ; ten 
 cents for each folio of any instrument recorded by him which 
 must or may legally be recorded by him ; twelve cents for seal- 
 ing any paper, when required; six cents for filing any paper 
 required by law to be filed in his office when no other fee is 
 prescribed; and twenty-five cents for a certificate other than 
 that a paper for the copying of which he is entitled to a fee 
 is a copy." The Secretary of State collects a fee of ten dol- 
 lars for. filing an amended certificate of incorporation pur- 
 suant to section seven of the General Corporation Law or 
 section eighteen or twenty-two of the Stock Corporation 
 Law." The questions relating to corporate taxation are 
 treated fully in a subsequent chapter to which reference is 
 made." But it must be borne in mind when incorporating a 
 company that all taxes required by law to be paid before or 
 upon incorporation must be paid before the certificate of 
 incorporation is filed, and that no corporation can exercise 
 any corporate powers or privileges until such taxes and fees 
 have been paid." A resume of the amount of and procedure 
 for paying the fees and taxes on organization or incorporation 
 of a company follows : 
 
 To the Secretary of State, the certificate of incorporation, 
 and twenty-five dollars for filing such certificate, and twenty- 
 five cents per folio for recording such certificate, and fifteen 
 cents per folio for a certified or exemplified copy of such 
 certificate (and one dollar for a certificate under seal of his 
 office attached thereto).^" 
 
 To the State Treasurer, a minimum organization tax of 
 ten dollars whatever the corporation's capitalization may be 
 and whether its stock have or have not a par value ; and if it 
 have par value stock, then so much more than ten dollars as 
 one-twentieth of one per centum upon the amqunt of capital 
 stock which the corporation is authorized to have shall exceed 
 ten dollars, and if it do not have par value stock, then so much 
 
 ^= Executive L. § 26 (L. 1917, L.R.A.(N.S.) 992; 30 L.R.A.(N.S.) 
 
 e. 69). '^^^- 
 
 16 p' p p g 0004 The question of taxation of eor- 
 
 ,,„■ ' .''^ ■ „„ ,^ _„,„ porations generally is discussed in a 
 
 "Executive L. § 26 (L. 1917, ^ote in 60 L.R.A. 366. 
 
 c. 69). 19 Gen. Corp. L. § 5 (L. 1913, 
 
 '*See § 563 et seq., infra. c. 479). 
 
 Taxation of shares of stock and ^^ Gen. Corp. L. § 5 (L. 1913, 
 
 corporate assets as double taxation, c. 479) ; Executive L. § 26 (L. 
 
 see notes in 58 L.R.A. 589; 15 1917, c. 69). 
 
§ 32. INCORPORATION AND NAME 33 
 
 more than ten dollars as the total of five cents for each share 
 of its stock which it is authorised to issue shall exceed ten 
 dollars/ 
 
 To the County Clerk, a duplicate original or a copy certified 
 by the Secretary of State of the certificate of incorporation; 
 and six cents per folio for filing such certificate ; and ten cents 
 per folio for recording such certificate.^ 
 
 The fees and taxes on reorganization of a corporation hav- 
 ing stock with par value so as to permit of the issuance of 
 stock without nominal or par value are discussed under the 
 section dealing with corporate reorganization.^" 
 
 § 32. Name: Governing Statutes. — The conditions imposed 
 by law upon choosing a name for a stock corporation are 
 these: (1) no certificate for the incorporation of a company 
 having (a) the same name as a corporation authorized to do 
 business under the laws of New York State, or (b) a name so 
 nearly resembling it as to be calculated to deceive, can be filed 
 or recorded in any office for the purpose of effecting its incor- 
 poration, or of authorizing it to do business in New York 
 State; (2) no business stock corporation can be authorized 
 to do business in New York State unless (a) its name has 
 such word or words, abbreviation, affix or prefix, therein or 
 thereto, as will clearly indicate that it is a corporation as dis- 
 tinguished f rorn a natural person, firm or co-partnership ; or 
 (b) such corporation uses with its corporate name, in New 
 York State, such an affix or prefix; (3) no stock business cor- 
 poration can be organized in New York State with the word 
 " trust ", " bank ", "banking ", " insurance ", " assur- 
 ance "," indemnity ", '' guarantee ", '' guaranty ", '' ti^s ", 
 " casualty ", " surety ", " fidelity ", " bonding ", " sav- 
 ings ", " investment ", ' ' loan ", or " benefit ' ', as part of its 
 name.^ Any corporation other than a moneyed corporation 
 who, or which within New York State, directly or indirectly 
 or through agents or representatives transacts business 
 under, or in anywise uses a corporate name or a corporate 
 title with the words " trust ", " bank ", " banking ", 
 " insurance ", " assurance ", '' indemnity ", " guarantee ", 
 
 ^Tax L. § 180 (L. 1917, c. 493), generally, see notes in 45 L.R.A. 
 
 and St. Corp. L. S 21 (L. 1917, 648; 22 L.R.A.(N.S.) 1013. . 
 c. 501). ■ 'Gen. Corp. L. § 6 (L. 1917, 
 
 ^Gen. Corp. L. § 5 (L. 1913, c. 594). Subd. 2 of the same sec- 
 
 c. 479); C. C. P. § 3304. tion (L. 1909, c. 28), prohibits the 
 
 ^*See § 507-k, infra. The gov- employment of the words "Lu- 
 
 eming statute is St. Corp. L. cretia Mott" by any domestic cor- 
 
 § 24-e (L. 1917, e. 484). poration to designate any hospital 
 
 On assessments on paid up stock or similar institution. 
 B. C. N. Y.— 3 
 
34 BUSINESS CORPORATIONS IN NEW YORK § 33 
 
 ' ' guaranty ", " savings ", ' ' investment ", ' ' ^o^^ "' " ^^ne- 
 fit ", as a part of such name or title, is guilty of a misde- 
 meanor.* The word " company " in the name of a corpora- 
 tion does not satisfy the statutory requirement that a cor- 
 porate name must have as part of it some word, abbreviation, 
 etc., which will clearly indicate that it is a corporation.^ 
 
 § 33. Id.: Protection of.—" The right of a man to use his 
 own name in his own business the law protects, even when 
 such use is injurious to another who has established a prior 
 business of the same kind and gained a reputation which goes 
 with the name. But in such case the courts require that the 
 name shall be honestly used, and they permit no artifice or 
 deceit, designed or calculated to mislead the public and palm 
 off the business as that of the person who first established it 
 and gave it its reputation (citations). It is weU settled that 
 an exclusive right may be acquired in the name in which a 
 business has been carried on, whether the name of a partner- 
 ship or of an individual, and it wUl be protected against 
 infringement by another who assumes it for the purposes of 
 deception, or even when innocently used without right to the 
 detriment of another, and this right, which is in the nature of 
 a right to a trade mark, may be sold or assigned (citation). 
 In respect to corporate names the same rules apply as to the 
 names of firms or individuals, and an injunction lies to re- 
 strain the simulation and use by one corporation of the name 
 of a prior corporation which tends to create confusion and to 
 enable the later corporation to obtain, by reason of the simi- 
 larity of names, the business of the prior one. The courts 
 interfere in these cases, not on the ground that the State may 
 not affix such corporate names as it may elect to the entities 
 it creates, but to prevent fraud, actual or constructive. The 
 names of corporations organized under general laws, and in 
 most other cases, are chosen by the promoters, and it would 
 
 * Penal L. § 666 (L. 1909, c. 88) ; shall, wherever the name shall be 
 " provided, however, that any do- printed, written, engraved or dis- 
 mestic corporation, other than a played, add, in legible English char- 
 moneyed corporation, heretofore acters, of substantially the same size 
 duly organized and heretofore duly and style as the name, directly 
 authorized by law to use and on under the said name or immediately 
 April 'twenty-ninth, nineteen hun- in connectiqi). therewith, wherever so 
 dred and four, lawfully using either used, the words ' not a moneyed cor- 
 or any of such words as a part of poration.' " 
 
 its lawful corporate title, may law- ^ Matter of American Cigar 
 
 fully continue to use such words as Lighter Co., 77 Misc. 643, 138 Supp. 
 
 a part of such corporate title, pro- 455 (1912) ; Gen. Corp. L. § 6 (L. 
 
 vided and if it, being a corporation 1912, c. 2). 
 other than a moneyed corporation. 
 
§ 33 INCORPORATION AND NAME 35 
 
 be an easy way to escape from the obligations which are 
 enforced as between individuals, if a corporation were granted 
 immunity by reason of their corporate character. . . . 
 Whether the court will interfere in a particular case must 
 depend upon circumstances ; the identity or similarity of the 
 names ; the identity of the business of the prospective corpo- 
 rations ; how far the name is a true description of the kind and 
 quality of the articles manufactured or the business carried 
 on; the extent of the confusion which may be created or 
 apprehended, and other circumstances which might justly 
 influence the judgment of the judge in granting or withholding 
 the remedy. " ° A corporation is protected in the use of its 
 trade as well as its corporate name.' A corporation 
 named in part after the family name of one who 
 had conducted the business it conducts before he 
 sold out to it may not enjoin either him after it has dis- 
 charged him from its employ or another of his family and 
 name who has employed him from conducting the same busi- 
 ness under their own family name, although it may enjoin a 
 corporation formed by them with such family name in a title 
 very like the complainant's from using such name in the 
 same business.* One Albert Eomeike and another, officers 
 and employees of a corporation named, after an ancestor of 
 the former, " Henry Eomeike " and which advertises itself 
 as " Henry Eomeike, Inc.," may lawfully do a like business 
 as such corporation in the same city, but a different neighbor- 
 hood, after leaving its employ, under the name of " Albert 
 Eomeike Co., Inc.," being a company incorporated by them, 
 provided they do not use such name dishonestly nor resort to 
 any artifice to mislead the public as to the identity of the two 
 businesses." One who has by his own voluntary act given a 
 corporation the right to use his name as and in its corporate 
 name cannot avail himself of the statute permitting a person 
 
 * Chas. S. Higgins Co. v. Hig- cessfully use of name " Harlem 
 
 gins Soap Co., 144 N. Y. 462, 27 Strand " by another corporation. 
 
 L.R.A. 42, 39 N. E. 490 (1895). «Merritt Burial & Cremation Co. 
 
 The use by a corporation of de- v. Merritt Company, 155 A. D. 565, 
 
 fendant's name held to infringe 140 Supp. 895 (1913), dissenting 
 
 plaintiff's name, both making soap opinion of Ingraham, P. J., in ac- 
 
 and plaintiff's soap being known as cordance with which judgment was 
 
 "Higgins' Soap." modified 214 N. Y. 676, 108 N. E. 
 
 'Mark Realty Corp'n v. Major 1108. 
 
 Amusement Co., — Misc. — (1918) ; 'Romeike, Inc. v. Romeike & Co., 
 
 N. Y. L. J. Jan. 9, App. Div., 1st Inc., 179 A. D. 712, 167 Supp. 235 
 
 Dept. Corporation using name (1917). 
 "Strand" for theater enjoined sue- 
 
36 BUSINESS CORPORATIONS IN NEW YORK § 33 
 
 whose name is used in trade without written consent first had 
 to restrain such use and recover damages." One selling to a 
 corporation his business and the right to use his name cannot 
 start a new business of a like character either in his individual 
 or in a corporate name which is similar to his own ; and if he 
 does, will be enjoined." The right to injunctive relief against 
 the unfair and misleading use of a corporate name is as avail- 
 able to a benevolent or fraternal association, not carrying on 
 any trade or industrial or financial business which can be 
 injuriously affected by the action of a similar body in appro- 
 priating its name, as to a trading corporation." ' ' The pro- 
 vision of our statute, in prohibiting the adoption of a name 
 nearly resembling that of an existing corporation, and the 
 rule of law, underlying the intervention by courts to restrain 
 the simulation by one corporation of the name of a prior cor- 
 poration, find their application, when it is plain that the busi- 
 ness of the prior corporation would, or might, be obtained and 
 thus the perpetration of fraud be made possible. " " If it 
 be made to appear that there is real ground for a present 
 apprehension of future injury to a corporation's property by 
 reason of confusion in the minds of those transacting business 
 with it and another corporation because of the similarity of 
 names of such two corporations, liable to create unfair trade, 
 the corporation to be injured would have standing in court 
 to protect itself against the injury reasonably to be antici- 
 pated ; but if there be no identity in the business of the two 
 corporations but the name of the complained-of corporation 
 clearly enough distinguishes the kind of article it would offer 
 to the trade, there is no ground of complaint." A corporation 
 has no absolute right to the aid of a court of equity to restrain 
 another corporation from the use of its corporate name on the 
 
 ^° White V. White, 160 A. D. 709, nevolent and Protective Order of 
 
 145 Supp. 743 (1914) ; Civil Rights Elks of the World, prohibiting not 
 
 L. § 51. only the use of that title but of the 
 
 ^^ Wheeler Syndicate, Inc. v. word Elks; but prohibition of the 
 
 Wheeler, 99 Misc. 291, 163 Supp. use of the same titles for its officers 
 
 817 (1917). was refused. The second organiza- 
 
 ^^B. P. 0. Elks V. Improved B. tion was not an offshoot but entirely 
 
 P. 0. Elks, 205 N. Y. 459, L.R.A. independent of the first. 
 
 1915B, 1074, 98 N. E. 756 (1912). ^^ Corning Glass Works v. Com- 
 
 The Benevolent and Protective ing Cut Glass Co., 197 N. Y. 173, 
 
 Order of Elks was granted an in- 90 N. E. 449 (1910) ; Gen. Corp. L. 
 
 junction against the use by the § 6. 
 
 Grand Lodge of the Improved Be- ^* Coming Glass Works v. Com- 
 
 nevolent and Protective Order of ing Cut Glass Co., 197 N. Y. 173, 
 
 Elks of the World, commonly 90 N. E. 449 (1910) ; Gen. Corp. L. 
 
 known simply as the Improved Be- § 6. 
 
§ 33 INCORPORATION AND NAME 37 
 
 ground that it so nearly resembles that of the complaining 
 corporation as to be calculated to deceive unless there was 
 fraudulent intent by the complained-of company to appro- 
 priate the corporate complainant's name or any part of it; 
 but in such a case the court may withhold its equitable aid in 
 the exercise of a sound discretion as the circumstances 
 require, and only when deception or confusion has in fact 
 resulted from the use of the name or it appears that such 
 result is likely to follow will it be time for the court to exercise 
 its extraordinary powers.^^ While a court cannot change the 
 name of a corporation incorporated in violation of the statute 
 prohibiting the incorporation of a company having a name so 
 nearly resembling that of an existing corporation as to be 
 calculated to deceive, it can and will enjoin it from using such 
 name without other appropriate words to distinguish the 
 business it conducts, like the older corporation's, from the 
 other 's.^° A corporation is entitled to enjoin the use by 
 another of a name similar to the one under which it has man- 
 ufactured and sold a commercial article if such use makes for 
 deception and injury, and the two parties are dealing in the 
 same or substantially similar articles; and it is immaterial 
 that the distinctive and similar features of both names 
 are a combination of geographical terms, that there 
 was no intent to produce confusion in the selection 
 of the similar name, or that no confusion has yet 
 resulted." It seems that a corporate name " The 
 German- American Hand Crochet Button Works " would 
 be refused a corporation if another corporation was 
 already in existence called ' ' German- American Button Co. ' ' " 
 The name " The Columbian Chemical Company " so nearly 
 resembles the name " Columbia Chemical Company " that if 
 a company has been duly incorporated with the latter name 
 
 ^' Hygeia Water lee Co. v. New Hegmsfeld, Inc., 170 A. D. 416, 156 
 
 York Hygeia Ice Co., Ltd., 140 Supp. 223 (1915). PlaintifE made 
 
 N. Y. 94, 135 N. E. 417 (1894). several kinds of buttons and defend- 
 
 ^° Material Men's Association, Ltd. ant advertised itself as importing 
 
 V. New York Material Men's Mer- one of such kinds and as " sole sell- 
 
 eantile Association, Inc., 169 A. D. ing agents of The German-Ameri- 
 
 843, 155 Supp. 706 (1915); Gen. can Hand Crochet Button Works," 
 
 Corp. L. § 6. The defendant manufactured by H. H. who had 
 
 charged less for doing the same work filed a certificate of adoption of the 
 
 as plaintiff had for years done, had trade-name of " German- American 
 
 its oflfiee in the same borough of Hand Crochet Button Works." 
 
 New York City, published a book " German- American Button Co. v. 
 
 like plaintiff did and under the same Hegmsfeld, Inc., 170 A. D. 416, 156 
 
 name. Supp. 223 (1915); Gen. Corp. L. 
 
 " German-American Button .Co. v. § 6. 
 
38 BUSINESS CORPORATIONS IN N1']W YORK § 34 
 
 the Secretary of State should refuse to file a certificate of a 
 new company with the former name.^' One entering into a 
 contract with another, who is an individual but uses a corpo- 
 rate name instead of his individual name to bind himself, can- 
 not for that reason hold such individual to a different price 
 for the subject-matter of the contract than that prescribed 
 therein, if both parties knew when the contract was signed 
 that such individual intended to bind himself as such and not 
 a corporation.^" A corporation to which is transferred cer- 
 tain cabinets bearing the name of an individual skilled in 
 making certain goods which such corporation makes under 
 his supervision as president does not by assignment for ben- 
 efit of creditors of aU its property except such as may be ex- 
 empt from execution give such assignee the right to convey, 
 with some of such property which he sells, the right to use 
 such individual's name on such kind of goods, except, of 
 course, on the very goods on which it was when it came to him 
 and which he in turn sells.^ Questions arising out of the re- 
 fusal of the Secretary of State to file a certificate of incorpo- 
 ration because of the similarity of the name of the proposed 
 corporation to an existing corporation have already been dis- 
 cussed.^ 
 
 § 34. Id.: Change of. — The courts will not interfere with a 
 change of name authorized for a corporation by its directors 
 and a majority in interest of its stock unless there be fraud, 
 illegality or a purpose detrimental to the corporation.^ The 
 method prescribed by law for the assumption by a domestic 
 business stock corporation of another corporate name is for 
 it to make a petition to the supreme court at a special term 
 thereof held in the judicial district in \Yhich its principal busi- 
 ness office is situated, with a certificate of the Secretary of 
 State annexed thereto that the name which such corporation 
 proposes to assume is not the name of any other domestic cor- 
 poration, or a name which he deems so nearly resembling it as 
 to be calculated to deceive.^ The petition must (1) be in writ- 
 ing, (2) be signed by the petitioner, (3) be verified in like man- 
 ner as a pleading in a court of record, (4) specify the grounds 
 of the application, (5) specify the corporation's present name, 
 
 ^° People ex rel. Columbia Co. v. ^ See § 22, supra. 
 
 O'Brien, lOl A. D. 296, 91 Supp. ^Matter of Hinds, Noble & El- 
 
 649 (1905); Gen. Corp. L. § 6 (L. dredge, 172 A. D. 140, 158 Supp. 
 
 1902, c. 9). 249 (1916) ; Gen. Corp. L. §§ 62, 63 
 
 ^» Davis V. Smith, 42 A. D. 333, (L. 1910, c. 296). 
 
 59 Supp. 120 (1899). *Gen. Corp. L. § 60 (L. 1909. 
 
 ^ Cutter V. Gudebrod Brothers Co., c. 28). 
 36 A. D. 362, 55 Supp. 298 (1898). 
 
§ 34 INCORPORATION AND NAME 30 
 
 (6) specify the name it proposes to assume, which must not be 
 the name of any other corporation or a name so nearly re- 
 sembling it as to be calculated to deceive.^ Notice of the pres- 
 entation of the petition must be published once in each week 
 of 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 corpo- 
 rate property is situated, or in which its operations are or 
 theretofore have been principally conducted, unless such 
 county be the county of New York or in the city of New York, 
 when the notice must be published in two newspapers instead 
 of one, both of which must be daily newspapers." A copy 
 both of (a) the petition and (b) the notice of motion must be 
 filed with the Secretary of State, and the proposed name 
 must thereupon be reserved for such corporation until three 
 weeks either (a) after the date of such motion or (b) after 
 the date of any adjournment of such motion if notice of such 
 adjournment is filed with the Secretary of State, and no cer- 
 tificate 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, can be 
 filed in any office for the purpose of effecting its incorporation, 
 and no corporation formed without the State of New York 
 having the same name or a name so nearly resembling it as 
 to be calculated to deceive can be given authority to do busi- 
 ness in New York State/ The court to which the petition is 
 presented must make an order authorizing the petitioning 
 corporation to assume the name proposed on a day specified 
 in the order (which must be not less than thirty days after 
 the entry of the order) if the court is satisfied: (1) either 
 from the petition, or the affidavit and certificate presented 
 therewith, that the petition is true ; (2) that there is no reason- 
 able objection to the change of name proposed; (3) that the 
 petition has been duly authorized ; and (4) that notice of the 
 presentation of the petition, if required. by law, has been 
 made.* The statutory proviso to a change of corporate name, 
 viz., " that there is no reasonable objection " thereto, puts it 
 within the discretion of the court to permit the change or not, 
 for an abuse of which only the appellate court will grant 
 redress.® " The change of name of a corporation is one of 
 
 = Gen. Corp. L. § 61 (L. 1909, « Gen. Corp. L. § 63 (L. 1910, 
 
 c. 28). e. 286). 
 
 ° Gen. Corp. L. § 62 (L. 1909, ' Matter of United States Mercan- 
 
 P 28) tile Reporting and Collecting 
 
 ' ' Gen. Corp. 'L. § 62 (L. 1909, Agency, 115 N. Y. 176, • 21 N. E. 
 
 c 28). ' 1034 (1889); L. 1870, e. 322. The 
 
40 BUSINESS CORPORATIONS IN NEW YORK .^ 34 
 
 those details of corporate and business management with 
 which, in the absence of fraud or illegality, the courts will not 
 interfere, but will respect the determination of those intrusted 
 with the direction of the affairs of the corporation, even if it 
 does not meet with the unanimous approval of the stock- 
 holders." ^° The order shall direct (1) that it be entered and 
 (2) the papers on which it was granted be filed within ten 
 days thereafter in the office of the clerk of the county in which 
 its certificate of incorporation, if any, is filed, or, if there be 
 none filed, in the office of the clerk of the county in which its 
 principal office is 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 con- 
 ducted, or in the office of the clerk of the county in which the 
 special term granting the order is held; and (2) that a cer- 
 tified copy of the order be filed within ten days after its entry 
 in the office of the Secretary of State; and (3) that a copy of 
 the order be published once in each week for four successive 
 weeks within ten days after its entry in a designated news- 
 paper in the county in which the order is directed to be 
 entered." The petitioning corporation must be known on 
 and after the day specified for that purpose in the order by 
 the name which is by that order authorized to be assumed and 
 by no other name if: (1) the order is fully complied with; and 
 (2) within forty days after the making of the order an affi- 
 davit of its publication has been (a) filed and (b) 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." 
 No action or special proceeding, civil or criminal, commenced 
 
 new name sought was " United proceedings had prior to April 4, 
 
 States Commercial Agency and Col- 1894, under sections 2414 and 2415 
 
 lecting Company, limited." The of the code of civil procedure for 
 
 corporation objecting was " The the change of the name of a corpo- 
 
 United States Mercantile Reporting ration, shall be invalid by reason of 
 
 Company." The Court of Appeals the non-filing of an affidavit of the 
 
 said it thought " the court below was publication of the order changing 
 
 somewhat too cautious" in refusing such name within 20 days from the 
 
 permission to change. date thereof. And no proceedings 
 
 ^"Matter of Hinds, Noble & El- heretofore had under the provisions 
 dredge, 172 A. D. 140, 158 Supp. of article 3, chapter 23, consolidated 
 249 (1916) ; Gen. Corp. L. §§ 62, laws, for the change of the name of 
 63. Two stockholders owing $117,- a corporation, shall be invalid by 
 500 of $300,000 stock opposed the reason of the nonfiling and record- 
 change, ing of such affidavit of the publica- 
 
 "Gen. Corp. L. § 63 (L. 1910, tion of the order changing such 
 
 c. 296). name within forty days from the 
 
 "Gen. Corp. L. § 64 (L. 1913, making of such order." 
 c. 721), which g:oes on to say: "No 
 
§ 35 INCORPORATION AND NAME 41 
 
 by or against a corporation the name of wMch is so changed 
 abates, nor is any relief, recovery or other proceeding therein 
 prevented, impeded or impaired in consequence of such 
 change of name ; and the plaintiff in the action or the party 
 instituting the special proceeding, or the people, as the case 
 requires, may at any time obtain an order amending any of 
 the papers or proceedings therein by the substitution of the 
 new name, without costs and without prejudice to the action 
 or proceeding.^' 
 
 § 35. Id.: On Reincorporation, Reorganization, Consolida- 
 tion, Sale of Property or Franchise, Merger, Dissolution and 
 Assignment. — A corporation formed by the reincorporation, 
 reorganization or consolidation of other corporations or upon 
 the sale of the property or franchises of a corporation, or a 
 corporation acquiring or becoming possessed of all the estate, 
 property, rights, privileges and franchises of any other cor- 
 poration or corporations by merger, may have the same name 
 as the corporation or one of the corporations to the franchise 
 of which it has succeeded." A corporation which on dissolu- 
 tion of a second corporation has acquired all its assets, busi- 
 ness and franchises (except the franchise to be a corporation), 
 acquires its good wUl^which carries with it the right to use its 
 name in connection with its own in such way as to show that it 
 is its successor.^^ A corporation which has acquired the busi- 
 ness, assets and franchises (save the franchise to be a corpo- 
 ratioii) of a second corporation on the latter 's dissolution may 
 enjoin the use by a third domestic corporation of the same 
 name as the second 's, even though the first has never used the 
 second's name and the third is not competing for business 
 with the first or second." A corporation of this State originally 
 granted a certain name apparently has sufficient .interest to 
 maintain an action to restrain another corporation incorpo- 
 rated afterwards in this State under the same name from con- 
 tinuing to use that name, although the former company has ■ 
 been formally dissolved, if it still has unmatured bonds of a 
 market value still outstanding and the latter corporation does 
 
 "Gen. Corp. L. § 65 (L. 1909, ^= Metropolitan Telephone & Tele- 
 
 e. 28) graph Co. v. Metropolitan Telephone 
 
 " Gen. Corp. L. § 6 (L. 1917, & Telegraph Co., 156 A. D. 577, 141 
 
 e. 594). Snpp. 598 (1913). 
 
 On right of corporations to con- ^'Metropolitan Telephone and 
 
 solidate, see note in 52 LRA 369. Telegraph Co. v. Metropolitan Tele- 
 
 As to rights of minority stock- phone and Telegraph Co., 1561 A. D. 
 
 holders to representation in new or 577, 141 Supp. 598 (1913). 
 reorganized corporation, see note in 
 10 L.R.A.(N.S.) 725. 
 
42 BUSINESS CORPORATIONS IN NEW YORK § 35 
 
 no business and has no assets but has issued bonds similar in 
 appearance to those of the former outstanding." A cause of 
 action against individuals based upon their assumption of an 
 expired corporation's name and of its duties and business is 
 destroyed by proof of continuance of such business in a 
 newly formed corporation's name." Upon the transfer by a 
 partnership of its business and property to a corporation to 
 the stock of which subscriptions were made upon the repre- 
 sentation of that one of the partnership whose name was the 
 only one printed in the firm title that all the partnership's 
 trade names and trade-marks had been transferred to the 
 corporation, though there was no written agreement to this 
 effect, any equitable estoppel which might exist in favor of 
 the corporation and its stockholders against the named indi- 
 vidual in the partnership title under the operation of which 
 he would be denied a right either to start a business in compe- 
 tition with it or withdraw from the concern his name and 
 trade-mark, or prohibit their use, will not inure in favor of the 
 transferee of an assignee of the corporation for the benefit 
 of creditors ; and all the right it will derive from the transfer 
 will be title to the tangible property assigned, including the 
 right to sell it even though the name of the partner appears 
 thereon but not to continue to use such name on other like 
 property manufactured and sold by the transferee." 
 
 " Metropolitan Telephone and ^° Cutter v. Gudebrod Brothers 
 
 Telegraph Company v. Metropolitan Co., 44 A. D. 605, 61 Supp. 225 
 Telephone and Telegraph Company, (1899) ; afE'd 168 N. Y. 512, 61 
 156 A. D. 577, 141 Supp. 598 N. E. 887. 
 (1913). 
 
 ^* People V. De Grauw, 133 N. Y. 
 254, 30 N. E. 1006 (1892). 
 
CHAPTER III. 
 
 ORGANIZATION, BY-LAWS, SEAL AND BOOKS. 
 
 V. Organization: First Meeting of Incorporators and Directors, § 36. 
 VI. By-Laws: 
 
 A. Governing Statutes, § 37. 
 
 B. How Far Binding on Strangers, Stockholders and Employees, 
 
 § 38. 
 
 C. Inspection of, § 39. 
 
 D. Amendment of, § 40. 
 VII. Seal: 
 
 A. Governing Statutes, § 41. 
 
 B. In General, § 42. 
 
 C. Adoption of, § 43. 
 
 D. Affixation Presumed to be by Authority and to Make' Instru- 
 
 ment Binding on Corporation, § 44. 
 Vin. Books and Records: 
 
 A. Adopting, Keeping and Compelling Delivery, § 45. 
 
 B. Inspection: 
 
 1. In General, § 46. 
 
 2. In Actions By and Against Corporations, § 47. 
 
 3. Stock Books: 
 
 a. Governing Statutes, § 48. 
 
 b. Who May Examine, § 49. 
 
 c. Demand, § 50. 
 
 d. Making Extracts, § 51. 
 
 e. Penalty for Refusing, § 52. 
 
 4. Practice in Enforcing: 
 
 a. In General, § 53. 
 
 b. By Mandamus : 
 
 aa. As to Books, in General, § 54. 
 
 bb. As to Stock Transfer Book, § 55. 
 
 ce. Stockholder's Motive in Seeking, § 56. 
 
 c. Pleading, Practice and Evidence, § 57. 
 
 C. As Evidence: 
 
 1. In General and Books of Account, § 58. 
 
 2. Stock Books, § 59. 
 
 3. Resolutions, Deeds and Records, § 60. 
 
 § 36. Organization: First Meeting of Incorporators and 
 Directors. — The first step in the organization of a corporation 
 is the meeting of the incorporators, at which it is proper to 
 accept notification of the due filing of the certificate of incor- 
 poration and of payment of the organization tax, and to 
 adopt by-laws. The next step is the first meeting of the direct- 
 ors, at which the officers of the corporation are chosen, its 
 seal is adopted, its form of stock certificate is approved and 
 the secretary instructed to procure a stock certificate book 
 
 43 
 
44 BUSINESS CORPORATIONS IN NEW YORK § 37 
 
 and stock transfer book and ledger, call is made for payment 
 by subscribers to the capital stock on account of their sub- 
 scriptions, filing of a certificate of payment of one-half the 
 authorized stock is directed, the principal office and the bank 
 for the company's deposits are designated, the resolution for 
 the method of signing cheques is passed, and the Secretary is 
 directed to keep the stock certificate book and book of account, 
 transfer ledger or register as prescribed by law. 
 
 § 37. By-Laws: Governing Statutes. — Every corporation 
 has power, though not specified in the law under which it is 
 incorporated, to have (1) succession for the period specified 
 in its by-law (or certificate of incorporation, and perpetually 
 when no period is specified) ; and to make by-laws, not in- 
 consistent with any existing law, for (2) the management of 
 its property, the (3) regulation of its affairs, (4) the transfer 
 of its stock, (5) the calling of meetings of its members; (6) 
 the fixing of the amount of stock which must be represented at 
 meetings of the stockholders in order to constitute a quorum, 
 unless otherwise provided by law; ^ (7) the fixing of the num- 
 ber 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 ; ^ (8) prescribing the powers and duties of 
 the president, secretary, treasurer and other officers, agents 
 and employees of the corporation;^ (9) prescribing the man- 
 ner of the appointment of the inspectors of election.* 
 By-laws duly adopted at a meeting of the members of the cor- 
 poration control the action of its directors; and no by-law 
 adopted by the board of directors regulating the election of 
 directors or officers is 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.' Subject to the by-laws, if any, adopted 
 by the members of a corporation, the directors may make 
 necessary by-laws of the corporation.* When the direc- 
 tors of any corporation for the first year of its 
 corporate existence hold over and continue to be 
 directors after the first year, because of their neglect 
 or refusal to adopt the by-laws required to enable the stock- 
 holders to hold the annual election for directors, all their 
 
 ^Gen. Corp. L. § 11 (L. 1909, * St. Corp. L. § 31 (L. 1909, 
 
 c. 28). e. 61). 
 
 ^Gen. Corp. L. § 34 (L. 1909, = Gen. Corp. L. § 11 (L. 1909, 
 
 c. 28). c. 28). 
 
 'St. Corp. L. § 30 (L. 1909, °Gen. Corp. L. § 34 (L. 1909, 
 
 c. 61). c. 28). 
 
§ 38 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 45 
 
 acts and proceedings while so holding over, done for and in the 
 name of the corporation, designed to charge upon it any lia- 
 bility 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, must be held fraudulent and 
 void/ 
 
 § 38. Id.: How Far Binding on Strangers, Stockholders and 
 Employees.—" It is idle to appeal to the by-laws of . . . 
 [a corporation the business of which is in the hands of execu- 
 tive agents] as affecting contracts made with third persons in 
 reliance upon the apparent authority of its executive 
 agents." ^ " By-laws of business corporations are as to third 
 persons private regulations binding as between the corpora- 
 tion and its members or third persons having knowledge of 
 them, but of no force as limitations per se as to third persons 
 of an authority, which, except for the by-law, would be con- 
 strued as within the apparent scope of the agency. " ° A cor- 
 porate by-law that no contract be made by the company, by 
 any officer, unless authorized by resolution of its directorate 
 does not limit the authority of a managing agent intrusted 
 with the sale of its securities to make a contract verbally 
 authorized by those controlling the corporation as an incident 
 to such sale.^° A corporation is bound by a contract in writing 
 made for it by one who generally managed it, sold its 
 manufactured goods, bought raw material for it to manufac- 
 ture, had charge of its bank account, drew all its cheques, was 
 its secretary and treasurer, owned two-thirds of its stock 
 and was the only one of its three stockholders and directors 
 who lived where it had its place of business, irrespective of a 
 by-law providing a contract for the amount of the one in 
 question should be signed by its president." " ... the 
 by-laws of a corporation, made in pursuance of its special 
 charter, or of the general laws under which it is organized, 
 are binding on all members and others acquainted with the 
 method of doing business . . . It is another rule, that 
 every by-law made in pursuance of a general or incidental 
 authority, must be a reasonable one. It is not a reasonable 
 by-law, which, without authority express or to be clearly 
 
 ^St. Corp. L. § 27 (L. 1909, i" Sherman v. Dwight, 138 A. D. 
 
 c. 61). 595, 123 Supp. 89 (1910). The con- 
 
 ^ Standard Fashion Co. v. Siegel- tract was of guaranty of stock. 
 
 Cooper Co., 44 A. D. 121, 60 Supp. " Cone v. Empire Plaid Mills, 12 
 
 739 (1899). A. D. 314, 42 Supp. 160 (1896). 
 
 » Rathbun v. Snow, 123 N. Y. 343, 
 10 L.R.A. 355, 25 N. E. 379 (1890). 
 
46 BUSINESS CORPORATIONS IN NEW YORK §§ 39, 40 
 
 implied, interferes with the common rights of property and the 
 dealings of third persons, and prevents the purchase and 
 transfer or delivery of property." " A by-law will not be set 
 aside, certainly unless for extremely good cause, as being in 
 subversion of the corporation's charter and in subversion of 
 and to the irreparable injury of stockholders, because it, in 
 enumerating the powers of the general manager of the 
 company, besides giving him customary powers, gives him 
 general and exclusive charge of the business in all unspecified 
 details and makes him executive officer of the board of trus- 
 tees, provided it make him at all times subject to the board's 
 control/* A corporate by-law that none of the stock shall be 
 allowed to be transferred on the books if the person in whose 
 name it stands is indebted to the company unless upon consent 
 of the board of trustees or president or treasurer has no 
 warrant in the statutes and if not made known on the stock 
 certificates cannot be upheld." A by-law of a corporation can- 
 not prevent one employed by its president to prepare a 
 pamphlet setting forth the patent under which the company 
 was organized to work from recovering against it for such 
 services." 
 
 § 39. Id.: Inspection of. — ^While it is in the discretion of the 
 court to grant an application of a stockholder to inspect his 
 corporation's by-laws just as much as its books and other 
 papers, yet it must be a strong case which will warrant a 
 denial of inspection of by-laws, because they are part of the 
 contract between him and it, while the books and papers are 
 not." The general subject of the right of inspection of cor- 
 porate books and records is treated hereinafter." 
 
 § 40. Id.: Amendment of. — " The power to make by-laws is 
 to make such as are not inconsistent with the constitution and 
 the law ; and the power to alter has the same limit, so that no 
 alteration could be made which would infringe a right already 
 
 " Driscoll V. West Bradley & Gary with such corporation is entitled to 
 
 Mfg. Co., 59 N. Y. 96 (1874) ; Gen. assume that in the ordinary trans- 
 
 Mfg. Act, L. 1848, c. 40, § 8. action of its business the president 
 
 ^'Burden v. Burden, 159 N. Y. is authorized to act for it, and the 
 
 287, 54 N. E. 17 (1899). corporation is liable for contracts 
 
 " Driscoll V. West Bradley & made in the conduct of its business." 
 Gary Mfg. Co., 59 N. Y. 96 (1874) ; On effect of corporate by-laws as 
 
 Gen. Mfg. Law, L. 1848, c. 40, § 8. notice, see notes in 25 L.B.A. 48; 
 
 "Powers V. Schlicht Heat' & 39 L.R.A.(N.S.) 295. 
 Power Co., 23 A. D. 380, 48 Supp. "Matter of Coats, 75 A. D. 567. 
 
 237 (1897); aff'd 165 N. Y. 662, 59 78 Supp. 429 (1902). 
 N. E. 1129. ". . . in the absence " See § 46 e« seq., infra. 
 
 of express notice, a person dealing 
 
J§ 41, 42 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 47 
 
 given and secured by the contract of the corporation."^' 
 Although a corporation's by-laws prescribe five as the num- 
 ber of its direciK)rs and that the stockholders by a vote of 
 ninety per cent of the issued and outstanding stock may 
 amend the by-laws, and at a duly called meeting the holders 
 of over fifty but less than ninety per cent of the issued and 
 outstanding stock, vote to decrease the number of directors 
 from five to four and to substitute " four " for " five " in 
 the by-laws' requirement for directors, yet the reduction is 
 lawful, if all statutory requirements were complied with, as 
 it is not lawful for a corporation to provide in its by-laws that 
 a vote of the holders of ninety per cent of its issued and out- 
 standing stock shall be required in order to change the num- 
 ber of directors.^" 
 
 § 41. Id.: Seal, Governing Statutes. — Every corporation as 
 such has power, though not specified in the law under which 
 it is incorporated, to have a common seal and to alter it at 
 pleasure.^" A seal of a corporation may be impressed directly 
 upon the instrument or writing to be sealed, or upon wafer, 
 wax or other adhesive substance affixed thereto, or upon 
 paper, or other similar substance affixed thereto by mucilage 
 or other adhesive substance.^ An instrument or writing duly 
 executed, in the corporate name of a corporation, which ha,s 
 not adopted a corporate seal, by the proper officers of the 
 corporation under their private seals, is deemed to have been 
 executed under the corporate seal.^ 
 
 § 42. Id.: In General. — " . . . when the sale, assign- 
 ment or transfer of the property of the corporation requires 
 the use of the common seal, it cannot be made without the 
 assent and authority of the board." ^ " The seal of a corpo- 
 ration like the seal of an individual when affixed to a contract 
 is presumptive evidence of a sufficient consideration for the 
 contract."* Assuming (what is gravely to be doubted) that 
 
 "Kent V. Quicksilver Mining Co., ""Gen. Corp. L. § 11 (L. 1909, 
 
 78 N. Y. 159 (1879.) c. 28). 
 
 " Katz V. The H. & H. Mfg. Co., ^ Gen. Const. L. § 43 (L. 1909, 
 
 183 N. Y. 578, 76 N. E. 1098 (1906) ; c. 27). 
 
 St. Corp. L. § 21, now § 26. ^Gen. Const. L. § 45 (L. 1909, 
 
 On right under reserved power to e. 27). 
 
 amend or repeal charter of corpora- ' Hoyt v. Thompson, 5 N. Y. 320 
 
 tion to change the rights of stock- (1851). 
 
 holders as to voting the stock, see "Mutual Life Insurance Co. v. 
 
 note in 22 L.R.A.(N.S.) 420. Yates County National Bank, 35 
 
 On reserved right to amend repeal A. D. 218, 54 Supp. 743 (1898). 
 charter as to taxation, see note in 
 60 L.R.A. 69. 
 
48 BUSINESS CORPORATIONS IN NEW YORK §§ 43, 44 
 
 the presence of the corporate seal upon instruments having 
 the appearance of having been made as the company's nego- 
 tiable promissory notes could affect their negotiability, yet 
 its mere presence, unaccompanied by a single fact evidencing 
 that the company's officers intended to, or did, affix it, is quite 
 insufficient to have any effect upon their apparent character/ 
 
 § 43. Id.: Adoption of. — The statutes governing the adop- 
 tion by a corporation of a seal are set forth in the last section 
 but one, and should be read in considering the present section. 
 "A corporation, like an individual, may adopt any seal that is 
 convenient for the particular occasion. The only limitation of 
 the rule is, that the seal adopted must be affixed as the seal 
 of the corporation (citations). Where . . . it is found 
 that the contract recites that it is executed under the hands 
 and seals of the parties, if one seal is affixed after the names 
 of the parties, that will be sufficient proof that the particular 
 seal was adopted by all those who sign under the recital, and 
 the seal will be deemed to be the seal of all parties alike. ' ' " 
 Adoption by the trustees of a religious corporation of a seal 
 affixed opposite the name of its president signed to a mort- 
 gage is sufficient if it had no seal at the time.' When a prior 
 president of a corporation withholds its corporate seal and 
 stock book so as to prevent the transfer of stock thereon, and 
 the issue of new stock in time to permit it to be voted upon 
 at an annual meeting, it is lawful for the directors to adopt 
 and procure a new seal and new stock book to accomplish that 
 purpose and those holding stock of record in the new book 
 may legally vote.^ 
 
 § 44. Id.: AflSxation Presumed to be by Authority and to 
 made Instrument Binding on Corporation. — " It is an ancient 
 and well-established rule of law that where the seal of a cor- 
 poration is affixed to a contract or written instrument, to 
 which such corporation is a party, and it is signed by the pres- 
 ident and secretary or other proper officers, it will be pre- 
 sumed that such officers did not exceed their powers, as the 
 seal is prima facie proof that it was attached by proper 
 authority, and it lies with the party objecting to its execu- 
 
 ° Weeks v. Esler, 143 N. Y. 374, Construction Co., by Calvin Detrick, 
 
 38 N. E. 377 (1894). Pres't, Jos. L. Rusling.' Opposite 
 
 ^ Rusling V. Tnion Pipe & Con- the name of Rusling appears a seal." 
 
 struction Co., 5 A. D. 448, 39 Supp. ^ South Baptist Society of Albany 
 
 216 (1896) ; 158 N. Y. 737, 53 N. E. v. Clapp, 18 Barb. 35 (1853). 
 
 1131. " The contract recites that, * Socorro Mountain Mining Co. v. 
 
 ' in witness whereof ' the parties Preston, 17 Misc. 220, 40 Supp. 1040 
 
 'have hereunto set their hands and (1896). 
 seals.' It is signed ' Union Pipe & 
 
§ 45 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 49 
 
 tion to^ show that it was affixed surreptitiously or improp- 
 erly."" " Although the presence of a seal upon an instru- 
 ment is prima facie ^ proof that it was attached by proper 
 authority ... it is only such proof as may be conclu- 
 sively rebutted . . . "^o " The seal of a corporation, 
 affixed to an instrument, proves itself, and is of itself suffi- 
 cient prima facie, or presumptive evidence, that it was so 
 affixed by due authority. It lies with the party objecting to 
 the instrument so sealed to show that the seal of the corpo- 
 ration was improperly affixed, or without the assent of the 
 proper authority {citations). The officer taking proof of the 
 deed is not required to take evidence that the corporate seal 
 was affixed by authority, or to examine into the title of the 
 person who_ assumes to be the officer of the corporation. ' ' '^ 
 A contract is presumed to be that of a corporation which is a 
 party to it if signed by its president and secretary and if it 
 had the corporate seal affixed; but this prima facie showing 
 may be upset by the corporation's demonstration that it was 
 ultra vires, even though it does not affirmatively so allege in its 
 answer, provided it generally denies." A corporate seal 
 affixed to a contract, within its lawful powers to make, by 
 lawful authority is sufficient to bind it until impeached." 
 " A deed formally executed under the corporate seal, bears 
 upon its face the presumption that it was executed by coin- 
 petent authority from the corporation."" 
 
 § 45. Books and. Records: Adopting, Keeping and Compel- 
 ling Delivery. — Every stock corporation must keep at its office 
 (1) correct books of account of all its business and trans- 
 actions, and (2) a book to be known as the stock book,- con- 
 taining (a) the names, alphabetically arranged, of all persons 
 who are stockholders of the corporation, showing (b) their 
 places of residence, (c) the number of shares of stock held 
 by them respectively, (d) the time when they respectively 
 became the owners thereof, and (e) the amount paid thereon." 
 The board of directors has power at a meeting lawfully con- 
 vened to adopt a new stock book, as the adoption of a stock 
 book in the first instance pertains to the duties of the directors 
 
 ^ Quackenboss v. Globe & R. F. gers Mr& Ins. Co., 106 A. D. 466, 
 
 Ins. Co., 177 N. Y. 71, 60 N. E. 94 Supp. 723 (1905). 
 
 223 (1903). ^^New England Iron Co. v. Gil- 
 
 '^"Gause v. Commonwealth Trust bert Elevated R. R. Co., 91 N. Y. 
 
 Co., 196 N. Y. 134, 24 L.R.A.(N.S.) 153 (1883). 
 
 967, 89 N. E. 476 (1909). ^^Hoyt v. Thompson, 5 N. Y. 320 
 
 "Canandaigua Academy v. Mc- (1851). 
 
 Kechnie, 19 Hun, 62 (1879). "St. Corp. L. § 32 (L. 1916, 
 
 ^2 Qnackenboss v. Globe & Rut- c. 127). 
 B. C. N. Y.— 4 
 
50 BUSINESS CORPORATIONS IN NEW YORK § 46 
 
 of a stock corporation, and if for any reason the existing 
 transfer book is not available for use by the directors for the 
 making of transfers of stock, the adoption of a new stock book 
 is incident to the original power vested in the directors.^' 
 "When one of three directors has left town after locking up the 
 corporate stock book the other two are faced with such an 
 exigency as enables them to issue a new stock book." ' ' Man- 
 damus is the proper remedy to compel an outgoing officer of 
 a corporation to deliver over books and papers belonging to 
 the corporation."^* Directors found by judicial determina- 
 tion to be the legal ones of a corporation as against others 
 claiming to be such are entitled to peremptory mandamus 
 against one of the latter who has its books compelling him to 
 turn them over." 
 
 § 46. Id.: Inspection, In General.—" ... A stockholder 
 has the right at common law to inspect the books of his cor- 
 poration at a proper time and place, and for a proper pur- 
 pose, and ... if this right is refused by the officers in 
 charge a writ of mandamus may issue, in the sound discretion 
 of the court, with suitable safeguards to protect the interests 
 of all concerned. It should not be issued to aid a blackmailer, 
 nor withheld simply because the interest of the stockholder 
 is small, but the court should proceed cautiously and dis- 
 creetly, according to the facts of the particular case. To the 
 extent, however, that an absolute right is conferred by statute, 
 nothing is left to the discretion of the court, but the writ 
 should issue as a matter of course, although even then, doubt- 
 less, due precautions may be taken as to time and place so as 
 to prevent interruption of business, or other serious incon- 
 veniences " ; but the statutory provision that a corporation 
 shall keep a stock book which shall be open to the inspection 
 of its stockholders does not abridge the common law rights of 
 the stockholders to examine the corporate books, stock as well 
 as other.™ The distinction must be borne in mind between the 
 
 ^* Matter of Petition of Argus and others the court will direct the 
 
 Co., 138 N. Y. 567, 34 N. E. 388 corporate books delivered to the 
 
 (1S9'3). county clerk so that they may be 
 
 " Matter of Petition of Argus accessible to all parties. 
 
 Co., 138 N. Y. 557, 34 N. E. 388 "Matter of Journal Publishing 
 
 (1893). Club, 30 Mise. 326, 63 Supp. 466 
 
 ^^ People ex rel. Keeseville, An- (1900). 
 
 sable Chasm & Lake Champlain ™ Matter of Steinway, 159 N. Y. 
 
 R. R. Co. V. Powers, 145 A. D. 693, 250, 45 L.R.A. 461, 53 N. E. 1103 
 
 130 Supp. 529 (1911). But if there (1899); Stock Corp. L. § 29. See 
 
 is much litigation and an account- now § 32. 
 ing pending between such officers 
 
§ 46 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 51 
 
 general business books and the stock book of a corporation in 
 determining _ a stockholder's right of inspection thereof; 
 because the inspection of the, former is a common-law right 
 granted or withheld in the sound discretion of the court ; and 
 an inspection of the general books will be withheld unless the 
 stockholder seek in good faith to learn something he has a 
 right to know or if he seek it for the purpose of annoying the 
 company ; while the inspection of the stock book is an absolute 
 right given by statute in addition to any common-law rights, 
 and the stockholder's motives in inspecting the stock book 
 alone are immaterial.^ " The principle upon which a stock- 
 holder is allowed access to the books of a corporation is as 
 applicable to the case of a banking corporation, as it is to any 
 other kind of corporation. It is his common-law right, and, 
 unleste restricted by law or by the charter, the exercise of that 
 right will not be denied him, at a proper time and place, when 
 the circumstances are such as seem to the court to make that 
 right available. ' ' ^ Two directors who control a corporation 
 • cannot prevent a third whom they have made secretary and 
 a dummy director (to satisfy the demand of the statute that 
 there be three) from inspecting the corporate books.^ All 
 that a director ' ' need show to entitle himself to an inspection 
 [of his corporation's books] is that he is a director of the 
 company; that. he has demanded permission to examine and 
 that his demand has been refused."* While a director may 
 examine his corporation's books assisted by a person desig- 
 nated by him and mandamus its officers to permit this, yet he 
 cannot turn his right over to professional accountants acting 
 alone.' A president has the right to inspect the books of his 
 corporation, irrespective of his motive, and may have per- 
 emptory mandamus to command the corporation's secretary 
 and treasurer, who refuses him such inspection, to permit it " 
 In order to entitle a stockholder to the aid of the court in 
 securing an examination of the books of account of his cor- 
 poration he should first show that he has demanded of its 
 
 On effect of by-laWs on stockhold- ^ People ex rel. Stanffer v. Bonwit 
 
 er^s right to inspect corporate books, Bros., 69 Misc. 70, 125 Supp. 958 
 
 see note in 20 L.R.A.(N.S.) 196. (1910). 
 
 ^ People ex rel. Callanan v. Keese- * People ex rel. Leach v. Central 
 
 ville, Ausable Chasm & Lake Cham- Fish Co., 117 A. D. 77, 101 Supp. 
 
 plain R. R. Co., 106 A. D. 349, 94 1108 (1907). 
 
 Supp. 555 (1905); St.~ Corp. L. § 29 ^People ex rel. Bartels v. Borg- 
 
 (L. 1901, c. 354). See now § 32, stede, 169 A. D. 421, 155 Supp. 322 
 
 ^Matter of Tuttle v. Iron Nat. (1915). 
 
 Bank, 170 N. Y. 9, 62 N. E. 761 * People ex rel. Gunst v. Goldstein, 
 
 (1902). 37 A. D. 550, 56 Supp. 306 (1899). 
 
52 BUSINESS CORPORATIONS IN NEW YORK §§ 47, 48 
 
 treasurer, and been refused, the statement, provided for by- 
 statute, of its affairs under oath, if such a statement will 
 furnish him with about the same information as he seeks by 
 inspection of its account books.' A peremptory writ of 
 mandamus to compel a corporation to exhibit its books and 
 papers to a stockholder will not be granted if his avowed 
 object is to obtain information to submit to the attorney- 
 general and district attorney so that they may make such use 
 thereof as might be necessary to cause the parties to make 
 good any deficit which might occur from a loan made by the 
 corporation which the stockholder desires to show by his 
 inspection was illegal.* One holding forty-three per cent of 
 the stock of a corporation of which he formerly was an ofificer 
 is entitled to mandamus to inspect the books to ascertain how 
 the money is being expended to build a large factory on land 
 belonging to the sister of the corporation's president who is 
 of precarious financial status, even though it be claimed that 
 he is seeking information to benefit a company (formed by 
 himself on severing his connection with the corporation) to 
 make player pianos, under a right reserved to him to make 
 them when the corporation was first formed to make pianos." 
 A stockholder, however small his holdings, alleging that bonds 
 of the corporation were redeemed by the company at more 
 than the market value at the time of redemption, presents 
 ground for judicial intervention by mandamus to inspect the 
 books to find with what moneys such bonds were redeemed, 
 etc.; but if the allegation is denied, a peremptory writ of 
 mandamus cannot issue, but the issue of fact must be deter- 
 mined upon a trial, after the issuance of an alternative writ.^° 
 
 § 47. Id.: In Actions By and Against Corporations. — The 
 points which arise in connection with the inspection of the 
 books of a corporation in actions by and against it are dis- 
 cussed in sections of a subsequent chapter to which reference 
 is made." 
 
 § 48. Id.: Stock Books, Governing Statutes. — Every stock 
 corporation must keep at its office a book to be known as the 
 stock book containing (1) the names, alphabetically arranged, 
 of all persons who are stockholders of the corporation, show- 
 
 ' People ex rel. Clason v. Nassau ° People ex rel. Ludwig v. Ludmg 
 
 Ferry Co., 86 Hun, 128, 33 Supp. & Co., 126 A. D. 696, 111 Supp. 94 
 
 244 (1895); St. Corp. L. § 52 (L. (1908). 
 
 1892, c. 688). See now § 32. "Matter of Hitchcock, 157 A. D. 
 
 * People ex rel. McElwee v. Prod- 328, 142 Supp. 247 (1913). 
 
 uce Exchange Trust Co., 53 A. D. 93, " See § 448, infra. 
 65 Supp. 926 (1900); C. C. P. 
 ? 2070. 
 
§ 49 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 53 
 
 ing (2) their places of residence, (3) the number of shares of 
 stock held by them respectively, (4) the tinie when they 
 respectively became the owners thereof, and (5) the amount 
 paid thereon. No transfer of stock is valid as against the 
 corporation, its stockholders and creditors for any purpose 
 except to render the transferee liable for the debts of the cor- 
 poration to the extent provided in the Stock Corporation Law 
 until it has been entered in the stock book by an entry showing 
 from and to whom transferred.^^ If a corporation does not 
 keep such a book as the statute prescribes a stockholder shall 
 have a right to inspect, it must permit him to see such book as 
 it does keep which will give him the information the statute 
 intends he shall get, even though it contain other information, 
 too." 
 
 § 49. Id.: Who May Examine. — The stock book of every 
 stock corporation must be open daily, during at least three 
 business hours, for inspection by (1) any judgment creditor 
 of the corporation; or (2) by any person who has been a stock- 
 holder of record in the corporation for at least six months 
 immediately preceding his demand; or (3) by any person 
 holding stock of such corporation to an amount equal to five 
 per centum of all its outstanding shares ; or (4) by any person 
 thereunto in writing authorized by the holders of stock of 
 such corporation to an amount equal to five per centum of all 
 of its outstanding shares." The right to examine corporate 
 books is a personal right depending on ownership of its stock 
 which makes the stockholder a member of the corporation, 
 and the right does not, therefore, extend to a mere custodian 
 of the stock pending a litigation as to its ownership, although 
 the custodian may become a stockholder as the result of the 
 litigation." A stockholder who has pledged his holdings of 
 a corporation's stock to it is entitled to inspect its books and 
 to sue for the penalty on its refusal to permit such inspec- 
 tion." The executor of a stockholder is entitled to mandamus 
 the ofificers of a corporation to exhibit its books to him and 
 permit him to examine them." An executor of a deceased 
 
 1^ St. Corp. L. § 32 (L. 1916, c. Co., 62 Misc. 252, 114 Supp. 1000 
 
 127). (1909). 
 
 " People ex rel. Richmond v. Pa- On right of stockholder to inspect 
 
 cific Mail iSteamship €o., 50 Barb, books of the corporation, see notes 
 
 280 (1867); 1 R. S. 601, § 1. in 45 L.R.A. 446; 20 L.R.A.(N.S.) 
 
 ^*St. Corp. L. S 32 (L. 1916, c. 185; 30 L.R.A. (N.S.) 290; 42 L.R.A. 
 
 127). (N.S.) 332. 
 
 ^^ Matter of Hastings, 120 A. D. " Matter of Hastings, 56 Misc. 45, 
 
 756, 105 Supp. 834 (1907). 106 Supp. 938 (1907). 
 
 ^' Booth V. Consolidated Fruit Jar 
 
54 BUSINESS COBPORATIONS IN NEW YORK §§ 50-52 
 
 holder of one-half of the capital stock of a corporation should 
 be granted mandamus to compel the corporation to permit 
 examination by him of its books." Personal representatives 
 of a deceased stockholder may have peremptory mandamus 
 to compel his corporation to permit inspection of its books to 
 enable them to testify in a transfer tax proceeding as to the 
 value of decedent's holdings of stock." 
 
 § 50. Id.: Demand. — " If the officer or agent having charge 
 of the stock book can be found at the office of the corporation, 
 during business hours, a demand made, there and then, by a 
 person entitled thereto, for an inspection of such book is 
 sufficient, even though it be at some other place, as he is not 
 obliged to go elsewhere for that purpose (citation). But if 
 the officer or agent having the custody of the specified book 
 has removed the same from the company's office, and he can- 
 not be found therein, during business hours, then a demand 
 elsewhere would, in my opinion, be valid. ' ' ^° 
 
 § 51. Id.: Making Extracts. — Persons entitled to inspect 
 the stock books of corporations may make extracts there- 
 from.^ Under a statute giving stockholders the right at 
 reasonable times for thirty days prior to any election of 
 directors to examine the stock transfer book, the stockholders 
 may not only inspect the book but take copies of the names 
 listed.^ ' ' The right of inspection . . . [by a stockholder 
 of his corporation's stock book] carries with it the right to 
 make such extracts from the book as will enable the share- 
 holder to retain the information disclosed by the inspection. ' ' " 
 A statute providing an unrestricted examination of a corpo- 
 ration's books by a stockholder or his attorney necessarily 
 includes the right to take extracts therefrom.* 
 
 § 52. Id.: Penalty for Refusing. — Every stock corporation 
 which neglects or refuses to keep or cause to be kept a stock 
 
 ^* Matter of Hastings, 128 A. D. Giroux Consolidated Mines, Co., 122 
 
 516, 112 Supp. 800 (1908) ; aff'd 194 A. D. 617, 107 Supp. 188 (1907) ; 
 
 N. Y. 546, 87 N. E. 1120. St. Corp. L. §§ 29, 53 (L. 1901, 
 
 "Matter of Kennedy, 37 Misc. c. 354 and L. 1897, c. 384). See 
 
 317, 75 Supp. 457 (1902). now §§ 32 and 33, respectively. 
 
 ^ Gunst V. Goldstein, 30 Misc. 44, ^ Cotheal v. Brouwer, 5 N. Y. 562 
 
 61 Supp. 707 (1899). (1851); 1 R. S. 601, § 1. 
 
 ^St. Corp. L. § 32 (L. 1916, 'People ex rel. Lorge v. Consoli- 
 
 c. 127). The statutes providing for dated National Bank, 105 A. D. 409, 
 
 inspection of the books of a do- 94 Supp. 173 (1905) ; St. Corp. L. 
 
 mestic and foreign corporation for- § W (L. 1901, c. 354). See now 
 
 merly were different in that the § 32. 
 
 latter does not provide for making * Matter of Martin, 62 Hun, 557, 
 
 extracts therefrom while the former 17 Supp. 133 (1891) ; L. 1876, c. 611, 
 
 does. See People ex rel. Althause v. §§ 16, 17. 
 
S 52 ORGANIZATION, BY-LAWS, SEAL AND BOOKS ' 55 
 
 book, or to keep any book open for inspection as required by 
 the statute, forfeits to the people the sum of fifty dollars for 
 every day it so neglects or refuses.' If any officer or agent 
 of a stock corporation neglects or refuses to make any proper 
 entry in its stock book, or neglects or refuses to exhibit it, or 
 to allow it to be inspected and extracts taken therefrom as 
 provided by the statute, the corporation and such officer or 
 agent each forfeits and pays to the party injured a penalty 
 of fifty doUars for every such neglect or refusal, and all 
 damages resulting to him therefrom/ It is a defense to any 
 action for penalties under the statute that the person suing 
 therefor has within two years sold or offered for sale any list 
 of stockholders of such corporation or of any other corpora- 
 tion, or had aided or abetted any person in procuring any 
 stock list for any such purpose.' There can be no recovery 
 by a corporation's judgment creditor of a statutory penalty 
 for its refusal to allow him to inspect its stock book if it kept 
 none, but showed him on demand the stock certificate book, 
 the only book it kept.' An officer of a corporation cannot be 
 held liable for the penalty imposed by statute on him for 
 failure to exhibit his corporation's stock book if the corpo- 
 ration does not keep one.' The penalty prescribed by statute 
 for failure to exhibit a corporation's books to a stockholder 
 on demand cannot be exacted if the corporation's president, 
 on demand for such inspection, asked the stockholder to come 
 back the next business day because the books were in the safe 
 and the clerk in charge was away and only knew the com- 
 bination.^" A statement by an agent of a corporation to a 
 stockholder seeking inspection of its stock book that it was 
 not at that, its main office, but that the applicant was at liberty 
 to examine it at the office of the corporation's president only 
 a short distance from its main office, is neither a refusal nor 
 a neglect to exhibit the book within the meaning of the statute 
 subjecting him to a penalty for such a refusal or neglect." 
 When a plaintiff stockholder, suing to recover from his corpo- 
 ration the penalty imposed by statute for its failure to allow 
 
 = St. Corp. L. § 32 (L. 1916, 'Billingham v. Gleason Mig. Co., 
 
 c. 127). 43 Misc. 681, 88 Supp. 398 (1904); 
 
 « St. Corp. L. § 32 (L. 1916, St. Corp. L. § 29. See now § 32. 
 
 c. 127). "Kelsey v. Pfaudler Process Fer- 
 
 ^St. Corp. L. § 32 (L. 1916, mentation Co., 41 Hun, 20 (1886); 
 
 c. 127). . L. 1848, c. 40, § 25. 
 
 'Moore v. Institute of Educa- "Lozier v. Saratoga Gas Co., 59 
 
 tional Travel, Inc., 89 Misc. 369, 151 A. D. 390, 69 Supp. 247 (1901) ; 
 
 Supp. 929 (1915); St. Corp. L. St. Corp. L. § 29 (L. 1892, c. 688). 
 
 § 32. See new § 32. 
 
56 BUSINESS CORPORATIONS IN NEW YORK §§ 53, 54 
 
 him to inspect its books, admits his several demands were for 
 the purpose of getting certain information sought once for 
 all, the defendant is liable for but one penalty in each action 
 in spite of having refused three separate times to submit its 
 books to inspection/^ A complaint to recover a penalty for 
 failure to exhibit a corporation's stock certificate book should 
 allege that the company is a stock corporation/^ 
 
 § 53. Id.: Practice In Enforcing, In General. — Inspection 
 of corporate books in actions against corporations is treated 
 in § 448 of this book. Nothing in the statute enabling inspec- 
 tion of a corporation's stock book under certain penalties 
 impairs the power of the courts to compel by mandamus or 
 judgment the production for examination by any stockholder 
 of the stock books of a corporation.^* While the right of a 
 stockholder to inspect his corporation's books exists at com- 
 mon law irrespective of any such right granted by statute, 
 the common law remedy wUl not be granted simply to enable 
 the stockholder to determine if the company has been prop- 
 erly conducted.^^ The proceeding for discovery of papers of 
 a corporation must be commenced by petition upon notice and 
 is entirely distinct from that for taking depositions begun by 
 summons in an action followed by affidavits and in which the 
 corporation to be examined may be required to produce its 
 books, not to be inspected by the other side as in a discovery 
 proceeding, but to refresh the recollection of the corporate 
 officer orally examined." 
 
 § 54. Id.: By Mandamus, As to Books In General. — A small 
 stockholder is entitled to mandamus to compel his corporation 
 to submit its books to his inspection when he has been such 
 three years and since its formation, no report has ever been 
 made by it, the president (a personal friend alleged to have 
 induced the purchase of the stock) says that he has answered 
 all " reasonable inquiries," that the corporation lost much 
 money in a transaction of which the stockholder knew and 
 that the latter has become hostile to him and is trying to make 
 htm buy the stock." A director is entitled as matter of law 
 
 ^''Walcott V. Little, 46 Misc. 96, "Manthey v. Wyoming County 
 
 91 Supp. 411 (1904) ; St. Corp. L. Co-operative Kre Ins. Co., 76 A. D. 
 
 § 29. See now § 32. 579, 78 Supp. 596 (1902) ; C. C. P. 
 
 " Gunst V. Goldstein, 30 Misc. 44, §§ 803-809 and 872, subd. 7. 
 
 61 Supp. 707 (1899) ; St. Corp. *L. On power to compel production 
 
 § 29. See now §§ 32. of corporate books to aid in assess- 
 
 "St. Corp. L. § 32 (L. 1916, ing holder of stocks or his estate, see 
 
 c. 127). note in 8 L.R.A.(N.S.) 788. 
 
 " Matter of Colwell, 76 A. D. 615, " Matter of O'Neill, 47 Misc. 495, 
 
 78 Supp. 607 (1902). 95 Supp. 964 (1905). 
 
§§ 55, 56 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 57 
 
 to a peremptory writ of mandamus to compel his domestic 
 corporation's president and treasurer to permit him and an 
 accountant to examine its books for a period limited by the 
 necessity of the case.^* As a peremptory writ of mandamus 
 issues only when the applicant's right to it depends upon 
 questions of law and in every other case it cannot issue until 
 after an alternative writ, one seeking only a peremptory writ 
 to examine a corporation's books to find out the value of his 
 stock, upon allegations that dividends were paid when he 
 managed it whereas none are now paid, will be unsuccessful 
 if the answering affidavits allege the reason for this to be that 
 he is unjustly and unfairly and illegally competing with its 
 business', because such answer is substantially admitted as 
 true by his demand for a peremptory writ.'^^ 
 
 § 55. Id.: As to Stock Transfer Book. — The exercise of the 
 power of the court in granting a mandamus to a stockholder 
 to enable him to examine the transfer books of the corpora- 
 tion in which he holds stock for proper purposes and on 
 proper occasions is discretionary, and will not be reviewed by 
 the Court of Appeals when the intermediate appellate tribunal 
 has held that such discretion has properly been exercised in 
 refusing the writ.^" The Court has discretion to mandamus 
 a corporation to show its stock transfer book to a stockholder 
 even though the application to the corporation by the stock- 
 holder for permission to inspect be not made within thirty 
 days of an election.^ 
 
 § 56. Id.: Stockholder's Motive in Seeking. — ^When there is 
 a strong and natural inference that the granting to one stock- 
 holder of a peremptory writ of mandamus to his corporation 
 to allow him to inspect its books would be inimical to and 
 destructive of the rights and interests of other stockholders 
 and of the corporation, it would be an abuse of discretion to 
 grant the writ. ^ Although there is no express provision of 
 law authorizing a mandamus to compel a corporation, whether 
 
 ^* People ex rel. Mclnnes v. Co- ^ People ex rel. Stobo v. Eadie, 63 
 
 lumbia Bag Co., 103 A. D. 208, 92 Hun, 320, 18 iSupp. 53; aff'd 133 
 
 Supp. 1084 (1906). N. Y. 573., 30 N. E. 1147; L. 1882, 
 
 ^» People ex rel. Giles v. Klauder- c. 409, § 199. 
 Weldon Dyeing Machine Co., 179 ^Matter of Coats, 73 A. D. 179, 
 
 A. D. 149, 167 Supp. 429 (1917). 76 Supp. 730 (1902). The applicant 
 
 Generally on the right of a stock- was stenographer to the person 
 
 holder to enforce inspection of books said to want to get the information 
 
 of corporation by mandamus, see in order to get control of the cor- 
 
 note in 45 L.R.A. 457. poration, and hardly had the money 
 
 ^° Matter of Sage, 70 N. Y. 220 himself to buy his holdings, acquired 
 
 (1877). while such stenographer. 
 
58 BUSINESS CORPORATIONS IN NEW YORK § 56 
 
 domestic or foreign, to let one of its stockholders inspect its 
 books, yet it will be granted when he shows a legal right to 
 such inspection; but the writ is in the court's judicial dis- 
 cretion and if the corporation states facts which justify an 
 inference that the application is not made bona fide for the 
 stockholder's purposes or protection but for the benefit of 
 undisclosed persons for undisclosed purposes, the court 
 should require the applicant frankly to state (by replying 
 affidavit or before a referee) the purpose of the application 
 and at whose instigation made.' "A stockholder has the right 
 for a proper purpose and at a proper time and place to inspect 
 the books of his corporation, and . . . if that right is 
 denied him by the officers of the corporation, the Supreme 
 Court may in its sound discretion issue a writ of mandamus 
 to compel an inspection . . . An examination will not be 
 allowed for an ulterior purpose or to embarrass the corpora- 
 tion. ' ' * Inspection of corporate books through the aid of the 
 court's mandamus will be denied when the real object of the 
 petitioner is to obtain information that will aid him in 
 crippling the corporation's business for the benefit of its 
 business rival.' " ... The motives of a stockholder, 
 however sinister, constitute no answer to an action by him to 
 recover the penalty prescribed by statute for the refusal of a 
 corporation to exhibit its stock book upon proper demand "; 
 but " the right to a mandamus to compel compliance with the 
 statute is not . . . specifically given by the written law ' ' 
 and the court will not aid a stockholder by mandamus if his 
 designs are sinister, e. g., if he makes the application in the 
 interest of a business rival of the corporation." A corporation 
 will be mandamused to allow a stockholder to examine its 
 books only in proper aid of his stock interest, and not to 
 secure to him information to aid him in a suit against 
 directors of the corporation for damages sustained by him 
 because of a false report published by them inducing him to 
 
 ' People ex rel. Hunter v. National formation to furnish to the presi- 
 
 Park Bank, 122 A. D. 635, 107 dent of a competing company . . ." 
 
 Supp. 369 (1907) ; St. Corp. L. § 29 ' Matter of Kennedy, 75 A. D. 188, 
 
 (L. 1901, c. 354), as to domestic cor- 77 Supp. 714 (1902) ; the declared 
 
 poration; and People ex rel. Alt- object of the examination was to. en- 
 
 thause v. Giroux Consolidated Mines able the county treasurer to ascer- 
 
 Co., 122 A. D. 617, 107 Supp. 188 tain the value of the corporation's 
 
 (1907) ; St. Corp. L. § 53 (L. 1897, stock so as to determine the taxable 
 
 e. 384). value of transfers of it by will. 
 
 * People ex rel. Lehman v. Con- ' People ex rel. Britton v. Ameii- 
 
 solidated Fire Alarm Co., 142 A. D. can Press Assn., No. 1, 148 A. D. 
 
 753, 127 Supp. 348 (1911); "the 651, 133 Supp. 216 (1912); St. 
 
 motive . . . was to obtain in- Corp. L. § 32. 
 
§ 57 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 59 
 
 become a stockholder.' The court, in its discretion, will deny 
 to a stockholder a peremptory writ of mandamus compelling 
 his corporation to exhibit to him its books, when his papers 
 do not make it appear that his purpose is to promote the 
 interest of its security holders or to enhance the value of or 
 protect his securities, but simply show his purpose to be to 
 determine if it be a fact that its directors have imperilled its 
 financial standing, and compelled it to resort to its capital to 
 pay its fixed charges by reducing the price of the commodity 
 it sells, which the answering papers show was necessary 
 because of competition/ A stockholder will not be granted 
 mandamus to inspect his corporation's books when his pur- 
 pose is to make an investigation which was the basis of an 
 action by him against it which resulted in a judgment against 
 him." 
 
 § 57. Id.: Pleading, Practice and Evidence.—" Statements 
 or denials on information and belief, or which are unspecific 
 and indefinite, are worthless in mandamus proceedings. ' ' ^° 
 Before one claiming to be entitled to peremptory mandamus 
 for inspection of a domestic corporation's books as one of its 
 stockholders can succeed he must show that he is a stock- 
 holder of record on its books.^^ Peremptory mandamus for 
 examination of a corporation's books will not lie simply on 
 the affidavit of one who alleges he has power of attorney from 
 a stockholder to examine such books.^^ " The rule is that 
 before a relator is entitled [as a stockholder to a peremptory 
 writ of mandamus directing his corporation to permit him to 
 examine its books] ... he must establish that the informa- 
 tion desired has been refused by the corporation, after a 
 demand made therefor, and that it was necessary for him to 
 have the information in order to properly protect his interest 
 in the corporation."" Before a stockholder may obtain the 
 court's power to compel his corporation to open its books to 
 his inspection he must establish that the information desired 
 has been refused by it after demand and that he needs the 
 information to protect his corporate interests." In determin- 
 
 ' Matter of Taylor, 117 A. D. 348, 62 Supp. 145 (1900); St. Corp. L. 
 
 101 Supp. 1039 (1907). § 29. See now § 32. 
 
 * Matter of Pierson, 44 A. D. 215, ^''Matter of Latimer v. Herzog 
 
 60 Supp. 671 (1899.) Teleseme Co., 75 A. D. 522, 78 Supp. 
 
 ^People ex rel. Maekey v. Ameri- 314 (1902). 
 can Union Life Ins. Co., 31 Misc. "Matter of Hitchcock, 149 A. D. 
 
 617, 64 'Supp. 916 (1900). 824, 134 Supp. 174 (1912). 
 
 "Matter of Reiss, 30 Misc. 234, "Matter of Latimer v. Herzog 
 
 62 Supp. 145 (1900). Teleseme €o., 75 A. D. 522, 78 Supp. 
 
 "Matter of Reiss, 30 Misc. 234, 314 (1902). 
 
60 BUSINESS CORPORATIONS IN NEW YORK § 58 
 
 ing an application for a peremptory writ of mandamus to a 
 corporation to allow a stockholder to inspect its books, the 
 affidavits submitted by respondent must be taken as true.^° 
 " It is a settled rule of law that where in an application for a 
 peremptory writ of mandamus the relators . . . proceed 
 wholly on the papers presented, only undisputed statements 
 of facts contained in the petition can be considered, and every 
 other statement of fact contained in the answering papers 
 must be assume [d] to be true.""- Moving affidavits on an 
 application for a mandamus to a corporation to -show books 
 to its stockholder pursuant to his common-law right of inspec- 
 tion should state his belief that transactions complained of 
 resulted or likely will result in loss to the corporation or its 
 stockholders." A denial to a flat statement that one is a 
 holder of stock of a corporation and has been refused permis- 
 sion to examine its stock transfer book is not sufficient to 
 defeat his application if it be to the effect that the person 
 making it, a director of the corporation, was advised by 
 counsel and charged the fact to be that the applicant was not 
 the owner or holder of shares although he held a certificate 
 therefor — such possession being illegal.^' 
 
 § 58. Id.: As Evidence, In General and Books of Account. — 
 " The books of a corporation for many purposes are evidence, 
 not only as between the corporation and its members, and 
 between members, but also as between the corporation or its 
 members and strangers. They are received in evidence gen- 
 erally to prove corporate acts of a corporation such as its 
 incorporation, its list of stockholders, its by-laws, the formal 
 proceedings of its board of directors and its financial con- 
 dition when its solvency comes in question. But we have not 
 been able ... to find any case in which it has been decided 
 that the books of account of a corporation are competent evi- 
 dence, of themselves, to establish an account or claim against 
 a trustee or stockholder in an action brought in behalf of the 
 corporation. ' ' " The books of a corporation proven to have 
 been kept by its treasurer, in his handwriting and he dead, 
 are admissible in evidence as entries made in the usual course 
 of business by one who had no interest to falsify.™ The books 
 of a corporation proven by its treasurer to have been kept by 
 
 "Matter of Coats, 73 A. D. 179, 17 Supp. 133 (1891); L. 1876, 
 
 76 Supp. 730 (1902). e. 611, §§ 16, 17. 
 
 '^Matter of Kennedy, 75 A. D. "Rudd v. Robinson, 126 N. Y. 
 
 188, -77 Supp. 714 (1902). 113, 12 L.K.A. 473, 26 N. E. 1046 
 
 " Matter of Colwell, 76 A. D. 615, (1891). 
 78 Supp. 607 (1902). ^o Chenango Bridge Co. v. Lewis. 
 
 ^'Matter of Martin, 62 Hun, 557, 63 Barb. Ill (1872). 
 
§ 50 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 61 
 
 him and to contain correct entries of tolls as given by the 
 toll-gatherer, coupled with proof by the latter that he had 
 made correct report of tolls gathered by him, are admissible 
 in evidence.^ The books of a corporation proven by its 
 treasurer to have been received by him as the company's 
 books upon his accession to office are not admissible.' The 
 books of account of a corporation relating to its own matters 
 and management, such as its stock and minute books, may be 
 -per se evidence ; but its ordinary books of account kept by it 
 relating to its transactions with third parties are not per se 
 evidence of an indebtedness against it in an action to charge 
 its directors with liability for its debts by reason of failure 
 to file an annual statement.' 
 
 § 59. Id.: Stock Books. — The stock book of every stock 
 corporation is presumiptive evidence of the facts therein 
 stated pursuant to statute in favor of the plaintiff in any 
 action or proceeding against such corporation or any of its 
 officers, directors or stockholders.* '-' There is nothing in any 
 statute which makes the books of the company the incontro- 
 vertible evidence of ownership of stock. A person may be the 
 absolute, legal and equitable owner of stock without any 
 transfer appearing upon the books. " ° " The books contain- 
 ing the lists of the stockholders are evidence of the ownership 
 of the stock, and a corporation is justified in being governed 
 thereby until proof or notice is given showing that other 
 parties than those named therein are the owners of the 
 stock."® "As between himself and third parties, the person 
 who appears upon the transfer books to be a stockholder, 
 may have parted with all his interest in the stock, but as 
 between himself and the corporation, such person, and he 
 only, is treated as a stockholder. ' ' ' The statute making a 
 corporation's stock book presumptive evidence of the facts 
 therein stated in an action against its directors, and others, 
 does not prevent common-law evidence to prove who are its 
 
 ^ Chenango Bridge Co. v. Lewis, ^ McMahon v. Macy, 51 N. Y. 155 
 
 63 Barb. Ill (1872). (1872); Gen. R. R. Act, L. 1850, 
 
 ^Chenango Bridge Co. v. Lewis, c. 140, §§ 10, 11, as amended L. 
 
 63 Barb. Ill (1872). 1854, e. 284. 
 
 ^ Minor v. Crosby, 76 A. D. 561, * Brisbane v. Delaware, Lacka- 
 
 78 Snpp. 594 (1902). ' wanna & Western R. R. Co., 94 
 
 On admissibility of account books N. Y. 204 (1883). 
 
 in evidence to establish personal lia- ' Roosevelt v. Brown, 11 N. Y. 148 
 
 bility of directors, see note in 53 (1854). The question was as to a 
 
 L.R.A. 537. stockholder's liability for corporate 
 
 *St. Corp. L. § 32 (L. 1916, debts on dissolution, under 1 R. L. 
 
 ,;. 127). 1813, p. 247, § 7; 3 R. S. 222, § 7. 
 
62 BUSINESS CORPORATIONS IN NEW YORK § 60 
 
 stockholders if it does not keep sucii a book.^ A stock certifi- 
 cate book is not a stock transfer book required by statute to be 
 kept so as to be presumptive evidence of the facts therein 
 stated as provided by such statute." The appearance of one 's 
 name on a corporation's stock book is presumptive evidence 
 that he is a stockholder and throws upon him the burden of 
 proving that he is not." 
 
 § 60. Id.: Resolutions, Deeds and Records, — " The acts of 
 corporations may be proved in the same way as the acts of 
 individuals. If there be no record evidence, they may be 
 proved by the testimony of witnesses; and even where no 
 direct evidence of such acts can be given, facts and circum- 
 stances may be proved from which the acts may be 
 inferred. ' ' ^^ When the whole agreement between a corpora- 
 tion and individuals is not in writing, though partly in a cor- 
 porate resolution, it is proper to admit parol evidence of the 
 agreement.^^ Entries in the minute books of a corporation 
 which come from the place where such books are deposited 
 and bear all the evidence of genuineness are competent evi- 
 dence to show possession of realty if the minutes refer to 
 things which were done at the time the entries were made and 
 are ancient." No- law requires the keeping of minutes by a 
 private corporation, or, if kept, their signature and attesta- 
 tion by any officer; and, if it be shown that a book is an 
 original corporate minute book, used in the corporation's 
 business, handed down to its officers, minutes therein in the 
 handwriting of one who was its secretary and which state that 
 such one acted as secretary of the meeting, should be admitted 
 as evidence of what they state, even though unsigned." Cor- 
 porate records, properly proven, ^re evidence of corporate 
 action, but not of the truth of recitals therein as to the value 
 of its property and so of its stock which are taken from the 
 report of an expert spread on the corporate minutes." When 
 a corporate resolution desired to be gotten in evidence is in 
 
 5 Union National Bank v. Scott, 53 Browne, 55 A. D. 444, 66 Supp. 867 
 
 A. D. 65, 66 Supp. 145 (1900) ; St. (1900) ; affi'd 179 N. Y. 542, 71 N. E. 
 
 Corp. L. § 29. See now § 32. 1139. 
 
 ° Geneva Mineral Springs Co., ^' Hamersohlag v. Dui-yea, 58 
 
 Ltd. V. Steele, 111 A. D. 706, 97 A. D. 288, 68 Supp. 1061 (1901); 
 
 Supp. 996 (1906) ; (L. 1875, c. 611, afiE'd 172 N. Y. 622, 65 N. E. 1117. 
 
 § 17). "Woodhaven Bank v. Brooklyn 
 
 ^"Hoagland v. Bell, 36 Barb. 57 Hills Improvement Co., 69 A. D. 
 
 (1861). 489, 74 Supp. 1023 (1902). 
 
 "Moss V. Averell, 10 N. Y. 449 "Reilly v. Freeman, 84 A. D. 
 
 (1853). 433, 82 Supp. 929 (1903). 
 
 '^ Rochester Folding Box Co. v. 
 
§ 60 ORGANIZATION, BY-LAWS, SEAL AND BOOKS 63 
 
 writing it should be produced; and not sought to be proven 
 in substance by oral testimony." The entry of a resolution 
 of a board of directors in the minute book under direction of 
 the corporation's secretary and its signature by him are 
 sufficient acts to permit the reading of the resolution in evi- 
 dence." As directors control a corporation, their resolution 
 providing for the employment and compensation of a person 
 is evidence thereof — whether by way of original employment 
 or ratification of the act of the president.^* The formal act 
 of a corporation recorded in a resolution of its board of 
 directors cannot be limited, modified or annulled by oral proof 
 in contradiction of its terms, not directed to mistake or to 
 fraud in the record of the resolution." A resolution of cor- 
 porate directors to increase the capital stock of their corpo- 
 ration when it is already issued to the full authorized amount 
 will be construed to mean the sale of some of such stock which 
 has been surrendered to the company after first having been 
 duly issued.^" A corporate board of directors' resolution 
 offering stock at a stated price is not repealed by a second 
 resolution not referring to the first which provides for issue 
 of its bonds to retire notes held by its stockholders.'^ A deed 
 over thirty years old purporting to be executed by a corpo- 
 ration, with a concluding clause stating its treasurer by order 
 of its board of directors thereto affixed its common seal and 
 his signature as treasurer, subscribed by him and witnessed, 
 and by him acknowledged in the usual manner of the acknowl- 
 edgment of a deed executed by an individual, is properly 
 received in evidence, and imports a grant by the corporation 
 as distinguished from the act and seal of the individual officer, 
 though it may be that it is necessary to prove that the seal 
 was that of the corporation and the individual was its treas- 
 urer.'' An admission that a corporate resolution was " duly 
 adopted " precludes any. contention that it was invalid 
 because the vote of one relying thereon was necessary as 
 director to its adoption.^ The books of a corporation are 
 
 " Mengis V. Fifth Avenue Ry. Co., opment Co., 164 A. D. 573, 150 
 
 81 Hun, 480, 30 Supp. 999 (1894). Supp. 229 (1914). 
 
 " United Growers Co. v. Eisner, ^" City Bank of Columbus v. Bruce 
 
 22 A. D. 1, 47 Supp. 906 (1897). & Fox, 17 N. Y. 507 (1868). 
 
 The action was to compel a sub- ^ Dustaberry v. Sagamore Devel- 
 
 scriber to pay for his subscription opment Co., 164 A. D. 573, 150 
 
 and the resolution was that one by Supp. 229 (1914). 
 
 which the directors called for pay- ^Hooper v. Auburn Water-Works 
 
 ment. Co., 37 Hun, 568 (1885) ; afif'd 109 
 
 ^' Fraker v. Hyde & Sons, 127 N. Y. 635, 16 N. E. 681. 
 
 A. D. 620, 111 Supp. 757 (1908). niaune v. Unity Press, 143 A. D. 
 
 "Dusenberry v. Sagamore Devel- 94, 127 Supp. 1O02 (1911). 
 
64 BUSINESS CORPORATION'S IN NEW YORK § 60 
 
 competent evidence to show an individual to have been a 
 director in order to enable a creditor to hold him to a liability 
 imposed by statute or directors.* A corporation cannot put 
 in evidence against a plaintiff suing it a train sheet and train 
 record, showing what trains passed a certain point at a cer- 
 tain time on its line, which is kept at one town by telegraphed 
 information from such point, unless the station man at that 
 point who gave the information to the telegraph operator to 
 click to the town in question and such operator are called as 
 witnesses.' 
 
 * St. George Vineyard Co. v. Fritz, ° Grraville v. New York Central & 
 
 48 A. D. 233, 62 Supp. 775 (1900) ; Hudson River R. R. Co., 34 Hun, 
 
 St. Corp. L. § 30 (L. 1892, c. 688). 224 (1884). 
 See now § 34. 
 
CHAPTER IV. 
 
 ™ „ STOCK. 
 
 IX. Stock: 
 
 A. Definitions, Distinctions and Nature of, § 61. 
 
 B. Classes, Kinds and Bights of: 
 
 1. In General, § 62. 
 
 2. Changing Classification of Issued Stock, § 63. 
 
 3. Preferred Stock, § 64. 
 
 4. Unissued and Treasury Stock, § 66. 
 
 C. Capital Stock: 
 
 1. Definitions, Distinctions and Nature, § 66. 
 
 2. 7s a Trust Fund for Creditors, § 67. . 
 
 D. Subscriptions to: 
 
 1. Governing Statutes, § 68. 
 
 2. When Binding: 
 
 a. In General, § 69. 
 
 b. When Subscription is in Certificate of Incorporation, 
 
 § 70. 
 e. When Subscription is in Separate Agreement, § 71. 
 d. When Ten Per Cent. Payment Necessary, § 72. 
 
 3. Calls: 
 
 a. Who May Make, § 73. 
 
 b. When No Call Necessary, § 74. 
 
 c. After Transfer of Stock, § 75. 
 
 d. Defenses Against Liability on, § 76. 
 
 e. Forfeiture for Nonpayment of, § 77. 
 
 4. Secret Profit to Subscriber, § 78. 
 
 5. Unpaid, Are Trust Fund for Creditors, § 79. 
 
 E. Payment for Stock or Subscriptions: 
 
 1. Governing Statutes, § 80. 
 
 2. The Person Liable, § 81. 
 
 3. Extent of Liability, § 82. 
 
 4. Defenses Against Liability: 
 
 a. In General, § 83. 
 
 b. Change in Charter or Name, § 84. 
 
 e. Defective Corporate Existence, § 85. 
 
 d. Defective Subscription Agreement, § 86. 
 
 e. Different Agreement With Other Subscribers, § 87. 
 
 f. Statute of Limitations, § 88. 
 
 5. Enforcement of: 
 
 a. TF/io Mat/ Enforce, § 89. 
 
 b. Pleading, Practice and Evidence, § 90. 
 
 6. Corporation's Remedies on Failure of, § 91. 
 
 7. Certificate of Payment of Capital Stock, § 92. 
 
 F. Issue of: 
 
 1. In General, § 93. 
 
 2. Common Stock, § 94. 
 
 3. Preferred Stock, § 95. 
 
 4. Partly Paid, § 96. 
 
 5. Non-Par Value Stock, § 96-a. 
 
 6. For What, § 97. 
 
 7. Evidence of Value of Consideration for, § 98. 
 
 8. Of New Stock, § 99. 
 
 B. C. N. Y.— 5 65 
 
66 BUSINESS CORPORATIONS IN NEW YORK 
 
 IX. Stock — Continued: 
 
 G. Assessments on Holders of, and Subscribers to, § 100. 
 H. Exchange of Preferred for Common Stock, § 101. 
 I. Increase of: 
 
 1. Governing Statutes, § 102. 
 
 2. In General, § 103. 
 
 3. Certificate of, § 104. 
 
 4. Stockholders' Bight to Subscribe to, § 105. 
 J. Beerease of, § 106. 
 
 K. Change of Number of Shares of Capital Stock, § 107. 
 L. Certificates of: 
 
 1. Issue and Reissue: 
 
 a. Governing Statutes, § 108. 
 
 b. -In General, § 109. 
 
 e. Corporation's Liability for, by Agent, Officer, etc., § 110. 
 
 d. Fraud or Forgery in, § 111. 
 
 2. Loss, Destruction or Theft of: 
 
 a. Governing Statutes, § 112. 
 
 b. In General, § 113. 
 
 e. Indemnity Bond, § 114. 
 
 d. Pleading, Practice, Evidence and Proof, § 115. 
 .3. As Evidence of Title, § 116. 
 
 4. Determination of Conflicting Claims to, § 117. 
 M. Transfer of: 
 
 1. Definitions, Distinctions and Nature, § 118. 
 
 2. Governing Statutes, § 119. 
 
 3. In General, § 120. 
 
 4. Consideration of and for, § 121. 
 
 5. By Power of Attorney, § 122. 
 
 6. Of Stock of Decedent, § 123. 
 
 7. Necessity and Effect of Corporation's Becognition of, § 124. 
 
 8. On Corporation's Books: 
 
 a. Governing Statutes, § 125. 
 
 b. Who May Compel and How, § 126. 
 
 e. Who May Question, § 127. 
 
 d. Limitations by Charter, By-Law or Begulations, § 128. 
 
 e. Corporation's Liability for Wrongful or Delayed, § 129. 
 
 9. Effect of: 
 
 a. In General, § 130. 
 
 b. On Books, § 131. 
 N. Purchase and Sale of: 
 
 1. By Corporation of Own Stock, § 132. 
 
 2. By Corporation of Another Corporation's Stock, § 133. 
 
 3. By Officer, Director or Stockholder of His Corporation's 
 
 Stock, § 134. 
 
 4. Agreements for: 
 
 a. In General, § 135. 
 
 b. Involving Questions of Time and Notice, § 136. 
 e. Conditional, § 137. 
 
 d. Involving Questions of Holding Stock in Escrow, § 138. 
 
 e. Joint and Several, § 138-a. 
 
 f. By Seller to Buy Back, § 139. 
 
 g. By Stockholders Inter Sese, § 140. 
 
§ 61 STOCK 6T 
 
 IX. Stock — Continued: 
 N. — Continued: 
 
 5. Fraud and Deceit in: 
 
 a. In General, § 141. 
 
 b. Through Prospectus, § 142. 
 
 e. Pleading and Practice, § 143. 
 
 d. Evidence and Proof, § 144. 
 
 e. Measure of Damages, § 145. 
 
 6. Equitable Remedies, § 146. 
 0. Pledge and Conversion of: 
 
 1. What Constitutes Conversion, § 147. 
 
 2. Who May Be Pledgor or Pledgee, § 148. 
 
 3. Liability of Corporation for, § 1^. 
 
 4. Actions and Practice, § 150. 
 
 5. Measure of Damages, § 151. 
 P. Dividends: 
 
 1. Definitions, Nature and Legality: 
 
 a. In General, § 152. 
 
 b. Property Dividend, § 153. 
 
 c. Stock Dividend, § 154. 
 
 d. Scrip Dividend, § 155. 
 
 2. Governing Statutes, § 156. 
 
 3. Declaration of: 
 
 a. By Directors Only, § 157. 
 
 b. By Court Compulsion, § 158. 
 
 e. From What, § 159. 
 
 4. Who Entitled to: 
 
 a. In General, § 160. 
 
 b. On Sale, Transfer or Assignment, § 16L 
 e. On Pledge, Death or Marriage, § 162. 
 
 d. Preferred or Guaranteed Stockholders, § 163. 
 
 e. Under Specific Contracts, § 164. ^ 
 
 5. When Entitled to, § 166. 
 
 § 61, Stock: Definitions, Distinctions and Nature of.—" The 
 word stock has various significations, but, as applied to a 
 joint stock association or corporation, it means the property 
 and franchises of the corporation. It is sometimes used to 
 designate the certificate, or scrip, issued to the stockholders ; 
 but this is "an inappropriate use of the word. The scrip is not 
 stock. The moment a corporation has either franchises or 
 property of any kind it has stock ; and the distributive share 
 of its members respectively, in this stock, will depend upon 
 the terms of its charter or articles of association. " ^ " Shares 
 of stock are in the nature of choses in action, and give the 
 holder a fixed right in the division of the profits or earnings 
 of a company so long as it exists, and of its effects when it is 
 dissolved." ^ "A share of corporate stock is the right which 
 
 ^ Burr V. "Wilcox, 22 N. Y. 551 ings, under Gen. Mfg. Act, L. 1848, 
 
 (1860). Determining the liability of c. 40, § 10. 
 
 one as stockholder for corporate ^Kent y. Quicksilver Mining Co., 
 
 debts up to the amount of his hold- 78 N. Y. 159 (1879). 
 
68 BUSINESS CORPORATION'S IN NEW YORK § 62 
 
 the shareholder has to participate according to the number 
 of shares in the surplus profits of the corporation on a divi- 
 sion, and in the assets or capital stock renaaining after pay- 
 ment of its debts on its dissolution or the termination of its 
 active existence and operation (citations). ■ It is created by 
 the joint action of the corporation and the shareholder. It 
 imports a contribution to the capital stock made by the share- 
 holder and accepted by the corporation. When a corporation 
 has agreed that a person shaU be entitled to a certain number 
 of shares for a consideration permitted by law and executed 
 by the person, those shares come into existence and are 
 owned by him. The statement in the certificate of incorpora- 
 tion or charter of the corporation that the capital stock is a 
 designated amount divided into a certain number of shares, 
 each of a named value, creates neither shares nor capital 
 stock. It expresses the power of the corporation to acquire 
 a capital stock. It creates potential shares which, transferred 
 into actual shares by the acquisition of members and their 
 payments, produce the money or property which, put into a 
 single corporate fund, is the actual capital or capital stock 
 on which the corporate business is undertaken and in which 
 are the shares. It also fixes the sum of the payment necessary 
 to create a share. The certificate of the corporation for the 
 shares, or the stock certificate, is not necessary to the exist- 
 ence of the shares or their ownership. It is merely the 
 written evidence of those facts. It expresses the contract 
 between the shareholder and the corporation and his co-share- 
 holders. But it is the payment, or the obligation to pay for 
 shares of stock, accepted by the corporation, that creates 
 both the shares and their ownership. " ' " The words ' cash 
 capital $150,000, ' do not necessarily import that the capital of 
 the company was aU paid in, or that it was intact, or that the 
 stock was worth par. The terms ' cash capital ' are some- 
 times used to signify the nominal capital, and their meaning 
 is at least equivocal."* A certificate of stock is the subject 
 of conversion and by that corporation which issued it.° 
 
 § 62. Id,: Classes, Kinds and Rights of, In General. — Every 
 domestic stock corporation may issue preferred stock and 
 common stock and different classes of preferred stock: (1) 
 by the unanimous consent of the stocMiolders expressed in 
 
 ^ U. S. Radiator Co. v. State of ^ Condouris v. Imperial Turkish, 
 
 New York, 208 N. Y. 144, 46 L.R.A. etc., Co., 3 Misc. 66, 22 Supp. 695 
 (N.S.) 585, 101 N. E. 783 (1913). (1893). 
 
 * Wakeman v. Dalley, 51 N. Y. 27 
 
 (1872). 
 
§ 63 . STOCK 69 
 
 writing ^.nd filed in the office of the Secretary of State and in 
 the office of the clerk of the county in which the principal busi- 
 ness office of the corporation is located; or (2) 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 sec- 
 retary or assistant secretary of the corporation, must be 
 filed and recorded in the offices where the original certificate 
 of incorporation of such corporation was filed and recorded/ 
 A corporation may issue stock with par value, whether com- 
 mon or preferred, and stock, other than preferred stock hav- 
 ing a preference as to principal, without any nominal or par 
 value." "There is nothing in the constitution or the law that 
 inhibits a corporation from beginning its corporate action by 
 classifying the shares in its capital stock, with peculiar privi- 
 leges to one share over another, and thus offering its stock 
 to the public for subscriptions thereto. No rights are got until 
 a subscription i s made. " " 
 
 § 63. id.: Changing Classification of Issued Stock. — But 
 when it comes to changing the classification of stock which 
 has been already issued, the rule is more strict. " The 
 right of every shareholder to his proportion of the profits of 
 the corporation . . . [is] vested, and in the absence of 
 some power to change the relative value of the shares con- 
 ferred by statute or by the articles of association, no change 
 . . . [can] be made without the consent of all the share- 
 holders," such e. g., as giving certain certain shares priority 
 over the rest." Once a by-law is adopted dividing corporate 
 capital stock into shares equal in amount, each share issued 
 pursuant thereto is equal in value and in right; and the 
 rights of the holders cannot be diverted without their consent." 
 " ... any action of a corporation which takes hold of 
 the shares of its capital stock already sold and in the hands 
 of lawful owners, and divides them into two classes — one of 
 which is thereby given prior right to a receipt of a fixed sum 
 from the earnings before the other may have any receipt 
 therefrom, and is given an equal share afterwards with the 
 
 ^St. Corp. L. 8 61 (L. 1917, "Campbell v. American Zylonite 
 
 c. 542). Co., 122 N. Y. 456, 11 L.E.A. 596, 
 
 ^Id. 25 N. E. 853 (1890). 
 
 *St. Corp. L. 8 19 (L. 1917, "Kent v. Quicksilver Mining Co., 
 
 c. 50O). 78 N. Y. 159 (1879). 
 
 "Kent V. Quicksilver Mining Co., 
 78 N. Y. 159 (1879). 
 
70 BUSINESS CORPORATIONS IN NEW YORK § 64 
 
 other in what earnings may remain — destroys the equality 
 of the shares, takes away a right which originally existed in 
 it, and materially varies the effect of the certificate of stock, ' ' 
 and is voidable." 
 
 § 64. Id.: Preferred Stock. — Every domestic stock corpo- 
 ration may' issue preferred stock and different classes of 
 preferred stock." But it cannot issue preferred stock with- 
 out any nominal or par value with a preference as to princi- 
 pal." ' ' The permission to issue preferred stock is practically 
 allowing the stockholders to divide the profits of the business 
 in such manner as they may see fit. It is the usual practice 
 to allow a certain dividend on the preferred stock, the holder 
 having no right to vote; also to defer payment of dividend 
 on the common stock untU the claims of the preferred share- 
 holders are satisfied. It is assumed, as a matter of course, 
 that the total amount of stock, preferred and common, repre- 
 sents an actual contribution of capital paid in either in money 
 or in property at a legal valuation. ' ' " The Legislature may 
 prescribe what conditions may be attached to preferred stock 
 issued by a corporation, but, if it do not specify any condi- 
 tions, the corporation may attach them, so that they become a 
 contract between it and those who acquire the stock.^' 
 Although a stock certificate itself gives no preference and a 
 written guaranty thereon only authorizes the dividend 
 described therein, yet the whole proceeding relating to the 
 issue of the stock may be taken into consideration as consti- 
 tuting one and an entire transaction in order to show the pref- 
 erence claimed." An owner by assignment of common stock 
 is as much bound by an agreement by his assignor as to the 
 preference to be given the holders of preferred stock as 
 would be his assignor." A holder of preferred or guaranteed 
 stock entitled to cumulative dividends does not deprive him- 
 self of the right to have net earnings applied to payment of 
 such dividends by alleged acquiescence in their distribution 
 among general stockholders, if he protested against such dis- 
 
 "Kent V. Quicksilver Mining Co., Miller, 180 N. T. 16, 72 N. E. 525 
 
 78 N. y. 159 (1879). (1904). 
 
 " St. Corp. L. § 61 (L. 1917, " Hackett v. Northern Pacific Ry. 
 
 c. 542). Co., 36 Misc. 583, 73 Supp. 1087 
 
 ^'St. Corp. L. § 19 (L. 1917, (1901). 
 
 e. 500) . " Boardman v. Lake Shore & 
 
 On right of preferred stock to Michigan Southern Ry. Co., 84 N. Y. 
 
 preference as to capital, see notes in 157 (1881). 
 
 27 L.R.A. 136; 21 L.R.A.(N.S.) 228; "Matter of Seneca Oil Co., 153 
 
 39 L.R.A.(N.S.) 1007. A. D. 594, 138 Supp. 78 (1912); 
 
 ^'People ex rel. Cohn & Co. v. aff'd 208 N. Y. 545, 101 N. E. 1121. 
 
§ 64 STOCK 71 
 
 position of net earnings and demanded his dividends on his 
 preferred or guaranteed stock.'" One who is found to have 
 been entitled to have the net earnings of a corporation ap- 
 plied to accumulated dividends due on his preferred or guar- 
 anteed stock instead of to, dividends on general stock is 
 entitled to interest on the dividends he was entitled to receive 
 from the time the net earnings were appropriated to the 
 holders of the common stock.^ No essential difference exists 
 between preferred stock, having priority over the remaining 
 stock in the payment of dividends, and stock to which that 
 preference is guaranteed; in the one case the agreenaent to 
 preserve the preference and pay the dividend before dividends 
 may be paid on the common stock, is to be clearly implied, 
 while in the other it is explicitly expressed.' A corporation 
 may make such arrangement with its stockholders as they 
 please as to the rights of preferred stockholders and if the 
 agreement is that the preferred stock is "to bear interest at 
 the rate of six per centum per annum, payable semi- 
 annually, cimaulative, " the dividends when declared would 
 be only of interest earned, and if a person take some of a new 
 issue on October 1 of preferred stock on the same terms and 
 with the same rights as the old issued June 13, he should get 
 such interest on the new, only, as will equalize it with the old, 
 i. e., only from October 1 and not from July 1.' Holders of 
 certificates of guaranteed corporate stock, which entitle them 
 * ' to dividends at the rate of ten per cent, per annum, payable 
 semi-annually, . . . out of the net earnings of said com- 
 pany, and ... to share 'gro rata with the other stock 
 of the company, in any excess of earnings over ten per cent, 
 per annum," are entitled, if the corporation fail, for want of 
 net earnings, to make the dividends on the days set, to have 
 dividends paid when the net earnings necessary for that pur- 
 pose should afterward be realized.* One holding stock of a 
 corporation represented by a certificate having printed on it 
 a copy of a guaranty by another corporation of a certain rate 
 of dividends by the former, provided for in a lease between 
 the two corporations, cannot on surrender of the certificate 
 
 ^"Prouty V. Michigan Southern & ^Utiea Trust & Deposit Co. v. 
 
 Northern Indiana E. R. Co., 1 Hun, Kellogg & Sons Co.; 126 A. D. 176, 
 
 655 (1874). 110 Supp. 1048 (1908). 
 
 ^Prouty V. Michigan Southern & *Prouty v. Michigan Southern & 
 
 Northern Indiana R. R. Co., 1 Hun, Northern Indiana R. R. Co., 1 Hun, 
 
 655 (1874). 655 (1874), 
 
 ^Prouty V. Michigan Southern & 
 Northern Indiana R. R. Co., 1 Hun, 
 655 (1874). 
 
72 BUSINESS CORPORATIONS IN NEW YORK §§ 65, 66 
 
 require the new certificate to contain a like guaranty if his 
 corporation's directors have in good faith changed the guar- 
 antor corporation's liability to a smaller rate; because the 
 lease is between the corporations and not their stockholders.^ 
 Evidence may be introduced to show that the actual agreement 
 as to the preference to be given stock the certificates for which 
 provide for a preference as to dividends only was that the 
 preference should be not only as to the dividends but also on 
 the distribution of assets.® An agreement made on consol- 
 idation of two corporations into one that a person receiving 
 some of the capital stock shall so long as he hold stock be paid 
 a stated interest on its par value does not entitle him to the 
 issue of stock preferred according to the agreement.' 
 
 § 65. Id.: Unissued and Treasury Stock. — The distinction 
 between unissued and treasury stock is that the latter has 
 been duly issued and then turned back into the treasury of 
 the company.* 
 
 § 66. Capital Stock: Definitions, Distinctions and Nature.— 
 The distinction between the capital stock of a corporation 
 . and the shares of that stock should be well understood: "A 
 corporation cannot issue and deliver a share of its capital 
 stock. By the joint action of the corporation and the sub- 
 scriber for its stock, he may become the owner of a given 
 number of shares thereof, but not in such sense as that he may 
 take away those shares out of the common corporate fund. 
 The capital stock, is that money or property, which is put into 
 a single corporate fund, by those, who by subscription there- 
 for, become members of the corporate body. That fund 
 becomes the property of the aggregate body only. A share 
 of the capital stock, is the right to partake, according to the 
 amount put into the fund, of the surplus profits of the cor- 
 poration, and ultimately on the dissolution of it, of so much of 
 the fund thus created, as remains unimpaired, and is no^ 
 liable for debts of the corporation. . . . But such a right, 
 that is, such a share, cannot be issued and delivered by a cor- 
 poration, continuing in legal existence, and carrying on the 
 business for which it was formed. . . . Those shares 
 are intangible, and rest in abstract legal contemplation. 
 . . . "Whiat the corporation can do, and what in some cir- 
 
 = People ex rel. Content v. Metro- '' Nobl« v. Eldredge, 175 A. D. 803, 
 
 politan Elevated Ry. Co., 26 Hun, 162 Supp. 503 (1916). 
 
 82 (1881). 8 Sanders v. Proctor, 172 A. D. 
 
 « Matter of Seneca Oil Co., 153 713, 158 Supp. 433 (1916). 
 A. D. 594, 138 Supp. 78 (1912); 
 afl'd 208 N. Y. 545, 101 N. E. 1121. 
 
§ 66 STOCK 73 
 
 cumstances it is compellable to do, is to issue and deliver, the 
 written evidence, of the existence of such shares, and of the 
 ownership of them; a paper usually called a stock certifi- 
 cate.'" " The capital of a corporation consists of its funds, 
 securities, credits and property of whatever kind which it 
 possesses. The word ' capital ' applied to corporations is 
 often used interchangeably with the words 'capital stock,' 
 and both are frequently used to express the same thing — the 
 property and assets of the corporation. Strictly, the capital 
 stock of a corporation is the money contributed by the cor- 
 porators to the capital, and is usually represented by shares 
 issued to subscribers to the stock on the initiation of the cor- 
 porate enterprise. " ^^ " When a corporation is organized it 
 secures capital by the issue of shares of capital stock. The 
 fund or property thus secured answers the twofold purpose 
 of furnishing means for carrying on the operations of the 
 corporation and also security for the payment of creditors. 
 This capital stock is carried as a liability and universally, so 
 far as I am aware, at its par amount. It is thus carried as a 
 liability because this is the proper bookkeeping entry. But 
 aside from this, such entry also serves to emphasize the duty 
 of the corporation to keep its capital stock unimpaired for the 
 protection of those dealing with it. If the operations of the 
 corporation result in gains, such gains are carried to the 
 credit, not of the capital stock account but of some other 
 account as surplus or profit and loss. Of course they may be 
 capitalized by the issue of stock against them and sometimes 
 in the case of certain corporations like banks or insurance 
 corporations where a certain ratio between assets and liabili- 
 ties other than to capital stock is required, such surplus or 
 profits may be counted and maintained as capital although not 
 formally capitalized. In the absence of some such special 
 consideration I think we may take notice that it is the ordi- 
 nary rule of corporate management established by decisions, 
 statutes and business usages that the surplus of these gains 
 or profits beyond what may be necessary to keep good the 
 liability to capital stock which has been issued, may, in the 
 discretion of a board of directors, be distributed amongst its 
 stockholders as dividends and returns on their investment. ' ' " 
 " That which constitutes the capital stock of a corporation 
 belongs to all of its stockholders, proportionately to their 
 
 ' Burrall v. Bushwick R. R. Co., " Equitable Life Assurance Soc. 
 
 75 N Y 211 (1878). v. Union Pacific R. R. Co., 212 N. Y. 
 
 "Christensen v. Eno, 106 N. Y. 360, L.R.A.1915D, 1052, 106 N. E. 
 
 &7, 12 N. E. 648 (1887). 92 (1914). 
 
74 BUSINESS CORPORATIONS IN NEW YORK § 67 
 
 holdings. It is divided into shares and each share represents 
 the holder's proportionate interest." " " By loss or misfor- 
 tune, or misconduct of the managing oflBcers of a corporation, 
 its capital stock may be reduced below the amount limited by 
 its charter ; but whatever property it has up to that limit must 
 be regarded as its capital stock. "When its property exceeds 
 that limit, then the excess is surplus. Such surplus belongs to 
 the corporation and is a portion of its property, and, in a gen- 
 eral sense, may be regarded as a portion of its capital, but in a 
 strictly legal sense it is not a portion of its capital, and is 
 always regarded as surplus profits."^' 
 
 § 67. Id.: Is a Trust Fund for Creditors.— " It is the estab- 
 lished law of this State that the capital of a corporation is 
 regarded as a substitute for the personal liability which sub- 
 sists in private ownerships and as a fund set apart and pledged 
 for the payment of its debts. While a corporation is contin- 
 uing its business, seeking credit and incurring liabilities, or 
 while, after it has ceased to do business, it has outstanding 
 liabilities, its directors or stockholders cannot lawfully and 
 with immunity from personal liability to the corporation 
 reduce the capital, which is the product of its capital stock as 
 certified in its incorporating certificate, by appropriating or 
 squandering it or giving it away. " " " The proposition is 
 weU settled, that the stock and property of every corporation 
 is to be regarded as a trust fund for the payment of its debts ; 
 and its creditors have a lien upon it, and the right to priority 
 of payment over any stockholder. It may be followed into the 
 hands of its directors; and even when it has been divided 
 among its stockholders before its debts are paid, a judgment- 
 creditor may pursue it, after the return of an execution unsat- 
 isfied, and maintain an action in the nature of a creditor's 
 bill against a stockholder, to reach whatever was so received 
 by him."" The law's policy is to maintain unimpaired a 
 business corporation's capital stock as a fund to which its 
 creditors may look and not to allow the corporation to pur- 
 
 ^^ Roberts v. Roberts-Wicks Co., sell and assign it to W. ; W. owed 
 
 184 N. Y. 257, 3 L.R.A.(N.S.) 1034, defendant a debt for the original 
 
 77 N. E. 13 (1906). price of such personalty; the corpo- 
 
 ^' Williams v. Western Union ration through defendant and W. as 
 
 Telegraph Co., 93 N. Y. 162 (1883). its officers and pursuant to such 
 
 " Hazard v. Wight, 201 N. Y. 399, agreement paid moneys to defendant 
 
 94 N. E. 856 (1911); St. Corp. L. from its business on W.'s debt. Held, 
 
 § 23. By transfer on incorporation, a violation of St. Corp. L. § 23. 
 
 the corporation owned personal ^'Hastings v. Drew, 76 N. Y. 9 
 
 property; defendant owned its capi- (1879). 
 tal stock subject to an agreement to 
 
§ 68 STOCK 75 
 
 chase its own capital stock except from surplus earnings, 
 which is simply reducing the nominal capital stock by increas- 
 ing the value of the actual capital stock in a like amount." 
 " In equity, the stock and other property of a private corpo- 
 ration are deemed a trust fund for the payment of its debts, 
 and the creditors have a lien upon it ; or a right of priority of 
 payment, in preference to its stockholders . . . The trust 
 is implied, and arises from what are called equitable liens, 
 being liens which exist in equity, and of which courts of equity 
 alone take cognizance (citation). Upon the dissolution of 
 such corporation, the creditors may pursue the property and 
 enforce their claims, unless it has passed into the hands of 
 bona fide purchasers; for the property is deemed to be held 
 in trust, first, for the payment of the debts of the corporation ; 
 and second, for the benefit of the stockholders, in proportion 
 to their respective interests."" " The assets of a corpora- 
 tion are a trust fund for the payment of its debts upon which 
 the creditors have an equitable lien both as against the stock- 
 holders and all transferees, except those purchasing in good 
 faith and for value ; ' ' and if, during the pendency of an action 
 against a corporation, all its assets are transferred to another 
 so that on rendition of judgment it cannot be satisfied the 
 creditor may have judgment of sequestration and the appoint- 
 ment of a receiver.** The bona fide creditors of a corporation, 
 organized, and the business of which is carried on by an indi- 
 vidual in its name, to defraud his creditors, have no right to 
 property held by him in the corporation's name superior to 
 that of a defrauded creditor of the individual, because of the 
 mere fact that the corperation was regularly organized." 
 
 § 68. Id. : Subscriptions To, Governing Statutes. — The cer- 
 tificate of incorporation of a business stock corporation must 
 state the number of shares of stock which each subscriber 
 agrees to take in it.^° If the whole capital stock is not sub- 
 scribed at the time of filing the certificate of incorporation 
 the directors named therein may open books of subscription 
 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- 
 
 i^MeGill Co. V. Underwood, 161 ^^ Booth v. Bunce, 24 N. Y. 592 
 
 A. D. 30, 146 Supp. 362 (1914) ; St. (1862). 
 Corp. L'. § 28. '" Bus. Corp. L. § 2 (L. 1909, 
 
 " Sands v. Kimbark, 27 N. Y. 147 c. 484). 
 (1863). 
 
 i« Cole V. Millerton Iron Co., 133 
 N. Y. 164, 30 N. E. 847 (1892). 
 
76 BUSINESS CORPORATIONS IN NEW YORK § 69 
 
 scribed; and at the time of subscribing every subscriber 
 whose subscription is payable in naoney must pay to the 
 directors ten per centum upon the amount subscribed by him 
 in cash, and no such subscription must be received or taken 
 without such payment.^ Subscriptions to the capital stock of 
 a corporation must be paid at such times and in such install- 
 ments as the board of directors may by resolution require. 
 If default is made in the payment of any installment as re- 
 quired 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 serv- 
 ice 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 
 corporation. If a receiver of the assets of the corporation 
 has been appointed all unpaid subscriptions to the stock 
 must be paid at such times and in such installments as the 
 receiver or the court may direct.^ A person who signs the 
 name of a fictitious person to any subscription for or agree- 
 ment to take stock in any corporation, existing or proposed, 
 or 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 under- 
 standing or agreement that the terms of such subscription or 
 agreement are not to be complied with or enforced, is guilty of 
 a misdemeanor.' 
 
 § 69. Id.: When Binding, In General.— The subject of the 
 consideration for which stock may be issued and with which 
 subscriptions therefor may be covered is treated hereinafter.* 
 " In this State contracts by which individuals agree to become 
 shareholders in corporations are not governed by the rules 
 applicable to common-law contracts, but are controlled by the 
 statutes prescribing how such contracts shall be made ; ' ' and 
 corporations may not " provide for securing their capital by 
 contracts to subscribe in the future for shares instead of by 
 subscriptions made in the mode prescribed by statute. ' ' ° 
 " ... the liability of a shareholder to pay for stock 
 
 ^ St. Corp. L. § 53 (L. 1909, ^ See § 97, infra. 
 
 c. 61). ^General Electric Co. v. Wight- 
 
 2 St. Corp. L. § 54 (L. 1909, man, 3 A. D. 118, 39 Supp. 420 
 
 c. 61). (1896); St. Corp. L. §§ 41, 42 (L. 
 
 = Penal L. § 660 (L. 1909, c. 88). 1892, c. 688). See now § 53 et seq. 
 
S 09 STOCK 77 
 
 does not arise out of his relation, but depends upon his eon- 
 tract, express or implied, or upon some statute, and in the 
 absence of either of these grounds of liability, ... a 
 person to whom_ shares have been issued as a gratuity has 
 [not], by accepting them, committed any wrong upon credi- 
 tors, or made himself liable to pay the nominal face of the 
 shares as upon a 'subscription or contract. "° " There can 
 be no. doubt that an agreement to take a certain number of 
 shares of the capital stock of an incorporated company 
 creates an obligation to pay for the shares so to be taken; " 
 and whether the obligation be considered express or implied, 
 the_ result is the same.' Taking a note in payment of a sub- 
 scription for its stock is an illegal thing for a corporation to 
 do ; but if it has done so and has accepted the benefit of a dis- 
 count thereof by the maker neither it nor its directors can 
 plead such illegality in an action by the discounter based upon 
 the indebtedness of the corporation- on the note.* The fact 
 that the amount loaned on a promissory note made by a sub- 
 scriber to corporate stock was not directly paid to the cor- 
 poration is no bar to an action against the maker of the note 
 if such corporation received the benefit of the money." Sub- 
 scribers to corporate stock prima facie estop themselves 
 from objecting that the whole amount of stock offered has not 
 been subscribed for by making their original subscription, 
 accepting certificates for their stock and paying assessments 
 levied by their board of directors ; and must take advantage 
 of the objection by answer." A subscriber to shares of a 
 corporation to be formed has an interest in the application 
 of his money which a purchaser of stock of an existing cor- 
 poration has not, because the former must know what persons 
 will have control of the corporation and if others are sub- 
 scribing honestly.^^ In a stockholder's action to obtain a 
 rescission of his stock subscription, a return of his money 
 paid for the stock and rescission of an agreement with the 
 
 " Christensen v. Eno, 106 N. Y. 97, before the corporation has a legal 
 
 12 N. E. 648 (1887). existence, and stich subscriptions 
 
 ^Buffalo & N. y. City R. E. Co. may be in the form of property 
 
 V. Dudley, 14 F. Y. 336 (1856). other than money." 
 
 * First National Bank v. Cornell, 'Borough Bank v. Lampheer, 154 
 
 8 A. D. 427, 40 Supp. 850 (1896); A. D. 177, 138 Supp. 864 (1912). 
 St. Corp. L. § 42; American Silk " Myers v. Sturgis, 123 A. D. 470, 
 
 Works V. Salomon, 4 Hun, 135 108 Supp. 528 (1908); afE'd 197 
 
 (1875). There is no opinion, but N. Y. 526, 90 N. E. 1162. 
 only this head-note : " Corporations ^^ "Walker v. Anglo-American 
 
 may acquire title to money .paid Mortgage & Trust Co., 72 Hun, 334, 
 
 upon subscriptions to capital stock 25 Supp. 432 (1893). 
 
78 BUSINESS CORPORATIONS IN NEW YORK §§ 70, 71 
 
 corporation, on the ground that the subscription and agree- 
 ment were procured by false and fraudulent representations, 
 ' then- must be some tangible facts set out connecting the 
 alleged false statements Avith the transactions set forth and 
 showing that damages have resulted to the plaintiff by reason 
 thereof.' "'= 
 
 § 70. Id.: When Subscription is in Certificate of Incorpo- 
 ration. — A subscription in a certificate of incorporation^ suffi- 
 cient in form and substance, takes effect simultaneously with 
 the filing of the certificate." A certificate of incorporation 
 wh^n filed becomes binding on the subscribers, and their 
 liability is fixed by their subscriptions without the formal 
 issuance of stock to them." One signing an agreement, with 
 others, to form a corporation, which designates the number of 
 shares to be subscribed for by each, and subsequently signing 
 and acknowledging a certificate of incorporation of the com- 
 pany, is liable to the corporation or its receiver for his sub- 
 scription.^^ A subscription to stock of a corporation is bind- 
 ing though it consist but of a signing of the certificate whereby 
 it was created and the placing opposite the signature of the 
 number of shares taken." 
 
 § 71. Id.: When Subscription is in Separate Agreement.— A 
 sufficient consideration to hold a subscriber for stock to his 
 subscription agreement results from the corporation's obli- 
 gation to issue the stock, his consequent control over the cor-- 
 poration to the extent of his holdings, the request implied in 
 his signing that the corporation proceed with its powers 
 under the charter and the detriment to it through having 
 done so." "While a subscription by one to corporate stock 
 before the complete formation of the corporation is not valid 
 and binding because there is no party with whom the sub- 
 scriber could then contract, yet he becomes a stockholder 
 liable to pay the full amount of his subscription if, after the 
 corporation is formed, it accepts the subscription and recog- 
 nizes the subscriber as a stockholder and he does, too, by pay- 
 ing caUs on his subscription." One is bound to fulfill his 
 I 
 
 ^^RitzwoUer v. LuriS, 176 A. D. ^'Phoenix Warehousing Co. v. 
 
 100, 162 Supp. 475 (1916). The Badger, 6 Hun, 293 (1875). 
 
 complaint is dissected in the opinion. " Richmondville Union Seminary 
 
 "Phoenix Warehousing Co. v. v. McDonald, 34 N. Y. 379 (1866). 
 
 Badger, 67 N. Y. 294 (1876). ^^ Buffalo & Jamestown R. R. Co. 
 
 "Stevens v. Episcopal Church v. Gifford, 87 N. Y. 294 (1882). 
 
 History Co., 140 A. D. 570, 125 Also holding that statutory pro- 
 
 Supp. 573 (1910). visions permitting the directors on 
 
 ^° Dorris v. French, 4 Hun, 292 filing the charter to open subscrip- 
 
 (1875). tion books for stock, if not already 
 
§ 71 STOCK 79 
 
 subscription agreement to take stock, without formal accept- 
 ance thereof or the actual issue of stock to him, if he signs the 
 ■agreement, at such time is requested to take stock in the com- 
 pany, the paper is presented to him and he subscribes for 
 certain shares, the agreement comes to the possession of the 
 corporation which calls upon him to pay and he refuses with- 
 out reason given," An agreement by persons to form a cor- 
 poration and to take stock in it when formed becomes binding 
 when the corporation has been accordingly formed, and it 
 may recover the amount agreed to be subscribed; but an 
 agreement to subscribe for stock in a corporation thereafter 
 to be formed (not by the parties agreeing to take stock) is 
 unenforcible.^" An agreement by which individuals agree 
 with a corporation to subscribe for its stock at a future time 
 and not to make any payment till such time on such subscrip- 
 tion does not make them shareholders till their shares are paid 
 for and issued and until then they have no voice in the man- 
 agement of the corporation but are wholly under the control 
 of the original incorporators.^ In order to hold one to his 
 subscription to stock of a corporation to be formed " a legal 
 and effectual formation of a corporation . . . for the 
 purpose specifieci in the contract was [is] a condition prece- 
 dent to his obligation to put in his capital. He would not be 
 bound under such a contract to invest his capital in the stock 
 of a corporation not legally formed, or which had not obtained 
 the franchise of carrying on the business contemplated by the 
 contract, and in which he had agreed to become interested."^ 
 One signing with others an agreement to subscribe to shares 
 of stock of a corporation to be formed to deal in automobiles, 
 cannot, if the agreement do not state the amount of his sub- 
 all subscribed, after such notice, etc., ^ Dorris v. Sweeney, 60 N. Y. 463 
 as they liked, and to continue till (1875). One subscribing to stock of 
 the whole capital was subscribed; a corporation to be formed " for the 
 and directing that on subscribing purpose of purchasing the exclusive 
 each subscriber should pay 10 per right to make, use and vend Nyce's 
 cent, of his subscription in money, patent for preserving fruits, or other 
 did not make invalid a subscription products out of season," cannot be 
 good at common law. Gen. R. R. held to his subscription if the corpo- 
 Act, L. 1850, c. 140, § 4. ration formed is so formed for " the 
 
 ^* Richmondville Union Seminary manufacture of preserved fruits, and 
 V. McDonald, 34 N. Y. 379 (1866). the canning of fruits and other 
 
 ^"Sanders v. Bamaby, 166 A. D. products, and the preserving and 
 274, 151 Supp. 580 (1915). keeping of fruits and other articles 
 
 ^General Electric Co. v. Wight- from decay, and the transaction of 
 man, 3 A. D. 118, 39 Supp. 420 such other business as is connected 
 (1896) ; St. Corp. L. §§ 41, 42 (L. with and incidental to the same." 
 1892, c. 688). See now St. Corp. 
 L. § 53. 
 
80 BUSINESS CORPORATIONS IN NEW YORK § 72 
 
 scription or the par value of the shares, be held liable thereon 
 at the suit of a corporation formed to make automobiles, not 
 shown to be identical with the one contemplated in the agree- ' 
 ment; because only those parties to the agreement could 
 enforce it contra sese, the agreement is too indefinite to be a 
 binding obligation, and no connection was shown between the 
 plaintiff corporation's certificate of incorporation and the 
 agreement.^ 
 
 § 72. Id.: When Ten Per Cent Payment Necessary.— The 
 certificate of incorporation must state the number of shares 
 of stock which each subscriber agrees to take ; and if the whole 
 capital stock is not subscribed at the time the certificate is 
 filed the directors named therein may open subscription books 
 to fill up the capital stock and continue to receive subscrip- 
 tions until the whole capital stock is subscribed, and at the 
 time of subscribing every subscriber whose subscription is 
 payable in money must pay the directors ten per centum upon 
 the amount subscribed by him in cash and no such subscrip- 
 tion must be received or taken without such payment.* It is 
 not necessary that ten per cent of an original subscription to 
 stock of a corporation, made for the purpose of its organiza- 
 tion, should be paid, to bind the subscriber." Payment of ten 
 per cent of subscriptions to corporate capital stock is required 
 only of those who subscribe after the organization of the cor- 
 poration.° A subscription to corporate stock after the incor- 
 poration of the company is void unless ten per cent thereof is 
 paid in cash ; but as to original subscriptions before incorpo- 
 ration, the necessity of such percentage payment is dubious." 
 One subscribing to capital stock of a corporation after its 
 incorporation but not paying ten per cent of his subscription 
 in cash as required by statute is not bound by his contract.' 
 A contract of cash subscription to corporate capital stock 
 made after incorporation, which has been assigned as col- 
 lateral security for a loan made upon the faith thereof, is no 
 more enforceable in the hands of the assignee if ten per cent 
 thereof has not been paid when the contract was made than 
 
 ^ Woods Motor Vehicle Co. v. 30 A. D. 334, 51 Supp. 969 (1898) ; 
 
 Brady, 181 N. Y. 145, 73 N. E. 674 St. Corp. L. §§ 41-43 (L. 1890, 
 
 (1905). c. 564). See now § 53 et seq. 
 
 *Btis. Corp. L. § 2 (L. 1909, 'Van Schaick v. Mackin, 129 
 
 e. 484), and St. Corp. L. § 53 (L. A. D. 336, 113 Supp. 408 (1908); 
 
 1909, c. 61). ■ St. Corp. L. § 41 (L. 1892, c. 688). 
 
 'United Growers Co. v. Eisner, 22 See now § 53. 
 A. D. 1, 47 Supp. 906 (1897); St. * South Buffalo Natural Gas Co. 
 
 Corp. L. § 41. See now § 53. v. Bain, 9 Misc. 425, 30 Supp. 264 
 
 'Yonkers Gazette Co. 'v. Taylor, (1894). 
 
§ 73 STOCK 81 
 
 it would be by the corporation itself.' The statute requiring 
 ten per cent of every money subscription to corporate capital 
 stock to be paid in cash .at the time of subscribing " relates 
 only to subscriptions made subsequently to incorporation 
 . . _ . and, as between the corporation and the subscriber, 
 a failure to comply with it undoubtedly renders the contract 
 of subscription invalid. . . . payment ... by check 
 does not satisfy the requirement of the statute . . . ; nor 
 is payment by promissory note a compliance with it. . . . 
 neither a promise to subscribe . . . nor a conditional sub- 
 scription ... is valid."" Statutes regulate contracts 
 for shareholding in corporations and an omission to obey the 
 statute requiring a ten per cent payment in cash for an 
 original issue of stock avoids the subscription, and the giving 
 of a note is not the equivalent of a cash payment." A cheque 
 may be taken instead of cash as a payment of ten per cent of 
 a subscription to the capital stock of a corporation under a 
 statute prohibiting filing of the corporate certificate until a 
 certain amount of stock is subscribed for and ten per cent 
 paid thereon in good faith and in cash.^^ 
 
 § 73. Id.: Calls, Who May Make.— Subscriptions to the 
 capital stock of a corporation must be paid at such times and 
 in such installments as the board of directors may by resolu- 
 tion require, and if a receiver of the assets of the corporation 
 has been appointed all unpaid subscriptions to the stock must 
 be paid at such times and in such installments as the receiver 
 or the court may direct." Upon insolvency of a corporation 
 the right to call for unpaid subscriptions to its capital stock 
 passes to its representative in bankruptcy and its directors 
 cannot relieve subscribers from liability by refusing to issue 
 a call." "When an agreement made after all a corporation's 
 stock has been taken up and is in the hands of stockholders 
 provides for putting a part of it with a trustee for sale at a 
 stated price, payable " one-third thereof as soon as the 
 whole " number of shares deposited had been subscribed for 
 
 ° Harriman National Bank v. ^ Syracuse, Phoenix & Oswego R. 
 
 Palmer, 93 Misc. 431, 158 Supp. Ill R. Co. v. Gere, 4 Hun, 392 (1875) ; 
 
 (City Ct., N. Y. C. 1916): St. Corp. 3 Stats, at Large, 618. 
 
 L. § 53. ''St. Corp. L. § 54 (L. 1909, 
 
 "Harriman National Bank v. c. 61)! 
 
 Palmer, 93 Misc. 431, 158 Supp. Ill "Rathbone v. Ayer, No. 2, 84 
 
 (City Ct., N. Y. C. 1916) ; St. Corp. A. D. 186, 82 Supp. 235 (1903) ; St. 
 
 L. § 53. Corp. L. §§ 53, 54 (L. 1901, c. 364). 
 
 "Hapgoods V. Lusch, No. 1, 123 See now § 54 (L. 19€9, c. 61). 
 A. D. 23, 107 Supp. 331 (1907); 
 St. Corp. L. § 41 (L. 1892, c. 688, 
 8 41). See now § 53. 
 B. C. K Y.— 6 
 
82 BUSINESS CORPORATIONS IN NEW YORK §§ 74, 75 . 
 
 and the rest as the board of trustees call for it " for the pur- 
 poses of the business, " it is not intended that all shall be paid 
 at once and the trustees cannot call for payment in full imme- 
 diately, but only when they in good faith determined that the 
 purposes of the business so required." 
 
 § 74. Id.: When No Call Necessary. — No call or demand 
 for pajTuent of subscriptions to capital is necessary when by 
 its certificate of incorporation, to which the subscribers were 
 parties, it was to commence business with the full amount of 
 capital stock paid in, and when it had commenced business, 
 continued it till bankrupt and has ceased to do business." One 
 subscribing to stock of a corporation under an agreement to 
 pay therefor when the board of directors by resolution might 
 require, without stipulating for notification to him of the reso- 
 lution, is bound to pay if the resolution be passed, though he 
 have no notice thereof.^' A stock subscription may be held 
 due, notwithstanding there be no allegation that it has been 
 called by the board of directors, on the theory that the sub- 
 scription is to be deemed payable on demand." 
 
 § 75. Id.: After Transfer of Stock. — No share of stock is 
 transferable until aU previous calls thereon have been fully 
 paid in." One transferring in a valid, bona fide and effectual 
 manner to another shares of corporate stock held by him, is 
 not liable for caUs made after the transfer.^" It would seem 
 ' ' that where the subscriber, after receiving his shares, made 
 transferable upon the books of the corporation by the terms 
 of the certificate, makes such transfer in good faith, and the 
 company accepts a surrender of his certificate, and issues a 
 new one to the transferee and credits him with the stock upon 
 its books, the transaction amounts to a consent by the com- 
 pany to a release of the old stockholder from liability for 
 future calls, and a substitution of the liability of the trans- 
 feree, ' ' but if the company understood that the old stockholder 
 transferred his stock and resigned as director on condition 
 of the substitution of the new stockholder, as liable in such 
 capacity, there can be no question of the former's release.^ 
 Although a transfer by a stockholder of his stock before fully 
 paid at par might have been held void as fraudulent, yet this 
 
 "WUliams v. Taylor, 120 N. Y. '^MeNelus v. Stillman, 172 A. D. 
 
 244, 24 N. E. 288 (1890). 307, 158 Supp. 428 (1916). 
 
 "Rathbone v. Ayer, No. 2, 84 "St. Corp. L. § 50 (L. 1909, 
 
 A. D. 186, 82 Supp. 236 (1903) ; St. c. 61). 
 
 Corp. L. §§ 43, 54 (L. 1901, c. 354). ^^ Billings v. Robinson, 94 N. Y. 
 
 See now § 54 (L. 190fl, c. 61). 415 (1884). 
 
 ^^ United Growers Co. v. Eisner, ^Billings v. Robinson, 94 N. Y. 
 
 22 A. D. 1, 47 Supp. 906 (1897). 415 (1884). 
 
§§ 76> 77 STOCK 83 
 
 cannot be done, as between it and the corporation, when the 
 corporation ratified the transfer by canceling his certificate 
 and issuing a new one to the purchaser and suing the latter 
 as a stockholder to recover the amount of a call.'' A trans- 
 feree on the company's books from an original subscriber to 
 corporate stock who signs a receipt for the certificate therefor 
 on the stock certificate stub showing a portion unpaid thereon 
 at the time of its original issue, who has paid some calls on 
 the stock and was duly notified of others duly made but 
 unpaid, is impliedly liable, independent of any statute, to pay 
 the calls on the stock transferred to him.' 
 
 § 76. Id.: Defenses Against Liability On.— The courts of 
 this State will not enforce a liability against one of its citizens 
 for calls made on stock held by him when it is illegal, unequal 
 and oppressive.* In an action against a stockholder to recover 
 for a call made upon his stock, it is a defense that the call was 
 illegal, unwarranted and made without authority.^ Under the 
 ' ' well settled principle, that where money is paid by one of 
 two parties to the other on an illegal contract, in a case where 
 they may be • considered as particeps criminis, and in pari 
 delicto, an action cannot be maintained after the contract is 
 executed to recover the money back again, for in pari delicto 
 potior est conditio defendantis," one who consented and acted 
 in all steps taken to increase a corporation's capital stock 
 illegally cannot sue to recover on account of his subscription 
 to such increase, part of which he has paid.* "... prima 
 facie subscribers to the stock of a corporation are not bound 
 to pay assessments upon their stock unless the whole capital 
 of the company has been subscribed for. . . . " ^ " ... 
 a complaint for an unpaid assessment need not allege that all 
 the stock has been subscribed for or anticipate the possible 
 defense that it has not been subscribed for." * 
 
 § 77. Id.: Forfeiture for Nonpayment of. — If default be 
 made in payment of any installment on a subscription to 
 capital stock as required by resolution of the board of 
 directors the board may declare the stock and all previous 
 
 ^ Rochester & K. F. Land Co. v. ° Knowlton v. Congress & Empire 
 
 Raymond, 158 N. Y. 576, 47 L.R.A. Spring Co., 57 N. Y. 518 (1874). 
 
 246, 53 N. E. 507 (189&). 'Myers v. Sturgis, 123 A. D. 470, 
 
 'Sigua Iron Co. v. Brown, 171 108 Supp. 528 (1908); affi'd 197 
 
 N. Y. 488, 64 N. E. 194 (1902). N. Y. 526, 90 N. E. 1162. 
 
 *Bank of China, etc., v. Morse, ^ Myers v. Sturgis, 123 A. D. 470, 
 
 168 N. Y. 458, 56 L.R.A. 139, 61 108 Supp. 528 (19'08) ; aff'd 197 
 
 N. E. 774 (1901). N. Y. 526, 90 N. E. 1162. 
 
 ^Bank of China, etc., v. Morse, 
 168 N. Y. 458, 56 L.R.A. 139, 61 
 N. E. 774 (1901), C. C. P. § 507. 
 
84 BUSINESS CORPORATIONS IN NEW YORK § 78 
 
 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 maU directed to him 
 at his last known postoffice address, of a written notice requir- 
 ing 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 corporation.' In 
 order to forfeit stock in a corporation all steps must be pur- 
 sued exactly as prescribed by statute ; so that if the notice to 
 the subscriber of intended forfeiture is not determined upon 
 by the board of directors but by persons assembled as such 
 but not being a quorum thereof (though of the executive com- 
 mittee), the forfeiture cannot be enforced.^" A corporation 
 which has exercised its charter right to forfeit a subscriber 's 
 shares for failure to pay a call thereon is barred from any 
 further claim against him upon his contract to take stock." 
 § 78. Id.: Secret Profit to Subscriber. — A secret agreement 
 between a corporation and a subscriber to its stock by which 
 the latter seeks to escape his statutory liability for payment 
 of his subscription is against public policy and will not be 
 upheld against creditors." One subscribing to half the stock 
 of a corporation, acting as a director and the president 
 thereof, keeping no stock book, and assigning his stock while 
 it was to his knowledge insolvent, cannot profit by a secret 
 agreement with it whereby he is relieved from paying his 
 stock subscription." One subscribing to corporate stock 
 enters into a joint undertaking with the other persons who at 
 the same or a later time become subscribers which makes it 
 illegal for him secretly to agree with one to whom some of the 
 corporate stock is issued in payment of a business conducted 
 by him and turned over to the corporation to accept some of 
 the latter 's stock as a condition to his own subscription ; and 
 such an agreement cannot be enforced." No action lies by 
 
 °St. Corp. L. § 54 (L. 1909, "Beals v. Buffalo Construction 
 
 c. 61). Co., 49 A. D. 589, 63 Supp. 635 
 
 '"Matter of New York & West- (1900); St. Corp. L. § 41 (L. 1892, 
 
 Chester Town Site Co., No. 1, 145 c. 6«8) ; Bus. Corp. L. § 5 (L. 1892, 
 
 A. D. 623, 130 Supp. 414 (1911); e. 691). See now St. Corp. L. 8 53 
 
 St. Corp. L. § 54. (L. 1909, c. 61). 
 
 " Small V. Herkimer Mfg. Co., '' Beals v. Buffalo Construction 
 
 2 N. Y. 330 (1849); L. 1833, pp. Co., 49 A. D. 589, 63 Supp. 635 
 
 191-2, § 4. (1900) ; St. Corp. L. §§ 29, 48. See 
 
 On effect of forfeiture of stock now §§ 32, 66. 
 
 on stockholder's personal liability as "Koster v. Pain, 41 A. D. 443, 
 
 to unpaid assessments, see note in 58 Supp. 866 (1899). The plaintiff 
 
 27 L.R.A. 314. was elected a director of the corpo- 
 
§ ^9 STOCK 85 
 
 stockholders of a corporation to recover from a firm a ' ' secret 
 profit "made by it under a " stock subscription " if the latter 
 be simply a contract between its subscribers and the firm, 
 which has been fulfilled, to buy from the firm the number of 
 shares subscribed in a company to be organized as the corpo- 
 ration, as there is no interest shown in the corporation in such 
 contract; and the fact that the firm had done some things 
 which by the contract it agreed itself to do or to procure to 
 be done makes no difference." 
 
 § 79. Id.: Unpaid, Are Trust Fund for Creditors.— Every 
 holder of capital stock not fully paid in any stock corporation 
 is personally liable to its creditors to an amount equal to the 
 amount unpaid on the stock held by him for debts of the cor- 
 poration contracted while such stock was held by him.'^' The 
 peculiar vigor of the doctrine that a corporation's capital 
 stock is a trust fund for the security of creditors and that a 
 liability in their favor to the extent of the unpaid part of the 
 nominal value of the actual shares exists and can be enforced 
 is * ' that contrary to the common law of England it secures 
 to the creditors of insolvent corporations or their representa- 
 tives the right of enforcing subscriptions for shares of which 
 the corporation has deprived itself by release or defeasance. 
 It declares that the capital or capital stock of a corporation 
 is a substitute for the personal liability which subsists in 
 individual or partnership undertakings and is a fund set 
 apart as a security for the payment of the corporate debts. 
 The capital or capital stock which it thus segregates is not 
 the capital stock authorized or named in the charter of the 
 corporation. If it were the members would be bound by the 
 doctrine to contribute on account of it the sum within its 
 named value needed to pay the debts of the insolvent corpora- 
 ration and voted for the proposition ^° St. Corp. L. § 56 (L. 1909, 
 to issue the stock (part of which he c. 61). "As to existing corporations 
 got under the agreement) to the in- the liability imposed by this section 
 dividual whose business the corpo- shall be in lieu of the liability im- 
 ration bought out. posed upon stockholders of any ex- 
 
 ^^ Hutchinson v. Simpson, 92 isting corporation, under any gen- 
 A. D. 382, 87 Supp. 369 (1904). eral or special law . . . on ac- 
 
 On right of corporation to pur- count of any indebtedness hereafter 
 chase its own shares of stock, see contracted or any stock hereafter 
 notes in 61 L.R.A. 621; 25 L.R.A. issued; but nothing in this section 
 (N.'S.) 50; 30 L.R.A. (N.S.) 694; 44 contained shall create or increase any 
 L.R.A.(N.S.) 156 ; L.R.A.1916.F, 286. liability of stockholders of any ex- 
 
 On effect of forfeiture of corpo- isting corporation under any general 
 rate stock on right to rescind sub- or special law." 
 scription for fraud, see note in 33 
 L.R.A. 722. 
 
36 BUSINESS CORPORATIONS IN NEW YORK § 79 
 
 tion. The statement in the charter does not create a security 
 for the creditors. It creates authorized or potential capital 
 stock and shares which, transferred into actual shares through 
 the acquisition of subscribing members and their payments, 
 produces the money or property which, put into a single cor- 
 porate fund, is the actual capital or capital stock on which the 
 business is undertaken and the assets or fund contemplated 
 by the trust fund doctrine which the directors or stockholders 
 may not lawfully diminish by appropriating or squandering 
 it or giving it away. And as there is not a fund or security in 
 the nominal or potential shares, there is none in the excess of 
 the nominal value over the subscribed value of the shares. 
 The subscription agreements, as they are enforceable through 
 their express provisions or implication or statutory con- 
 ditions, are the sources and the measure of the duty of the 
 subscribers (citations). The doctrine further declares that 
 unpaid subscriptions are a part of the capital and that a sub- 
 scriber cannot be discharged to the injury of creditors by 
 arrangement or device to which the creditors do not give their 
 assent and by which he is to pay less than his subscription 
 (citations). The doctrine does not create or nullify sub- 
 scriptions. It lays hold of the assets of an insolvent corpora- 
 tion, and in doing that it compels subscribers to fulfill their 
 legal obligations and perform their legal duties; but it does 
 not beget those duties or obligations ; it does not make unlaw- 
 ful or invalid a subscription which, apart from it, was valid 
 and lawful. The question with it is, has the subscriber fully 
 performed the subscription agreement as it in fact and in law 
 exists, and an affirmative finding renders it inapplicable and 
 inoperative. " " "It may be admitted that the liability of 
 subscribers on unpaid stock subscriptions constitute an asset 
 of the corporation, which cannot be surrendered or given up 
 by the corporation without consideration to the prejudice of 
 creditors. . . . The unissued shares of a corporation are 
 not assets. When issued they represent a proportionate 
 interest in the shareholder in the corporate property — an 
 interest, however, subordinate to the claims of creditors. ' ' ^' 
 Unpaid subscriptions to a corporation's capital stock are 
 debts belonging to the corporation, so that its trustee in bank- 
 ruptcy may sue therefor." 
 
 " South-worth v. Morgan, 205 N. Y. " Rathbone v. Ayer, No. 2, 84 
 
 293, 51 L.R.A.(N.S.) 56, 98 N. E. A. D. 186, 82 Supp. 235 (1903); 
 
 490 (1912). St. Corp. L. §§ 43, 54 (L. 1901, 
 
 "Christensen v. Eno, 106 N. Y. c. 354). See now §§ 54, 56. 
 97, 12 N. E. 648 (1887). 
 
§§ 80, 81 STOCK 87 
 
 § 80. Id.: Payment for Stock or Subscriptions, Governing 
 Statutes. — No corporation can issue stocks except for money, 
 labor done or property actually received for the use and law- 
 ful purposes of such corporation; but any corporation may 
 purchase any property authorized by its certificate of incor- 
 poration, or necessary for the use and lawful purposes of such 
 corporation, and may issue stock to the amount of the value 
 tliereof in payment therefor, and the stock so issued is full 
 paid stock and not liable to any further call, nor is the holder 
 thereof liable to any further payment under the provisions of 
 the statute, and in the absence of fraud in the transaction the 
 judgment of the directors as to the value of the property pur- 
 chased is conclusive.^" 
 
 § 81. Id.: The Person Liable.— The subject of the liability 
 of subscribers to corporate stock to calls has been already 
 discussed.^ The person liable for an amount remaining due 
 on shares of corporate stock is the one in whose name such 
 shares stand in the certificate and on the corporation's books, 
 irrespective of whether or not such one claims to be a trustee 
 or to have assigned his holdings or to have executed a power 
 of attorney to transfer the holdings.^ A corporation cannot 
 in an action at law against one who was a subscriber to its 
 stock hold him for the unpaid amount due on his subscription 
 if it has transferred such stock to another on the defendant's 
 endorsement of the certificates issued to him therefor and 
 issued new certificates to the transferee, and prosecuted to 
 judgment (which it had satisfied without any payment having 
 been made thereon) its like claim against the transferee.' 
 A corporation cannot hold liable for the amount unpaid on a 
 subscription to its stock, marked on the certificates " assess- 
 able," a purchaser thereof from the subscriber, if the latter 
 made no formal subscription therefor, the former executed no 
 formal written promise to pay therefor, and the circumstances 
 show reliance by the purchaser upon statements by his vendor 
 and the officers of the company that the stock was fully paid.* 
 The signature by. one to an agreement, preliminary to a cor- 
 
 ^° St. Corp. L. § 55 (L. 1909, ^ Rochester Land Co. v. Raymond, 
 
 c. 61). 4 A. D. 600, 39 Supp. 145 (1896); 
 
 As to whether commercial paper aff'd 158 N. T. 576, 47 L.R.A. 246, 
 
 will be held to be payment for sub- 53 N. E. 507; St. Corp. L. § 40 
 
 scription to capital stock of corpo- (L. 1890, c, 564). See now § 50 
 
 ration, see note in 35 L.R.A.(N.S.) (L. 1909, e. 61). 
 
 80. * Rochester & Kettle Falls Land 
 
 ^ See § 73 et seq., supra. Co. v. Roe, 7 A. D. 366, 40 Supp. 
 
 2 Mann v. Curie, 2 Barb. 294 72 (1896). 
 (1848). 
 
88 BUSINESS CORPORATIONS IN NEW YORK § 81 
 
 poration's organization, for the formation of a joint stock or 
 corporate company for specified purposes, does not make him 
 a stockholder in a corporation thereafter formed pursuant to 
 statute or bind him to take and pay for stock therein.' The 
 fact that one person, using his own name, subscribes to cor- 
 porate stock for the benefit of another, who pays the install- 
 ments and is recognized by the company as the owner thereof 
 and is issued the certificate therefor, gives the former no right 
 to insist that he should be considered the owner." " To hold 
 a subscriber to the capital stock of an unsuccessful company 
 liable over to a purchaser upon a public subscription [of its 
 stock], it seems necessary that there should be fraud, mis- 
 representation or deceit personally brought home to and 
 chargeable upon him. ' ' ^ One signing an agreement to sub- 
 scribe to corporate stock twice, once with his name simply 
 and the second time with his name adding the word " Exr." 
 may be sued in two different actions, one on each signature, 
 even though the latter signature as well as the former bound 
 him individually.^ The representative of one who has paid 
 but part of his subscription to corporate stock and who has 
 plead successfully to a suit by the corporation to recover the 
 balance of the subscription the Statute of Limitations cannot 
 succeed in having issued to him a certificate for stock equiva- 
 lent to the whole subscription, as his success in pleading the 
 statute did not make him any the less indebted for the unpaid 
 part of his subscription though it prevented recovery thereof 
 by the corporation.® Onie buying unpaid subscriptions to stock 
 of a corporation on sale thereof by a receiver appointed in 
 proceedings to sequestrate its property is protected against 
 a claim by a mortgagee of all the corporation's property who 
 acquired title to the property mortgaged under a foreclosure 
 sale thereof that he must pay such subscriptions." A receiver 
 of a corporation which had sold some of its stock outright to 
 an individual cannot hold one who had made a subscription 
 thereto to such individual for a balance claimed to be due on 
 such subscription." A bona fide buyer of corporate stock as 
 
 = Dorris v. Sweeney, 64 Barb. 63fe * Erie & N. Y. City R. R. v. Pat- 
 
 (1873); L. 1848. rick, 41 N. Y. (2 Keyes), 256 
 
 ^Burr V. Wilcox, 22 N. Y. 551 (1865). 
 
 (1860); Gen. Mfg. Act, L. 1848, "Johnson v. Albany & Susque- 
 
 e. 40, § 10. The true owner was hanna R. R. Co., 54 N. Y. 416 
 
 held liable for the corporate debt (1873). 
 
 under the statute making stockhold- "Dean v. Biggs, 25 Hun, 122 
 
 ers so liable to an amount equal to (1881); aff'd 93 N. Y. 662. 
 
 their holdings. ^^ Stevens v. Lippman, 85 Misc. 
 
 'White V. Robinson, 145 A. D. 347, 148 Supp. 419 (1914); C. C. P. 
 
 751, 130 Supp. 388 (1911). § 1185. 
 
§ 82 STOCK 89 
 
 paid up and without knowledge that it was not paid up cannot 
 be held liable by a receiver later appointed for the corporation 
 for the amount unpaid on the stock/' No implied obligation 
 to pay IS raised by the delivery of certificates of unissued as 
 distinguished from treasury stock to one man on the request 
 of a third.^^ 
 
 § 82. Id.: Extent of Liability. — The binding character of sub- 
 scriptions to corporate stock has been heretofore considered ;" 
 as well as liability on calls.'' Stock issued to the amount of 
 the value of property which a corporation is authorized by 
 its certificate of incorporation to purchase or which is 
 necessary for its use and lawful purposes is full paid and not 
 liable to any further call, nor is the holder thereof liable foi 
 any further payment under the statute.'" Every holder of 
 capital stock not fully paid in any stock corporation is per- 
 sonally 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." The only 
 obligation assumed by any subscriber to an agreement to take 
 stock in a corporation to be formed to the others, or any of 
 them, is to pay the sum subscribed ; and the expression in the 
 agreement of a desire to establish a certain institution does 
 not make any subscriber liable for indebtedness incurred by 
 the others to secure such establishment.'* In the absence of 
 some governing statutory provision a stockholder cannot be 
 held liable for the difference between the nominal or par value 
 of stock to which he has subscribed and the amount paid by 
 him therefor less than such nominal or par value, if by express 
 contract between himself and the corporation it was agreed 
 that he should pay no more than he did pay.'° A mere sub- 
 scriber for the stock of a business corporation does not assume 
 a liability to pay the full par value thereof after its transfer, 
 
 ^^ Wentringham v. Rosenthal, 25 laws relating to moneyed corpora- 
 Hun, 580 (1881). tions, and corporations and associa- 
 ^^ Sanders v. Proctor, 172 A. D. tions for banking purposes, on ac- 
 713, 158 Supp. 433 (1916). count of any indebtedness hereafter 
 " See § 69 et seq., supra. contracted on any stock hereafter 
 ^^ See § 73 et seq., supra. issued ; but nothing in this section 
 ^° St. Corp. L. § 55 (L. 1909, contained shall create or increase 
 e. 61). any liability of stockholders of any 
 ^'St. Corp. L. § 56 (L. 1909, existing corporation under any gen- 
 e. 61) : "As to existing corpora- eral or special law. 
 tions the liability imposed by this '* Shibley v. Angle, 37 N. Y, 626 
 section shall be in lieu of the liabil- (1868). 
 
 ity imposed upon stockholders of " Southworth v. Morgan, 205 
 
 any existing corporation, under any N. Y. 293, 51 L.R.A.(N.S.) 56, 98 
 
 general or special law, excepting N. E. 490 (1912). 
 
90 BUSINESS CORPORATIONS IN NEW YORK § 83 
 
 unless there be some agreement making him so liable.^ When 
 some of subscribers to stock of a corporation, all of whom had 
 agreed to pay their subscriptions to a lender of money to the 
 corporation on its note, when it matured, to be applied to its 
 payment, pay the lender after verdict had by the lender 
 against themselves and the rest of the subscribers, they may 
 hold such rest for contribution.^ 
 
 § 83. Id.: Defenses Against Liability, In General. — ^A cor- 
 poration is not prevented from obtaining and compelling pay- 
 ment of subscriptions to its capital stock because it has not 
 filed its certificate of incorporation with the county clerk and 
 Secretary of State.^ One cannot avoid his subscription to 
 corporate stock because of a change in the line of the road of 
 the company which does not injure him.' In an action to hold 
 one to his unpaid subscription to capital stock of a corpo- 
 ration on his unconditional written agreement to subscribe, it 
 is competent for him to show verbally the conditions upon 
 which the subscription was made if they were part of an 
 original, complete agreement of which but a part was reduced 
 to writing in the subscription agreement.* If a corporation's 
 certificate of incorporation expresses no illegal purpose, the 
 fact that subsequent to the incorporation there were corporate 
 acts showing a purpose to form and create a monopoly but 
 not showing any adoption of an illegal scheme therefor 
 planned before the incorporation by promoters, a stockholder 
 cannot claim that his subscription to the capital stock was 
 tainted with the alleged illegal character of the incorporation 
 so to absolve him from payments thereon.° A subscriber to 
 capital stock of a corporation " cannot rely upon a mere 
 prospectus or on the representations of promoters to defeat 
 his liability [to pay his subscription in full] unless such 
 prospectus or representations have, after the incorporation, 
 been adopted by the corporation and the business conducted 
 in accordance therewith."* One subscribing to stock of a 
 
 "" Rochester & K. F. Land Co. v. original contract was verbal and 
 
 Raymond, 158 N. Y. 576, 47 L.R.A. complete, and a part only of it was 
 
 246, 53 N. E. 507 (1899). afterward reduced to writing, and 
 
 ^Hart V. Sickles, 45 Misc. 174, 91 in such cases it is always com- 
 
 Supp. 897 (1904). petent to prove the whole agree- 
 
 ^ United Growers Co. v. Eisner, 22 ment." 
 
 A. D. 1, 47 Supp. 996 (1897). ^Vinegar Co. v. Foehrenbach, 148 
 
 ^Schenectady & Saratoga Plank N. Y. 58, 42 N. E. 403 (1895). 
 
 Road Co. V. Thatcher, 11 N. Y. 102 « United States Vinegar Co. v. 
 
 (1854). Schlegel, 67 Hun, 356, 22 Supp. 407 
 
 * Brewers' Fire Insurance Co. v. (1893); aff'd 143 N. Y. 537, 38 
 
 Burger, 10 Hun, 56 (1877). "The N. E. 729. 
 ease presented was one where the 
 
§§ 84, 85 STOCK 91 
 
 corporation upon the false and material representations of a 
 promoter for it may rescind his subscription and recover what 
 installments he has paid, even though the promoter had no 
 authority to make .the representations, if the corporation 
 retained the benefit thereof.' The extent to which promoters 
 may bind the corporation resulting from their promotion has 
 been heretofore discussed.* 
 
 § 84. Id.: Change in Charter or Name. — " . . . no mere 
 addition to or alteration of the charter, however great, would 
 operate to discharge a stockholder from his obligation to the 
 corporation " to fulfill his subscription to its stock; " to work 
 such a discharge the charter must be repealed, or the legis- 
 lation must be such as virtually to subvert the corporation 
 itself; or, at least, destroy its identity." ° One subscribing to 
 stock of a corporation incorporated under a charter making 
 the charter subject to a law, permitting its alteration, super- 
 vision and repeal at the Legislature's discretion, is not dis- 
 charged from liability on his subscription by an amendment 
 by the Legislature giving the corporation five instead of two 
 years within which to commence its work, as this is not an 
 organic change." One subscribing to the capital stock of a 
 corporation to be formed under a certain name "which is later 
 refused it by the Secretary of State because of its similarity 
 to the name of another corporation is not relieved from lia- 
 bility on his subscription because of the adoption of another 
 name if the purpose of the corporation is carried out and no 
 prejudice results to him from the change." 
 
 § 85. Id.: Defective Corporate Existence. — A subscriber 
 cannot defend his liability upon his subscription to corporate 
 stock on the ground that the articles of association wer^ 
 defective if he and his associates formed the corporation by 
 their acts, it has assumed to exercise its corporate powers 
 and has received recognition by the Legislature as a corpora- 
 tion." One sued on his subscription to stock of a corporation 
 cannot raise the point that it was not properly organized if 
 he was one of its original incorporators and directors, took 
 
 ^ Talmadge v. Sanitary Security ^^ Cayuga Lake R. R. Co. v. Kyle, 
 
 Co., 31 A. D. 498, 52 Supp. 139 64 N. Y. 185 (1876). The claimed 
 
 (1898). defect was that the articles of the 
 
 * See § 5, supra. railroad,- formed under L. 1869, c. 
 
 » Buffalo & N. Y. City R. R. Co. 314, did npt distinctly state its ter- 
 
 V. Dudley, 14 N. Y. 336 (18.56). mini, nor the counties through which 
 
 "Union Hotel Co. v. Hersee, 79 it passed. 
 N. Y. 454 (1880). 
 
 "Yonkers Gazette Co. v. Taylor, 
 30 A. D. 334, 51 Supp. 969 (1898). 
 
92 BUSINESS CORPORATIONS IN NEW YORK §§ 86, 87 
 
 part in all done by way of incorporation and also in conduct- 
 ing its business as director for three months, till he resigned/' 
 One sued for his unpaid subscription to stock of a corporation 
 is estopped from denying that it had an existence, as against 
 creditors, if he not only subscribed for the stock but became 
 an officer of the corporation, serving as one of its directors." 
 One sued on behalf of a receiver of a corporation for an 
 unpaid balance on his subscription to its stock is estopped 
 from denying its legal existence and validity or disputing its 
 de facto existence, if he was one of the incorporators and 
 directors, and the suit is for the benefit of creditors of the 
 insolvent corporation." One signing a subscription to stock 
 in a corporation which recites that it has been formed and 
 issued a portion of its authorized stock cannot claim lack of 
 evidence, in a suit by it on such subscription, of its corporate 
 authority or its right to issue stock." 
 
 § 86. Id.: Defective Subscription Agreement. — The ques- 
 tion of when a stock subscription agreement is binding has 
 .already been discussed." A contract by one to subscribe to 
 corporate stock is not per se discharged by the facts that a 
 name of another subscriber on the same sheet as that of the 
 first subscriber is canceled by lines drawn through it and that 
 opposite his name is ' ' By agree 't, Mar. 5, '73, ' ' — a date sub- 
 sequent to the time of the subscription by the first one." The 
 liability of one to pay in full his subscription to the capital 
 stock of a corporation to be formed is not terminated because 
 his and the many other subscriptions were on as many 
 different subscription blanks, the signatures to which were cut 
 off and pasted consecutively on one of the blanks before it 
 was filed with the Secretary of State.^" 
 
 § 87. Id.: Different Agreement with Other Subscribers. — 
 One of several subscriptions to the capital stock of a corpo- 
 ration for securing to it working capital, all conditioned on the 
 whole number of shares being reliably subscribed, is not in 
 fraud of the other subscribers because the promoters of the 
 corporation, as an inducement to the subscription, agree with 
 the particular subscriber to take the stock off his hands within 
 a year, at cost price, if he so desired ; and they cannot escape 
 liability so to do by pleading the invalidity of the agreement 
 
 " United Growers Co. ,v. Eisner, Kreusler, 40 A. D. 268, 57 Supp. 
 
 22 A. D. 1, 47 Supp. 906 (1897). 983 (1899). 
 
 ^* Ruggles V. Brock, 6 Hun, 164 ^' See § 69 et seq., supra. 
 
 (1875). 1* Whittlesey v. Frantz, 74 N. Y. 
 
 ^^ Phoenix Warehousing Co. v. 456 (1878). 
 
 Badger, 6 Hun, 293 (1875). " Sodus Bay & Coming R. R. 
 
 ^"Atlantic Construction Co. v. Co. v. Hamlin, 24 Hun, 390 (1881). 
 
§§ 88, 89 STOCK 93 
 
 because of its alleged fraud on other stockliolders.^ It is no 
 defense to one sued for an unpaid' subscription to corporate 
 stock that another subscriber was induced to subscribe under 
 an arrangement that paid-up stock to the amount of his 
 subscription should be delivered to him without his paying 
 therefor and that the subscriber being sued made his sub- 
 scription relying on the genuineness of such other's subscrip- 
 tion and other subscriptions/ 
 
 § 88. Id. : Statute of Limitations. — The statute of limitations 
 on a claim, for unpaid installments on subscriptions to capital 
 stock of a defunct corporation does not begin to run from the 
 time of the subscription but from the time an order is made 
 for its trustee to call on the stockholders up to the par amount 
 of their holdings for the benefit of corporate creditors.^ A 
 creditor of a corporation has no better right than the corpo- 
 ration itself to enforce payment of subscriptions of stock and 
 is limited by the same statute of limitations.^ 
 
 § 89. Id.: Enforcement of, Who May Enforce.— When a 
 plan is expressed in writing to form a corporation for a 
 particular purpose and after such recital the words " we 
 hereby subscribe " appear, followed by the signature of an 
 individual, such individual may be compelled by the corpo- 
 ration formed pursuant to such plan to pay the amount of his 
 subscription without any further move on his part.* "... 
 
 ™ Meyer v. Blair, 109 N. Y. 600, latter class are mutual agreements 
 
 17 N. E. 228 (1888). to subscribe for stock in a corpo- 
 
 ^ Armstrong v. Danahy, 75 Hun, ration thereafter to be formed. In 
 
 405, 27 Supp. 60 (1894). the first the agreement is uncondi- 
 
 ^ Southworth v. Morgan, 71 Misc. tional and absolute to form the cor- 
 
 214, 128 Supp. 598 (1911). poration and take the stock, and 
 
 As to when the statute of limita- when acted upon by the corporation 
 
 tions begins to run against the un- is binding, as that is all that is 
 
 paid balance of a stock subscription, needful to make the contract of 
 
 see note in 1 L.E.A.(N.S.) '901. force. Such contracts contemplate 
 
 ^Leighton v. Leighton Lea Assn., no further act iipon the part of the 
 
 146 A. D. 255, 130 Supp. 935 person making such agreement. In 
 
 (1911). the second class the agreement is to 
 
 *Yonkers Gazette Co. v. Taylor, subscribe for shares when the com- 
 
 30 A. D. 334, 51 Supp. 969 (1898). pany shall be organized. This 
 
 " There are agreements of a some- clearly contemplates something' more 
 
 what similar character which do not to be done, i. e., the actual subscrip- 
 
 admit of enforcement and are not tion. There exists no agreement 'in 
 
 binding a.s a common-law agreement. such case to become stockholders. 
 
 It is quite easy to confuse the two When the corporation is formed 
 
 classes, although there is a clear dis- such agreement is to take shares, 
 
 tinetion between them. In the first which involves a subsequent act, 
 
 class it is to be noticed that the that of formally subscribing for the 
 
 agreement is to form a corporation stock." 
 and subscribe to its stock. The 
 
94 BUSINESS CORPORATIONS IN NEW YORK § 90 
 
 the president of a corporation has authority to receive the 
 payment of subscriptions for its stock, even though the cor- 
 poration is a trust company which cannot transact business 
 until all its capital stock is paid in. . . . Subscriptions to 
 stock are assets of the corporation, and there can be no doubt 
 that a corporation can maintain actions to recover such sub- 
 scriptions."' " . . . a cause of action upon an unpaid sub- 
 scription to stock, when based merely upon the implied 
 promise of the stockholder to make the payment, does not 
 accrue to the corporation ; but where there has beenan express 
 promise that promise may be enforced by action as in the case 
 of any other contract liability." " One of many subscribers to 
 a paper agreeing to pay the amount set opposite their names 
 to a party selected by them, on establishment of a proper con- 
 sideration for his undertaking, may be sued therefor by the 
 individual selected as such party.' A stock subscription due 
 on a contract between the subscriber and the corporation may 
 be enforced, by attachment in this state against the resident 
 subscriber on a debt owing by the corporation itself, by a 
 creditor as lone plaintiff, without his suing on behalf of all 
 creditors or a receiver bringing the suit.* Syndicate man- 
 agers under an agreement showing an intention of the parties 
 that each should pay the amount of his subscription to the 
 managers who in turn should pay it to a lender of moneys 
 used in buying bonds to be bought by such managers under the 
 agreement may as trustees of an express trust sue to recover 
 subscriptions to such bonds." 
 
 § 90. Id.: Pleading, Practice and Evidence. — An action 
 may properly be brought on an original subscription to stock, 
 without the necessity of averring calls, if no condition as to 
 time of payment is attached." An action brought by a cor- 
 poration to collect unpaid subscriptions before the appoint- 
 ment of a receiver may be continued for the latter 's benefit in 
 the name of the original party." The enforcement of an 
 
 '^ Higginbotham v. International ' Presbyterian Society v. Beach, 74 
 
 Trust Co., 141 A. D. 535, 126 Supp. N. Y. 72 (1878). 
 
 366 U910). ^jjfgNel^g ^ Stillman, 172 A. D. 
 
 « Harris V. Wells, 57 Misc. 172, 307, 158 Supp. 428 (1916) ; C. C. P. 
 
 108 Supp. 1078 (1907) ; afif'd 126 §§ 677, 678. 
 
 A. D. 911, 110 Supp. 1131, " within » Gallogly v. Whitmore, 172 A. D. 
 
 this rule, . . . the trustee in 381, 15.8 Supp. 830 (1916) ; C. C. P. 
 
 bankruptcy certainly succeeds to a § 449. 
 
 cause of action existing in favor of '^^ Phoenix Warehousing Co. v. 
 
 the bankrupt corporation upon an Badger, 67 N. Y. 294 (1876). 
 
 express agreement by the stockholder ^^ Phoenix Warehousing Co. v. 
 
 to pay for the stock delivered to Badger, 67 N. Y. 294 (1876). 
 him . . ." 
 
§ 91 STOCK 95 
 
 unpaid subscription to stock of a corporation may be accom- 
 plished in a statutory action by a creditor to sequestrate its 
 property, by joining the subscriber as a party, on the theory 
 that he owes the corporation the amount of his subscription 
 which is available to its creditors/' A delivery or tender of a 
 certificate of stock in a corporation to a subscriber to its 
 original stock is not necessary as a condition precedent to the 
 maintenance by its receiver of an action to recover the amount 
 of his subscription in behalf of the corporate creditors." A 
 subscription for shares is a legal obligation enforceable by 
 action and forfeiture for non-payment, and if a bond and 
 mortgage be given to secure payment of the subscription it 
 may be collected after he has demanded scrip for his shares 
 and the company has neglected or refused to issue it." An 
 agreement by persons to form a corporation and subscribe to 
 its stock is not so indefinite as to be unenforceable because the 
 agreement to subscribe is not for a stated sum but a certain 
 number of dollars or such portion thereof as may be necessary 
 to provide the corporation with working funds and capital as 
 a going concern, as how much will be necessary for such pur- 
 pose is a matter of fact not difficult to ascertain and prima 
 facie is the amount such persons fixed on in their agreement 
 in fixing the amount of capital stock to be issued.^' 
 
 § 91. Id.: Corporation's Remedies on Failure of. — The 
 right of the corporation 'to sue for unpaid subscriptions to its 
 stock has been previously considered.^" If default is made in 
 the payment of any installment of a subscription to stock of 
 a corporation as required by resolution of its board of 
 directors, the board may declare the stock and all previous 
 payments upon it forfeited for the use of the corporation, 
 after the expiration of sixty days from the service on the 
 
 "Beals V. Buffalo Construction shares for which he has subscribed; 
 
 Co., 49 A. D. 589, 63 Supp. 635 but if his relation is that of pur- 
 
 (1900) ; C. C. P. §§ 1784r-1796. The chaser, the delivery of the certifi- 
 
 remedy is not confined to that pro- cate and payment for the stock are 
 
 vided by St. Corp. ,L. § 54. in contemplation concurrent, and the 
 
 ^^Kohlmetz v. Calkins, 16 A. D. offer or tender of the certificate be- 
 518, 44 Supp. 1031 (1897). "A fore suit is necessary to its main- 
 person may become the owner of tenance for the recovery of the 
 shares of stock of a corporation by amount of the unpaid balance for 
 subscription or by purchase. In the stock." 
 
 the former case he becomes a mem- "Battershall v. Davis, 31 Barb, 
 
 ber and takes all the rights as such 323 C1860). 
 
 by his subscription to the original ^^ Sanders v. Bamaby, 166 A. D. 
 
 stock. And no offer or delivery of 274, 151 Supp. 580 (1915). 
 
 a certificate is essential to his lia- ^* See § 89, supra. 
 bility to pay the amount of the 
 
96 BUSINESS CORPORATIONS IN NEW YORK §§ 92, 93 
 
 defaulting stockholder, personally, or by mail directed to him 
 at his last-known post-office address, of a written notice requir- 
 ing 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 corporation ; and 
 such stock, if forfeited, may be reissued or subscriptions 
 therefor may be received as in the case of stock not issued or 
 subscribed for, and if not sold for its par value or subscribed 
 for within six months after such forfeiture, shall be cancelled 
 and deducted from the amount of the capital stock.^^ 
 
 § 92. Id.: Certificate of Payment of Capital Stock.— One- 
 half of the capital stock of a stock business corporation must 
 be- paid in within one year from its incorporation, or the cor- 
 poration must be dissolved; and the directors within thirty 
 days after such payment must make a certificate of the fact 
 of such payment which must 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 object of the statute in requiring a certificate [of pay- 
 ment of capital stock] to be filed is to inform the public so 
 that they can transact business with the corporation upon the 
 assurance, either that the capital stock has all been paid in, 
 or that the stockholders are severally liable for an amount 
 equal to the stock held by them respectively."" The " pro- 
 visions of various statutes, relating to the stock of corpora- 
 tions, indicate very clearly that the amount of capital stock 
 paid in and certificate therefor issued is intended for the 
 information of the general public as to the financial condition 
 of a corporation and that its shares necessarily represented 
 money or property contributed for the conduct of its 
 business."^" 
 
 § 93. Id.: Issue of, In General. — The classes, kinds and 
 rights of stock have been previously discussed.^ While the 
 
 "St. Corp. L. § 54 (L. 1909, c. ^«Bus. Corps'. L. § 5 (L. 1909, 
 
 61): "If by such cancellation, the c. 12). 
 
 amount of the capital stock is re- "Nat. Tube Works Co. v. Gil- 
 
 duced below the minimum required fillan, 124 N. Y. 302, 26 N. E. 538 
 
 by law, the capital stock shall be (1891); L. 1848, c. 40, § 10. 
 
 increased to the required amount ^" People ex rel. Cohn Co. v. 
 
 within three months thereafter or an Miller, 180 N. Y. 16, 72 N. E. 525 
 
 action may be brought or proceed- (1904) ; Stock Corp. L. §§ 40, 47; 
 
 ings instituted to close up the busi- Bus. Corps. L. §§ 3, 5. See now 
 
 ness of the corporation as in the Bus. Corps. L. § 5. 
 
 case of an insolvent corporation." ^ See § 62 et seq., supra. 
 
§ 94 STOCK 97 
 
 statute prohibits issue of corporate stock except for mojiey, 
 labor done or property received, jet it does not make stock 
 issued for other consideration void or the directors issuing 
 it or a vendor of the particular stock liable to a subsequent 
 holder individually for a violation of the statute.' No act of 
 negligence of an agent of a board of directors or the board 
 itself can naake the corporation liable for stock issued beyond 
 the amount authorized by its charter." A corporation alleg- 
 ing a contract of employment of one as its general manager 
 and of issue of its stock to him to have been fraudulently 
 obtained and therefore seeking to avoid it cannot by injunc- 
 tion restrain the manager in a suit against him from acting as 
 such during the pendency of the action if the complaint ask 
 no such relief and no facts are alleged which would warrant 
 judgment for such relief.* If reliance is intended to be placed 
 upon statutory or other conditions and circumstances enter- 
 ing into the creation of corporate shares and the issuance 
 and acceptance of the stock certificate, so as to imply a con- 
 tract, such conditions and circumstances must be plead and 
 proven.^ 
 
 Federal legislation has created a " Capital^ Issues Com- 
 mittee ' ' which ' ' may, under rules and regulations to be pre- 
 scribed by it from time to time, investigate, pass upon, and 
 determine whether it is compatible with the national interest 
 that there should be sold or offered for sale or for subscrip- 
 tion any issue, or any part of any issue, of securities here- 
 after issued by any person, firm, or corporation, or associa- 
 tion, the total or aggregate par or face value of which issue 
 and any other securities issued by the same person, firm, cor- 
 poration or association since the passage of this Act is in 
 excess of $100,000."'" 
 
 § 94. Id. : Common Stock. — The classes, kinds and rights of 
 stock have already been discussed." Every domestic stock 
 
 = Ersfeld v. Exner, 128 A. D. 135, tion Act," § 203. " Shares of stock 
 
 112 Supp. 561 (1908) ; St. Corp. of any corporation or association 
 
 L. § 42 (L. 1901, c. 354). See now without nominal or par value shall 
 
 § 55. for the purpose of this section be 
 
 'New York & New Haven R. R. deemed to be of the par value of 
 
 Co. V. Schuyler, 38 Barb. 534 $100 each. Any securities which 
 
 (1860) ; aff'd 34 N. Y. 30. upon the date of the passage of this 
 
 * Maine Products Co. v. Alexan- Act are in the possession or control 
 
 der, No. 1, 115 A. D. 109, 100 Supp. of the corporation, association or 
 
 709 (1906). obligor issuing \he same shall be 
 
 ° Milliken v. Caruso, 205 N. Y. deemed to have been issued after the 
 
 559, 98 N. E. 493 (1912). passage of this Act within the 
 
 ^* Act approved Apr. 5, 1918, meaning hereof. ' ' 
 
 known as "War Finance Corpora- °§ 62.e* seq., supra. 
 B. C. N. Y.— 7 
 
98 BUSINESS CORPORATIONS IN NEW YORK § 95 
 
 corporation may issue common stock (1) if the certificate of 
 incorporation so provides, or (2) 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 corporation 
 is located, or (3) 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 must be filed and recorded in the offices where 
 the original certificate of incorporation of such corporation 
 was filed and recorded.* 
 
 § 95. Id.: Preferred Stock. — The classes, kinds and rights of 
 stock have previously been discussed." Every domestic stock 
 corporation may issue preferred stock and different classes of 
 preferred stock, (1) if the certificate of incorporation so pro- 
 vides, or (2) 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 corporation is located, or 
 (3) 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 meet- 
 ing, signed and sworn to by the president or a vice-president 
 and by the secretary or assistant-secretary of the corporation 
 must be filed and recorded in the offices where the original cer- 
 tificate of incorporation of such corporation was filed and 
 recorded." " In the absence of a statutory provision of law 
 reserving such power there can be no issue of preferred stock 
 in a corporation to the prejudice and injury of the owners of 
 the common capital stock without their unanimous consent.'" " 
 That the law of this state at the time of the incorporation of a 
 company does not permit the issue of preferred stock by it 
 save through the unanimous consent of its stockholders is no 
 objection to the issue of such stock by vote of a less number 
 pursuant to a law later passed permitting such a course." 
 
 'St. Corp. L. § 61 (L. 1917, "St. Corp. L. § 61 (L. 1917, 
 
 c. 542). e. 542). 
 
 »St. Corp. L. § 61 (L. 1917, ^^ Ernst v. Elmira Munieipal Im- 
 
 c. 542). provement Co., 24 Misc. 583, 54 
 
 ^§ 62 e* seq., supra. Supp. 116 (1898). 
 
 "St. Corp. L. § 61 (L. 1917, "Hinckley v. Schwarzschild & 
 
 e. 542). Sulzberger Co., 107 A. D. 470, 95 
 
§§ 96-97 STOCK 99 
 
 Holders of stock in a corporation not availing themselves of 
 opportunity extended to them all to secure a preference in 
 annual payments on their stock by contribution of a certain 
 cash sum each to the company cannot hold a preference so 
 given to some of their number making such contribution void 
 if they do nothing about it for four years after the preference 
 has been in operation and they have had full knowledge of it." 
 
 § 96. Id.: Partly Paid Stock. — The original or amended cer- 
 tificate of incorporation of any stock corporation may contain 
 a provision expressly 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 has been paid in." 
 
 § 96-a. Non-Par Value Stock. — UporL the formation or the 
 reorganization of any stock corporation, other than a 
 moneyed corporation, and other than a corporation under the 
 jurisdiction of any public service commission, the certificate 
 of incorporation may provide for the issuance of the shares 
 of stock of such corporation, other than preferred stock hav- 
 ing a preference as to principal, without any nominal or par 
 value."* The method of doing this is hereinafter discussed in 
 connection with the reorganization of corporations."*" 
 
 § 97. Id.: For What. — No corporation can issue stock except 
 for money, labor done or property actually received for the 
 use and lawful purposes of such corporation ; and any corpo- 
 ration may purchase any property authorized by its certificate 
 of incorporation, or necessary for the use and lawful pur- 
 poses of such corporation, and may issue stock to the amount 
 of the value thereof in payment therefor, and the stock so 
 issued is full paid stock not liable to any further call, nor is 
 the holder thereof liable for any further payment under any 
 of the provisions of the Stock Corporation Law; and in the 
 absence of fraud in the transaction the judgment of the 
 directors as to the value of the property purchased is con- 
 clusive.^® The purpose of the statute prohibiting the issue of 
 corporate bonds or stock except for money, labor done or 
 property received is to prevent reckless speculators from 
 fraudulently issuing securities and does not inhibit the issue 
 of bonds to corporate creditors who had theretofore delivered 
 
 Supp. 357 (1905), app. dism'd 193 ^' St. Corp. L. § 60 (L. 1909, 
 
 N. Y. 599, 86 N. B. 1125; N. Y. e. 61). 
 
 Const, art. 8, § 1; St. Corp. L. § 47 "^ St. Corp. L. § 19 (L. 1917, 
 
 (L. 1892, e. 688, as amend'd by L. c. 500). 
 
 1901, e. 354). See now § 61 (L. ""See § 507-k et seq., infra. 
 
 1917, e. 542). ' "" St. Corp. L. § 56 (L. 1909, 
 
 ^*Kent V. Quicksilver Mining Co., e. 61). 
 78 N. Y. 159 (1879). 
 
100 BUSINESS CORPORATIONS IN NEW YORK § 97 
 
 their property to the company, which the bonds represented." 
 The meaning of the words " lawful purposes," in the statute 
 prohibiting the issue of stock or bonds by a corporation 
 except for money, labor done or property actually received 
 for its use and lawful purposes, is " purposes not foreign tb 
 the business of the corporation and such as are not discon- 
 nected with the lawful management of that business, ' ' such as 
 " to secure itself against ruinous competition whereby its 
 whole business may be destroyed."^* When divers persons 
 owning property chip it into a corporation formed by them 
 to hold it all for purposes of convenience and in which they 
 only are stockholders, it is immaterial at what price the prop- 
 erty was conveyed to the corporate entity." The valuation of 
 property, business and good will, as consideration for the 
 issue of corporate stock therefor, is controlled by entirely 
 different rules when it is made in the conversion of a family 
 partnership into a family corporation than when it is made 
 for the purpose of exploiting the public.^" In determining 
 whether property issued for stock is such as to make the stock 
 full-paid the real question is whether the property was placed 
 and taken at a high valuation with a fraudulent intent of 
 evading the provisions of the statute; and an error in judg- 
 ment or mistake in valuing the property, if made in good 
 faith, will not of itself subject the stockholders to a personal 
 liability.^ Services rendered in bringing a corporation into 
 existence is neither cash nor property for which its stock may 
 legally be issued.^ A corporation cannot issue its stock or 
 bonds for services to be rendered in the future.** A certificate 
 of stock, regular on its face, in the hands of the original 
 owner, issned as consideration- for his becoming president of 
 the corporation, giving credit to it and his services as presi- 
 dent to be rendered for one year after election, is void.* 
 
 "Matter of Snyder, 29 Misc. 1, L. 1870, c. 773, § 2. Agricultural 
 
 59 Supp. 993 (1899); St. Corp. L. land was bought to establish a city 
 
 § 42 (L. 1892, c. 688). See now St. thereon. Evidence of prices at 
 
 Corp. L. § 55 (L. 1909, c. 61). which portions of the land had been 
 
 ^'Rafferty v. Buffalo City Gas sold for city purposes and of offers 
 
 Co., 37 A. D. 618, 56 Supp. 288 made therefor for such purposes is 
 
 (1899); St. Corp. § 42. See now competent. 
 
 St. Corp. L. § 55 (L. 1909, c. 61). ^ Herbert v. Duryea, 34 A. D. 478, 
 
 ^^ Seymour v. Spring Forest Ceme- 54 Supp. 311 (1898) ; aff'd 164 
 
 tery Assn., 144 N. Y. 333, 26 L.R.A. N. Y. 596, 58 N. E. 1087; Gen. 
 
 859, 39 N. E. 365 (1895). Mfg. Act (L. 1848, c. 40). 
 
 ^^ Williams v. McClave, 168 A. D. ' Morgan v. Bon Bon Co., Inc., 
 
 192, 154 Supp. 38 (1915). 165 A. D. 89, 150 Supp. 668 (1914) ; 
 
 ^Thurber v. Thompson, 21 Hun, St. Corp. L. § 55 (L.-1909, c. 61). 
 
 472 (1880); L. 1853, c. 117, § 10; ^ The B. & C. Electrical Construe- 
 
§ 97 STOCK ■101 
 
 Stock issued in consideration of contracts made^for and 
 inuring to the benefit of a company upon its formation and 
 providing for rendition of future services by stockholders is 
 not issued for cash or property or sei'vices.' " The require- 
 ments of the statute with respect to the payment to be made 
 for the capital stock of a corporation which were designed 
 for the benefit and protection of creditors can only be satis- 
 fied as to creditors by labor theretofore performed, by actual 
 payment in money or by the purchase, at what is in good faith 
 deemed its fair and reasonable value, of property of a sub- 
 stantial nature having a pecuniary value capable of ascer- 
 tainment and which the corporation might lawfully purchase 
 as necessary to its business (citations). It is manifest that 
 this requirement cannot be satisfied by the purchase of an 
 executory contract for the performance of services in 
 future." ^ Stock issued to a promoter ostensilply for his con- 
 tribution to the corporation's capital stock used to buy realty 
 but really for nothing because he charged the company just 
 so much more than the realty cost as would pay his contribu- 
 tion to its stock is void, and one with whom he had agreed to 
 hold part of such stock for a consideration cannot enforce the 
 agreement/ The statute prohibiting the issue by a corpora- 
 tion of stock or bonds except for money, labor done or prop- 
 erty received, is not violated by its delivery of its bonds and 
 stock to one who has contracted to build a railway for it, and 
 as consideration therefor, even though the delivery be made 
 in advance.^ It is not sufficient in a complaint alleging that 
 corporate stock and bonds issued by agreement to a con- 
 tractor for work done and material furnished were wrongly 
 issued to allege that the contractor never did his work but it 
 must unequivocally be alleged that the securities were not' 
 issued therefor or that some other facts exist justifying an 
 inference that the corporation did not receive full value for 
 the securities, as otherwise the conclusion will be indulged 
 that the contractor took the securities in payment for work 
 done and materials furnished." " The fair value contem- 
 
 tion Co. V. Owen, 176 A. D. 399, 163 County Midland R. R. Co. v. Han- 
 
 Supp. 31 (1917). field, ^6 A. D. 605, 55 Supp. 877 
 
 'Shaw V. Ansaldi Co., Inc., 178 (1899); St. Corp. L. § 42 (L. 1892, 
 
 A. D. 589, 166 Supp. 872 (1917); c. 688). See now St. Corp. L. § 55 
 
 St. Corp. L. §§ 55, 56. (L. 1909, c. 61). 
 
 * Stevens v. Episcopal Church ' Bostwick v. Young, 118 A. D. 
 
 History Co., 140 A. D. 570, 125 490', 103 Supp. 607 (1907); aff'd 
 
 Supp. 573' (1910). 194 N. Y. 516, 87 N. E. 1115; St. 
 
 ' Travis v. Travis, 140 A. D. 191, Corp. L. § 42 (L. 1892, e. 688). See 
 
 124 Supp. 1021 (1910). now § 55 (L. 1909, e. 61). 
 
 ' Hudson River & Washington 
 
il02 BUSINESS CORPORATIONS IN NEW YORK § 98 
 
 plated by the statute [requiring that corporate stock issued 
 for property be only " at its fair value "], is that which the 
 property had at the time of the sale and which constituted the 
 consideration upon which the subscription to the capital stock 
 of the company was satisfied.^ ... It could not be 
 dependent upon subsequent success or faUure of the invest- 
 ment further than such result may have been legitimately 
 within evidential contemplation at the time of the sale in view 
 of the uses, for which it may have had available advantages 
 within itself."" Once all the stockholders of a corporation 
 have agreed, under a colorable arrangement, to the issue of 
 all its capital stock for property the value of which is insig- 
 nificant in comparison to the value of the stock, no subsequent 
 stockholder — in whatever good faith he may have bought 
 his stock — can question the legality of the issue or compel 
 the return of the excess of stock issued either in behalf of the 
 stockholders or the corporation." A subscriber to a loan 
 sought by a corporation proposing to give bonds therefor and 
 also the privilege to become a stockholder in proportion to 
 his loan, and agreeing upon payment of the loan 's first install- 
 ment to give certificates entitling to such capital stock, 
 exchangeable for scrip shares on payment of the last install- 
 ment, does not have only a right of election, on a fixed date, 
 to decide whether or not to take stock, but an absolute right 
 thereto on fulfillment of his part of the contract." The value 
 of a franchise controlled by one corporation operating under 
 it to the ruin of another may be considered in determining the 
 market value of the former's bonds and stocks on their pur- 
 chase by the latter.^' 
 
 § 98. Id.: Evidence of Value of Consideration for. — The 
 words " value thereof " in the statute permitting corporate 
 trustees to purchase property " necessary for their business 
 and to issue stock to the amount of the value thereof in 
 payment therefor," mean the " fair valuation of the prop- 
 erty considering the purposes for which it is to be used, the 
 nature of the business for which it is purchased and for the 
 prosecution of which the corporation is organized. This 
 rule authorizes an extended and wide latitude in the determi- 
 nation of the question o£ value. While certain kinds of prop- 
 
 1° Huntington v. AttriU, 118 N. Y. " Van Alen v. Illinois Central R. 
 
 365, 23 N. E. 544 (1890); L. 1875, R. Co., 41 N. Y. (2 Keyes) 673 
 
 c. 61, § 14. (1866). 
 
 "Miller V. University Magazine "Rafferty v. Buffalo City Gas 
 
 Co., 10 Misc. 311, 30 Supp. 969 Co., 37 A. D. 618, 56 Supp. 288 
 
 (1894). (1899) ; St. Corp. L. § 42. 
 
§ 99 STOCK 103 
 
 erty which are employed for manufacturing purposes, such as 
 machinery, fixtures, etc., have a specific and definite value 
 which is readily ascertained and fixed, there are other 
 descriptions of property where the value is dependent upon 
 circumstances which render it quite unce];tain and frequently 
 very difficult to decide what' the real fair and just value of the 
 same actually is. ' ' " Evidence of the value of property taken 
 by a corporation in exchange for its stock based upon com- 
 parison with other property of like kind at different places 
 is not admissible.^^ In determining the value of property 
 taken by a corporation in exchange for its stock " tjie books 
 of the company were competent as evidence so far as related 
 to any entries legitimately contained in them and so far as 
 they were relevant to the issues on trial."" The surrender 
 and retransfer to a corporation of a large amount of its stock 
 issued for property, without consideration, is some evidence 
 that the amount of stock issued was not regarded as the value 
 of the property." In determining if stock issued for property 
 is full paid it is entirely inconsistent with a bona fide sale 
 that the seller was willing to divide with his co-trustees, the 
 bargainers, two-thirds of the nominal consideration he 
 received for it.^' The presumption — until the contrary is 
 shown — is that common stock bought by the corporation 
 and transferred to such holders of preferred stock as had no 
 common was regularly issued for value." 
 
 § 99. Id.: Of New Stock. — ^A return to the holders thereof 
 of stock improperly surrendered and illegally cancelled is 
 not an issue of new stock so as to violate an injunction upon 
 the directors and officers of the corporation against issuing 
 any stock pending a new election of the acting directors and 
 officers.^" The fact that a contemplated issue of corporate 
 stock at par to common stockholders though worth above par 
 
 "Boynton v. Andrews, 63 N. Y. "Douglass v. Ireland, 73 N. T. 
 
 93 (1875); Gen. Mfg. Act, L, 1848, 100 (1878); L. 1848, e. 40; L. 1853, 
 
 c. 40, § 10, as amended L. 1853, c. 33. See now St. Corp. L. § 55. 
 
 c. 333. "Mines and mining lands ^'Douglass v. Ireland, 73 N. Y. 
 
 may properly be considered as em- 100 (1878); L. 1848, e. 40; L. 1853, 
 
 braced in the latter class." See now c. 33. See now St. Corp. L. § 55. 
 
 St. Corp. L. § 55. "Matter of Seneca Oil Co., 153 
 
 " Huntington v. AttriU, 118 N. Y. A. D. 594, 138 Supp. 78 (1912) ; 
 
 365, 23 N. E. 544 (1890) ; L. 1875, aff'd 208 N. Y. 545, 101 N. E. 1121. 
 
 c. 611, § 14. See now St. Corp. L. See now St. Corp. L. § 55. 
 
 § 55. 2° Matter of New York & West- 
 
 " Huntin^on v. Attrill, 118 N. Y. Chester Town Site Co., No. 2, 145 
 
 365, 23 N.E. 544 (1890); L. 1875, A. D. 630, 130 Supp. 418 (1911). 
 c. 611, § 14. See now St. Corp. L. 
 § 55. 
 
104 BUSINESS CORPORATIONS IN NEW YORK §§ 100, 101 
 
 will reduce the preferred stockholders' proportionate interest 
 in the corporation is not objectionable if the issue is from the 
 amount of stock authorized by the charter and is not the result 
 of an increase of the authorized capital stock.^ A preferred 
 stockholder cannot complain that his corporation's common 
 stockholders are given the right to subscribe at par for 
 unissued but authorized stock of the corporation -worth more 
 than par while he and other preferred stockholders are not 
 given the same chance, if the corporation pays dividends on 
 the preferred stock and has property left in excess of its 
 debts and the amount of its capital stock issued, as whatever 
 value the stock to be issued has above par represents surplus 
 and is distributable among the common stockholders.^ 
 
 § 100. Id.: Assessments on Holders of and Subscribers To.— 
 The subject of calls on stockholders to pay any amount 
 remaining unpaid upon subscriptions to their corporation's 
 stock has been previously considered.' A by-law imposing an 
 annual assessment on stock already fully paid is inoperative 
 on a non-assenting stockholder.* No assessment to pay the 
 estimates of the expenses for conducting a corporation for 
 the current year part of which has expired before the assess- 
 ment was made can be levied on stockholders under a by-law 
 providing that " when there are not sufficient funds in the 
 treasurer's hands to pay the indebtedness of the corporation 
 an assessment shall be made on the stockholders to cover the 
 amount necessary to cancel said indebtedness, unless other- 
 wise arranged and paid by the board of directors."^ In 
 determining how many shares of stock a person owns in 
 order to fix his liability for assessments when it goes into 
 liquidation the entries on the corporate stock ledger are bind- 
 ing unless contradicted." 
 
 § 101. Id.: Exchange of Preferred for Common Stock.— A 
 domestic stock corporation may, upon the written request of 
 the holders of any'preferred stock, by a two-thirds vote of its 
 
 ^ Russell V. American Gas & Elec- * Cuykendall v. Douglas, 19 Hun, 
 
 trie Co., 152 A. D. 136, 136 Supp. 577 (1880) ; dism'd 95 N. Y. 314; 
 
 602 (1912). L. 1848, c. 40, § 25. 
 
 ^Russell V. American Gas & Elec- For authorities , discussing the 
 
 trie Co., 152 A. D. 136, 136 Supp. question of assessments on paid-up 
 
 602 (1912). stock generally, see notes in 45 
 
 'See § 73, supra. L.R.A. 648; 22 L.R.A.(N.S.) 1013. 
 
 * Sullivan County Club v. Butler, On right to make successive 
 
 26 Misc. 306, 56 Supp. 1 (1899). assessments on stockholders to pay 
 
 'Delaware Valley Telephone Co. debts, see note in 66 L.R.A. 971. 
 V. Tiffanv. 131 A. D. 343, 115 Supp. 
 867 (1909). 
 
§ 102 STOCK 105 
 
 directors, exchange such preferred for common stock, and 
 issue certificates for common stock therefor, upon such valua- 
 tion as may have been agreed upon (1) in the certificate of 
 organization of such corporation, or (2) the issue of such 
 preferred stock, or (3) share for share; but the total amount 
 of such capital stock must not be increased thereby.' 
 
 § 102. Id.: Increase of, Governing Statutes. — Any domestic 
 corporation may increase its capital stock, not, however, 
 above the maximum if any prescribed by general law govern- 
 ing corporations formed for similar purposes, by either (1) 
 the unanimous consent of its stockholders (a) expressed in 
 writing and (b) filed in the office of the Secretary of State and 
 (c) filed in the office of the clerk of the county in which the 
 principal business office of the corporation is located, or (2) 
 a vote of the stockholders owning at least a majority of the 
 stock of the corporation (a) taken at a meeting of the stock- 
 holders specially called for that purpose in the manner pro- 
 vided by law or the by-laws, (b) after notice of the meeting, 
 stating the time, place and object and the amount of the 
 increase proposed, signed by the president or a vice-president 
 and the secretary has been 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 (c) after a copy of such notice has been either duly 
 mailed to each stockholder or member at his last-known post- 
 office address at least two weeks before the meeting or per- 
 sonally served on him at least five days before the meeting.' 
 The procedure for increasing the capital stock now differs 
 according as the increase shall be authorized by unanimous 
 written consent or by a vote of the stockholders in meeting 
 called. When the unanimous consent of stockholders in writ- 
 ing signed by them or their duly authorized proxies has been 
 filed the capital stock of such corporation is increased to the 
 amount specified in such consent.^ A copy of such consent 
 must be entered upon the minutes of the corporation." If 
 the increase be not unanimously consented to by the stock- 
 holders, a stockholders' meeting must be held. If, at the 
 time and place specified in the notice of such meeting the 
 stockholders appear in person or by proxy in numbers repre- 
 senting at least a majority of all the shares of stock they (1) 
 must organize by choosing from their number a president 
 and secretary, and (2) take a vote of those present in person 
 
 ^St. Corp. L. § 61 (L. 1917, ° St. Corp. L. § 64 (L. 1913, 
 
 c. 542). c. 305). 
 
 «St. Corp. L. § 63 (L. 1909, "St. Corp. L. § 64 (L. 1913, 
 
 c. 61). c. 305). 
 
106 BUSINESS CORPORATIONS IN NEW YORK § 10:i 
 
 or by proxy and if a sufficient number of votes is given in 
 favor of such increase,.(3) have filed in the office of the clerk 
 of the county where its principal place of business is located, 
 and a duplicate thereof in the office of the Secretary of State, 
 a certificate of the proceedings showing (a) a compliance 
 with the provisions of the Stock Corporation Law, (b) the 
 amount of capital theretofore authorized, (c) the proportion 
 thereof actually issued, (d) the amount of the increased capi- 
 tal stock, and (e) signed, verified and acknowledged by the 
 chairman and secretary of the meeting." When such certifi- 
 cate has been filed the capital stock of such corporation is 
 increased to the amount specified in such certificate." The 
 proceedings of the meeting at which sujeh increase is voted 
 must be entered upon the minutes of the' corporation.^^ 
 
 Any corporation formed or reorganized pursuant to the 
 statute permitting a business corporation upon its formation 
 or reorganization to provide in its certificate of incorporation 
 for the issuance of shares of stock, other than preferred 
 stock having a preference as to principal, without any nominal 
 or par value, may amend its certificate of incorporation so as 
 to increase the number of shares which it may issue, or so as 
 to increase the amount of its stated capital, by filing in the 
 manner provided for the original certificate of incorporation, 
 a certificate of amendment under seal executed by its presi- 
 dent or a vice-president and by its secretary or its treasurer, 
 stating the amendment proposed and that the same has been 
 duly authorized by a vote of a majority of the directors and 
 also by the vote of the holders of at least three-fifths of the 
 outstanding shares of each class issued by the corporation, at 
 a meeting of the stockholders called for the purpose in the 
 manner provided in section sixty-three of the Stock Corpo- 
 ration Law ; and by filing with such certificate of amendment 
 a copy of the proceedings of such meeting, made, signed, ver- 
 ified and acknowledged by the president or a vice-president 
 and by the secretary or the treasurer of the corporation ; but 
 such an amendment cannot be made unless as so amended 
 the certificate of incorporation could lawfully have been filed 
 under the statute referred to, permitting a business corpo- 
 ration upon its formation or reorganization to provide in its 
 certificate of incorporation for the issuance of stock without 
 nominal or par value."' 
 
 "St. Corp. L. § 64 (L. 1913, "St. Corp. L. § 64 (L. 1913, 
 c. 305). . c. 305). 
 
 "St. Corp. L. § 64 (L. 1913, ^^^St. Corp. L. § 22 (L. 1912, 
 e. 305). c. 351). 
 
§ 103 STOCK 107 
 
 § 103. Id.: In General. — A subscriber to corporate stock 
 does not upon receiving his stock acquire any inherent right 
 to preserve the existing ratio between his stock and the stock 
 issued and outstanding at that particular time." " There is 
 but one way in- which the capital stock of a company can be 
 increased and that is in the manner authorized by its charter, 
 or by some express authorization of the legislature of the 
 State. No acts of the officers or agents of the company are 
 competent to enlarge the capital stock; nor can the stock- 
 holders do so, save in the particular manner pointed out by 
 t}ie_ statute. There is no .such thing as an implied authority 
 to increase or diminish the capital stock of a company."" 
 The number of shares of stock of a corporation authorized by 
 its charter cannot be increased by any act or resolution of its 
 board of directors or by anyone by the board's authority." 
 It is doubtful if a statement in a report of a board of directors 
 that it will not increase the corporate capital stock is suffi- 
 cient to warrant the restraining of the company from doing 
 ?o, if authorized by statute to do so." ' ' A stockholder coming 
 into court and alleging that the increase of stock was unau- 
 thorized by the articles of association, in order to maintain his 
 allegations, would have the burden to prove and establish that 
 fact."^* An increase of capital stock by a resolution of the 
 corporation's trustees, followed by a ratification thereof by a 
 stockholders' meeting of which the statutory notice was not 
 given, and of the proceedings of which no certificate was made 
 or filed as required by statute, while illegal, is nevertheless 
 validated as against the corporate creditors by acceptance 
 by the stockholders of their proportions of the increased stock, 
 their voting for such increase, their taking dividends upon it, 
 and their holding it out to those dealing with the company as 
 an actual component of its capital," If a special statute per- 
 mitting the incorporation of a particular corporation and giv- 
 ing it a charter neither requires the assent of the stockholders 
 to an increase of stock nor provides for any public record of 
 the action of the company in making the increase, but author- 
 izes a majority of the directors to make the increase as its 
 
 " Russell V. American Gas & Elec- " Howell v. Chicago & Northwest- 
 trie Co., 152 A. D. 136, 136 Supp. ern Ry. Co., 51 Barb. 378 (1868). 
 602 (1912) ; St. Corp. L. § 53. ^* Williams v. Western Union Tele- 
 
 " Einstein v. Rochester Gas & graph Co., 93 N. T. 462 (1883). 
 
 Electric Co., 146 N.- Y. 46, 40 N. E. " Veeder v. Mudgeft, 95 N. Y. 295' 
 
 631 (1895). (1884); Gen. Mfg. Act, L. 1848, 
 
 " New York & New Haven R. R. c. 40, §§ 10, 11, 20, 21, 22. See 
 
 Co. V. Schuyler, 38 Barb. 534 now St. Corp. L. § 62. 
 (1860) ; aff'd 34 N. Y. 30. 
 
108 BUSINESS CORPORATIONS IN NEW YORK §§ 104, 105 
 
 business might require, their resolution that the increase be 
 made ' ' for the purpose of erecting and putting in operation ' ' 
 certain apparatus fulfills all the requirements of the statute 
 and charter.^" In an action to have an increase of corporate 
 stock adjudged illegal and to compel certain .parties holding 
 such increase to deliver it up for cancellation it is not neces- 
 sary to join all stockholders or directors as defendants.^ 
 
 § 104. Id.: Certificate of.— The Secretary of State collects 
 a fee of ten dollars for filing a consent to or certificate of 
 increase of capital stock pursuant to section six or Sixty- 
 three or sixty-four of the Stock Corporation Law.^ The 
 statute prescribing the certificate of increase of capital stock 
 has been heretofore set forth.' A certificate of increase of 
 capital stock required by statute to be " acknowledged " by 
 the chairman of the meeting at which the increase was voted 
 is sufficient if it states to the left of the chairman 's signature 
 at the end that it was " Subscribed and, sworn to before " 
 the proper official.* A certificate that " the whole of the 
 
 said capital stock of $12,000 has been sold, and all but $ 
 
 paid in " imports that the entire amount of the capital has 
 been paid in, and is a sufficient compliance with the require- 
 ment of the statute prescribing that a certificate of increase 
 of capital stock must show " the amount of capital actually 
 paid in. ' "^ 
 
 § 105. Id.: Stockholder's Right to Subscribe To.— When a 
 corporation has power to increase its capital it is immaterial 
 whether it does so by awarding the stock to stockholders as 
 dividends in lieu of money (retaining the money for corporate 
 purposes) or by paying the stockholders in cash from the 
 corporate earnings (and selling the stock in the market for 
 corporate use)." "A corporation may use its original unis- 
 sued authorized capital stock for any legitimate or lawful pur- 
 pose it sees fit . . . Before making such use it is not 
 obligated to give to existing stockholders an opportunity to 
 purchase. It is only when the capital stock is increased by 
 the issue of new shares that each holder of the original stock 
 ihas a right to subscribe for and demand from the corporation 
 
 ^"Sutherland v. Olcott, 95 N. Y. L. 1848, c. 40, § 22. See now St. 
 
 93 (1884); L. 1867, c. 401. Corp. L. § 64. 
 
 ^Witherbee v. Bowles, 201 N. Y. 'Moosbrugger v. Walsh, 89 Hun, 
 
 427, 95 N. E. 27 (1911). 564, 35 Supp. 550 (1895); L. 1848, 
 
 'Executive L. § 26 (L. 1917, c. 40, § 22. See now St. Corp. L. 
 
 c. 69). § 64. 
 
 ^ See § 102, supra. " Howell v. Chicago & Northwest- 
 
 *Cuykendall v. Douglas, 19 Hun, em Ry. Co., 51 Barb. 378 (1868). 
 577 (1880); dism'd 95 N. Y. 314; 
 
§ 106 STOCK 109 
 
 such a proportion of the new stock as the number of shares 
 already owned by him bears to the whole number of shares 
 before the increase. In that case the rule simply applies when 
 the new stock is issued for money only, and not to purchase 
 property necessary for the purposes of the corporation, or to 
 effect a consolidation."^ "... a stockholder has an 
 inherent right to a proportionate share of new stock issued 
 for money only and not to purchase property for the purposes 
 of the corporation or to effect a consolidation, and while he 
 can waive that right, he cannot be deprived of it without his 
 consent except when the stock is issued at a fixed price not 
 less than par and he is given the right to take at that price in 
 proportion to his holding, or in some other equitable way that 
 will enable him to protect his interest by acting on his own 
 judgment and using his own resources." * A stockholder of a 
 corporation at the time its capital is increased has a right to 
 subscribe to his pro rata share of the new stock at any time 
 until he has declined to do so or consented that the company 
 withhold the new shares from him, even though the time fixed 
 for exercise of his right has passed; provided, always, that 
 the stock is still in the company's possession." A stockholder 
 who is given a chance, in common with other stockholders, to 
 get his proportion of an additional issue of stock on the same 
 terms as the others, must take advantage of the opportunity 
 within a reasonable time or lose it.^° A stockholder protesting 
 against the sale of his share of an increase of stock of the cor- 
 poration before the price was fixed, is then under no obliga- 
 tion to offer to take it at any price in order to preserve his 
 rights ; but to put him in default the directors or corporation 
 must offer it to him at the price they or it offer or offers it 
 to outsiders." A purchase of corporate stock which secures 
 to the -buyer control of the corporation cannot be set aside by 
 other stockholders on the ground of lack of opportunity in 
 them to buy it if the directors ' resolution authorizing sale at 
 a specified price was of record and open to their inspection 
 and copies of it were sent them, as this is a complaint ' ' not 
 
 ^Archer v. Hesse, 164 A. D. 493, subscribe for increase of stock, see 
 
 150 Supp. 296 (1914). note in 12 L.R.A.(N.S.) 969. 
 
 * Stokes V. Continental Trust Co., ^" Conklin v. United Construction 
 
 186 N. Y. 285, 12 L.R.A.(N.S.) 969, & Supply Co., 166 A. D. 284, 151 
 
 78 N. E. 1090 (1906). Supp. 624 (1915); afC'd without. 
 
 ' Sommer v. Armor Gas & Oil Co., opinion 219 N. Y. 555, 114 N. B. 
 
 71 Misc. 211, 128 Supp. 382 (1911) ; 1063. 
 
 aff'd 147 A. D. 919, 131 Supt). " Stokes v. Continental Trust Co., 
 
 1144. ' 186 N. Y. 285, 12 L.R.A.(N.S.) 069, 
 
 On right of existing stockholder to 78 N. E. 1090 (1906). 
 
110 BUSINESS CORPORATIONS IN NEW YORK § 106 
 
 of an opportunity denied, but rather of an opportunity over- 
 looked, and the grievance does not seem to arise over a lost 
 investment but rather over the power of control over the cor- 
 poration gained by others more vigilant." " 
 
 § 106. Id.: Decrease of. — ^Any domestic corporation may 
 reduce its capital stock, not, however, below the minimum if 
 any prescribed by general law governing corporations formed 
 for simUar purposes, or to such an amount that its debts and 
 liabilities shall exceed the amount of its reduced capital, or 
 so as to relieve the owner of any stock from any liability exist- 
 ing prior to the reduction of the capital stock of any stock 
 corporation, by (1) the unanimous consent of the stockholders 
 expressed in writing, or (2) by a vote of the stockholders own- 
 ing 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." The pro- 
 cedure if the reduction is accomplished by written and unani- 
 mous consent of the stockholders is (1) to file such consent 
 (a) in the office of the Secretary of State and (b) in the office 
 of the clerk of the county in which the principal business office 
 of the corporation is located." The consent should show (1) 
 a compliance with the provisions of the Stock Corporation 
 Law, (2) the amount of capital theretofore authorized, (3) 
 the proportion thereof actually issued, (4) the amount of the 
 reduced capital, and (5) the whole amount of the ascertained 
 debts and liabilities of the corporation." The consent must 
 have endorsed on it 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." When the unanimous consent of stock- 
 holders in writing, signed by them or their duly authorized 
 proxies and approved by the comptroller has been filed the 
 capital stock of the corporation is- reduced to the amount 
 specified in such consent." A copy of such consent must be 
 entered on the minutes of the corporation." 
 
 The procedure if the reduction is accomplished by a vote 
 of the stockholders owning at least a majority of the stock is 
 
 "Dusenberry v. Sagamore Devel- "St. Corp. L. § 64 (L. 1913, 
 
 opment Co., 164 A. D. 573, 150 c. 305). 
 Supp. 229 (1914). "St. Corp. L. § 64 (L. 1913, 
 
 "St. Corp. L. §§ 62, 63 (L. 1909, c. 305). 
 c. 61). "St. Corp. L. § 64 (L. 191? 
 
 "St. Corp. L. § 63 (L. 1909, c. 305). 
 p. 61). 
 
 '=St. Corp. L. § 64 (L. 1913 
 (. 305). 
 
§ 106 STOCK 111 
 
 (1) to publish once a week for at least two successive weeks 
 in a newspaper in the county where the corporation's prin- 
 cipal business office is located (if any is published therein) a 
 notice of the meeting stating (a) the time, (b) place, and (c) 
 object, (d) the amount of the reduction proposed, (e) signed 
 by the president or a vice-president and the secretary; and 
 
 (2) to duly mail a copy of such notice to each stockholder or 
 member at his last-known post-office address at least two weeks 
 before the meeting, or j[3) to serve each such stockholder per- 
 sonally with such copy 'at least five days before the meeting." 
 If at the time and place specified in the notice the stockholders 
 appear in person or by proxy in numbers representing at 
 least a majority of all the shares of stock they must (1) 
 organize by choosing from their number a chairman and a 
 secretary, and (-2) take a vote of those present in person or 
 by proxy, and if a sufficient number of votes is given in favor 
 of such reduction (3) file a certificate of the proceedings in 
 the office of the clerk of the county where its principal place 
 of business is located and a duplicate in the office of the Secre- 
 tary of State, showing (a) a compliance with the provisions 
 of the Stock Corporation Law, (b) the amount of capital 
 theretofore authorized, (c) the proportion actually issued, 
 (d) the amount of the reduced capital stock, and (e) the 
 whole amount of the ascertained debts and liabilities of the 
 corporation, which certificate must be signed, verified and 
 acknowledged by the chairman and secretary of the meeting, 
 and must have endorsed thereon the approval of the comp- 
 troller 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?" The proceedings of the 
 meeting at which such decrease is voted must be entered upon 
 the minutes of the corporation/ When such certificate, 
 approved by the comptroller, has been filed the capital stock 
 of the corporation is reduced to the amount specified therein.^ 
 
 Any corporation formed or reorganized pursuant to the 
 statute permitting a business corporation upon its formation 
 or reorganization to provide by its certificate of incorporation 
 for the issuance of the shares of its stock, other than preferred 
 stock having a preference as to principal, without any nominal 
 or par value, may amend its certificate of incorporation so as 
 to reduce the number of shares which it may issue, or so as 
 
 ^»St. Corp. L. § 63 (L. 1909, ^ St. Corp. L. § 64 (L. 1913, 
 e. 61). e. 305). 
 
 ^'St. Corp. L. § 64 (L. 1913, = St. Corp. L. § 64 {L. 1913, 
 p. 305). ■ c. 305). 
 
112 BUSINESS CORPORATIONS IN NEW YORK § W 
 
 to reduce the amount of its stated capital, by filing, in the 
 manner provided for the original certificate of incorporation, 
 a certificate of amendment under seal executed by its presi- 
 dent or a vice-president and by its secretary or its treasurer, 
 stating the amendment proposed and that that same has been 
 duly authorized by a vote of a majority of the directors and 
 also by the vote of the holders of at least three-fifths of 
 the outstanding shares of each class issued by the corpora- 
 tion, at a meeting of the stockholders called for the purpose 
 in the manner provided in the sixty-third section of the Stock 
 Corporation Law; and by filing with such certificate of 
 amendment a copy of the proceedings of such meeting, made, 
 signed, verified and acknowledged by the president or a vice- 
 president and by the secretary or the treasurer of the corpo- 
 ration; but such an amendment cannot be made unless as so 
 amended the certificate of incorporation could lawfully have 
 been filed under the statute already mentioned, permitting a 
 business corporation upon its formation or reorganization to 
 provide for the issuance of non-par value stock; and there 
 must be filed with the certificate of amendment a certificate' 
 setting forth the whole amount of the ascertained debts and* 
 liabilities of the corporation, signed, verified and acknowl-' 
 edged by the president or a vice-president and by the secre- 
 tary or the treasurer of the corporation ; and such certificate 
 of amendment itself must have endorsed on it the approval of ' 
 the comptroller to the effect that as so stated the reduced 
 amount of capital is sufiicient for the proper purposes of the 
 corporation and is in excess of its ascertained debts and 
 liabilities.'* 
 
 However the capital stock is reduced, the amount of the 
 capital over and above the amount of the reduced capital must, 
 if the meeting or consent so determine or provide, be returned 
 to the stockholders pro rata, at such times and in such manner 
 as the directors determine/ 
 
 The reorganization of a corporation formed before passage 
 of the statute permitting non-par value stock so as to avail 
 itself of such statute may result in a change in its capital; 
 but this kind of reorganization and change of capital is later 
 considered/" 
 
 The provisions of the statute authorizing corporations to 
 diminish the amount of their capital stock " are all consistent 
 with the interpretation that the act had in view only the 
 
 ="St. Corp. L. § 22 (L. 1912, =» See § 507-a et seq., infra; St. 
 
 <-. 351). ■ Corp. L. § 24 et seq. (L. 1917, 
 
 ' St. Corp. L. § 64 (L. 1913, c. 484). 
 c. 305). 
 
§ 107 STOCK 113 
 
 diminution of the amount fixed as the amount of the capital 
 stock, and did not contemplate the distribution of any part 
 of the actual capital;" and, certainly, " the mere diminution, 
 by the proceedings authorized by the act . . . , of the 
 a,mount of the capital stock, does not authorize the distribu- 
 tion among the stockholders- of a sum equal to the difference 
 between the amount originally named as the capital, and the 
 reduced amount fixed by the vote of the stockholders, even if 
 it appears that the original amount was actually paid in."* 
 If the legislature does not provide that either the common or 
 preferred stock of corporations organized under laws enacted 
 by it may be separately reduced, but simply prescribes in gen- 
 eral terms for stock reduction to be so done as to preserve the 
 rights of stockholders, a domestic business corporation with 
 preferred and common stock, each having the same voting 
 power, cannot reduce one class against the will of the holder 
 of some of it, as to do this reduces his voting power.^ A 
 statute covering the whole subject of reduction of corporate 
 capital stock, not purporting to amend a former statute cover- 
 ing the reduction of the stock of corporations organized under 
 it, and plainly intended to furnish the only law on the subject, 
 will govern the reduction of the capital stock of a corporation 
 formed under the former statute.; and even though the later 
 statute by its terms is not to affect any law then existing 
 authorizing any corporation theretofore organized to reduce 
 its capital stock, if the corporation in question was not organ- 
 ized till after the new act became law." Under a special 
 statute chartering a particular corporation giving no power 
 to reduce its capital stock, an attempted reduction by vote of 
 stockholders and directors, followed by filing a certificate of 
 the directors' resolution and of full payment of the reduced 
 capital is ineffective.' 
 
 § 107. Id.: Change of Number of Shares of Capital Stock.— 
 The number of shares into which the capital s,tock of any stock 
 corporation is divided may be increased or reduced by a two- 
 thirds vote of all stock duly represented at a meeting held 
 and conducted in like manner and upon filing a like certificate 
 
 * Strong V. Brooklyn Cross-Town American Co. v. Carr, 36 Hun, 488 
 
 R. R. Co., 93 N. Y. 426 (1883); L. (1885); L. 1875, c. 611, § 15; L. 
 
 1878, c. 264. See now St. Corp. L. 1878, c. 264. 
 
 § 62 et seq. ' Sutherland v. Olcott, 95 N. Y. 
 
 ^ Page V. American & British 93 (1884) ; L. 1867, c. 401. 
 
 Manufacturing Co., 129 A. D. 346, As to validity of proceedings for 
 
 113 Supp. 734 (1908) ; St. Corp. L. reduction of capital stock, see note 
 
 § 44 (L. 1901, c. 354), now § 62. in 1 L.R.A.(N.S.) 571. 
 
 ° People ex rel. Eden Musee 
 B. C. N. Y.— 8 
 
114 BUSINESS CORPORATIONS IN NEW YORK §§ 108-110 
 
 as required for the increase or reduction of its capital stock ; 
 and if such increase or reduction of the number of shares be 
 so authorized, the corporation must 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 sur- 
 render and cancellation of such old stock,* The increase or 
 reduction of the number of shares of a corporation formed or 
 reorganized to permit issuance by it of stock without par 
 value has already been discussed.'* 
 
 § 108. Id.: Certificates of, Issue and Reissue, Governing 
 Statutes. — The stock of every corporation must be repre- 
 sented by certificates (1) prepared by the directors, (2) 
 signed by the president or vice-president and secretary or 
 treasurer, (3) sealed with the seal of the corporation, and (4) 
 transferable in the manner prescribed in the Stock Corpora- 
 tion Law and the by-laws.* 
 
 § 109. Id.: In General. — " ... if a corporation having 
 power to issue stock certificates does in fact issue such a cer- 
 tificate, in which it aflSrms that a designated person is entitled 
 to a certain number of shares of stock, it thereby holds out to 
 persons who may deal in good faith with the person named in 
 the certificate, that he is an owner and has capacity to transfer 
 the shares ;" and such a certificate must be regarded as a con- 
 tinuing affirmation of the ownership of the nominee and his 
 power over the stock until it is withdrawn in some manner 
 recognized by law." " To countersign an instrument [e. g., 
 a stock certificate] is to sign what has already been signed by 
 a superior, to authenticate by an additional signature, and 
 usually has reference to the signature of a subordinate in 
 addition to that of his superior by way of authentication of 
 the execution of the writing to which it is affixed, and it 
 denotes the complete execution of the paper. ' ' " 
 
 § 110. Id.: Corporation's Liability for, By Agent, Officer, 
 etc — " It is undoubtedly the general rule that a corporation 
 is responsible for the acts of its officers in issuing certificates 
 of stock, but the' responsibility only attaches when it has 
 power under its charter to issue certificates and the officers 
 
 = St. Corp. L. § 65 (L. 1909, i" Holbrook v. New Jersey Zinc 
 
 c. 61). "This section does not au- Co., 57 N. Y. 616 (1874). 
 
 thorize the increase or reduction of ^"^ Fifth Avenue Bank of N. Y. v. 
 
 the capital stock of such corpora- Forty-Second St. & Grand St. Ferry 
 
 tion." R. R. Co., 137 N. Y. 231, 19 L.R.A. 
 
 «»St. Corp. L. § 22 (L. 1912, 331, 33 N. E. 378 (1893). 
 c. 351). See § 106, supra. 
 
 »St. Corp. L. § 50 (L. 1909, 
 e. 61). 
 
§ 111 STOCK 115 
 
 are clothed with power, apparent or real, to perform the acts 
 complained of."" Information by a person in charge of a 
 corporation to brokers contemplating the receipt of a stock 
 certificate for the purpose of sale that the certificate is in a 
 condition for transfer is in substance an assurance that the 
 stock will be transferred in case the brokers took it, and if 
 they act on such assurance the corporation is estopped from 
 denying the liability to indemnify them if it subsequently 
 develops that the corporation's transfer agent fraudulently 
 had the certificate issued." One who has bought certificates 
 issued by the president of a corporation, upon the authority 
 of its executive committee given no power to issue stock, is 
 not entitled to have certificates of the company's stock issued 
 to him on surrender of such certificates, though they so state, 
 if the board of directors has neither authorized nor ratified 
 the issue of such certificates, and he is not a hona fide pur- 
 chaser thereof." If a corporate by-law, enacted pursuant to 
 charter authority, permit the issuance of certificates of its 
 stock signed by its president and treasurer and with the cor- 
 porate seal affixed, without any exception as to the form or 
 signers of certificates issued to its president or treasurer, 
 certificates so executed in the name or favor of the president 
 or treasurer himself are binding on the corporation.^^ A 
 by-law that surrendered certificates of corporate stock should 
 be canceled does not make the negligence of the corporation 
 in issuing new certificates without cancellation of the old 
 actionable if the old were seen put in the corporate safe by 
 the president who directed their cancellation by an employee 
 who instead negotiated them while also procuring the signa- 
 ture of new ones by the president."^ 
 
 § 111. Id.: Fraud and Forgery 'In. — An officer, agent or 
 other person in the service of a domestic, or foreign (state 
 or country) corporation who wilfully and knowingly with 
 intent to defraud sells, pledges, signs, executes or causes to be 
 sold, pledged, issued, signed or executed with intent to sell, 
 
 "Eeno Oil Co. v. Culver, 60 ^* Ryder v. Bushwick R. R. Co., 
 A. D. 129, 69 Supp. 969 (1901). A 134 N. Y. 83, 31 N. E. 251 (1892). 
 complaint by a stockholder of a ^' Titus v. President, Directors and 
 foreign corporation to enjoin the dis- First Company of the Great West- 
 position of stock issued illegally em Turnpike Road, 61 N. Y. 237 
 was held demurrable because it did (1874). 
 
 not allege the corporation had the "Knox v. Eden Musee Co., 148 
 
 right to issue the stock. N. Y. 441, 31 L.R.A. 779, 42 N. E. 
 
 "Jarvis v. Manhattan Beach Co., 988 (1896). 
 148 N. Y. 652, 31 L.R.A. 776, 43 
 N. E. 68 (1896). 
 
116 BUSINESS CORPORATIONS IN NEW YORK § HI 
 
 pledge or issue, any certificate or instrument purporting to be 
 a certificate or evidence of the ownership of any share or 
 shares of such corporation, without being first thereto duly 
 authorized by such corporation, or contrary to the charter or 
 laws under which such corporation exists, or in excess of the 
 power of such corporation or of the limit imposed by law or 
 otherwise upon its power to create or issue stock; or who 
 reissues, sells, pledges or disposes of, or causes to be reissued, 
 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 both." The acts of a corporate officer , 
 entrusted with the authority to make the final declaration as 
 to the validity of the shares of stock the corporation might 
 issue (e. g., its secretary, treasurer and transfer agent coun- 
 tersigning the stock certificates), done in the apparent exer- 
 cise of such authority, when accompanied with all the indicia 
 of genuineness, bind the corporation to all persons acting on 
 the faith thereof, whether the indicia are true or not." A 
 corporation is bound by a certificate of its stock issued by its 
 transfer agent, who forges the signatures of the president and 
 treasurer thereto.'" Certificates of corporate stock fraudu- 
 lently issued by the corporation's transfer agent after its 
 whole authorized stock had been issued give no right to a 
 holder in good faith deriving title thereto through the one to 
 whom they were originally issued by the agent, with knowl- 
 edge of the latter 's fraud.^° A corporation may in equity have 
 canceled certificates of its stock fraudulently issued by its 
 officer in excess of the authorized capital which are indistin- 
 guishable from its valid certificates.' " . . . in case the 
 officers of a corporation authorized to issue share certificates 
 fraudulently issue certificates for shares in excess of the num- 
 ber of shares the corporation is authorized to issue, the eor- 
 
 " Penal L. § 662 (L. 1909, c. 88). "Mutual Life Insurance Co. v. 
 
 ^* Fifth Avenue Bank of N. Y. v. Forty-second St. R. R. Co., 74 Hun, 
 
 Forty-second St. & Grand St. Ferry 505, 26 Supp. 545 (1893) ; Hellman 
 
 R. R. Co., 137 N. Y. 231, 19 L.R.A. v. Forty-second St. R. R. Co., 74 
 
 331, 33 N. E. 378 (1893). The Hun, 529, 26 Supp. 553; aff'd 148 
 
 transfer agent forged the president's N. Y. 727, 42 N. E. 723. 
 
 signature to a certificate taken from ^"Mechanics' Bank v. New York 
 
 the corporate stock book, put on the & New Haven R. R. Co., 13 N. Y. 
 
 corporate seal, countersigned it and 599 (1856). 
 
 issued it to a bona fide purchaser ^ New York & New Haven R. R. 
 
 for valuable consideration in the Co. v. Schuyler, 17 N. Y. 592 
 
 ordinary course of business. (1858). 
 
§§ 112, 113 STOCK 117 
 
 poration is liable in damages for. such overissue to an innocent 
 holder for value of the overissued shares. "\ A corporation 
 cannot be held liable for a forged certificate of its stock issued 
 by its president in the names of officers not in office when 
 issued but in office at the time he ante-dated the certificate.' 
 The officers of a corporation, authorized to issue certificates 
 to the stockholders as evidence of title to stock, are liable not 
 only* to the immediate purchaser of spurious stock falsely and 
 fraudulently certified by them, but also to any subsequent pur- 
 chaser buying upon the faith of the false certificate.* 
 
 § 112. Id.: Loss, Destruction or Theft of, Governing Stat- 
 utes. — The owner of (a) a lost or (b) destroyed certificate of 
 stock may apply to the supreme court at any special term held 
 either 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, but only, if the corporation refuses to issue a new 
 certificate of stock.^ Further provisions of the governing 
 statutes are found in the three immediately following sec- 
 tions of this book. 
 
 § 113. Id.: In General. — The statute giving one who has 
 lost his certificate of stock which the corporation is unwilling 
 to replace the right to have the supreme court on his applica- 
 tion order the issuance of a new certificate if the facts justify 
 this step does not restrain the jurisdiction of equity to award 
 specific relief in such a case but gives a cumulative, additional 
 and summary remedy of a purely equitable character to be 
 administered by an equity court.° "... no case . . . 
 denies to the owner of a stock certificate which has been los't 
 without his negligence, or stolen, the right to reclaim it from 
 the hands of any person in whose possession it subsequently 
 comes, although the holder may have taken it in good faith 
 and for value. ' ' ^ The title of one acquiring certificates of 
 
 ' Archer V. Dunham, 89 Hun, 387, 'St. Corp. L. § 67 (L. 1909, 
 
 35 Supp. 387 (1895).. c. 61). 
 
 ^Manhattan Life Insurance Co. v. ^Kinman v. Forty-second St., 
 
 Forty-second St. & Grand St. .Ferry M. & St. N. Ave. Ey. Co., 140 N. Y. 
 
 R. R. Co., 139 N. Y. 146, 34 N. E. 185, 35 N. E. 498 (1893) ; L. 1873, 
 
 776 (1893). c. 1151. See now St. Corp. L. § 67. 
 
 *Shotwell V. Mali, 38 Barb. 445 ''Knox v. Eden Musee Co., 148 
 
 (1862). N. Y. 441, 31 L.R.A. 779, 42 N. E. 
 
 On liability of corporations for 988 (1896). An employee of the 
 
 fraud or forgery of officers in issue •corporation trusted for years was, 
 
 of stock, see notes in 19 L.R.A. directed by its president to cancel 
 
 331; 41 L.R.A. (N.S.) 187. surrendered stock certificates which 
 
118 BUSINESS CORPORATIONS IN NEW YORK § 114 
 
 stock from another who stole, them is not good.' One buying 
 stock from a lad of sixteen for one-third its market value 
 through the conduit of a clerk may be held for its value by the 
 true owner from whom the lad stole it, even though the stock 
 certificate was endorsed in blank by the true owner." One 
 purchasing a voting trust certificate endorsed in blank by him 
 in whose name it stands who intrusts it to another to have it 
 transferred to the purchaser's name, is estopped from contest- 
 ing the title of a holder thereof for value who acquired the 
 certificate in due course from him to whom it was entrusted, 
 even though the last mentioned individual was guilty of lar- 
 ceny in appropriating the instrument to his own use ; because 
 a voting trust certificate possesses elements of negotiability 
 like a certificate of stock which are sufficient to protect the 
 holder for value who acquires it without notice of any infirm- 
 ity in the title of the holder." 
 
 § 114. Id.: Indemnity Bond. — The bond required by court 
 order of the petitioner seeking issue of a new certificate by 
 the corporation for his lost or destroyed stock must be in 
 such form and with such sureties as to the court appears 
 sufficient to indemnify any person other than the petitioner 
 who. thereafter is found to be the lawful owner of the certifi- 
 cate lost or destroyed." The penalty of the bond required on 
 an application for a new to supplant a lost certificate of corpo- 
 rate stock should be at least equal to its market value.^^ Those 
 entitled to ownership of a lost negotiable certificate of a cor- 
 poration entitling to an extra dividend may compel the corpo- 
 ration to pay them on giving it full indemnity, in analogy to 
 
 the president saw were put in the The voting trust certificate was an 
 safe. The president, signed new instrument certifying that the trans- 
 certificates not knowing whether the feree named therein would on a cer- 
 oid had been canceled or not and tain date be entitled to receive cer- 
 ignorant that the employee had ab- tificates for a stated number of 
 stracted them from the safe and shares of a corporation's stock, and 
 n^otiated them. The by-laws pro- in the meantime to receive certain 
 vided no new certificate should be dividends; and recited that it was 
 issued till the corresponding old had issued pursuant to a written agree- 
 been surrendered. The corporation ment between the stockholders and 
 was held blameless. the voting trustees, whose signa- 
 
 * Knox V. Eden M'usee American ture it bore. 
 Co.. 17 A. D. 365, 45 Supp. 255 "St. Corp. L. § 68 (L. 1909, 
 
 (1897). c. 61). 
 
 "Anderson v. Nicholas, 28 N. Y. "Matter of Speir, 69 A. D. 149, 
 
 600 (1864). 74 Supp. 555 (1902); St. Corp. L. 
 
 . ^0 Union Trust Co. v. Oliver, 214 §§ 50, 51 (L. 1892, c. 688). See 
 
 N. Y. 517, 108 N. E. 809 (1915). now §§ 67, 68. 
 
§ 115 ^ STOCK 119 
 
 the common practice in cases of lost commercial paper." Any 
 person claiming any rights under the certificates alleged to 
 have been lost or destroyed has recourse to such indemnity, 
 and the corporation issuing such certificate is discharged from 
 aU liability to such person upon compliance with such order ; 
 and obedience to the order may be enforced by attachment 
 against the officer or officers of the corporation on proof of 
 his or their refusal to comply with it." 
 
 § 115. Id.: Pleading, Practice, Evidence and Proof.— The 
 application must be by petition (1) duly verified by the owner, 
 (2) stating (a) the name of the corporation, if known, or 
 if it can be ascertained by the petitioner, the (b) number and 
 (c) date of the certificate, (d) the number of the shares named 
 therein, (e) to whom issued, (f) as particular a statement of 
 the circumstances attending the loss or destruction as the 
 petitioner can give, and (g) the refusal of the corporation to 
 issue a new certificate in place thereof, and (3) praying 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." Upon the presentation of the petition 
 the court must 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; and a copy of the petition 
 and such order must 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.^^ Upon (1) the return of the order with (2) 
 proof of due service thereof, the court must (a) in a sum- 
 mary manner, and (b) in such mode as it may deem 
 advisable, (c) inquire into the truth of the facts stated in 
 the petition, and (d) hear the proofs and allegations of the 
 parties in regard thereto, and (e) if satisfied that the 
 petitioner is the lawful owner of the number of shares, or any 
 part thereof, described in the petition and (f ) that the certifi- 
 cate therefor has been lost or destroyed, and (g) cannot after 
 due diligence be found, and (h) that no sufficient cause has 
 been shown why a new certificate should not be issued, it 
 must make an order." The order must (1) require the cor- 
 
 " Butler V. Glen Cove Starch Co., "St. Corp. L. § 67 (L. 1909, 
 
 18 Hun, 47 (1879). c. 61). 
 
 "St. Corp. L. § 68 (L. 1909, "St. Corp. L. § 68 (L. 1909, 
 
 e. 61). c. 61). 
 
 ^'St. Corp. L. § 67 (L. 1909, 
 c. 61). 
 
120 BUSINESS CORPORATIONS IN NEW YORK § 115 
 
 poration (a) within such time as is therein designated (b) to 
 issue and deliver to the petitioner a new certificate (c) for 
 the number of shares specified in the order, (d) upon deposit- 
 ing such security or filing a bond in such form and with such 
 sureties as to the court appears sufficient to indemnify any 
 person other than the petitioner who thereafter is found to be 
 the lawful owner of the certificate lost or destroyed ; and may 
 (2) direct the publication of such notice as it deems proper 
 either before or after making such order." In order to war- 
 rant the application to the court provided by statute to compel 
 a corporation to issue a new stock certificate in the stead of 
 one lost or destroyed there must be proven a distinct demand 
 of and refusal by the corporation to issue a new certificate in 
 lieu of particularized stock/' In order to obtain an order by 
 the court for the issue of new certificates of stock, under a 
 statute permitting such issue in place of certificates lost or 
 destroyed, * ' two facts must be maintained, that the petitioner 
 is the owner of the shares, and that such shares have been 
 lost or destroyed and cannot after due diligence be found;" 
 and these facts are not shown by proof that a receiver of an 
 association owning some of such certificates sold them to the 
 petitioner and that they were not in the receiver's possession^ 
 or that trustees for others of such certificates refused to 
 deliver them to the petitioner because their cestuis objected.^" 
 When, on an application for issue of a new stock certificate 
 for one lost the petition's allegations are denied by affidavit 
 of the corporation, the court should not grant the application 
 until proof has been made by witnesses subject to cross-exam- 
 ination by the corporation of the essential facts, and notice of 
 the application has been given by such publication as would 
 give an opportunity to anyone claiming an interest in the 
 stock to appear and be heard.^ On return of an order to show 
 cause why a new certificate should not be issued in lieu of a 
 lost or destroyed one proof of the facts stated in the petition 
 must be taken : the court cannot make an order on the papers 
 alone and without publication of any notice.^ Testimony by 
 
 "St. Corp. L. § 68 (L. 1909, ^Matter of Speir, 69 A. D. 149, 
 
 c. 61). 74 N. Y. Supp. 555 (1902); St 
 
 ^'Matter of Coats, 75 A. D. 469, Corp. L. §§ 50, 51 (L. 1892, c. 688). 
 
 78 Supp. 425 (1902) ; St. Corp. L. See now §§ 67, 68. 
 
 §§ 50, 51 (L. 1892, c. 688). See ^Matter of Coats, 75 A. D. 469, 
 
 now §§ 67, 68. 78 Supp. 425 (1902) ; St. Corp. L. 
 
 ^Matter of Big^lin v. Friendship ?§ 50, 51 (L. 1892, c. 688). See 
 
 Assn., 46 Hun, 223 (1887) ; L. 1872, now §§ 67, 68. 
 c. 151. See now St. Corp. L. § 67 
 et seq. 
 
§ 116 STOCK 121 
 
 witnesses that lost stock certificates were signed by the cor- 
 poration's officers is not essential to the issuance of new ones 
 if they are described by a competent witness as certificates of 
 the company.^ 
 
 § 116. Id.: As Evidence of Title.—" The capital stock of an 
 incorporated company is personal property; and it has not, 
 neither has the certificate or other evidence of title or owner- 
 ship, any of the qualities of commercial or negotiable paper. 
 As a rule, the purchaser or assignee of shares of the capital 
 stock in a corporation acquires no other or better title than 
 the seller or assignor has, and takes it subject to the legal and 
 equitable rights of third persons. . . . The property in 
 the capital stock of a corporation is not distinguishable from 
 other personal property ; and the owner cannot be divested of 
 his property except by his own voluntary act and consent, or 
 by some act which would be effectual to give title as against 
 him to other movable property and choses in action^' ' * " The 
 certificates are not the stock, but the evidence of its owner- 
 ship. "° " Certificates of stock are not securities for money 
 in any sense, much less are they negotiable securities. They 
 are simply the muniments and evidence of the holder's title 
 to a given share in the property and franchises of the corpo- 
 ration of which he is a member."* " Mere possession of a 
 non-negotiable instrument [a certificate of corporate stock], 
 does not carry a presumption of ownership in the possessor." ^ 
 While possession of an assigned stock certificate — though in 
 blank — justifies a presumption of ownership, yet it is open 
 to the corporation denying the possession to introduce evi- 
 dence that the certificate was not delivered or was not. 
 delivered with intent to pass title.' A certificate of stock 
 is evidence of the stock entitling the lawful holder to have 
 his stock entered of record in the" corporate books and to all 
 the privileges of the corporation, but it does not prevent, 
 a person in interest from showing that the holder of the cer- 
 tificate is not the owner of the stock." A stock certificate 
 
 ^Kinman v. Forty-second St.,- M. & New Haven R. R. Co., 13 N. Y. 
 
 & St. N. Ave. Ry. Co., l40 N. Y. 599 (1856). 
 
 183, 36 N. E. 498 (1893) ; L. 1873, ' Matter of Perry, 129 A. D. 587, 
 
 c. 151. See now St.. Corp. L. § 67 114 Supp. 246 (1908). 
 
 et seq. ' * Hannahs v. Hammond Type- 
 
 * Weaver v. Barden, 49 N. Y. 286 writer Co., 158 A. D. 620, 143 
 
 (1872). Supp. 939 (1913). 
 
 = Francis v. N. Y. & B'klyn El. » O'Dwyer v. Verdon, 115 A. D. 
 
 R. R. Co., 106 N. Y. 93, 15 N. E. 37, 100 Supp. 588 (1906); aff'd 190 
 
 192 (1888). N. Y. 505, 83 N. E. 1128. 
 
 ® Mechanics' Bank v. New York 
 
122 BUSINESS CORPORATIONS IN NEW YORK §§ 117, 113 
 
 of itself is merely evidence tending to show the ownership 
 of the shares and, although on its face in due form, may 
 be the subject of inquiry to ascertain whether it was fraudu- 
 lently issued; and the resolutions, book of minutes, annual 
 reports and other proceedings may be looked to for the pur- 
 pose of showing the real character of the transaction and as 
 part thereof." A certificate of corporate stock fifty years old 
 is not admissible in evidence without direct proof of its 
 execution as an ancient document to prove the title thereto of 
 its assignee if the corporation went out of existence ten 
 months after its date, and the sole evidence as to it is that it 
 was found among plaintiff's grandfather's papers on his 
 death nineteen years before the trial, and no proof is given 
 of any connection between its nominal holder and the deceased 
 grandparent as assignee thereof or of the custodian thereof." 
 A stock subscription paper is relevant and competent evidence 
 upon a question whether a person is a stockholder." Neither 
 the doctrine in equity of notice of lis pendens nor the law of 
 negotiable instruments applies to shares of corporate stock." 
 Pendency in another state of an action to determine the owner- 
 ship of stock cannot be regarded as constructive notice that 
 the ostensible absolute owner of stock holds it in trust," 
 
 § 117. Id.: Determination of Conflicting Claims To. — When 
 a corporation is confronted- by two adverse claims to a cer- 
 tificate of its stock it is entitled to interplead the claimants 
 and to restrain one of them from suing it for conversion of or 
 to establish his rights in the stock." One being on the facts 
 alleged by him entitled to possession of a certificate of stock 
 held by the corporation itself must sue at law for its recovery 
 and cannot sue in equity in the form of an interpleader, join- 
 ing another asserting a right to possession of the certificate 
 under its pledge to secure a loan to plaintiff's husband alleged 
 by the latter to have been paid." 
 
 § 118. Id.: Transfers of, Definitions, Distinctions and 
 Nature. — " The issuing of the original certificates is in no 
 
 ^'' Boardman v. Lake Shore & "Holbrook v. New Jersey Zinc 
 
 Michigan Southern Ry. Co., 84 Co., 57 N. Y. 616 (1874). 
 
 N. Y. 157 (1881). "American Press Assn. v. Brant- 
 
 " Longworth v. East River Na- ingham, 57 A. D. 399, 68 Supp. 285 
 
 tional Bank, 160 A. D. 737, 145 (1901). 
 
 Supp. 1051 (1914). "Brown v. Arbogast & Bastian 
 
 ^^ Partridge v. Badger, 25 Barb. Co., 162 A. D. 603, 147 Supp. 998 
 
 146 (1857). (1914). "The remedy by an action 
 
 ^^ American Press Assn. v. Brant- of interpleader is given only to the 
 
 ingham, 75 A. D. 435, 78 Supp. stakeholder . . ." C. C. P. 
 
 305 (1902). §§ 820, 820a. 
 
§ 119 STOCK 123 
 
 sense a transfer of stock. The interest of the parties to whom 
 they are issued is the same before as after such issue. The 
 certificate is simply a written acknowledgment by the com- 
 pany of the interest of the subscribers in its property and 
 franchises."" 
 
 § 119. Id.: Governing Statutes. — Every corporation as such 
 has power, though not specified in the law under which it is 
 incorporated, to make by-laws, not inconsistent with any exist- 
 ing law, for the transfer of its stock.^' Stock of a corporation 
 is transferable in the manner prescribed by the Stock Corpo- 
 ration Law and the corporation's by-laws.^^ No share of stock 
 is transferable until all previous calls thereon have been fully 
 paid in.^" No transfer of stock is valid as against the corpo- 
 ration, its stockholders and creditors for any purpose except 
 to render the transferee liable for the debts of the corporation 
 to the extent provided in the Stock Corporation Law until it 
 has been entered in the corporation's stock book, as required 
 by the statute, by an entry showing from and to whom trans- 
 ferred.^ If a stockholder is 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 the fifty-first 
 section of the Stock Corporation Law is written or printed 
 upon the certificate of stock.^ No stockholder can make any 
 transfer or assignment of his stock to any person in contem- 
 plation of his corporation's insolvency, and every such trans- 
 fer or assignment is void except in the hands of a purchaser 
 for a valuable. consideration without notice.^ Transfers in 
 contemplation of insolvency are discussed in their general 
 aspect hereinafter.* Every corporation (1) engaged in whole 
 or in part in the making or negotiating of sales, agreements 
 to sell, deliveries or transfers of shares or certificates of 
 stock, or (2) conducting or transacting a stock brokerage 
 business, and (3) every stock corporation which maintains a 
 
 "Burr V. Wilcox, 22 N. Y. 551 ^ St. Corp. L. § 51 (L. 1909, 
 
 (1860). Determining the liability c. 61). 
 
 of one as stockholder for corporate ^ St. Corp. L. § 66 (L. 1909, 
 
 debts up to the amount of his hold- c. 61) : " Every director or officer 
 
 ings, under Gen. Mfg. Act, L. 1848, of a corporation who shall, violate 
 
 c. 40, § 10. or be concerned in violating any 
 
 "Gren. Cdrp. L. § 11 (L. 1909, provisions of this section shall be 
 
 e. 28). personally liable to the creditors 
 
 '^"St. Corp. L. § 50 (L. 1909, and stockholders of the corporation 
 
 c. 61). of which he shall be director or an 
 
 ™ St. Corp. L. § 50 (L. 1909, officer to the full extent of any loss 
 
 c. 61). they may respectively sustain by 
 
 "^St. Corp. L. § 32 (L. 1916, such violation." 
 
 c. 127). *See § 402 et seq., infra. 
 
124 BUSINESS CORPORATIONS IN NEW YORK § 120 
 
 principal office or place of business within New York State 
 or keeps or causes to be kept within New York State a place 
 for the sale, transfer or delivery of its stock, must file in the 
 office of the comptroller a certificate stating (a) its said prin- 
 cipal office or place of business. and (b) when and (c) where 
 incorporated; and such certificate must be (d) executed and 
 (e) duly acknowledged by. the president or secretary of the 
 corporation; and in the event of a change in the address of 
 any such corporation,, a like certificate setting forth the facts 
 with respect to such change must within ten days thereafter 
 be filed in the office of the comptroller ; and any such corpora- 
 tion failing to comply with the statute is guilty of a misde- 
 meanor and "upon conviction thereof must pay a fine of not 
 less than one hundred nor more than five hundred dollars (or 
 imprisonment for not more than six months, or both such 
 fine and imprisonment, in the discretion of the court).*' Taxes 
 imposed by law on transfers of corporate stock are herein' 
 after discussed.*'' 
 
 § 120. Id.: In General. — The presumption is that stock is 
 transferred in the course of business, unless there is some evi- 
 dence to the contrary.^ " Stock received and transferred on 
 the same day should, in equity, be considered as received 
 before it was transferred, although the numbers of the trans- 
 fer may be such as to make the transfer by the transferrer 
 appear earlier than the transfer to him ; unless it was proven 
 that such transfer was made prior to the one by which the 
 stock was consigned to the transferrer." ° A transfer of cor- 
 porate stock by one who at the time held no shares on the 
 company's books passes no title — not even to stock later 
 acquired; and cannot be made good by a transfer of such sub- 
 sequently acquired stock to the person making the transfer.' 
 Transfer of stock may be proven by means of an acknowledg- 
 ment made by the subscribing witness before a notary long 
 after the power of attorney to transfer was executed and 
 shortly before it is offered in evidence.' Cancellation of a 
 " revenue stamp on a power of attorney on a stock certificate 
 leads to the presumption that the power itself was executed 
 
 ^''Tax L. § 275-a (L. 1914, c. 206). 'New York & New Haven R. R. 
 
 *'' See § 678 et seq., infra. Co. v. Schuyler, 38 Barb. 534 
 
 ^Holbrook v. -New Jersey Zinc (1860); aff'd 34 N. Y. 30. 
 
 Co., 57 N. Y. 616 (1874). » Holbrook v. New Jersey Zinc 
 
 « New York & New Haven R. R. Co., 57 N. Y. 616 (1874) ; L. 1833, 
 
 Co. V. Schuyler, 38 Barb. 534 c. 271, § 9. 
 (1860) ; aff'd 34 N. Y. 30. 
 
§ 121 STOCK 125 
 
 as of the date of such cancellation.' Delivery of a certificate 
 of stock is to be presumed from the fact that it, with the 
 proper endorsement, is in the possession of the holder." A 
 corporation cannot have an injunction against persons hold- 
 ing its certificates of stock which shall prevent them from 
 disposing thereof or prosecuting any action against the corpo- 
 ration for its refusal to transfer them upon its books as an 
 incident to a suit by it to determine what rights those persons 
 have to such certificates, if the fault in issuing the certificates 
 is the corporation's." One to whom stock of a corporation 
 has been assigned by others under agreement by him not to 
 sell it and to give them three-fourths of the profits will be 
 enjoined, together with another to whom he has transferred 
 it without consideration, from making any transfer thereof 
 pending an action against him for an accounting." No pre- 
 sumption arises that a person is still stockholder of a corpo- 
 ration because he once had been, he has transferred his stock 
 and he alleges that such transfer was obtained without con- 
 sideration or by false representations." Stock of a company 
 may lawfully be surrendered or transferred to it under a 
 resolution of its directors privileging its debtor stockholders 
 on stock notes to pay their indebtedness in its capital stock at 
 a specified rate." 
 
 § 121 Id.: Consideration of and for. — The mere existence 
 of a precedent debt is not a sufficient consideration to support 
 a transfer of stock by the debtor to the creditor as against one 
 who has furnished the consideration for the stock originally, 
 though it has been transferred into such debtor's name 
 instead of his ; and he may follow the stock into the hands of 
 such creditor.^^ The transfer of corporate stock is sufficient 
 consideration for a cheque." A transferee without considera- 
 tion of corporate stock from the wife of one in whose name it 
 stood always on the corporate books, who in turn had received 
 the unrecorded transfer thereof from her husband without 
 consideration, cannot set aside a trust agreement, made by 
 
 ^Holbrook v. New Jersey Zinc 248, 25 Supp. 890 (1893); aff'd 147 
 
 Co., 57 N. Y. 616 (1874). N. Y. 713, 42 N. E. 726. 
 
 ^^ Holbrook v. New Jersey Zinc ^* City Bank of Columbus v. 
 
 Co., 57 N. Y. 616 (1874). Bruce & Fox, 17 N. Y. 507 (1858). 
 
 "BuTifalo Grape Sugar Co. v. Al- "Weaver v.' Barden, 49 N. Y. 
 
 berger, 22 Hun, 349 (1880). 286 (1872). 
 
 ^^ "Weston V. Goldstein, 26 Misc. ^*Avon Springs Sanitarium Co. 
 
 171, 56 Supp. 755 (1899) ; aff'd 39 v. Kellogg, 125 A. D. 51, 109 Supp. 
 
 A. D. 661, 57 Supp. 311; C. C. P. 153 (1908); aff'd .194 N. Y. 567, 88 
 
 § 604, subd. 1. N. E. 1132. 
 
 ^^ Thompson v. Stanley, 73 Hun, 
 
126 BUSINESS CORPORATIONS IN NEW YORK § 122 
 
 all stockholders of record and interested in the corporate 
 property before he became such transferee, intended to reha- 
 bilitate the hopelessly insolvent and involved corporation, if 
 this transferrer (the wife of the stockholder of record) held 
 the stock for three years, while all the negotiations for 
 rehabilitation were going on, and did nothing." 
 
 § 122. Id.: By Power of Attorney. — " We know how, as a 
 usual thing a transfer of stock is made. . . . An assign- 
 ment of the. stock in writing, is made by the former owner of 
 it, with a power of attorney to transfer it on the books of the 
 corporation. Books of transfer are kept for that purpose, and 
 on the production of these papers, the nominated attorney 
 makes the formal transfer, the old certificate is cancelled, and 
 a new certificate is issued to the new owner. " ^' "A blank 
 transfer of a certificate of stock with an irrevocable power of 
 attorney to transfer signed by the person who appears by 
 the certificate to be the owner, confers upon the holder of the 
 certificate apparent title to the stock and the bona fide trans- 
 feree of such stock from the holder can hold the stock against 
 the real owner, who is estopped from asserting his title (cita- 
 tions). The reason for this well-settled rule is that where 
 one has conferred upon another apparent ownership, it is 
 contrary to justice and good conscience to permit him to assert 
 his real title against an innocent purchaser from one clothed 
 by him with all the indicia of ownership and power of disposi- 
 tion. Another reason for the rule is that such a case calls 
 for the application of the legal maxim that, where one of two 
 innocent parties must sustain a loss from the fraud of a 
 third, such loss shall fall upon the one, if either, whose act 
 has enabled such fraud to be committed."" " Certificates 
 of stock in business corporations, . . . are not negotiable 
 in form, they represent no debt and are not securities for 
 money. But the courts . . . have given to them some of 
 the elements of negotiability. The owner of shares may 
 transfer his title by delivery of the certificate with a blank 
 power of attorney indorsed thereon signed by the owner of 
 the shares named in the certificate. Such a delivery transfers 
 the legal title to the shares as between the parties to the trans- 
 fer, and not a mere equitable right (citation). The transferee 
 
 • 
 
 "Marbury v. Stone, 17 A. D. 352 786 (1915). The exception to the 
 
 (1897). rule when the instrument claimed to 
 
 ^^Burrall v. B'ushwick R. R. Co., create the estoppel is obtained by 
 
 75 N. Y. 211 (1878). common-law larceny does not hold 
 
 ^® Fisher v. Mechanics & Metals when the larceny is by false pre- 
 
 Nat. Bank, 89 Misc. 587, 153 Supp. tences. 
 
§ 122 STOCK 127 
 
 in good faith -and for value, holds his title free from latent 
 equities between prior parties in the line of transmission. ' ' ^° 
 The rule is well settled that one who takes a certificate with 
 the usual power of attorney as between him and the trans- 
 ferrer takes the whole title, both legal and equitable, and it 
 makes no difference that the blanks are not filled up."^ "It 
 was only necessary to a valid transfer [of corporate stock] 
 as between the parties, that the assignment and power should 
 be in writing. The common practice of passing the title of 
 stock by delivery of the certificate with blank assignment and 
 power has been repeatedly shown and sanctioned in cases 
 which have come before our courts. " ^ A power of attorney 
 on a stock certificate is not incomplete because there are 
 blanks for the number of shares and for the name of the 
 attorney, as any holder may fill up the blanks and constitute 
 himself the attorney.' ". . . a blank transfer of a cer- 
 tificate of stock with an irrevocable power of attorney to 
 transfer, signed by the person who appears by the certificate 
 to be the owner, confers upon the holder of the certificate 
 apparent title to the stock and . . . the bona fide pur- 
 chaser of such stock from such holder can hold the stock 
 against the real owner who is estopped from asserting his 
 title," in the absence of fraud, crime or exceeded authority 
 of an agent, even though the transfer and power of attorney 
 are not endorsed on the back of the certificate but are in a 
 separate paper; so that one putting it in the power of an 
 agent to sell stock in this way cannot complain if the brokers 
 making the sale pay the agent the proceeds or credit them to 
 his account.* One loaning money on the security of a certifi- 
 cate of stock in the name of one not the borrower with a cus- 
 tomary blank on the back for assignment and power of attor- 
 ney not in any way filled in but with a separate slip pinned 
 thereto in the same form, signed by the one in whose name 
 the certificate is made out and with the signature guaranteed 
 and received in the ordinary course of business, but without 
 the name of the stock thereon, is entitled to use such slip as 
 a valid transfer and power.^ " Where stock is transferred 
 under a power of attorney attached to a certificate, which 
 
 '° Knox V. Eden Miisee Co., 148 " Holbrook v. New Jersey Zinc 
 
 N. Y. 441, 31 L.R.A. 779, 42 N. E. Co., 57 N„ Y. 616 (1874). 
 
 988 (1896). * Mitchell V. Beyer, 160 A. D. 565, 
 
 ^Cutting V. Damerel, 88 N. Y. 145 Supp. 715 (1914). 
 
 410 (1882) 'Talcott v. Standard Oil Co., 149 
 
 2 McNeil V. The Tenth Nat. B'k, A. D. 694, 134 Supp. 617 (1912). 
 46 N. Y. 325 (1871). The pledgee 
 of stock certificates in blank pledged 
 it. 
 
128 BUSINESS CORPORATIONS IN NEW YORK § 123 
 
 power also contained an assignment of the shares, and author- 
 ity to transfer the said shares, the power did not authorize 
 the transfer of any shares acquired after the date of the 
 power."® One accepting a certificate of stock in the name of 
 another in trust, and endorsed in the same way as security 
 for a loan to such other, without any investigation save the 
 assurance of such other that he owned the stock or had control 
 over it and could transfer it if necessary, can not enforce any 
 claim to it as against its true owner.' ". . . an agent to 
 whom the owner has delivered a certificate of stock duly 
 indorsed for transfer, with a limited power of disposition 
 for a special purpose, may bind the title thereto as against 
 the true owner by transferring it to a bona fide transferee 
 who has no notice of the limitations of the agent's authority, 
 although the transfer was made for an unauthorized purpose 
 and with the intention. on the part of the agent to commit a 
 fraud upon his principal. ' ' ^ 
 
 § 123. Id. : Of Stock of Decedent. — A writing by a decedent 
 to another in whose possession it is found at the former's 
 death, annexed to certain stock certificates and reciting that 
 the decedent holds such stock in trust for his daughter to be 
 delivered to her at his death, he however retaining the divi- 
 dends during life, but directing such other to hand such cer- 
 tificates to his daughter at his death, transfers irrevocally the 
 stock to the daughter on the decedent's death." Possession of 
 a certificate of stock in the name of a decedent endorsed by 
 him in blank gives room to a presumption of ownership, which 
 may, however, be crowded out and rebutted by the stronger 
 presumption of continued ownership in the one to whom the 
 certificate was made out." A corporation which has, after a 
 person's death, issued certificates of its stock to an individual, 
 " attorney for " the deceased, properly refuses, on the 
 latter 's subsequent request, to transfer the certificates form- 
 ally on its books to the same individual ' ' as attorney of ' ' the 
 decedent, solely upon transfers signed by him with his name 
 " as attorney of " the dead person and a paper purporting 
 to be executed by one as executor of the decedent's will and 
 
 «New York & New Haven R. R. 'Matter of King, 115 A. D. 751, 
 
 Co. V. Schuyler, 38 Barb. 534 100 Supp. 1089 (1906); aflf'd 188 
 
 (1860); aff'd 34 N. Y. 30. N. Y. 626, 81 N. E. 1167. 
 
 'Budd V. Munroe, 18 Hun, 316 "Richards v. Wells-Fargo Ex- 
 
 (1879). press Co., 156 A. D. 268, 141 Supp. 
 
 « McNeil V. Tenth National Bank, 306 (1913) ; aff'd 216 N. Y. 645, 
 
 46 N. Y. 325, as interpreted in 110 N. E. 1048. 
 Knox V. Eden Musee Co., 148 N. Y. 
 441, 31 L.R.A. 779, 42 N. E. 988 
 (1896). 
 
§ 124 STOCK 129 
 
 the decedent's daughter requesting and authorizing the trans- 
 fer." One having possession of a certificate of stock signed 
 by the executors of the deceased owner thereof has the right 
 to have the transfer entered on the corporation's books in 
 spite of the facts that the executor's are foreign and have not 
 taken out letters testamentary in this state, and that the 
 charter of the corporation provides that every transfer shall 
 be signed by the shareholder, his attorney or legal repre- 
 sentatives/^ A corporation is not protected from liability for 
 a transfer made by it of shares of stock standing on its books 
 in the name of its deceased stockholder to his personal repre- 
 sentative without presentation of a certificate' therefor in the 
 name of the decedent, as such certificate is transferable only 
 on production of the original.^^ An executor of a deceased 
 owner of stock in a corporation by transfer thereof by instru- 
 ment under seal not evidenced by any certificate may in his 
 individual name transfer such stock by assignment so as to 
 give good title to the transferee." One taking an assignment 
 of a certificate of stock from an executor in payment of the 
 latter 's personal debt acquires no rights over the prior title 
 or equities of other persons." The identity of the name of a 
 decedent with that in which corporate stock has stood for 
 many years unclaimed is not of itself sufficient to establish the 
 right of his estate thereto."- 
 
 § 124. Id.: Necessity and Effect of Corporation's Recogni- 
 tion of; — The question of the liability of a corporation for a 
 wrongful or delayed transfer on its books of corporate stock 
 is hereinafter considered ; " as well as charter or by-law 
 
 " Spellissy v. Cook & Bernheimer ^® Moss v. Manhattan Co., 48 
 
 Co., 58 A. D. 283, 68 Supp. 995 A. D. 561, 62 Supp. 936 (1900). 
 
 (1901). The presentation of those No proof was given that he ever 
 
 papers gave the corporation notice dealt or had connections with the 
 
 that the plaintiff individually was corporation or the person who trans- 
 
 not the absolute owner of the stock, ferred the stock to his name. The 
 
 and " there was no proof that the certificate was not produced or proof 
 
 person signing that consent was the given that he ever possessed it. He 
 
 executor of" the decedent. lived in the city of the corporation 
 
 ^^ Middlebrook v. Merchants' 25 years after the transfer, but never 
 
 Bank, 42 N. Y. (3 Keyes) 135 claimed a dividend,' though divi- 
 
 (1866). dends were always declared and ad- 
 
 ^' Brisbane v. Delaware, Lacka- vertised. He never spoke of his 
 
 wanna & Western R. R. Co., 94 stock; died destitute, leaving a large 
 
 N. Y. 204 (1883). family which made no claim for 40 
 
 "Mahaney v. Walsh, 16 A. D. years. Advertisement was made by 
 
 601, 44 Supp. 969 (1897). the bank for unclaimed dividends. 
 
 ^= White V. Price, 39 Hun, 394 " See § 129, infra. 
 (1886); afl'd 108 N. Y. 661; 15 
 N. E. 427. 
 
 B. C. N. Y.— 9 
 
130 BUSINESS CORPORATIONS IN NEW YORK § 124 
 
 limitations on such transfer.^' " In this state it is well-settled 
 that the delivery of the certificate with a power of attorney to 
 transfer, passes the entire title, legal and equitable, in the 
 shares as between the parties, and that the provisions . . . 
 [of statute, charter and by-laws that stock shall be transferred 
 only on the corporate books and by certificates signed in cer- 
 tain ways] are for the protection of the corporation, in secur- 
 ing its interests in its relations and dealings with stockholders 
 . . . It has never been held that a corporation can avail 
 itself of its own negligence as a basis of a cause of action 
 against a stockholder, nor that it is not competent to waive a 
 performance of its own rules, nor that it may not be estopped 
 by its own acts and official declarations, the same as natural 
 persons. If it did not provide a transfer book or did not 
 transfer the stock according to the prescribed forms, the fault 
 was its own. ... It could waive the observance of any 
 other rules which it had adopted. ' ' " When stock standing in 
 one person's name on a corporation's books had been sold and 
 assigned validly in writing, with the certificates, upon pres- 
 entation of such certificates and assignment by the transferee 
 to -the corporation with a demand for transfer on its books, 
 and a refusal so to do, and a return of the certificates and 
 assignment, the transferee is vested with the entire legal and 
 equitable title, and the corporation is as bound to recognize 
 the transferee 's title as if it had made the transfer, as ' ' the 
 requirement of a registry, existing only for its own protection 
 and convenience, must be deemed waived and non-essential 
 when it wrongfully refuses to obey its own rule."^° Recog- 
 nition by a corporation of a transfer of its stock ensues from 
 payment by it of dividends thereon, and crediting them on its 
 books to the transferee, though no change in the name of the 
 holder be made in its stock book.^ " The delivery of the cer- 
 tificate, as between the owner and assignee, Avith the assign- 
 ment and power indorsed, passes the entire legal and equitable 
 title in the stock, subject only to such liens or claims as the 
 corporation may have upon it (citations). Any act suffered 
 by the corporation that invested a third, party with the owner- 
 ship of the shares, without due production and surrender of 
 the certificate, rendered it liable to the owner ; and it was its 
 duty to resist any transfer on the books without such produc- 
 tion and surrender. ' ' ^ 
 
 '*See § 128, infra. ^Cutting v. Daiiierel, 88 N. Y. 
 
 '^sham V. Buckingham, 49 N. Y. 410 (1882). 
 
 216 (1872). ^Cushman v. Thayer Mfg. Jew- 
 
 ^ Robinson v. National Bank of elry Co., 76 N. Y. 365 (1879). 
 Berne, 95 N. Y. 637 (1884). 
 
§§ 125, 126 STOCK 131 
 
 § 125. Id.: On Corporation's Books, Governing Statutes. — 
 No transfer of stock is 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 in the Stock Corporation Law until it has 
 been entered in the corporation's stock book, as required by 
 the statute, by an entry showing from and to whom trans- 
 ferred.' Other statutes governing the transfer of stock have 
 been heretofore noted.* The statute making invalid any 
 transfer of stock for any purpose except to render the trans- 
 feree liable for the company's debts, unless made on its books, 
 was enacted " to guard against secret and unavowed sales 
 and assignments ... by holding the vendor still liable 
 until the transfer of his stock was avowed and made known in 
 the mode prescribed, and to hold the vendee also liable as the 
 real owner;" and the law will imply an obligation from the 
 transferee to the transferrer that the burdens and liabilities 
 consequent on holding stock will be assumed by the former, 
 and will make good the latter 's claim for such liabilities." 
 A statutory provision that corporate stock shall be transfer- 
 able as provided by by-law, which stipulated that such trans- 
 fer should only be on the transfer book on surrender of the 
 certificate, ' ' has reference solely to the transfer of stock from 
 on6 stockholder to another, and not at all to the original issue 
 of the certificates of stock by the company to its subscribers." * 
 
 § 126. Id.: Who May Compel, and How.—" When no dis- 
 cretionary power is reserved to that effect there is not, nor 
 should there be any .rule of law which will enable a corpora- 
 tion or company whose stock is on sale in the open market to 
 so discriminate between bona fide purchasers who invest 
 money in it for their own benefit, as to deny to some of them 
 the right to make their title effectual for recognition by the 
 company in the manner provided by it for that purpose. The 
 perfection in such case of the transfer is one of apparent right 
 incident to the purchase, and which the holder who thus 
 acquires the stock in the market is permitted to assume will be 
 effectuated."^ "... where a certificate of stock shows 
 
 ^ St. Corp. L. §• 32 (L. 1916, of one as stockholder for corporate 
 
 e. 127). debts to an amount equal to his 
 
 *See § 119, supra. holdings, under Gen. Mfg. Act, L. 
 
 '^Johnson v. Underhill, 52 N. Y. 1848, c. 40, § 10. See now Gen. 
 
 203 (1873) ; Gen. Mfg. Act, L. 1848, Corp. L. § 11. 
 
 c. 40, 8 25. See now St. Corp. L. ''Riee v. Rockefeller, 134 N. Y. 
 
 § 32. 174, 17 L.R.A. 237, 31 N. E. 907 
 
 «Burr V. Wilcox, 22 N. Y. 551 (1892). 
 (1860). Determining the liability 
 
132 BUSINESS CORPORATIONS IN NEW YORK § 126 
 
 apparently all the essentials of genuineness, a bona fide holder 
 thereof is entitled to recognition as a stockholder if a new cer- 
 tificate can be legally issued to him, or to indemnity if this can- 
 not he done." ' One holding a certificate for a certain number 
 of shares of stock in his name, or in the name of another with 
 a power of attorney from the latter directing the transfer by 
 the corporation of such shares to such one, is entitled to have 
 the corporation issue new certificates therefor in his name, 
 split up as he likes, and the fact that the president of the cor- 
 poration is claimed to own the latter kind of stock by assign- 
 ment from the record owner does not justify the corporation 
 in refusing to issue the. new certificates." One owning half the 
 capital stock of a corporation may sue in equity the corpora- 
 tion to have a certificate issued to him to complete his holdings 
 if, after surrender of his one certificate for all his shares in 
 order that smaller certificates might be issued instead, the cor- 
 porate officers refuse to give him certificates representing his 
 full holdings; and he may have a temporary injunction to 
 restrain the transfer of those shares pending settlement of 
 the corporation's claim that he surrendered so much of the 
 stock as is refused him for the benefit of the corporation." 
 " When a corporation refuses to transfer stock, the person 
 entitled to demand such a transfer has a cause of action 
 against the corporation;" and not against the officer indi- 
 vidually who refuses to make the transfer.^^ "... an 
 equitable action will lie to compel a transfer of stock by a cor- 
 poration to the owner of the same;" because mandamus will 
 not lie and an action for damages does not give adequate 
 relief." " ... mandamus will not lie to compel a cor- 
 poration to transfer stock on its books . . . [the] remedy 
 is by action. . . . If a corporation refuses to transfer, 
 it is but the denial to the holder of an individual right 
 and no one is affected but himself. The remedy by man- 
 damus ... is a writ issuing in behalf of the People 
 . . . "" Persons who are both the legal and equitable 
 owners of stock are entitled to have entered on the books of 
 
 * Jarvis v. Manhattan Beach Co., ^^ Cooley v. Curran, 54 Misc. 221, 
 
 75 Hun, 100, 26 Supp. 1061 (1894) ; 104 Supp. 424.(1907). 
 
 aff'd 148 N. Y. 652, 31 L.R.A. 776, " Cushman v. Thayer Mfg. Jew- 
 
 43 N. E. 68. elry Co., 76 N. Y. 356 (1879). 
 
 ' Powers V. Universal Film Mfg. ^' People ex rel. Rottenberg v. 
 
 Co., 162 A. D. 806, 148 Supp. 114 Utah Gold & Copper Mines Co., 135 
 
 (1914). A. D. 418, 119 Supp. 852 (1909). 
 
 ^° Bedford v. American Aluminum 
 Co., 51 A. D. 537, 64 Supp. 856 
 (1900). 
 
§§ 127, 128 STOCK 133 
 
 the corporation the transfer by which they became such and 
 to have new ■ certificates made oiiit to them; and they may 
 in one action compel this and enjoin an issue of stock which 
 will materially depreciate the value of their holdings." 
 Upon the refusal of two surviving out of three directors of 
 a corporation to meet and elect a secretary and treasurer 
 vice the deceased director who was such so that a trans- 
 ferof stock may be lawfully made upon the corporate books, 
 action may properly be brought to require the corpora- 
 tion to transfer the stock and to compel such two directors 
 as individual defendants to take such action as is necessary to 
 bring about the election of the officer needed to sign the new 
 certificate.^' To constitute a cause of action for the issue and 
 delivery by a corporation of a share of its stock there must be 
 shown that the complainant is the owner of the certificate 
 thereof and of the right which it evidences ; and that the cor- 
 poration has unjustly refused to take from him a surrender 
 of the paper and issue to him a new certificate;^* 
 
 § 127. Id. : Who May Question. — Any stockholder may raise 
 the point that a transfer of stock is the result of an illegal 
 transaction connected with an effort to control a corporate 
 election." 
 
 § 128. Id. : Limitations by Charter, By-Laws or Regulations. 
 — The necessity and effect of a corporation's recognition of a 
 transfer of its stock have been heretofore discussed ; ^* and 
 the effect of such a transfer is later considered." Every cor- 
 poration as such has power, though not specified in the law 
 under which it is incorporated, to make by-laws, not incon- 
 sistent with any existing law, for the transfer of its stock.^" 
 Stock of a corporation is transferable in the manner pre- 
 scribed by the Stock Corporation Law and the corporation's 
 
 ^* Ernst V. Elmira Municipal Im- compel transfer, see note in 5 L.R.A. 
 
 provement Co,, 24 Misc. 583, 54 (N.S.) 85. 
 Supp. 116 (1898). ■ "Matter of Glen Salt Co., 17 
 
 1= Orvis V. Lorraine Co., — Misc. A. D. 234, 45 Supp. 568 (1897) ; 
 
 — (1918) ; N. Y. L. J. Mch. 9, aff'd 153 N. Y. 688, 48 N. E. 1104. 
 
 p. 1843. On right of corporation to refuse 
 
 ^'Burrall v. Bushwick R. R. Co., to transfer stock on its books be- 
 
 75 N. Y. 211 (1878). cause of objections , of former 
 
 On right to the aid of equity to holder, see note in 27 L.R.A.(N.S.) 
 
 compel a corporation to transfer on 200. 
 
 its books stock acquired in aid of a " See § 124, supra. 
 
 conspiracy, see note in 24 L.R.A. "See §§ 130-1, infra. 
 
 (N.S.) 108. '"Gen. Corp. L. § 11 (L. 1909, 
 
 On the question of removal for e. 28). 
 separable controversy of action to 
 
134 BUSINESS CORPORATIONS IN NEW YORK § 129 
 
 • 
 
 by-laws/ No share of stock is transferable until all previous 
 calls thereon have been paid.^ If a stockholder is indebted to 
 the corporation the directors may refuse to consent to a trans- 
 fer of his stock until such indebtedness is paid, provided a 
 copy of the fifty-first section of the Stock Corporation Law is 
 written or printed upon the certificate of stock.^ No by-law, 
 but only a certificate of incorporation, can limit the right of 
 a stockholder to transfer his stock (on its books if desired), 
 or to vote such stock.* It is questionable if a corporate by-law 
 is valid which prohibits a holder of an original issue of stock 
 from transferring it till he has given written notice to the 
 secretary, the latter has given written notice to the board and 
 the holders of other original issue of stock and these persons 
 have bid therefor, if they wish/ " The by-laws of the com- 
 pany, requiring a surrender of the certificate before making a 
 transfer, are not binding on third persons lo as to affect their 
 rights, or deprive them of their property. " ° "... as 
 between the parties, the delivery of the [stock] certificate, 
 with assignment and power indorsed, passes the entire title, 
 legal and equitable, in the shares, notwithstanding that, by the 
 terms of the charter or by-laws of the corporation, the stock is 
 declared to be transferable only on its books; . . . such 
 provisions are intended solely for the protection of the cor- 
 poration, and can be waived or asserted at its pleasure, and 
 . . . no effect is given to them except for the protection of 
 the corporation ; . . . they do not incapacitate the share- 
 holder from parting with his interest, and . . . his assign- 
 ment, not on the books, passes the ^entire legal title to the 
 stock, subject only to such liens or claims as the corporation 
 may have upon it, and excepting the right of voting at elec- 
 tions, etc. " ' " The managing agents of a corporation may 
 prescribe reasonable rules and formalities, regulating the 
 transfer of shares; but they could have no discretionary 
 power to refuse to register a proposed transfer." * 
 
 § 129. Id.: Corporation's Liability for Wrongful or Delayed. 
 — The necessity and effect of a corporation's recognition of a 
 
 ^St. Corp. L. § 50 (L. 1909, «New York & New Haven R. R. 
 
 e. 61). Co. V. Schuyler, 38 Barb. 534 
 
 = St. Corp. L. § 50 (L. 1909, (1860) ; afPd 34 N. Y. 30. 
 
 c. 61). 'McNeil v. The Tenth Nat. B'k, 
 
 = St. Corp. L. § 51 (L. 1909, 46 N. Y. 325 (1871). The pledgee 
 
 c. 61). of stock, certificates in blank pledged 
 
 * Kinnan v. Sullivan County Club, it. 
 
 26 A. D. 213, 50 Supp. 95 (1898). ^ Simpson v. Jersey City Improve- 
 
 * Matter of David Jones Co., 67 ment Co., 165 N. Y. 193, 55 L.R.A 
 Hun, 360, 22 Supp. 318 (1893). 796, 58 N. E. 896 (1900). 
 
S i-di) STOCK 135 
 
 transfer of its stock have been heretofore discussed ; ' and the 
 effect of such a transfer is later considered." "... per- 
 sons holding certificates of stock, valid when they were issued, 
 accompanied by an assignment and power, on which they have 
 advanced money, may recover damages against the company 
 when such certificates have been rendered of no value by the 
 allowance of transfers on the books of the company, without 
 requiring the surrender of the certificates."" Persons who 
 have received transfers of spurious stock by the acts of a cor- 
 poration's transfer agent, or certificates of spurious stock 
 from him, without knowledge or ground of suspicion of fraud 
 or irregularity, and have advanced money thereon, or who 
 have been misled by the acts or negligence of its officers, and 
 have advanced money in consequence thereof, are entitled to 
 recover damages against the company in a proper action.^" 
 One receiving stock of a foreign corporation only after a 
 delay because of the refusal of the corporation's transfer 
 agent in this state to transfer the stock for some time cannot 
 hold the transf<^r agent for the difference between the market 
 value of the stock when transfer was refused and when 
 received and sold, as the transfer agent was the agent of the 
 foreign corporation and not of the complaining stockholder." 
 Holders of corporate stock transferred by the corporation on 
 receipt and cancellation of the original certificates under a 
 forged power of attorney may compel the corporation to issue 
 new certificates and account for the dividends, or to pay them 
 the value of the shares if it has no stock it can issue to them." 
 A corporation which has permitted a stockholder to sell stock 
 covered by certificates when there was stock standing to his 
 credit sufficient to cover such certificates is bound to make 
 good such certificates to the extent of any shares owned by 
 the company, within its capital stock.^° 
 
 § 130. Id.: Effect of, In General.— The necessity and effect 
 of a corporation's recognition of transfer of its stock have 
 already been considered." The effect of transfer of stock by 
 giving a power of attorney has been already discussed." 
 ' ' Ordinarily, when the holder of stock sells it, and delivers to 
 
 » See § 124, supra. A. D. 584, 101 Supp. 87 (1906) ; 
 
 ^» See §§ 130, 131, infra. aff'd 193 N. Y. 642, 86 N. E. 1123. 
 
 " New York & New Haven E. E. " Pollock v. National Bank, 7 
 
 Co. V. Schuyler, 38 Barb. 534 N. Y. 274 (1852). 
 
 (1860); aff'd 34 N. Y. 30. "New York & New Haven E. E. 
 
 " New York & New Haven E. E. Co. v. Schuyler, 38 Barb. 534 
 
 Co. V. Schuyler, 38 Barb. 534 (1860) ; aff'd 34 N. Y. 30. 
 
 (1860) ; aff'd 34 N. Y. 30. " See § 124, supra. 
 
 " Dunham v. City Trust Co., 115 " See § 122, supra. 
 
136 BUSINESS CORPORATIONS IN NEW YORK § 130 
 
 the vendee the certificate therefor, with an executed power of 
 attorney to transfer upon the books of the company, the ven- 
 dee becomes the owner of all title, legal and equitable, thereto 
 (citation). But until the transfer upon the books is in fact 
 made, the vendor is still the nominal owner ; and he is, while 
 such, to be treated as the trustee of the stock for his ven- 
 dee."^* Certificates of corporate stock are not "to be 
 regarded as negotiable instruments ... so that by their 
 endorsement and delivery to a purchaser in good faith, a title 
 to the stock they profess to represent may be acquired, 
 although in the hands of the vendor they are spurious and 
 void, and although the company itself has never recognized 
 the transfer."" Transfer of his shares of stock by a stock- 
 holder vests legal title thereto in the transferee although they 
 are not transferred on the books of the corporation and the 
 certificate of stock provides that the stock is " transferable 
 only on the books of said company by her or her attorneys or 
 the surrender of the certificate," as this provision regulates 
 only the relation between the holder of the certificate and the 
 corporation.^" " Until a transfer out of his name, the stock- 
 holder of record is to the world the owner of the stock and the 
 assignee [thereof] must abide by his action in the manage- 
 ment of corporate affairs."^ "... the rule that a cor- 
 poration acting in good faith and without notice of the rights 
 of others may treat registered shareholders as the actual 
 owners of the shares standing in their names ... is only 
 applicable to such transactions as are within the express or 
 implied powers conferred upon the company or its share- 
 holders. Collective or corporate powers common to all stock- 
 holders may u,sually be exercised by a registered shareholder, 
 though he has assigned all of his shares, and his action will 
 bind his assignee holding under an unregistered transfer and 
 all others. These powers being conferred on corporations and 
 their shareholders, purchasers are bound to know that they 
 may be exercised by their assignors until the transfers are 
 registered in their names. But the assignee of shares having 
 
 " Johnson v. Underhill, 52 N. Y. The record owner of stock had 
 
 203 (1873) ; Gen. Mfg. Act, L. pledged it. An agreement between 
 
 1848, e. 40, § 25. all stockholders of record resulted 
 
 ** Mechanics' Bank v. New York in the corporation selling and going 
 
 & New Haven R. R. Co., 13 N. Y. out of business. The pledgee sought 
 
 599 (1856). unsuccessfully to set aside the sale. 
 
 ^ Matter of Petition of Argus Co., The charter allowed a pledger of 
 
 138 N. Y. 557, 34 N. E. 388 (1893). stock still to represent it at meet- 
 
 ^ Elyea v. Lehigh Salt Mining Co., ings and vote it. 
 169 N. y. 29, 61 N. E. 992 (1901). 
 
§ 131 STOCK 137 
 
 possession of the certificates, though holding under unregis- 
 tered transfers, are not bound by contracts between the 
 registered shareholder, the corporation and all other share- 
 holders which are not within the express or implied powers of 
 corporations, or of their shareholders," such as a change in 
 the relative value of shares which the corporation and its 
 registered shareholders seek to effect.^ Property of a corpo- 
 ration subject to a creditor's lien at the time of the transfer 
 of some of its stock remains subject to the lien after the trans- 
 fer.^ A sale by instrument under seal by the owner of shares 
 of stock in a corporation, evidenced by one certificate for the 
 whole thereof, of part of such shares, confers upon the trans- 
 feree the legal title thereto without any delivery of the stock 
 or transfer of the stock upon the books of the corporation, 
 though such transfer is e&sential to entitle the buyer to divi- 
 dends and enjoyment of the benefit of the stock transferred, 
 and until such transfer is made the holder of record continues 
 the nominal owner of the stock and is treated as trustee 
 thereof for his transferee.* 
 
 § l3l. Id.: On Books. — The transfer of stock on a corpora- 
 tion's books has already been treated.' No transfer of stock is 
 valid as against the corporation, its stockholders and cred- 
 itors for any purpose except to render the transferee liable 
 for the debts of the corporation to the extent provided in the 
 Stock Corporation Law until it has been entered in the corpo- 
 ration's stock book, as required by the statute, by an entry 
 showing from and to whom transferred.® " ... one who 
 authorizes and permits a transfer to himself of shares of stock 
 upon the books of a corporation must be held to be a stock- 
 holder, whether in truth the real owner or not, when the rights 
 of corporate creditors are involved, and is equitably estopped 
 from denying the apparent relation;" but " if the act done, 
 the false appearance created, is the act, not of the party, but 
 of some third person, such party is in no manner bound or 
 affected by it unless he either originally authorized it or sub- 
 sequently ratified it.'"' One who has accepted corporate 
 
 ^ Campbell v. American Zylonite transfer, see notes in 11 L.R.A. 
 
 Co., 122 N. Y. 455, 11 L.R.A. 596, (N.S.) 818; 46 L.R.A. (N.S.) 669. 
 25 N. E. 853 (1890). ^See § 125 et seq., supra. 
 
 = Hastings v. Drew, 76 N. Y. 9 ° St. Corp. L. § 32 (L. 1916, 
 
 (1879). e. 127). 
 
 * Mehaney v. Walsh, 16 A. D. 601, ' Glenn v. Garth, 133 N. Y. 18, 
 
 44 Supp. 969 (1897). 30 N. E. 649, 31 N. E. 344 (1892). 
 
 As to efifeet on statutory liability Brokers directed an agent to buy 
 
 of stockholder who sells his shares the corporate stock for a customer. 
 
 of a technical failure to record the The agent had it transferred by 
 
138 BUSINESS CORPORATIONS IN NEW YORK § 132 
 
 stock in consideration of a transaction vdth another individual 
 and had it transferred on the corporate books into the names 
 of infants cannot avoid the transaction for fraud without 
 returning the stock, which he cannot do after the transfer even 
 though he said nothing to the infants about the transfer, as 
 the other individual cannot be put to the risk of a claim by 
 them to the stock as a gift on becoming majors.' One receiv- 
 ing a stock certificate with transfer and power of attorney 
 endorsed thereon gets no legal title until it is transferred on 
 the corporation's books; so that a transfer thereof on the 
 books to a bona fide holder gives the latter legal title though 
 the transferrer's certificate is not surrendered when the book 
 transfer is made and is pledged as security to such other." 
 A suit in equity lies by a stockholder against a corporation to 
 compel it to transfer his stock on its books or to issue him a 
 certificate of stock when it has wrongfully canceled his cer- 
 tificate ; and he need not make a party one whom it alleges is 
 owner of the stock and forbade it to transfer the stock to the 
 plaintiff and demanded, instead, that it be delivered to him; 
 although the corporation may interplead him if it wishes."^ 
 § 132. Id.: Purchase and Sale of, By Corporation of Own 
 Stock. — The purchase of the stock of a corporation by it from 
 one of its stockholders is legal if no creditor is affected, all 
 stockholders and directors concur in the purchase and the 
 stock is received by it into its treasury for sale to others.'" 
 A contract by a corporation by which it agrees after purchase 
 by an individual of its stock on the installment plan to refund 
 the purchase pric6 within a stated period at the buyer's option 
 is not such a contract as is prohibited by the Penal Law as a 
 contract to purchase its own stock." In the absence of any 
 evidence as to how a corporation acquired some of its stock 
 which it agrees to sell below par, the agreement will be 
 enforced." A corporation seeking to free itself from a con- 
 mistake on the company's books into 'New York & New Haven R. R. 
 the brokers' names. They repudi- Co. v. Schuyler, 38 Barb. 534 
 ated it and in order to enable the (I860) ; aff'd 34 N. Y. 30. 
 agent to sell the stock and undo the °* Selwyn-Brown v. Superno Co., 
 
 mischief signed and executed the Inc., 181 A. D. 420 (1918). 
 usual assignment in blank under " Moses v. Soule, 63 Misc. 203, 
 
 which the agent sold it, but the 118 Supp. 410 (1909); affd 136 
 transfer was not entered on the A. D. 904, 120 Supp. 1136. 
 corporate books. The brokers were ^^ Hyman v. New York Urban 
 
 held not liable for unpaid subscrip- Real Estate Co., 79 Misc. 439, 140 
 tions on the stock. Supp. 138 (1913) ; Penal L. § 664. 
 
 * Francis v. N. Y. & B'klyn El. ^^ Otter v. Brevoort Petroleum Co., 
 
 R. R. Co., 108 N. Y. 93, 15 N. E. 50 Barb. 247 (1867). 
 192 (1888). 
 
§§ 133, 134 STOCK 139 
 
 tract to purchase its own stock by reason of the statute mak- 
 ing it a misdemeanor for a director concurring in the act of 
 the other directors to apply any portion of the corporate 
 funds except surplus profits to the purchase of shares of its 
 own stock must show that it did not possess surplus profits 
 out of which the stock could be purchased, as the law will not 
 presume an intent to do an illegal act." 
 
 § 133. Id.: By Corporation of Another Corporation's Stock. 
 — The power of one corporation to buy stock of another corpo- 
 ration is discussed in the four hundred and fifteenth section 
 of this book. Any stock business corporation may purchase, 
 acquire, hold and dispose of the stocks of any corporation and 
 issue in exchange therefor its stock, bonds or other obligations 
 if authorized to do so by a provision in the certificate of incor- 
 poration of such stock corporation or in any certificate 
 amendatory thereof or supplementary thereto, filed in pursu- 
 ance of law, or if the corporation, the stock of which is so pur- 
 chased, acquired, 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 construc- 
 tion or operation of works necessary 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 corporation with 
 which such stock corporation is or may be authorized to 
 consolidate." 
 
 § 134. Id.: By Officer or Director or Stockholder of His Cor- 
 poration's Stock. — The fact that a purchaser of corporate 
 stock is president of the corporation does not disqualify him 
 as a buyer.^° One selling stock to a director of the corpora- 
 tion cannot demand to be placed in statu quo because the 
 buyer did not disclose all facts he knew which were material 
 to the question of value, as there is no such trust relation 
 between a stockholder and a director as to demand this." No 
 stockholder of a corporation which has refused to pay any of 
 
 ^^ Richards v. ' Wiener Co., 207 • On power of corporation to deal 
 
 N. Y. 59, 100 N. E. 592 (1912); in stock of other corporations, s^e 
 
 Penal L. § 664. , note in 18 L.R.A. 252. 
 
 On right of corporation to pur- ^'Dusenberry v. Sagamore Devel- 
 
 chase its own shares of stock, see opment Co., 164 A. D. 573, 150 
 
 notes in 18 L.R.A. 254; 61 L.R.A. Supp. 229 (1914). 
 
 621; 25 L.R.A:(N.S.) 50; 30 L.R.A. "Carpenter v. Danforth, 52 Barb. 
 
 (N.S.) 694; 44 L.R.A.(N.S.) 156; 581 (1868). 
 L.R.A.1916F, 286. 
 
 "St. Corp. L. § 52 (L. 1909, 
 e. 61). 
 
140 BUSINESS CORPORATIONS IX NEW YORK §§ 135, 136 
 
 its notes or other obligations in lawful money of the United 
 States when due or which is insolvent or the insolvency of 
 which is imminent must make any transfer or assignment of 
 his stock therein to any person in contemplation of its insol- 
 vency; and such a transfer or assignment, if made, is void, 
 provided that such a transfer to a purchaser for valuable 
 consideration without notice is not void." 
 
 § 135, Id.: Agreements for, In General. — An executory 
 agreement by a stockholder of record to sell his stock, con- 
 ditioned on payment by the vendee, does not prevent him 
 from voting it if the condition has neither been performed nor 
 waived wheli voting time comeS around.'* An agreement for 
 purchase of stock at a certain price and so much more as 
 should be paid for like stock to anyone else contemplates the 
 voluntary purchase of stock and not amounts paid for stock 
 in order to obtain a settlement of actions which might have 
 injured the company's credit." "While the delivery and 
 acceptance of treasury stock would raise an implied obligation 
 to pay, no such obligation ... is raised by the delivery 
 of certificates of unissued stock to one man on the request of 
 a third. " ^ A written contract by which one who is a majority 
 stockholder agrees to sell to another some of his holdings in 
 certain corporations and to miake the latter manager and 
 principal officer therein at a stated salary for the first year 
 and a larger salary thereafter, with half-representation on the 
 corporations' boards of directors, and by which each party 
 agreed to offer the other his holdings before selling them to 
 anyone else, should either desire to sell, is void.' 
 
 § 136. Id.: Involving Questions of Time and Notice. — 
 " ... upon holidays other than Sunday, all transactions 
 may be carried on as on any other day," except " that a 
 negotiable instrumental maturing on a holiday is payable on 
 the next succeeding business day (Laws 1887, chapter 289), 
 and . . . that holidays shall be considered as Sunday 
 for all purposes whatsover, as regards the transaction of 
 
 " St. Corp. L. § 66 (L. 1909, Specific performance of contract 
 
 c. 61). for sale of corporate stock, see notes 
 
 '^^ Matter of Petition of Argus in 50 L.R.A. 501; 31 L.B.A.(N.S.) 
 
 Co., 138 N. Y. 557, 34 N. E. 388 491; L.R.A.1915D, 300. 
 (1893). Contract by selling shareholder 
 
 " Stewart v. Huntington, 124 not to engage in business in compe- 
 
 N. Y. 127, 26 N. E. 289 (1891). tition with the corporation, see note 
 
 ™ Sanders v. Proctor, 172 A. D. in 23 L.R.A.(N.S.) 506. 
 713, 158 Supp. 433 (1916). 
 
 ^Fennessy v. Ross, 5 A. D. 342, 
 39 Supp. 323 (1896). 
 
§§ 137, 138 STOCK 141 
 
 business in the public offices of the State or of the counties 
 of the State (Laws 1897, chapter 614, section 1);" and an 
 agreement requiring one, if requested by another, to take the 
 latter 's stock on January 1st, is not, therefore, fulfilled by a 
 tender of the stock and request for payment made January 
 3d, even though January 1st was a holiday, and January 2d a 
 Sunday.^ An agreement to purchase a certain number of 
 shares of corporate stock on a certain number of days' notice 
 is not satisfied by a notice given the day before the last day on 
 which it may be given under the contract or by a notice to 
 purchase a less than the stated number of shares.' One 
 agreeing to buy within a stated time half of a subscription to 
 stock if another would make the subscription must fulfill his 
 promise though the latter do not tender one-half of the securi- 
 ties subscribed to within that time.* 
 
 § 137. Id.: Conditional.— A sale of stock to be absolute only 
 when the stock should be transferred on the books is a con- 
 ditional sale ; and if payment is made by check on agreement 
 that the money is not to be drawn until the condition is ful- 
 filled, the payment is nevertheless a cash one.^ One contract- 
 ing to sell corporate stock to another provided a certain per- 
 centage of the stockholders should vote to increase the capital 
 stock is not bound to perform if the increase is enjoined at the 
 instigation of the one agreeing to buy the stock." Whether a 
 provision for forfeiture of stock by one corporate party to an 
 agreement on failure to pay a certain share of rental has the 
 effect of a condition absolute is to be determined by the 
 expressed contractual intent.^ ! 
 
 § 138. Id.: Involving Questions of Holding Stock in lEscrow. 
 —When corporate stock is to be held by one in escrow till a 
 certain date, no action can be successfully maintained against 
 such one for delivery of the stock unless a demand therefor 
 shall have been made after the expiration of such date.' 
 If it be agreed by the holders, ostensibly, of all a corporation's 
 stock to put the stock of a new company in escrow with a trust 
 company to be issued as against the old company's stock on 
 
 ^Page V. Shainwald, 169 N. Y. Jan. 1, 1909." The only tender of 
 
 246, 57 L.R.A. 173, 62 N. E. 356 such half was on Jan. 3, 1910. 
 
 (1901). = Gould V. Town of Oneonta, 71 
 
 ^Baird v. Hagen, 143 A. D. 679, N. Y. 298 (1877). 
 
 128 Supp. 217 (1911). ^Lovell v. Jacobs, 150 N. Y. 84, 
 
 *Hendrickson v. Callan, 147 A. D. 44 N. E. 792 (1896). 
 
 480', 131 Supp. 839 (1911); aff'd 'West v. Giiaranty Trust Co., 162 
 
 210 N. Y. 543; 103 N. E. 1124. A. D. 301, 147 Supp. 421 (1914). 
 
 The agreement was to buy half the ^Delahunty v. Hake, 10 A. D. 
 
 subscription "within one year from 230, 41 Supp. 896 (1896). 
 
142 BUSINESS CORPORATIONS IN NEW YORK §§ 138a, 139 
 
 presentation of certificates therefor at a certain time, but, in 
 fact, one stockholder of the old company signed the agree- 
 ment as holder not only of his own stock but of that of 
 another stockholder without the latter 's knowledge, the latter 
 cannot hold the trust company responsible for issuing a cer- 
 tificate of stock in the new company to such signer not only for 
 his shares but for those of the other stockholder, when the 
 old company's officer's duly certified to the trust companj' 
 that such signer was entitled thereto." An agreement by 
 which each of several persons deposits in escrow with a cor- 
 poration to be formed a certain number of shares of its stock 
 for three years, at the end of which time the aggregate of such 
 shares is to be parcelled out among such parties and in such 
 amounts as is decided upon by those holding a majority of the 
 corporation's stock, amounts " to no more than a prohibition 
 of division of the stock for three years," and none of the 
 depositaries can object to any kind of division thereof pur- 
 suant to their agreement, however much it may imperil his 
 control of the corporation." 
 
 § 138-a. Id.: Joint and Several. — An agreement by three 
 " to carry for Mr. M's benefit one thousand shares of the 
 capital stock " of a corporation is an agreement by each of 
 the three to carry a stated portion of such stock and a several 
 agreement." When several persons contract that on(> of 
 them shall buy corporate stock from another who shall sell 
 it and that the others shall be released from their agreements 
 to buy respectively certain portions of such stock and that 
 on performance of the contract all parties but the seller should 
 be released from any obligation to him, all but the seller are 
 jointly bound to him under the contract." 
 
 § 139. Id.: By Seller to Buy Back.— The statute of limita- 
 tions does not run against a suit on an agreement by a seller 
 of corporate stock to buy it back whenever the buyer wished 
 him to from the date of the agreement." A complaint in an 
 action to recover damages for breach of an agreement to 
 repurchase stock must allege a tender or offer of the stock 
 at the time of the demand to repurchase."" A condition 
 
 "Bean v. American Loan & Trust "Walter v. Rafalsky, 113 A. D. 
 
 Co., 122 N. Y. 622, 26 N. E. 11 223, 98 Supp. 915 (1906) ; aff'd 186 
 
 (1890). N; Y. 543, 79 N. E. 1118. 
 
 ■'"Gideon v. Hinds, Noble & El- "Oaks v. Taylor, 30 A. D. 177, 
 
 dredge, 172 A. D. 478, 158 Supp. 51 Supp. 775 (1898); C. C. P. 
 
 774 (1916). Same case in 219 N. Y. § 410. 
 
 mem. 4. "Ketchum v. Alexander, 168 
 
 I'Villard v. Moyer, 123 A. D. A. D. 38, 15? Supp. 864 (1915). 
 
 629, 107 Supp. 1054 (1908). An allegation that "plaintiff has 
 
S i40 STOCK 143 
 
 precedent to the enforcement of an agreement to repurchase 
 corporate stock at the end of the year from its purchase is an 
 offer or tender of a transfer of the shares at the time 
 stipulated." 
 
 § 140. Id. : By Stockholders Inter Sese.— It seems that a pro- 
 vision in a corporation's certificate or by-laws that a stock- 
 holder shall not sell his stock without first giving a stated 
 period within which the corporation and the other stockhold- 
 ers may have opportunity to purchase, is not against public 
 policy." It is legal for two persons who with others transfer- 
 property to a corporation organized to hold it to agree not 
 to dispose of their stock holdings for a stated number of 
 years without mutual consent and that a power of attorney 
 to a third person to vote such holdings be irrevocable for such 
 period." An agreement by stockholders in a corporation by 
 which each promises not, at any time or place, to sell his 
 shares unless all the others assent is invalid." An agree- 
 ment between stockholders of a corporation to give prefer- 
 ence to each other in the purchase of any of their holdings 
 they might wish to sell does not deprive them of the right to 
 dispose of their stock as an incident to ownership nor the 
 purchaser from getting good title though he knew his pur- 
 chase violated the agreement, as the only effect of a violation 
 of the agreement is to give the other stockholders than those 
 who violate it an action for damages." An executory agree- 
 ment between individual stockholders not to transfer their 
 holdings without giving each other a prior right to purchase 
 vests in contract and does not disenable any of them from 
 giving legal title to his stock by transfer to a third person 
 •vidthout the consent of the other parties to the agreement, 
 
 duly performed all conditions on his of attorney to vote, or agree to sell, 
 
 part to be performed," under assign, transfer, set over, pledge or 
 
 C. C. P. § 533, is not sufficient. give power of attorney to vote in 
 
 ^^ Taylor v. Blair, 59 Hun, 347, any way, shape or manner the stock 
 
 13 Supp. 154 (1891). which we respectively and individu- 
 
 ^° Moses V. Soule, 63 Misc. 203, ally own, hold or possess in said 
 
 118 Supp. 410 (1909) ; afE'd 136 company, without the concurrent 
 
 A. D. 904, 120 Supp. 1136. consent of all signers to this instru- 
 
 ^^Hey V. Dolphin, 92 Hun, 230, ment. And either of the parties 
 
 36 Supp. 627 (1895). who shall be guilty of a breach of 
 
 ^* Fisher v. Bush, 35 Hun, 641 this agreement, shall be liable to 
 (1885). The agreement read: "For each of the other parties hereto for 
 value received from and paid to the full value of the stock held by 
 each other, we, the undersigned each respectively, which full value 
 stockholders of the G. V. C. R. R. shall be deemed the liquidated dam- 
 Co., mutually agree with the other, ages and not as a penalty." 
 nnd to all, that we will not sell, as- "Brown v. Britton, 41 A. D. 57, 
 sign, set over, pledge or give power 58 Supp. 353 (1899). 
 
144 BUSINESS CORPORATIONS IN NEW YORK § 140 
 
 whose remedy is in damages at law, save in the sound dis- 
 cretion of the court to grant the equitable relief of specific 
 performance of the contract.^" An agreement seeking to con- 
 trol the stock of a corporation for purposes of management 
 by which the holders of the stock agree that on their deaths or 
 sale of their holdings each shall give the survivor or other 
 the right to purchase his holdings at a stipulated price or at 
 the same price as is offered by the would-be purchaser, as the 
 case may be, is valid and is not in the nature of a wager upon 
 life or illegal interference with the right of testamentary dis- 
 position, or void as a prohibition of the right of alienation of 
 property.^ A clause in an agreement between individual 
 stockholders for options inter sese to purchase each other's 
 holdings on disposal thereof, that a disposition by either of 
 the parties to the agreement of all the shares held by him 
 should terminate the agreement, means a disposition pur- 
 suant to the agreement's provisions and does not intend to 
 provide that a party transferring his shares in violation of 
 the agreement should thereby be released from its obliga- 
 tions ; but a transfer made with the consent of the other par- 
 ties, express or implied, would give effect to the condition.* 
 It is not true " that when one stockholder contracts with 
 another stockholder of a corporation for the purchase and 
 sale of shares of stock at the book value as shown on the 
 accounts of the corporation, such a contract requires or justi- 
 fies the intervention of a court of equity in the management 
 and control of the books of account of the corporation 
 . . . , there being no diversion or waste of assets : " if the 
 contingency, pursuant to which by the contract the one stock- 
 holder is entitled to have the other purchase his stock at thff 
 book value, arise, and the stockholder having the option to 
 sell desire to avail himself of that right, there would seem to 
 be no reason why an action in equity against the purchasing 
 stockholder to ascertain the true book value of the stock 
 instituted at that time would not be as efficacious to protect 
 the rights of the stockholder with the option as the action in 
 question.^ A stockholder seeking to hold a corporation liable 
 
 ^^ Matter of Petition of Argus Co., holder who might be compelled to 
 
 138 N. Y. 557, 34 N. E. 388 (1893). buy the stock at its book value re- 
 
 ^ Scruggs V. Cotterill, 67 A. D. duced the book value of the corpo- 
 
 583, 73 Supp. 882 (1902). ration's assets so as to decrease the 
 
 ^Matter of Petition of Argus Co., book value of the stock and impor- 
 
 138 N. Y. 557, 34 N. E. 388 (1893). tuned the stockholder with the bp- 
 
 'Drucklieb v. Harris, 209 N. Y. tion to sell his holdings at less than 
 
 211, 102 N. E. 599 (1913). After he paid therefor, 
 the contract was made, the stock- 
 
§ 141 STOCK 145 
 
 for sale of its stock to a third person without his knowledge, 
 contrary to an agreement between himself and other incor- 
 porators giving them first chance to buy such stock, cannot 
 succeed if he bring the action in a representative capacity 
 unless he show an injury to the corporation from the sale, as 
 " a plaintiff who asserts a derivative cause of action must 
 establish the existence of a cause of action in the party whose 
 rights are sought to -be enforced ; " his remedy is to enforce 
 his personal right of action.* 
 
 § 141. Id.: Fraud and Deceit In, In General. — Actionable 
 deceit in inducing purchases of corporate stock cannot be 
 practiced without an actual intention to deceive, resulting in 
 actual deception and consequent loss.' "A false and fraudu- 
 lent representation as to the property of a corporation of 
 material facts which necessarily affect the value of shares 
 of stock therein, constitutes a cause of action against 
 a party inducing another by means of such fraud- 
 ulent misrepresentation to purchase such shares quite 
 as sufficient as if the purchase had been of the 
 property of the company with regard to which the representa- 
 tion was made.".° Ordinarily a vendor's statement that his 
 wares are " of great value " will be held an expression of 
 opinion rather than a representation of fact ; but a statement 
 that corporate stock has been fully paid is a statement regard- 
 ing an extrinsic fact made to induce the public to buy, and if 
 false a purchaser in reliance thereon may sue the officers and 
 directors of the corporation making it for a conspiracy to 
 rob the public' A representation made to induce purchase of 
 stock in a corporation that certain property had been acquired 
 by it unencumbered except for a small debt and that it was 
 a perfectly safe investment which the speaker was himself 
 interested in and that the speaker was conversant with the 
 whole situation, though there be no evidence that the repre- 
 senter knew his representation to be false or made it with 
 intent to deceive, is in substance a representation that he 
 knew the property and of the incumbrances on it and is suffi- 
 cient for rescission of the sale and recovery of the considera- 
 tion.* The rule of caveat emptor applies to a purchaser of 
 corporate stock who himself proposes the purchase, is a 
 
 * Waters v. Waters & Co., 201 ^Van SclocheM v. Villard, No. 1, 
 N. T. 184, 94 N. E. 602 (1911). 154 A. D. 161, 138 Supp. 852 
 
 = Duryea v. Zimmerman, 121 A. D. (1912) ; aff'd 207 N. Y. 587, 101 
 
 560, 106 Supp. 237 (1907). N. E. 467. 
 
 * Schwenk v. Naylor, 102 N. Y. ^ Lambert v. Elmendorf , 124 A. D. 
 683, 7 N. E. 788 (1886). 758, 109 Supp. 574 (1908). 
 
 B. C. N. Y.— 10 
 
146 BUSINESS CORPORATIONS IN NEW YORK § 141 
 
 stockholder in the corporation and presumably could have 
 satisfied himself as to its financial condition.^ Two stock- 
 holders, each owning a third of a corporation's stock and 
 being its president and treasurer respectively, may be held 
 by the committee of the third owning the remaining stock for 
 damages resulting from their fraud and deceit in creating an 
 impression that the corporate business was not as profitable 
 as it had been and that unusual losses had been sustained, 
 whereby the last mentioned third of stock was bought by them 
 at less than its value, when in fact any unusual loss was a 
 matter of bookkeeping and the company had never been 
 more prosperous; and the conunittee's remedy is not confined 
 to a representative action to redress thie wrong to the cor- 
 poration." A stockholder induced by fraudulent representa- 
 tions by another to sell the latter his stock may, on the disso- 
 lution of the corporation and acquisition by the latter of its 
 business, rescind the sale and hold the latter as trustee of an 
 implied trust." Persons claiming they had been induced by 
 fraud to enter into a syndicate agreement to purchase stock 
 in a corporation have three lines of relief open to them: 
 " They might retain that which they received and bring an 
 action at law against the guilty party to recover damages 
 sustained by reason of his fraud ; they might bring an action 
 for rescission of the contract in which it would be sufficient to 
 tender back anything which they might have received under 
 the contract; they might bring an action based on a prior 
 rescission wherein, having previously tendered back what 
 they had received, they would recover that which had been 
 taken from them." " A syndicate agreement to subscribe to 
 stock of a corporation made by each subscriber by its express 
 terms not only with the other subscribers but also with the 
 chief promoter as syndicate manager and for his benefit not 
 only in authorizing him to purchase a corporation's stock in 
 which he is majority stockholder but also in conferring upon 
 him general powers as a manager, is voidable for fraud of 
 such chief promoter as well as of the other subscribers." 
 
 ° Rothmiller v. Stein, 143 N. Y. creasing salaries, (o) representing 
 
 581, 36 L.R.A. 148, 38 N. E. 718 reverses as suffered by the company, 
 
 (1894). The question was as to so as to depress the value of the 
 
 corporate solvency. stock and cause its sale. 
 
 " Von Au v. Magenheimer, 126 " Schafuss v. Betts, 94 Misc. 463, 
 
 A. D. 257, 110 Supp. 629 (1908); 157 Supp. 608 (Sup. Ct. 1916). 
 
 aff'd 196 N. Y. 510, 89 N. E. 1114. "Heckscher v. Edenborn, 203 
 
 The complaint alleged a conspiracy N. Y. 210, 96 N. B. 441 (1911). 
 
 by fraudulently (a) refraining from "Heekscher v. Edenborn, 203 
 
 declaring a fair dividend, (b) in- N. Y. 210, 96 N. E. 441 (1911). 
 
§ 142 STOCK 147 
 
 In an action to recover damages for loss sustained through 
 subscription to a syndicate agreement on the ground of fraud 
 by the chief promoter in suppression and misrepresentation 
 of facts in that he did not disclose that the syndicate would 
 purchase the stock of a corporation in which he was majority 
 stockholder, a tender of stock in a new corporation which had 
 acquired not only the chief promoter's stock in such other 
 corporation but also various other property, and which new 
 stock had been delivered to the plaintiff as his portion under 
 the syndicate agreement, ig sufficient as a prerequisite to an 
 action based on rescission of the contract." " If one by mis- 
 representation or suppression of facts when he ought to 
 speak induces another ignorantly to make a contract appoint- 
 ing the first his agent to buy and conferring upon him dis- 
 cretionary power to purchase his own property, the contract 
 is voidable and even if executed may be rescinded and the 
 money recovered back on restoration of what 'has been 
 received." ""''. If one agrees as agent to buy for another cor- 
 porate stock and in pretended fulfillment of the agreement 
 and with intent to defraud causes stock of the corporation to 
 be transferred to such other which belongs to himself, retain- 
 ing to his own use the money paid therefor, such other on 
 discovery of the fraud may rescind the contract and recover 
 back the purchase money paid.^^ The false representations 
 of the holder of ninety-eight per centum and the controller of 
 the remaining two per centum of the capital stock of a cor- 
 poration in securing purchase of its stock are binding on the 
 corporation and may be sued upon as its representations.^* 
 
 § 142. Id.: Through Prospectus. — The impression ordinarily 
 created by a prospectus determines the liability of those 
 
 "Heckscher v. Edenborn, 203 of it, but his $500,000 subscription 
 
 N. Y. 210, 96 N. E. 441 (1911). in the agreement and statements by 
 
 ^*''* Heckscher v. Edenborn, 203 him that he was " putting in cash 
 
 N. Y. 210, 96 N. E. 441 (1911). the same as" one of the subscribers 
 
 Defendant was chief promoter of an and that " any man in joining puts 
 
 enterprise contemplating $1,000,000 in a dollar against the other mans 
 
 par value of stock of a corporation dollar " and that there were no 
 
 of which he was majority owner ; " inside profits " tended to exclude 
 
 the syndicate agreement made him the idea he owned such stock, 
 
 and two associates agents of the sub- ^^ Mayo v. Knowlton, 134 N. Y. 
 
 scribers with discretion to buy this 250, 31 N. E. 985 (1892). 
 
 stock; defendant, holding a rather ^* Cawthra v. Stewart, 59 Misc. 
 
 intimate, influential relation with 38, 109_ Supp. 770 (1908). 
 
 some of plaintiff's assignors, in effect On liability of corporate officer 
 
 solicited their subscription to the for misrepresentation which in- 
 
 syndicate agreement; they did not duced the sale or purchase of stock, 
 
 know his interest in the property to see note in 1 L.R.A.(N.S.) 258. 
 be acquired, he did not inform them 
 
148 BUSINESS CORPORATIONS IN NEW YORK § 142 
 
 making the representations in it." One purchasing stock 
 relying upon the truth of a prospectus has a right of action 
 for deceit against any persons " who, with knowledge of the 
 fraud and with intent to deceive, put it in circulation. The 
 representation was made to each person comprehended 
 within the class of persons who were designed to be influenced 
 by the prospectus ; and when a prospectus of this character has 
 been issued no other relation or priority between the parties 
 need be shown, except that created by the wrongful and 
 fraudulent acts of the defendants in issuing or circulating the 
 prospectus, and the resulting injury to the plaintiff. " '^ "So 
 if any person makes or causes to be made to the public at 
 large for the purpose of inducing purchases of the stock of a 
 corporation, false statements as to the solvency and pros- 
 perity of the corporation, any person acting upon such repre- 
 sentations and suffering loss thereby may prosecute his action 
 for damages."" One investing in corporate stock by pur- 
 chase in the open market relying on false and fraudulent 
 representation in a prospectus delivered to him and the gen- 
 eral public for the purpose of inducing investment by the pub- 
 lic in general and aU persons into whose hands the prospectus 
 should come, may sue at law to recover damages for deceit 
 from those preparing, publishing and delivering the pros- 
 pectus.^" " Where a prospectus is circulated as an induce- 
 ment to take stock in a corporate enterprise the language of 
 the prospectus is to be interpreted by the effect which it 
 would produce upon an ordinary mmd . . . [and] in esti- 
 mating the probability of subscribers being mislead by a pros- 
 pectus the court may take into consideration not only the 
 facts stated therein, but the facts suppressed. " ^ " . . . 
 a fraudulent intent on the part of the author and publisher of 
 
 " Churchill v. St. George Develop- mental in having such declaration 
 
 ment Co., 174 A. D. 1, 160 Supp. advertised. Complaint held good. 
 357 (1916). ''"Reusens v. Gerard, 160 A. D. 
 
 "Morgan v. Skiddy, 62 N. Y. 319 625, 146 Supp. 86 (1914). 
 (1875). ^Downey v. Finucane, 205 N. Y. 
 
 "Keeler v. Seaman, 47 Misc. 292, 257, 40 L.R.A.(N.S.) 307, 98 N. E. 
 95 Supp. 920 (1905). Action 391(1912). Prospectus read : "This 
 against one who was corporate treas- company . . . owns a franchise 
 urer; not a director; based princi- in the city of New York acquired 
 pally on false representation con- under the advice of eminent counsel, 
 sisting of act of directors in declar- under which it is its purpose to be- 
 ing dividends payable out of earn- gin as soon as practicable and in 
 ings which did not exist and so of the near future the construction of 
 representing to public that company an independent telephone system in 
 was making surplus earnings; alle- that city." No permit had been 
 gation that treasurer was instru- granted for extension of the com- 
 
§ 143 STOCK 149 
 
 the prospectus [to promote subscriptions to corporate stock] 
 may be inferred from the falsity of the statements therein 
 contained and that alone." ^ It is not error to allow a jury to 
 pass on the- character of representations in a prospectus that 
 certain dividends have been paid by the corporation if the 
 testimony shows such dividends had not been earned as a 
 declaration that dividends have been paid imports that they 
 have been earned/ It is proper to submit to a jury the ques- 
 tion of whether or not a statement in a prospectus is true that 
 413,030 shares of the corporation's capital stock have been 
 issued or are contracted to be issued, as it conveys the idea 
 that the stock had been issued or contracted to be issued for 
 money or property its equivalent in value, if as a matter of 
 fact 410,000 of such 413,030 shares of the corporation's stock 
 had been issued on account of a franchise bought for $250,000, 
 as the disparity is so great as of itself to warrant an inference 
 of fraud.* One relying in purchasing stock in a corporation 
 upon written statements of its president, director and stock- 
 holder, positively misrepresenting material facts relating to 
 its property and equipment, of the truth of which the repre- 
 senter had no personal knowledge and in making which he 
 relied on information he believed received from engineers 
 and others (but which he did not state to have been made on 
 such information and belief), may hold such representer 
 liable for the damages.^ 
 
 § 143. Id.: Pleading and Practice. — A sale of corporate 
 stock by one to another with authorization "-to take all such 
 proceedings in my name for his benefit and at his expense as 
 
 pany's lines and they could not be bilateral and enforceable by the 
 
 extended without such permission. company. The latter interpretation 
 
 Legal advice had shown the validity was held proper, 
 
 and sufficiency of the alleged fran- ^ Downey v. Tinacune, 205 N. Y. 
 
 chise to be doubtful. 251, 40 L.R.A.(N.S.) 307, 98 N. E. 
 
 2 Downey v. Finucane, 205 N. T. 391 (1912). 
 
 251, 40 L.R.A.(N.S.) 307, 98 ¥. E. . * Downey v. Einuoane, 206 N. Y. 
 
 391 (1912). The prospectus read: 251, 40 L.R.A.(N.S.) 307, 98 N. E. 
 
 "Such $7,000,000 of bonds are 391 (1912). 
 
 to be issued pursuant to contracts ^ Bystrom v. Willard, 175 A. D. 
 
 already made by the company and 433, 162 Supp. 100 (1916) ; dis- 
 
 binding on it, and as a result of the missed 220 N. Y. 765, 116 N. E. 
 
 performance of said contracts the 1038. 
 
 company will have $5,000,000 cash On liability of officers of corpora- 
 
 in its treasury in addition to the tion to one who purchases stock 
 
 securities pledged under the mort- from an individual in reliance on a 
 
 gage." One side claimed this meant prospectus issued to induce pur- 
 
 the contracts were unilateral and chase of treasury stock, see note in 
 
 bound the company to sell, while 28 L.R.A.(N.S.) 359. 
 the other said it meant they were 
 
150 BUSINESS CORPORATIONS IN NEW YORK § 143 
 
 he may be advised are necessary or proper to enforce his 
 rights as the holder of said stock " gives power to the 
 immediate purchaser only to use the seller's name in such 
 proceedings." One may sue both individually and as personal 
 representative of another to set aside a sale of corporate 
 stock by him and the decedent induced by the same alleged 
 fraudulent representations/ An action on an executory con- 
 tract to recover the purchase price of corporate stock cannot 
 be maintained unless the plaintiff has tendered a delivery and 
 is able to perform/ A complaint for rescission of a contract 
 for fraud and deceit in the sale of corporate stock must be 
 based on something more than promises or fraud and deceit 
 as to things undone and wholly to be done, there must be mis- 
 representation of something present or past.' Pleading due 
 performance of all things to be performed on his part by one 
 seeking to recover damages resulting from failure of another 
 party to a contract to buy stock pursuant thereto is sufficient 
 without alleging compliance with the terms of the contract." 
 An allegation in a complaint to recover damages for fraud 
 and deceit in selling corporate stock of ratification of the pur- 
 chase is insufficient to show a waiver of the cause of action 
 for deceit, as the contract may be affirmed without ratifying 
 the fraud.^^ A defendant sued for failure to live up to his 
 agreement to take stock in a corporation at an agreed price, 
 cannot be held to answer as for fraud in that he, as a director 
 of the company, had been guilty of a fraudulent issue of 
 stock, unless the complaint is based on fraud, instead of con- 
 tract, liability." One seeking to recover damages resulting 
 from the purchase of stock in a corporation of which he was 
 not yet a stockholder on the faith of a false report by its 
 treasurer may join a cause of action under the statute and a 
 cause of action upon substantially the same facts with an addi- 
 tional allegation of knowing misrepresentation by the 
 treasurer." A complaint is an action to rescind a contract 
 for the sale by the defendant of corporate stock and the 
 recovery of its purchase price is not demurrable because it 
 
 'MacVeagh v. Continental Trust ^° Moghabgha/b v. Sherman & 
 
 Co., 10 Misc. 600, 32 Supp. 198 Sons Co., 161 A. D. 135, 146 Supp. 
 
 (1894). 392 (1914); C. C. P. § 533. 
 
 ' Groh V. Flammer, 100 A. D. " Potts v. Lambie, 138 A. D. 144, 
 
 306, 91 Supp. 423 (1905). 122 Supp. 935 (1910). 
 
 'Security Title & Trust Co. v. "Lamphere v. Lang, 213 N. Y. 
 
 Stewart, 154 A. D. 434, 139 Supp. 585, 108 N. E. 82 (1915). 
 
 74 (1913). ^'Hutchinson v. Young, 93 A. D 
 
 =• Wilson V. Meyer, 154 A. D. 300, 407, 87 Supp. 678 (1904); C. C. V 
 
 138 Supp. 1048 (1912). § 484, subd. 6. 
 
§ 143 STOCK 151 
 
 states two definite grounds of relief, one in fraud and the 
 other in mutual mistake." A cause of action to set aside a 
 sale by the plaintiff of corporate securities as induced by- 
 fraud cannot be joined with a cause of action to compel the 
 buyer to account for the property of the corporation he has 
 received by virtue of his control of it acquired by the sale of ■ 
 stock in question in violation of an alleged agreement with 
 the plaintiff." A complaint for return of corporate stock 
 exchanged because of false and fraudulent representations 
 for stock of another corporation is not bad because no dam- 
 age is alleged on the theory that the stock received in 
 exchange may be as valuable as that given in exchange if the 
 complaint allege that by the exchange plaintiff and those in 
 harmony with him lost control of the corporation, the stock of 
 which was exchanged, while one of the representations lead- 
 ing to the exchange was that by it the other corporation would 
 control — which was not so." If one selling stock sues the 
 purchaser claiming, first, to recover the difference between the 
 price paid him and a greater amount paid other stockhdlders, 
 under an agreement whereby he should be paid such dif- 
 ference and, second, to have the stock he sold returned to him 
 under an option given him by such agreement, he seeks to 
 recover on two inconsistent theories, one under the contract 
 and the other on disafiirmance of the contract, and must 
 make his election: he cannot claim breach of the contract and 
 demand damages conditioned on the existence of the con- 
 tract as he does when he demands the largest price paid by 
 the purchaser for any stock as the basis of the purchase of 
 his own stock.^' In an action based on failure to complete a 
 contract for the purchase of corporate stock, the failure to 
 pay the tax charged by statute on sales and transfers of 
 stock is a matter to be plead in defense, and if this is not done 
 it cannot be availed of." To a complaint seeking to recover the 
 agreed price of sale of corporate stock the defendant may 
 counterclaim inducement by the plaintiff by fraud to make 
 him enter into the agreement sued on." An action to recover 
 the value of shares of corporate stock pursuant to an agree- 
 ment to pay therefor is to recover a sum of money, though to 
 
 "Garrett Co. v. Astor, 67 A. D. ^^Bean v. Flint, 204 N. Y. 153, 
 
 595, 73 Supp. 966 (1902). 97 N. E. 490 (1912); Tax L. §§ 270- 
 
 "Groh V. Flammer, 100 A. D. 278. 
 305, 91 Supp. 423 (1905). "Delano v. Rice, 23 A. D. 327, 48 
 
 1" Jahn V. Reynolds, 115 A. D. Supp. 295 (1897). 
 647, 101 Supp. 293 (1906). 
 
 " Stewart v. Himtin^on, 124 
 N. Y. 127, 26 N. E. 289 (1891). 
 
152 BUSINESS CORPORATIONS IN NEW YORK § 144 
 
 be gauged by the figures disclosed on an account of the assets 
 and property of the corporation ; and the Supreme Court can- 
 not compel a reference to hear and determine, though it 
 could, if it thought the case a suit in equity, refer the case so 
 _ far as to have the testimony as to the value of such assets 
 ' taken by a referee and reported to it with his opinion thereon.^ 
 " ... the doctrine of lis pendens, &o far as it maintains 
 that the mere pending of an action concerning the title to 
 stocks, is constructive notice to all mankind, and that a pur- 
 chaser acting in gtod faith is bound by the results of the 
 action, is no part of the law of this State. "^ A cause of 
 action at law to recover damages for deceit in having been 
 induced by false and fraudulent representations to make a 
 contract for the purchase of corporate stock begins to run 
 from the consummation of the fraud and not from the dis- 
 covery thereof, even though but part payment on the contract 
 was made, and suit cannot be brought after six years from the 
 date of the contract.^ A broker seeking to recpver commis- 
 sions for securing a purchaser of stock of a corporation to be 
 formed who never bought the stock because of false state- 
 ments made by the principal to the broker must also allege 
 in his complaint that such statements were communicated to 
 the purchaser who relied upon them when he accepted the 
 proposition to buy the stock.^ 
 
 § 144, Id.: Evidence and Proof.— One complaining that 
 another induced him to buy certain stock by false and fraudu- 
 lent representations has the burden " to show (1) that defend- 
 ant made material representations to induce the purchase of 
 the stock; (2) that the defendant knew that they were 
 untrue; (3) that plaintiff relied thereon in making the pur- 
 chase; and (4) that (s)he was damaged thereby."* The evi- 
 dence sufficient to warrant the recovery of damages for fraud 
 by one in inducing another to buy his holdings of stock in a 
 corporation must tend to establish the falsity of the seller's 
 statements and his knowledge of their falsity; and to this end 
 facts and circumstances showing the seller's means of 
 knowledge bearing upon the candor and integrity of his acts 
 in his connection with the corporation and the management 
 of its business are more freely admissible.^ A memorandum 
 
 '^Camp V. IngersoU, 86 N. Y. 433 ^Lewin v. Hecht, 179 A. D. 106, 
 
 (1881); C. C. P. § 1015. 166 Supp. 116 (1917). 
 
 ^Holbrook v. New Jersey Zinc * Bevan v. Roach, 142 A. D. 541, 
 
 Co., 57 N. Y. 616 (1874). 127 Supp. 68 (1911). . 
 
 ^Ball V. Gerard, 160 A. D. 619, ^ Townsend v. Felthousen, 156 
 
 146 Supp. 81 (1914). N. Y. 618, 51 N. E. 279 (1898). 
 
i^ 145, 146 STOCK 153 
 
 concerning sale of corporate stock which omits the amount of 
 the stock and the time of performance does not satisfy the 
 Statute of Frauds.^ Writings endorsed by one involved iii a 
 dispute as to ownership of corporate stock on returned certifi- 
 cates of stock are made for his own benefit and not in per- 
 formance of his duties as ofiicer of the company and are inad- 
 missible in evidence/ 
 
 § 145. Id.: Measure of Damages. — In an action to recover 
 damages for breach of a contract of sale of corporate stock 
 the measure is the difference between the price the plaintiff 
 agreed to pay and the value on the day set for delivery ; but 
 an unaccepted offer for such stock in an isolated transaction, 
 not shown to have been made in a market attended by sellers 
 and buyers, or in the open market on the floor of the stock 
 exchange, under circumstances warranting the conclusion that 
 the person bidding was in a situation to buy, is no evidence 
 as to the stock's value.^ One buying stock which should have 
 been delivered under contract is entitled to recover from him 
 who failed to fulfill the contract the difference between the 
 purchase price and the price at the time when the stock 
 should have been delivered.^ The measure of damages for 
 deceit in selling corporate stock is the difference between the 
 actual value of the stock sold and what its value would have 
 been if the stock had been as represented.^" In recovering 
 damages for deceit in securing the sale of corporate stock the 
 plaintiff can have only the difference between the value of the 
 stock and what he paid for it." 
 
 § 146. Id.: Equitable Remedies. — One seeking equitable 
 relief that he be given certain corporate stock pursuant to a 
 certain transaction will be refused if he does not come into 
 court with clean hands." Specific performance by certain 
 persons of their agreement to convey stock of a certain cor- 
 poration to another individual will not be decreed if damages 
 to the latter are an adequate remedy." Equity will not exer- 
 cise its discretion to award specific performance of an. agree- 
 ment to secure corporate stock to a plaintiff when there is 
 nothing to show that its value cannot be determined so that 
 
 » Leach v. Weil, 129 A. D. 688, ^° Spotten v. De Freest, 140 A. D. 
 
 114 Supp. 234 (1908). 792, 125 Supp. 497 (1910). 
 'Geneva Mineral Springs Co., " Tripler v. Fairchild, 167 A. D. 
 
 Ltd. V. Steele, 111 A. D. 706, 97 195, 152 Supp. 624 (1915). 
 
 S-upp. 996 (1906). "York v. Searles, 97 A. D. 331, 
 
 « Wildes V. Robinson, 50 A. D. 90 Supp. 37 (1904); aff'd 189 N. Y. 
 
 .192, 63 Supp. 811 (1900). 573, 82 N. E. 1134. 
 
 » Sloan V. McKane, 131 A. D. 244, " Kennedy v. Thompson, 97 A. D. 
 
 115 Supp. 648 (1909). 296, 89 Supp. 963 (1904). There 
 
154 BUSINESS CORPORATIONS IN NEW YORK § 146 
 
 a money-damage judgment will compensate plaintiff." 
 "... an action to compel specific performance of a 
 contract whereby the defendant agreed to deliver to the 
 plaintiff a number of shares of the stock in a specified corpora- 
 tion which the plaintiff ha(s) no special interest in acquiring 
 except for the pecuniary advantage which would accrue to 
 him from its ownership, cannot be maintained simply because 
 it appears that there have been no sales of the stock in ques- 
 tion " — certainly not if there have been sales." Pending an 
 action to compel a retransfer of stock alleged to have been 
 acquired by an individual pursuant to a fraudulent contract, 
 in which fraud is denied, it is proper to enjoin the defendant 
 from disposing of his stock pendente lite but not to abstain 
 from voting on it or exercising any rights incident to its 
 ownership." One seeking to rescind an executed contract 
 for the purchase of corporate stock on the ground of fraud 
 and to require the taking back of other shares acquired by 
 subscription to increases of stock must offer to return the 
 stock at once on discovering the fraud or otherwise disaffirm 
 the purchase." A denial in an answer to a complaint for 
 specific performance of an agreement to sell certain corporate 
 stock which alleges that plaintiff has no adequate remedy at 
 law is sufficient to enable the defendant to urge that the case 
 is not of equitable cognizance without need for the defendant 
 setting up that matter in his answer." Defendants are 
 entitled to an order compelling a reply to allegations in their 
 answer to a complaint seeking specific performance of a con- 
 tract of sale of stock if such allegations are that no stock 
 transfer tax was paid or canceled in connection with the agree- 
 ment of sale." A written agreement by two persons to buy 
 from a third person a certain number of dollars' worth of 
 stock in a corporation within a stated time of its incorporation, 
 and the agreement of such third person to deliver such amount 
 of stock to such two persons, cannot be enforced by such third 
 person, for one-half the amount agreed to be taken, against 
 one of the two purchasers after delivery to the other of one- 
 half on receipt from him of one-half of the price agreed upon 
 
 were no allegations in the complaint ander, No. 2, 115 A. D. 112, 100 
 
 that the stock had any peculiar value Supp. 711 (1906). 
 
 or that plaintiff could not fully re- " Davis v. Levering, 168 A. D. 78, 
 
 cover at law by way of damages. 153 Supp. 772 (1915). 
 
 " Bateman v. Straus, 86 A. D. ^° Clements v. Sherwood-Dunn, 108 
 
 540, 83 Supp. 785 (1903). A. D. 327, 95 Supp. 766 (1905). 
 
 ^' Clements v. Sherwood-Dunn, 108 " Dittenfass v. Horsley, 171 A. D. 
 
 A. D. 327, 95 Supp. 766 (1905). 507, 157 Supp. 632 (1916); C. C. P. 
 
 "Maine Products Co. v. Alex- § 516. 
 
§ 147 STOCK 155 
 
 and release of such other from the agreement.* A court of 
 equity invoked to cancel a subscription for stock on the ground 
 of fraud by individual promoters (who later became officers 
 and directors) in securing it, and to enjoin further calls for 
 payments, and the prosecution of actions thereon, is justified 
 in bringing in the officers and agents of the corporation who 
 were personally guilty of making the misrepresentations con- 
 stituting the fraud, so that the plaintiff miay have complete 
 relief in one action against both the corporation and the per- 
 sons guilty of the fraud/ One induced by fraudulent repre- 
 sentations to subscribe to corporate bonds cannot have the 
 remedy of rescission unless resort to equity is necessary to 
 do full justice, but must sue at law for their purchase after 
 returning the bonds ; so that the statute of limitations govern- 
 ing legal actions and not equitable suits bars him.^ A com- 
 plaint by one who had advanced to a corporation at the 
 request of subscribers to its stock the amount of the subscrip- 
 tions to the capital stock, upon the written agreement of the 
 subscribers that in case of the failure of any subscriber to 
 pay, the remaining subscribers would be liable jointly and 
 severally to pay such unpaid subscription, against a sub- 
 scriber to recover for ^uch a failure by another subscriber, is 
 good, although if the corporation itself had sued for the 
 unpaid subscriptions it could not have succeeded because ten 
 per cent of the subscriptions had not been paid in when made, 
 as the complaint in question is not for an unpaid subscription 
 but upon an individual promise.' 
 
 § 147. Id.: Pledge and Conversion of, What Constitutes 
 Conversion. — Conversion lies against a holder of shares of 
 stock in a corporation, evidenced by one certificate for the 
 whole thereof, who sells and assigns the whole thereof with 
 such certificate endorsed for transfer after he has by a sepa- 
 rate instrument under seal sold part of such shares to 
 another.* A refusal on demand of payment by one tenant in 
 conmion of corporate stock of proceeds of the sale thereof by 
 him to the other tenant of his share of the proceeds is a 
 
 ^o Van Dam v. Tapscott, 40 A. D. ^ Mack v. Latta, 178 N. Y. 525, 67 
 
 36, 57 Supp. 534 (1899). It is not L.R.A. 126, 71 N. E. 97 (1904). 
 
 the law. " that a joint contract of ^ Dennin v. Powers, 96 Misc. 252, 
 
 two or more parties to purchase 160 Supp. 636 (1916) ; C. C. P. 
 
 property, where the property is di- § 382. 
 
 visible into portions absolutely alike ^Knickerbocker Trust Co. v. 
 
 in quality and value, can be treated Hard, 67 A. D. 463, 73 Supp. 979 
 
 as the individual promise of each (1902). 
 
 party to purchase and take his * Mahaney v. Walsh, 16 A. D. 601, 
 
 aliquot share." 44 Supp. 969 (1897). 
 
156 BUSINESS CORPORATIONS IN NEW YORK §§ 148, 149 
 
 conversion.' Sale made by a lender of corporate stock 
 deposited with him by the borrower as collateral for the loan 
 without first demanding payment of the advance and giving 
 notice of the time and place of sale of the stock constitutes 
 conversion.® 
 
 § 148. Id.: Who May Be Pledgor or Pledgee.— While a 
 blank transfer of a certificate of stock, with irrevocable power 
 of attorney to transfer, signed by the person who appears by 
 the certificate to be the owner, confers upon the holder of the 
 certificate and power of attorney th« apparent legal and 
 equitable title to the stock so that a bona fide purchaser can 
 hold the stock against the real owner, yet it does not per se 
 and with the holder's verbal statement of authority confer 
 upon the holder the power to pledge the stock for a loan to 
 the owner.' A pledge of treasury stock by a corporation as 
 collateral to a loan which would be valid if made to an out- 
 sider is none the less valid because a director of the corpo- 
 ration induced his firm to make the loan which no one else 
 would make and as security for which the pledge was given." 
 
 § 149. Id.: Liability of Corporation for. — A corporation is 
 not chargeable with negligence so as to render it liable for 
 damages suffered by a pledgee of certificates of its stock 
 pledged to secure a loan to one of its employees thrt)ugh the 
 unauthorized use of the certificates by the pledgor made pos- 
 sible because the corporation in violation of its by-laws per- 
 mitted the certificates to remain uncanceled and in its safe to 
 which the employee had access or because it neglected to exer- 
 cise a proper supervision over its business and its employees 
 and committed to this particular employee the management of 
 its affairs without special inquiry into the manner in which he 
 discharged his duties, unless it be shown that it knew he was 
 dishonest or had reason to suspect his dishonesty." A corpo- 
 ration cannot be held for conversion of stock alleged to have 
 been loaned to it by one of its directors because a receipt for 
 its proceeds was signed by the corporation or because it was 
 given its president who by its by-laws had the duty of special 
 supervision over its property, when the president was handed 
 
 ^Warner v. Cecil, 84 Misc. 21, 'Merchants' Bank v. Livingston, 
 
 145 Supp. 902 (1914). 74 N. Y. 223 (1878). 
 
 * Wallace v. Berdell, 24 Hun, 379 ^Kinsmaii v. Fisk, 83 Hun, 494, 
 
 (1881). 31 Supp. 1045 (1895). 
 
 As to what sales of corporate "Knox v. Eden Mxisee American 
 
 stock by pledgee amounts to con- Co., 17 A, D. 365, 45 Supp. 255 
 
 version, see note in 43 L.R.A. 739. (1897). 
 
§§ 150, 151 STOCK 157 
 
 .the stock and there is no evidence of his implied authority to 
 borrow for the corporation." 
 
 § 150. Id.: Actions and Practice. — In an action against an 
 individual pledgee of corporate stock and a corporation as 
 joint wrongdoers in converting the stock, recovery may be 
 had against one though not sustained against the other, and 
 if the corporation took the stock from the pledgee knowing he 
 converted it Ho tender of the stock to the company is needed 
 to permit recovery of its value.^^ In an action to recover from 
 certain persons who have converted the stock of a corporation, 
 one who is a director but who had no connection as such or in 
 any other way with the corporation until after the consumma- 
 tion of the alleged illegal scheme, is not a proper party." An 
 action by a pledgee of stock to recover damages from a third 
 person who agreed to buy it from the pledgee at a stated price 
 if the pledgor did not redeem it before a certain date is not 
 to recover the purchase price but for breach of contract, and 
 the fact that no tax was paid or stamps affixed at the time of 
 the pledge is therefore no defence to the action.^^ A conver- 
 sion of corporate stock by the pledgee does not entitle the 
 pledgor to demand its return without tender of payment of 
 his debt." 
 
 § 151. Id. : Measure of Damages.— When ' ' a pledgee of cor- 
 porate stock, acting in good faith and under an honest mis- 
 take, converts it, it is the duty of the owner to replace it 
 himself within a reasonable time after notice, and the proper 
 measure of damages for the conversion is the highest market 
 price during such reasonable time, and . . . where the 
 facts are undisputed, what is a reasonable time is a question 
 of law for the court ' ' ; but if there be no evidence upon which 
 the value of the stock can properly be determined within a 
 
 ^° Logan V. Fidelity-Phenix Fire On liabili^ of pledgee of stock 
 
 Ins. Co., 161 A. D. 404, 146 Supp. as a shareholder, generally, see 
 
 678 (1914). The lender was also notes in 36 L.R.A. 139; 19 L.R.A. 
 
 one of a committee of accounts of (N.S.) 249. 
 
 the corporation directed by its by- ^^ Usher v. Van Vranken, 48 
 
 laws to audit the books and accounts A. D. 413, 63 Supp. 104 (1900). 
 
 of its secretary and examine its ^^Mulheran v. Gebhardt, 93 A. D. 
 
 assets every six months and report 98, 86 N. Y. Supp. 941 (1904). 
 
 to the board, which was not done. ^^Wyllis Co. v. Nixon, 165 A. D. 
 
 On validity of pledge of stock of 373, 150 Supp. 944 (1915) ; Tax L. 
 
 corporation when not made in the § 278. 
 
 books of the company as against at- " N«w York, Lake Erie & West- 
 
 tachments, executions, or subsequent em R. R. Co. v. Davies, 38 Hun, 
 
 transfers, see notes in 67 L.R. A. 656; 477 (1886). 
 20 L.R.A.(N.S.) 996; 49 L.R.A. 
 (N.S.) 1159. 
 
158 BUSINESS CORPORATIONS IN NEW YORK § 152 
 
 reasonable time after its conversion, nominal damages only 
 can be awarded.^^ The measure of damages accorded an 
 owner of pledged stock sold wrongfully but in good faith and 
 by mistake by the pledgee is the highest price it reaches within 
 a reasonable time after the owner learns of the conversion of 
 his stock within which he could go in the market and repur- 
 chase it.^* One suing a pledgee of his corporate stock who has 
 converted it " is entitled to recover the highest market value 
 of the stock at any time intermediate the conversion and the 
 close of the trial." " Evidence of the par value of stock and 
 none other does not support a judgment for damages for its 
 conversion." 
 
 § 152. Id.: Dividends, Definitions, and Legality, Nature, 
 In General. — "A dividend is a corporate profit set aside, 
 declared and ordered by the directors to be paid to the stock- 
 holders upon demand or at a fixed time."" " This word 
 [" dividends "] when used in reference to corporate stocks 
 has a technical but well understood meaning, and indicates 
 corporate funds derived from the business and earnings of 
 the corporation, appropriated by a corporate act to the use of 
 and to be divided among the stockholders."^" "A division 
 of profits without the formality of declaring a dividend is the 
 equivalent of declaring a dividend. " ^ A payment of all the 
 net amount realized from sale of realty put in a corporation 
 to the stockholders who were owners of undivided interests in 
 the realty after the termination of a litigation because of 
 which such interests were pooled in the corporation is a dis- 
 tribution of capital and not the payment of a dividend.^ "A 
 corporation which has earned profits is not precluded from 
 distributing them as dividends because some of its assets are 
 in such a form that it must borrow money for its business. ' ' ' 
 A distribution by directors of surplus corporate earnings 
 among themselves "and certain employee stockholders under 
 
 " Griggs V. Day, 158 N. Y. 1, 52 (1909) ; aff'd 198 N. Y. 605, 92 N. E. 
 
 N. E. 692 (1899). 1097, citing Cook Corp. 6th ed. 
 
 " Wright V. Bank of the Metropo- § 534. 
 
 lis, 110 N. Y. 237, 1 L.R.A. 289, 18 =» Hyatt v. Allen, 56 N. Y. 553 
 
 N. E. 79 (1888). (1874). 
 
 " Romaine v. Van Allen, 26 N. Y. ^ Hartley v. Pioneer Iron Works, 
 
 309 (1863). 181 N. Y. 73, 73 N. E. 576 (1906). 
 
 ^* Warren v. Stikeman, 84 A. D. ^ People ex rel. Tetragon Co. v. 
 
 610, 82 Supp. 10O3 (1903). Sohmer, 162 A. D. 433, 147 Supp. 
 
 On measure of damages for con- 611 (1914) ; aff'd 213 N. Y. 702, 108 
 
 version of pledged stocks by invalid N. E. 1105; Tax L. § 182. 
 
 sale, see note in 43 L.R.A. 768. 'Holmes v. St. Joseph Lead Co., 
 
 1* People ex rel. Pullman Co. v. 84 Misc. 278, 147 Supp. 104 (1914) ; 
 
 Glynn, 130 A. D. 332, 114 Supp. 460 aff'd 163 A. D. 885, 147 Supp. 1117. 
 
§§ 153, 154 STOCK 159 
 
 the guise of additional salary but upon a uniform basis of a 
 percentage of the stock held by each and not according to the 
 services rendered the corporation by the distributees is with- 
 out consideration and a wrong to the corporation itself, which 
 a stockholder, in a representative action, may compel the 
 officers to account for as a diversion of the corporation's 
 money and property.* 
 
 § 153. Id.: Property Dividend. — A dividend in property, as 
 well as in money, is lawful.^ " 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 
 declared, and that may be distributed among stockholders. ' ' ° 
 " There is no statute which requires dividends in telegraph 
 companies or in companies generally to be made in cash. 
 Whether they shall be made in cash or property must also rest 
 in the discretion of the directors. " ^ " . . . a railroad 
 corporation may issue to its stockholders bonds in lieu of cash 
 dividends, to represent the earnings of the company which 
 have been used by the company for construction and the 
 betterment of its railroad and property. ' ' * 
 
 § 154. Id.: Stock Dividend.— Stock dividends are not within 
 the purview of the statute prohibiting declaration of divi- 
 dends except from surplus, etc., as " after a stock dividend 
 a corporation has just as much property as it had before. ' ' ' 
 " So long as every dollar of stock issued by a corporation is 
 represented by a dollar of property, no harm can result to 
 individuals or the public from distributing the stock to the 
 stockholders. " ^° "A stock dividend does not distribute prop- 
 erty, but simply dilates the shares as they existed before 
 . . . "." " There is no limit to the capital which business 
 corporations in this state may have, and there is no limit in 
 the law beyond which they may not increase their capital. All 
 that can be required in any case is that there shall be an actual 
 capital in property representing the amount of share capital 
 issued," so that if this requirement Ije observed, there is no 
 
 * Godley v. Crandall & Godley Co., dismissed 124 N. Y. 83, 26 N. E. 
 
 212 N. Y. 121, L.R.A.1915D, 632, 338. 
 
 106 N. E. 818 (1914). ^Williams v. Western Union Tele- 
 
 = Scott V. Central R. B. & Banking graph Co., 93 N. Y. 162 (1883); 
 
 Co. of Ga., 52 Barb. 45 (1868). B. S. e. 18, part 1, title 4, § 2. 
 
 ® Williams v. Western Union Tele- ^° Williams v. Western Union Tele- 
 graph Co., 93 N. Y. 162 (1883). graph Co., 93 N. Y. 162 (1883). 
 
 ' Williams v. Western Union Tele- ^"^ Williams v. Western Union Tele- 
 graph Co., 93 N. Y. 162 (1883). graph Co., 93 N. Y. 162 (1883). 
 
 *Wood V. Lary, 47 Hun, 550; 
 
160 BUSINESS CORPORATIONS IN NEW YORK §§ 155, 156 
 
 limit upon the declaration of stock dividends, which operate 
 to increase the capital stock.^^ "... when stock has 
 been lawfully created and is held by a corporation, which it 
 has a right to issue for value, then a stock dividend may be 
 made, provided that the stock always represents property. ' ' ** 
 A bonus of $30,000 cash and $70,000 in stock of a corporation 
 to be paid to one of its directors or a company controlled by 
 him under a resolution of the board for negotiating a $200,000 
 loan to the corporation on the security of its second mortgages 
 wUl be enjoined when the stockholders authorizing the loan 
 knew nothing of the bonus." 
 
 § 155. Id.: Scrip Dividend. — " 'A scrip dividend is a divi- 
 dend of certificates giving the holder certain rights which are 
 specified in the certificate itself ' " ; and it is a legal kind of 
 dividend." A corporation cannot make a scrip dividend one 
 year and issue bonds the next to pay it ; nor can it reduce its 
 capital stock by substituting therefor bonds." A trustee 
 appointed to hold corporate stock and pay the dividends for 
 another's life to such other and on such other's death to dis- 
 tribute should pay dividends not only on the stock originally 
 coming to his hands but also on stock coining to him by decla- 
 ration of a scrip dividend." 
 
 § 156. Id.: Governing Statutes. — The directors of a stock 
 corporation must not make dividends except from the surplus 
 profits arising from the business of the corporation, nor 
 divide, withdraw or in any way pay to the stockholders or any 
 of them any part of the capital of the corporation, or reduce 
 its capital stock, except as authorized by law, but it is legal 
 for the corporation to divide and distribute the assets of the 
 corporation remaining after payment of all its debts and lia- 
 bilities upon its dissoltftion or the expiration of its charter, 
 and to accept shares of its capital stock in complete or partial 
 settlement of a debt owing to it which is deemed bad or doubt- 
 ful by its board of directors." 
 
 ^^ Williams v. Western Union Tele- ^° Merz v. Interior Conduit & In- 
 
 graph Co., 93 N. Y. 162 (1883). sulation Co., 87 Hun, 430, 34 Supp. 
 
 ^^ Williams v. Western Union Tele- 215 (1895); app. dism'd 151 N. Y. 
 
 graph Co., 93 N. Y. 162 (1883). 638, 45 N; E. 1133. 
 
 ^^ Commercial National Bank of " Goldsmith v. Swift, 25 Hun, 201 
 
 Cleveland v. Syracuse Rapid Transit (1881). 
 
 Ry. Co., 25 Misc. 36, 54 Supp. 429 " St. Corp. L. § 28 (L. 1909, 
 
 (1898). e. 61). 
 
 .^^ Bankers Trust Co. v. Dietz Co., 
 157 A. D. 594, 142 Supp. 847 
 (1913). 
 
§§ 157, 158 STOCK 161 
 
 § 157. Id.: Declaration of, By Directors Only.—" It is well 
 settled that in the absence of statutory provisions, the grant- 
 ing of dividends from the profits of a trading corporation is 
 in the discretion of the directors subject to the intervention 
 of a court of equity for improper refusal. " " " When a cor- 
 poration has a surplus, whether a dividend shall be made, and 
 if made, how much it shall be, and when and where it shall be 
 payable, rest in the fair and honest discretion of the directors 
 uncontrollable by the courts. " ^^ A stocldiolder cannot compel 
 declaration of dividends from surplus determined by directors 
 in good faith to be advantageously retained in the corporate 
 business.^ There is no reason why the exercise of the power 
 and discretion of the directors of a corporation to declare 
 dividends may not be controlled by agreement between the 
 persons owning all its stock, so long as the interests of corpo- 
 rate creditors are not affected.^ 
 
 § 158. Id.: By Court Compulsion. — " While, as a general 
 rule, courts of equity will not exercise visitorial powers over 
 corporations, and its officers are the sole judges as to the 
 propriety of declaring dividends, and in this respect the court 
 will not interfere with a proper exercise of their discretion, 
 yet where the right to the dividend is clear and fixed by the 
 contract, and requires the directors to take action before it 
 can be asserted by a suit at law, and a restraint by injunction 
 is essential to maintain the right of the stockholder, the inter- 
 position of a court of equity is a proper exercise of its power 
 and shoidd be upheld."^ " ... where, without doubt, 
 the surplus of a corporation properly applicable to a dividend 
 is ample for the purpose, and the directors, or a majority of 
 them, acting in bad faith, and without reasonable cause, refuse 
 to declare a dividend, the courts will interpose in favor of 
 those stockholders who otherwise would be without remedy." * 
 A stockholder must prove a dividend and a demand for it 
 before he can maintain an action for it.* A complaint to 
 recover unpaid dividends is demurrable if it do not aver that 
 
 " Turnbloom v. International ^ Kassel v. Empire Tinware Co., 
 
 Paper Co., — Misc. — (1918); 178 A. D. 176, 164 Supp. 1033 
 
 N. Y. L. J. Feb. 7, Sp. T. N. Y. Co.; (1917). 
 
 quoting from Wilson v. American ^Boardman v. Lake Shore & 
 
 Ice Co., 206 Fed. 736. . Michigan Southern Ry. Co., 84 N. Y. 
 
 "" Williams v. Western Union Tele- 157 (1881). 
 
 graph Co., 93 N. Y. 162 (1883). *Hiscock v. Lacy, 9 Misc. 578, 
 
 ^McNab V. McNab & Harlin Mfg. 30 Supp. 860 (1894). 
 
 Co., 62 Hun, 18, 16 Supp. 448 = Scott v. Central R. R. & Bank- 
 
 (1891); afi'd 133 N.Y.687,31 N. E. ing Co. of Ga., 52 Barb. 45 (1868). 
 
 r27. 
 
 B. C. N. Y.— 11 
 
162 ■ BUSINESS COEPORA.TIONS IN NEW YORK § 159 
 
 the plaintiff was the owner of the stock at the time the divi- 
 dends were declared, or became entitled to them by reason of 
 a subsequent assignment." An assignee of a transferee of 
 stock, which, upon demand of the latter and presentation of 
 all indicia of ownership, the corporation has refused to trans- 
 fer on its books, need not, as a condition precedent to suit to 
 recover dividends, make further demand of the corporation 
 that the stock be transferred on its books to his name/ 
 
 § 159. Id.: From What. — Dividends may only be declared 
 from the surplus profits arising from the business of the cor- 
 poration ; and division, withdrawal or payment of any part of 
 the capital or reduction of the capital stock is forbidden, 
 except as authorized by law.* " The ' capital stock ' . . . 
 [in the statute prohibiting declaration of dividends except 
 from surplus profits, etc.] does not mean share stock, but it 
 means the property of the corporation contributed by its 
 stockholders or otherwise obtained by it, to the extent 
 required by its charter. ' ' ° By making illegal any dividend 
 made by a corporation when its capital stock is impaired the 
 legislature uses the word " dividend " in its " popular sense, 
 that is, a sum of money distributed pro rata among the stock- 
 holders, without reference to the source from which it was 
 taken or paid. ' ' ^° Dividends cannot lawfully be made " of a 
 hope based on an expectation of a future delivery at a favor- 
 able price of what is not yet in existence. " ^' If an a^nount 
 greater than the par value of stock be paid therefor, the entire 
 sum need not be held and distributed as capital, but only the 
 amount at par value paid for each share, while the amount 
 above par represents accumulated profits or surplus, dis- 
 tributable as such in dividends." The gains or profits realized 
 by a corporation from its active transactions, such as sale of 
 its stock above its par value and the purchase and sale at an 
 advance of various stocks, constitute profits and surplus which 
 
 ° Tepf er v. Ideal Gas & Electric " Hutchinson v. Curtiss, 45 Misc. 
 
 Fixtures Co., 58 Misc. 396, 109 484, 92 Supp. 70 (1904). The divi- 
 
 Supp. 664 (1908). dend was based on calculations made 
 
 ' Robinson v. National Bank of months in advance of profits to be 
 
 Berne, 95 N. Y. 637 (1884). made on contracts to deliver at a 
 
 ' St. Corp. L. § 28 (L. 1909, future time a product not yet made 
 
 c. 61). from raw material, not yet pur- 
 
 * Williams v. Western Union Tele- chased, with the aid of labor not yet 
 
 graph Co., 93 N'. Y, 162 (1883); expended. 
 
 E. S. c. 18, part 1, tit. 4, § 2. See ^^ Equitable Life Assurance Soc. 
 
 now St. Corp. L. § 28. v. Union Pacific R. R. Co., 212 
 
 " Osgood V. Layten, 42 N. Y. (3 N. Y. 360, L.R.A.1915D, 1052, 106 
 
 Keyes) 521 (1867); 4 Edm. R. S. N. E. 92 (1914). 
 p. 210. See now St. Corp. L. § 28. 
 
§ 159 STOCK 163 
 
 are available for dividends." " Dividends, as the rule, are 
 not payable out of the capital of a corporation ; but only from 
 the surplus profits arising from the business carried on . . . 
 When the property of a corporation has accumulated in excess 
 of its chartered capital, the excess may be regarded and dealt 
 with as constituting a surplus of profits; but not when the 
 surplus capital arises simply from a reduction of capital." " 
 The definition in the Century dictionary of ' ' net profits ' ' has 
 been judicially adopted as a basis for determining if the 
 statute prohibiting the making of dividends except from sur- 
 plus or net profits has been violated, viz.: " What remains 
 as the clear gain of any business after deducting the capital 
 invested in the business, the expenses incurred in its manage- 
 ment and the losses sustained by its operation."" A share- 
 holder in a family, close corporation, given a salary as a sub- 
 stitute for dividends though doing no work will be compelled 
 to account therefor if the company runs at a loss, as this then 
 constitutes a division of non-existing profits.'" The statutory 
 provisions against directors paying to stockholders or reduc- 
 ing capital stock without legislative consent " were intended 
 to prevent the division, distribution, withdrawal and reduction 
 of the property of a corporation below the sum limited in its 
 charter or articles of association for its capital, but not to 
 prevent its increase above that sum. The purpose was to pre- 
 vent the depletion of the property of the corporation, thereby 
 endangering its solvency. ' ' " When all of the stock of a cor- 
 poration is issued for patent rights, an agreement to transfer 
 territorial rights therein is a reduction of capital forbidden 
 by law and void." 
 
 ^^ Equitable Life Assurance Soc. surplus profits (1 R. S., 589, § 1), 
 
 V. Uniou Pacific R. R. Co., 212 as the only penalty imposed on a 
 
 N. Y. 360, L.R.A.1915D, 1052, 106 corporation so formed is that the 
 
 N. E. 92 (1914). trustees shall become liable for all 
 
 "Roberts v. •Roberts-Wicks Co., debts contracted during their terms 
 
 184 N. Y. 257, 3 L.R.A.(N.S.) 1034, of office, thereby substituting for 
 
 77 N. E. 13,(1906). creditors the liability of the trustees 
 
 ^^ Hutchinson v. Curtiss, 45 Misc. for the impairment of capital. 
 
 484, 92 Supp. 70 (1904) ; People ex ^° Williams v. M'cCleve, 168 A. D. 
 
 rel. Edison General Electric Co. v. 192, 154 Supp. 38 (1915). 
 
 Barker, 141 N. Y. 251, 36 N. E! 196 " Williams v. Western Union Tele- 
 
 (1894); 1 R. S. 589, § 1; Gen. Mfg. graph Co., 93 N. Y. 162 (1883); 
 
 Act, § 13 (L. 1848, c. 40). A cor- R. S. c. 18, part 1, tit. 4, § 2. See 
 
 poration incorporated under the now St. Corp. L. § 28. 
 
 General Manufacturing Act (L. ^' Stevens v. Olus Manufacturing 
 
 1848, c. 40) is not subject to the Co., 72 Misc. 508, 130 Supp. 22 
 
 inhibition against a corporation de- (1911) ; aff'd 146 A. D. 951, 131 
 
 daring dividends other than from Supp. 1145; St. Corp. L. § 28. 
 
164 BUSINESS CORPORATIONS IN NEW YORK §§ 160, 161 
 
 § 160. Id.: Who Entitled To, In General.—" Prima facie all 
 stockholders, at any particular period, are equally interested 
 in the property and business of a corporation. . . . When, 
 therefore, the directors undertake to distribute among the 
 stockholders any portion of the funds or property of a corpo- 
 ration — whether it be called profits or not — all the stock- 
 holders are entitled to an equal share in the fund, propor- 
 tionate to their stock; whether they have been stockholders 
 for a longer or a shorter period."^" "... a stockholder 
 in a corporation has an interest, in proportion to his stock, in 
 all the corporate property, and has a right to share in any 
 surplus of profits arising from its use and employment in the 
 business of the company ; and this legal right does not depend 
 upon the question whether he is a stockholder of long standing 
 or of recent date. " ^ . Directors cannot, in declaring dividends, 
 discriminate between the stockholders for any reason what- 
 ever, but must treat all who are holders of stock before the 
 dividends are declared alike." It is suflBcient, if uncontra- 
 dicted, to entitle the holder of stock to dividends coming to a 
 certain class of stock, to show that he held a certificate of the 
 stock ; that dividends' were not paid ; that the stock was to pay 
 a dividend; and that there is no proof of any other stock of 
 this description.' If directors do not limit the period for 
 which a dividend is declared the ofiicers can only pay to those 
 who are stockholders on the corporate books at the time of its 
 declaration.* 
 
 i § 161. Id.: On Sale, Transfer or Assignment. — "A share of 
 stock represents the interest which the shareholder has in the 
 capital and net earnings of the corporation. The interest is 
 of an abstract nature, that is the shareholder cannot by any 
 act of his, nor ordinarily by any act of the law, reduce it to 
 possession. He can take, and is entitled to take, the surplus 
 profits when a dividend has been declared by the proper 
 officers of the corporation, and upon dissolution, of the corpo- 
 
 ^ Jones V. Terre Haute & Rich- * Jones v. Terre Haute & Rich- 
 mond R. R. Co., 29 Barb. 353 mond R. R. Co., 29 Barb. 353 
 (1859). (1859). 
 
 ^ Jones V. Terre Haute & Rich- The right as between life tenant 
 
 mond R. R. Co., 57 N. Y. 196 and remainderman in dividends on 
 
 (1874). distribution by corporations is dis- 
 
 ^ Jones V. Terre Haute & Rich- cussed in notes in 12 L.R.A.(N.S.) 
 
 mond R. R. Co., 57 N. Y. 196 768; 35L.R.A.(N.S.) 563; 50 L.R.A. 
 
 (1874). - (N.S.) 510; L.R.A.1916D, 211. 
 
 ' Boardman v. Lake Shore & 
 Michigan Southern Ry. Co., 84 N. Y. 
 157 (1881). 
 
§ 161 STOCK 165 
 
 ration he can take his share of the assets thereof left for dis- 
 tribution, pro rata, among the shareholders. The corporation 
 represents the whole body of the shareholders and to it, before 
 a dividend has been declared, belong, in solido, all the assets 
 in which the shareholders, as such, are interested. When a 
 dividend has once been declared out of net earnings, the 
 amount of such dividend is no longer a part of the assets of 
 the company, but is appropriated or set apart for the share- 
 holders. They receive credit for the dividends and the corpo- 
 ration simply holds them as their trustee. Therefore, before 
 a dividend has been declared, a share of stock represents the 
 whole interest which the shareholder has in the corporation, 
 and when he transfers his stock he transfers his entire inter- 
 est, and dividends subsequently declared, without reference 
 to the source from which or the time during which the funds 
 divided were acquired by- the corporation, necessarily belong 
 to the holder of the stock at the time of the declaration. But 
 when the dividend has once been declared and credited to the 
 shareholder, the amount thereof has been separated from the 
 assets of the corporation and been appropriated to his use. 
 It is then no longer represented by his stock, and is no longer 
 an incident thereof ; and hence when he transfers his stock he 
 does not transfer his dividend, which remains subject to his 
 control. " ' " . . . when a dividend is declared it belongs 
 to the owner of the stock at that time, but , . . until such 
 declaration the profits form part of the assets, and an assign- 
 ment by a stockholder before such declaration carries with it 
 his proportional share of the assets, including all undeclared 
 dividends. This is so in regard to dividends declared, but 
 which are payable at a future time, and such dividends belong 
 to the owner of the stock when declared. ... In the 
 absence, therefore, of any provision in a contract of sale and 
 purchase of stock, outside of and not subject to the rules of 
 the Stock Exchange, the law declares that such a contract 
 gives the dividends to the owner of the shares when the divi- 
 dends were declared. " ' _ A vendee of stock is entitled to all 
 dividends thereon, declared after the sale even though the, 
 transfer has not been recorded.'' The purchaser under al 
 contract for sale of corporate stocks by which the seller 
 assumes to have them and agrees to deliver them on a certain 
 date is entitled to dividends accruing between ^he sale and 
 
 ' Jermain v. Lake Shore and ' Tepfer v. Ideal Gas & Electric 
 
 Michigan Southern Ry. Co., 91 Fixtures Co., 58 Misc. 396, 109 
 N. Y. 483 (1883). Supp. 664 (1908). 
 
 * Hopper V. Sage, 112 N. Y. 530, 
 20 N. E. 350 (1889). 
 
166 BUSINESS CORPORATIONS IN NEW YORK § 161 
 
 delivery.* A bona fide purchaser of stock, " dividend on," 
 upon the New York Stock Exchange, ig not entitled to divi- 
 dends declared, but not payable at the time of such purchase, 
 as against the owner at the time the dividend was declared 
 who had endorsed an irrevocable power of attorney upon the 
 stock certificate and pledged the stock for a time loan with 
 parties who fraudulently and without notice to him had, before 
 the loan was due, sold the stock upon the street." A transfer 
 of the stock of a corporation carries with it to the transferee 
 its proportionate share of the assets of the company includ- 
 ing dividends which have not been declared and all the inci- 
 dents and advantages which appertain to the rights of a 
 shareholder ; and no separate and distinct assignment of the 
 dividends is essential." One coming to hold stock entitled to 
 dividends, is entitled to those then unpaid for any period of 
 time prior to his becoming holder of the stock, as well as to 
 those for any period thereafter until he ceases to hold 
 the stock, provided such dividends are none of them 
 declared save while he is holder of the stock." One 
 holding stock at the time a dividend thereon is declared 
 though to be paid from past earnings sometime in the future 
 at the discretion of an agent of the corporation to whom the 
 stock is later transferred but before fixing by him of the 
 date of payment is entitled to the dividend rather than such 
 agent." Even though there be a special contract by a com- 
 pany with the holders of its stock to declare dividends, that 
 does not alter or change the effect of the contract by which 
 a transferee of the stock holds it and becomes entitled to 
 dividends thereon; for in all cases the dividends follow the 
 stock and belong to the owner of the stock at the 
 time the dividends are declared." The facts that divi- 
 
 ' Currie v. White, 45 N. Y. 822 books of transfer of the corpora- 
 
 (1871). tion or company declaring a divi- 
 
 * Warner v. Watson & Gibson, 4 dend payable at a future day, carry 
 
 Misc. 12, 23 Supp. 922 (1893). with them the dividend so declared, 
 
 "Boardman v. Lake Shore & and the price is regulated accord- 
 Michigan Southern Ry. Co., 84 ingly. After, the books are closed, 
 N. Y. 157 (1881). the sales are understood to be ex- 
 
 ^^ Boardman v. Lake Shore & dividend, and the price is corre- 
 
 Michigan Southern Ry. Co., 84 spondingly affected, by the fact that 
 
 N. Y. 157 (1881). the seller retains and is to collect 
 
 ^^Hill V. Lewichawanick Co., 8 the dividend. Those usages and 
 
 Hun, 459 (1876) ; aff'd 71 N. Y. rules have nothing to do with the 
 
 593. " The transaction of sale . . . case . . ." 
 
 was a private one . . . sales of ^'Boardman v. Lake Shore & 
 
 stock ma^e at the board of brokers Michigan Southern Ry. Co., 84 
 
 in this city at any time before the N. Y. 157 (1881). 
 day fixed for the closing of the 
 
§ 162 STOCK 167 
 
 dends, the subject of a corporate guaranty of payment, are 
 payable before a transfer of stock, and that sufficient cor- 
 porate net earnings exist before such transfer to make the 
 guaranteed dividends, do not entitle the transferror (but the 
 transferee) to the dividends if they are not declared before 
 the transfer and the guaranty of their payment is repudiated 
 by the corporation until after such transfer." " The circum- 
 stance that the directors have adopted some particular day 
 as the close of the corporate fiscal year, or that special days 
 are adopted for declaring dividends, or that it is found con- 
 venient to close the transfer books for any purpose does not, 
 in any way, impair the legal rights of a stockholder to share 
 in dividends subsequently declared, although the closing of 
 the books would, to some extent, embarrass the transfer of 
 stock. " " " . . . when a dividend is made payable on a 
 day subsequent to the day on which it is formally declared it 
 belongs to the stockholder who owns the share on the day the 
 dividend is declared and not to the owner at the time it is 
 payable. ' ' " One entitled to convert his bonds into stock, 
 who mails them for that purpose so that they do not reach 
 the corporation's office till after its transfer books have been 
 closed preparatory to making usual semi-annual dividends, 
 but who has mailed his certificate for stock before the declara- 
 tion by the directors of such dividends, is entitled to his pro . 
 rata share thereof though the resolution declaring them 
 do so on the company's business and stock as they stood on 
 the date of the closing of the books." 
 
 § 162. Id.: On Pledge, Death or Marriage. — Dividends 
 declared on pledged stock after the pledge belong to the 
 pledgee as an increment of the thing pledged, to be accounted 
 for later." A corporation is justified in paying to the duly 
 appointed personal representative of a deceased stockholder 
 of record on its books dividends due on such stock, even with- 
 out production of a certificate of shares of such stock in 
 the name of the decedent.^® The question of the efficacy of 
 
 " Jermain v. Lake Shore & M'ichi- On right to dividends on transfer 
 
 gan Southern Ry. Co., 91 N. Y. 483 of stock see notes in 45 L.R.A. 392; 
 
 (1883). L.E.A.1917B, 326. 
 
 ^' Jones V. Terre Haute & Rich- '* Booth v. Consolidated Fruit 
 
 mond R. R. Co., 57 N. Y. 196 Jar Co., 62 Misc. 282, 114 Supp. 
 
 (1874). 1000 (1909). 
 
 ^° Tepfer v. Ideal Gas & Electric " Brisbane v. Delaware, Lacka- 
 
 Fjxtures Co., 58 Misc. 396, 109 wanna & Western R. R. Co., 94 
 
 Supp. 664 (1908). N. Y. 204 (1883). 
 
 " Jones V. Terre Haute & Rich- 
 mond R. R. Co., 57 N. Y. 196 
 (1874). 
 
168 BUSINESS CORPORATIONS IN NEW YORK § 163 
 
 payment to a husband of dividends on stock held by his wife 
 in order to discharge the corporation from liability therefor is 
 to be determined by the law of the State in which the contract 
 to pay them was made, and they were declared and payable, 
 as distinguished from the law of the State of their domicile." 
 § 163. Id.: Preferred or Guaranteed Stockholders. — Pre- 
 ferred stockholders entitled to preferred dividends annually 
 of a certain per cent, and "to no other or further share of 
 the profits ' ' cannot claim more than their per cent, of divi- 
 dends, even though resulting from profitable dealing by the 
 corporation in stocks which it was not organized to deal in.^ 
 A charter provision for cumulative dividends to preferred 
 stockholders out of surplus profits before payment of any 
 dividends to common stockholders is a contract binding on all 
 stockholders, and such dividends are a charge upon the profits 
 for all time, with accrued interest ; so that on reduction of the 
 company's capital stock the preferred stockholders, though 
 holding a less number of shares, are still entitled to be paid 
 arrears of dividends on shares they had previously held from 
 any dividends declared after the reduction before the common 
 stockholders could receive any dividends, if such dividends 
 were declared from surplus profits, but not if declared from a 
 surplus of capital brought about by the reduction, as to which 
 all stockholders share alike.^ If a stock certificate alone entitle 
 the holder to dividends at a stated rate payable at stipulated 
 periods from net earnings and a guaranty thereon assure 
 payment of the dividends as provided, it necessarily follows 
 that, in the event that such earnings should not reach that 
 amount or at any time failed, the dividends must afterward 
 be paid from the net earnings when earned and received by 
 the company ; and ' ' the reasonable and fair interpretation of 
 the contract is, that the dividends were not only to be pre- 
 ferred but, being guaranteed, were cumulative and a specific 
 charge upon the accruing profits, to be paid as arrears, before 
 any other dividends were divided upon the common stock, ' ' ° 
 Interest should be allowed a holder of preferred stock on 
 dividends passed by the corporation to which he is entitled if 
 
 ^"Graham v. First Nat. B'k, 84 ^ Roberts v. Roberts-Wieks Co., 
 
 N. Y. 393 (1881). 184 N. Y. 257, 3 L.R.A.(N.S.) 1034, 
 
 1 Equitable Life Assurance Soe. 77 N. E. 13 (1906). 
 
 V. Union Pacific R. R. Co., 212 ^Boardman v. Lake Shore . & 
 
 N. Y. 360, L.R.A.1915D, 1052, 106 Michigan Southern Ry. Co., 84 
 
 N. E. 92 (1914). N. Y. 157 (1881). 
 
§ 164 STOCK 169 
 
 the directors in violation of the contract with him pay out 
 dividends on common stock before paying him his dividends.* 
 § 164. Id.: Under Specific Contracts.— A clause in a stock 
 certificate that dividends shall be paid from net earnings at a 
 certain time or at certain regulated periods does not mean 
 that the holder is entitled to the dividends only if there be 
 net earnings available therefor when such time and periods 
 roll around.' An agreement by individuals that, in the event 
 a corporation in which another holds stock fails to declare 
 dividends at a certain rate yearly, they will pay the money 
 necessary to make up such dividends, is not within the statute 
 of frauds.® Payment by one of the purchase price of corporate 
 stock is sufficient consideration for an agreement by persons 
 interested in the corporation to make up to him dividends at 
 a certain rate if not paid by the company.' A certificate by a 
 corporation that one is entitled to a stated sum representing 
 undivided earnings on a certain certificate of its stock, " this 
 dividend . . . payable at the pleasure of the company " 
 on surrender thereof and of such certificate of stock, repre- 
 sents an obligation of the company to pay the stated sum of 
 money, the time at which payment was to be made being left 
 to its determination; and the obligation being absolute, pay- 
 ment must be made within a reasonable time, at the expira- 
 tion of which the holder may sue to recover payment, after 
 due demand and tender of the certificate and the stock certifi- 
 cate — particularly if the corporation has paid similar cer- 
 tificates to their holders.* Under a stock certificate providing 
 that the holder is entitled to dividends whenever in any year 
 the net earnings, after payment of all interest charges, are 
 sufficient for the payment thereof, the directors may legally 
 .declare a lump dividend for four years past, although the 
 certificate stipulate that the dividends shall not be cumula- 
 tive." In an action for the recovery of an undeclared dividend 
 
 *Boardman v. Lake Shore & * Crook v. Seott, 65 A. D. 139, 
 
 Michigan Southern Ey. Co., 84 72 Supp. 516 (1901); afE'd 174 
 
 N. Y. 157 (1881). N. Y. 520, 66 N. E. 1106. 
 
 The question of rights and pref- ' Crook v. Scott, 66 A. D. 139, 72 
 
 «rences of preferred shareholders to Supp. 516 (1901) ; aff'd 174 N. Y. 
 
 dividends, is discussed in a note in 520, 66 N. E. 1106. 
 
 27 L.R.A. 143. *Billingham v. Gleeson Mfg. Co., 
 
 On right to have earnings applied 101 A. D. 476, 91 Supp. 1046 
 
 to payment of dividends on pre- (1906); aff'd 185 N. Y. 571, 78 
 
 f erred stock of previous years, see N. E. 1099. 
 
 note 3 L.R.A.(N.S.) 1034. 'Wood v. Lary, 47 Hun, 550; 
 
 = Boardman v. Lake Shore & dism'd 124 N. Y. 83, 26 N. E. 338. 
 Michigan Southern Ry. Co., 84 
 N. Y. 157 (1881). 
 
170 BUSINESS CORPORATIONS IN NEW YORK § 165 
 
 upon a corporation's preferred stock, " the plaintiffs can- 
 not recover unless they prove that the net earnings of the 
 company have been large enough to pay them a dividend, 
 according to the agreement by which they became preferred 
 stockholders ' ' ; and it is not necessary that the common stock- 
 holders be parties to the action, though the court has discre- 
 tion to have them in." 
 
 § 165. Id.: When Entitled To. — " A shareholder in a corpo- 
 ration has no legal title to the property or profits of the corpo- 
 ration until a division is made or a dividend declared (cita- 
 tions). He acquires no right or title to the accumulated gains 
 from the revenues of the corporation, which entitles him to 
 sue for his aliquot share of dividends. Until divided by the 
 directors or trustees of the corporation, aU of its property is 
 held in joint ownership by the corporators, and no several 
 right is possessed by the individual stockholder, until after 
 a dividend is declared. The declaration of a dividend from a 
 surplus, or the division of profits is within those discretionary 
 powers of the directors or trustees, which will not be con- 
 trolled by the courts."" "A shareholder in a corporation 
 has no legal title to the property or profits of the corporation 
 until a division is made. " " " ... before a dividend is 
 declared all the property of the corporation belongs, in fact, 
 jointly to aU the stockholders, the legal title being in the cor- 
 porate body and its affairs managed by the directors as trus- 
 tees for the stockholders. After a dividend is declared, each 
 stockholder has a right in severalty to his particular propor- 
 tion; and this right cannot ... be abridged by any dis- 
 crimination of the directors in any form whatever." " 
 
 ^^ Thompson v. Erie R. R. Co., dividends and profits on certain 
 
 45 N. Y. 468 (1871). stock to a certain date should be 
 
 On right of holder of preferred paid plaintiffs. Though an increase 
 stock, in absence of express statu- in the company's assets came about 
 tory provision or agreement on the before that date, yet as no dividend 
 point, to share in earnings, in ad- was declared, plaintiffs could not 
 dition to the stipulated dividends, share therein as the profits result- 
 see note in 24 L.R..A.(N.S.) 1079. ing from such increase were the 
 
 '^ Beveridge v. New York Elevated company's and not the stockholder's. 
 
 R. R. Co., 112 N. Y. 1, 2 L.R.A. 648, " Jones v. Terre Haute & Rich- 
 
 19 N. E. 489 (1889). mond R. R. Co., 57 N. Y. 196 
 
 >2 Hyatt V. Allen, 56 N. Y. 553 (1874). 
 (1874). Defendant agreed that 
 
CHAPTER V. 
 
 STOCKHOLDERS. 
 
 Stockholders: 
 
 A. Definitions, Distinctions and Nature, § 166. 
 
 B. Powers, Privileges and Duties: 
 
 1. In General: 
 
 a. Miscellaneous, § 167. 
 
 b. Sy Unanimous Consent Without Meeting, § 168. 
 
 c. To Vote at Meetings, § 169. 
 
 d. To Vote by Proxy or Voting Trust/ ^ 170. 
 
 e. To Batify Unauthorized Acts of Officers and Directors, 
 
 § 171. 
 
 f. To Bind Successors, § 172. 
 
 g. To Deal with Their Corporation, § 173. 
 
 h. To Complain of Corporate Acts of Which They Knew, 
 
 or to Which They Assented, § 174. 
 i. To Demand and Receive Financial Statement from Cor- 
 poration's Treasurer : 
 aa. Governing Statutes, § 175. 
 bb: Who May Compel, § 176. 
 cc. How Often, § 177: 
 dd. What Statement Suffices, § 178. 
 ee. Suit for Penalty, § 179. 
 
 2. Of Majority: 
 
 a. In General, § 180. 
 
 b. Voting Salaries in Fraud of Minority, § 181. 
 
 e. Selling Corporate Property in Fraud of Minority, § 182. 
 
 3. Of Minority: 
 
 a. In General, § 183. 
 
 b. Invoking Court Protection against Acts of Majority, 
 
 § 184. 
 
 c. Preventing Sale of Corporate Assets by Majority, § 185. 
 
 d. Preventing Sale of Stock by Majority, § 186. 
 
 4. Actions By: 
 
 a. In General, § 187. 
 
 b. What Stockholders May Sue, § 188. 
 
 c. When Corporation Must Sue or Be Asked To, § 189. 
 
 d. Grounds for Suit By Stockholder, § 190: 
 
 e. Pleading, Practice and Evidence, § 191. 
 
 f. Objections To, § 192. 
 
 C. Liabilities of: 
 
 1. In General, § 193. 
 
 2. Of Representatives of Deceased Stockholder, § 194. 
 
 3. For Debts: 
 
 a. Governing Statutes, § 195. 
 
 b. In General, § 196. 
 
 e. For What Debts, § 197. 
 
 171 
 
172 BUSINESS CORPORATIONS IN NEW YORK § 166 
 
 X. Stockholders — Continued: 
 C, 3 — Continued: 
 
 d. Who May Enforce, § 198. 
 
 e. Who Liable: 
 
 £ia. In General, § 199. 
 bb. Subscribers, § 200. 
 ec. One Becoming Stockholder after Debt Incurred, 
 
 § 201. 
 dd. On Increase or Reduction or Change from Par to 
 
 Non-Par Value of Capital Stock, § 202. 
 ee. After Disposal of Holdings By Sale, Transfer on 
 
 Books, etc., § 203. 
 
 f. To What Extent Liable: 
 
 aa. In General, § 204. 
 
 bb. When Stock Fully Paid, § 205. 
 
 g. Action, Judgment and Execution against Corporation, 
 
 Condition Precedent to: 
 aa. Governing Statutes, § 206. 
 bb. In General, § 207. 
 
 cc. Not When Corporation Dissolved, Bankrupt, etc., 
 § 208. 
 h. Judgment against Corporation as Measure of Stock- 
 holder's Liability, § 209. 
 i. Statute of Limitations Against, § 210. 
 j. For Interest On, § 211. 
 k. Defenses of and Contribution Among Stockholders, 
 
 § 212. 
 1. Pleading, Practice and Evidence in Actions Against: 
 aa. In General, § 213. 
 bb. Making All Creditors or Any One Plaintiffs or 
 
 Plaintiff, § 214. 
 ce. In Equity, Making All Stockholders Ratably Lia- 
 ble; or In Law, Against Any Stockholder, § 215. 
 dd. Sufficiency of Allegations in Complaint, § 216. 
 ee. Sufficiency of Answer; and Pleading Defenses, 
 
 §217. 
 ff. Judgment and Execution Against Stockholder, 
 § 218. 
 m. Under Foreign Statutes, § 219. 
 4. For Services of Corporate Laborers, Servants and Em- 
 ployees : 
 
 a. Governing Statutes, § 220. 
 
 b. In General, § 221. 
 
 c. Who Liable, § 222. 
 
 d. For What Liable, § 223. 
 
 e. Who are Laborers, Servants and Employees, § 224. 
 
 f. Necessity and Effect of Judgment First Had Against 
 
 Corporation, § 225. 
 
 g. Pleading, Practice and Evidence, § 226. 
 
 § 166. Stockholders: Definitions, Distinctions and Nature. — 
 One is constituted a stockholder in a corporation hy subscrip- 
 tion to its stock ; it is not necessary that a certificate for stock 
 
§ 167 STOCKHOLDERS 173 
 
 be issued to him.' " It is often said that the great distinc- 
 tion between stockholders and bondholders is that stock- 
 holders are partners in the enterprise, while bondholders are 
 creditors."^ At the time of apportionment by corporate 
 trustees of shares according to a certificate of incorporation, 
 if the corporation then had property or valuable rights, or as 
 soon as obtained, every person to whom shares are assigned 
 acquires a proprietary interest in the company and becomes a 
 stockholder/ 
 
 § 167. Id.: Powers, Privileges and Duties, in General; Miscel- 
 laneous. — The certificate of incorporation of any corporation 
 may contain -any limitation upon the powers of its stock- 
 holders which does not exempt them from the performance 
 of any obligation or the performance of any duty imposed by 
 law.* " As a general rule stockholders cannot act in relation 
 to the ordinary business of a corporation. The body of 
 stockholders have certain authority conferred by statute 
 which must be exercised to enable the corporation to act in 
 specific cases, but except for certain authority conferred by 
 statute, which is mainly permissive or confirmatory, such as 
 consenting to the mortgage, lease or sale of real property of 
 the corporation, they have no express power given by statute. 
 They are not by any statute in this State given general power 
 of initiative in corporate affairs. Any action by them relat- 
 ing to the details of the corporate business is necessarily in 
 the form of an assent, request or recommendation. Recom- 
 mendations by a body of stockholders can only be enforced 
 through the board of directors, and indirectly by the authority 
 of the stockholders to change the personnel of the directors 
 at a meeting for the election of directors. Such action may 
 or may not result in securing adequate, corporate action with 
 reference to illegal or fraudulent acts . . . Although it 
 is said that the authority of stockholders in the manageinent 
 of business corporations is exhausted when they elect the 
 directors (citation) nevertheless it is generally recognized 
 that certain acts of boards of directors that are legal, but 
 voidable, can be ratified and confirmed by a majority of the 
 body of stockholders as the ultimate parties in interest and 
 
 ^Beals V. Buffalo Construction (1860). Determining the liability 
 
 Co., 49 A. D. 589, 63 Supp. 635 of one as a stockholder for debts of 
 
 (19*00). a corporation to an amount equal to 
 
 ^ Smith V. Westchester Bronxville his holdings under Gen. Mfg. Act, 
 
 Realty Co., 78 Misc. 75, 137 Supp. L. 1848, c. 40, § 10. 
 690 (1912); aiE'd 156 A. D. 920, *Gen. Corp. L. § 10 (L. 1909. 
 
 141 Supp. 1147. c. 28). 
 
 'Burr V. Wilcox, 22 N. T. 551 
 
174 BUSINESS CORPOEATIONS IN NEW YORK § 167 
 
 thus make them binding upon the corporation (citation). 
 Such recognized authority in stockholders to ratify and eon- 
 firm the acts of boards of directors is confined to acts voida- 
 ble by reason of irregularities in the make up of the board or 
 otherwise or by reason of the directors or some of them being 
 personally interested in the subject-matter of the contract 
 or act, or for some other similar reason which makes the 
 action of the directors voidable. No such authority 
 exists in case of an act of the board of direc- 
 tors which is prohibited by law or which is against public 
 policy (citation). In any case where action is taken by stock- 
 holders confirming and ratifying a fraud and misapplication 
 of the funds of the corporation by the directors or others the 
 action is binding only by way of estoppel upon such stock- 
 holders as vote in favor of such approval. "° " While he [a 
 stockholder] does not own and cannot dispose of any specific 
 property of the corporation, yet he and his associates own the 
 corporation itself, its charter, franchises and all rights con- 
 ferred thereby, including the right to increase the stock. He 
 has an inherent right to his proportionate share of any divi- 
 dend declared, or of any surplus arising upon dissolution, and 
 he can prevent waste or misappropriation of the property of 
 the corporation by those in control. Finally, he has the right 
 to vote for directors and upon all propositions subject by law 
 to the control of the stockholders and this is his supreme right 
 and main protection." ° " The equal and ratable distribution 
 of the assets and the equal and ratable enforcement of the 
 liabilities of a company, according to the interest of share- 
 holders therein, is equitable and should be enforced, so that 
 each shareholder may receive an equal proportion of the 
 assets and contribute only an equal proportion to discharge 
 its liabilities. This principle . . . applies as well to the 
 proceeds of calls as to property already in hand. In other 
 words, shareholders have equal rights and must bear equal 
 burdens. ' ' ' Any stockholder not party to arrangements by 
 directors of a corporation for virtually suspending the func- 
 tions for which it is incorporated may complain and demand 
 restoration.* "When the charter appoints the corporation's 
 directors to manage its affairs, its stockholders as such can- 
 not make a leaee of its property, even though they be also 
 
 ^Continental Securities Co. v. 'Bank of China, etc., v. Morse, 
 
 Belmont, 206 N. Y. 7, 51 L.R.A. 168 N. Y. 458, 56 L.R.A. 139, 61 
 
 (N.S.) 112, 99 N. E. 138 (1912). N. E. 774 (1901). 
 
 " Stokes V. Continental Trust Co., - ' Jacobus v. Diamond Soda Water 
 
 186 N. Y. 285, 12 L.R.A.(N.S.) 969, Mfg. Co., 94 A. D. 366, 88 Supp. 
 
 78 N. E. 1090 (1906). 302 (1904). 
 
§ 168 STOCKHOLDERS 175 
 
 directors.' "While directors may not properly vote to discon- 
 tinue an action by their corporation in which they are per- 
 sonally interested, a majority of the stockholders may." 
 ' ' The admissions of a member of a corporation aggregate are 
 not competent to charge the corporation unless they are made 
 in rela,tion to a transaction in which such member is the 
 authorized agent of the corporation."" One not a stock- 
 holder who holds a proxy and is requested by the president 
 (under arrest) to call a stockholders' meeting to order may 
 do so." One making a loan of shares of stock in a corporation 
 to be returned or paid for at the borrower's option and deliv- 
 ering a certificate for the shares endorsed in blank is not 
 entitled to the same certificate back but must be satisfied with 
 any certificate for the same number of shares." A transfer 
 of corporate property which does not purport to be a cor- 
 porate act is insufficient to effect a transfer even though made 
 by one who owns substantially all of the corporation's stock." 
 On application by a stockholder he will be permitted to come 
 in and defend in behalf of his company by an attorney of his 
 own selection an action in which judgment has been had 
 against it (and which is opened so he can defend), when col- 
 lusion in obtaining the judgment is shown in directors to the 
 special injury of such stockholder.^^ The power of stock- 
 holders to control the expenditure by directors of their cor- 
 poration of its funds in co-operation with other corporatioijs 
 or persons to help win the World War is hereinafter stated.^^" 
 § 168. Id.: By Unanimous Consent Without Meeting.— 
 " Certainly, what the stockholders might have done by the 
 
 * Couro V. Port Henry Iron Co., pany was afterward organized iri 
 
 12 Barb. 27 (1851). California, to which it was proposed 
 
 " Socorro Mountain Mining Co. v. to convey all the property of the 
 
 Preston, 17 Misc. 220, 40 Supp. 1040 former corporation. The plaintiff, 
 
 (1896). claiming that such transfer was 
 
 ^^ Simmons v. Sisson, 26 N. T. made with the intent to render his 
 
 264 (1863). stock worthless, brought this action 
 
 ^^ People V. Albany & Susque- to restrain the defendant from car- 
 
 hanna B. E. Co., 55 Barb. 344 rying such transfer into effect, and 
 
 (1869). to secure the appointment of a re- 
 
 ^^ Barclay v. Culver, 30 Hun, 1 ceiver. Held, that a temporary in- 
 
 (1883) ; Kelly v. Mariposa Land & junction was properly granted and 
 
 Mining Co., 4 Hun, 632 (1875). a receiver appointed." 
 
 There is no opinion, but only this "Palmer v. Ring, 113 A. D. 643, 
 
 headnote: "The plaintiff owned, gg g 290 (1906). 
 
 tS oYLnt^n^th: R. Tm. ,,7^%°* li^f ' '^ ^- 3?. 
 
 CZ, a corporation . . . of this f JT^' ISgi c isVf'''- ^°'^- ^• 
 
 State, to which a large tract of land 8 ^» (L. 1894 c. 687). 
 
 had been conveyed, constituting the *See § 284, mfra. 
 
 bulk of its property. A new com- Charter restrictions on eligibility 
 
176 BUSINESS COEPOEATIONS IN NEW YORK § 169 
 
 requisite vote, at a formal meeting," they might do by agree- 
 ment between themselves, to which the assent of every one was 
 obtained. ' ' " Stockholders of a corporation formed, in which 
 none but themselves ever were interested, which never did 
 any business, and which never had any creditors may inter 
 sese agree to release each from their subscriptions to stock." 
 Whenever under the provisions of any of the corporate laws 
 a corporation is authorized to take any action after notice to 
 its members or after the lapse of a prescribed period of time, 
 such action may be taken without notice and 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 attorney thereunto 
 authorized." 
 
 § 169. Id.: To Vote at Meetings. — Every corporation has 
 power to make by-laws not inconsistent with any existing law 
 for the calling of meetings of its members." Every corpo- 
 ration has power to make by-laws not inconsistent with any 
 existing law fixing the amount of stock which must be repre- 
 sented at meetings of the stockholders in order to constitute 
 a quortim.^ Unless otherwise provided in the certificate of 
 incorporation, every stockholder of record of a stock corpo- 
 ration is entitled at every meeting of the corporation to one 
 vote for every share of stock standing in his name on the 
 books of the corporation.^ The certificate of incorporation of 
 a\iy 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." 
 The stockholders of a stock corporation, by a by-law adopted 
 by a vote (a) at any annual meeting, or (b) at any special 
 meeting duly called for such purpose, may prescribe a period, 
 
 to become a shareholder in a eorpo- ^ Gen. Corp. L. § 11 (L. 1909, 
 
 ration, see note in 46 L.R.A. 618. c. 28). 
 
 " Elyea v. Lehigh Salt Mining Co., ^ Gen. Corp. L. § 23 (L. 1909, 
 
 169 N. Y. 29, 61 N. E. 992 (1901). c. 28). 
 
 Selling out of corporation, all cred- " Gen. Corp. L. § 24 (L. 1909, 
 
 itors being taken care of. c. 28). "The stockholders of a cor- 
 
 ^^ Non-Electric Fibre Mfg. Co. v. poration heretofore formed, who, 
 
 Peabody, 21 A. D. 247, 47 Supp. by the provisions of laws existing 
 
 677 (1897). on April thirtieth, eighteen hundred 
 
 ^*Gen. Corp. L. § 42 (L. 1909, and ninety-one, were entitled to the 
 
 c. 28). exercise of such right, may hereafter 
 
 ^°Gen. Corp. L. § 11 (L. 1909, exercise such right according to the 
 
 e. 28). ' provisions of this section." 
 
§ 169 STOCKHOLDERS 177 
 
 not exceeding forty days prior to meetings of the stockhold- 
 ers, during' which no transfers of stock on the books of the 
 corporation may be made.^ Unless a certificate of incorpo- 
 ration or by-laws make provision for the manner of voting at 
 a stockholders ' meeting, each share of stock, as distinguished 
 from each person holding one or more shares, is entitled to a 
 vote, under a statute providing that all shares standing on 
 the corporation's books sha:ll be voted on by him in whose 
 name they stand.* A statute giving every stockholder the 
 right to one vote for every share of stock held by him for ten 
 days preceding an election gives such vote only to such 
 stockholder as is shown on the corporate books by 
 transfer made on such books ten days before the 
 election.^ The books and papers containing the record 
 of membership of the corporation must be produced 
 at any meeting of its members upon the request of 
 any member; and if the right to vote at any such meeting 
 is challenged, the inspectors of election or other persons pre- 
 siding thereat, must 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 members of the corporation may vote 
 at such meeting in person, subject to the provisions of the 
 General Corporation Law," Every member of a corporation 
 offering to vote at any election or meeting of the corporation 
 must, 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 sol- 
 emnly swear that in voting at this election I have not, either 
 directly, indirectly or impliedly received any promise or any 
 sum of money or any thing of value to influence the giving of 
 my vote or votes at this meeting or as a consideration there- 
 for ' ' ; and the inspectors or persons presiding at the election 
 may administer such oath and all such oaths must be filed in 
 the office of the corporation/ In the absence at a special meet- 
 ing of the members of a corporation, called by the directors 
 
 "Gen. Corp. L. § 23 (L. 1909, § 29 (L. 1892, c. 688), see now 
 
 c. 28). § 32: "As between the holder of 
 
 * Matter of Rochester District the certificate and his assignee the 
 
 Telegraph Co., 40 Hun, 172 (1886); transfer may operate to pass the 
 
 2 R. S. (7th ed.) 1535. title, but it does not determine the 
 
 ^Matter of Glen Salt Co., 17 right of voting at elections." 
 A. D. 234, 45 Supp. 568 (1897); 'Gen. Corp. L. § 23 (L. 1909, 
 
 affi'd 153 N. Y. 688, 48 N. E. 1104; c. 28). 
 
 Gen. Corp. L. § 20 (L. 1892, 'Gen. Corp. L. § 27 (L. 1909, 
 
 c. 687), see now § 23; St. Corp. L. c. 28). 
 B. C. N. Y.— 12 
 
178 BUSINESS CORPORATIONS IN NEW YORK § 169 
 
 for the purpose of electing directors because directors were 
 not elected on the day designated in the by-laws or by law, of 
 the books of the corporation showing who are members 
 thereof, each person, before voting, must present his sworn 
 statement setting forth (1) that he is a member of the corpo- 
 ration; (2) the number of shares of stock owned by him and 
 standing in his name on the books of the corporation ; and (3), 
 if known to him, the whole number of shares of stock of the 
 corporation outstanding, and on filing such statement he may 
 vote as a member of the corporation on the shares appearing 
 in such statement to be owned by him and standing in his 
 name on the books of the corporation.* Any person is guilty 
 of a misdemeanor who acts as an inspector of election of any 
 meeting of stockholders or bondholders of a stock corporation 
 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 conduct as such inspector." No member 
 of a corporation must sell his vote to any person for any sum 
 of money or anything of value." Any person is guilty of a 
 misdemeanor who, being entitled to vote at any meeting of 
 the stockholders of a stock corporation, sells his vote or issues 
 a proxy to vote to any person for any sum of money or thing 
 of value, except as expressly authorized by law." "A share- 
 holder has a legal right at a meeting of the shareholders to 
 vote upon a measure, even though he has a personal interest 
 therein separate from other shareholders. In such a meeting 
 each shareholder represents himself and his own interests 
 solely and he in no sense acts as a trustee or representative 
 of others. The law of self interest has at such time very great 
 and proper sway."" One corporation becoming a stock- 
 holder in another through acquisition pursuant to statute of 
 stock of the latter possesses and may exercise in respect of 
 such stock aU the rights, powers and privileges of individual 
 owners or holders of such stock." That part of corporate 
 stock paid for by a subscriber in full, constituting a portion 
 
 'Gen. Corp. L. § 31 (L. 1909, "Gen. Corp. L. § 23 L. 1909, 
 
 c. 28): "The inspectors shall re- c. 28). 
 
 turn and file such statements, with "Penal L. § 668 (L. 1909, c. 88). 
 
 a certificate of the result of the ^^ Gamble v. Queens Co. Water 
 
 election, verified by them, in the Co., 123 N. Y. 91, 9 L.R.A. 527, 
 
 office of the clerk of the county in 25 N. E. 201 (1890). 
 
 which such election is held, and the ^' St. Corp. L. § 53 (L. 1909. 
 
 persons so elected shall be the di- c. 61). See §§ 415 and 416 of thit 
 
 rectors of the corporation." book for further discussion. 
 
 » Penal L. § 668 (L. 1909, c. 88). 
 
§ 170 
 
 STOCKHOLDERS 
 
 179 
 
 of the whole amount subscribed for by him, the whole amount 
 of which was issued to a third person in trust for him till he 
 paid the amount of his subscription unpaid upon the residue, 
 may properly be voted by the trustee in an election of direct- 
 ors." Pending the determination by trial of the ownership 
 of corporate stock held by one as trustee ■ for another the 
 latter may in this State enjoin the former from voting or 
 otherwise dealing with it to his prejudice, even though both 
 be non-residents and the corporation be a foreign one.^'' No 
 rule of law is offended by a testamentary restriction on trus- 
 tees to vote stock in a corporation mapped out by will." In 
 the note is a recent statute regulating the voting of stock by 
 fiduciaries.^"'' Persons holding stock as members of a reorgan- 
 ization committee which stands on the corporate books, in 
 their names as such committee, may vote upon it, especially if 
 the agreement under which they act gives them such voting 
 power." 
 
 § 170. Id.: To Vote by Proxy or Voting Trust.— Every 
 stockholder in a corporation entitled to vote at any meeting 
 
 "Matter of Conlon Electric 
 Washer Co., Inc., 169 A. D. 192, 
 154 Supp. 366 (1915). 
 
 ^' Harper v. Smith, 93 A. D. 608, 
 87 Supp. 516 (1904). 
 
 i^Elger V. Boyle, 69 Misc. 273, 
 126 Supp. 946- (1910). 
 
 16a < < j^iduciaiies, whether ap- 
 pointed by last will and testament 
 or by the court, shall have the same 
 right and power, either in person 
 or by proxy, at all corporate meet- 
 ings to vote • any and all shares of 
 stock held by them in a iiduciary 
 capacity in any corporation organ- 
 ized under the laws of this state, as 
 the deceased or legal owner thereof 
 had in his lifetime. And where 
 such stock is registered on the 
 books of such corporation in the 
 name of, or has passed by operation 
 of law or by virtue of any last will 
 and testament, to more than two 
 fiduciaries, and dispute shall arise 
 among them, the said shares of 
 ftock shall .be voted by a majority 
 of such fiduciaries, and in such 
 manner and for such purposes as 
 such majority shall authorize, direct 
 rr desire the same to be voted. If 
 the number of fiduciaries shall be 
 even and they shall be equally" di- 
 
 vided upon the question of voting 
 such stock, it shall be lawful for 
 the court having jurisdiction of 
 their accounts, upon petition filed 
 by any of such fiduciaries or by any 
 party in interest, to direct the vot- 
 ing of such stock in the manner 
 which, in the opinion of such court,- 
 will be for the best interests of the 
 parties beneficially interested in the 
 stock. Fiduciaries, whether ap- 
 pointed by last will and testament, 
 filed in any court of this state, or 
 by any court of this state, shall 
 have all the foregoing rights and 
 powers, subject to the foregoing 
 limitations, to vote any and all 
 shares of stock, held by them in a 
 fiduciary capacity, in any corpora- 
 tion, organized under the laws of 
 any other state, provided nothing 
 in the laws of the state, under 
 which the corporation was organ- 
 ized, prohibits the exercise of such 
 rights and powers." 
 
 ^^ Haines v. Kinderhook & Hud- 
 son Ry., 33 A. D. 154, 53 Supp. 368 
 (1898). 
 
 On right of holders of preferred 
 stock to vote at corporate meetings, 
 see note in 2 L.R.A.(N.S.) 121. 
 
180 BUSINESS CORPORATIONS IN NEW YORK § 170 
 
 thereof may so vote by proxy, which must be executed in writ- 
 ing by either the member himself or his duly authorized attor- 
 ney and is not valid after the expiration of eleven months 
 from the date of its execution unless the member executing 
 it has specified therein the length of time it is to continue in 
 force (which must be for some limited period) ; and every 
 such proxy is revocable at the pleasure of the person executing 
 it." A stockholder may by agreement in writing transfer his 
 stock to any person or persons for the purpose of vesting in 
 him or them the right to vote thereon for a time not exceeding 
 five years upon terms and conditions stated, pursuant to 
 Avhich such person or persons shall act ; and every other stock- 
 holder, upon his request therefor, may by a like agreement 
 in writing also transfer his stock to the same person or per- 
 sons and thereupon may participate in the terms, conditions 
 and privileges of such agreement ; and the certificates of stock 
 so transferred must be surrendered and cancelled 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 the corporation that fact must also be 
 noted, and thereupon he or they may vote upon 
 the stock so transferred during the time in such agreement 
 specified; and a duplicate of every such agreement must be 
 filed in the office of the corporation where the principal busi- 
 ness is transacted and be open daily' during business hours 
 to the inspection of any stockholder." Any person offering to 
 vote as proxy for any other person must present his proxy 
 and, if so required, take and subscribe the following oath: 
 " I do solemnly swear that I have not, either directly, indi- 
 rectly or impliedly, given any promise or any sum of money 
 or any thing of value to induce the giving of a proxy to me to 
 vote at this election, or received any promise or any sum of 
 money or any thing of value to influence the giving of my 
 vote at this meeting, or as a consideration therefor ; ' ' and the 
 
 ^*Geii. Corp. L. § 26 (L. 1909, the shares owned or to be owned by 
 
 c. 28): "but a corporation having him; if he does, no voting trust is 
 
 no capital stock may prescribe in its created. "A voting trust agreement 
 
 by-laws the persons who may act as accumulates in the hands of a per- 
 
 proxies for members, and the length son or persons shares of several own- 
 
 of time for which proxies may be ers, in trust for the purpose of vot- 
 
 executed." Manson v. Curtis, — ing them, in order, through the se- 
 
 N. y. — (1918) j N. Y. L. J., lection and election of directors, to 
 
 May 14, p. 533. A test to deter- control the corporate business and 
 
 mine if an agreement is a voting affairs." 
 
 trust is to ask whether under it each ^° Gen. Corp. L. § 25 (L. 1909, 
 
 party retains the voting power of c. 28). 
 
§ 170 STOCKHOLDERS 181 
 
 inspectors or persons presiding at the election may adminis- 
 ter such oath, and all such oaths and proxies must be filed in 
 the office of the corporation.^" The books and papers con- 
 taining the record of membership of the corporation must be 
 produced at any meeting of its members upon the request 
 of any member ; and if the right to vote at any such meeting 
 is challenged, the inspectors of election, or other persons pre- 
 siding thereat, must require such books, if they can be had, 
 to be produced as evidence of the right of the person chal- 
 lenged to vote at such meeting, and all persons who may 
 appear from such books to be members of the corporation 
 may vote at such meeting by proxy subject to the provisions 
 of the General Corporation Law.^ No member of a corpo- 
 ration must issue a proxy to vote to any person for any sum 
 of money or any thing of value.^ Any person is guilty of a 
 misdemeanor who, being entitled to vote at any meeting of 
 the stockholders of a stock corporation, sells his vote, or 
 issues a proxy to vote to any person for any sum of money or 
 thing of value, except as. expressly authorized by law.' The 
 record holder of stock (1) held by him as security or (2) which 
 actually belongs to another, upon demand therefor and pay- 
 ment of necessary expenses thereof, must issue to such 
 pledger or actual owner of such stock a proxy to vote thereon, 
 except in cases (a) of express trust, or (b) in which other 
 provision has been made by written agreement between the 
 parties.* A transfer, absolute on its face, by the owner of 
 corporate stock to another, designed only to confer upon the 
 latter the power to vote thereon for a period of years is, in 
 substance, a proxy given for a consideration, and is void.^ 
 It seems that an agreement between stockholders perpetually 
 to give certain of themselves by proxy from others the control 
 of the corporation might be void.° A by-law declaring that a 
 stockholder's proxy must himself be a stockholder to be 
 entitled to vote as such for the former is void if the corpora- 
 tion is created under a law which simply enacts ' ' that the 
 
 Corp. L. § 20 (L. 1892, e. 687) ; see 
 now § 23. 
 
 'Brown v. Britton, 41 A. D. 57, 
 58 Supp. 353 (1899), The owners 
 of the majority stock agreed to ap- 
 point one of themselves proxy for 
 any meeting some of them could not 
 attend, the proxy to be irrevocable 
 for three years; and not to sell his 
 holdings for three years except on 
 approval of all such majority stock- 
 holders; and to give preference inter 
 sese on sale by any of his stock. 
 
 '" Gen. 
 
 Corp. 
 
 L. § 
 
 27 
 
 (L. 
 
 1909, 
 
 c. 28). 
 
 
 
 
 
 
 ^Gen. 
 
 Corp. 
 
 L. § 
 
 23 
 
 (L. 
 
 1909, 
 
 c. 28). 
 
 
 
 
 
 
 ^Gen. 
 
 Corp. 
 
 L. § 
 
 23 
 
 (L. 
 
 1909, 
 
 e. 28). 
 
 
 
 
 
 
 ^ Penal L. § i 
 
 668 (L 
 
 ,. 1909, c 
 
 !. 88). 
 
 *Gen. 
 
 Corp. 
 
 L. § 
 
 23 
 
 (L. 
 
 1909, 
 
 c. 28). 
 
 
 
 
 
 
 'Matter of Glen Salt Co 
 
 ., 17 A. D. 
 
 234, 45 
 
 Supp. 
 
 568 
 
 (1897) ; 
 
 aff'd 
 
 153 N. Y. 688, 
 
 48 N. 
 
 E. 1104; 
 
 ; Gen. 
 
182 BUSINESS CORPORATIONS IN NEW YORK §§ 171, 172 
 
 election shall be made by such of the stockholders as shall 
 attend for tha^t purpose, either in person or by proxy." ' A 
 stockholder cannot issue a proxy coupled with an interest; 
 and every proxy issued by a stockholder is revocable.' 
 
 § 171. Id.: To Ratify Unauthorized Acts of Officers and 
 Directors. — ' ' The stockholders are the equitable owners of 
 the corporate property, and if the officers or trustees do an 
 unauthorized act or incur indebtedness which would not 
 create a corporate liability, the stockholders may subsequently 
 ratify the acts and validate the originally unauthorized trans- 
 action. What they might originally have done, they may do 
 afterwards, and their subsequent assent is equivalent to 
 original authority."' The validity of a blanket ratification 
 by stockholders at an annual meeting of the acts of their 
 officers for a long period of time depends upon the knowl- 
 edge of the facts by them when they passed the resolution of 
 approval." " The direct or indirect misappropriation of 
 assets of the corporation to his own use or benefit by an offi- 
 cer is incapable of being authorized or ratified by a vote or 
 any act or omission of the majority of the stockholders;" 
 but a proceeding by such officers, such as the sale of its prop- 
 erty to a syndicate having members in common with its direct- 
 ors, conducted in good faith and .in furtherance of the cor- 
 poration's purposes, though voidable, may be ratified by the 
 stockholders through a duly had majority vote." " It is well 
 settled that a misappropriation of the funds of a corporation 
 cannot be ratified as against the rights of creditors by all the 
 stockholders of a corporation, and that no such ratification, 
 even by all but one of the stockholders, would be binding 
 upon the corporation itself. ' ' " 
 
 § 172. Id,: To Bind Successors. — While it may be competent 
 in some cases for stockholders to bind themselves by an 
 
 ' Matter of Lighthall Mfg. Co., 47 " Pollitz v. Wabash R. R. Co., 
 
 Hun, 258 (1888); L. 1848, c. 40, 207 N. Y. 113, 100 N. E. 721 
 
 § 3. (1912). 
 
 ^ Matter of Germicide Co., 65 " Moch Co. v. Security Bank, 176 
 Hun, 606, 20 Supp. 495 (1892); A. D. 842, 163 Supp. 277 (1917). 
 L. 1890, c. 564, § 54. On ratification of acts of direct- 
 On right of stockholder to vote ors by vote of stockholders includ- 
 by proxy, see note in 29 L.R.A. 844. ing those who are directors, see note 
 
 'Martin v. Niagara Falls Paper in 36 L.R.A.(N.S.) 199. 
 Mfg. Co., 122 N. Y. 165, 25 N. E. On implied ratification of unau- 
 
 303 (1890). Corporate paper thorized loan effected by agent, see 
 
 signed by one said not to have au- notes in 6 L.R.A.(N.S.) 311; 52 
 
 thority. L.R.A.(N.S.) 571. 
 
 ^° Missouri Pacific Ry. v. Mer- On ratification of contract of pro- 
 
 cantile Trust Co., 76 Misc. 10, 134 moters, see note in 50 L.R.A.(N.S.) 
 
 Supp. 548 (1912). 980. 
 
§§ 173, 174 STOCKHOLDERS 183 
 
 agreement not to exercise a discretionary power given by 
 statute, such as authority to increase or decrease the capital 
 stock or to increase or decrease the number of the directors, 
 it would seem that the agreement would not be binding on 
 subsequent owners of the stock who purchased in good faith 
 and without notice of the agreement." A scheme to share by 
 certain allotments in the capitalized profits from construction, 
 accruing to a corporation, to which all the then members of 
 the corporation assent, is not such a fraud on the corporation 
 as will enable persons becoming stockholders after the trans- 
 action to bring a derivative suit, asserting rights of the cor- 
 poration itself, against individuals profiting by the scheme 
 who were directors and incorporators of the corporation." 
 
 § 173. Id.: To Deal With Their Corporation.— " When a 
 person in substantial control of a corporation resigns his 
 office, rids himself of his holdings of stock and then acquires 
 by transfer to himself all the assets of the corporation, he 
 must at least take care to provide himself with and to preserve 
 the clearest possible evidence that every step in the trans- 
 action was unobjectionable and that creditors were not 
 injured."" A corporation may give its bond secured by 
 mortgage on its property to one who has been one of its stock- 
 holders in order to secure a loan by him to it and the unpaid 
 amount due on its purchase by it from him of his stockhold- 
 ings." Purchases by a stockholder from his corporation of 
 materials on the same terms as buyings by strangers are void- 
 able, not void ; and not to be complained of by another stock- 
 holder who knew about them." 
 
 § 174. Id.: To Complain of Corporate Acts of Which They 
 Knew or to Which They Assented. — ' ' . . . the act of a 
 corporation that is ultra vires cannot be questioned by a stock- 
 holder who has assented to it. " " A stockholder who has 
 never objected to a course by his corporation known to him 
 and which he claims to be ultra vires though profitable cannot 
 succeed in his claim." One signing a subscription book recit- 
 ing the formation and existence of a corporation, the filing of 
 articles and necessary affidavits, is estopped to deny its 
 
 "Bond V. Atlantic Terra Cotta 118 Supp. 410 (1909); affi'd 136 
 Co., 137 A. D. 671, 122 Supp. 425 \.^- ^^> 120 Supp. 1136. 
 
 (1910). 
 
 "Murray v. Smith, 166 A. D. 
 
 'Continental Securities Co. v. ^^fs'^^^^/'^PP' ^°^^^^\^la xr v 
 
 D 1 i. Taa \ T\ /iQQ iKA a "Burden v. Burden, 159 N. Y. 
 
 ^ Mm^^ ' ^P' 287, 54 N. E. 17 (1899). 
 
 J}..'' XT ■ ^rr, , ^ ^»McN.ab V. McNab & Harlin 
 
 "Littmann v. Harris, 157 A. D. jjf q^,^ gg Hun, 18, 16 Supp. 
 
 909, 142 Supp. 341 (1913). 443 (1891) ; aflE'd 133 N. Y. 687, 31 
 
 ^° Moses V. Soule, 63 Misc. 203, N. E. 627. 
 
184 BUSINESS CORPORATIONS IN NEW YORK § 174 
 
 corporate character.'" One who has become a stockholder in a 
 corporation, acted for several years as a trustee, taken part 
 in its management and contracted with it as a corporation can- 
 not dispute the validity of its incorporation.^ A stockholder 
 who has long known of a transaction between the corporation 
 and one of its directors is precluded from complaining thereof 
 after it has been entirely consummated.'^ Acquiescence by a 
 stockholder in an alleged illegal act of a corporation's 
 directors may arise from his conduct relating to the trans- 
 action subsequent to its rise, justifying the reasonable con- 
 clusion that he had accepted the transaction, i. e., implied 
 ratification ; or from his silence or inactivity when there was 
 opportunity and duty to speak or act, i. e., equitable estoppel.' 
 Holders of shares of corporate stock issued by a corporation, 
 in good faith and in an attempted compliance with all legal 
 requirements, who have accepted them and participated in 
 whatever benefits accrued until the corporation became insol- 
 vent, cannot then question the legality of the issue.^ Stock- 
 holders (as distinguished from creditors) of a corporation 
 who for upwards of four years after knowledge of a transfer 
 by its trustees in good faith and in settlement of a claim 
 against it of all its property take no steps to impeach the 
 transfer (during all which time the transferee has conducted 
 business made possible by the transfer) are estopped from 
 disputing the validity of the transfer.' One who has accepted 
 a directorship and the presidency in a corporation, acted as 
 such, and assimaed duties in recognition of his connection with 
 the company as. a stockholder, cannot disclaim such connec- 
 tion." A stockholder cannot object to security taken as 
 security by his corporation from a debtor if he refuses its 
 president's offer to pay the corporation in cash and himself 
 take over the security.^ A stockholder and director of a cor- 
 poration which loans money to one not a stockholder with his 
 knowledge cannot complain of the loan, if it is made from 
 surplus and no demand has been made for distribution of sur- 
 
 2° Black River & Utica R. R. Co. ' Sheldon Hat Blocking Co. v. 
 
 V. Clarke, 25 N. Y. 208 (1862). Eickeraeyer Hat Blocking Machine 
 
 ^Phoenix Warehousing Co. v. Co., 90 N. Y. 607 .(1882). 
 
 Badger, 67 N. Y. 294 (1876). "Beals v. Buffalo Constraetion 
 
 ^Steinway v. Steinway, 2 A. D. Co., 49 A. D. 589, 63 Supp. 635 
 
 301, 37 Supp. 742 (1896) ; aff'd 157 (1900). 
 
 N. Y. 710, 53 N. E. 1132. ' McNab v. McNab & Harlin Mfg. 
 
 'Pollitz V. Wabash R. R. Co., 207 Co., 62 Hun, 18, 16 Supp. 448 
 
 N. Y. 113, 100 N. E. 721 (1912). (1891); aff'd 133 N. Y. 687, 31 
 
 * People V. New York Building- N. E. 627. 
 Loan Banking Co., 119 A. D. 830, 
 104 Supp. 892 (1907); aff'd 189 
 N. Y. 547, 82 N. E. 1131. 
 
§§ 175, 176 STOCKHOLDERS 185 
 
 plus or for dividends.' A transaction involving the purchase 
 by one corporation of the stock of another cannot he objected 
 to by the stockholders of the selling corporation as ultra vires 
 the buying corporation: only the stockholders of the latter or 
 the People can raise the point.® 
 
 § 175. Id.: To Demand and Receive Financial Statement 
 from Treasurer of Corporation, Governing Statutes. — Stock- 
 holders owning five or three per centum of the capital stock 
 of a corporation according as such capital stock is under or 
 above one hundred thousand dollars may make a written 
 request to the treasurer or chief fiscal officer thereof for a 
 statement of its affairs under oath embracing a particular 
 account of all its assets and liabilities.^" The treasurer must 
 "(1) make such statement; (2) deliver it to the person present- 
 ing the request within thirty days thereafter, and (3) keep 
 on file for twelve months thereafter a copy of such statement." 
 The copy kept on file must at all times during business hours 
 be exhibited to any stockholder demanding an examination 
 thereof, but the treasurer or chief fiscal officer is not required 
 to deliver more than one such statement in any one year.^^ 
 The supreme .court, or any justice thereof, may upon appli- 
 cation 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 officer thereof to comply 
 with the provisions of the sixty-ninth section of the Stock Cor- 
 poration Law he must 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 is furnished." 
 
 § 176. Id.: Who May Compel.— What stockholder may 
 request a statement of his corporation's affairs depends upon 
 the amount of its capital stock: If the capital stock is not over 
 one hundred thousand dollars only a stockholder owning five 
 per centum thereof may make the request ; while if the capital 
 stock is above one hundred thousand dollars a stockholder 
 owning but three per centum thereof may make the request," 
 
 » Murray v. Smith, 166 A. D. 528, 
 152 Supp. 102 (1915). 
 
 "Oelbermann v. New York & 
 Northern R. R. Co., 7 Misc. 352, 27 
 Supp. 945 (1894). 
 
 On effect of assent of all stock- 
 holders at time of transaction to 
 promoter's siale of property to cor- 
 poration, see note in 18 L.E.A. 
 (N.S.) 1116. c. 61) 
 
 logt. Corp. L. § 69 (L. 1909, 
 e. 61). 
 
 "St. 
 
 Corp. 
 
 L. 
 
 § 
 
 69 
 
 (L. 
 
 1909, 
 
 c. 61). 
 
 
 
 
 
 
 
 "St. 
 
 Corp. 
 
 L. 
 
 § 
 
 69 
 
 (L. 
 
 1909, 
 
 c. 61). 
 
 
 
 
 
 
 
 "St. 
 
 Corp. 
 
 L. 
 
 § 
 
 69 
 
 (L. 
 
 1909, 
 
 c. 61). 
 
 
 
 
 
 
 
 i*St. 
 
 Corp. 
 
 L. 
 
 I 
 
 69 
 
 (L. 
 
 1909, 
 
 c. 61). 
 
 
 
 
 
 
 
 ^=St. 
 
 Corp. 
 
 L. 
 
 § 
 
 69 
 
 (L. 
 
 1909, 
 
186 BUSINESS CORPORATIONS IN NEW YORK §§ 177, 178 
 
 A treasurer of a corporation may be compelled to state under 
 oath the condition of its affairs at the instance of a stock- 
 holder who is a director as well as of a stockholder who is not 
 a director, if the stockholder owns five per cent of its capital 
 stock/° ' ' If the stockholder wishes to enforce the penalty he 
 must see to it that he is a stockholder of record at the time of 
 making the demand upon the treasurer for a statement of the 
 affairs of the corporation. ' ' " The executor of a deceased 
 holder of half of a corporation's stock who has been refused 
 a demand for information of its affairs by its officers is 
 entitled to an order for the names and salaries of its officers 
 and directors ; its net profits for two years past ; the names of 
 its banks and deposits therein ; its cash on hand, accounts and 
 bills receivable, and liabilities outside of capital stock, its total 
 indebtedness due from its two largest creditors; changes in 
 salaries and whose were increased ; and overdrafts of officers 
 and employees.^* 
 
 § 177. Id.: How Often. — The treasurer or chief fiscal officer 
 of a corporation is not required to deliver more than one 
 statement of its affairs in any one year." The statute per- 
 mitting one holding five per cent of the stock of a corporation 
 to compel its treasurer to give htm a sworn statement of its 
 affairs expressly provides that the treasurer shall not be 
 required to deliver more than one statement in any one year, 
 thus showing that a particular stockholder cannot have more 
 than one such statement a year ; so that one suing to recover 
 the statutory penalty for the treasurer's neglect to give the 
 statement must allege that the latter has not delivered a state- 
 ment during the fiscal year within which the demand was 
 made.^° " The statute provides that this statement [of the 
 affairs of a corporation], when made, shall be open to the 
 inspection of any stockholder demanding an exafnination 
 thereof, and that only one such statement can be required 
 during any one year."^ 
 
 § 178. Id.: What Statement Suffices. — The statement should 
 be (1) of the corporation's affairs, (2) under oath and (3) one 
 embracing a particular account of all its assets and liabilities.^ 
 A statute requiring a treasurer of a corporation to give a 
 
 "Townsend v. Davis, 153 A. D. "St. Corp. L. § 69 (L. 1909, 
 
 599, 138 Snpp. 758 (1912); St. c. 61). 
 
 Corp. L. § 69. ^Troughton v. Grace, 151 A. D. 
 
 "Pray v. Todd, 71 A. D. 391, 75 655, 136 Supp. 200 (1912); St. 
 
 Supp. 947 (1902) ; St. Corp. L. Corp. L. § 69. 
 
 § 52 (L. 1892, c. 688). See now ^Matter of Hitchcock, 149 A. D. 
 
 § 69. 824, 134 Supp. 174 (1912). 
 
 " Matter of Hastings, 56 Misc. ^ St. Corp. L. § 69 (L. 1909, 
 
 45, 106 Snpp. 938 (1907). e. 61). 
 
§ 179 STOCKHOLDERS 187 
 
 stockholder thereof upon demand a ' ' statement of the affairs 
 of said company, under oath, embracing a particular account 
 of all its assiets and liabilities, in minute detail," is satisfied 
 by a sworn statement of its assets and liabilities.* A treas- 
 urer furnishing a stockholder demanding the statutory state- 
 ment under oath of the corporation's affairs with a sufficient 
 statement save that it is not sworn to is liable to the statutory 
 penalty for failure to furnish the prescribed statement, unless 
 the stockholder waive the oath.* Acceptance without objec- 
 tion that it was not verified of an unverified statement by a 
 corporate treasurer of his corporation's condition up to a 
 date earlier than that first asked for, in pursuance of a modi- 
 fication of the demand for a statement to a later date, pre- 
 cludes recovery of the penalty for refusing to give such state- 
 ment or the right to any other statement during that year.' 
 
 § 179. Id.: Suit for Penalty. — For every neglect or refusal 
 of the treasurer or other chief fiscal officer of a corporation 
 to comply with the provisions of the statute permitting a 
 stockholder to obtain a statement of the corporation's affairs 
 he must forfeit and pay to the person making the request for 
 the statement the sum of fifty dollars and the further sum of 
 ten dollars for every twenty-four hours thereafter until such 
 statement is furnished." A suit to recover from a corporate 
 treasurer the penalty imposed upon him by statute for failure 
 to give a statement of its affairs to a stockholder on demand 
 must be based upon and comply with the statute as amended 
 and effective wh'en the default occurred.^ In order to hold the 
 treasurer of a corporation liable for the penalty imposed by 
 statute for failure to give a stockholder a financial statement 
 of corporate affairs demanded by the latter, the demand must 
 be delivered to the treasurer personally and not by mail, and 
 must give the treasurer some reasonable form of notice that 
 the stockholder is seeking to obtain information pursuant to 
 legal right, as distinguished from a possible act of business 
 courtesy.* A demand by a stockholder of his corporation's 
 treasurer of a statement of its affairs, without requiring that 
 
 ^French y. McMillan, 43 Hun, 'McCrea v. Bedell, 9 Misc. 372, 
 
 188 (1887); L. 1854, c. 201, § 27. 29 Supp. 705 (1894); L. 1890, 
 
 See now St. Corp. L. § 69. c. 564, § 52, as amend. L. 1892, 
 
 *St. John V. Eberlin, 23 Misc. c. 688, § 52. The amendment re- 
 
 585, 51 Supp. 998 (1898) ; St. Corp. quired compliance within thirty in- 
 
 L. § 52 (L. 1892, c. 688). See stead of twenty days of demand and 
 
 now § 69. the complaint alleged failure within 
 
 ° Sutton V. MacBride, 176 A. D. twenty instead of thirty days. 
 
 362, 162 Supp. 1023 (1917); St. ^ Troughton v. Grace, 84 Misc. 
 
 Corp. L. § 69 (L. 1909, c. 61). 577, 147 Supp. 993 (1914); St. 
 
 "St. Corp. L. § 69 (L. 1909, Corp. L. § 69, (L. 1909, c. 61). 
 
 c. 61). "Will you please send me a state- 
 
188 BUSINESS CORPORATIONS IN NEW YORK § 180 
 
 it be sworn to, is sufficient basis for a suit to recover the 
 penalty imposed by statute on failure to give it.' , 
 
 § 180. Id.: Of Majority, In General. — "An illegal corporate 
 act cannot be ratified by majorities of stockholders." ^ "It 
 is well established that the ownership of a majority of the 
 stock of a corporation, while it gives a certain control of the 
 corporation, does not give that control of corporate trans- 
 actions which makes the holder of the stock responsible for 
 the latter. ' ' " One who is president and owner of a large part 
 of the stock of a corporation has no power to give away its 
 property." The courts, on the application of a stockholder 
 controlling the corporation by his holdings prior to an issue 
 of stock which he seeks to have cancelled, cannot pendente lite 
 enjoin the corporate officers and directors from exercising or 
 interfering with the corporate management in any way, 
 because " presumably the power of managing the business of 
 a corporation is vested solely in its officers and directors . . . 
 The court may arrest such officers in some proposed course 
 or halt them in the doing of some specific act, but it cannot 
 . . . virtually remove the directors, for it thereby prac- 
 tically winds up the corporation pendente lite, or, if not, it 
 vests some of the corporate powers in a mere stockholder by 
 virtue of such status, which it cannot do."" The persons 
 who, though minority stockholders, constitute the majority 
 of the directors, will not be temporarily enjoined from selling 
 further stock at the instance of a majority stockholder who 
 would not remain so if the further stock wete sold and who 
 is at odds with them in an action by the latter ostensibly to 
 obtain a permanent injunction but really to get such tempo- 
 rary injunction so as to tie up the corporation's board till the 
 next stockholders' meeting whereat the existing board could 
 be changed." One taking stock in a corporation formed to 
 buUd an apartment the by-laws of which subject all questions 
 as to the purchase of land and erection of buildings and lease 
 of apartments to the vote of the majority stockholders takes 
 
 ment of the assets and liabilities, " Stone v. Cleveland, C. C. & 
 
 also a copy of the balance sheet," St. L. Ry. Co., 202 N. Y. 352, 35 
 
 etc., held insufficient demand. L.R.A.{N.S.) 770, 95 N. E. 816 
 
 »McCrea v. Bedell, 9 Misc. 372, 29 (1911) ; dictum. 
 
 Supp. 705 (1894); L. 1890, c. 564, ^^ ^orthington v. Worthington, 
 
 § 52, as amend. L. 1892, c. 688, 100 A. D. 332, 91 Snpp. 443 (1905). 
 
 § 52. See now St. Corp. L. § 69. ^' Moore v. Moore Mica Paint Co., 
 
 "Pollitz V. Wabash Railroad Co. 150 A. D. 792, 135 Supp. 210 
 
 No. 1, 150 A. D. 709, 135 Supp. (1912). 
 
 785 (1912). The illegal act was the "Gillette v. Noyes, 92 A. D. 313, 
 
 issue of preferred stock without the 86 Supp. 1062 (1904). 
 consent, required by the Missouri 
 Constitution, of all the stockholders. 
 
§ 181 STOCKHOLDERS 189 
 
 title to an apartment in a building erected by the company 
 not legally but as an equitable right upon the reasonable con- 
 ditions imposed by the majority stockholders under the 
 by-laws.^^ An agreement evidencing nothing more than an 
 attempt by two parties holding the majority of the stock of a 
 corporation to perpetuate, by their personal contract, their 
 joint control of the corporate affairs, cannot be considered a 
 partnership agreement warranting an application for judg- 
 ment annulling the agreement and dissolving the partner- 
 ship." An agreement by a majority of the directors and the 
 owners of a majority of the stock of a corporation for the 
 purpose of perpetuating themselves and their successors in 
 office and control of the company, not only during their own 
 lives, but for years after their death, without regard to the 
 rights of a minority of the directors or stockholders, is an 
 unlawful combination, whether morally corrupt or intended 
 for the benefit of all stockholders and the corporation." One 
 corporation has the right to buy the stock of another and vote 
 it; buy the mortgage bonds of such other, foreclose and use 
 the property bought on foreclosure in any way allowed by 
 law; and minority stockholders suffering thereby cannot 
 justly complain ; but. it cannot directly injure the minority 
 stockholders by doing anything unlawful in its corporate 
 affairs which is a breach of trust toward such minority." The 
 powers, privileges and duties of minority stockholders in 
 general are shortly discussed." 
 
 § 181. Id.: Voting Salaries in Fraud of Minority. — A court 
 of equity will always give relief to a minority stockholder 
 from the acts of a majority in disposing of all the profits by 
 voting themselves salaries not commensurate with the work 
 done by them.^° The general rule that acts done in the interest 
 of the corporation, not fraudulent or ultra vires, may be 
 ratified by a majority of the shareholders does not enable 
 majority stockholders for selfish purposes to act in hostility 
 to the interests of the corporation with the intention of 
 defrauding the non-assenting stockholders, by voting, after 
 the commencement by a minority stockholder of a representa- 
 tive action to compel the directors or officers of the corpo- 
 
 ^° Compton V. The Chelsea, 128 tain persons in stated offices at an 
 
 N. Y. 537, 28 N. E. 662 (1891). increased salary. 
 
 " Whittingham v. Darrin, 45 Misc. ^* Oelbcrrnann v. New York & 
 
 478, 92 Supp. 752 (1904). Northern By. Co., 14 Misc. 131, 36 
 
 "Snow V. Church, 13 A. D. 108, Supp. 1096 (1895). 
 
 42 Supp. 1072 (1897). The agree- ^» See § 183, infra. 
 
 ment was to vote always for three ^"Fitchett v. Murphy, 46 A. D. 
 
 directors named by one and two 181, 61 Supp. 182 (1899). 
 named by others; and to keep cer- 
 
190 BUSINESS CORPORATIONS IN NEW YORK § 182 
 
 ration to account for salaries they had voted themselves, as 
 such majority stockholders, to ratify the acts of the directors.' 
 A minority stockholder suing in equity to remedy the use of 
 all profits by the majority stockholders in the shape of 
 salaries to themselves should allege a demand by him of the 
 corporation for redress.^ An administrator of a minority 
 stockholder suing in equity to redress disposition by the 
 majority stockholders of the entire corporate profits by way of 
 salaries to themselves must allege that the decedent was a 
 stockholder at the date of his death, or that the administrator 
 is the OAvner of such stock.' A minority stockholder may sue 
 to recover back for the corporation money paid as salaries to 
 the majority stockholders by the vote of the latter as the cor- 
 poration's only directors when such salaries practically use 
 up the entire corporate earnings; and the directors voting 
 themselves the salaries have the burden of overcoming the 
 presumption which comes into being with their vote that they 
 voted in their own and against the ' corporation 's interest.* 
 A majority of a corporation's stockholders cannot ratify 
 salaries voted by its directors consisting of money taken from 
 its treasury without any authority for services performed 
 without any agreement that the company would pay for them ; 
 but such a majority may ratify salaries fixed for the future by 
 the board.° 
 
 § 182. Id.: Selling Corporate Property in Fraud of Minority. 
 — Equity will charge with a constructive trust the property of 
 a corporation in the hands of one who is its majority stock- 
 holder and one of its officers and who has put it up for sale 
 and bought it himself to exclude a minority stockholder; or, 
 if he transferred it elsewhere, will make him account to the 
 corporation for the loss it has suffered through his waste of 
 its property." Majority stockholders may, each in his own 
 interest, vote to discontinue the corporation's business; but 
 they cannot lawfully do that in bad faith for the purpose of 
 turning its business and good will over to another corporation 
 without compensation so as to exclude minority stockholders 
 
 ^ Godley v. Crandall & Godley corporation the remaining five-sixths 
 
 Co., 212 N. Y. 121, L.R.A.1915D, being owned by the three who as 
 
 632, 105 N. E. 818 (1914). directors increased their salaries by 
 
 ^Fitehett v. Murphy, 46 A. D. their three votes from $6,750 to 
 
 181, 61 Supp. 182 (1899). $24,000. 
 
 'Fitchett V. Murphy, 46 A. D. "Lewis v. Matthews, 161 A. D. 
 
 181, 61 Supp. 182 (1899). 107, 146 Supp. 424 (1914). 
 
 * Davids v. Davids, 135 A. D. 206, " Drucklieb v. Harris, 84 Misc. 
 
 120 Supp. 350 (1909). Plaintiff 291, 147 Supp. 298 (1914). 
 owned one-sixth of the stock of a 
 
§ 183 STOCKHOLDERS 191 
 
 from participating therein.' One of few stockholders in a 
 corporation who has a controlling interest in its stock and its 
 whole management must account to the others for profits 
 made by him on sale of the whole stock over and above what 
 they receive for their holdings under a sale negotiated by htm 
 without knowledge* by them of its terms.* The rights of 
 minority stockholders to prevent the sale of corjporate assets 
 and stock by the majority is shortly discussed.^ 
 
 § 183. Id.: Of Minority, In General. — The powers, privileges 
 and duties of majority stockholders in general have been 
 treated.'" When holders of over half of a corporation's stock 
 are prevented by temporary injunction from participating in 
 the election of directors so that control of the company is 
 obtained by a minority of the stockholders, the election will be 
 set aside on the injunction's subsequent dissolution." One 
 minority stockholder in a corporation being consolidated with 
 another who contributes individually to the cost of an investi- 
 gation conducted by another stockholder to ascertain the 
 value of their holdings may recover his contribution even 
 though he makes a different arrangement from a committee of 
 minority stockholders into which such other stockholder's 
 activities grew and refuses to deposit his stock with such com- 
 mittee, if the corporation pays to such committee an amount 
 to cover the cost of such investigation which includes the sum 
 contributed by the minority stockholder in question." A 
 minority stockholder cannot set aside a contract made by his 
 corporatioii if he waits for eight years before bringing suit, 
 meanwhile taking benefits from the contract, and if he does 
 not show any demand on his corporation to set aside the con- 
 tract." A minority stockholder is entitled to an accounting by 
 his corporation though left practically alone by staying out 
 of a general sale of his corporation's stock without a merger 
 
 ^ Grodley v. Crandall & Godley Co., On power of majority stoekhold- 
 
 212 N. Y. 121, L.R.A.1915D, 632, ers against consent of minority to 
 
 105 N. E. 818 (1914). sell property of corporation essen- 
 
 ^McManus v. Durant, 168 A. D. tial to its existence as a going eon- 
 
 643, 154 Supp. 580 (1915). D. got cem, see note in 35 L.R.A.(N.S.) 
 
 other stockholders to sell their hold- 396. 
 
 ings at par while he sold all the ^° See § 180, supra. 
 
 stock at $150. He was president, "Matter of Townsend, 24 Misc. 
 
 direotor and 'general manager. He 80, 53 Supp. 289 (1898). • 
 
 controlled 70 per cent, of the stock. ^^Metropolitan Life Ins. Co. v. 
 
 He never told them any details of Read, 168 A. D. 828, 154 Supp. 
 
 the sale save that they would get 523 (1915). 
 
 par. He guaranteed an indebtedness ^'Norman v. Federal Mining & 
 
 of the company, but got $8,000 in- Smelting Co., 180 A. D. 325, 167 
 
 stead of $5,000 salary thereafter. Supp. 794 (1917). 
 
 'See §§ 185, 186, infra. 
 
192 BUSINESS CORPORATIONS IN NEW YORK § 184 
 
 which emptied the corporation of its property and ended the 
 functions of its board of directors." 
 
 § 184. Id.: Invoking Court Protection Against Acts of 
 Majority. — The interference of a court in the internal manage- 
 ment of a corporation is hereinafter discussed." The power 
 of majority stockholders to vote salaries in fraud of the 
 minority has been discussed." The court will not at the 
 request of a minority of the holders of corporate certificates 
 determine whether the minority or the majority are right as 
 to the goodness of the policy of entering into an agreement, 
 not ultra vires, which a trustee acting for the majority has 
 deliberately ratified in good faith, to which the majority have 
 not objected and under which third parties have acquired sub- 
 stantial rights." " ... the court should not interpose 
 in a dispute between the majority and minority stockholders 
 in relation to the ordinary control and management of its 
 corporate affairs, or substitute its judgment as to the proper 
 management and control of the corporation for that of the 
 directors elected by and representing the majority stock- 
 holders. It is the duty of the court, however, to interfere, if 
 called upon, when the proposed action of the majority is so 
 detrimental to the interests of the corporation itself as to lead 
 to the necessary inference that the interests of the majority 
 of the shareholders lie wholly outside of, and in opposition to, 
 the interests of the corporation and of a minority of the sha,re- 
 holders, and its consummation would be a wanton or fraudu- 
 lent destruction of the rights of the minority stockholders." " 
 " To warrant the interposition of the court in favor of the 
 minority shareholders in a corporation or joint-stock associa- 
 tion, as against the contemplated action of the majority, where 
 such action is within the corporate powers, 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 com- 
 pany and in a manner inconsistent with its interests. " " "To 
 
 "Logan V. New York Sugar Re- ^'Kissel v, Chicago & Eastern 
 
 flnine Co., 176 A. D. 660, 163 Supp. Illinois R. R. Co., 126 A. D. 852, 
 
 214 (1917). Ill Supp. 937 (1908). 
 
 On right of minority stoekhold- ^'Robinson v. New York, West- 
 ers to representation in new or re- Chester & Boston R. Co., 123 A. D. 
 organized corporation, see note in 339, 108 Supp. 91 (1908). 
 10 L.E.A.(N.S.) 725. "Gamble v. Queens Co. Water 
 
 " See § 421, infra. Co., 123 N. Y. 91, 9 L.R.A. 527, 25 
 
 ac 
 
 See § 181, supra. N. E. 201 (1890). 
 
§ 185 STOCKHOLDERS 193 
 
 justify the interference of the court with the management of 
 a corporation on the application of a minority of the stock- 
 holders it must be shown that the action of the governing body 
 complained of has been so clearly against the interests of the 
 minority of the stocldiolders as to amount to a wanton and 
 fraudulent destruction of the rights of such minority. "^ To 
 enjoin majority at the instance of minority stockholders from 
 exercising their corporate powers, an intent by the majority 
 to subserve purposes not the corporation's must be shown, 
 quasi fraudulently.^ A minority of stock turned in to a corpo- 
 ration by those to whom it had been issued for property can- 
 not maintain an action to compel the owners of such property, 
 i. e., the property they had conveyed to the corporation for 
 all its stock, to pay back any portion of the consideration paid, 
 i. e., the stock, without a rescission of the" sale and a retransfer 
 to the vendors of the property which had been transferred to 
 the corporation and for which the vendors had received the 
 consideration agreed upon, even though the law of the state 
 of the corporation's organization provided its stock should 
 not be disposed, of at less than par.^ The only question that 
 survives the approval by the majority of stockholders of the 
 action of the directors in leasing corporate property is 
 whether their action was so plainly unfair and oppressive of 
 the minority stockholders that the court should interfere.' 
 § 185. Id.: Preventing Sale of Corporate Assets by Major- 
 ity. — The power of majority stockholders to sell corporate 
 property in fraud of the minority has been discussed.* A 
 minority stockholder is entitled to an injunction temporarily 
 enjoining the lump sale of all the property of his corporation 
 in dissolution proceedings which are a step towards reorgani- 
 zation in another state if the property is worth many millions, 
 the advertisement of its sale gives but four weeks' notice and 
 is obscurely printed, no one except its directors can know the 
 value or nature of a large part of the property to be sold, the 
 terms of sale are more favorable to the trustees on dissolu- 
 tion, who desire to bid for consenting stockholders, than to 
 anyone else; and the reorganization committee which pro- 
 poses to bid in the property in behalf of the stockholders to 
 
 2° Hart V. Ogdensburg & Lake Wire Co., 103 A. D. 472, 93 Supp. 
 
 ,Champlain R. R! Co., 89 Hun, 316, 134 (1905). 
 
 35 Supp. 566 (1895). =* Westchester Fire Ins. Co. v. 
 
 ^ McLeary v. The Eri« Telegraph & Sjrracuse, Binghamton & N. Y. R. 
 
 Telephone Co., 38 Misc. 3, 76 Supp. R. Co., 97 Misc. 471, 161 Supp. 
 
 712 (1902). 759 (1916). 
 
 * Insurance Press ' v. Montauk * See § 182, supra. 
 B. C. K Y.— 13 
 
194 BUSINESS CORPORATIONS IN NEW YORK § 186 
 
 protect their interests alone is not disposed to secure any 
 larger price than is necessary merely to bid it in/ A minority 
 stockholder of a domestic corporation may properly in equity 
 and in the right of his company sue to prevent the transfer 
 without consideration by the directors and officers of his cor- 
 poration to a foreign corporation of which they are also 
 officers and directors of the legal title to all the domestic 
 corporation's property; and this suit may be brought without 
 a demand on his directors to bring it.° A minority stockholder 
 in an old corporation may on its behalf set aside a sale at a 
 grossly inadequate price of all its property by a majority 
 of its stockholders and its directors to a new corporation 
 organized by them of which they are directors, stockholders 
 and officers.' 
 
 § 186. Id.: Preventing Sale of Stock by Majority.— A 
 minority stockholder cannot restrain the majority stock- 
 holders from disposing of their stock to another person or 
 company because such disposition would result in the control 
 of the stockholders' company by such person or corporation^ 
 as " a violation of the duty of the holders of a. majority of the 
 stock to manage a corporation in good faith in the interest of 
 its stockholders impose [s] a liability in favor of the corpo- 
 ration and this obligation can be enforced only by the corpora- 
 tion or by a suit instituted in its behalf. ... a deprecia- 
 tion in the value of the stock as the result of wrongs committed 
 against the corporation (does) not give to a stockholder 
 suffering from such a depreciation a cause of action against 
 the holders of a majority of the stock." * The fact that stock- 
 holders of a corporation have illegally agreed to transfer its 
 
 ^ Treadwell v. United Verde Cop- the corporation and the other stock- 
 
 per Co., 47 A. D. 613, 62 Supp. 708 holders from voting on their stock 
 
 (1900). or taking any action toward per- 
 
 •^Boaz V. Sterlingworth Ry. Sup- fecting a private sale by the corpo- 
 
 ply Co., 68 A. D. 1, 73 Supp. 1039 ration of certain of its mining claims 
 
 (1902). in the foreign state, lying between 
 
 ' Hinds V. Fishkill & Matteawan the properties of rival raining com- 
 
 Gas Co., 96 A. D. 14, 88 Supp. 954 panics, under an offer from one of 
 
 (1904). "Directors who own a ma- them, which the board of directors 
 
 jority of the stock can no more for of the foreign corporation has ae- 
 
 their own benefit and advantage ap- cepted, merely because ai its stock- 
 
 propriate the property of the corpo- holders' meeting, called in the for- 
 
 ration than the directors who own a eign state to confirm the sale, the 
 
 minority . . ."; Lewisohn Bros, minority stockholder made a larger 
 
 V. Anaconda Copper Mining Co., 26 offer in the interest of the other min- 
 
 Misc. 613, 56 Supp. 807 (1899). The ing company, it appearing," etc. 
 
 head note reads in part : "A mi- ' Delevan v. New York, New 
 
 nority stockholder of a foreign cor- Haven and Hartford R. R. Co., 154 
 
 poration will not be granted an in- A. D. 8, 139 Supp. 17 (1912). 
 junction by our courts to restrain 
 
§ 187 STOCKHOLDERS 195 
 
 stock, but which the corporation has not agreed to, does not 
 warrant a minority stockholder in restraining the consummaT 
 tion of the agreement." 
 
 § 187. Id.: Actions By, In General. — In a stockholder's 
 representative action the hurt or benefit not of the stock- 
 holders individiially but of the corporate entity is alone in 
 issue." One bringing a representative stockholder's action 
 has no standing to proceed until he can have issued to himself 
 the stock to which he claims he is entitled.^^ " If a stockholder , 
 brings an action against the corporation and fails, the pay- 
 ment by him of the judgment for costs puts him in the same 
 relations to it that he had occupied before. The directors 
 could not resist his application to transfer his stock by setting 
 up a claim that the corporation, by reason of the suit, was 
 obliged to pay out large sums for counsel fees and expenses 
 in the litigation which were not covered by the taxable 
 costs. ' ' " When corporate stock is delivered by one to another 
 for use for a designated purpose and it is used for another, 
 the transferrer is not limited to an action for recovery of his 
 damages but may sue in equity for a rescission of the trans- 
 action and return of the stock, or an accounting." An action 
 by minority stockholders in their own interest, solely against 
 a majority corporate stockholder, based on an alleged trust 
 relationship between them to compel the latter to account 
 directly to the former for profits it holds to their exclusion, 
 lies far outside the limits of an action in behalf of a corpora- 
 tion against many defendants as alleged workers of fraud 
 whereby the corporation has been stripped of its property to 
 recover back such property." A stockholder enjoined from 
 disposing of his holdings pending an action by the corporation 
 to rescind as fraudulent the contract by which he acquired 
 them is not guilty of contempt through joining in an action in 
 
 ^Delevan v. New York, New 292, 25 L.R.A. 670, 38 N. E. 285 
 
 Haven & Hartford R. R. Co., 154 (1894). The ease involved the trans- 
 
 A. D. 8, 139 Snpp. 17 (1912) ; Sher- fer of a certificate evidencing an 
 
 man Act, 26 U. S. Stat, at Large, interest in property held in trust, 
 
 209, §§ 1, 2. rather than a certificate of corporate 
 
 On right of minority stockholder stock proper. 
 
 to restrain voluntary dissolution of ^^ Slayback v. Raymond, 93 A. D. 
 
 corporation by directors' or majority 326, 87 Supp. 931 (1904). S. deliv- 
 
 stockholders, see note in 23 L.R.A. ered stock to R. to deliver to H. to 
 
 (N.S.) 1177. induce H. to sustain the credit of 
 
 "Archer v. Hesse, 164 A. D. 493, the corporation so that the corpo- 
 
 150 Supp. 296 (1914). ration securities which S. held might 
 
 " Bergen v. National Architects' remain valuable. R. instead trans- 
 Bronze Co., 173 A. D. 6S0, 160 ferred the stock to his relatives. 
 Supp. 331 (1916). "MacArdell v. Olcott, 389 N. Y. 
 
 i^Cassagne v. Marvin, 143 N. Y. 368, 82 N. E. 161 (1907). 
 
1% BUSINESS CORPORATIONS IN NEW YORK § 188 
 
 another state to compel the corporation's directors to restore 
 to it realty in that state which they had fraudulently 
 acquired.^' 
 
 § 188. Id.: What Stockholders May Sue.— The equitable 
 owner of stock in a corporation may properly bring suit in 
 equity to protect his interest and that of other stockholders in 
 the corporate property." One showing a legal right, by 
 reason of owning corporate stock, to question the corpora- 
 tion's acts (in issuing preferred stock) and having a personal 
 interest in obtaining the judgment which.he seeks, is not liable 
 to have his motives inquired into by the court." One buying 
 stock to bring and carry on litigation against the corporation 
 will not be allowed to have or retain an injunction if his rights 
 can be preserved by awarding damages for such injury as he 
 may have sustained.^* One who has placed his holdings of 
 corporate stock in a voting trust may nevertheless bring a 
 representative action to enjoin corporate acts." Stockholders 
 of a holding company may maintain a representative action 
 for the benefit and in behalf of the subsidiary company, the 
 directors of both companies having refused, after due request, 
 to institute an action in the name of either company.^" One 
 pledging his corporate stock with a voting trustee with whom 
 aU other stock is also deposited has no individual cause of 
 action for mismanagement of the corporation against the 
 trustee resulting in an injury to the corporation, common to 
 all stockholders^ although such injury incidentally depreciate 
 the value of his pledge ; but for a direct injury to his stock, 
 not common to all stockholders as such, the pledgor may have 
 his action notwithstanding he is also a stockholder.^ "... 
 a stockholder may bring an action in behalf of the corporation 
 for the benefit of himself and all other stockholders, to set 
 aside as fraudulent an improper transaction consummated at 
 the expense of the corporation before he acquired his stock." " 
 
 ^^ Maine Products Co. v. Alex- & Ogdensburg R. R. Co., 30 Hun, 
 
 ander, No. 3, 115 A. D. 475, 101 73 (1883). 
 Supp. 464 (1906). ^^ Robinson v. New York, West- 
 
 ^''Baum V. Sporborg, 146 A. D. Chester & Boston Ry.Co., 55 Misc. 
 
 537, 131 Supp. 267 (1911). 516 105 Supp 897 (1907). 
 
 " Pollitz V Wabash Railroad Co. , " ^"^'"^In ?ri^\ r r p T»' 
 
 No. 1, 150 A. D. 709, 135 Supp. 785 JJJd^^gPP' ^*° ^^^^^^ ' ^- ^- ^^ *^^' 
 (1912). The defense was that the i Milliken v. McGarrah, 159 A. D. 
 
 plaintiff knew of the matters of 728, 144 Supp. 964 (1913). 
 which he complained when he ^ p^jujj.^ y Gould, 202 N. Y. 11, 
 
 bought his stock, and bought the 38 L.R.A.(N.S.) 988, 94 N. E. 1088 
 
 stock as an interloper to bring the (19—) ; Continental Securities Co. 
 
 action. v. Belmont, 206 N. Y. 7, 51 L.R.A. 
 
 "Kingman v. Rome, Watertown (N.S.) 112, 99 N. E. 138 (1912). 
 
§ 189 STOCKHOLDERS 197 
 
 In the absence of special circumstances a stockholder may 
 bring an action on behalf of himself and all other stockholders 
 to set aside as fraudulent a transfer and exchange of the cor- 
 poration 's stock for the purpose of avoiding the transfer and 
 exchange as an improper transaction consummated at the 
 expense of the corporation even though the consummation 
 took place before he acquired his stock.^ A stockholder in 
 existence before stock of his corporation is issued at gross 
 overvaluation foi patents, or the corporation itself may dis- 
 affirm the agreement for such stock issue ; but if all the stock 
 is so issued there can be no existing stockholder and no one can 
 complain — not even one buying some of such stock at less 
 than par after its issue and return as a gift to the corporation 
 by the person to whom originally issued for patents.* A com- 
 plaint by one not alleged at the time of the commencement of 
 the action to hold stock in a corporation against an individual 
 to recover damages for injury by the reduction in value of 
 such stock through wrongful acts of the individual in. taking 
 possession of the corporate office and business at best sets 
 forth a cause of action in the corporation rather than in an 
 individual stockholder and will not lie: certainly it will not 
 warrant attachment/ 
 
 § 189. Id.: When Corporation Must Sue or Be Asked to 
 Sue. — In determining whether an action at law for recovering 
 damages should be brought by a stockholder of the corpora- 
 ' tion damaged as aii individual, or for and on behalf of the 
 corporation and its stockholders as a whole, the question is 
 whether the damages belong to the individual stockholder or 
 the corporation ; and in determining this question, it must be 
 borne in mind that the rights of creditors are superior to those 
 of stockholders : e. g., the action should be brought by a stock- 
 holder as an individual when he has been induced to purchase 
 stock and pay a higher price than it was fairly worth, or when 
 he has been induced to part with his stock for less than its 
 value through false and fraudulent representations of "others; 
 but the action should be brought in the name of the corpo- 
 ration or as representative of all stockholders when the acts 
 complained of are waste and destruction of the corporation's 
 property and franchises through obtaining a controlling stock 
 interest, refusing opportunities for business, diverting its 
 
 ' PoUitz V. Gould, 202 N. Y, 11, Wire Co., 103 A. D. 472, 93 Supp. 
 
 38 L.R.A.(]Sr.S.) 988, 94 N. E. 1088 134 (1905). 
 
 (1911). There was no question ^Dudley v. Armenia Insurance 
 
 raised of consent by the holder of Co., 115 A. D. 380, 100 Supp. 818 
 
 the stock. (1906) ; C. C. P. § 635. 
 
 * Insurance Press v. Montauk 
 
198 BUSINESS CORPORATIONS IN NEW YORK § 189 
 
 business so as to prevent payment of bond-interest, buying in 
 control of such bonds, foreclosing and so acquiring the corpo- 
 rate property at an unfair price.° " ... the exercise of 
 jurisdiction in equity rests in the sound discretion of the 
 court, and depends upon the special circumstances disclosed 
 . . . to enable a stockholder in a corporation to sustain in 
 a court of equity, in his own name, a suit founded on a right 
 of action existing in the corporation itself, there must exist 
 as a foundation for the suit, ' some action or threatened action 
 of the managing board of directors or trustees of the corpo- 
 ration, which is beyond the authority conferred on them by 
 their charter or other source of organization; or such a 
 fraudulent transaction, completed or contemplated by the 
 acting managers in connection with some other party, or 
 among themselves, or with other shareholders, as will result 
 in serious injury to the corporation, or to the interests of the 
 other shareholders; or where the board of directors, or a 
 majority of them, are acting for their own interest in a man- 
 ner destructive of the corporation itself, or of the rights of the 
 other shareholders. ' " ^ If a right of action belong to a corpo- 
 ration, a stockholder cannot sue in his own name unless he 
 has demanded of the board of directors that it sue and it has 
 refused; unless hostility of the directors or connection by 
 them with the transaction sued on is shown.' Before a stock- 
 holder may successfully sue representatively for spoliation 
 of his corporation's property by its officers and directors he 
 must allege or prove demand upon the corporation or its 
 board of directors to bring the same suit." A stockholder 
 may sue to nullify an action by his corporation, which is in 
 fraud of its stockholders' rights and renders their stock 
 valueless, if the corporation itself refuses on demand to bring 
 the action." A stockholder bringing a representative action 
 to secure a return to his corporation of assets fraudulently 
 dissipated need not allege a demand on the corporation to 
 bring the action if aU its directors and officers and all its 
 stocfiiolders known to the plaintiff are charged with active 
 
 "Niles V. New York Central & eal Co., 96 Misc. 501, 160 Supp. 549 
 
 H. R. R. R. Co., 176 N. Y. 119, 68 (1916); Godley v. Godley & Cran- 
 
 N. E. 142 (1903). dall Co., 181 A. D. 75 (1917). 
 
 ' Leslie v. Lorillard, 110 N. Y. 519, ° Norman v. Federal Mining & 
 
 1 L.R.A. 456, 18 N. E. 363 (1888), Smelting Co., 180 A. D. 325, 167 
 
 approving doctrine of Dodge v. Snpp. 794 (1917). 
 
 Woolsey, 18 How. (U. S.) 331, as "Pondir v. New York, Lake 
 
 laid down in Hawes v. Oakland, 104 Erie & Western R. R. Co., 72 Hun, 
 
 U. S. 450. 384, 25 Supp. 560 (1893). 
 
 'Dillon V. Pan- American Theatri- 
 
§ 189 STOCKHOLDERS 199 
 
 participation in the fraud." A stockholder suing officers of 
 a corporation for waste of its assets through a conspiracy to' 
 which they all were parties to benefit themselves need not as 
 a condition precedent to his suit demand that they or the 
 corporation sue." Stockholders, individually or collectively, 
 have no cause of action because a director or officer of their 
 corporation unlawfully obtains its property. The action is in 
 the corporation, or in its receiver if one has been appointed, 
 and in the directors as trustees on dissolution if the receiver 
 appointed has been discharged." "... there may be a 
 fraudulent issue of stock not in the interests of the corpora- 
 tion, but in the interest of the individual directors and with a 
 view to enabling them to obtain and maintain control of the 
 corporation and to appropriate to themselves to the exclusion 
 of other stockholders all profits of the business, and if so an 
 action may be maintained by a stockholder in the right of the 
 corporation to enjoin the further consummation of the con- 
 spiracy and for an accounting to the corporation. " " A 
 stockholder in a successful, dividend-paying corporation, with 
 large assets and good prospects, compelled by the vote of 
 its directors and the other stockholders, induced by fraud, to 
 surrender a part of his interest in the corporate assets repre- 
 sented by his stock, without any real consideration, is entitled 
 in equity to have the transaction set aside and the delinquent 
 parties account, but the right of action belongs not to him indi- 
 vidually, but to the corporation, and should be brought by it 
 unless after due demand and refusal, or unreasonable neglect 
 to proceed, it refuses to proceed, whereupon the stockholder 
 may himself bring it and make the corporation a defendant, 
 upon proper averments." One claiming to be a stockholder 
 in a corporation which has distributed dividends among its 
 stockholders without recognizing the claimant as such cannot 
 in the first instance sue one of the recognized stockholders to 
 recover a portion of his dividends on the theory that the 
 dividends such recognized stockholder received were greater 
 than he was entitled to if the claimant had been recognized 
 too, in payment of dividends." The stockholders of a lessor 
 corporation wholly under the control of a lessee corporation 
 
 " Weber v. Wallerstein, No. 1, 111 ' " Flynn v. Brooklyn City B. R. 
 A. D. 693, 97 Supp. 846 (1906). Co., 158 N. Y. 493, 53 N. E. 520 
 
 "Kelsey v. Sargent, 40 Hun, 150 (1899). 
 (1886). ^"Peckham v. Van Wagenen, 83 
 
 ^'Michel V. Betz, 108 A. D. 241, N. Y. 40 (1880). 
 95 Snpp. 844 (1905). 
 
 ^* Brewster v. Brewster Co., 138 
 A. D. 139, 122 Supp. 1019 (1910). 
 
200 BUSINESS CORPORATIONS IN NEW YORK §§ 190, 191 
 
 which refuses to pay rent may themselves enforce in equity 
 its rights." 
 
 § 190. Id.: Grounds for Suit by Stockholder.— A stockholder 
 may bring a representative action to enforce a contract made 
 by a promoter for its benefit, adopted by it, which it refuses 
 to enforce.^' "... at common law an action can be 
 maintained by the stockholders of a corporation to have 
 declared void a contract with another corporation when the 
 two corporations are controlled by common directors where 
 the acts of the two corporations are based upon a fraudulent 
 combination by which a majority of the directors of the two 
 companies seeks to defraud one corporation for the benefit 
 of the other. " " A stockholder of a corporation of this State 
 may sue to set aside as illegal a conveyance of all its prop- 
 erty to a foreign corporation in consideration of shares of 
 the latter 's stock authorized by majority vote of the former's 
 stockholders in which he did not concur, if the domestic cor- 
 poration refuses to bring the suit at his request, as such a 
 method of terminating a New York corporation's existence 
 is not recognized.^" A stockholder may sue in equity to 
 restrain his corporation from forfeiting his stock for non- 
 payment of assessments and for an accounting for such sums 
 as might be due him from it, if its books are confused and 
 were kept partly while he and partly while another was pres- 
 ident.^ A stockholder may sue to recover on behalf of his 
 corporation moneys received by individuals as its agents who 
 were also its officers and make the corporation a defendant, 
 if these individuals themselves refuse to bring the suit.° 
 
 § 191. Id.: Pleading, Practice and Evidence. — One having 
 elected to be deemed excluded from his alleged rights as a 
 stockholder and having brought his action for damages for 
 such exclusion cannot at the same time claim to be treated as 
 a stockholder and to be entitled to receive the dividends on 
 the shares of which he claims to have been unjustly deprived.' 
 A complaint will not be dismissed on the ground that it does 
 
 " Barr v. New York, Lake Erie therefore cancelled the lease of II 
 
 & Western R. R. Co., 125 N. Y. 263, and took possession of its property 
 
 26 N. E. 145 (1891). for the benefit of I. 
 
 i« Cmnmings v. Brown, 122 A. D. ^ Taylor v. Earle, 8 Hun, 1 
 
 505, 107 Supp. 498 (1907). (1876). 
 
 " Jacobs V. Mexican Sugar Refin- ^ Schultz v. German- American 
 
 ing Co., Ltd., 104 A. D. 242, 93 Real Estate Co., 21 A. D. 163, 47 
 
 Supp. 776 (1905). B. and C. con- Supp. 500 (1897). 
 
 trolled a majority not only of stock ^ Sheridan v. Sheridan Electric 
 
 but the directors of each corpora- Light Co., 38 Hun, 396 (1886). 
 
 tion, though much larger stock in- ' Hughes v. Vermont Copper Min- 
 
 terest in Company I than II, and ing Co., 72 N. Y. 207 (1878). 
 
§ 191 STOCKHOLDERS 201; 
 
 not allege ownership in the plaintiff of corporate stock during 
 the time he seeks to recover from defendants on their guaranty 
 of payment of certain dividends thereon if it alleges purchase 
 thereof and payment therefor by the plaintiff in reliance 
 upon such guaranty.* In a stockholder's representative suit 
 in equity for an accounting and setting aside as fraudulent of 
 a transaction consummated at the corporation's expense it is 
 not necessary to allege that the predecessors in title of the 
 plaintiff did not assent to or acquiesce in the alleged fraud, 
 unless such assent or acquiescence is to be presumed from 
 delay in bringing suit or generally from the complaint's 
 allegations.^ " In a derivative action . . . ' the com- 
 plaint should allege, that the corporation, on being applied to, 
 refused to prosecute, and .... this averment constitutes 
 an essential element of the cause of action ' . . . subject 
 to this exception, that where facts are alleged showing that 
 the demand would be unavailing, a demand is unnecessary. 
 . . . "° An action by a stockholder on behalf of the corpo- 
 ration being derivative, he must allege: " first, a good cause 
 of action in favor of the corporation; second, facts which 
 authorized his intervention and the institution of his suit in 
 behalf of his corporation.'" A complaint by a stockholder 
 in a representative action need not allege plaintiff was a 
 stockholder at the time demand was made upon the corpora- 
 tion to bring the action if it allege plaintiff was still a stock- 
 holder, though it must be shown on the trial that he was a 
 stockholder when the demand was made.* A stockholder of 
 a solvent corporation which has appointed a committee and 
 gone into voluntary liquidation need not in suing, either 
 before or after the committee was appointed, "in the right of 
 the corporation for an accounting by directors for misman- 
 agement, allege a demand upon such committee in addition to 
 
 * Crook V. Soott, 65 A. D. 139, 72 ' O'Connor v. Virginia Passenger 
 Snpp. 516 (1901) ; aff'd 174 N. Y. & P. Co., l84 N. Y. 46, 76 N. E. 
 520, 66 N. E. 1106. 1082 (1906). 
 
 ° Continental . Securities Go. v. ' Holmes v. Camp, 176 A. D. 771, 
 
 Belmont, 206 N. Y. 7, 51 L.R.A. 162 Supp. 1014 (1917). ". . . 
 
 (N.S.) 112, 99 N. E. 138 (1912). it is not necessary to decide whether 
 
 * O'Connor v. Virginia Passenger the stockholders of a corporation 
 & P. Co., 184 N. Y. 46, 76 N. E. 1082 which owns stock in another corpo- 
 (1905). Complaint alleged a board ration may, on the failure of their 
 of directors subservient to the stock- corporation to act on due demand, 
 holder complained of under whose make the demand on such other cor- 
 domination it issued bonds to him at poration and, on a failure to com- 
 an inadequate price; but did not ply therewith, maintain the action 
 allege board at time of the action which their oorporaition as such- 
 was the same as when the bonds stockholder oould have maintained 
 
 \\!if\ 1+ ma.dft thp (^pmnTirl" 
 
 wrava i ecu an 
 
202 BUSINESS CORPORATIONS m NEW YORK § 191 
 
 the board of directors as a condition precedent to his suit." 
 A stockholder seeking to set aside as unconscionable a contract 
 by which the corporation retained a lawyer to represent it in 
 certain proceedings must either allege a demand of and 
 refusal by the corporation to bring the action or show the 
 futility thereof — which is not done by showing that a 
 majority of the directors who authorized the employment are 
 still in office." A stockholder of a lessor company excuses 
 himself from a demand upon his company to take action 
 which he himself is taking when he alleges that the manage- 
 ment of such company is wholly in the interest of the lessee 
 corporation; that he and the other stockholders he repre- 
 sents have no means of causing a demand by the lessor- 
 corporation on the lessee-corporation for unpaid rent out of 
 which dividends may be declared, and that there is a conspir- 
 acy to deprive himself and others of their rights as stock- 
 holders." An objection to a stockholder's suit that the plain- 
 tiff does not sue in behalf of all other stockholders who might 
 come in as well as himself is waived if not raised either by 
 answer or by demurrer.^" A complaint merely alleging a 
 duty on defendant as trustee to hold an old stock certificate 
 of plaintiff for which an interim certificate was given till new 
 shares were issued and given a depositary for delivery, and 
 to cancel the old certificate on issue of the new shares; and 
 that the new shares have long been ready; but not alleging 
 their issue, states no cause of action." A complaint by a 
 stockholder in a representative action based on a conspiracy 
 to impair the value of the corporate stock by the declaration 
 of scrip dividends must appropriately allege that the undi- 
 vided profits of the company did not amount to as much as 
 the total sum for which the scrip dividend was authorized; 
 an allegation that the company did not have surplus profits 
 available for the payment of dividends in that sum is not 
 sufficient." A stockholder's representative action against 
 another corporation to enforce the latter 's agreement to pay 
 his corporation money pursuant to contract should not make 
 
 ° Planten v. National Nassau " Hiscock v. Lacy, 9 Misc. 578, 
 
 Bank, 174 A. D. 254, 160 Supp. 297 30 Supp. 860 (1894) ; C. C. P. 
 
 (1916) ; aff'd 220 N. Y. 577, 116 §§ 488, 498, 499. 
 
 N. E. 1070. " Petty v. Emery, 96 A. D. 35, 88 
 
 "McCoy V. Gas Engine & Power Supp. 823 (1904). 
 
 Co., 135 A. D. 771, 119 Supp. 864 "Bankers Trust Co. v. Dietz Co., 
 
 (1909). 157 A. D. 594, 142 Supp. 847 (1913). 
 
 ^^ Barr v. New York, Lake Erie & 
 Western R. R. Co., 96 N. Y. 444 
 (1884). 
 
§ 191 STOCKHOLDERS 203 
 
 parties the directors of either corporation." It is proper for 
 stockholders suing in their individual right to regain their 
 stock and position as controlling stockholders to attack in one 
 cause of action all the acts and join all the parties who took 
 part in the acts which have impaired their rights and which 
 are barriers between them and the relief they seek.^° Both 
 in an action by a stockholder in his own right or as represent- 
 ative in behalf of his corporation, acts of directors and of 
 third persons, though constituting independent causes of 
 action in favor of the corporation, may be so connected as 
 to constitute a single cause of action in favor of a stock- 
 holder against all of the wrongdoers." It is proper in a 
 representative action by a stockholder setting forth a cause 
 of action in the corporation's favor to combine allegations 
 of neglect of directors with allegations of their willful 
 wrongdoing." A complaint in a representative action by a 
 stockholder cannot join without separately stating a cause 
 of action in favor of the corporation, both to recover dam- 
 ages for injury to its own business and to recover damages 
 for the diminution in the value of the stock of another 
 corporation owned by it." An individual cannot in one com- 
 plaint unite a cause of action as a representative stockholder 
 in which the corporation, although a nominal defendant, is 
 really a plaintiff- in the sense that it has rights against 
 the other defendants which the plaintiff is entitled as stock- 
 holder to have it enforce, with another cause of action to 
 destroy the corporate life of the corporation.^" In an action 
 by an individual stockholder alleging that the corpora- 
 tion's assets were consideration for the issue of stock of a 
 second corporation which the individual defendant received 
 as trustee for the holders of stock in the first company, and 
 seeking to recover from such trustee his share of the second 
 company's stock, the first company is a necessary party 
 defendant, as well as its stockholders, granting that a cause 
 of action by plaintiff, individually and not as representative 
 
 " Case V. New York Mutual Sav- Supp. 650 (1916) ; C. C. P. § 481, 
 
 ings & Loan Assn., 88 A. D. 538, 85 subd. 2, and § 483. 
 
 Supp. 104 (1903); C. C. P. § 484. " Fleitmann v. United Gas Im- 
 
 " Witherbee v. Bowles> 2Q1 N. Y. provement Co., 174 A. D. 781, 161 
 
 427, 95 N. E. 27 (1911). Supp. 650 (1916); C. C. P. § 481, 
 
 " Meredith v. Art Metal Construe- subd. 2, and § 483. 
 
 tion Co., 97 Misc. 69, 161 Supp. 1 ^'' Dusenberry v. Sagamore Devel- 
 
 (1916). opment Co., 157 A. D. 485, 142 
 
 "Fleitmann v. United Gas Im- Supp. 595 (1913). 
 provement Co. 174 A. D. 781, 161 
 
204 BUSINESS CORPORATIONS IN NEW YORK § 191 
 
 of all stockholders, lies at all, which is doubtful.^ A represent- 
 ative action by a stockholder to recover of stockholders of 
 his corporation sums unpaid on their stock, to adjust the 
 claims of its creditors and to pay in full or ratably, should 
 have all stockholders as parties and when reduced to judg- 
 ment will inure to the benefit of all other creditors who prove 
 their claims and contribute their proportion to the expenses 
 of the litigation; but original subscribers to the stock who 
 never paid ten per cent, on their subscriptions need not be 
 made parties, nor stockholders who subscribed certain 
 amounts and then released the corporation from all obliga- 
 tions on account of their subscription which was then declared 
 forfeited by the directors, even though the details essential 
 to forfeiture be not alleged.^ In a derivative action by minor- 
 ity stockholders to recover an amount in the hands of the 
 vendor of property to their corporation, alleged to have been 
 fraudulently obtained, the burden is on them to prove over 
 his denial that this amount, which they seek to hold him for 
 under an obligation created by operation of law, is still in 
 his hands.^ The statute of limitations against proceedings by 
 a stockholder and director to compel restitution to his corpo- 
 ration by a representative stockholders' action of loans made 
 by it to another stockholder and director is the ten year stat- 
 ute and does not begin to run till the death, of the latter if he 
 continues as stockholder and director till such death.* A 
 judgment in a successful representative action by a stock- 
 holder to have paid back into the corporate treasury money 
 improperly voted therefrom as officers' salaries should not 
 also direct the distribution of such sum among stockholders 
 by the corporation, as the declaration of a dividend should 
 not be made by the court.° A stockholder who has received 
 certain property on account of stock which he has released 
 and surrendered to other stockholders and the corporation, 
 if he desires to have that transaction set aside as fraudulent 
 and his original stock restored to him, should, it seems, either 
 tender back what he has received before bringing his action or 
 offer in his complaint to restore what he has received as the 
 proceeds of the alleged fraudulent transaction.* " ... 
 
 ^ Knickerbocker v. Conger, 110 * Murray v. Smith, 166 A. D. 528, 
 
 A. D. 125, 97 Supp. 127 (1905). 152 Supp. 102 (1915); C. C. P. 
 
 ^Ford V. Chase, 118 A. D. 605, § 388; Gen. Corp. L. § 28. 
 
 103 Supp. 30 (1907) ; aff'd 189 "> Miller v. Crown Perfumery Co., 
 
 N. Y. 500. 125 A. D. 881, 110 Supp. 806 
 
 'Ebling V. Nekarda, 148 A. D. (1908). 
 
 193, 132 Supp. 309 (1911); aflPd « Brock v. Poor, 216 N. Y. 387, 
 
 210 N. Y. 566, 104 N. E. 1129. Ill N. E. 229 (1915). 
 
§ 191 STOCKHOLDERS 205 
 
 No valid reason exists, either in law or equity, why several 
 stockholders of a corporation seeking redress of those who 
 are conspiring to defeat their rights should not be allowed 
 to unite in a single action for that purpose. . . . where 
 the board of directors of a corporation is acting in a manner 
 destructive of the rights of the other shareholders, or where 
 the majority of the shareholders themselves are oppressively 
 and illegally pursuing a course in the name of the corporation 
 which is in violation of the rights of the other shareholders 
 and which can only be restrained by the aid of a court of 
 equity, an action to obtain relief may be maintained by a 
 stockholder. " ^ There is a distinction between the liability of 
 a corporation owing its stockholders dividends from money 
 which has never been severed from the mass of the corporate 
 property, which must be enforced by an action at law, and 
 the liability of its directors who have set apart the money 
 into a distinct fund to pay dividends and hold that fund as 
 the stockholders' trustees, but refuse to distribute it, and the 
 former is an individual stockholder's action while the latter 
 is a stockholder's representative suit, which cannot be joined 
 in one complaint.' A plaintiff bringing a cause of action as a 
 stockholder of a corporation to enforce a right of action exist- 
 ing in favor of the corporation cannot join the other stock- 
 holders as parties defendant when no relief is asked against 
 them and when in no aspect of the case can they be entitled to 
 any relief or be subject to any liability .° A stockholder's 
 action to compel an individual as such, and with another as 
 members of a partnership, to account to the corporation of 
 which the plaintiff is a stockholder and they both were direct- 
 ors and one an officer, as its financial agents, will not be sus- 
 tained when the gravamen of the complaint is simply their 
 failure to cause the corporation to keep what the plaintiff 
 considered proper books of account and to render proper' 
 accounts from the plaintiff's viewpoint." A representative 
 action by a stockholder to recover for acts prejudicial to 
 stockholders ' rights inay be brought against the corporation 
 without alleging its refusal to act for their relief upon demand 
 if such wrongs are alleged as existing and continuing down to 
 the time of the commencement of the action, and without hav- 
 
 ' Barr v. New York, Lake Erie & ° McCrea v. McClena,haii, 114 
 
 Western R. R. Co., 96 N. Y. 444 A. D. 70, 99 Supp. 689 (1906). 
 
 (1884). i°Clubb V. Cook, 161 A. D. 775, 
 
 ^Searles v. Gebbie, 115 A. D. 778, 147 Supp. 94 (1914). 
 101 Supp. 199 (1906); aff'd 190 
 N. Y. 533, 83 N. E. 1131. . 
 
206 BUSINESS CORPORATIONS IN NEW YORK § 192 
 
 ing the president, originally made a party as a co-conspirator, 
 continued as a party after his demurrer has been sustained.^^ 
 An examination of a sole surviving director of a corporation 
 before trial to enable stockholders to frame their complaint 
 against him for an accounting wiU be denied if the plaintiff 
 alleges enough to make out a good complaint." A discussion 
 of the costs properly payable by stockholders after dissolution 
 of an injunction against issue of securities by their corpora- 
 tion under an injunction bond, including attorneys' allow- 
 ances, is found in the note case.^* 
 
 § 192. Id.: Objections To.— " . . . Where the objec- 
 tion to the acts of a corporation is that they are ultra vires 
 Avithout being either mala proMbita or mala in se, a stock- 
 holder cannot maintain an action in his own behalf based on 
 such objection, where he himself, with knowledge of the char- 
 acter of the acts, has acquired and accepted pecuniary benefits 
 thereunder. ' ' " The right of a stockholder to maintain a 
 representative action to compel another stockholder to 
 account to the corporation is not affected by its bankruptc}' 
 after the action is begun, as the accounting will then be to the 
 trustee in bankruptcy instead of to the corporation." The 
 fact that in an action there have been joined one cause accru- 
 ing to the plaintiff in his individual right and another derived 
 from and asserted in behalf of the corporation of which he 
 is stockholder is not proven so as to make his complaint 
 demurrable simply because the acts in the alleged second 
 cause of action might be made the basis of an action by or in 
 behalf of the corporation if they also worked injury to plain- 
 tiff's individual rights and the complaint in the main shows 
 an intent to recover or be restored in plaintiff's individual 
 capacity." A holder of preferred stock of a corporation 
 having a right of action to hold it to payment of passed divi- 
 dends is not guilty of such laches as to be barred from com- 
 plaining because he awaited the result of suits by other stock- 
 holders, or in any event if the company sought to be held 
 liable necessarily was acquainted with the claim of stock- 
 holiders for such dividends and nevertheless proceeded to 
 divert the corporate funds from distribution as dividends on 
 
 ^^ Brown v. BufBalo, New York & ^*Treadwell v. United Verde Cop- 
 Erie R. R. Co., 27 Hun, 342 (1882). per Co., 134 A. D. 394, 119 Supp. 
 
 "De Martini v. McCaldin, 176 112 (1909). 
 
 A. D. 541, 163 Supp. 484 (1917). "Meyer v. Page, 112 A. D. 625, 
 
 "Continental Securities Co. v. 98 N. Y. Supp. 739 (1906). 
 
 New York Central R. R. Co., 179 "Witherbee v. Bowles, 201 N. Y. 
 
 A. D. 355, 166 Supp. 499 (1917). 427, 95 N. E. 27 (1911). 
 
§ 193 STOCKHOLDERS 207 
 
 preferred stock, so that its conduct was not affected by this 
 particular stockholder's delay in suing." A stockholder 
 suing for frauds culminating in an injury to the corporation 
 must show a refusal or neglect of the corporation to sue after 
 his demand that it do so ; and in such an action by the stock- 
 holder any defense which a defendant would have if the cor- 
 poration itself were the actual plaintiff may be interposed to 
 bar the stockholder.^^ If individuals sued on behalf of a 
 corporation by a stockholder in a representative action have 
 illegally a,nd wrongfully occasioned a loss to the corporation 
 " it is neither a defense nor a mitigating circumstance that 
 despite such illegal and wrongful acts the corporation is still 
 solvent, or that the stock has increased in value during the 
 time when the alleged illegal and wrongful acts have been 
 coinmitted. ' ' ^^ One who is a stockholder in a corporation 
 which operates and sues for his benefit cannot set up the 
 failure of its organizers to perform a duty initiatory to its 
 legal existence, in an action, the plaintiffs in which eould not 
 set up the same fact as a defense to them if sued by the cor- 
 poration for such one's benefit.^" 
 
 § 193. Id.: Liabilities of, In General. — Every business cor- 
 poration formed under the Business Corporation Law may be 
 or become a full liability corporation by inserting a state- 
 ment in the certificate of incorporation that the corporation 
 thereby formed is intended to be a full liability corpora- 
 tion.^ Where there is no common-law liability on the 
 part of a holder of stock, the legal presumption is 
 that ' any statutory conditions imposed upon the cor- 
 poration, non-compliance with which may subject him 
 to liability, have been complied with; and one seeking to 
 establish his liability must show noncompliance with such 
 conditions." " There is no provision of law . . . that 
 makes the holder of capital stock of a corporation liable to 
 the corporation for the difference between the par value of 
 
 ^■'Boardnian v. 'Lake Shore & ^^ Eaton v. Aspinwall, 19 N. Y. 
 
 Michigan Southern Ry. Co., 84 N. T. 119 (1859). The failure was of 
 
 157 (1881)". payment of 10 per cent, of the capi- 
 
 ^* Alexander v. Donohue, 143 tal stock under a statute requiring 
 
 N. Y. 203, 38 N. E. 263 (1894). it. 
 
 The plaintiff stockholder was held ^Bus. Corp. L. § 6 (L. 1909, 
 
 bound by an adjudication in an ac- c. 12). 
 
 tion of foreclosure against the oor- ^ Chase v. Lord, 77 N. Y. 1 
 
 poration. (1879). 
 
 ^° Jacobson v. Brooklyn Lumber 
 Co., 184 N. Y. 152, 76 N. E. 1075 
 (1906), 
 
208 BUSINESS CORPORATIONS IN NEW YORK § 19* 
 
 the stock and the amount that under an agreement between 
 the corporation and the stockholder the stockholder has paid 
 the corporation therefor. ' ' ^ One buying as a speculation the 
 stock of a company which has substantially given up its busi- 
 ness cannot hold a stockholder who took no part in the nego- 
 tiations liable for a statement of its affairs on which he did 
 not rely for fraud, or recover the consideration paid/ Stock- 
 holders electing their creatures as directors by using stock 
 not legally outstanding are liable to account to the corporation 
 for large blocks of stock given away without consideration by 
 such directors, mortgage bonds sold by such directors at less 
 than the authorized price, and so forth/ When a number of 
 stockholders in a corporation give their joint and several 
 note as individuals for its accommodation, they are liable as 
 individuals each for the whole and to contribute among them- 
 selves each that fraction of the note which their total number 
 was, and not each according to the amount of stock he held 
 as compared with the others/ " There is no rule of law 
 which charges a director or stockholder of a corporation with 
 actual knowledge of its business transactions merely because 
 he is such director or stockholder. ' ' ^ 
 
 § 194 Id.: Of Representative of Deceased Stockholder. — 
 Executors of the estate of a holder of corporate stock take it 
 subject to any liability which existed on account of it.' 
 " ... When a stockholder in any corporation dies his 
 estate succeeds him in the title to, and the rights in, the stock 
 he held. . . ' . it must take that title and those rights sub- 
 ject to any liability then existing upon them; and so lotig as 
 the estate is, by. operation of law, the holder of such stock, the 
 estate must become responsible for any obligations accruing 
 during that time, which the law may impose upon any holder 
 of the stock, as such. ' ' " The statutory liability of a stock- 
 holder of a corporation for its debts to an amount equal to the 
 amount of his holdings of stock until the corporate capital 
 
 'Thompson v. Knight, 74 A. D. « Cobum v. Wheelock, 34 N. Y. 
 
 316, 77 Supp. 599 (1902). The 440 (1866). 
 
 general assignee af the corporation ' Rudd v. Robinson, 126 N. Y. 
 
 was suing. The liability in such a 113, 12 L.R.A. 473, 26 N. E. 1046 
 
 case to a corporate creditor is set- (1891). 
 
 tied. "Chase v. Lord, 77 N. Y. 1 
 
 * Garrett Co. v. Appleton, 101 (1879). 
 
 A. D. 507, 92 Supp. 136 (1905); * Bailey v. HoUister, 26 N. Y. 112 
 
 aff'd 184 N. Y. 557, 76 N. E. 1099. (1862). 
 
 ' O'Connor v. Virginia Passenger 
 and Power Co., 46 Misc. 530, 92 
 Supp. 525 (1905). 
 
§ 195 STOCKHOLDERS 209 
 
 stock is wholly paid in is inherent in every contract that the 
 corporation makes with creditors prior to the time that its 
 certificate of payment of capital stock is filed, is therefore 
 contractual, survives the death of the stockholder, and may be 
 laid at the door of his representatives." 
 
 § 195. Id.: For Debts, Governing Statutes.— Every holder 
 of capital stock in any stock corporation is personally liable 
 to its creditors for debts of the corporation, provided (1) his 
 stock is not fully paid, and (2) the debts of the corporation 
 were contracted while such stock was held by him ; but in any 
 event only to an amount equal to the ?imount unpaid on the 
 stock held by him." No person holding stock in any corpora- 
 tion is personally subject to liability as a stockholder if he 
 holds it (1) as collateral security, (2) as executor, (3) as 
 administrator, (4) as guardian, or (5) as trustee, unless he 
 voluntarily invested the trust funds in such stock; but the 
 person pledging such stock is considered the holder thereof 
 and liable as stockholder, and the estates and funds in the 
 hands of the executor, administrator, guardian or trustee are 
 liable in the like manner and to the same extent as the testator, 
 intestate, ward or person interested in such trust fund would 
 have been if he had been living and competent to act and held 
 the stock in his own name (unless, as already said, it appears 
 that such executor, administrator, guardian or trustee volun- 
 tarily invested the trust fund in such stocks, in which case he 
 is personally liable as a stockholder)." No stockholder is per- 
 sonally liable for any debt of the corporation unless (1) it 
 is payable within two years from the time it is contracted, 
 and (2) an action for its collection is brought against the 
 corporation within two years after the debt becomes due." 
 An action cannot be brought against a stockholder for any 
 debt of his corporation until (1) an action has been carried 
 to judgment against the corporation for such debt and (2) 
 an execution on such judgment has been returned unsatisfied 
 
 ^° Cochran v. Wiechers, 119 N. Y. for banking purposes, on account of 
 
 399, 7 L.R.A. 553, 23 N. E. 803 any indebtedness hereafter con- 
 
 (1890) ; L. 1875, c. 611, § 37. tracted on any stock hereafter 
 
 "St. Corp. L. § 56 (L. 1909, issued; but nothing in this section 
 c. 61) : "As to existing corporations contained shall create or increase 
 the liability imposed by this section any liability of stockholders of any 
 shall be in lieu of the liability im- existing corporation under any gen- 
 posed upon stockholders of any ex- era! or special law." 
 isting corporation, under any gen- "St. Corp. L. § 58 (L. 1909, 
 eral or special law, excepting laws c. 61). 
 
 relating to moneyed corporations, " St. Corp. L. § 59 (L. 1909, 
 
 and corporations and associations e. 61). 
 B. C. N. Y.— 14 
 
210 BUSINESS CORPORATIONS IN NEW YORK § 196 
 
 in whole or in part." The amount recoverable against a 
 stockholder under his statutory liability for the debts of his 
 corporation is (1) the amount due on an execution returned 
 unsatisfied on a judgment obtained in an action against the 
 corporation for such debt, plus (2) the costs against the stock- 
 holder.^^ No action can be brought against a stockholder for 
 any debt of his corporation after he has ceased to be a stock- 
 holder unless such action be brought within two years from 
 the time he ceased to be a stockholder." The liability of 
 stockholders of a business corporation reorganized so as to 
 put it in the class of corporations having stock without nom- 
 inal or par value for corporate debts contracted or obligations 
 incurred prior to the filing of the certificate of such reorgani- 
 zation is unaffected thereby, but for the purpose of enforcing 
 and recovering upon such claims creditors have the same right 
 of recourse against the stockholders individually that they 
 would have had if the corporation had not been so reorgan- 
 ized; and all the rights and benefits conferred by sections 
 fifty-six to fifty-nine, inclusive, of the Stock Corporation Law 
 are especially reserved and saved to such creditors, subject to 
 the conditions, limitations and restrictions imposed by those 
 sections ; but except for this liability the new shares issued by 
 the reorganized corporation are deemed fully paid and non- 
 assessable and the holder of such shares is not liable to the 
 corporation or to its creditors in respect thereof."' 
 
 § 196. Id.: In General. — "A right of action against a stock- 
 holder for the debts of a corporation does not exist at com- 
 mon law, and a statute which imposes upon the- stockholder 
 personal liability for the corporate debts must be strictly con- 
 strued as it is in derogation of the common law . . . . " " 
 The liability of a stockholder for the corporation's debts 
 though frequently called statutory is in fact contractual and 
 springs from an implied promise." The liability of a stock- 
 holder under statute for the debts of his insolvent corpora- 
 tion is not primary and contractual but statutory and secon- 
 dary, conditional on the failure of the corporation itself to 
 pay its debts." The liability imposed by statute on holders 
 of corporate stock not fuUy paid for debts up to the amount 
 
 " St. Corp . L. § 59 (L. 1909, " Barnes v. Wheaton, 80 Hun, 8, 
 
 c. 61). 29 Supp. 830 (1894). 
 
 "St. Corp. L. § 59 (L. 1909, "Howarth v. Angle, 162 N. Y. 
 
 c. 61). 179, 47 L.R.A. 725, 56 N. E. 489 
 
 "St. Corp. L. § 59 (L. 1909, (1900). 
 
 c. 61). i»MarshaU v. Sherman, 148 N. Y. 
 
 "»St. Corp. L. § 24-c (L. 1917, 9, 34 L.R.A. 757, 42 N. E. 419 
 
 c. 484). (1895). 
 
§ 196 STOCKHOLDERS 211 
 
 unpaid on subscriptions is supplemental to the contract 
 liability of stockholders to pay so much of their subscriptions 
 as may be necessary for the proper conduct of the corporate 
 business.^" " There is no substantial difference between the 
 liability for an unpaid balance on a stock subscription, which 
 is an express contract to take stock and pay for it (citation), 
 and the liability for the unpaid deficiency of assets assumed 
 by the act of becoming a member of the corporation through 
 the purchase of stock, from which a contract is implied to 
 perform the stjatutory conditions upon which stock may be 
 owned. "^ The liability of a stockholder for the debts of his 
 corporation must be measured by the law as it stood when 
 the debt was contracted/ The liability of stockholders for 
 the debt of a corporation on its promissory note is to be 
 determined by the statute fixing the liability applicable at the 
 time the note was made.^ A right by statute to a corporate 
 creditor to maintain an action at law against one or more of 
 its stockholders to recover corporate indebtedness cannot be 
 taken away by subsequent legislation/ "All that a creditor 
 of a company, seeking to enforce this personal liability upon a 
 stockholder, is required to prove, is the existence of the debt, 
 and that judgment has been obtained, and execution issued 
 and returned as the statute requires ; ' ' and it seems that the 
 judgment entered against the company is prima facie evi- 
 dence of the debt, and that no further proof is required, 
 either as to the origin, existence or nature of that indebtness/ 
 The Stock Corporation Law afiixes three conditions to the 
 liability of stockholders to an action: " (1) The recovery of a 
 judgment against the corporation for the debt, and the return 
 of an execution thereon unsatisfied in whole or in part; (2) 
 that the debt was payable within two years from the time it 
 
 ^"Rathbone v. Ayer, No. 2, 84 ^Leighton v. Leighton Lea Assn., 
 
 A. D. 186, 82 N. Y. Supp. 235 146 A. D. 255, 130 Supp. 935 
 
 (1903); St. Corp. L. §§ 43, 54 (L. (1911). 
 
 1901, c. 354). See now § 56. *Lang v. Lutz, 180 N. Y. 254, 73 
 
 ■ ^ Howarth v. Angle, 162 N. Y. 179, N. E. 24 (1904) ; Stock Corp. L. 
 
 47 L.R.A. 725, 56 N. E. 489 (1900). § 54 (L. 1892, e. 588, amended by 
 
 ^By analogy to the decisions in L. 1901, c. 354). See now § 56. 
 
 Close V. Potter, 2 Misc. 1, 21 Supp. ^ Belmont v. Coleman, 21 N. Y. 96 
 
 1086 (1892) ; L. 1890, e. 564, § 72, (1860) ; L. 1852, act passed April 
 
 and same case in 5 Misc. 543, 25 12, § 6 e* seq., making stockholders 
 
 Supp. 972 (1893), rendered when liable to creditors to an amount 
 
 the liability of the stockholder ex- equal to their holdings until its capi- 
 
 isted not only while his own stock tal is fully paid in, and making exe- 
 
 was not fully paid for but until the cntion returned unsatisfied on judg- 
 
 corporation's capital stock was fully jnent against it a prerequisite, 
 
 paid for. ' 
 
212 BUSINESS CORPORATIONS IN NEW YORK § 197 
 
 was contracted; (3) that the action against the corporation 
 for the debt is brought within two years after it became due, 
 and if the action is brought against the stockholder after he 
 ceased to be a stockholder, it must be brought within two 
 years after that time."° Ratification by owners of all the 
 stock of a corporation of an act by one of them as ofiScer using 
 the corporate funds to pay his personal indebtedness does 
 not impair the rights of the corporate creditors/ 
 
 § 197. Id.: For What Debts.— A stockholder is only liable 
 under the statute for debts of the corporation (1) which were 
 contracted while he held his stock in such corporation, and 
 
 (2) not exceeding the amount unpaid on the stock he holds, 
 
 (3) payable within two years from the time they were con- 
 tracted, (4) on which action for collection has been brought 
 against the corporation within two years after they became 
 due; (5) on which judgment against the corporation has been 
 had; and (6) on which judgment-execution has been returned 
 unsatisfied, in part at least.* " Within the limitations of the 
 statute the stockholders are liable for ' all debts and contracts 
 made by such company,' irrespective of the circumstances 
 under which they were made. . . . There is no exemption 
 from liability because credit was imprudently given by the 
 creditor, or because he supposed that the property of the cor- 
 poration was sufficient to pay its debts."" "An obligation 
 incurred by a corporation for the rendition of professional 
 service is a debt in the strict sense of the term, and may be 
 enforced by the same remedies by which commercial debts are 
 enforced " against its stockholders.^" For corporate debts 
 incurred in the process of organization or in preparing to 
 begin business actual subscribers to stock are liable.^^ Per- 
 sons who become stockholders in a corporation after its 
 organization and receive a dividend after the time limited in 
 its charter for duration of corporate life, but without knowl- 
 
 'Hirschfeld v. Bopp, 145 N. Y. "Hallett v. Metropolitan Mes- 
 
 84, 39 N. E. 817 (1895) ; St. Corp. senger Co., 69 A. D. 258, 74 Supp. 
 
 L. § 55; see now § 59. 639 (1902); St. Corp. L. § 54 (L. 
 
 ^Ward V. City Trust Co., 192 1892, c. 688), see now § 56. The 
 
 N. Y. 61, 84 N. E. 585 (1908). statute as it stood when this case 
 
 On right of corporation to take was decided made stockholders liable 
 
 stock of another corporation in pay- until the corporation's capital stock 
 
 ment of debts, see note in 18 L.R.A. was fully paid. 
 
 253. " Myers v. Sturgis, 123 A. D. 470, 
 
 «St. Corp. L. § 56 (L. 1909, 108 Supp. 526 (1908); afi'd 197 
 
 c. 61). N. Y. 526, 90 N. E. 1162. 
 
 ' Nat. "Tube Works Co. v. Gilfillan, 
 124 N. Y. 302, 26 N. E. 538 (1891) ; 
 L. 1848, c. 40, § 10. 
 
§ 198 STOCKHOLDERS 213 
 
 edge that such time has expired, cannot be held liable as indi- 
 viduals or partners for an indebtedness incurred by an agent 
 of the corporation after the expiration of its life, as ' ' during 
 the life of the corporation the body corporate was the legal 
 owner [of its property], and upon the expiration of the 
 charter the legal title vested in the trustees in office, at the 
 time, in trust for the creditors and stockholders," who are 
 merely cestuis que trust.^^ 
 
 § 198. Id.: Who May Enforce.— The statute makes stock- 
 holders liable to the ' ' creditors ' ' of their corporation for its 
 debts ; but only to creditors who, directly or indirectly, have 
 obtained judgment for their claims against the corporation 
 and who have had execution returned unsatisfied thereon in 
 whole or in part; and, furthermore, only to such creditors 
 whose claims against the corporation are payable within two 
 years from the time they were contracted and who have, 
 directly or indirectly, sued the corporation thereon within 
 two years after the claims became due.^' An endorser of a 
 corporate note is a creditor who may take advantage of the 
 statutory liability of a stockholder for a corporate debt." One 
 receiving for adequate cash from another a certificate of stock 
 in a corporation of which such other is treasurer signed by 
 the latter and the corporation's president is a creditor of the 
 company and not of the treasurer as an individual, even 
 though the corporation never became qualified to do business 
 and it was understood the treasurer individually might use 
 the money in his business (which was .to be turned over to the 
 corporation when it was qualified to do business) until the 
 corporation began to do business.^' An assignee of a joint 
 claim against a corporation which has been reduced to judg- 
 ment is not debarred from holding a stockholder thereof liable 
 therefor to the amount unpaid on his subscription to its stock 
 because one of his assignors was a stockholder of the same 
 corporation.^* The liability imposed by statute on holders of 
 corporate capital stock not fully paid for corporate debts up 
 
 ^2 Central Savings Bank v. Walk- " St. Corp. L. §§ 56, 59 (L. 1909, 
 
 er, 66 N. Y. 424 (1876). c. 61). 
 
 On liability of members of mutual " Moss v. Averell, 10 N. Y. 449 
 
 lire insurance companies, see note in (1853) ; L. 1837, c. 441, § 9. 
 
 32 L.R.A. 481. "Matter of Frye, 75 Hun, 402, 
 
 On liability of incorporated . re- 27 Supp. 14 (1894). 
 
 ligious society for- its debts, see note " Montgomery v. Brush Eieetrie 
 
 in 69 L.R.A. 256. Illuminating Co., .48 A. D. 12, 62 
 
 On liability of stockholders of in- Supp. 606 (1900) ; aff'd 168 N. Y. 
 
 solvent insurance company for 657, 61 N. E. 1131; St. Corp. L. 
 
 debts, see note in 38 L.R.A. 110. § 54 (L. 1892, c. 688) ; see now § 56. 
 
214 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 198 
 
 to the amount unpaid on their holdings is wholly statutory, in 
 the nature of a penalty, given to the corporation's creditors 
 and not to it, and does not, therefore, pass to its trustee in 
 bankruptcy." The statutory liability of a stockholder to cor- 
 porate creditors is not an ^sset of the corporation, and a 
 trustee of the corporation in bankruptcy cannot enforce such 
 a liability.^^ A receiver appointed upon the petition of a 
 judgment creditor of a corporation may sue a stockholder of 
 the corporation though he was appointed receiver by a state 
 court after a United States Court had adjudged the corpora- 
 tion bankrupt/® Decisions as to who is to be considered a 
 creditor of a corporation entitled to hold stockholders to 
 various liabilities under statutes no longer on the books are 
 collected in the note, because, though the statutes under which 
 the decisions were rendered are no longer extant, yet the 
 opinions of the courts therein given as to who are and who 
 are not to be considered creditors are helpful.^" 
 
 "Bathbone v. Ayer, No. 2, 84 
 A. D. 186, 82 Supp. 235 (19Q3) ; 
 St. Corp. L. §§ 43, 54 (L. 1901, 
 c. 354). See now § 56. 
 
 "Breck v. Brewster, 153 A. D. 
 800, 138 Supp. 821 (1912); St. 
 Corp. L. § 56; Bankruptcy Act, § 47 
 (30 U. S. Stat, at Large, 557, § 4; 
 as amended 36 id. 840, § 8, in 1910). 
 
 " Holsinger v. Wood, — Misc. — 
 (1918) ; N. Y. L. J., Mch. 23, 1918, 
 p. 2008; Sup. Ct. Spec. T. Pt. III. 
 
 ^'' An assignee after a corpora- 
 tion's dissolution of a claim owing 
 by it prior thereto is a creditor with 
 just as much right to hold sub- 
 scribers to its stock for the debt be- 
 cause of failure to file a eertifleate 
 of full payment of capital stock as 
 the assignor. Moosbrugger v. Walsh, 
 89 Hun, 564, 35 Supp. 550 (1895) ; 
 L. 1890, e. 567, § 7. The liability of 
 stockholders for the debts of a cor- 
 poration the capital stock of which 
 is not fully paid is "a fund which 
 any creditor of the company may 
 reach," and if the stockholder sought 
 to be held for his liability " is him- 
 self such creditor to an amount 
 equaling his statutory liability, he 
 has quite as good a right to the fund 
 which is pursued as the pursuer." 
 If the stockholder is not a creditor 
 
 when accounts are adjusted between 
 himself and the company he has no 
 equity against the fund. Wheeler 
 V. Millar, 90 N. Y. 353 (1882) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 10. 
 In an action against a stock- 
 holder of a corporation who is also 
 a creditor thereof to hold him to his 
 liability for its debts by reason of 
 the fact that its capital stock is not 
 fully paid, the stockholder has an 
 interest, as a creditor, in the fund 
 constituted by statute from the sev- 
 eral liability of the stockholders, ir- 
 respective of whether the money ad- 
 vanced by him to the corporation 
 was used to pay obligations for 
 which he was individually liable or 
 not, and may defend by setting up 
 his advances against his stockhold- 
 ings. "A stockholder owning $1,000 
 of stock with a debt against the 
 company of $5,000, sued by a cred- 
 itor for $1,000, would himself be 
 entitled to five-sixths of the $1,000, 
 if there were no othet stockholders 
 personally liable and no other debts ; 
 and if there were other personal lia- 
 bilities to the amount of $5,000, 
 and no other debts, he would be 
 entitled to $5,000 of the $6,000 con- 
 stituting the fund. Henee it would 
 be inequitable to permit a recovery 
 
§§ 199, 200 
 
 STOCKHOLDERS 
 
 215 
 
 § 199. Id.: Who Liable, In General.— A holder of capital 
 stock in a stock corporation is not liable to its creditors for 
 its debts unless (1) his stock is not fully paid, (2) the debts 
 were contracted while such stock was held by him, (3) he 
 holds the stock as absolute owner and not as collateral 
 security, or as executor, administrator, guardian or trustee 
 (unless he voluntarily invested the trust funds in such stock). ^ 
 The statute making stockholders liable for their corporation's 
 debts contemplates a several liability; and, therefore, a 
 demurrer on! the ground of non-joinder of them all will be 
 overruled.^ One holding stock of a corporation which has 
 become insolvent in his own name though under an unwritten 
 agreement that he did so for another who paid interest on the 
 purchase price advanced by the holder and agreed to pay the 
 price itself when called upon is liable to the company's cred- 
 itors as a stockholder, but may hold him for whom he holds it 
 for the amount he is compelled to pay.^ A decision, helpful bv 
 analogy, of the liability of a stockholder under a statute no 
 longer on the books is given in the note.* 
 
 § 200. Id.: Subscribers. — On signature by one to a certifi- 
 cate of incorporation he becomes personally liable to the cor- 
 
 against a stockholder thus situated." 
 Mathez v. Neidig, 72 N. Y. 100 
 (1878) ; L. 1848, e. 40, § 12. That a 
 creditor of a corporation seeking to 
 hold one of its stockholders for the 
 debt. of the corporation due him, by- 
 reason of its failure to file its annual 
 report, is himself a stockholder, is 
 no hindrance to his suit. Sanborn v. 
 Lefiferts, 58 N. Y. 179 (1874) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. 
 "... a creditor of a corporation, 
 the stockholders of which are liable 
 for its debts, may bring a suit in 
 equity against all stockholders liable 
 to him, and in favor of all creditors 
 jointly interested with him_ who 
 choose to come in and share in the 
 benefits and expenses of his suit for 
 the establishment of a fund, for the 
 adjustment of all liabilities to con- 
 tribute thereto, and of all claims 
 thereon. ... It matters not whether 
 the right of action to so many arises 
 from general principles of law, or 
 from particular provisions of con- 
 stitution or of statute. . . . The 
 provision in the charter of the cor- 
 
 poration that the stockholders shall 
 be severally liable, does not have 
 such reach as that it precludes the 
 attaching and exercise of this juris- 
 diction of equity." Pfohl v. Simp- 
 son, 74 N. Y. 137 (1878) ; L. 1868, 
 c. 816, §§13,14. 
 
 ^ St. Corp. L. §§ 56, 58 (L. 1909, 
 c. 61). ' ' 
 
 ^Roebling's Sons Co. v. Federal 
 Storage Battery Car Co., — Misc. 
 — (1918) ; N. Y. L. J. Feb. 27, Sp. 
 T. N. Y. Co.; St. Corp. L. § 56. 
 
 'Stover V. Flack, 30 N. Y. 64 
 (1864). 
 
 * One not a stockholder at the time 
 of a sale to the corporation is not 
 liable for the purchase price on the 
 ground that the whole capital stock 
 is not paid up because he has become 
 one at the time suit for the purchase 
 price is instituted. Tracy v. Ya/tes, 
 18 Barb. 152 (1854) ; L. 1848, p. 54, 
 §10. 
 
 Dischai^e of corporation as affect- 
 ing stockholder's liability for its 
 debts, see note in 38 L.B.A.(N.S.) 
 648. 
 
216 BUSINESS CORPORATIONS IN NEW YORK § 200 
 
 poration's creditors for the difference between the amount of 
 stock for which he subscribes by such certificate and the 
 amount he has paid in on his subscription, irrespective of his 
 having paid ten per cent, down on all the shares he subscribed 
 to, or of the full amount of the capital stock having been paid.° 
 One is a stockholder so as to be liable for unpaid amounts due 
 for his holdings of stock if he subscribes a subscription paper 
 preliminary to the certificate of incorporation which provides 
 for the organization of a corporation subsequently incorpo- 
 rated as therein provided, though with somewhat broader 
 powers, notwithstanding he does not sign the certificate of 
 incorporation itself." A person is subject to the statutory 
 liability of a stockholder in a corporation for its debts because 
 of failure to pay for holdings by him of its stock even though 
 he has but subscribed for it (though not paid for it) if, in 
 addition, " the corporation has explicitly recognized the 
 alleged stockholder as such, and the latter has acted in that 
 capacity. " ' A contractor agreeing to take bonds and stock 
 of a corporation for building its road cannot be considered a 
 subscriber to stock, so as to be liable for the par value thereof 
 to corporate creditors: the issue thereof is dependent on con- 
 struction of the road.* Decisions as to the liability of stock- 
 holders under statutes no longer on the books are collated in 
 the note because of their helpfulness as analogies.* 
 
 On issuance of stock at discount et seq. The person held for the oor- 
 as affecting stockholder's liability for porate debt " was on* of the original 
 debts, see note in 38 L.R.A.(N.S.) incorporators, and signed the arti- 
 263; 51 L.R.A.(N.S.) ^6. cles of incorporation; . . . sub- 
 Does statutory liability of officer scribed for . . . shares . . .; 
 for debts of corporation include lia- was a trustee of the company . . . ; 
 bility for torts, see notes in 22 L.R.A. . . . was secretary of the com- 
 (N.S.) 256. pany and actively engaged in the 
 ° Irish Paper Corporation v. management of its affairs; . . . 
 White, 91 Misc. 261, 154 Supp. 778 appeared upon the stock-book . . . 
 (1915) ; St. Corp. L. §§ 53, 56. as a stockholder ...;.. 
 
 ^Lyell Avenue Lumber Co. v. called upon to produce such book, 
 
 Lighthouse, 137 A. D. 422, 121 he failed to do so, alleging that it 
 
 Supp. 802 (1910); St. Corp. L. was lost." 
 
 §§ 56, 59. The subscriber owned *Bostwick v. Young, 118 A. D. 
 realty mentioned in the paper he 490, . 103 Supp. 607 (1907) ; aflf'd 
 signed as to be bought and paid for 194 N. Y. 516, 87 N. E. 1115. 
 by the corporation's bonds when or- ° Immediately upon acceptance by 
 ganized and otherwise had knowl- a corporation of transfers of prop- 
 edge of the incorporation and held erty to it by individuals under an 
 himself out as a stockholder therpin. agreement for the issue of stock 
 'Wheeler v. Miller, 90 N. Y. 353 therefor the individuals become 
 (1882) ; Gen. Mfg. Act, L. 1848, c. stockholders and liable for debts of 
 40, § 10. See now St. Corp. L. § 56, ibe corporation to the extent of 
 
202 
 
 STOCKHOLDERS 
 
 217 
 
 § 201. Id.: One Becoming Stockholder After Debt Inpurred. 
 
 — The statute makes a stockholder liable for such debts of his 
 corporation only as were contracted which such stock was held 
 by him." Decisions under analogous but no longer extant 
 statutes are found in the note." 
 
 § 202. Id.: On Increase or Reduction of Capital Stock. — If 
 the capital stock of a domestic corporation be increased in the 
 manner provided in the Stock Corporation Law the holders of 
 the additional stock issued are subject to the same liabilities 
 with respect thereto as are, provided by law in relation to the 
 original capital ; and if such stock be in like manner reduced 
 the owner of any stock is not relieved from any liability exist- 
 ing prior to the reduction of the capital stock of any stock 
 corporation.^^ Decisions under analogous but superseded 
 statutes are collated in the note." The liability of stock- 
 holders on reorganization of their corporation to permit issu- 
 
 their stockholdings until the whole 
 of the outstanding capital stock has 
 been fully paid. Flower City Na- 
 tional Bank v. Shire, 88 A. D. 401, 
 84 Supp. 810.(1903); St. Corp. L. 
 § 54 (L. 1892, e. 688). One signing 
 the original certificate for the in(;or- 
 poration of a company, acting as 
 trustee or director, indorsing certifi- 
 cates of its stock made out to him 
 and frequently declaring himself a 
 stockholder may claim it is still a 
 question of fact if he ever contracted 
 with the company to become owner 
 of some of its stock so as to be liable 
 for its debts on failure of full pay- 
 ment of its capital stock, if other 
 circumstances show he acted as a 
 dummy; but when he with others 
 also signed an agreement to take and 
 pay for shares of' stock, that agree- 
 ment and his other acts looking 
 toward incorporation together debar 
 him fiom denying his liability. 
 Powers V. Knapp, 71 Hun, 371, 25 
 Supp. 19 (1893); L. 1848, c. 40, 
 § 10. 
 
 ^"St. Corp. L. § 56 (L. 1909, 
 c. 61). 
 
 " A stockholder of a corporation, 
 the capital stock of which is not 
 fully paid may be held for an 
 amount due by the corporation un- 
 der a contract made before he be- 
 
 came a stockholder but which did not 
 become payable until certain serv- 
 ices had been rendered, which were 
 not rendered till after he became a 
 stockholder. McMaster v. Davidson, 
 29 Hun, 542 (1883). Before a 
 stockholder can be charged with the 
 debts of his corporation, under the 
 statute making him so to the extent 
 of his holdings until its capital stock 
 shall have been fully paid in, it 
 must appear that he was such stock- 
 holder at the time the debt was cre- 
 ated. Close v. Brady, 4 Misc. 474, 
 24 Supp. 567 (1893) ; afPd 144 N. Y. 
 648, 39 N. E. 493; L. 1890, c. 564, 
 § 57. 
 
 "St. Corp. L. § 62 (L. 1909, 
 c. 61). 
 
 ^' A stockholder becoming such by 
 an increase of the corporation's stock 
 is liable for a debt owing a lawyer 
 for the corporation under a retainer 
 entered into before the increase and 
 while all the corporate stock was 
 fully paid, if the services, thereunder 
 did not terminate till after the in- 
 crease which was not fully paid. 
 Hallett v. Metropolitan Messenger 
 Co., 69 A. D. 258, 74. Supp. 639 
 (1902) ; St. Corp. L. § 54 (L. 1892, 
 c. 688). In considering the liability 
 of a stockholder for the debts of his 
 corporation prior to the filing of a 
 
218 BUSINESS CORPORATIONS IN NEW YORK § 203 
 
 ance by it of shares without nominal or par value has been 
 already stated."' 
 
 § 203. Id.: After Disposal of Holdings by Sale, Transfer, on 
 Books, etc. — The statute provides that no transfer of the stock 
 of a corporation is valid as against its creditors for any pur- 
 pose except to render the transferee liable for the debts of the 
 corporation to the extent provided therein until such transfer 
 has been entered in the corporate stock book as required by 
 the statute, by an entry showing from and to whom trans- 
 ferred." A judgment creditor of a corporation seeking to 
 hold a stockholder for the amount unpaid on his holdings 
 makes out a prima facie case of ownership by showing his 
 name on the company's books as holder of such stock.^^ The 
 statute making a holder of stock liable for any amount unpaid 
 thereon imposes the liability upon every holder of stock, but 
 it is a question of fact for the jury to decide whether one 
 appearing on the corporate books as holder of stock who 
 testifies that he simply signed an assignment in blank on a 
 certificate of stock presented to him by his employer who 
 beneficially held the stock is a holder so as to be liable under 
 such statute." It was held in an old case, decided before the 
 present statute, that a receiver of a corporation cannot hold 
 liable for the unpaid balance on its stock one who has at one 
 time held the stock but has transferred it by signing the power 
 of attorney on the certificate of such stock in .blank and 
 delivering it to the transferee, to whom the corporation has 
 paid dividends thereon, even though the transfer has never 
 
 certificate of full pajntnent of its tal stock to liability for corporate 
 
 capital stock, it must be borne in debts." Griffeth v. Grreen, 129 N. Y. 
 
 mind that if the corporation files 517, 29 N. E. 838 (1892) ; (Jen. Mfg. 
 
 such certificate and later increases Act, L. 1848, c. 40, § 10. 
 
 its stock, the stockholder who was "* See § 195, supra. The govem- 
 
 such before the increase is no longer ing statute is St. Corp. L. § 24-c 
 
 liable for corporate debts, but only (L. 1917, c. 484). 
 
 the stockholders who become holders " St. Corp. L. § 32 (L. 1916, 
 
 of stock after the increase, and they c. 127). 
 
 only to the amount of the increase. ^° Breck v. Brewster, 150 A. D. 
 
 Veeder v. Mudgett, 95 N. Y. 295 202, 134 Supp. 697 (1912) ; St. 
 
 (1884) ; G«n. Mfg. Act, L. 1848, Corp. L. § 59. 
 
 c. 40, §§ 10, 11, 20, 21, 22. " . . . " Breck v. Brewster, 150 A. D. 
 
 the consequences of the omission [by 202, 134 Supp. 697 (1912) ; St. 
 
 a corporation] to file a certificate as Corp. L. § 56. The ostensible owner 
 
 to the payment of the increase of also signed a proxy, a consent to an 
 
 capital were to subject, not the hold- increase of capital and a waiver of 
 
 ers of the capital stock which had notice of a special meeting in which 
 
 been fully paid up, and as to which he described himself as a stockholder 
 
 there was no statutory default, but of record. 
 
 the holders of the new issue of capi- 
 
§ 203 STOCKHOLDERS 219 
 
 been recorded in the corporate stock book." The owners of 
 corporate stock made liable to respond to the demands of the 
 corporation's creditors " divest themselves of the liabilities 
 incident to their relation to the corporation when they have 
 actually transferred their stock in the manner provided by the 
 law," viz.: in good faith, at a time when the corporation is a 
 going and solvent concern, by entry of the transfer upon its 
 books.^^ A presumption that a transfer by stockholders of 
 their holdings was made to avoid their personal liability, up 
 to the amounts unpaid thereon, for their corporation's debts, 
 arises if the transfer pn the corporaite books was made while 
 the corporation was financially embarrassed to their knowl- 
 edge, and they all joined at the same time in making the trans- 
 fer to a person employed by one of them and of no pecuniary 
 responsibility; and if they do not rebut this presumption they 
 will continue to be held to their statutory liability as stock- 
 holders." " Fully paid-up shares are transferable, and the 
 holder of such shares (though he be a director), who has lost 
 faith in the management and future success of a corporation 
 which is engaged in business, may sell them to whosoever will 
 buy, and for such a price as he can get, ^nd if the transfer is 
 absolute and registered he ceases to be a director and is not 
 liable to the future creditors of the corporation, and the trans- 
 fer is not void as to them. " ™ A stockholder cannot be held 
 personally liable for a debt due by his corporation contracted 
 after he disposed of his stock, even though he is liable to a suit 
 by the corporation for a portion of the purchase price remain- 
 ing unpaid.^ " 'A bona fide purchaser for value and without 
 notice of stock issued by a corporation as paid up cannot be 
 held liable on such stock in any way either to the corporation, 
 corporate creditors or other persons even though the stock 
 was not actually paid up as represented. ' " ^ One who has 
 contracted to buy all the stock of a corporation at the time a 
 judgment is had against it but had not yet paid the agreed 
 price cannot be held liable for the judgment in equity.^ Deci- 
 
 " Cutting V. Damerel, 88 N. Y. 410 ^ Veiller v. Brown, 18 Hun, 571 
 
 (1882). (1879). 
 
 ^8 Tucker V. Gilman, 121 N. Y. 189, "Van Slochem v. Villaxd, No. 1, 
 
 24 N. E. 302 (1890). 154 A. D. 161, 138 Supp. 852 
 
 "Veiller v. Brown, 18 Hun, 571 (1912); afE'd 207 N. Y. 587, 101 
 
 i;l879). N. E. 467, quoting from Cook Corp. 
 
 =» Sinclair v. Dwight, 9 A. D. 297, 6th ed. § 50. 
 
 41 Supp. 193 (1896); afE'd 158 N.Y. ^Tilley v. Coykendall, 69 A. D. 
 
 607, 53 N. E. 510; St. Corp. L. 92, 74 Supp. 631 (1902) ; aff'd 172 
 
 §§ 30, 48 (L. 1892, c. 688), and § 54 N. Y. 587, 65 N. E. 574. 
 (2 E. S. 9th ed. 1025). See now St. 
 Corp. L. § 56. 
 
220 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 §"204 
 
 sions under analogous but repealed statutes are given in the 
 note/ 
 
 § 204. Id.: To What Extent Liable, In General.— The statute 
 makes a stockholder liable to corporate creditors for debts 
 contracted while such stock was held by him only up to an 
 amount equal to the amount unpaid on the stock held by him.' 
 " Before 1901, a stockholder who had paid in full for his 
 stock, nevertheless could be compelled, under the statute, to 
 pay creditors an amount equal to his stock, if the entire 
 capital stock, by whomsoever subscribed, had not been paid in 
 
 *Aii assignment by a stockholder 
 of his holdings, not entered in the 
 stock-transfer book prescribed by 
 statute for corporations, cannot re- 
 lieve him from liability for the cor- 
 poration's debts if its capital is not 
 fully paid up. Powers v. Knapp, 71 
 Hun, 371, 25 Supp. 19 (1893); L. 
 1848, c. 40, § 25. One holding stock 
 of a corporation issued in payment 
 for property bought by it and fairly 
 worth the face value of the stock is 
 not liable for corporate debts under 
 a statute making stockholders so 
 liable until their corporation's capi- 
 tal stock has been fully paid in and 
 a certificate thereof filed. Powers v. 
 Knapp, 85 Hun, 38, 32 Supp. 622 
 (1895); aff'd 158 N. Y. 733, 53 
 N. E. 1131; L. 1848, c. 40, § 10; 
 L. 1853, c. 333, § 2. A statute en- 
 abling a corporation's creditor, enti- 
 tled to enforce its stockholders' lia- 
 bility for its debts, to recover " of 
 the stockholders who were such when 
 the debt was contracted or the loss 
 or damage sustained, or of any sub- 
 sequent stockholder," means " that 
 in respect of every share of stock 
 issued by the corporation there shall 
 be a stockholders' liability to an 
 amount equal to the par value 
 thereof, against either the stock- 
 holder who was such when the debt 
 was contracted or the loss or damage 
 sustained, or by any subsequent 
 stockholder;" and the vendor and 
 the vendee of shares of stock may 
 be both made defendants, though 
 there can be but one recovery. 
 The Mosler Safe Co. v. Ghiardian 
 Trust Co., 208 N. Y. 524, 101 N. E. 
 
 786 (1913) ; Banking L. § 303. An 
 unsatisfied judgment creditor of a 
 corporation cannot hold liable for 
 his claim a stockholder on the 
 ground that no certificate of pay- 
 ment of its capital stock had been 
 filed and no such payment had in 
 fact been made if the facts were that 
 the particular stockholder received 
 his holdings gratuitously from one 
 to whom all the capital stock had 
 been issued for a patent, unless it be 
 shown that, besides purchasing such 
 patent at an over-valuation, the cor- 
 poration agreed on the price in bad 
 faith and to evade the statute. 
 Knowles v. Duffy, 40 Hun, 485 
 (1886); L. 1848, c. — , §§ 10, 11 
 (Gen. Mfg. Act). A stockholder is 
 individually liable for a debt of his 
 corporation if he paid nothing for 
 his stock but received it as part of 
 $400,000 of stock issued for a patent 
 to one who kept but $80,000 and sur- 
 rendered the rest. Thurston v. 
 Duffy, 38 Hun, 327 (1885) ; L. 1853, 
 c. 333. 
 
 »St. Corp. L. § 56 (L. 1909, c. 
 61) : " As to existing corporations 
 the liability imposed by this section 
 shall be in lieu of the liability im- 
 posed upon stockholders of any ex- 
 isting corporation, under any gen- 
 eral or special law ... on ac- 
 count of any indebtedness hereafter 
 contracted on any stock hereafter id- 
 sued ; but nothing in this section con- 
 tained shall create or increase any 
 liability of stockholders of any ex- 
 isting corporation under any gen- 
 eral or special law." 
 
I 204 
 
 STOCKHOLDERS 
 
 221 
 
 full; but, in 1901, the statutory liability was reduced as to 
 claims originating after that time, so that now, aside from the 
 special liability to laborers, the stockholder is liable, under 
 section 54, to creditors only for the amount which is unpaid 
 upon his own stock; in which respect the statutory liability 
 and the liability in equity are alike. The distinction between 
 the two forms of action is retained, however . , ."^ Cred- 
 itors of a corporation are only entitled to collect on unpaid 
 subscriptions to stock so far as necessary, and although as to 
 them two or more defendants may be liable only one satis- 
 faction may be had as to the same stock or that issued in place 
 thereof.' No suit can be brought in this State by a judgment- 
 creditor of a corporation to hold its bonus stockholders to an 
 amount equal to the par value of their holdings under a 
 foreign statute unless such a statute giving such right is 
 alleged.'' Decisions under repealed statutes are collected in 
 the note.^" 
 
 ^ Leighton v. Leighton Lea Assn., 
 62 Misc. 73, 114 Supp. 918 (1909). 
 
 ^Stevens v. Episcopal Church His- 
 tory Co., 140 A. D. 570, 125 Supp. 
 573 (1910). 
 
 " Holsinger v. Wood, — Misc. — 
 (1918), N. Y. L. J. Meh. 23, 1918, 
 p. 2008, Sup. Ct. Spec. T. Pt. III. 
 
 '^° " A stockholder may be abso- 
 lutely discharged from all liability 
 under . . . [the statute making 
 him liable for corporate debts of a 
 corporation the capital stock of 
 which is not fully paid] by payment, 
 on legal compulsion, to any creditor 
 or creditors for whose debts he is 
 liable, if such payment equals the 
 amount of his stock. His liability 
 is measured by the amount of stock 
 held by him. To entitle a stock- 
 holder to interpose such discharge as 
 an absolute bar to a claim by other 
 creditors, either at law or in equity, 
 it would . ■ . . be incumbent upon 
 him to show that the payment was 
 made to a creditor or creditors for 
 whose debts he was liable under the 
 statute. He is only liable to pay 
 the amount once; but the payment 
 must be made in discharge of a 
 statute liability. Probably the same 
 effect would result from a voluntary 
 pajrment." Mathez v. Neidig, 72 
 
 N. Y. 100 (1878); L. 1848, c. 40, 
 § 12. "By the provision of this 
 section liability is created against 
 every stockholder according to the 
 amount of his holdings so long as 
 any of the stock of the corporation 
 issued and outstanding shall not 
 have been fully paid." Hallett v. 
 Metropolitan Messenger Co., 69 
 A. D. 258, 74 Supp. 639 (1902) ; St. 
 Corp. L. § 54 (L. 1892, c. 688). 
 " The statutory liability [of a stock- 
 holder for the debts of a corporation 
 the capital stock of which is not 
 fully paid] arises whenever the 
 whole capital stock has not been 
 paid in. The stockholder sued may 
 have paid in full, but that does not 
 relieve him, if others are in default 
 (citation). He is still liable to an 
 amount equal to his stock, so long 
 as the whole capital is not fully 
 paid." Wheeler v. Millar, 90 N. Y. 
 353 (1882) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 10. When judgment has 
 passed against a stockholder of a 
 corporation, the capital stock of 
 which is not fully paid, for a cor- 
 porate debt, " and his personal lia- 
 bility is fixed for the debts of the 
 corporation to an amount equal to 
 the stock held by him, or when he 
 has paid debts of the corporation to 
 
222 BUSINESS CORPORATIONS IN NEW YORK § 205 
 
 § 205. Id.: When Stock FuUy Paid.— The cases now cited 
 were rendered under former statutes; but the principles set 
 forth seem soundly applicable to the present law. In deter- 
 mining whether or not stockholders are personally liable for 
 the debts of their corporation, on the ground that their hold- 
 ings were not fully paid for because of the issue of their stock 
 for property less valuable than the stock issued therefor, the 
 real question is of fact, viz. : whether the property was placed 
 and taken at a higher valuation with a fraudulent purpose, 
 with the intent of evading the provisions of the statute." 
 " ... to charge a holder of stock, issued upon and for 
 the purchase of property, individually for the debts of 
 the company, it is not enough to prove that the property has 
 been purchased and paid for at an over-valuation through 
 a mere mistake or error of judgment on the part of the 
 trustees, but ... it must be shown that the purchase 
 at the price agreed upon was in bad faith and to evade 
 the statute. " " " ... a mere mistake or error of judg- 
 ment by the trustees [of a corporation], either as to the 
 necessity or value of property, purchased by them in good 
 faith " with stock of the company will not subject a stock- 
 holder to liability on the ground that the stock of the com- 
 pany is not full paid." In determining the personal lia- 
 bility of holders of stock of a corporation issued for prop- 
 erty on the ground that it is not fully paid it must be 
 borne in mind that " a discretion is vested in the trustees 
 which calls for the honest exercise of their judgment. If they 
 acted in good faith [in issuing stock for certain property] the 
 stockholders could not be made liable. The real question in 
 cases of this character is whether the property was placed and 
 taken at a high valuation with a fraudulent intent of evading 
 the provisions of the statute. . . . where property, the 
 value of which is well known and understood, or capable of 
 
 that amount," he is relieved from was issued for patents under an 
 
 further liability. Weeks v. Love, 50 agreement that part should be put 
 
 N. Y. 568 (1872) ; Gen. Mfg. Act, in trust for sale at half of par value, 
 
 L. 1848, c. 40, § 10. one-sixth of the proceeds to go to 
 
 On personal liability at common the owners of the patents and the 
 law of sitockholders of a corporation five-sixths to the company as work- 
 to the other party to an act or trans- ing capital. 
 
 action in excess of the corporate or ^^ Douglass v. Ireland, 73 N. Y. 
 
 in violation of law, see note in 6 100 (1878) ; L. 1848, c. 40; L. 1853, 
 
 L.R.A.(N.S.'> 1003. c. 33. 
 
 ^^ Lake Superior Iron Co. v. " Schenck v. Andrews, 57 N. Y. 
 
 Drexel, 90 N. Y. 87 (1882) ; Gen. 133 (1874) ; Gen. Mfg. Act, L. 1848, 
 
 Mfg. Act, L. 1848, c. 40, as amend'd c. 40, § 10, as amend'd L. 1853. 
 
 L. 1853, c. 333, § 10. All the stock c. 333. 
 
§ 205 STOCKHOLDERS 223 
 
 being easily ascertained, is taken at a most exorbitant esti- 
 mate, far beyond any intrinsic and real value, it raises a 
 strong presumption that the valuation is not in good faith and 
 was made for a fraudulent purpose. This presumption will 
 be conclusive unless it is rebutted by evidence which fully 
 explains the apparent bad faith."" " While in equity the 
 capital stock of a corporation is a fund for the payment of 
 debts, and upon the dissolution of such corporation stock- 
 holders may be compelled to pay the amount unpaid upon the 
 stock owned by them for the benefit of creditors, such stock- 
 holders can only be made liable where it is shown that the 
 stock has been actually taken by them, or fraudulently 
 received, and not where it has been delivered, in good faith 
 and for an adequate consideration, by the corporation to the 
 stockholder."" In an action to hold a stockholder liable 
 because his corporation's capital stock has never been paid in 
 and no certificate of payment thereof has been recorded the 
 plaintiff may prove any fact tending to show that the stock 
 issued as full-paid stock was not in fact paid for, such as the 
 issue of shares for services rendered by a promoter.^® In the 
 note are collected cases dealing with the requirement of the 
 former statute that a stockholder should not be relieved from 
 liability to creditors of the corporation until a certificate of 
 full payment of its capital stock should have been filed." 
 
 ^* Boynton v. Andrews, 63 N. Y. relation is deemed contractual." 
 
 93 (1875); Gen. Mfg. Act, L. 1848, Close v. Potter, 155 N. Y. 145, 49 
 
 c. 40, § 10, as amend'd L. 1852, N. E. 686 (1898). The statute mak- 
 
 e. 333. ing a stockholder liable for his cor- 
 
 ^^Van Cott V. Van Brunt, 82 poration's debt until filing of a cer- 
 
 N. Y. 535 (1880). The construction tifioate of full payment of its eapi- 
 
 of a railroad was all paid for in its tal stock in effect " withdraws the 
 
 stock — and properly. protection of the corporation from 
 
 ^"Herbert v. Duryea, 34 A. D. the stockholders, and regards them 
 
 478, 54 Supp. 311 (1898) ; aff'd 164 liable to the extent of the amount of 
 
 N. Y. 595. their' stock as copaj^iners." Wiles 
 
 ""The liability of stockholders v. Suydam, 64 N. Y. 173 (1876); 
 differs from that of ofScers of a L. 1848, c. 40, §§ 10, 12; Code, 
 corporation who have 'neglected to § 167. Under the statute making 
 file annual reports, in that the latter a stockholder liable for his corpora- 
 ls in the nature of a penalty. The tion's debts until its stock is fully 
 statutory obligation which a stock- paid in " two things are requisite to 
 holder assumes becomes a part of end the stockholder's liability. The 
 the contracts made by the company whole amount of capital stock must 
 with its creditors until the corpora- be paid in, and the certificate of that 
 tion is so far organized and com- fact . . , must be made and re- 
 pleted that its stock is subscribed corded. A false assertion of com- 
 for and paid in, at which time the pliance does not make compliance 
 statute relieves the stockholder from with the first condition." Veeder 
 further liability. IJntil that time his v. Mudgett, 95 N. Y. 295 (1884) ; 
 
224 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 206 
 
 § 206. Id.: Action, Jud^fment and Execution Against Corpo- 
 ration Condition Precedent To, Governing Statutes.^No stock- 
 holder is personally liable for any debt of the corporation 
 unless (1) an action for its collection is brought against the 
 
 Gen. Mfg. Act, L. 1848, e. 40, §§ 10, 
 11, 20, 21, 22. A creditor of a cor- 
 poration who has a judgment against 
 it on which execution has been re- 
 turned unsatisfied may hold a stock- 
 holder individually liable therefor to 
 the amount of his holdings, if its 
 capital stock is not fully paid, with- 
 out waiting till the two years have 
 expired during which such full pay- 
 ment of capital stock may be made, 
 although he may not hold the' stock- 
 holder if the debt is not to be paid 
 within one year from the time it is 
 contracted, and for such a debt must 
 sue the company within a year of 
 its due date in order to hold the 
 stockholder. King v. Duncan, 38 
 Hun, 461 (1886); L. 1848, c. 40, 
 §§ 10, 24. A subscriber to capital 
 stock is not liable for a corporate 
 debt up to the amount of bis hold- 
 ings on the ground that he certified 
 the stock was fully paid when he 
 knew it was not unless he knew that 
 others putting up property for the 
 stock they got in bad faith put a 
 fictitious value on such property in 
 order to evade the statute. Van 
 Vleet V. Jones, 75 Hun, 340, 26 
 Supp. 1082 (1894); L. 1848, c. 40, 
 § 10. " . . . persons contracting 
 with a corporation, by which they 
 give credit to it, have the right to 
 rely upon the liability of all the 
 stockholders, and not a portion 
 thereof, until the certificate [of pay- 
 ment of the whole amount of capital 
 stock] is given; a^d . . . per- 
 sons becoming stockholders before 
 the stock is paid in, and a certificate 
 given, must be understood as con- 
 tracting that they will be personally 
 liable to creditors to an amount equal 
 to the stock held by them until the 
 terms of the statute are filled. It 
 may be very different with persons 
 who have acquired stock in a corpo- 
 ration after the certificate has been 
 
 made and recorded." White, Corbin 
 & Co. V. Jones, 167 N. Y. 158, 60 
 N. E. 422 (1901); L. 1848, o. 40, 
 and amendments, §§ 10> 11, making 
 stockholders individually liable to 
 creditors upon their holdings until 
 certificate of payment of whole capi- 
 tal stock had been recorded. The 
 purpose of the law making corpo- 
 rate stockholders individually liable 
 for their corporation's debts to the 
 amount of their stockholdings until 
 its whole capital shall have been cer- 
 tified to have been paid in is to pro- 
 vide a fund for the security of cred- 
 itors; and if payment is taken for 
 stock in property, it must be prop- 
 erty necessary for the business of 
 the company and of the value of 
 the stock paid for it, so that the 
 transaction may always be im- 
 peached for fraud, of which an ac- 
 tual value of .the property at one- 
 half the price paid for it in stock is 
 evidence. Boynton v. Hatch, 48 
 N. Y. 225 (1872) ; Gen. Mfg. Act, 
 L. 1848, c. 40, as amended L. 1853, 
 c. 333. The object of a statute 
 making stockholders of a corpora- 
 tion individually liable for its debts 
 up to the amount of their holdings 
 until a certificate of payment of its 
 capital stock in full has been re- 
 corded " in the office of the secre- 
 tary of state, and of the ccnmty in 
 which the principal business office 
 of such corporation is situated " is 
 to protect persons giving credit to 
 the corporation by requiring it3 
 capital to be paid in promptly and 
 the fact announced to the world by 
 a certificate filed in a public office; 
 and, though the statute read literally 
 requires the certificate to be filed in 
 the office of the secretary of state, 
 and, also, either in the office of the 
 county, or of the secretary of the 
 county, yet if it be duly filed in the 
 office of the secretary of state alone 
 
207 
 
 STOCKHOLDERS 
 
 225 
 
 corporation within two yearg after the debt becomes due; (2) 
 such action against the corporation has been carried to judg- 
 ment against it; (3) an execution on such judgment against 
 the corporation has been returned unsatisfied in whole, or in 
 part." 
 
 § 207. Id.: In General.— The decisions under statutes which 
 were the forerunners of the existing statute are freely used 
 because deemed in point as regards the requirement in the 
 present statute, which also had its place in its predecessors, 
 that action, judgment and unsatisfied execution against the 
 corporation were conditions precedent to the stockholder's 
 liability. A suit against the corporation is a condition pre- 
 cedent to holding its stockholders personally liable for its 
 debts under a sitatute making them so liable until the whole 
 
 a stockholder will be protected from 
 liability tinder the statute at the 
 suit of a- creditor of the corporation, 
 brought over four years after 
 such filing on the ground of 
 the technical violation of the stat- 
 ute in not filing the certificate also 
 in the office of the secretary of the 
 county or of the county, either of 
 which the statute might be construed 
 to intend. Jones v. Butler, 146 
 N. Y. 55, 41 N. E. 633>(1895) ; Bus. 
 Ck>rp. Act, § 37 (L. 1875, c. 611). 
 A certificate of full payment of 
 capital stock is sufficient to relieve 
 the corporation's stockholders of 
 liability for its debts though not re- 
 corded with the statutory limitation 
 of time, provided the omission to 
 record was that of a clerk directed 
 to record it. Veeder v. Mndgett, 95 
 N. y. 295 (1884); Gen. Mfg. Act, 
 L. 1848, c. 40, §§ 10, 11, 20, 21, 22. 
 Certificates of payment of capital 
 stock paid in, required by statute to 
 be filed in the county clerk's office 
 and to be " signed and sworn to " 
 by the corporate officers, which are 
 not sworn to but ' simply acknowl- 
 edged are not a compliance with the 
 statute, and the liability of owners 
 of shares of stock for corporate 
 debts imposed by statute if such 
 certificate be not properly executed 
 and filed is not terminated. Hard- 
 man V. Sage, 124 N. Y. 25, 26 N. E. 
 B. C. N. Y.— 15 
 
 354 (1891) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 11. Under a statute making 
 corporate stockholders liable to the 
 corporation's creditors for its debts 
 until a certificate of payment of all 
 its capital stock shall have been filed, 
 but permitting full-paid, non-asses- 
 sable stock to be issued in payment 
 of property, the failure to file the 
 certificate when the stock is issued 
 for property is in itself no ground 
 of liability. Rowell v. Janvrin, 151 
 N. Y.. 60, 45 N. E. 398 (1896) ; L. 
 1848, c. 40, § 10 et seq., as amend'd 
 L. 1853, c. 333, § 2. " . . . a per- 
 son to whom stock has been issued 
 for a manufactory, or other prop- 
 erty purchased by a corporation, is 
 not liable to the creditors of the 
 company because of a failure on the 
 part of the president and trustees to 
 file the certificate " of full payment 
 of the company's capital stock; and 
 if the stock is issued in payment of 
 the rent of premises necessarily 
 leased for the company's business, 
 they are a manufactory and " prop- 
 erty " within the meaning of the 
 statute so as to absolve the person 
 to whom the stock is issued from lia- 
 bility. Closer V. Noye, 147 N. Y. 
 597, 41 N. E. 570 (1895) ; L. 1853, 
 c. 333, amend'g Mfg. Act of 1848, 
 c. 40, § 10. 
 
 ^»St. Corp. L. § 59 (L. 1909, 
 c. 61). 
 
226 BUSINESS CORPORATIONS IN NEW YORK § 207 
 
 amount of its capital stock shall have been paid." To hold a 
 stockholder liable to a creditor of his corporation for its 
 indebtedness to the creditor on the ground that the whole of 
 its outstanding capital stock has not been fully paid, pursuant 
 to a statute, the return unsatisfied of an execution in the cred- 
 itor's favor against the corporation is all that is required; 
 and it is not necessary that the creditor should set aside in 
 equity or recover property of the corporation fraudulently 
 sold to dieat the sheriff."" The statute making stockholders 
 of a corporation liable to its creditors until its capital stock 
 is wholly paid in made " it a condition precedent to main- 
 taining an action against a stockholder . . . that the 
 creditor should have obtained judgment upon his claim 
 against the company, and that an execution should have been 
 issued thereon and returned unsatisfied;" and this condition 
 applies to the case of a continuing stockholder as well as to 
 that of one who has ceased to be such.^ A bona fide purchaser 
 for value before maturity of corporate notes is not thereby 
 relieved from procuring judgment thereon and execution 
 returned unsatisfied as a prerequisite to holding a stockholder 
 to his statutory liability for the corporation's debts." The 
 issuing and return of an execution upon a judgment of a 
 creditor against a corporation on his claim is a condition, 
 precedent to his right to maintain an action against one of its 
 stockholders for an amount equal to the stock held* by the 
 latter in the corporation on the grounds stipulated in a statute 
 that its whole capital stock has not been paid in and that no 
 certificate of such payment has been made and recorded.^ 
 The judgment against a corporation which must be recovered 
 and be unsatisfied by execution as a condition precedent to 
 the right of a creditor of the corporation to sue a stockholder 
 thereof for his debt must be a judgment recovered and an 
 execution returned unsatisfied in this State.* In order to hold 
 
 ^° Birmingham National Bank v. ^ Close v. Potter, 155 N. Y. 145, 
 
 Mosser, 14 Hun, 605 (1878); L. 49 N. E. 686 (1898). 
 
 1848, c. 40. See now St. Corp. L. ^ Berwind- White Coal Mining Co. 
 
 § 59. V. Ewart, 90 Hun, 60, 35 Supp. 573 
 
 ^o Berwind- White Mining Co. v. (1895). 
 
 Wadsworth, 27 A. D. 550, 50 Supp. * Rocky Mountain Nat. B'k v. 
 
 501 (1898) ; St. Corp. L. §§ 54, 57 Bliss, 89 N. Y. 338 (1882) ; Gen. 
 
 (L. 1892, c. 688; L. 1890, c. 564. Mfg. Act, L. 1848, c. 40, §§ 10, 24. 
 
 See now St. Corp. L. § 59. See now St. Corp. L. § 59. A pro- 
 
 ^ Handy v. Draper, 89 N. Y. 334 ceeding in rem against the oorpora- 
 
 (1882) ; Gen. Mfg. Act, L. 1848, tion in a foreign state held insuffi- 
 
 c. 40, § 10; Rocky Mountain Nat. eient. 
 B'k V. Bliss, 89 N. Y. 338 (1882). 
 See now St. Corp. L. § 59. 
 
§ 208 STOCKHOLDERS 227 
 
 a stockholder personally liable for his corporation's debt an 
 execution must have been issued and returned unsatisfied on 
 the judgment which is the foundation of the plaintiff's suit — 
 not on some other judgment.' A creditor 's action against a 
 stockholder in a limited liability company for its debt, when 
 it is organized under a statute providing that suit on the debt 
 must first have been brought against the company but not 
 requiring that execution against the company must have been 
 returned unsatisfied before an enforceable liability^ arises 
 against the stockholder, may be maintained after a suit to 
 recover the debt has been commenced against the corporation, 
 but before judgment has been obtained thereon against the 
 corporation.® A cause of action in favor of a receiver of a 
 corporation incorporated in a State the laws of which make 
 its stockholders liable, above the stock owned by them and any 
 amount unpaid thereon, to a further sum at least equal to the 
 amount of such stock, does not accrue till judgment is ren- 
 dered fixing and determining the amount of the assessment 
 upon the stock.'' 
 
 § 208. Id.: Not When Corporation Dissolved, Bankrupt, 
 etc. — The decisions under statutes which were the parents of 
 the present statute are used as freely as the decisions under 
 the existing law because of the similarity of the present 
 statute and its predecessors as to the necessity of the return 
 of an execution against the corporation unsatisfied as a con- 
 . dition precedent to the stockholder's liability. The complaint 
 in an action under the statute to hold stockholders for debts 
 of their corporation need not allege recovery of judgment and 
 return unsatisfied of execution thereon in an action against 
 the corporation if it allege excuse for failure to obtain such 
 judgment, etc.^ The statutory condition precedent to mainte- 
 nance of an action to enforce the liability of a stockholder in 
 a manufacturing company that " an execution against the 
 company shall have been returned unsatisfied in whole or in 
 part " will be dispensed with only " (1) where the corporation 
 has been dissolved by judicial decree ; (2) where by final judg- 
 ment in an action for sequestration a perpetual injunction has 
 
 ^ Terry v. Rothschild, 83 Hun, 486, ' Shipman v. Treadwell, 208 N. Y. 
 
 31 Supp. 1119 (1895); St. Corp. L. 404, 102 N. E. 634 (1913). 
 
 § 24. See now § 59. ^Roebling's Sons Co. v. Federal 
 
 ° Walton V. Coe, 110 N. Y. 109, 17 Storage Battery Car Co., — Misc. 
 
 N. E. 676 (1888); Bus. Corps. Act, — (1918), N. Y. L. J. Feb. 27, Sp. 
 
 L. 1875, c. 611, § 37. The act of T. N. Y. Co.; St. Corp. L. § 56. 
 1848 for organizing manufacturing 
 corporations has a different provi- 
 sion in part. 
 
228 BUSINESS CORPORATIONS IN NEW YORK § 208 
 
 been issued restraining suits by creditors, and (3) where, by 
 statute, such suits are prohibited;" the fact that a receiver 
 has been appointed in a stockholder's suit who has been ren- 
 dered immune from suit by court order is insufficient, cer- 
 tainly in the absence of any effort for a modification of such 
 order.* When the performance of the condition, that judg- 
 ment must be had and be unsatisfied against a corporation 
 before its stockholders can be held, under the statute, for its 
 debt evidenced thereby, is rendered " impossible by the opera- 
 tion and effect of a statute, that is, becomes illegal, the per- 
 formance is excused, and the rights of the parties will be 
 preserved. ' ' " The statutory requirement that judgment shall 
 have been recovered against a corporation and execution 
 thereon returned unsatisfied before an action can be brought 
 against a stockholder to hold him for the amount unpaid on 
 his stock does not hold when the recovery of the judgment 
 and the return of execution unsatisfied are rendered impos- 
 sible by a law of the United States and the action of its courts 
 thereunder.^' The condition of execution returned unsatisfied 
 on a judgment obtained against a corporation which is 
 required as a prerequisite to an action against its stock- 
 holders under a statute making them liable for its debts if 
 the stock is not fully paid in is not dispensed with by allega- 
 tions that a proceeding for the corporation's voluntary 
 dissolution had been begun, a receiver appointed and an 
 injunction against suits granted before the action was begun." 
 Under a statute relieving a stockholder from personal liability 
 for corporate debts ' ' not to be paid within one year from the 
 time the debt is contracted," unless suit be brought against 
 the company within one year after debt is due, a final judg- 
 ment dissolving the corporation entered so as to make it 
 impossible for the corporate creditors to recover a judgment 
 
 » United Glass Co. v. Vary, 152 (N.S.) 628, 86 N. E. 1116 (1909); 
 
 N. Y. 121, 46 N. E. 312 (1897) ; L. St. Corp. L. §§ 54, 55. See now 
 
 1848, c. 40, § 24. See now St. Corp. St. Corp. L. § 59 ; Bankruptcy L. 
 
 L. § 59. §§ 12, 14, 1 (subd. 12), (4 subd. b). 
 
 ^ Shellington v. Howard, 53 N. Y. The debtor corporation had been 
 
 371 (1873) ; Gen. Mfg. Act, L. 1848, adjudged bankrupt, its assets dis- 
 
 c. 40, § 24. See now St. Corp. L. tributed under a composition ap- 
 
 § 59. Plaintiff commenced his ac- proved by the Federal court and dis- 
 
 tion against the corporation in time charged. 
 
 but was prevented from prosecuting ^^ United States Glass Co. v. Lev- 
 it to judgment by the act of the ett, 24 Misc. 429, -53 Supp. 688 
 defendant and the operation of the (1898) ; St. Corp. K §§ 54, 55 (L. 
 Bankrupt Act of the United States. 1892, c. 688). See now St. Corp: 
 
 " Firestone Tire and Rubber Co. L. § 59. 
 V. Agnew, 194 N. Y. 165, 24 L.R.A. 
 
§ 209 STOCKHOLDERS 229 
 
 and have an execution returned unsatisfied enables the cred- 
 itors to maintain an action for the recovery of any debt which, 
 within the meaning of the statute, fell due during the preced- 
 ing year without first obtaining judgment against the cor- 
 poration and having an execution returned unsatisfied." 
 Although as a condition precedent to holding a stockholder 
 liable for his corporation's debt no judgment recovered 
 against it and execution returned thereon unsatisfied is neces- 
 sary if it has been dissolved, yet no such dissolution results 
 from the appointment of a receiver for it and injunction upon 
 it from exercising its franchise or intermeddling with its 
 property ; and in such a case one seeking to hold a stockholder 
 for a corporate debt must still get his judgment against the 
 corporation." 
 
 § 209. Id.: Judgment Against Corporation as Measure of 
 Stockholder's Liability.— The statute provides that the 
 amount due on the execution returned unsatisfied in whole or 
 in part on the judgment recovered against the corporation is 
 the amount recoverable." " ... the provision of the 
 statute prohibiting the bringing of an action against a stock- 
 holder for a 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 at 
 least requires a verdict determining the amount of the plain- 
 tiff's claim and that the stockholder, when he is called upon to 
 pay, cannot be required to ascertain the amount from esti- 
 mates and figures made by the plaintiff's brother as to the 
 various items included by the jury in their verdict."" The 
 provision of the statute that the amount due on an unsatisfied 
 execution issued after a judgment against a corporation shall 
 be the amount recoverable against a stockholder is not equiva- 
 lent to saying that the judgment and execution shall be all the 
 evidence necessary to fix the amount recoverable from the 
 stockholder but means that the amount due on the execution 
 required to be issued shall be a limitation of the stockholder 's 
 liability and not proof of an indebtedness for which the stock- 
 holder is liable." As an analogous provision to that contained 
 
 "Hardman v. Sage, 124 N. Y. 25, "Card v. Groesbeck, 204 N. Y. 
 
 26 N. E. 354 (1891) ; Gen. Mfg. Act, 301, 97 N. E. 728 (1912).; St. Corp. 
 
 L. 1848, c. 40, § 24. L. § 59. 
 
 "Kincaid v. Dwinelle, 59' N. Y. ^*^ Assets Realization Co. v. How- 
 
 548 (1875) ; Gen. Mfg. Act, L. 1848, ard, 211 N. Y. 430, 105 N. E. 680 
 
 c. 40, §§ is, 24. See now St. Corp. (1914) ; St. Corp. L. § 59. 
 L. § 59. 
 
 ^*St. Corp. L. § 59 (L. 1909, 
 c. 61). 
 
230 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 §210 
 
 in the present statute was contained in statutes which were 
 precursors of the present law the decisions under the former 
 statutes are given in the note." The extent to which a judg- 
 ment against the corporation is evidence of the debt owing 
 from a stockholder is discussed in cases decided under old 
 statutes and collated in the note." 
 
 § 210. Id,: Statute of Limitations Against.— No stockholder 
 is liable personally for any debt of the corporation unless an 
 action for its collection is brought against the corporation 
 within two years after the debt becomes due, nor for any debt 
 of the corporation not payable within two years from the time 
 it is contracted, nor to any action after he has ceased to be a 
 
 ^^ In an action against a stock- 
 holder, to enforce his liability under 
 a statute making him individually 
 liable to corporate creditors to an 
 amount equal to the amount unpaid 
 on the stock held by him for all its 
 debts until the whole capital stock 
 held by him has been paid, a judg- 
 ment recovered by him against the 
 company is competent evidence of 
 his status as a creditor of the com- 
 pany and of the amount due him 
 (from the corporation). Stephens 
 V. Fox, 83 N. Y. 313 (1881) ; Gen. 
 R. R. Act, L. 1850, c. 140, § 10, 
 as amend'd L. 1854, c. 282. In an 
 action by a judgment creditor of a 
 corporation to hold a stockholder 
 for the debt, under a statute making 
 stockholders liable to an amount 
 equal to their capital stock until the 
 whole capital stock shall have been 
 paid and a certificate thereof filed, 
 the judgment against the corpora- 
 tion is of no virtue against the 
 stockholder and is only evidence as 
 proving the performance of the con- 
 dition precedent, and the stock- 
 holder may show there was no debt 
 due from the corporation to the 
 plaintiff. Lawyer v. Rosebrook, 48 
 Hun, 453 (1888). A stockholder of 
 a corporation the capital of which 
 is not fully paid and sued, there- 
 fore, under a statute, for a debt of 
 the company on its draft, is prima 
 facie bound by a judgment in evi- 
 dence on the draft insofar as the 
 legality of the draft is concerned. 
 
 Hoagland v. Bell, 36 Barb. 57 
 (1861). 
 
 ^^ It seems to be questionable 
 " whether a judgment against a 
 company is in a separate action 
 against a stockholder for the re- 
 covery of the same debt, evidence of 
 the debt sued upon." McMahon v. 
 Macy, 51 N. Y. 155 (1872); Gen. 
 R. R. Act, L. 1850, c. 140, §§ 10, 
 11, as amend'd L. 1854, c. 284. It 
 seems that in a statutory action 
 against a stockholder to recover a 
 debt contracted by his corporation, 
 " a judgment previously recovered 
 by the plaintiff against the corpo- 
 ration upon the same demand, . . . 
 [is] prima facie evidence of a debt 
 against the defendant; but subject 
 to be impeached for collusion or 
 mistake." Moss v. Averell, 10 N. Y. 
 449 (1853); L. 1837, c. 441, § 9. 
 A judgment debt against a corpora- 
 tion, unless shown to have been had 
 by collusion or fraud, is binding on 
 a stockholder in an action to hold 
 him individually for such debt. 
 Conklin v. Furman, 57 Barb. 484 
 (1865) ; aff'd 48 N. Y. 527; L. 1847, 
 c. 210, § 14, making stockholders 
 liable for corporate debts to the 
 amount of their holdings. A judg- 
 ment against a corporation is as ob- 
 ligatory on its stockholders when 
 they are sought to be chained with 
 their statutory liability for its debts 
 as it is on the corporation itself. 
 Moss V. MeCuUough, 7 Barb. 279 
 (1849). 
 
§ 210 STOCKHOLDERS 231. 
 
 stockholder unless brought within two years from the time 
 he ceased to be a stockholder.^" Decisions under former stat- 
 utes containing statutes of limitation of similar period are 
 used in the text as well as opinions concerning the statute 
 now in force, because of the similarity of all such laws. While 
 the power of the legislature is undoubted to alter or amend 
 the Statute of Limitations and apply it to existing liabilities, 
 yet it cannot change the period of time for which a stock- 
 holder shall be personally liable for his corporation's debts, 
 so as to bind stockholders who are such at the time of the 
 statute's amendment ; because a stockholder's liability for the 
 corporate debts accrues only after judgment had against the 
 corporation and execution thereon returned unsatisfied, and 
 is that of a surety, guaranteeing the solvency of the corpo- 
 ration during that period only for which the statute made him 
 liable when he became a stockholder.^ The legislature may 
 change the limitation upon an action by a corporate creditor 
 to enforce the liability of corporate stockholders for corpo- 
 rate debts to the extent of unpaid subscriptions on their 
 stockholdings.^ " . . . whenever an existing stockholder 
 shall be divested of his interest in or control over the 
 affairs of a corporation, whether by voluntarily trans- 
 ferring his share to another person, or compulsorily as by 
 forfeiture upon the declaration of the company . . . , 
 time begins to run, and at the end of two years the statu- 
 tory limit is reached and he is no longer liable for any 
 debt of the corporation. The same result must follow upon 
 the actual dissolution of the corporation by formal judgment, 
 or by a surrender of its corporate rights, privileges and fran- 
 chises. Organization then ceases and the artificial entity is 
 resolved into its independent parts. The thing itself there- 
 fore no longer existing, there can be no shares in the thing 
 and of course no stockholders." ' A time limitation imposed 
 by statute on an action by a creditor of a corporation against 
 one of its stockholders for recovery of the debt on the ground 
 that the whole of the corporate stock has not been paid in is 
 a matter of defense, waived if not plead by answer, which need 
 
 ■ ^° St. Corp. L. S 5» (L. 1909, N. Y. 96, 13 N. E. 621 (1887) ; Gen. 
 
 c. 61). ■ Mfg. Act, L. 1848, e. 40, § 24: "No 
 
 ^ Close V. Potter, 155 N. Y. 145, suit shall be brought against any 
 
 49 N. E. 686 (1898). stockholder . . . who shall cease 
 
 "Lang V. Lutz, 180 N. Y. 254, 73 to be a stockholder . . . unless 
 
 N. E. 24 (1904) ; Stock Corp. L. the same shall be commenced within 
 
 § 54 (L. 1901, c. 354, amend'g L. two years from the time he shall 
 
 .1892, c. 688). See now § 59. have ceased to be a stockholder." 
 
 HoUingshead v. Woodward, 107 
 
232 BUSINESS CORPORATIONS IN NEW YORK ? 210 
 
 not be negatived by allegations of the complaint.* When 
 under a statute stockholders are liable for their corporation 's 
 debts to the amount of their stockholdings from the time the 
 corporation is liable, the fact that they cannot be sued sepa- 
 rately until judgment is had against the corporation does not 
 prevent the statute of limitations from beginning to run 
 against a suit against them separately from the time the cor- 
 poration became liable rather than from the time judgment is 
 had against iV Renewal notes given by a corporation do not 
 operate to prevent the running of the statute of limitations 
 against a claim against the stockholder on his personal lia- 
 bility by statute for the corporate debts." The statute limit- 
 ing the time within which a stockholder may be sued for an 
 indebedness of his corporation is a general statute of limita- 
 tions which affects full liability business corporations as -ttell 
 as others.' Though there is an apparent conflict between the 
 statute providing that stockholders of a full liability corpo- 
 ration shall be liable for all debts and the statute providing 
 that stockholders shaU not be liable for any corporate debt 
 not payable within two years from the time it is contracted, 
 yet the latter statute is applicable as a statute of limitations 
 to an action brought under the former." The purpose of the 
 statute providing that no stockholder shall be personally 
 liable for any debt of his corporation not payable within two 
 years from the time it is contracted is " to prevent the exten- 
 sion of a credit to a corporation for a longer period than two 
 years;" and, therefore, the fact that ah original debt, later 
 assumed by a corporation, has run for a longer period than 
 two years before sued upon against the corporation is im- 
 material, if the company becomes chargeable with it (because 
 of its maturity) within two years from the time it assumes 
 payment, as not till such assumption does it become the cor- 
 porate debt." The liability of stockholders of a business 
 corporation individually for its liabilities is contingent on an 
 
 * Castner v. Duryea, 16 A. D. 249, Corps. L. § 6. See now St. Corp. 
 
 44 Supp. 708 (1897) ; L. 1848, c. 40, L. § 59. 
 
 §§ 10, 20. See now St. Corp. L. * Sanford v. Rhoads, 113 A. D. 
 
 § 59. 782, 99 Supp. 407 (1906); Bus. 
 
 ^Conklin v. Furman, 57 Barb. 484 Corps. L. § 6 (L. 1892, c. 691) ; St. 
 
 (1865); aff'd 48 N. Y. 527; L. 1847, Corp. L. § 55 (L. 1892, c. 686). 
 
 c. 210, § 4. See now St. Corp. L. § 59. 
 
 "Close V. Potter, 155 N. Y. 145, 'Ford v. Chese, 118 A. D. 605. 
 
 49 N. E. 686 (1898). 103 Supp. 30 (1907); aflf'd 189 
 
 'Adams v. Wallace, 82 A. D. 117, N. Y. 504, 81 N. E. 1164; St. Corp. 
 
 81 Supp. 848 (1903); St. Corp. L. L. § 54 (L. 1901, c. 354). See now 
 
 § 55; Gen. Corp. L. § 33, 2; Bus. § 59, 
 
§ 211 
 
 STOCKHOLDERS 
 
 233 
 
 action having been brought against it for the liability in ques- 
 tion within two years after it became due." In applying the 
 statute releasing stockholders from liability for a debt of their 
 corporation payable over two years from the time it is con- 
 tracted, a lease by the corporation under which the rent is 
 payable quarterly becomes a debt only as the installments 
 become due." The period for which creditors of a corporation 
 are enjoined from suing it is not part of the two-year period 
 prescribed by statute as the time a stockholder shall be liable 
 for the corporation's debt " unless an action for its collection 
 shall be brought against the corporation within two years 
 after the debt becomes due." " Decisions under former stat- 
 utes providing different statutes of limitations are given in 
 the note." 
 
 § 211. Id. : For Interest On. — The statute makes no pro- 
 vision for holding a stockholder liable for interest on a claim 
 of a corporate creditor ; but some decisions under the prede- 
 cessor-laws of the existing statute are given, though the 
 parent statutes differed from the one now in force. Interest 
 on a creditor's claim against a stockholder of a corporation 
 the capital stock of which is not fully paid should be allowed 
 
 "Adams v. Slingerland, 87 A. D. 
 312, 84 Supp. 323 (1903); Bus. 
 CJorps. L. § 6 (L. 1892, c. 691) ; St. 
 Corp. L. § 55 (L. 1892, c. 688). See 
 now § 59. 
 
 "Sanford v.Rhoads, 113 A. D. 
 782, 99 Supp. 497 (1906); Bus. 
 Corps. L. § 6 (L. 1892, c. 691) ; St. 
 Corp. L. § 55 (L. 1892, c. 688). See 
 now § 59. 
 
 "Ford V. Chese, 118 A. D. 605, 
 103 Supp. 30 (1907) ; aff'd 189 N. Y. 
 504, 81 N. E. 1164; St. Corp. L. 
 § 55. See now § 59. 
 
 '^ " The year within which an ac- 
 tion must be be^n for the recovery 
 of a debt owing by a manufacturing 
 corporation so as to lay a foundation 
 for a recovery against a stockholder, 
 begins to run on the day when the 
 debt first became due, and if the 
 time of its payment is extended by 
 a, promissory note which is sued 
 within a year from the date of its 
 maturity, but more than a year after 
 the date when the debt for which 
 it was given first became due, and a 
 
 judgment is recovered and an execu- 
 tion returned unsatisfied, it is not a 
 compliance with the section quoted, 
 and stockholders cannot be charged 
 with the payment of the debt." 
 Hardman v. Sage, 124 N. Y. 25, 26 
 N. E. 354 (1891); Gen. Mfg. Act, 
 L. 1848, c. 40, §§ 10, 24. Under a 
 statute that stockholders are person- 
 ally liable for debts contracted by 
 their corporation after judgment has 
 been had and unsatisfied against the 
 corporation, an action against them 
 is barred by the six and not the 
 three year statute. Coming v. Mc- 
 Cullough, 1 N. Y. 47 (1847); L. 
 1837, c. 445, § 9. "No action can 
 be maintained against a stockholder 
 for a liability under . . . [the 
 statute because of nonpayment of 
 capital stock and filing of a certifi- 
 cate thereof] after the expiration of 
 six years from the time it is in- 
 curred." Knox V. Baldwin, 80 N. Y. 
 610 (1880) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 10. 
 
234 BUSINESS CORPORATIONS IN NEW YORK § 212 
 
 only from the time of the commeneement of the suit." When 
 the debt of a corporation the capital of which is not fully 
 paid to a creditor is less than the liability of a stockholder for 
 such debt under the statute, and the allowance of interest on 
 the creditor's claim does not, therefore, swell the recovery 
 sought against such stockholder beyond the statutory limit, 
 the creditor is entitled to be allowed interest as against the 
 stockholder from the maturity of the debt." 
 
 § 212, Id.: Defenses Of and Contributions Among Stock- 
 holders. — Decisions under statutes preceding the present law 
 and differii}g in some respects from it are made use of, as well 
 as opinions rendered under the exact text of the law as it now 
 stands. On the grounds of sound public policy and the plain 
 rules of good faith one who has agreed with a corporation to 
 take shares of its stock for a stated sum, though he has later 
 paid less than ten per centum of his subscription, if he has 
 acted as director of the corporation, received dividends from 
 and sold his stock, will be held a stockholder liable to pay to 
 its trustee in bankruptcy so much of the amount unpaid on his 
 subscription as is necessary to satisfy its creditors." A stock- 
 holder cannot be held to his statutory liability for his corpo- 
 ration's debts based on notes given by it out of the regular or 
 ordinary course of its business as part of a scheme by those 
 acting as corporate officers to saddle its liability upon its 
 stockholders and in that way make good their own claims 
 against the company." "While the language of a statute mak- 
 ing corporate stockholders liable to creditors of the corpo- 
 ration for the amount of their holdings of stock until the 
 capital stock is wholly paid in may be broad and general, yet 
 it must not be construed to permit directors of a moribund 
 corporation to constitute themselves creditors for salaries or 
 wages and thus impose liabilities upon confiding and innocent 
 stockholders." The fund created by a statute from the per- 
 sonal liability of a stockholder to an amount equal to his hold- 
 ings on failure to file a certificate of payment of its capital 
 gtock is a trust which the corporate officers and directors must 
 
 " Handy v. Draper, 89 N. Y. 334 " Jeffery v. Selwyn, 220 N. Y. 77, 
 
 (1882); Gen. Mfg. Act, L. 1848, 115 N. E. 275 (1917)5 St. Corp. L. 
 
 c. 40, § 10. § 53 (L. 1909, c. 61). 
 
 " Wheeler v. Miller, 90 N. Y. 353 " Close v. Potter, 155 N. Y. 145, 
 
 (1882); Gen. Mfg. Act, L. 1848, 49 N. E. 686 (1898). 
 
 c. 40, § 10. '« McDowall v. Sheehan, 129 N. Y. 
 
 Does statutory liability of stock- -200, 29 N. E. 299 (1891) ; Gen. Mfg. 
 
 holders for debts of corporation in- Act, § 10 (L. 1848, c. ^). 
 elude interest thereon, see note in 19 
 L.R.A.(N.S.) 428. 
 
§ 212 STOCKHOLDERS . 235 
 
 apply honestly and in good faith for the interest of the com- 
 pany and its creditors ; and a director cannot, therefore, buy 
 up the company's outstanding debts for his own benefit, know- 
 ing it to be insolvent, so that as a stockholder, liable under the 
 statute for the corporate debts, he may offset the debts he has 
 bought against his personal liability.'' A stockholder of a cor- 
 poration lialjle for an indebtedness by it to another because 
 of non-filing of a certificate of payment of capital stock, pur- 
 suant to a then-existing statute, is not relieved from such 
 liability by reason of the fact that a note was given by it for 
 its indebtedness, as the note does not merge or extinguish the 
 demand for which it is taken and the original consideration 
 remains.'" "... a defect in the proceedings to organize 
 a corporation is no defense to a stockholder sued to enforce 
 his individual liability [for its debts under a statute because 
 of its failure to file an annual report], who has participated in 
 its acts of user as a corporation de facto, and appeared as a 
 stockholder upon its books, when the debt for which he is sued 
 was contracted.'" The dissolution of a corporation and the 
 appointment of a receiver of its assets operates to terminate 
 the relation of its stockholders to it, so that no action may be 
 brought against them after the passage of two years after 
 dissolution on their statutory liability for itsdebts.^ A stock- 
 holder who as an officer of .a private corporation signs its 
 notes is estopped from disputing their validity in an action 
 by its creditor to hold him to his liability for its debts under 
 a statute making stockholders liable therefor.^ In an action 
 to charge a stockholder for stocks and bonds of a corporation 
 received under circumstances by which he incurred a liability 
 to pay an unsatisfied judgment against his corporation, an 
 offset of judgments against the corporation in favor of the 
 stockholder is allowable.* A stockholder of a safe deposit 
 company who is also a creditor in a class which would entitle 
 him to enforce the personal liability of other stockholders may 
 properly offset his loans to the company against his liability 
 as a stockholder ; but he cannot use such offset against a stock- 
 holder suing him and other stockholders to enforce their stat- 
 utory liability as such for the company's debts when the 
 
 19 
 
 Bulkley v. WHiteomb, 121 N. Y. ^ Smith v. Quale, 86 Misc. 259, 148 
 
 107, 24 N. E. 13 (1890) ; Mfg. Act, Supp. 448 (1914) ; St. Corp. L. § 59. 
 
 L. 1848, c. 40, § 10. ^M'oss v.' Averell, 10 N. Y. 449 
 
 ""•Jagger Iron Co. v. Walker, 76 (1853); L. 1837, c. 441, § 9. 
 
 N. Y. 521 (1879). *Christensen v. Colby, 43 Hun, 
 
 ^Aspinwall v. Sacchi, 57 N. Y. 362 (1887). 
 331 (1874) ; L. 1852, c. 228, §§ 6, 7. 
 
236 BUSINESS CORPORATIONS IN NEW YORK § 213 
 
 plaintiff stockholder is not in the class who are entitled to 
 share in the f und.° When by statute all stockholders are made 
 individually liable for the debts of a corporation, one com- 
 pelled to pay may seek and recover contribution in equity 
 from the others.* "An action will not lie by one stockholder 
 against a fellow stockholder of a corporation, to enforce a 
 personal liability for a debt of the company." ' 
 
 § 213. Id.: Pleading, Practice, and Evidence in Actions 
 Against, In General. — The liability of a stockholder for the 
 debts of his corporation rests on contract and is one of which 
 the municipal and city courts have jurisdiction.' " In order to 
 sue a stockholder of an incorporated company, it is not neces- 
 sary to aver that the corporation was insolvent, except in those 
 cases in which the charter makes the liability subject to the 
 existence of such insolvency, and requires the creditor to 
 exhaust his remedy against the corporation before proceeding 
 against the stockholder. In other cases, when a debt is 
 unpaid at maturity, there is nothing to prevent the creditor 
 from proceeding to collect his claim either from the corpo- 
 ration or those who by their charter are made responsible for 
 the debts without any limitation.'" An assignee of a cause 
 of action by a creditor of an insolvent corporation brought 
 under agreement with its receivers on behalf of himself and 
 all other creditors similarly situated to enforce the statutory 
 liability of the corporation's stockholders Avith the under- 
 standing that the action was to be conducted and controlled 
 by the receivers and their counsel in consideration of their 
 stipulation to hold such creditor harmless and to pay the 
 expenses from the general fund in their hands as receivers 
 cannot have a substitution of attorneys if he thereafter 
 
 ° The Hosier Safe Co. v. Guardian could not sue his co-stockholder. 
 
 Trust Co., 208 N. Y. 524, 101 N. E. " To the extent of the personal lia- 
 
 786 (1913) ; Banking L. § 303. bility created by the statute, the cor- 
 
 "Aspinwall v. Sacchi, 57 N. Y. porators are partners, and one part- 
 
 331 (1874) ; L. 1852, c. 228, §§ 6, 7. ner can not sue a co-partner for 
 
 ' Richardson v. Abendroth, 43 a debt due from all." 
 
 Barb. 162 (1864) ; L. 1848, c. 40, On right of one stockholder to sue 
 
 § 18. A corporation's secretary sued another for contribution outside 
 
 a stockholder for his personal lia- state of incorporation, see note in 
 
 bility for the debt to the secretary 33 L.R.A.(N.S.) 909. 
 
 by the corporation for salary, under ' Girberkian v. Costikyan, 126 
 
 the statute making stockholders lia- A. D. 812, 111 Supp. 243 (1908) ; 
 
 ble for debts due their corporation's old Mun. Ct. Act, § 1, subd. 1, 
 
 " laborers, servants and apprentices, amended L. 1905, c. 513. 
 
 for services performed for such cor- ° Perkins v. Church, 31 Barb. 84 
 
 poration." The secretary was also (1859). 
 
 a stockholder and it was held he , 
 
§ 213 STOCKHOLDERS 237 
 
 intends to discontinue the action and the Statute of Limita- 
 tions has run against a fresh action by any of the other cred- 
 itors." In an action to hold a stockholder liable for a corpo- 
 rate debt, ' ' evidence that the stock in question was assigned 
 to the defendant as collateral security " is competent." In 
 order that a creditor of a corporation may hold one of its 
 stockholders liable under a statute making a stockholder 
 liable to the creditors of the company to an amount equal to 
 the amount unpaid on the stock held by him, until the whole 
 aniount of the capital stock so held by him shall have been 
 paid to the company, the creditor must prove that the defend- 
 ant is a stockholder and is still liable on unpaid subscription ; 
 no presumption will avail him.^^ It is not necessary for a 
 trustee in bankruptcy of a corporation to go into a bank- 
 ruptcy court to ascertain the amount of the indebtedness of 
 the corporation in order to know for how much he may hold 
 stockholders on their unpaid stock subscriptions.^^ In an 
 action by a judgment creditor whose execution has been 
 returned unsatisfied to reach certain shares of corporate 
 stock, alleged to belong to the debtor but which stand in his 
 wife 's name on the corporation 's books, it is proper to appoint 
 a receiver if there is reasonable ground to apprehend that 
 before the suit can be determined the stock will be removed 
 beyond the court's jurisdiction or lost in some adverse turn of 
 the defendant's affairs." In an action by a corporate creditor 
 to hold stockholders liable for unpaid subscriptions on their 
 stock it is not necessary to join the receiver of the corpora- 
 tion, because the stockholders are sued upon a personal 
 liability." The statutory liability of stockholders for corpo- 
 rate debts " is a several individual liability of each stock- 
 holder, directly to such of the creditors as have complied with 
 the requisite conditions precedent ' ' ; and ' ' there is no statu- 
 ^tory provision by which the rights of such creditors can be 
 vested in a receiver of the corporation. " " " The courts in 
 
 " Hirschfeld v. Bopp, 5 A. D. 202, Corp. L. §§ 43, 54 (L. 1901, c. 354). 
 
 39 Supp. 24 (1896). See now St. Corp. L. § 56 et seq. 
 
 " McMahon v. Macy, 51 N. Y. 155 " State Bank of Syracuse v. Gill, 
 
 (1872); Gen. R. R. Act, L. 1850, 23 Hun, 410 (1881); C. C. P. § 713. 
 
 c. 140, §§ 10, 11, as amended L. ^^ Lang v. Lutz, 180 N. Y. 254, 73 
 
 1854, c. 284. N. E. 24 (1906); Stock Corp. L. 
 
 ^"Wellington v. Continental Con- § 54. 
 
 struction and Improvement Co., 52 ^®Famsworth v. Wood, 91 N. Y. 
 
 Hun, 406, 5 Supp. 587 (1889) ; Gen. 308 (1883). "The plaintiff is a 
 
 R. R. Act, § 10, as amended L. 1854, receiver of a corporation created 
 
 c. 282. under the General Manufacturing 
 
 "Ratihbone v. Ayer, No. 2, 84 Law of 1848, appointed upon the 
 
 A. D. 186, 82 Supp. 235 (1903) ; St. sequestration of its property on the 
 
238 BUSINESS CORPORATIONS IN NEW YORK § 213 
 
 this State Ijold that in order to charge the holders of stock 
 individually for the debts of the corporation, it must be 
 proved that the property was purchased and paid for at an 
 overvaluation, and it must be shown that the purchase at the 
 price agreed upon was made in bad faith and to evade the 
 statute. ' ' " When an action is brought by a creditor of a 
 corporation and the law makes its stockholders, directors, 
 trustees or other officers, or any of them, liable in any event 
 or contingency for the payment of his debt, they may be made 
 parties defendant by the original or by a supplemental com- 
 plaint and their liability may be declared and enforced by the 
 judgment in the action; or the plaintiff in the action may, 
 instead of making them parties, maintain a separate action 
 against them to procure a judgment declaring, apportioning 
 and enforcing their liability ; and in either kind of action the 
 court must when it is necessary cause an account to be taken 
 of the property and of the debts of the corporation and there- 
 upon the defendants' liability must be apportioned accord- 
 ingly, though 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 
 determine the amount of each defendant's liability, and 
 enforce the same accordingly." When the stockholders of the 
 corporation are parties to the action, if the property of the 
 corporation is not sufficient to discharge its debts, the inter- 
 locutory or final judgment, as the case requires, must adjudge 
 that each stockholder pay into court the amount due and 
 remaining unpaid on the shares of stock held by him, or so 
 much thereof as is necessary to satisfy the debts of the corpo- 
 ration.^" 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 insufficient to 
 pay the debts of the corporation the court must ascertain the 
 several sums for which the directors, trustees or other officers, 
 or the stockholders of the corporation, being parties to the 
 action, are liable; and must adjudge that the same be paid 
 into court, to be applied, in such proportions and in such 
 
 return of an execution, and seeks by Gaglez, — Misc. — (1918) ; N. Y. 
 
 this action to enforce against the L. J. Feb. 26, Sp. T. N. Y. Co.; 
 
 stockholders, the personal liability to St. Corp. L. § 56. 
 
 creditors which is imposed by that ^* Gen. Corp. L. §§ 109, 110, 111 
 
 act upon stockholders in .such cor- (L. 1909, c. 28). 
 
 porations." It was held he could "Gen. Corp. L. § 113 (L. 1909, 
 
 not do so. c. 28). 
 *' Barber Asphalt Paving Co. v. 
 
§§ 214, 215 STOCKHOLDERS 239 
 
 order as justice requires, to the payment of the debts of the 
 corporation.^" 
 
 § 214. Making All Creditors or Any One Plaintiffs or Plain- 
 tiff. — An action against a stockholder of a corporation, the 
 capital stock of which has not been fully paid, to recover a 
 debt owing by it, may be brought by a single creditor, with- 
 out making other corporate creditors parties.^ A creditor 
 may alone sue a stockholder, without joining as parties the 
 corporation and other creditors, for a debt payable by the 
 corporation within two years from the date it was- incurred, 
 on which he has had judgment with execution returned 
 unsatisfied.^ 
 
 § 215. In Equity, Making All the Stockholders Ratably 
 Liable or In Law Against Any Stockholder. — When an action 
 authorized by the law of the State of New York 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, at any time before final 
 judgment, may, upon motion of either party, amend the plead- 
 ings and other papers without prejudice to the previous pro- 
 ceedings 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, repre- 
 sentative or successor.* " It is a very plain proposition that 
 the stock and property of every corporation is to be regarded 
 as a trust fund for the payment of its debts, and its creditors 
 have a lien and the right to priority of payment over any 
 stockholder;" and, if some of such property be found in a 
 stockholder's hands after division thereof among its stock- 
 holders but before discharge of all the corporate debts, a 
 creditor may maintain an action against such stockholder 
 alone without bringing a suit both on his own behalf and that 
 
 ^ Gen. Corp. L. § 114 (L. 1909, 495 (1899) ; St. Corp. L. §§ 54, 55 
 
 c. 28). (L. 1892, c. 688). See now St. 
 
 ^ Weeks v. Love, 50 N. Y. 568 Corp. L. §§ 56, 59. 
 
 (1872); Gen. Mfg. Act, L. 1848, ^ Gen. Corp. L. § 309 (L. 1909, 
 
 e. 40, § 10. See now St. Corp. L. c. 28). 
 
 § 56 e* seq. *Gen. Corp. L. § 309 (L. 1909, 
 
 2 Citizens' Bank of Buffalo v. c. 28). 
 Weinberg, 26 Misc. 518, 57 Supp. 
 
240 BUSINESS CORPORATIONS IN NEW YORK § 215 
 
 of all other creditors, and against all stockholders/ " In the 
 absence of statutory authority for an action directly against 
 the stockholder of a corporation to secure payment of his 
 debt to the extent of the former's unpaid balance upon the 
 stock owned by him," the corporate creditor cannot sue the 
 stockholder direct.* A statute amending a prior law giving 
 a corporate creditor a right of action at law against the corpo- 
 rate stockholders who have not fully paid for their stock, 
 jointly or severally, for the corporate indebtedness to him, 
 by providing that " .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," probably " prescribes a 
 new rule of liability under which the remedy available to a 
 creditor is intended to be by way of an equitable action, or 
 proceeding, wherein all the stockholders of the corporation 
 should be made equally and ratably responsible for the pay- 
 ment of the corporate debts. " ' A creditor seeking to hold 
 the subscribers to stock of his debtor-corporation to payment 
 thereof must first recover a judgment against it, and must 
 then — if he sues in equity for the benefit of aU creditors — 
 join as defendants all stockholders who are liable and the 
 personal representatives of any who have died, to the end 
 that stockholders be not compelled to pay more than their 
 pro rata share and that multiplicity of suits be avoided.* 
 Decisions under the statutes as they existed before the amend- 
 ment of nineteen hundred and one are collated in the note.' 
 
 ^ Bartlett v. Drew, 57 N. Y. 587 relationship between stockholder and 
 
 (1874). "Where stock and prop- creditor. 
 
 erty has been divided between stock- ' Lang v. Lntz, 180 N. Y. 254, 73 
 
 holdere before all the debts of the N. E. 24 (1904) ; St. Corp. L. § 54 
 
 corporation have been discharged, if (L. 1901, c. 354, amending L. 1892, 
 
 any one stockholder is compelled to c. 688). See now St. Corp. L. 
 
 pay more than his fair share of any § 56. 
 
 unpaid debt he may resort to his ' Warth v. Moore Blind Stitcher & 
 associates for equitable contribution; Overseamer Co., 146 A. D. 28, 130 
 but with that proceeding the cred- Supp. 748 (1911); aff'd 207 N. Y. 
 itor has nothing to do, unless he 673, 100 N. E. 1128. The stock- 
 chooses to intervene to settle equities holders may be discovered by ex- 
 that may exist between his debtors." amination of the corporate officers. 
 
 "Manufacturers' Commercial Co. The suit, it will be noted, was not 
 
 V. Heckscher, 144 A. D. 601, 129 to enforce the remedy by a creditor 
 
 Supp. 556 (1911) ; aff'd 203 N. Y. in his own right against the stock- 
 
 560; Act Concerning Corporation, holders severally, under St. Corp. L. 
 
 N. J. Revision of 1896. The corre- § 56. 
 
 srponding New York law, St. Corp. ' Under a statute rendering stock- 
 
 L. §§ 55, 56 and 59, creates a direct holders jointly and. severally person- 
 
§ 216 
 
 STOCKHOLDERS 
 
 241 
 
 § 216. SufSciency of Allegations in Complaint. — A trustee 
 in bankruptcy suing by authority of the Federal Court a 
 stockholder of the bankrupt corporation to recover amounts 
 unpaid on his subscription to its stock need not in his com- 
 plaint show the necessity of collecting the full amount of the 
 subscription to pay the corporate creditors." In an action 
 against a stockholder to hold him for the debt of his corpora- 
 tion it is sufficient if the complaint allege that at the time the 
 debt was created the defendant was a stockholder ; and that 
 he ceased to be such or that the action was not brought within 
 two years thereafter are matters to be plead in defense." 
 
 ally liable to the corporation's cred- 
 itors up to the amount of their hold- 
 ings until the whole capital stock 
 outstanding at the time the corpo- 
 rate debts were incurred had been 
 fully paid, any number or all of 
 the stockholders may be made de- 
 fendants. Lang V. Lutz, 180 N. Y. 
 254, 73 N. E. 24 (1904) ; St. Corp. 
 L. § 54 (L. 1892, c. 688), before 
 1901 amendment. "... a cred- 
 itor may proceed by suit, in the 
 nature of a common law action, 
 agrainst a single stockholder . . . 
 But if the stockholder thus prose- 
 cuted can show that he has already 
 paid, on account of the debts of the 
 corporation, a sum equal to the lia- 
 bility which the statute has imposed, 
 namely, the amount of his stock, he 
 will, so far as that remedy is con- 
 cerned, have defeated the action. 
 . . . If the creditor cannot find 
 a responsible stockholder, who is 
 not, at the same time, a creditor to 
 the amount of his stock, he must 
 proceed for an account, if he ascer- 
 tains that such a proceeding will re- 
 sult in recovering his debt. So, if a 
 stockholder be sued to enforce his 
 individual liability in a case where 
 an account and the enforcing of all 
 the liabilities would relieve him from 
 the whole or a part of the debt 
 claimed, he may himself resort to a 
 suit for such account and for dis- 
 tribution." Garrison v. Howe, 17 
 N. Y. 458 (1858); Gen. Mfg. Act, 
 L. 1848, e. 40, § 12. A creditor of 
 a corporation the capital stock of 
 which is not fully paid has his elee- 
 B. C. N. Y.— 16 
 
 tion to bring an action for his debt 
 against a stockholder under the stat- 
 ute, or to bring a suit in equity, and 
 have an accounting between all the 
 stockholders and all the creditors, 
 when the rights of each can be as- 
 certained and protected. Mathez v. 
 Neidig, 72 N. Y. 100 (1878); L. 
 1848, c. 40, § 12. A receiver of a 
 corporation appointed at the insti- 
 gation of a judgment creditor whose 
 execution has been returned unsatis- 
 fied may bring separate suit against 
 each shareholder to recover the 
 amount of his unpaid subscription, 
 and is not confined to an omnibus 
 suit to which all creditors and stock- 
 holders should be parties. Van 
 Wagenen v. Clark, 22 Hun, 497 
 (1880); L. 1860, c. 403; 2 R. S. 
 469, § 69. An action to hold a stock- 
 holder to his statutory liability for 
 the corporation's debts by reason of 
 its capital not being fully paid may 
 be brought at law by an individual 
 creditor against an individual stock- 
 holder, and a suit in equity for an 
 accounting with all the parties be- 
 fore the court is unnecessary. 
 Thompson v. Nicolai, 21 Misc. 70O, 
 49 Supp. 422 (1897) ; St. Corp. L. 
 §§ 54, 55. See now §§ 56, 59. 
 
 " Jeffery v. Selwyn, 220 N. Y. 77, 
 115 N. E. 275 (1917) ; St. Corp. L. 
 § 53 (L. 1909, c. 61). 
 
 "Citizens' Bank of BufCalo v. 
 Weinberg, 26 Misc. 518, 57 Supn. 
 495 (1899)'; St. Corp. L. §§ 54, 55 
 (L. 1892, c. 688). See now §§ 56, 
 59. 
 
242 BUSINESS CORPORATIONS IN NEW YORK § 216 
 
 An allegation is a complaint to hold a stockholder to the 
 amount unpaid on his holdings for a debt of his corporation 
 unrecoverable by execution to the efifect that he has paid into 
 the treasury not exceeding $3,000, whereas his holdings 
 amount to $4,800, " leaving a balance due on said stock of at 
 least $1,800," does not state facts sufficient to show that 
 defendant has not fully paid for his stock, as he may have 
 paid the balance in services or property, and the quoted 
 clause is but a conclusion." A complaint to hold a stock- 
 holder to the amount unpaid on his holdings for a debt of his 
 corporation unrecoverable by execution must show that it 
 is a stock corporation; and this is not sufficiently shown by 
 allegations that its name is so and so and that goods, wares 
 and merchandise were sold by it." In a complaint against a 
 stockholder to recover a judgment-debt against his corpora- 
 tion on the theory that the holdings of the defendant have 
 not been fully paid for it is not sufficient to allege that there 
 was something due on the defendant's subscription at the time 
 the corporation's debt was contracted, but it must be stated 
 that there was something due at the time the judgment was 
 recovered and execution thereon was returned unsatisfied." 
 Decisions involving the sufficiency of complaints in actions 
 under former statutes governing the liability of stockholders 
 for corporate debts are given in the note." 
 
 ^^ Dyer v. Drucker, 108 A. D. 238, respectively. To hold one on his 
 
 95 Supp. 749 (1905) ; St. Corp. L. liability as a stockholder for debts 
 
 § 54 (L. 1901, c. 354). See now of the company up to the amount 
 
 § 56. of his holdings on the ground that 
 
 " Dyer v. Drucker, 108 A. D. 238, the whole capital bad not been paid 
 
 95 Supp. 749 (1905) ; St. Corp. L. in, it must be averred that his hold- 
 
 § 54 (L. 1901, c. 354). See now ings of stock equalled the amount of 
 
 § 56. the debts sued for. Chambers v. 
 
 "Dyer v. Drucker, 108 A. D. 238, Lewis, 28 N. Y. 454 (1863) ; Gen. 
 
 95 Supp. 749 (1905) ; St. Corp. L. Mfg. Act, § 32. The causes of action 
 
 § 54 (L. 1901, c. 354). See now given a creditor against a corporate 
 
 § 56. stockholder and trustee to recover a 
 
 ^°An amendment, to a complaint debt due by his corporation because 
 
 seeking to hold a stockholder beoause of its failure to file a certificate of 
 
 of failure to file a certificate of full full payment of its capital stock and 
 
 payment of his corporation's capital to file its annual report, respectively, 
 
 stock, which endeavors to hold the cannot be joined m one complaint 
 
 stockholder for a liability ari^ng as arising out of the same trans- 
 
 from the purchase of property and action or transactions connected with 
 
 the issuing of stock therefor, should the same subject of action, for the 
 
 not be permitted. Rowell v. Jan- reason that the former is on con- 
 
 vin, 69 Hun, 305, 23 Supp. 481 tract and subject to the six year 
 
 (1893) ; app. dism. 138 N. Y. 656, statute of limitations and the latter 
 
 34 N. E. 514; Manufacturers' Act is for a penalty and subject to the 
 
 (L. 1848, c. 40), §§ 10, 11, and 14, three year statute. Wiles v. Suy- 
 
§§ 217-219 STOCKHOLDERS 243 
 
 § 217. Sufficiency of Answer and Pleading Defenses.— A 
 
 defense of being not individually liable as mennbers of a joint 
 stock company because merely stockholders in a corporation 
 need not be plead.^* An answer which denies upon informa- 
 tion and belief the allegations of a complaint by a judgment 
 creditor of a corporation to hold a stockholder liable for the 
 debt to the amount unpaid on subscriptions by him to its 
 stock, that the corporation was organized on a certain date 
 with certain capital authorized, subscribed and paid in, and 
 that the amount which defendant subscribed has not been 
 paid, is not frivolous." 
 
 § 218. Id.: Judgment and Execution Against Stockholders. 
 — A creditor seeking to hold the stockholders of his corporate 
 judgment debtor, which has assigned for- creditors' benefit 
 for the debt, upon the ground that the capital of the corpo- 
 ration is not fully paid in, is not entitled to a personal judg- 
 ment against each stockholder for the full amount of his 
 judgment against the corporation, but only a judgment for 
 the benefit of himself and other creditors in like fix as him- 
 self.^* When by a judgment against stockholders under their 
 statutory liability for corporate debts the county treasurer is 
 authorized to docket judgments against them all for the min- 
 imum amount of their possible liability, and to collect thereon 
 by execution against each defendant separately enough to 
 satisfy the claims of the creditors and their costs, and out of 
 his payments to retain his lawful commissions, he is entitled 
 in issuing his executions, for the purpose of providing 
 enough to pay the creditors, to include therein the commis- 
 sions thus authorized to be retained ; but the plaintiff has no 
 right to include these commissions in his bill of costs." 
 
 § 219. Id.: Under Foreign Statutes. — If a foreign statute 
 imposing a liability upon stockholders of corporations under 
 the jurisdiction of the foreign state also provides a remedy,. 
 
 dam, 64 N. Y. 173 (1876) ; L. 1848, Suydam, 64 N. Y. 173 (1876) ; L. 
 
 c. 40, §§ 10, 12; Code, § 167. A 1848, c. 40, §§ 10, 12; Code, § 167. 
 
 complaint by a corporate creditor ^^Demerest v. Flack, 128 N. Y. 
 
 against a person who is a stockholder 206, 13 L.R.A. 854, 28 N. E. 645 
 
 and trustee to recover his debt under (1881). 
 
 the statutory liability imposed on ^^ Trumbull v. Ashley, 26 A. D. 
 
 stockholders and trustees on failure 356, 49 Supp. 786 (1898). 
 
 of the corporation to file certificates ^' Hallett v. Metropolitan Mes- 
 
 of full payment of stock and annual senger Co., 69 A. D. 258, 74 Supp. 
 
 reports, respectively, contains two 639 (1902). 
 
 I causes of action, one on contract ^°Veeder v. Judson, 91 N. Y. 374 
 
 against the defendant as stockholder (1883) ; Gen. Mfg. Act, L. 1848, 
 
 land the other for a penalty against c. 40, § 12. 
 the defendant as trustee. Wiles v. 
 
244 BUSINESS CORPORATIONS IN NEW YORK § 219 
 
 that remedy is exclusive and cannot be enforced in the courts 
 of this State ; but if the remedy is left to be worked out accord- 
 ing to common law, it may be enforced in this State against a 
 resident stockholder; and " it is not necessary that the pro- 
 cedure to enforce the liability in question should be that 
 required by statute in this State in the ease of domestic cor- 
 porations, as that would frequently be impossible and would 
 withhold the right of comity altogether," e. g., the necessary 
 return of execution unsatisfied against a domestic corpo- 
 ration.^ "A right of action against the stockholders of a 
 corporation does not exist at common law, and ordinarily 
 exists only by virtue of some statutory enactment, . . . 
 a right of action unknown to the common law and existing 
 only by force of the statutes of another state, can be enforced 
 [only in the courts of the corporation's domicile and not] in 
 the courts of this State, or outside of the local jurisdiction 
 where the corporation is domiciled. ' ' ^ The liability of stock- 
 holders to their corporation's creditors is not a common law 
 but a statutory liability and such liability of the stockholders 
 of a foreign corporation under its home laws will not be 
 enforced in an action in this state.'' The liability of resident 
 subscribers to the capital stock of a defunct foreign corpora- 
 tion to its creditors for the amount unpaid up to the par value 
 of their holdings is not based on any statute but on common 
 law doctrines of contract, so that the statutes of the home 
 state of the corporation imposing such liability need not be 
 specially pleaded.' A cause of action accruing to a corpo- 
 ration's receiver by the laws of the state of its incorporation 
 making its stockholders liable to a sum (beyond the stock 
 owned by them and any amount unpaid thereon) equal to 
 the amount of such stock, is barred in this state within the 
 same period as it is barred by the laws of such other state.* 
 The liability of a stockholder of a corporation incorporated 
 in a state under the laws of which he is liable for the corpo- 
 ration's debts, etc., to the extent of the amount of his stock 
 at par in addition to the amount invested in such stock rests 
 not on contract but upon statute ; and is to be enforced pri- 
 
 =»Howarth v. Angle, 162 N. Y. baum, 74 Misc. 579, 134 Supp. 487 
 
 179, 47 L.R.A. 725, 56 N. E. 489 (1911). 
 
 (190O). ^Southworth v. Morgan, 71 Misc. 
 
 1 Marshall v. Sherman, 148 N. Y. 214, 128 Supp. 598 (1911). 
 
 9, 34 L.R.A. 757, 42 N. E. 419 * Shipman v. Treadwell, 208 N. Y. 
 
 (1895). 404, 102 N. E. 634 (1913) ; C. C. P. 
 
 '"■ Coulter Dry Goods Co. v. Rosen- § 390-a. 
 
§§ 220, 321 STOCKHOLDERS 245 
 
 marily at the home of the corporation and in the state creat- 
 ing the obligation, and in the form of action prescribed.^ 
 
 § 220. Id.: ForServices of Corporate Laborers, Servants and 
 Employees, Governing Statutes.— Stockholders of every stock 
 corporation are (1) personally, (2) jointly and (3) severally 
 liable for all debts dne and owing for services performed for 
 such corporation by and to any of its (a) laborers, (b) serv- 
 ants or (c) employees — other than contractors — provided: 
 (1) Such laborer, servant or employee before charging such 
 stockholder for such services gives the stockholder notice in 
 writing within thirty days after the termination of such 
 services that he intends to hold him liable; (2) such laborer, 
 servant or employee (a) commences an action for such 
 service-debt within two years after it becomes due against 
 such corporation, (b) obtains judgment therein against the 
 corporation, (c) has execution on such judgment returned 
 unsatisfied in whole or in part; (3) such laborer, servant or 
 employee conunences an action for such service-debt against 
 the stockholder within thirty days after the return unsatisfied 
 of such execution upon the judgment for services against the 
 corporation; (4) the stockholder holds his stock absolutely 
 and not as collateral security or as executor, administrator, 
 guardian or trustee (unless he voluntarily invested the trust 
 funds in such stock) ; and (5) the service-debt is payable 
 within two years from the time it is contracted." 
 
 § 221. Id.: In General. — " . . . the scope and purpose 
 of the statute [making stockholders liable for debts from 
 their corporation to laborers, servants and apprentices] was 
 to protect the classes most appropriately described by the 
 words used, as those engaged in manual labor, as distin- 
 guished from officers of the corporation or professional men 
 engaged in its service ; in short, to furnish additional relief to 
 a class who usually labor for small compensation, to whom the 
 moderate pittance of their wages is an object of interest and 
 necessity, and who are poorly qualified to take care of their 
 own concerns, or look sharply after their employers.'" A 
 corporation is — and a fortiori its stockholders are — not 
 bound by a settlement made by its foreman after it had 
 ceased to do business with its servant so as to have it settle 
 the amount due the servant in an action by him against the 
 
 * Knickerbocker Trust Co. v. Ise- ' Coffin v. Reynolds, 37 N. Y. 640 
 
 lin, 185 N. Y. 54, 77 N. E. 877 (1868); G^n. Mfg. Act, L. 1848, 
 
 (1906) ; Laws of Md. 1904, chs. 101, c. — , § 18. The present statute, 
 
 337. St. Corp. L. §§ 57-59, uses the word 
 
 •St. Corp. L. §§ 57, 58, 59 (L. "employees" instead of "appren- 
 
 1909, c. 61). tices." 
 
246 BUSINESS CORPORATIONS IN NEW YORK § 222 
 
 stockholders under their statutory liability for the wages of 
 their corporation's servants." An assignee of a liability which 
 has accrued and become fixed by a corporation to a laborer 
 for wages may hold a stockholder to his statutory liability 
 therefor.' A stockholder who has paid a judgment had by a 
 laborer for wages due from the corporation may not at law 
 sue one alone of his co-stockholders for contribution, but 
 must bring them all in in an equitable action ; because their 
 liability is that of co-partners and is joint and several.^". 
 
 § 222. Id.: Who Liable. — Only a stockholder holding his 
 stock in some way other than as collateral security, or as 
 executor, administrator, guardian or trustee can be held liable 
 to his corporation's laborer, servant or employee, unless he, 
 though holding the stock as executor, administrator, guard- 
 ian or trustee, voluntarily invested the trust funds in such 
 stock.^^ The statute making stockholders of a corporation 
 liable for its debts to its laborers, servant and apprentices 
 for services rendered it " means to hold liable those stock- 
 holders who are shown to be such at the time when the debts 
 are due and owing. And the burden of proof is upon him who 
 sues, to show that there is a debt due and owing for services 
 performed for the corporation, by a laborer, or a servant, or 
 an apprentice ; and that the person sued is, when the debt is 
 due and owing, a stockholder of the company. " " In order 
 to prove that defendants are stockholders in an action by a 
 laborer to hold them liable for wages for work done for their 
 corporation it is sufficient to show that they were trustees or 
 directors and that the statute under which the corporation was 
 formed required such to be stockholders ; and ' ' having been 
 thus shown to be stockholders at the time the corporation was 
 formed, they will be presumed to continue such until the con- 
 trary shall be established ", even though a book offered 
 shows their resignation as trustees." It seems that one who 
 remains on corporate books as a stockholder is personally 
 liable for statutory liabilities, e. g., for a debt of the corpo- 
 ration to a servant for services rendered, although he has 
 pledged or assigned his stockholdings.". 
 
 « Strong V. Wheaton, 38 Barb. 616 203 (1873) ; Gen. Mfg. Act, L. 1848, 
 
 (1861). c. 40, § 25. The present statute, St. 
 
 'Krauser v. Ruckel, 17 Hun, 463 Corp. L. §§ 57-59, uses the word 
 
 (1879); L. 1848, c. 40, § 18. "employees" instead of " appren- 
 
 " Clark V. Myers, 11 Hun, 608 tices." 
 
 (1877) ; L. 1848, e. 40. " H«rries v. Wesley, 13 Hun, 492 
 
 " St. Corp. L. §§ 57-59 (L. 1909, (1878) ; L. 1848, c. 40. 
 
 c: 61). "Richardson v. Abendroth, 43 
 
 "Johnson v. UnderhiU, 52 N. Y. Barb. 162 (1864). 
 
§ 223 STOCKHOLDERS 247 
 
 § 223. Id.: For What Liable.— Stockholders are liable for 
 all debts due and owing by their corporation only if (1) for 
 services performed for such corporation (2) by any of its 
 (a) laborers, (b) servants or (c) employees — other than 
 contractors — who (3) have given the stockholders notice in 
 writing that they intend to hold the stockholders liable (a) 
 before charging such stockholders and (b) within thirty days 
 after the termination of such services and (4) have com- 
 menced an action against the corporation for such debts 
 within two years after it became due and (5) have obtained 
 judgment therein against such corporation and (6) have had 
 execution on such judgment returned unsatisfied in whole or 
 in part, and (7) have commenced an action for such debts 
 against the stockholders within thirty days after the return 
 unsatisfied of such execution upon the judgment against the 
 corporation, and (8) whose debt is payable within two years 
 from the time it is contracted." A stockholder of a corpora- 
 tion is not liable, under the statute making him liable for the 
 corporation's debts to its laborers, servants or employees, 
 for damages for breach of contract by the corporation, or for 
 materials purchased or money borrowed by it; but only for 
 services rendered ; and he cannot, therefore, be charged with 
 costs incurred in the defense of an action prosecuted against 
 the corporation for damages upon causes of action other than 
 that embraced in the statute." A distinction is made in the 
 statute making stockholders liable personally for the corpo- 
 rate debts to its " laborers, servants, and apprentices ": 
 " The stockholder must pay, not debts due to all employees of 
 the company, but those due to ' laborers, servants, and appren- 
 tices, ' and not all debts due to them, but only such as are due 
 for ' services ' performed for such corporation. . . . the 
 services referred to are menial or manual services — he 
 who performs them must be of a class whose members usually 
 look to the reward of a day's labor, or service, for immediate 
 or present support, from whom the company does not expect 
 credit, and to whom its future ability to p^y is of no conse- 
 quence; one who is responsible for no independent action, 
 but who does a day's work, or a stated job under the direction 
 of a superior. ... To the language of the act must be 
 applied the rule common in the construction of statutes, that 
 I when two or more words of analogous meaning are coupled 
 together, they are understood to be used in their cognate 
 
 " St. Corp. L, §§ 57-50 (L. 1909, 301, 97 N. E. 728 (1912) ; St. Corp. 
 c. 61). • L. §§ 57, 59. 
 
 ' "Card V. Groesbeck, 204 N. Y. 
 
248 BUSINESS CORPORATIONS IN NEW YORK § 224 
 
 sense, express the same relations, and give color and expres- 
 sion to each other. • Therefore, although the word ' servant ' 
 is general, it must be limited by the more specific ones, 
 ' laborer and apprentice ' with which it is associated, and be 
 held to comprehend only persons performing the same kind 
 of service that is due from the others. . . . The word 
 used is no doubt broad enough, and might without exaggera- 
 tion, represent all persons connected with the administration , 
 or furtherance of the affairs of a corporation ; in this instance, 
 from the one who dips or bottles the water, to the president, 
 but ithis would manifestly be too general. ' Laborer or 
 apprentice ' are M'ords of limited meaning, and refer to a 
 particular class of persons employed for a defined and low 
 grade of service performed . . . without responsibility 
 for the acts of others, themselves directed to the accomplish- 
 ment of an appointed task under the supervision of 
 another. ' ' " The purpose of the statute making stockholders 
 of a corporation personally liable for debts due its laborers, 
 servants or employees was " the protection of those who 
 earned their living by manual labor, and not by professional 
 services, and who were supposed to be the least able to pro- 
 tect themselves ", i. e., " such employees as perform services 
 in subordinate positions and for whose inclusion within the 
 scope of the provision there is a politic reason . " " A bill of 
 exchange drawn by a laborer on a corporation for wages and 
 accepted by it gives the transferee thereof for value not only 
 the right to the money specified in it but the original consider- 
 ation upon which the bill was drawn and accepted, so that the 
 transferee may hold a stockholder to his personal statutory 
 liability for such wages." A laborer or servant of a corpora- 
 tion seeking to hold a stockholder for his wages, which are 
 payable monthly, may only recover for the last year's.^" 
 
 § 224. Id. Who Are Laborers, Servants, and Employees. — 
 The statute makes stockholders liable for debts of the corpo- 
 ration to laborers, servants and employees other than con- 
 tractors.^ In determining who is to be held a " servant " 
 within a statute making stockholders of a corporation indi- 
 
 " Wakefield v. Fargo, 90 N. Y. tract at a weekly salary was held not 
 
 213 (1882) ; L. 1863, e. 63, § 2; L. within the statute. 
 
 1848, e. 40, § 18. The present stat- " Pilcher v. Brayton, 17 Hun, 429 
 
 ute, St. Ck)rp. L. §§ 57-59, uses the (1879) ; L. 1848, c. 40, § 18. 
 
 word " employees " instead of " ap- ^ Short v. Medberry, 29 Hun, 39 
 
 prentices." (1883) ; L.- 1848, c. 40, § 24. 
 
 " Bristor v. Smith, 158 N. Y. 157, ^ St. Corp. L. §§ 57-59 (L. 1909, 
 
 53 N. E. 42 (1899); St. Corp. L. c. 61). 
 § 54. An attorney employed by con- 
 
§ 224 STOCKHOLDEES 249 
 
 vidually liable for all debts owing to its " laborers, servants 
 and apprentices, for services performed for such corpora- 
 tion," it must be borne in mind that " in common parlance, 
 it [the word * ' servant ' '] is understood to relate and apply 
 only- to a person rendering service of a subordinate, but not 
 necessarily of a menial, character to an employer, varying in 
 its nature, according to the business or occupation in which 
 it is rendered, and not to extend to and include every employe 
 or party who does work for another. The context in which it 
 is used . , . being assoteiated with ' laborers ' and 
 * apprentices,' indicates that it was intended to apply to a 
 person employed to devote his time, and render his service 
 in the performance of work, similar in its general character 
 to that done by those employes." ^ Contractors with a corpo- 
 ation are not within the scope of the statute making its stock- 
 holders liable for debts due its laborers and servants for serv- 
 ices performed for it.' A stockholder of a corporation is not 
 individually liable for a debt due a laborer of a contractor of 
 the corporation for services rendered the contractor.* A 
 consulting engineer cannot be held an operative or laborer of 
 a corporation so as to render its stocHiolders liable for the 
 value of services he renders it.° One employed by a corpo- 
 ration as a civil engineer and traveling agent is a servant who 
 may hold its stockholders for its debt to him.* One per- 
 
 ^ Hill V. ' Spencer, 61 N. Y. 274 * Gallagher v. Ashby, 26 Barb. 143 
 (1874); Gen. Mfg. Act, L. 1848, (1857) ; Gen. R. R. Act, §§ 12, 60. 
 c. 40. The plaintiff's first employ- ^Ericsson v. Brown, 38 Barb. 390 
 ment was called "that of commercial (1862). The special act incorpo rat- 
 agent for the management of their ing the company made its stockhold- 
 commercial and financial affairs in ers liable for debts " to all their 
 California and Mexico;" later "to Laborers and operatives for services 
 manage and conduct their business performed said corporation." The 
 and affairs in that country, the same, court said of such words that they 
 in all respects, as the said company would apply " to a class who obtain 
 could do if located at the place;" their living by coarse manual labor, 
 lastly at a " salary " of $5,000' a as distinguished from professional 
 year. He was held not to be a men ; men who work with their 
 " servant " within the statute. The hands, rather than their heads, 
 present statute, St. Corp. L. §§ 57- Operative, though of very nearly the 
 59, uses the word " employees " in- same signification, is somewhat more 
 stead of " apprentices." comprehensive than labor. 
 
 * Aikin v. Wasson, 24 N. Y. 482 The purpose of the legislature was 
 
 (1862) ; Gen. R. R. Act, L. 1850, to protect a class of men not well 
 
 c. — , § 10. " In some very ex- qualified to protect themselves." The 
 
 tended eases, the directors and other present statute, St. Corp. L. §§ 57- 
 
 principal officers of the corporation 59, uses the words " laborers," " serv- 
 
 may be considered as its agents and ants " and " employees." 
 servants, and yet no one ... ? Williamson v. Wadsworth, 49 
 
 would contend that the provision Barb! 294 (1867) ; L. 1848, c. 40, 
 
 was intended for their benefit." making stockholders liable for cor- 
 
250 BUSINESS CORPORATIONS IN NEW YORX § 224 
 
 forming some manual labor, but merely as an incident to 
 his position of general superintendent of a corporation, is 
 not a laborer, servant or apprentice who may hold a stock- 
 holder for the wages due him/ In determining the liability 
 of a stockholder for corporate debts due the corporation's 
 laborers, servants and apprentices for services performed 
 for it, he cannot be held for the services of a secretary.* 
 Under a statute making stockholders personally liable for 
 debts due by his corporation to " laborers, servants and 
 apprentices ' ', the stockholders are not liable to a book-keeper 
 and general manager of the company who kept an account of 
 all the receipts and disbursements of the company, had charge 
 of its business in the absence of the superintendent, and 
 worked by the year at an annual salary of $1,200.° Under the 
 statute making stockholders personally liable for debts of 
 their corporation ' ' to any of its laborers, servants or 
 employees other than contractors ' ' a bookkeeper paid weekly 
 who keeps the company's books, attends to its banking busi- 
 ness, discharges the usual duties of a bookkeeper and answers 
 inquiries of callers in the absence of the president and the one 
 in charge of the office when the president was not there, may 
 recover of stockholders for his services if judgment therefor 
 against the company is unsatisfied by execution.^" A book- 
 keeper of a corporation may hold its stockholders personally 
 liable for a debt due him from it for services performed for 
 it." One employed by a corporation at an annual compen- 
 sation of $1,000, payable monthly or as he wanted, on con- 
 dition that he obtain for it a loan of $3,000, who acts as 
 foreman, as one of his principal duties did manual labor in 
 manufacturing stone, kept time for the men, solicited orders, 
 collected biUs, and did whatever was required of him, all 
 under the secretary and treasurer of the corporation who 
 acted as general superintendent, is entitled to recover from a 
 stockholder as being a "laborer" or "servant" of the 
 company." 
 
 porate debts due laborers, servants without opinion 218 N. Y. 672, 113 
 
 and apprentices. N. B. 1055; St. Corp. L. § 57. 
 
 ^Krauser v. Ruckel, 17 Hun, 463 ^^Famum v. Harrison, 83 Misc. 
 
 (1879) ; L. 1848, c. 40, § 18. 424, 145 Supp. 36 (1913) ; St. Corp. 
 
 » Coffin V. Reynolds, 37 N. Y. 640 L. § 57. 
 
 (1868) ; Gen. Mfg. Act, L. 1848, " Short v. Medberry, 29 Hun, 39 
 
 e. — , § 18. (1883) ; L. 1848, c. 40, § 18. 
 
 ' Wakefield v. Fargo, 90 N. Y. 213 As to who are laborers, servants 
 
 (1882); L. 1863, c. 63, § 2; L. 1848, or employees under statute making 
 
 c. 40, § 18. . stockholders individually liable, see 
 
 " Fanram v. Harrison, 167 A. D. note in 18 L.R.A. 308. 
 704, 152 Supp. 835 (1915); aff'd 
 
§ 225 STOCKHOLDERS 251 
 
 § 225. Id.: Necessity and Effect of Judgment First Had 
 Against Corporation. — One seeking to hold a stockholder per- 
 sonally for a claim for wages due from the corporation cannot 
 rely on a judgment and execution thereon unsatisfied in an 
 action in a court which had no jurisdiction as satisfying the 
 statutory condition precedent ; but he can rely on a Supreme 
 Court injunction against proceedings by creditors as excusing 
 such a judgment, etc., although rendered in a sequestration 
 action based on a judgment in a court which had no juris- 
 diction." The statutory requirement that no action may be 
 brought against a stockholder for an amount due a laborer 
 for services rendered the corporation until judgment has been 
 recovered against the corporation does not necessitate the 
 perfecting of a judgment in a court of record in which the 
 judgment would be a lien on the corporate realty; so that 
 obtaining a judgment in a Justice's Court, the issuance of an 
 execution by the justice and its return unsatisfied is a compli- 
 ance with the statutory requirement." In order that a laborer 
 may hold a stockholder for wages due him by a corporation 
 he must obtain a judgment in this State (not in another) 
 against the corporation, and must prove that the wages were ' 
 to be paid within one year from the time when the liability 
 therefor was contracted (not simply allege that the labor was 
 rendered the company during stated years).^° In an action to 
 hold stockholders for wages due by their corporation to its 
 servants a judgment recovered against it is essential to the 
 right of action but is proof of nothing beyond the fact of its 
 own existence, and is not evidence of the amount the plaintiff 
 is entitled to recover.^* A judgment by one against a corpo- 
 ration is of itself no evidence against a stockholder of the 
 indebtedness of the company to the judgment creditor in an 
 action against the stockholder to recover the amount of the 
 judgment as the amount due the judgment creditor for 
 services rendered the corporation as laborer." A judgment 
 of the Supreme Court sequestrating a corporation's property, 
 appointing a receiver and forbidding creditors from suing the 
 corporation or interfering with its assets is a sufficient excuse 
 for non-compliance by an employee of the corporation suing a 
 
 "Hunting v. Blun, 69 Hun, 562, "Dean v. Mace, 19 Hun, 391 
 
 23 Supp. 965 (1893) ; aff'd 143 (1879) ; L. 1848, e. 40, §§ 18, 24. 
 
 N. Y. 511, 38 N. E. 716, L. 1848, "Strong v. Wheaton, 38 Barb, 
 
 c. 40, § 18. 616 (1861). 
 
 " Padros v. Swarzenbach, 134 " Truesdell v. Chumar, 75 Hiln, 
 
 A. D. 811, 119 Supp. 589 (1909); 416, 27 Supp. 87 (1894); L. 1848, 
 
 St. Corp. L. § 56 (L. 1892, c. 688, c. 40, § 18. 
 § 55). See now § 57 et seq. 
 
252 BUSINESS CORPORATIONS IN NEW YORK § 226 
 
 stockholder for his unpaid wages with the statutory condition 
 precedent that judgment on the claim had been rendered 
 against the corporation and execution thereon returned 
 unsatisfied ; and the employee is not bound to test the juris- 
 diction of the court to make the injunction against actions 
 against the corporation by disregarding it and suing the 
 corporation." 
 
 § 226. Id.: Pleading, Practice, and Evidence. — ^A complaint 
 in an action against a stockholder to hold him to his personal, 
 statutory liability for wages of a laborer for the corporation 
 which alleges its incorporation under the statute imposing 
 such liability, performance of work for it for two years prior 
 to the date when the amount claimed became due for labor for 
 it as its request, recovery of a judgment within a month there- 
 after against it for such labor, return of execution thereon 
 unsatisfied and the standing of defendant as a stockholder 
 now and when plaintiff performed his work, is sufficient." 
 A complaint in an action to hold stockholders for debts due 
 their corporation's laborers, servants or apprentices is not 
 sufficient if it allege that the services were rendered as the 
 secretary to the corporation; and the addition of the words 
 " and otherwise " does not help the pleading.™ While a 
 laborer for a corporation cannot, after bringing an action to 
 hold stockholders liable for his wages under the statute, dis- 
 continue as to one of them, yet if such one's verified answer 
 denied he was a stockholder, the discontinuance amounts to a 
 withdrawal of the allegation of the complaint that he is a 
 stockholder and the action properly continues as to the other 
 defendants unless there be some other legal evidence that he 
 is a stockholder.^ When an action authorized by the law of 
 the State of New York is brought against one or more per- 
 sons 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 stock- 
 holder thereof by the name so appearing, but who is mis- 
 named or dead or is not liable for any cause.^ In such a case 
 the court, at any time before final judgment, may, upon the 
 
 " Hunting v. Blun, 143 N. Y. 511, ^ Dean v. Whiton, 16 Hun, 203 
 
 38 N. E. 716 (1894). (1878); L. 1848, c. 40, § 18. 
 
 ^» Dempsey v. Willett, 16 Hun, 264 ^ Gen. Corp. L. § 309 (L. 1909, 
 
 (1878); C. C. P. § 519. e. 28). 
 
 ^ Coffin V. Reynolds, 37 N. Y. 640 
 (1868); Gen. Mfg. Act, L. 1848, 
 c. -, § 18. 
 
§ 226 STOCKHOLDERS 253 
 
 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.' 
 An action to hold a stockholder liable for a debt due by his 
 corporation to its servant for wages cannot, under a statute 
 declaring that persons severally liable on the same obligation 
 may all or any be included as defendants, be brought without 
 bringing in all other stockholders/ In an action against stock- 
 holders for wages due laborers, servants and apprentices of 
 their corporation, in which all the stockholders are sued as 
 joint debtors, one or more may compromise his or their lia- 
 bility without destroying the cteditor's claim as to the others/ 
 
 ^Gen. Corp. L. § 309 (L. 1909, 1838, c. 257, authorizing one or 
 
 c. 28). more of several joint debtors to com- 
 
 * Strong V. Wheaton, 38 Barb. 616 pound or compromise their joint in- 
 
 (1861) ; Code, § 120: debtedness in discharge of their 
 
 ^Herries v. Piatt, 21 Hun, 132 joint liability, without affecting the 
 
 (1880); L. 1848, c. 40, § 18; L. liability of the other joint debtors. 
 
CHAPTER VI. 
 
 BONDS AND MORTGAGES 
 
 XI. Bonds and Mortgages. 
 
 A. Definitions, Distinctions and Nature, § 227. 
 
 B. In General, § 228. 
 
 C. Subscriptions, § 229. 
 
 D. Issue and Making. 
 
 1. In General, § 230. 
 
 2. For What Purposes, § 231. 
 
 3. On What as Security, § 232. 
 
 4. No Limit to, § 233. 
 
 . 5. At Less than Par, § 234. 
 6. Stockholder's Consent. 
 
 a. Governing Statutes, § 235. 
 
 b. In General, § 236. 
 
 c. What Consent Sufficient, § 237. 
 
 d. Filing and Recording of, § 238. 
 
 e. To What Mortgages Necessary, § 239. 
 
 E. When Effective, § 240. 
 
 r. Notice of Irregularity, § 241. 
 G. Conversion into Stock, § 242. 
 H. Coupons, § 243. 
 I. Chattel Mortgages, § 244. 
 J. Construction of. 
 
 1. In General, § 245. 
 
 2. When Negotiable, § 246. 
 
 3. Principal Due on Default in Interest Payment, § 247. 
 K. Mortgage Registrars and Trustees. 
 
 1. Registrars and Transferrers, § 248. 
 
 2. Mortgage Trustees. 
 
 a. In General, § 249. 
 
 b. Appointment, § 250. 
 e. Removal, § 251. 
 
 d. Powers, § 252. 
 
 e. Liabilities, § 253. 
 
 L. Actions, Remedies and Liabilities. 
 
 1. 7m General, § 254. 
 
 2. 0/ Bondholders in General, § 255. 
 
 3. Of Bond- and Stock-holders Inter Sese, § 256. 
 
 4. On Foreclosure. 
 
 a. In General, § 257. 
 
 b. 0/ Stockholders, § 258. 
 
 c. 0/ Creditors,.^ 259. 
 
 d. 0/ Bondholders. 
 
 aa. Jw General, § 260. 
 
 bb. To jSwe Direct Instead of Through Trustee, § 261. 
 
 e. Purchaser to Form New Corporation, § 262. 
 
 f. Setting Sale Aside, § 263. 
 
 5. Practice, § 264. 
 
 254 
 
§227 BONDS AND MORTGAGES 255 
 
 § 227. Bonds and Mortgages: Definitions, Distinctions and 
 Nature. — The power of a corporation to borrow money in 
 general is discussed in the three hundred and ninety-fifth sec- 
 tion of this book. ' ' The distinguishing feature of a bond is 
 that it is an obligation to pay a fixed sum, with stated interest. 
 It may or may not be secured, but if it is, and the security 
 proves to be insufficient, the indebtedness is not thereby wiped 
 out. The distinguishing feature of stock is that it confers 
 upon the holder a part ownership of the assets and the right 
 to participate according to the amount of his stock in the 
 surplus profits of the corporation, and ultimately, on its dis- 
 solution, in the assets remaining after the payment of its 
 debts (citations). It is fundamental that a stockholder, 
 whether common or preferred, cannot have a lien on the prop- 
 erty of the corporation, even though the stock by its terms is 
 accorded a lien (citations). . . . a form of security which 
 should possess all the attributes of stock, including a right to 
 share ratably in the profits and increase in value, and at the 
 same time to preserve a specific lien upon the company's 
 assets which should be superior to the claims of creditors 
 . . . cannot lawfully be done. . . ."^ " The word 
 ' debenture ' as defined means ' a writing acknowledging a 
 debt;' when, therefore, a certificate is declared to be a pre- 
 ferred debenture share of capital stock, it presents a legal con- 
 tradiction, a debenture being the acknowledgment of a debt 
 and a share of stock representing a contribution of capital to 
 a corporate business equal to the amount of its face value, 
 either in money or in property. " ^ " . . . mortgages 
 mean the instruments which charge property with the liability 
 to make good the debt its owner has contracted. They may 
 be said to describe a property liability, which is evidenced by 
 the promissory note, or bond of the property .owner. They 
 are collateral, or incident to the debt itself, and where made, 
 . . . to secure the payment of bonds, they cannot properly 
 be termed the debt or liability of the obligor, but only the 
 liability charged upon his property. . . . The word ' mort- 
 gage, ' taken in its literal sense, or in affecting legal conditions, 
 means the liability impressed by the company upon the prop- 
 erty then owned, or thereafter to be acquired. . . ." 
 
 ^ Cass V. Realty Securities Co., Miller, 180 N. Y. 16, 72 N. E. 525 
 
 148 A. D. 96, 132 Supp. 1074 (1904). • 
 
 (1911); afe'd 206 N. Y. 649, 99 ^ Polhemus v. Titehburg R. R. Co., 
 
 N. E. 1105. 123 N. Y. 502, 26 N. E. 31 (1890). ' 
 
 ^People ex rel. Cohn & -Co. v. 
 
256 BUSINESS CORPORATIONS IN NEW YORK §§ 228-230 
 
 § 228. Id.: In General. — Corporate bonds have their situs 
 where they are, not where the corporation maintains a place 
 of business, in so far as an injunction to prevent payment of 
 interest thereon is concerned, pending determination of their 
 ownership.^ In the absence of a statute prescribing a particu- 
 lar form of proof or acknowledgment of a deed or mortgage 
 made by a corporation, a form in use for many years will be 
 held sufficient.^ 
 
 § 229. Id.: Subscriptions. — Under a syndicate agreement 
 bj' which subscribers agree to pay certain sums for the ulti- 
 mate purchase of bonds, and which shows an intention 
 (though not an express statement) of all parties that each 
 subscriber should pay the amount of his subscription to cer- 
 tain persons named as syndicate managers, who in turn should 
 pay it to the lender of the moneys used in purchasing the 
 bonds (taking up bonds to the amount paid and delivering 
 them to the subscriber), the syndicate managers may sue for 
 an unpaid subscription, and it is not necessary that the lender 
 of the moneys, with whom the bonds were pledged, should 
 sue.* An action to cancel a subscription to a syndicate agree- 
 ment for the purchase of bonds of a corporation to be formed 
 may successfully be maintained if the only consideration run- 
 ning to the subscriber is that of the syndicate managers to 
 issue to subscribers upon payment of their subscriptions 
 negotiable receipts in a form prescribed, as the rule that a 
 sufficient consideration for a subscription to stock results 
 from the rights acquired by a subscriber by acceptance of the 
 subscription does not hold when the contract is to become a 
 shareholder in a corporation at a future time.^ 
 
 § 230. Id.: Issue and making, In General. — " In general, 
 the right to mortgage inheres in the ownership of property as 
 much as the right of other disposition ; but it is competent in 
 the case of corporations to restrict their powers and regulate 
 their exercise in such manner as public policy and the inter- 
 ests of those investing their means in these artificial organi- 
 zations may dictate."* There is no rule of law prescribing 
 any particular form to the mortgage given by a corporation 
 pursuant to statute and by consent of its stockholders on its 
 
 * Von Hesse v. Mackaye, 55 Hun, 381, 158 Supp. 830 (1916) ; C. C. P. 
 
 365, 8 Supp. 894; aff'd 121 N. Y. § 449. 
 
 694, 24 N. E. 1099. " ' ' Jennyn v. Searing, 170 A. D. 
 
 ^Pruyne v. Adams Furniture & 707, 156 Supp. 718 (1915). 
 
 Mfg. Co., 92 Hun, 214, 36 Supp. ' Greenpoint Sugar Co. v. Whitin, 
 
 361 (1895). 69 N. Y. 328 (1877) ; L. 1848, c. 40, 
 
 ^ Gallogly V. Whitmore, 172 A. D. as amended L. 1864, c. 517. 
 
§230 BONDS AND MORTGAGES 257 
 
 realty to secure payment of its debts.' A corporation suffi- 
 ciently " owns " realty as to validate the requisite statutory 
 assent to the mortgage by its stockholders if at the time of 
 their signatures to the assent it occupies the premises under 
 a contract of purchase pursuant to which a deed was taken." 
 The burden is on one claiming that corporate bonds which 
 are valid on their face are invalid to prove his contention.'^ 
 There is no objection to a mortgage of corporate realty to 
 E-^cure payment of debts made pursuant to statute because it 
 authorizes a sale, after certain notices specified, in a city of 
 this State, of real estate situated outside the State, as our 
 statute in reference to the sale of mortgaged premises under 
 a power of sale contained in a mortgage has reference only 
 to real estate and mortgages . recorded in this State." A 
 mortgage given by a corporation upon all its property to a 
 trustee to pay its creditors (whom it could not otherwise 
 pay) is invalid if those creditors who do not accept the ten- 
 year bonds, secured thereby, in payment of their claims, are 
 left without any security; because such a scheme is a clear 
 threat to those creditors who will not grant what is virtually 
 a ten-year extension to make doubtful if not worthless their 
 claims." If a resolution of a corporation directing issue and 
 sale of its bonds stipulate that the treasurer and president 
 execute them but do not state who shall sell them and the 
 by-laws do not show what the duties of the corporation's 
 officers are, it is not apparent that this duty falls more directly 
 upon any one than the president, and if he sells some and 
 turns others over to the vice-president to sell, he is not 
 accountable for the latter but only for those he himself sells." 
 A claim that a mortgage given a corporation to secure a loan 
 made by it to an individual is usurious and void because a 
 subscription to its stock was exacted of the borrower as a 
 condition for making the loan cannot be upheld if the con- 
 dition was imposed by an incorporator before the company 
 was incorporated and was never ratified by it." No objection 
 
 » Carpenter v. Black Hawk Gold Mining Co., 65 N. Y. 43 (1875) ; L. 
 
 Mining Co., 65 N. Y. 43 (1875) ; L. 1848, c. 40, as amended L. 1864, 
 
 1848, c. 40, as amended L. 1864, c. 577. 
 
 c. 517. See now St. Corp. L. § 6. ^'Jenkins v. John Good Cordage 
 
 ^^ Greenpoint Sugar Co. v. Whitin, & Machine Co., 56 A. D. 573, 68 
 
 69 N. Y. 328 (1877) ; L. 1848, c. 40, Supp. 239 (1900) ; aff'd 168 N. Y. 
 
 as amended L. 1864, c. 517. See 679, 61 N. E. 1130. 
 
 now St. Corp. It. § 6. "Oswego Gas Light Co. v. B'ozer, 
 
 "Nichols V. Mase, 94 N. Y. 160 111 A. D. 140, 96 Supp. 486 (1906). 
 
 (1883). "Central Park Fire Ins. Co. v. 
 
 "Carpenter v. Black Hawk Gold Callaghan, 41 Barb. 448 (1864). 
 B. C. N. Y.— 17 
 
258 BUSINESS CORPORATIONS IN NEW YORK § 231 
 
 can be made by a corporation holding on to property for 
 which it has issued its bonds that the issue was irregular: 
 ** That kind of plunder which holds on to the property but 
 pleads the doctrine of ultra vires against the obligation to 
 pay for it, has no recognition or support in the law of this 
 state."" 
 
 § 231. Id.: For What Purposes. — No corporation can issue 
 bonds except for money, labor done or property actually 
 received for the use and lawful purposes of the corporation." 
 A corporation may issue and dispose of its obligations, and 
 mortgage its property and franchises to secure the payment 
 thereof or of any debt, if such obligations and mortgage are 
 to secure payment of money borrowed by it or debts con- 
 tracted by it, necessarily, in the transaction of its business or 
 for the exercise of its corporate rights, privileges or fran- 
 chises or for any other lawful purpose of its incorporation.'* 
 " . . . it is not foreign to the lawful business and 
 objects of a corporation to secure payment of its debts by 
 way of mortgaging its property. "'' The statutory authority 
 to a corporation to secure payment of any debt which may 
 be contracted by it in its business by mortgaging its property 
 on consent of holders of two-thirds of its capital stock permits 
 the issue of corporate bonds secured by mortgage on its prop- 
 erty as security not only for corporate debts contracted sim- 
 ultaneously with the delivery of the bond but as well of past 
 debts ; and, possibly, for purposes other than the payment of 
 existing debts.^" The statute authorizing a mortgage of a 
 corporation's realty to secure payment of its debts permits 
 of a mortgage of such realty by it to secure payment of bonds 
 issued to the creditors or sold to raise money to pay them.^ 
 The fact that corporate bonds are unauthorizedly issued for 
 the purpose of raising money to carry on the business as Avell 
 as the authorized and legal purpose of paying debts does 
 not invalidate the mortgage made to secure the bonds insofar 
 
 ^' Seymour v. Spring Forest '" Lord v. Yonkers Fuel Gas Co., 
 
 Cemetery Assn., 144 N. Y. 333, 26 99 N. Y. 547, 2 N. E. 909 (1885) ; 
 
 L.R.A.'859, 39 N. E. 365 (1895). L. 1864, c. 517, § 2, as amended L. 
 
 There was no formal corporate reso- 1871, c. 481, amend'g Gen. Mfg. Act. 
 
 lution of purchase. See now St. Corp. L. § 6. 
 
 "St. Corp. L. § 55 (L. 1909, ^Carpenter v. Black Hawk Gold 
 
 e. 61). Mining Co., 65 N. Y. 43 (1875) ; L. 
 
 "St. Corp. L. § 6 (L. 1909, c. 61). 1847, c. 40, as amended L. 1864, 
 
 "New Britain National Bank v. c. 517. See now St. Corp. L. § 6. 
 Cleveland Co., 91 Hun, 447, 36 
 Supp. 387 (1895) ; aff'd 158 N. Y. 
 722, 53 N. E. 1128. 
 
§ 231 BONDS AND MORTGAGES ' 259 
 
 as it is security for the payment of the debts." " Corpora- 
 tions, unless restrained by their charters, have the power to 
 mortgage their property to secure borrowed money, or their 
 debts," and the statutory permission to corporations to 
 mortgage their property on assent of holders of two-thirds of 
 their capital stock, while it removes the restraint as to mort- 
 gaging realty does too as to personalty; so that as to both, 
 therefore, the mortgage could only be to secure the payments 
 of debts and not to raise money merely to carry on the opera- 
 tions of the company.^ It is not within the province of the 
 Supreme Court to allow the sale of the properties of an in- 
 solvent corporation upon a mortgage for the entire consid- 
 eration with a condition that the amount may be abated from 
 time to time by the mortgagor delivering up stock of the cor- 
 poration, procured by it in any method at a valuation not 
 then ascertained by any legal proceedings or other method 
 than the statement of its value to be found in the corporation's 
 books, as this would be " equivalent to the purchase by an 
 insolvent corporation of its own shares from its stockholders, 
 and would seem to be ultra vires and beyond the power of the 
 court to authorize."* The courts will enjoin a corporation 
 at the behest of a minority stockholder from issuing corporate 
 bonds entitling the holders, after payment in full of principal 
 and interest, to receive an equal share with the stockholders 
 and the balance remaining until the one-half apportioned to 
 the stockholders shall amount to the sum paid into the com- 
 pany's treasury by them, whereupon the bondholders are to 
 receive the entire balance ; because present stockholders can- 
 not be excluded from sharing in the surplus and profits of the 
 company, if any, after payment of the bonded indebtedness 
 and existing prior obligations.^ A corporation formed under 
 a statute permitting the borrowing of money for the purpose 
 of carrying on its business or operations and the mortgaging 
 of its property and franchises to secure payment of its debts 
 contracted for the purpose of its business cannot mortgage 
 except to secure a debt which could be enforced against itself 
 nor borrow after it has transferred all its property and 
 
 ^ Carpenter v. Black Hawk Gold so limiting purpose of mortgage on 
 
 Mining Co., 65 N.'Y. 43 (1875); L. property mortgageable. 
 
 1848, c. 40, as amended L. 1864, * People v. Anglo-American Sav- 
 
 e. 517. See now St. Corp. L. § 6. ings & Loan Assn., 60 A. D. 389, 
 
 ^Carpenter v. Black Hawk Gold 69 Supp. 1054 (1901). 
 
 Mining Co., 65 N. Y. 43 (1875) ; L. = Smith v. Westchester Bronxville 
 
 1848, c. 40, as amended L. 1864, Realty Co., 78 Misc. 75, 137 Supp. 
 
 c. 517, allowing mortgage of realty 690 (1912) ; afE'd 156 A. D. 920, 141 
 
 only. See now St. Corp. L. § 6, not Supp. 1147. 
 
260 BUSINESS COEPORATIONS IN NEW YORK § 232 
 
 franchises to another corporation for the unexpired term of 
 its charter and for any renewal or extended term it might 
 lave, even though such transfer be in the form of a lease." 
 Under a statute permitting a corporation to mortgage its 
 property to secure payment of a debt contracted for the pur- 
 pose of completing, finishing or operating its road, it may 
 pledge its bonds as security for a precedent debt contracted in 
 the process of borrowing money for the construction and 
 operation of its road.' 
 
 § 232. Id.: On What as Security. — A corporation may 
 mortgage its' property and franchises to secure the payment 
 of its obligations and debts, as authorized by statute.' A cor- 
 porate mortgage on realty given pursuant to statute to secure 
 payment of its debts may cover future as well as present real 
 estate of the company.^ "A corporation, without some stat- 
 ute allowing it, can neither sell nor mortgage its franchises ' ' ; 
 but this fact does not invalidate, as security for corporate 
 debts, a mortgage issued by it on its realty pursuant to law 
 to secure payment of such debts, even though it also cover its 
 franchises.^" Bondholders secured by a mortgage on cor- 
 porate property described as projected when the mortgage 
 was made but changed before completion are secured by the 
 completed . property if the mortgage in terms conveys all 
 property to be acquired." When, aftqr a corporate trust 
 mortgage has been made additions are made to its plant, nec- 
 essary to the operation thereof, under a contract by which 
 title thereto remains tiU payment is made therefor in full in 
 the vendor, and the mortgagor becomes insolvent, on fore- 
 closure and sale of such additions together with the mort- 
 gaged property the vendor is entitled from the purchase 
 price first to be paid whatever remains due on the purchase 
 price of the additions." It is probable that a trust mortgage 
 by a gas company extends to after-acquired personal 
 property." 
 
 "Astor V. Westchester Gas-Light L. 1848, c. 40, as amended L. 1864, 
 
 Co., 33 Hun, 333 (1884). c. 517. See now St. Corp. L. § 6, 
 
 ' Duncomb v. New York, Housa- permitting mortgage of franchises, 
 
 tonic & Northern B. R. Co., 84 N. Y. " Elwell v. Grand St. & Newtown 
 
 190 (1881) ; Gen. R. R. Act, L. 1850, B. R. Co., 67 Barb. 83 (1874) ; aff'd, 
 
 c. 140, § 28, subd. 10. see foot-note, p. 85. 
 
 'St. Corp. L. § 6 (L. 1909, c. 61). "Washington Trust Co. v. Morse 
 
 ^Carpenter v. Black Hawk Gold Iron Works & D. & D. Co., 187 
 
 Mining Co., 65 N. Y. 43 (1875) ; L. N. Y. 307, 79 N. E. 1022 (1907). 
 
 1848, c. 40, a^ amended L. 1864, " New York Security Co. v. Sara- 
 
 c. 517. See now St. Corp. L. § 6. toga Gas Co., 88 Hun, 569, 34 Supp. 
 
 "Carpenter v. Black Hawk Gold 890; aff'd 157 N. Y. 689, 51 N. E. 
 
 Mining Co., 65 N. Y. 43 (1875); 1092; L. 1891, c. 171; L. 1871, c. 481. 
 
§§ 233-235 BONDS AND MORTGAGES 261 
 
 § 233. Id.: No Limit to. — The statute puts no limitation 
 upon the issue of corporate bonds and obligations or the 
 making of corporate mortgages to secure them." 
 
 § 234. Id.: At Less Than Par.— " ... A corporation 
 has the power to issue its bonds at less than par.". But " an 
 issue of almost twice the number of bonds, taken at their 
 actual value, necessary to pay the balance due on the property 
 purchased, such issue being made in fact because the stock 
 was really worth no* more than forty per cent, of its par 
 value, would be ... a mere evasion of the statute as to 
 issuing stock at par, and ought not to be tolerated . . ." " 
 Issuance of corporate bonds at less than par does not violate 
 the statutory inhibition of the issue of stocks or bonds other- 
 wise than for money, labor done or property received." 
 
 § 235. Id.: Stockholders' Consent, Governing Statutes. — 
 In addition to the powers conferred by the General Corpo- 
 ration Law every stock corporation has 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 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 such purposes provided that every 
 such mortgage is consented to by the holders of not less than 
 two- thirds of the capital stock of the corporation; except it 
 
 " St. Corp. L. § 6 (L. 1909, c. 61). if that be greater than the paid-up 
 
 The eases decided under the former capital stock." rijmn v. Coney 
 
 statute containing such a limitation Island & Brooklyn R. R. Co., 26 
 
 are given in this note, but are no A. D. 416, 50 Supp. 74 (1898). The 
 
 longer binding. ' A transfer of about fact of an issue of bonds by a cor- 
 
 all a corporation's property by poration beyond one-half the value 
 
 mortgage is not illegal as a virtual of its property does not make the 
 
 termination of its busine^ if made issue void, but voidable only in the 
 
 with the intent and belief that it favor of those who can questitui the 
 
 wwuld enable the continuance of the act of issuing the bonds. New 
 
 business. New Britain National Britain National Bank v. Cleveland 
 
 Bank v. Cleveland Co., 91 Hun, 447, Co., 91 Hnn, 447, 36 Supp. 387 
 
 36 Supp. 387 (1895); aff'd 158 ClSaS) : aff'd 158 N. Y. 722, 53 
 
 N. Y. 722, 53 N. E. 1128. ". . . N. B. 1128; L. 1888, c. 394. 
 section 2 of the Stock Corporation *® Gamble v. Oueens Co. Water 
 
 Law (chap. 564 of 1890, as amended Co.. 123 N. Y. 91. 9 L.R.A. 527, 25 
 
 by chap. 688 of 1912) .applies to N. E. 201 (1890); Gen. Mfg. Act, 
 
 railroad corporations, and that a L. 1848. c. 40, § 2. 
 mortgage must be limited, either bv ^"MacQuoid v. Queens Estates, 
 
 the amount of the paid-up capital 143 A. D. 134, 127 Supp. 867 
 
 stock or by two-thirds of the value (1911) ; St. Corp. L. § 55. 
 of the pr'operty of the corporrftion. 
 
262 BUSINESS CORPORATIONS IN NEW YORK § 235 
 
 be (a) a purchase-money mortgage or (b) a mortgage author- 
 ized by a contract made prior to May first, eighteen hundred 
 and ninety-one." The consent which the holders of not less 
 than two-thirds of the capital stock of a corporation must give 
 to validate any mortgage save a purchase-money one or one 
 authorized by a contract made before May first, eighteen 
 hundred and ninety-one must (1) be either (a) in writing or 
 (b) by vote at a special meeting of the stockholders called 
 for that purpose, and upon the same notice as that required 
 for the annual meetings of the corporation.^^ A certificate 
 (1) under the seal of the corporation (2) that such consent 
 was given by the stockholders (a) in writing or (b) by yote 
 at a special meeting of the stockholders called for that pur- 
 pose upon the same notice as that required for the annual 
 meetings of the corporation, (3) must be (a) subscribed and 
 (b) acknowledged (c) by the president or a vice-president 
 and (d) by the secretary or an assistant-secretary of the cor- 
 poration, which (4) must be (a) filed and (b) recorded in the 
 office of the clerk or register of the county wherein the cor- 
 poration has its principal place of business." The failure of 
 stockholders to give the requisite statutory consent to a cor- 
 porate mortgage need not necessarily invalidate such mort- 
 gage under all circumstances. The statute makes the recital 
 or representation in a mortgage affecting property or fran- 
 chises in New York, executed by authority of its board of 
 directors in behalf of a foreign or domestic corporation of 
 any description, in substance or effect, that its execution has 
 been duly consented to or authorized by stockholders, pre- 
 sumptive evidence after public record of the mortgagte in 
 New York that its execution has been duly and sufficiently con- 
 sented to and authorized by stockholders as required by any 
 provision of law.^° The statute further makes a recital or 
 representation in substance or effect, in any mortgage affect- 
 ing property or franchises in New York executed by author- 
 ity »f the corporation's board of directors in behalf of any 
 domestic or foreign stock corporation of any description, 
 that the execution of such mortgage has been duly consented 
 to or authorized by stockholders, after, such mortgage has 
 been publicly recorded- for more than one year in one or more 
 of the counties of New York State containing the whole or any 
 part of the mortgaged premises and after the corporation 
 
 "St. Corp. L. § 6 (L. 1909, i» St. Corp. L. § 6 (L. 1909, 
 c. 61). c. 61). 
 
 ^«St. Corp. L. § 6 (L. 1909, ^''St. Corp. L. § 7 (L. 1909, 
 c. 61). c. 6f). 
 
§ 236 BONDS AND MORTGAGES 263 
 
 has received value for bonds actually issued under and 
 secured by such mortgage and after interest has been paid 
 on any of such bonds according to the terms thereof, con- 
 clusive evidence that the execution of such mortgage has been 
 duly and sufficiently consented to and authorized by stock- 
 holders as required by any provision of law, and its validity 
 is not impaired by reason of any defect or insufficiency of 
 consent or authority of stockholders or in filing or recording 
 such consent or authority, but the mortgage is valid and 
 binding upon the corporation and those claiming under it as 
 security for all valid bonds issued or to be issued thereunder, 
 unless such mortgage is adjudged invalid because of insuffi- 
 ciency of consent by stockholders in an action begun for such 
 purpose within one year after the earliest record of such 
 mortgage in any county of New York State, provided such 
 action is 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.^ In any such 
 action so bfegun by or on behalf of the corporation the recitals 
 or representations of the mortgage are presumptive evidence 
 after public record thereof within New York only that the 
 execution, of such mortgage has been duly and sufficiently- 
 consented to and authorized by stockholders as required by 
 any provision of law.^ Whenever, in compliance with any 
 law of New York, the officers of any corporation have made 
 and filed and recorded a certificate that the execution of a 
 mortgage made by their corporation has been duly consented 
 to by stockholders, such certificate is conclusive evidence as 
 to the truth thereof in favor of any and all persons who in 
 good faith receive or purchase for value any bond or obliga- 
 tion purporting to be secured by such mortgage, at any time 
 when such certificate remains of record and uncanceled.* 
 Nothing in the statute contained affects any right or any 
 remedy in respect of any such right of any creditor accrued 
 before its enactment.* 
 
 § 236. Id.: In General.— The statutory prohibition against 
 mortgaging corporate property without the consent of a cer- 
 tain percentage of the corporation's stockholders is for the 
 benefit and* protection of the stockholders, to protect them 
 from improvident or corrupt acts of the officers of the com- 
 
 'St. Corp. L. § 7 (L. 1909, ^St. Corp. L. § 7 (L. 1909, 
 c. 61). c. 61). 
 
 = St. Corp. L. § 7 (L. 1909, *St. Corp. L. § 57 (L. 1909, 
 
 c. 61). ■ c. 61). 
 
264 BUSINESS CORPORATIONS IN NEW YORK § 2^7 
 
 pany, and not for the purpose of making corporate mortgages 
 improper per se.^ By the statute requiring the assent of 
 holders of at least two-thirds of a corporation's stock as a 
 condition precedent to a mortgage of its property there is 
 " called into action, the corporation as an artificial entity, 
 the body of the trustees as its agent, and lastly, the constitu- 
 ent members of the corporation or the several individuals 
 composing it. . . . The corporation might become a party 
 to the mortgage, and the trustees direct its officers to 
 execute it; but there must still be the assent of the stock- 
 holder. The will of the whole body, expressed by vote or res- 
 olution, cannot take its place . . . the corporation can- 
 not assent for the stockholders, neither can one stockholder 
 for another ; nor can one who assents on the strength of stock 
 standing in his own name be deemed to represent a propor- 
 tionate amount of the stock owned by the corporation."" 
 It is doubtful if the corporation can raise the point that a 
 mortgage by it lacked the statutory assent of stockholders: 
 certainly it cannot do so while it holds the benefit of any 
 property acquired under4-the.moFtga'ge.' The statute requir- 
 ing assent by stockholders to a mortgage by their corporation 
 does not make a mortgage without such assent improper per 
 se or avoid it if the stockholders treat it as valid, as the stat- 
 ute is intended to protect them only from improvidence or 
 corruption of their officers.* For the purposes of the act 
 requiring assent by two-thirds of a corporation's stock- 
 holders to mortgage of its property, " the amount actually 
 issued and owned should be regarded as the amount of the 
 capital stock. The design was to confer this power of assent 
 upon those who represented two-thirds of the actual stock." '" 
 A judgment of foreclosure of corporate property presupposes 
 due assent by the stockholders to the mortgage, in the absence 
 of proof." 
 
 § 237. Id.: What Consent Sufficient. — The statute requires, 
 as to the consent of stockholders to a mortgage by their cor- 
 
 ^ Greenpoint Sugar Co. v. Whiten, * Market & Fulton Nat. B'k v. 
 
 69 N. Y. 328 (1877); L. 1848, c. 40, Jones, 7 Misc. 207, 27 Supp. 677 
 
 as amend'd L. 1864, c. 517. See (1894) ; aff'd 90 Hun, 605, 35 Supp. 
 
 now St. Corp. L. § 6. 1109; L. 1878, c. 163. See now St. 
 
 °Vail V. Hamilton, 85 N. Y. 453 Corp. L. § 6. 
 (1881); Gen. Mfg. Act, L. 1848, 'Greenpoint Sugar Co. v. Whitin, 
 c. 40, as amend'd L. 1864, c. 517, 69 N. Y. 328 (1877) ; L. 1848, c. 40, 
 § 2, and L. 1871, c. 481. See now as amend'd L. 1864, c. 517. See now 
 St. Corp. L. § 6. St. Corp. L. § 6. 
 . 'Atlantie Trust' Co.- v. Crystal "Denike v. New York and Rosen- 
 Water Co., 72 A. D. 539, 76 Supp. dale Lime and Cement Co., 80 N. Y. 
 647 (1902). 599 (1880). 
 
§ 237 BONDS AND MORTGAGES ; 265 
 
 poration of its property and franchises, that it be given by 
 the holders of not less than two-thirds of the corporation's 
 capital stock, and that it be given either in writing or by 
 vote at a special stockholder 's meeting called for the purpose 
 upon the same notice as is required for the stockholders' 
 annual meeting." No particular form of assent by stock- 
 holders to a mortgage by their corporation of its property, 
 nor what it shall specify or contain, is prescribed: " the stat- 
 ute only requires an assent in writing to securing a debt by 
 mortgage," and it " should receive a practical and not a 
 technical, construction, and especially in the absence of fraud, 
 and in the absence of any objection on the part of those for 
 whose benefit the proviso was inserted, . . . [the court 
 is] not called upon to exercise great astuteness in discovering 
 defects which are not of such a substantial and radical char- 
 acter as to render the assent ineffective for the purpose 
 designed."" If the assent by stockholders to a mortgage by 
 their corporation of its property is defective, it is competent 
 by parol evidence to connect the instrument with the subject 
 matter." A mortgage by a corporation of its franchises, 
 etc., as well as of its real and personal property is inopera- 
 tive as to the franchises, etc., if the required consent of 
 holders of two-thirds of its stock is to the mortgage of its 
 real and personal property only." The statute, " requiring 
 the assent of stockholders to the mortgaging of corporate 
 property, is carried out by a subsequent as well as by a prior 
 assent, and . . . the intent and spirit of the statute per- 
 mits the validating of a mortgage by an assent subsequent to 
 its execution. Such assent makes the instrument as of the 
 time it is given a valid mortgage." ^° A mortgage by a cor- 
 
 ^"^St. Corp. L. § 6 (L..1909, c. 61). unnecessary to specify the amount 
 
 '^^ Greenpoint Sugar Co. v. of the debt, or the character of it." 
 
 Whiten, 69 N. Y. 328 (1877) ; L. See now St. Corp. L. § 6. 
 
 1848, c. 40, as amend'd by L. 1864, " Greenppint Sugar Co. v. Whitin, 
 
 c. 517. " we, stockholders 69 N. T. 328 (1877) ; L. 1848, c. 40, 
 
 of the K. C. M. Co., and owning as amend'd L. 1864, c. 517. See now 
 
 more than two-thirds of the capital St. Corp. L. § 6. 
 
 stock of the said company, do hereby ^* Lord v. Yonkers Fuel Gas Co., 
 
 severally consent that the said K. C. 99 N. Y. 547, 2 N. E. 909 (1885) ; 
 
 M. Co. execute to the G. S. Co. a L. 1864, c. 517, § 2 as amend'd L. 
 
 bond conditioned for the payment 1871, c. 481, amend'g Gen. Mfg. 
 
 of , and a mortgage to secure Act. See now St. Corp. L. § 6. 
 
 the same upon the lands and. prem- *' Rochester Savings Bank v. 
 
 ises by them owned, situate in the Averell, 96 N. Y. 467 (1884) ; Gen. 
 
 city of B., county of K., in the Mfg. Act, L. 1864, c. 517, as 
 
 State of N. Y., or any part thereof " amend'd L. 1871, c. 481. See now 
 
 — held a sufficient consent. " It is St. Corp. L. § 6. 
 
266 BUSINESS CORPORATIONS IN NEW YORK § 237 
 
 poration executed in pursuance of an agreement signed by- 
 its trustees who are also all its stockholders is good, even 
 though no previous assent by stockholders to the agreement 
 as required by statute is given; because the assent by the 
 signers binds them in their joint capacities as trustees and 
 stockholders.** A corporation owning shares of its own stock, 
 in part transferred to an individual as security for an indebt- 
 edness by it to him, cannot by corporate action so give its 
 assent as holder of such shares as to make such assent a part 
 of the assent of holders of two-thirds of its stock to a mortgage 
 by it of its property." It is gravely to be doubted if a motion 
 shown by the minutes of a special meeting of stockholders 
 holding more than two-thirds of the stock that the directors 
 be authorized to borrow a certain sum and secure its pay- 
 ment by the mortgage then before the stockholders, though 
 such minutes be attested by the secretary, is equivalent to the 
 " written assent " of stockholders owning more than two- 
 thirds of the stock of a corporation required by statute to 
 validate such a mortgage ; but if it be insufficient neither the 
 individual signing as president of the corporation the mort- 
 gage reciting the requisite assent, nor a corporation acquir- 
 ing the property expressly subject to the mortgage, nor the 
 corporation itself which has absolutely parted with all interest 
 in the mortgaged property, can question its validity for 
 lack of such stockholders ' consent." s6-cquiescence by a stock- 
 holder in the issue by his corporation of bonds secured by 
 mortgage (even though not authorized by owners of two- 
 thirds of the corporate capital stock) will be presumed when 
 he has held the stock for twelve years and before then his 
 father held it and refused to buy such bonds when offered to 
 him, and throughout all this time interest has been paid on 
 the bonds and they have appeared on the corporation's 
 annual statements." A mortgage given by a corporation hav- 
 ing but two shareholders when an assent thereto, required 
 by statute of stockholders holding at least two-thirds of the 
 stock, is signed, is good.^° 
 
 '« Paulding v. The Chrome Steel Power Co., 3 A. D. 334, 38 Supp. 
 
 Co., 94 N. Y. 334 (1884) ; L. 1881, 395 (1806) ; L. 1888, c. 394. See 
 
 c. 481, § 2; L. 1878, c. 163. See now St. Corp. L. § 6. 
 
 now St. Corp. L. § 6. "Warren v. Bigelow Blue Stone 
 
 " Vail V. Hamilton, 85 N. Y. 453 Co., 74 Hun 304, 26 Supp. 649 
 
 (1881); Gen. Mfg. Act, L. 1848, c (1893); app. dism'd 142 N. Y. 
 
 40, as amend'd L..1864, c. 517, § 2, 669, 37 N. E. 571. 
 
 and L. 1871, c. 481. See now St. ^ Welch v. Importers & Traders 
 
 Corp. L. § 6. Nat. B'k, 122 N. Y. 177, 25 N. E. 
 
 "Beebe v. Richmond Light & 269 (1890); Gen. Mfg. Act, L. 
 
§§ 238, 239 BONDS AND MORTGAGES 267 
 
 § 238. Id.: Filing and Recording of Consent. — The statute 
 requires that the certificate of stockholders' consent to mort- 
 gage must be filed and recorded in the office of the clerk or 
 register of the county wherein the corporation has its princi- 
 pal place of business.^ The filing of an assent by stockholders 
 to a mortgage by their corporation in a wrong county clerk's 
 office by mistake does not invalidate the mortgage as against 
 a subsequent mortgagee with notice.^ A corporate mortgage 
 given under authority of a statute requiring the written 
 assent of stockholders owning at least two-thirds of the corpo- 
 ration's capital stock to be first filed in the county clerk's 
 office is good as against the company and stockholders if the 
 requisite assent be given before the execution of the mort- 
 gage, no rights of creditors intervening, even though, appar- 
 ently, the consent be not filed till after the mortgage is exe- 
 cuted.^ Certainly this is true if the written assent is signed 
 by all the stockholders before the execution of the mortgage 
 and is filed simultaneously with the filing of the mortgage for 
 record.* An assent by stockholders to a mortgage by their 
 corporation of its property filed the same day that the mort- 
 gage is will be inferred to have been filed before the mortgage 
 if necessary to sustain the validity of the transaction, as 
 " the reasonable construction of the statute is, that the mort- 
 gage is valid from the filing of the assent." ^ 
 
 § 239. Id.: To What Mortgages Necessary. — Purchase- 
 money mortgages and mortgages authorized by a contract 
 made prior to May first, eighteen hundred and ninety-one 
 are excepted by the statute from its requirement that stock- 
 holders consent thereto." A purchase money mortgage may 
 be issued by a corporation without the consent of its stock- 
 holders.^ An instrument executed by a corporation assigning 
 
 1848, c. 40, § 2, as amend'd L. 1864, ers' Nat. B'k, 122 N. Y. 177, 25 
 
 e. 517, and L. 1871, c. 481. See N. E. 260. "... the proviso, 
 
 now St. Corp. L. § 6. in respect to the assent of sharehold- 
 
 ^St. Corp. § 6 (L. 1909, e. 61). ers, is for their protection." 
 
 ^ Rochester Savings Bank v. ° Greenpoint Sugar Co. v. Whiten, 
 
 Averell, 96 N. Y. 467 (1884); Gen. 69 N. Y. 328 (1877). 
 Mfg. Act, L. 1864, c. 517, as «St. Corp. L. § 6 (L. 1909, e. 61). 
 amend'd L. 1871, c. 481. See now ^Farmers' Loan & Trust Co. v. 
 
 St. Corp. L. § 6. Equity Gas Light Co., 84 Hun, 373, 
 
 ^Martin v. Niagara Tails Paper 32 Supp. 385 (1895). The agree- 
 
 Mfg. Co., 122 N. Y. 165, 25 N. E. ment to mortgage was made before 
 
 303 (1890); Gen. Mfg.. Act, L. 1848, L. 1890, c. 564, requiring assent of 
 
 c. 40, § 2, as amend'd L. 1864, c. 517 stockholders to corporate mortgage, 
 
 and L. 1871, c. 481. See now St. went into effect. See now iSt. Corp. 
 
 Corp. L. § 6. L. § 6. 
 
 * Welsh V. Importers' and Trad- 
 
2^ BUSINESS CORPORATIONS IN NEW YORK §§ 240-242 
 
 to a mortgagee of realty of which it has the equity the rents 
 thereof and authorizing such mortgagee to enter into posses- 
 sion thereof in order to prevent foreclosure is not a mortgage 
 which must be consented to by two-thirds of the corpora- 
 tion's capital stockholders.* 
 
 § 240. Id.: When Effective. — Bonds of a corporation, 
 though prepared and made complete in form by due execu- 
 tion for the purpose of borrowing money, yet cannot be the 
 subject of attachment nor sale upon execution until delivered 
 by the corporation.' " The ordinary mortgage bond of a 
 railroad corporation represents a loan of money from the 
 holder to the borrower. It becomes a valid obligation and 
 must be regarded as having been issued by the corporation 
 when it is actually delivered for a valuable consideration 
 (citation). Although completely executed in due form to be 
 used as security for borrowed money, such bonds acquire no 
 validity before delivery. . . ."" 
 
 § 241, Id.: Notice of Irregularity. — A buyer in good faith, 
 for value, of bonds conditioned on their face so as not to 
 become obligatory until authenticated by a certificate 
 endorsed thereon in the signature of a named trustee which 
 bear a forged signature of such trustee is not permitted to 
 compel delivery thereof to him by the obligor of good bonds 
 if he make no inquiry save from his vendor." " The presence 
 of due and unpaid coupons on the bond [of a corporation] is 
 sufficient to put the purchaser on inquiry, but they do not of 
 themselves make the bond to which they are attached dis- 
 honored paper."" A bank paying the indebtedness as an 
 individual of an officer of a corporation who owns all but two 
 of its shares and is its secretary and treasurer, on the col- 
 lateral security of its bonds, represented by such secretary 
 and treasurer to be good and valid securities, and of any 
 irregularity or illegality in the issue whereof it had no notice, 
 is not put upon further inquiry." 
 
 § 242. Id.: Conversion into Stock. — The directors may con- 
 fer on the holder of any debt or obligation evidenced by bonds 
 of the corporation (whether such debt or obligation be secured 
 or unsecured) the right to convert the principal thereof into 
 
 * Hirsch v. Twelfth Ward B'k, ^* Maas v. Missouri, Kansas & 
 
 66 Misc. 290, 122 Supp. 1076 Texas Ry. Co., 83 N. Y. 223 (1880). 
 
 (1910) ; St. Corp. L. § 2 (see now " Buffalo L., T. & S. D. Co. v. 
 
 § 6). Medina Gas Co., 162 N. Y. 67, 56 
 
 "Sickles V. Richardson, 23 Hun, N. E. 505 (1900). 
 
 559 (1881). "Buffalo L., T. & S. D. Co. v. 
 
 ^'' Ziimnermann v. Timmermann, Medina Gas €o., 162 N. Y. 67, 56 
 
 193 N. Y. 486, 86 N. E. 540 (1908). N. E. 505 (1900). 
 
§ 243 BONDS AND MORTGAGES 269 
 
 stock of the corporation after two and not more than twelve 
 years from the date of such bonds; provided (1) that the 
 directors are authorized by consent of the holders of not less 
 than two-thirds of the capital stock of the corporation in writ- 
 ing or at a special meeting of the stockholders called for that 
 purpose upon the same notice as that required for the annual 
 meetings of the corporation and a certificate of the giving of 
 such consent in one of such two ways under the seal of the cor- 
 poration, subscribed and acknowledged by the president or a 
 vice-president and by the secretary or an assistant-secretary, 
 is filed and recorded in the oflSce of the clerk or register of 
 the county wherein the corporation has its principal place of 
 business; and (2) that such right be conferred under such 
 . regulations as the directors may adopt." If the capital stock 
 of the corporation is not sufficient to meet the conversion of 
 its bonds into stock pursuant to the statute when made, the 
 directors from time to time must authorize an increase of 
 capital stock sufficient for that purpose by causing a certificate 
 to be filed (a) in the office of the Secretary of State and a 
 duplicate thereof (b) in the office of the clerk of the county 
 where the principal place of business of the corporation is 
 located, which certificate must: (1) be under the seal of the 
 corporation ; (2) be subscribed by the president and secretary 
 of the corporation; (3) be acknowledged by the president and 
 secretary of the corporation; ''4) set forth either (a) a copy 
 of such mortgage or (b) a resolution of the directors authoriz- 
 ing the issue ol such bonds; (5) set forth that the holder-s of 
 not less than two-thirds of the capital stock of the corporation 
 duly consented to the execution of such mortgage or resolu- 
 tion of directors authorizing the issue of such bonds by such 
 corporation; (6) set forth a copy of the resolution of the 
 directors of the corporation authorizing the increase of the 
 capital stock of the corporation necessary for the purpose of 
 such conversion; (7) set forth the amount of capital thereto- 
 fore authorized; (8) set forth the proportion of the capital 
 actually issued; and (9) set forth the amount of the increased 
 capital stock." "When the certificate provided for by the 
 statute has been filed the capital stock of such corporation is 
 increased to the amount specified in such certificate." 
 
 § 243. Id.: Coupons. — ^Detachment from a bond of coupons 
 does not deprive the holders of them of the security of the 
 
 "St. Corp. L. § 6 (L. 1909, c. ^« St. Corp. L. § 6 (L. 1909, c. 
 
 61). 61). 
 
 ^''St. Corp. L. § 6 (L. 1909, c. 
 61). 
 
270 BUSINESS CORPORATIONS IN NEW YORK § 243 
 
 mortgage." One who is simply the owner of a coupon severed 
 from a bond having annexed a guaranty " to the holder of the 
 within bond [of] the punctual payment of the principal and 
 interest thereof when and as the same shall become due and 
 payable ' ' cannot recover on the guaranty." A corporation is 
 entitled to show that one suing to recover the amount of a 
 coupon detached from a bond issued by it, though he acquired 
 it before maturity, yet did not obtain it in good faith and for 
 value." In determining whether a corporation is liable for 
 interest on its bonds from their due date to the date of trial 
 ' ' the Court of Appeals lays down, as to interest coupons, the 
 rule that interest follows the principal and cannot be com- 
 pounded unless there are circumstances which create an 
 exception to the general rule," and such circumstances must 
 be plead and proven.™ Coupons of corporate bonds which 
 are in distinct terms promises to pay the bearer the amount 
 specified therein at a day and place named are transferable by 
 delivery, promissory notes for the payment of money to the 
 holder, transferable by delivery though detached from their 
 parent bonds; and that they are declared to be for interest 
 upon bonds specified by their numbers and are under seal, 
 does not destroy their negotiability when detached from the 
 bonds.^ Coupons attached to corporate bonds which are 
 termed upon their face " interest warrants," not on their face 
 negotiable or payable to any person by name or to his order 
 or the order of bearer or of a fictitious person, are not 
 negotiable and do not pass by delivery.^ One advancing 
 money to another to pay maturing coupons of a corporate 
 bond and mortgage, under an agreement with the corporation, 
 but unknown to the bondholders, that he should hold the 
 coupons as security for his advance, cannot on foreclosure 
 share, as to the coupons paid by such other with his advance 
 and delivered to him, in the funds realized on foreclosure pro 
 rata with the other holders of bonds and coupons.' Although 
 an action may be maintained upon the coupons to a bond with- 
 out the production of the bond, a recovery must be based on 
 the obligation contained in the bond and no recovery can be 
 
 ^H'nion Trust Co. v. Monticello Light Co., 33 Misc. 596, 67 Supp. 
 
 & Port Jervis Ry. Co., 63 N. Y. 311 922 (1901). 
 
 (1875). ^Evertson v. National B'k of 
 
 "Clokey v. Evansville & Terre Newport, 66 N. Y. 14 (1876). 
 
 Haute R. R. Co., 16 A. D. 304, 44 ^Evertson v. National B'k of 
 
 Supp. 631 (1897). Newport, 66 N. Y. 14 (1876). 
 
 ^° Wisner v. Osteyee Bros., 23 ' Union Trust Co. v. Monticello & 
 
 Misc. 123, 50 Supp. 689 (1898). Port Jervis Ry. Co., 63 N. Y. 311 
 
 ^ Klein v. East River Electric (1875). 
 
§ 244 BONDS AND MORTGAGES m 
 
 had contrary to the agreement therein expressed.* The same 
 Statute of Limitations bars an action on coupons attached to 
 a bond as bars an action on the bond itself ; so that if it be 
 under seal, an action on the coupons is not barred for twenty 
 years/ _ On judgment had for damages against one sued for 
 conversion of corporis off a corporate bond, and satisfaction 
 thereof, the title to the coupons vests in such one, and he may 
 sue the corporation on such coupons.* A corporate bond with 
 coupons attached, or detached if still in the hands of the bond- 
 holder, are mere evidences of the indebtedness of the corpo- 
 ration, which may, as a condition of redemption by it pur- 
 suant to the bond's conditions, require the surrender of such 
 detached coupons as well as those attached ; and if this be not 
 done, interest ceases on the date of such tender.'' 
 
 § 244. Id. : Chattel Mortgages. — ^A corporation may borrow 
 money on a mortgage of its real as well as its personal prop- 
 erty.* The statutory provision that corporate mortgages 
 other than purchase money mortgages shall be consented to 
 by not less than two-thirds of the stockholders does not apply 
 to a renewal chattel mortgage given by a corporation as 
 transferee of an interest in a lease from an individual con- 
 taining an obligation, which it assumed, to deliver a new 
 chattel mortgage each year to secure payment Of liquidated 
 damages provided for in such lease and of certain personalty 
 as well ; because the obligation to renew was part of the pur- 
 chase price of the chattels.' A chattel mortgage assumed by 
 a corporation on buying the chattels covered thereby and 
 which was given by the corporation's vendor as a purchase 
 money mortgage, is not such a mortgage as requires the 
 assent of two-thirds of the corporation's stockholders to 
 validate it." In determining if two-thirds of the stockholders 
 of a corporation give their consent to its chattel mortgage so 
 as to make it valid, " it is the amount of stock actually issued 
 and owned which is taken into account. " " A corporate mort- 
 
 * McClelland v. Norfolk Southern Supp. 387 (1895); aff'd 158 N. Y. 
 
 R. R. Co., 110 N. Y. 469, 1 L.R.A. 722, 53 N. E. 1128; L. 1888, e. 394, 
 
 299, 18 N. E. 237 (1888). limiting mortgage to realty. See 
 
 ^Kellv V. Forty-Second St. R. now St. Corp. L. § 6. 
 
 Co., 37" A. D. 500, 55 Supp. 1096 = Black v. Ellis, 197 N. Y. 402, 90 
 
 (1899). N. E. 958 (1910); St. Corp. L. 
 
 « Kelly V. Forty-Second St. R. § 2. (See now § 6.) 
 
 Co., 37 A. D. 500, 55 Supp. 1096 i" Black v. Ellis, 58 Misc. 391, 111 
 
 (1899). Supp. 347 (1908); aff'd 129 A D. 
 
 'Bailev v. County of Buchanan, 140, 113 Supp. 558. 
 
 115 N. Y. 297, 6 L.R.A. 562, 22 " Swan v. Stiles, 94 A. D. 117, 87 
 
 N. E. 155 (1889). Supp. 1089 (1904); St. Corp. L. 
 
 «New Britain National Bank v. § 48 (L. 1892, c. 688). Now § 6. 
 Cleveland Co., 91 Hun, 447, 36 
 
272 BUSINESS CORPORATIONS IN NEW YORK § 345 
 
 gage of realty and personalty as security for bonds which is 
 recorded as a mortgage of realty need not be filed as a chattel 
 mortgage, too.'^ The defense of the invalidity of a corporate 
 chattel mortgage on the ground of failure to comply with the 
 statutory requirements in its execution is available to the cor- 
 poration as a defense to an action against it." "A [corpo- 
 rate] mortgage may be so drawn as to embrace within its lien 
 property that may be acquired by the mortgagor subsequent 
 to the execution of the mortgage . . . But such a mort- 
 gage, as to chattels not in esse when it is executed, is merely 
 an executory contract to give a lien which a court of equity 
 may enforce, as between the parties, when the chattels come 
 into existence, or which the mortgagee may, in some cases, 
 make effective by taking actual possession of the after- 
 acquired property. ' ' " 
 
 § 245. Id.: Construction of, In General. — " It is in the 
 highest degree important that there should be a strict adher- 
 ence to those terms [of bonds] and, if a doubt may arise in 
 construction, it should rather be resolved in favor of the bond- 
 holder."" When " choses in action " are made the subject 
 of a corporate mortgage, and the phrase is associated with 
 such items as " bills receivable, debts, demands, dues and 
 accounts," those kindred terms define " choses in action " as 
 property ejusdem generis; and they do not include causes of 
 action arising out of torts committed after the execution of 
 the mortgage, but rather such choses as might come into exist- 
 ence and be acquired by the mortgagor through its contractual 
 relations with others in the regular course of business." If 
 one contract to deliver to another a portion of the bond issue 
 of a corporation ' ' when, as and if issued, " it is not meant 
 that no delivery need be made till the bonds are wholly issued, 
 but that such delivery must be made when the issue of bonds 
 is reasonably large enough to make fulfillment of the contract 
 practicable to the seller at the time when delivery should be 
 
 "Guaranty Trust Co. v. Troy S. D. Co., 193 N. Y. 92, 85 N. E. 
 
 Steel Co., 33 Misc. 484, 68 Supp. 801 (1908). 
 
 915 (19O0) ; L. 1895, c. 529, amend'g " St. Louis «& San Francisco Rail- 
 
 L. 1868, c. 779, so as to make ap- road Co. v. Guaranty Trust Co. of 
 
 plicable to mortgages by any eorpo- N. Y., 205 N. Y. 609, 98 N. E. 162 
 
 ration. See now St. Corp. L. § 6. (1912). 
 
 *^ London Realty Co. v. Coleman "MacDonnell v. Buffalo L., T. & 
 
 Stable Co., 140 A. D. 495, 125 Supp. S. D. Co., 193 N, Y. 92, 85 N. E. 
 
 410 (1910) ; St. Corp. L. § 6. SOI (1908). 
 
 "MacDonnell v. Buffalo L., T. & 
 
§ 245 BONDS AND MORTGAGES 273 
 
 called for." When a valid, written agreement has been made 
 by one business corporation to give a first mortgage upon its 
 assets for a certain amount and for a specified consideration 
 to another business corporation which has fully performed on 
 its part, an effort by the former corporation to perform its 
 legal obligation by giving the mortgage is binding in equity as 
 against. junior judgment creditors even though certain statu- 
 tory requirements have not been observed/* When a mort- 
 gage by a corporation to secure the payment of the principal 
 and interest of its bonds, although in terms purporting to 
 include future earnings and products, stipulates that until 
 default the mortgagor shall have the use of the earnings in 
 the conduct of its business, and that upon default the mort- 
 gagee may go into possession, exercise the corporate fran- 
 chises and appropriate the earnings to the payment of the 
 debt secured by the mortgage, the mortgage does not, as 
 against general creditors, operate as a lien upon such earn- 
 ings until actual entry and possession under the mortgage by 
 the mortgagee.^" If a trust mortgage require delivery of 
 ' ' any ' ' of the bonds secured thereby to the mortgagor by the 
 trustee a't the indefinite and unlimited choice of the mort- 
 gagor, the word ' ' any ' ' must be construed ' ' all. " ^" To 
 entitle a holder of corporate bonds to exchange them for stock 
 under a provision in the bonds permitting their conversion 
 into stock " at any time within ten days after any dividend 
 shall have been declared and become payable on said pre- 
 ferred stock, upon the delivery ... of this bond and the 
 unmatured coupons, ' ' the bonds must be presented within ten 
 days after a dividend had been declared and become payable, 
 and there must then be unmatured coupons attached thereto : 
 they could not be presented after the bonds had matured and 
 the coupons all been paid.^ Under a sinking fund provision 
 in a trust mortgage to secure a bond issue that the grantor 
 pay the trustee annually ' ' an amount which shall equal, in the 
 following years [thereafter specified], the following percent- 
 ages [thereafter also specified] of the entire amounts of bonds 
 
 " Zimmermann v. Timmermann, G. & El. L. Co., 159 N. Y. 137, 45 
 
 193 N. Y. 486, 86 N. B. 540 (1908). L.R.A. 132, 53 N. E. 758 (1899). 
 
 ^* Hamilton Trust Co. v. Clemes, ^^ Fleisher v. Farmers' Loan & 
 
 163 N. Y. 423, 57 N. E. 614 (1900) ; Trust Co., 58 A. D. 473, 69 Supp. 
 
 Stock Corp. L. §§20, 24, 29. A 437 (1901). 
 
 contract to give a mortgage was ^ Carpenter v. Chicago, Milwaukee 
 
 caused to be entered into by the cor- & St. Paul R. Co., 119 A. D. 169, 
 
 poration by three directors named in 104 Supp. 152 (1907) ; aff'd 192 
 
 the certificate of incorporation. N. Y. 586, 85 N. E. 1107. 
 
 ^'N. Y. Security Co. v. Saratoga 
 B. C. N. Y.— 18 
 
274 BUSINESS CORPORATIONS IN NEW YORK § 246 
 
 which shall have been issued and outstanding on said dates ' ' 
 for certain purposes, if some of the bonds have been bought, 
 redeemed and cancelled by funds from other sources than the 
 sinking fund payments, " the estimated annual percentages 
 are to be paid upon the whole amount of bonds issued for the 
 particular purpose mentioned . . . , including all of such 
 bonds as . may have been purchased by the trustee with 
 percentages already paid, which, for the purpose alone of 
 calculating the sinking fund payments, are to be deemed out- 
 standing, but not including any bonds issued for that purpose 
 which may have been purchased, redeemed and cancelled with 
 moneys not derived from the payment of percentages speci- 
 fied . . . . " ^ A purchaser from one receiving, as col- 
 lateral to an indebtedness by a corporation to him, its bonds 
 endorsed as " consolidated first mortgage bonds," in reliance 
 upon there being some of such bonds, cannot hold the corpo- 
 ration and its officers on the ground that they are first mort- 
 gage bonds if the mortgage would have shown, had it been 
 inspected, that the design was to substitute such bonds for 
 others previously issued and secured by mortgage and that 
 the prior bondholders would all have to consent to the 
 substitution/ 
 
 § 246. Id. : When Negotiable. — ' ' It is undoubtedly the gen- 
 eral rule that the bonds of railroad, manufacturing, municipal 
 and other like corporations, payable to bearer, issued for the 
 purpose of securing loans of money, are, in this country, 
 deemed negotiable, and coupons thereto attached partake of 
 the same character (citations). But when such instruments 
 contain special stipulations and their payment is subject to 
 contingencies not within the control of their holders, they are, 
 by established rules, deprived of the character of negotiable 
 instruments, and become exposed to any defense existing 
 thereto, as between the original parties to the instrument. ' ' * 
 Corporate bonds, though under seal, when they are " issued 
 to secure the payment of money upon time, and contain on 
 
 ^ Ckilumbia Gas & Electric Co. v. bearer, of a certain sum at a time 
 
 Knickerbocker Trust Co., 152 A. D. capable of exact ascertainment {cita- 
 
 5, 136 Supp. 840 (1912). tions). It would seem, therefore, 
 
 ^ Caylus V. New York, Kingston if these coupons were subject to the 
 
 & Syracuse R. R. 'Co., 10 Hun, 295 condition that the time of their pay- 
 
 (1877) ; aflf'd 76 N. Y. 609. ment could be changed, altered or 
 
 * McClelland v. Norfolk Southern postponed from time to time at the 
 
 R. R. Co., 110 N. Y. 469, 1 L.R.A. option of a majority of the holders 
 
 299, 18 N. E. 237 (1888). "It is of the series of bonds simultaneously 
 
 essential . . . that such paper issued therewith, it would deprive 
 
 should provide for the unconditional them of one of the essential charac- 
 
 pnyment to a person, or order, or teristics of negotiable paper." 
 
§§ 247, 248 BONDS AND MORTGAGES 275 
 
 their face an expression showing that they are expected to 
 pass from one person to another, and thus to perform the 
 office of bills and notes or of money, as the words ' bearer,' 
 or ' assigns,' or ' the holder,' or the like," are negotiable; and 
 blank assignments signed by the payees are sufficient to trans- 
 fer them/ 
 
 § 247. Id.: Principal Due on Default in Interest Payment. — 
 The reasonable construction of a clause in a railroad bond 
 that " in case of default in the payment of any of the interest 
 coupons ... in the manner provided in the trust deed 
 and mortgage . . . the principal sum . . . shall become 
 due in the manner and with the effect provided in the said 
 trust deed or mortgage " is that the " principal sum of the 
 mortgage debt, upon the failure to pay interest thereon, 
 was not intended to be made payable except in the manner 
 specifically provided by the terms of the mortgage. ' ' ^ Under 
 a guaranty by a corporation of payment of the principal and 
 interest of a bond according to its tenor, to wit, that on default 
 of interest the principle might be collected as stipulated in the 
 mortgage, which provided that on a default continuing six 
 months after demand by the trustees in the deed of trust 
 the principal at their election should become immediately 
 collectible from the mortgaged premises, the corporation 
 becomes liable to a bondholder for interest immediately on 
 default in payment thereof, but for principal only when the 
 principal itself becomes due — whatever may be its obligation 
 to the trustees.'' A holder of a bond guaranteed by a corpo- 
 ration to the extent of punctual payment of principal and 
 interest sa that in case of default in payment of principal or 
 any interest the principal should become due at the trustees' 
 election may hold the guarantor corporation liable for the 
 principal as soon as the trustees have elected.^ A provision 
 for foreclosure of a trust mortgage at the option of the holders 
 of the bonds it secures on default in payment of principal or 
 interest for a stated period does not require that the option 
 be exercised by all bondholders.^ 
 
 § 248. Id.: Mortgage Registrars and Trustees, Registrars 
 and Transferrers. — ' ' When bonds are registered the company 
 
 ^ Brainerd v. New York & Harlem ^ Dougan v. Evansvilie & Terre 
 
 R. R. Co., 25 N. Y. 496 (1862). Haute R. R. Co., 15 A. D. 483, 44 
 
 ^Batchelder v. Council Grove Supp. 503 (1897). 
 
 Water Co., 131 N. Y. 42, 29 N. E. ^Atlantic Trust Co. v. 'Crystal 
 
 801 (1892). Water Co., 72 A. D. 539, 76 Supp. 
 
 'Dougan v. Evansvilie •& Terre 647 (1902). 
 Haute R. R. Co., 15 A. D. 483, 44 
 Supp. 503 (1897). 
 
276 BUSINESS CORPORATIONS IN NEW YORK § 249 
 
 registering them undertakes to keep a registry of them, not 
 to transfer them except upon the books of the company by 
 direction of the owner or by his duly authorized attorney, and 
 to pay the interest accruing on the bonds and the principal 
 when due to the registered owner. " " A company registering 
 bonds in the name of their charitable-corporation owner, 
 engaged in no commercial business, is liable for its act in 
 enabling the treasurer of the owner to have the bonds trans- 
 ferred so as to be subject to his individual order and conver- 
 sion." A corporation transferring its bonds registered in the 
 name of an executor to his individual name upon the strength 
 of his rubber stamp endorsement forged by the thief of the 
 bonds is liable to the registered owner for their value." While 
 to an action to set aside corporate securities a depositary 
 thereof and agent for the exchange thereof is a proper party, 
 a registrar is not, if the only ground for joining it is that it 
 countersigns the stock certificates in order that the stock may 
 be listed on the Stock Exchange." 
 
 § 249. Id.: Moj%age Trustees, In General. — A mortgage by 
 a corporation, pursuant to statute, of its realty to secure pay- 
 ment of its debts, need not be given to a creditor direct, or a 
 separate mortgage to each creditor, but may be to one person 
 in trust for the benefit of all creditors." If only such bonds 
 are secured by the lien of a trust mortgage as are certified by 
 the trustee, coupons detached therefrom before the bonds 
 are certified, sold or delivered, and before they had any incep- 
 tion as secured obligations, do not come within the protection 
 of the mortgage lien." A mortgagor cannot compel a corpo- 
 rate mortgage trustee to redeem the bonds in any way other 
 than that provided for by agreement so as to accomplish, 
 through a sinking clause provision, a calling in of certain out- 
 standing bonds on a basis less favorable to the holders thereof 
 than if the mortgagor had performed instead of violated his 
 agreement." 
 
 ^° Clarkson Home v. Missouri, K. ** Carpenter v. Black Hawk Gold 
 
 & T. R. Co., 182 N. Y. 47, 70 L.R.A. Mining Co., 65 N. Y. 43 (1875) ; L. 
 
 787, 74 N. E. 571 (1905). 1847, c. 40, as amended L. 1864, 
 
 " Clarkson Home v. Missouri, K. c. 517. See now St. Corp. L. § 6. 
 
 & T. R. Co., 182 N. Y. 47, 70 L.R.A. " Holland Trust Co. v. Thomson- 
 
 787, 74 N. E. 571 (1905). Houston El. Co., 170 N. Y. 68, 62 
 
 '^Che&ter County Guarantee N. E. 1090 (1902). 
 
 Trust & Safe Deposit Co. v. Seeuri- "Missouri, K. & -T. R. Co. v. 
 
 ties Co., 165 A. D. 329, 150 Supp. Union Trust €o., 156 N. Y. 592, 51 
 
 1010 (1904). N. E. 309 (1898). 
 
 "Pollitz V. Wabash R. R. Co., 142 
 A. D. 755, 127 Supp. 782 (1911). 
 
§§ 250-252 BONDS AND MORTGAGES 277 
 
 § 250. Id.: Appointment. — An owner and holder of the 
 bonds of a corporation as to the validity of some of which 
 there is question should not be appointed as trustee, particu- 
 larly if under the mortgage the trustee has certain discretion- 
 ary powers." *A court of equity will not, at the instance of 
 one who represents neither the mortgagor nor the mortgagee, 
 nor any of the bondholders under a mortgage, interfere 
 because of any alleged irregularity in its appointment of a 
 corporate trustee as successor to an insolvent corporate 
 trustee when the former is acting at the request of and by the 
 consent of all the parties interested.^' The Supreme Court, as 
 successor to the Court of Chancery, has power to appoint a 
 successor corporate trustee to a predecessor corporate trustee 
 of a trust mortgage which has become insolvent; and if the 
 appointment be irregular it must be negatived by appeal or 
 motion for rehearing.^' 
 
 § 251. Id.: Removal. — A good cause of action for the 
 removal of a mortgage trustee is alleged in a complaint show- 
 ing a judgment of foreclosure and sale (though containing no 
 direction to convey) and refusal of the trustee to convey, if 
 the judgment was later amended so as to direct conveyance 
 by the trustee without notice to the latter till after the amend- 
 ment was made, provided the trustee then took no action to 
 annul the amendment.^" The inability of the court to appoint 
 another trustee under a mortgage giving the bondholders 
 power so to do will not deprive it of power to remove the 
 incumbent trustee.^ A trustee of a corporate mortgage may 
 be removed for consenting to the subordination of the lien 
 of the mortgage to expenditures on the mortgaged property.^ 
 Some of the holders of corporate trust bonds may for their 
 own benefit and the benefit of the holders of the rest of the 
 bonds sue to remove the trustee, itself a corporation.^ 
 
 § 252. Id.: Powers. — A corporate trustee may come into 
 court as the representative of its cestuis que trustent, resi- 
 dents of different states and many of them unknown, to seek 
 
 " Matter of Radam Microbe Killer ^ Harrison v. Union Trust Co., 
 
 Co., 110 A. D. 329, 97 Snpp. 76 144 N. Y. 326, 39 N. E. 353 (1895). 
 
 (1906). 'Gibson v. American Loan & 
 
 " New York Security Co. v. Sara- Trust Co., 58 Hun, 443, 12 Supp. 
 
 toga Gas Co., 88 Hun, 569, 34 Supp. 444 (1890). 
 
 890; aff'd 157 N. Y. 689, 51 N. E. ^Gibson v.' American Loan & 
 
 1092. Trust Co., 58 Hun, 443, 12 Supp. 
 
 ''New York Security Co. v. Sara- 444 (1890). 
 t(^a Gas Co., 88 Hun, 569, 34 Supp. ■ ^ Gibson v. American Loan & 
 
 890; afE'd 157 N. Y. 689, 51 N. E. Trust Co., 58 Hun, 443, 12 Supp. 
 
 10O2. 444 (1890). 
 
278 BUSINESS CORPORATIONS IN NEW YORK § 252 
 
 the court's direction as to a fund held by it as trustee, and 
 claimed by one person only in hostility to the trust, by making 
 that one only a defendant.* A mortgage trustee required by 
 court order to bid on foreclosure " up to " a certain sum may 
 in his discretion bid a larger sum.' Althou^ under a trust 
 mortgage the trustee's power to purchase on foreclosure is 
 dependent on the written request of a majority of the bond- 
 holders, yet he must be held to have the right to buy, even 
 though no such consent be given, as against a bondholder who 
 intervened in the foreclosure proceedings and secured a court 
 order directing the trustee to bid for the benefit of all bond- 
 holders.° A mortgage trustee authorized by the mortgage in 
 case of default to form a new corporation for the benefit of 
 the bondholders and reconvey the corporation's property to 
 it, if bought in by him on foreclosure, cannot sell the property 
 bid in by him at all.' A trustee may foreclose corporate bonds 
 which are negotiable as though he were the bondholders and 
 has the advantage of the presumption in their favor, from the 
 negotiable character of the bonds, that they were issued for 
 consideration.* One of two trustees of a mortgage to secure 
 a series of corporate bonds may sue alone as such to foreclose 
 without asking his co-trustee to join him, and may make the 
 latter a party defendant, if the latter be a director in the com- 
 pany against which it is sought to enforce the mortgage." One 
 claiming to own a temporary receipt exchangeable for a per- 
 manent corporate bond cannot enjoin the trustee of the mort- 
 gage securing the bonds from delivering any of the permanent 
 bonds to anyone holding a temporary receipt if no one denies 
 that the holders of such receipts are entitled to such bonds.'" 
 
 * Holland Trust Co. v. Sutherland, closure proceedings on the interven- 
 
 177 N. Y. 327, 69 N. E. 647 (1904). tion of a bondholder asking court 
 
 A foreign corporation deposited directions to the trustee; or though 
 
 money Tvith plaintiff to pay its cou- the new corporation was to bo 
 
 pons shortly to mature; but before organized in such manner as the ma- 
 
 sueh maturity defendant attached jority bondholders directed, and 
 
 the deposit as the property of a they instead requested a sale, 
 
 non-resident defendant. 'Atlantic Trust Co. v. Crystal 
 
 ° James v. Cowing, 82 N. Y. 449 Water Co., 72 A. D. 539, 76 Supp. 
 
 (1880). 647 (1902). 
 
 ° James v. Cowing, 82 N. Y. 449 ' Cumming v. Middletown, Union- 
 
 (1880). ville & Water Gap R. R. Co., 147 
 
 'James v. Cowing, 82 N. Y. 449 A. D. 105, 131 Supp. 710 (1911); 
 
 (1880). This is true though he C. C. P. § 448. 
 
 bought by order of court, and nbt ^"MoCaddon v. Central Trust Co. 
 
 on consent of a majority of stock- of N. Y., 167 A. D. 897, 151 Supp. 
 
 holders as provided by the mortgage, 646 (1915). 
 if the court order was made in fore- 
 
§ 252 BONDS AND MORTGAGES 279 
 
 It is doubtful if a resolution by the board of directors of a 
 corporate trustee of a mortgage is necessary to make valid a 
 notice by its secretary of exercise of option to declare the 
 mortgage principal due; but, if such a notice be insufficient, 
 the institution of suit is certainly sufficient notice of intent to 
 exercise such option." There is nothing in the language of a 
 corporate mortgage, that the trustee shall pay out the pro- 
 ceeds of the bonds only on the order of certain committees or 
 officers of the corporation which " shall include a written 
 statement, or memorandum, declaring the purpose, or pur- 
 poses, for which the proceeds of said bonds so ordered to be . 
 paid over are to be appropriated or used," to warrant an 
 express covenant by the trustee to exact from the committees 
 or officers of the corporation such a statement ; but an implied 
 covenant to this effect will be found by a court, of equity." It 
 is at least doubtful whether a mortgage trustee which has 
 instituted foreclosure proceedings alleging a proper written 
 request from the bondholders to do so under the terms of the 
 bond, can later maintain the action upon the ground that it 
 was voluntarily commenced by it, if the request was invalid." 
 A corporation organized independently and with a larger 
 capital and additional stockholders than one authorized by a 
 mortgage to be organized by the mortgage trustee to take over 
 the mortgaged property on foreclosure cannot be considered 
 to satisfy the requirements of the mortgage." A court of 
 equity will not tolerate an agreement by which a trustee of a 
 trust mortgage on whom rests the duty of protecting the 
 interests of the bondholders for whose benefit the mortgage 
 was executed and a temporary receiver obligated to preserve 
 the property of his sectui que trust agree with a third party 
 to sell the last named the property secretly and for an inade- 
 quate consideration, thereby securing to themselves the 
 benefit of a sale thus conducted at the expense of the parties 
 towards whom they occupied a fiduciary relation." 
 
 ^^ New York Security Co. v. Sara- " Farmers' Loan & Trust €o. v. 
 
 toga Gas Co., 88 Hun, 569, 34 Supp. New York & N. R. Co., 150 N. Y. 
 
 890; aff'd 157 N. Y. 689, 51 N. E. 410, 34 L.R.A.. 76, 44 N. E. 1043 
 
 1092. (1896). 
 
 " Rhinelander v. Farmers' Loan " James v. Cowing, 82 N. Y. 449 
 
 & Trust Co., 172 N. Y. 519, 65 N. E. (1880). 
 
 499 (1902). The action on the cove- "Atkins v. Judson, 33 A. D. 42, 
 
 nant was held not to come within the 53 Supp. 504- (1898). 
 twenty but within the six year stat- 
 ute of limitations; and so to be 
 barred. 
 
280 BUSINESS CORPORATIONS IN NEW YORK §§ 253, 254 
 
 § 253. Id.: Liabilities. — A certificate endorsed by a mort- 
 gage trustee of a corporate mortgage upon each bond that 
 " this bond is one of a series of bonds mentioned and 
 described in the mortgage within referred to," when the 
 bonds so certified are each endorsed by the mortgagor as a 
 " First Mortgage Bond," does not make the trustee liable as 
 guarantor for the nature and extent of the security, so as to 
 hold it if the bonds are later cut off by foreclosure of a first 
 mortgage."* In accepting the position of trustee under a trust 
 mortgage the trustee undertakes to discharge the duty and 
 exercise the care and diligence which would naturally be 
 expected of an intelligent person acting in like circumstances 
 to protect his own mortgage.^* A trustee of a trust corporate 
 mortgage must himself or itself actually and not nominally 
 take what legal proceedings are necessary to protect the bond- 
 holders ; and if he or it permit certain bondholders in its name 
 to assume complete control of such proceedings he or it is 
 liable for any damages sustained by any other bondholder 
 because of its negligence.^' If all that is required of a trustee 
 under a trust mortgage as a condition precedent to delivery 
 by it to the mortgagor of the bonds secured by the mortgage 
 be a specified statement, the trustee is not bound, if it receive 
 such a statement, to inquire into application of the proceeds 
 of the bonds or the order in which they are applied by the 
 mortgagor.^^ To hold a mortgage trustee as upon a sealed 
 instrument and so in an action of covenant not limited save 
 by the twenty year Statute of Limitations the covenant may 
 be implied as well as expressed; but the obligation assumed 
 by the trustee under the instrument must be clear." 
 
 § 254. Id.: Actions, Remedies, and Liabilities, In General. — 
 When fraud has been committed in the sale of corporate 
 bonds, the right of action is not dependent upon the payment 
 or default of interest.'" 
 
 "» Tschetinian v. City Trust Co., Co., 144 A. D. 863, 129 Supp. 807 
 
 186 N. Y. 432, 79 N. E. 401 (1906). (1911). 
 
 " The language employed when in- " Merrill v. Farmers' Loan & 
 
 terpreted in its natural and ordinary Trust Co., 24 Hun, 297 (1881). 
 
 meaning simply amounts to a state- 'Tleisher v. Earmers' Loan & 
 
 ment identifying the bond whereon Trust Co., 58 A. D. 473, 69 Supp. 
 
 it is written as one of those men- 437 (1901). 
 
 tioned in the mortgage, and the "Fleisher v. Farmers' Loan '& 
 
 effect of this is an assurance to the Trust Co., 58 A. D. 473, 69 Supp. 
 
 purchaser that his bond is amongst 437 (1901). 
 
 those entitled to the benefits and "Currier v. Poor, 155 N. Y. 344, 
 
 protection afforded by such mort- 49 N. E. 937 (1898). Bonds of a 
 
 gage." corporation held as collateral may be 
 
 " Patterson v. Guardian Trust proved in full, but the dividend pay- 
 
§ 255 BONDS AND MORTGAGES 281 
 
 § 255. Id.: Of Bondholders, In General. — No action can be 
 maintained on a corporate bond issued to the holder's knowl- 
 edge for no consideration.^ A bondholder's complaint is not 
 demurrable because upon the same guaranty by a corporation 
 he seeks to recover both principal and interest.^ A bona fide 
 holder of a negotiable bond issued by a corporation may 
 recover against it thereon although sold at less than par in 
 violation of the corporation's charter; and particularly is this 
 true if, after issuing and selling the bond, the corporation paid . 
 interest upon it for several years.""* If a majority of corporate 
 bondholders may postpone the time of the payment of the 
 interest coupons of the bonds, this cannot be done before 
 default has occurred in the payment of interest if the reason- 
 able construction of the mortgage is .to the contrary.^ A cor- 
 poration guaranteeing payment of principal and interest of a 
 bond, the compensation of a trustee and payment of the 
 charges on the property mortgaged as security for the bond, 
 is liable to a bondholder individually for default in its guar- 
 anty, and not only to the trustee.* When a question arises 
 between a solvent corporation and the holders of its bonds as 
 to the right of the latter to be paid interest under a contract 
 in the bonds that interest was to be paid out of current corpo- 
 rate earnings so far only as the directors certified it had 
 been earned " over and above all expenses, including neces- 
 sary repairs ", the remedy of the bondholders is at law upon 
 contract and not in equity for an accounting based on a trust 
 relationship; because there was no title in the fund in the 
 bondholders.^ Bondholders entitled to interest from such 
 corporate earnings as are certified by the directors to have 
 been earned above all expenses, and " in default of such cer- 
 tificates " not entitled to interest, are not concluded by the 
 omission of th^ directors so to certify, but are justified in 
 suing for the interest on the wrongful withholding of the 
 certificate when demanded.' Bondholders suing to get inter- 
 able upon them should be limited to ^ McClelland v. Norfolk S'outhern 
 the amount of the debt. Duneomb R. R. €o., 110 N. Y. 460, 1 L.R.A. 
 V. New York, Housatonic & North- 299, 18 N. E. 237 (1888). 
 em R. E. Co., 84 N. Y. 190 (1881). *Townsend v. Colorado Fuel & 
 
 1 Campbell v. Cypre&s Hills Ceme- Iron Co., 16 A. D. 314, 44 Supp. 
 tery, 41 N.'Y. (2 Hand) 34 (1869). 849 (1897). 
 
 ^ Dou^an v. Evansville & Terre ^ Thomas v. New York & Green- 
 
 Haute R. R. Co., 15 A. D. 483, 44 wood Lake Ry. Co., 139 N. Y. 163, 
 Supp. 505 (1897). 34 N. E. 877 (1893). 
 
 ^*ElswOTih vi St. Louis, Alton & 'Thomas V. New York & Green- 
 
 Terre Haute R. R. Co., 33 Hun, 7 wood Lake Ry. Co., 139 N. Y. 163, 
 (1884) ; aff'd 98 N. Y. 553. 34 N. E. 877 (1893). 
 
282 BUSINESS CORPORATIONS IN NEW YORK § 255 
 
 est on their bonds which provide that it shall be paid only 
 from such earnings as are certified by the directors to be in 
 excess of all expenses must show in their complaint that there 
 were earnings applicable to the payment of such interest 
 which had either been retained by the corporation or applied 
 to other purposes.' " ... a party loaning money to an 
 embarrassed corporation, subsequently adjudged to be insol- 
 vent, and taking security therefor, is not in a position which 
 . entitles him in equity to be adjudged to have a lien on mort- 
 gaged property of the corporation or its proceeds in prefer- 
 ence to bondholders under a mortgage existing when the loan 
 was made, and . . . it is immaterial for what purpose the 
 loan was made, or how the money received thereon was 
 applied, provided the bondholders were not parties to the 
 transaction."* Under an agreement on foreclosure and 
 reorganization of a corporate mortgage whereby one person 
 agrees with another to sell to the latter " the bonds " of the 
 company, and whereby all the holders of its bonds, who have 
 under the foreclosure decree registered them, have the option 
 of accepting the same price, such holders must put their bonds 
 in for sale through such one person who has the right to sell 
 ' ' the bonds ' ' to the purchaser, and the purchaser cannot be 
 held to have bound himself to each separate bondholder.* 
 A new corporation accepting a bill of sale from an old corpo- 
 ration containing an assumption by the new of all debts and 
 obligations of the old except its mortgage bondS: is not bound 
 to pay a holder of bonds of the old on any contract contained 
 in such bill, whatever may be the terms of the resolution 
 of the board of the new corporation accepting such bill.^° 
 One who has received without consideration stock and sec- 
 ond-mortgage bonds of a corporation is not liable to a judg- 
 ment-creditor of the corporation whose execution has been 
 unsatisfied for the debt on the theory that he received some- 
 thing for such bonds if it appears that though one of the 
 coupons was paid it was not paid by the corporation and that 
 on foreclosure enough was brought to pay the first-mortgage 
 bonds only." Any person is guilty of a misdemeanor who, 
 
 ' Thomas v. New York & Green- " Femschild v. Yuengling Brew- 
 wood Lake Ry. Co., 139 N. Y. 163, ing Co., 15 A. D. 29, 44 Supp. 106 
 34 N. E. 877 (1893). (1897); aff'd 154 N. Y. 667, 49 
 
 ^Farmers' Loan & Trust Co. v. N. E. 151. 
 
 Bankers' & Merchants' Telegraph " Christensen v. Illinois & St. 
 
 Co., 148 N. Y. 315, 31 L.R.A. 403, Louis Bridge Co., 52 Hun, 478, 5 
 
 42 N. E. 707 (1896). Supp. 925 (1889). 
 
 « Johnson v. Morgan, 68 N. Y. 494 
 (1877). 
 
§ 256 BONDS AND MORTGAGES 283 
 
 • 
 being entitled to vote at any meeting of the bondholders of a 
 stock corporation, sells his vote, or issues a proxy to vote to 
 any person for any sum of money or thing of value, except 
 as expressly authorized by law." 
 
 § 256. Id.: Of Bond- and Stock-holders Inter Sese.— One 
 bond-, or coupon-holder cannot obtain an advantage over 
 others by procuring judgment and levying execution against 
 the mortgagor-corporation's property in the hands of a 
 trustee, " the rule of law being that the holder of unpaid 
 coupons detached from mortgage bonds may sue at law and 
 recover a judgment for his unpaid interest, but he cannot, 
 nevertheless, cause the execution to be levied upon the prop- 
 erty covered by the mortgage, because that property has been 
 conveyed to the trustee under the mortgage in trust for all 
 the bondholders, and because the bondholders under the mort- 
 gage stand in reference to that security upon an equal right, 
 and are entitled to equality of distribution. . . , ' . if it 
 becomes necessary for him to reach the property held by the 
 trustee he must proceed against the trustee, not for his own 
 separate benefit, but as a bondholder or coupon-holder, and on 
 behalf of the "bondholders as a class. " " It seems that mere 
 naked bondholders of a corporation, as its creditors, cannot 
 attack the right and title of other bondholders, claiming also 
 to be creditors, and have the title adjudicated as an inde- 
 pendent cause of action in their own behalf against the corpo- 
 ration, the trustees under the deed of mortgage securing the 
 bonds, and the creditors.^* Injunction will not be granted a 
 minority bondholder against the acts of the majority bond- 
 holders in mortgaging anew to a trust company which was 
 trustee under the old mortgage the same property and addi- 
 tional property as the old mortgage covered and in permitting 
 the trust company to refuse to foreclose, if the bonds 
 originally bought by the minority subjected the holder to the 
 will of the majority and prohibited foreclosure till a majority 
 consented.^° When bondholders of a corporation execute a 
 reorganization agreement which permits stockholders to 
 participate only if and as the bondholders ' committee deem it 
 discreet they should, a stockholder cannot seek to affirm in 
 part and disaffirm in part the contemplated reorganization, as 
 
 "Penal L., § 668 (L. 1909, c. 88). ^^ Emery v. New York, Lake Erie 
 
 1^ Guaranty Trust Co. v. Troy & Western R. R. Co., 9 Misc. 310, 
 
 Steel Co., 33 Misc. 484, 68 Supp. 30 Supp. 306 (1894). 
 
 915 (1900). 
 ^* Sickles V. Richardson, 23 Hun, 
 
 559 (1881). 
 
284 BUSINESS CORPORATIONS IN NEW YORK § 2o7 
 
 • 
 he has no standing." Bondholders of a corporation, the proji- 
 erty of which is about to be foreclosed, who permit stock- 
 holders to receive stock in a new corporation formed by the 
 bondholders to prevent foreclosure of the old on payment of 
 certain assessments within a specified time, are relieved from 
 their agreement as to all stockholders or their successors in 
 interest who do not pay the assessments within the time 
 limited." When by a foreclosure sale all rights of the mort- 
 gaged corporation have been destroyed, one of such stock- 
 holders cannot when he claims. first to know of the foreclosure, 
 etc., sue a new corporation formed by a committee on the fore- 
 closure of the old for a privilege of taking stock in the new 
 corpora:tion within a stated period extended by such com- 
 mittee to stockholders in the old corporation, as he must 
 either claim under the agreement and is barred after expira- 
 tion of the time limited therein, or he must proceed to set 
 aside the foreclosure sale." One who is both majority bond- 
 and stock-holder of a corporation is not precluded from insist- 
 ing on payment of his bonds or bound individually to pay the 
 mortgage interest because the minority want to compel him 
 to do so, or because he is also a creditor of the company and 
 hopes the corporation will be unable to meet its debts." 
 
 § 257. Id.: On Foreclosure, In General. — On judgment of 
 foreclosure of a corporate mortgage the court is not bound to 
 set aside the sale because a reorganization agreement, entered 
 into by some of the creditors of the company, had been vio- 
 lated ; but may leave the parties thereto who complain of the 
 violation to their remedy by action against the reorganization 
 committee or other persons or bodies.^ One buying in on 
 foreclosure of a corporate bond and mortgage under terms 
 requiring a certain cash payment and the rest " not required 
 to be paid in cash ' ' by surrender of bonds, must pay in cash, 
 not only such certain account, but also an amount suifficient to 
 pay off accrued interest due holders of coupons.^ The fact 
 that an order appointing a receiver on foreclosure is so drawn 
 as to make him receiver of all the corporate-mortgagor's 
 
 ^« Miller v. Dodge, 28 Misc. 640, ^Earmers' Loan & Trust Co. v. 
 
 59 Supp. 1070 (1899). Bankers' and Merchants' Telegraph 
 
 "Dow V. Iowa Central Rv. Co., Co., 119 N. Y. 15, 23 N. E. 173 
 
 144 N. Y. 426, 39 N. E. 398 (1896). (1890). 
 
 ^* Thornton v. Wabash Ry. Co., ^Holland Trust Co. v. Thomson- 
 
 81 N. Y. 462 (1880). Houston Co., 9 A. D. 473, 41 Supp. 
 
 "Oelbermann v. New York & 457 (1896) ; afE'd 153 N. Y. 645, 47 
 
 Northern R. R. Co., 7 Misc. 352, 27 N. E. 1108. 
 Supp. 945 (1894). 
 
§ 258 BONDS AND MORTGAGES 285 
 
 property, instead of the mortgaged property only, does not 
 render it void ab initio; and if not attacked directly, a further 
 order approving the receiver's accounting not only for funds 
 derived from the mortgaged property but for all the corpo- 
 ration's property protects him, so that a receiver later 
 appointed in sequestration proceedings cannot hold the mort- 
 gage receiver liable.^ On motion to confirm a sale of corpo- 
 rate property by its receiver he must furnish evidence that 
 a mortgage by the corporation on such property was con- 
 sented to by holders of two-thirds of its stock, if creditors 
 appearing in opposition to the motion complain such consent 
 was not given.' A corporation buying in on foreclosure all 
 the assets of another company in the hands of a receiver 
 pendente lite subject to all {axes which might be liens thereon 
 takes subject to and is liable for franchise taxes levied dur- 
 ing the receivership upon the corporate franchise.* "When 
 one corporation acquires the majority stock of another, which 
 is hopelessly insolvent, in consideration of guaranteeing pay- 
 ment of the latter 's second mortgage bonds, and on the com- 
 ing due of the interest on such bonds actively instigates the 
 foreclosure of the mortgage securing them with the intent of 
 buying in on the foreclosure and does so buy in the name of a 
 newly-formed corporation, the minority stockholders of the 
 mortgagor company are entitled to have it decreed that that 
 portion of the stock of the newly formed corporation equiva- 
 lent to their holdings in the old is held in trust for them if 
 they bear their pro rata proportion of the just claims of the 
 guarantor corporation against the property of the mortgagor 
 company.' 
 
 § 258. Id.: Of Stockholders. — When property of a corpora- 
 tion is sold in foreclosure proceedings, all its rights and all 
 the proprietary interests of the stockholders are absolutely 
 barred and cut off." The court will deny the motion of a stock- 
 holder to be made party to a foreclosure proceeding in which 
 his corporation is a party when its receiver, as party to the 
 action, was guilty of no fraud a'nd the facts do not show if the 
 receiver's refusal to appeal from the judgment rendered was 
 
 ^ Piatt V. N. Y. & Sea Beach Ry. R. Co., 66 A. D. 414, 73 Supp. 21 
 
 Ck)., 170 N. Y. 451, 63 N. E. 532 (1901); dism'd 177 N. Y. 552, 69 
 
 (1902). N. E. 1122. 
 
 ^Matter of Wendler Machine Co., "Vatable v. New York, Lake Erie 
 
 2 A. D. 16, 37 Supp. 444 (1896). & Western R. R. Co., 96 N. Y. 49 
 
 *New York Terminal Co. v. Gaus, (1884); L. 1874, c. 430, § 2, as 
 
 204 N. Y. 512, 98 N. E. 11 (1912) ; amended L. 1876, c. 446. See now 
 
 Tax L. § 182. St. Corp. L. § 9 et seq. 
 
 ^ Cutting V. Baltimore & Ohio R. 
 
286 BUSINESS CORPORATIONS IN NEW YORK §§ 259-261 
 
 justifiable after a litigation fought strenuously by at least one 
 of .the moving stockholders/ 
 
 § 259. Id.: Of Creditors. — Unsecured creditors are not nec- 
 essary or proper parties to an action to foreclose a mort- 
 gage on the property of their corporate debtor, have no right " 
 to intervene in such action, and are bound by any adjudica- 
 tion made therein against the corporate mortgagor.* A 
 judgment creditor who has levied against mortgaged property 
 of a corporation after default by the corporation but before a 
 receiver thereof has been appointed in proceedings to dis- 
 solve it, takes nothing by his action, as the corporation has 
 no interest upon which the execution-lien can attach, in view 
 of the law that after default the mortgagor has no interest in 
 the mortgaged property that can be sold on execution against 
 him.° 
 
 § 260. Id. : Of Bondholders, In General. — The damages to a 
 bondholder of a corporation from the sale of its property 
 bought in on foreclosure without his assent, if his bonds have 
 no market value, are his aliquot part of what the corporate 
 property would have sold for, after due allowance for the 
 reasonable expenses of making a sale.^" A mortgagee of a 
 mortgage on which a corporation which has become insolvent 
 is liable and who has not at the time of its insolvency and the 
 appointment of a receiver for it realized anything on his 
 mortgage may thereafter foreclose and demand from the 
 receiver and receive a dividend upon the whole amount of his 
 debt as it existed at the time of the receiver's appointment, 
 without regard to the proceeds of the sale received by him, 
 provided such dividend do not exceed the amount of the 
 deficiency." 
 
 § 261. Id.: To Sue Direct Instead of Through Trustee.— 
 One bondholder cannot set aside the action of a committee 
 organized by a majority of the bondholders of a corporation 
 to protect their interests on foreclosure of a mortgage which 
 gives each bondholder equal rights with every other, as bond- 
 holders are not trustees for each other." A bondholder who 
 has on behalf of himself and other bondholders similarly sit- 
 uated applied to the mortgage trustee to institute suit against 
 
 ^ Matter of Fontana, 85 Hun, 219, Ltd. v. Tod, 180 N. Y. 215, 73 N. E. 
 
 32 Supp. 956 (1895) ; C. C. P. § 452. 7 (1904). 
 
 * Herring v. N. Y., Lake Erie & "Matter of Simpson, 36 A. D. 
 
 Western R. R. Co., 105 N. Y. 340, 562, 55 Supp. 697 (1899) ; affi'd 158 
 
 12 N. E. 763 (1887). N. Y. 720, 53 N. E. 1132. 
 
 ^Leadbetter v. Leadbetter, 125 "Moss v. Geddes, 28 Misc. 291, 
 
 N. Y. 290, 26 N. E. 265 (1891). 59 Supp. 867 (1899). 
 
 ^"Industrial & General Trust, 
 
§ 262 BONDS AND MORTGAGES 287 
 
 the mortgagor and whose application has been denied has 
 himself the right to bring the action, as the mortgage secur- 
 ing his bond, though made to the trustee, is really to furnish 
 security for the payment to the bondholder of his money." 
 When a trustee of a trust mortgage is absent from the coun- 
 try or is insane it is not necessary that his refusal to bring 
 action of foreclosure shall be obtained if he is compos mentis, 
 or that a new trustee be appointed if he is non compos mentis, 
 before a bondholder himself may foreclose; because " the 
 bondholders are the real parties in interest ; it is their right 
 which is to be redressed, and their loss which is to be pre- 
 vented; and any emergency which makes a demand upon 
 the trustee futile or impossible, and leaves the right of the 
 bondholder without other reasonable means of redress should 
 justify his appearance as plaintiff in a court of equity for the 
 purpose of a foreclosure. ' ' " One cannot invoke the statutory 
 provision, that ' ' where there is no answer the judgment shall 
 not be more favorable to the plaintiff than that demanded in 
 the complaint ", if he is one of several bondholders repre-- 
 sented on foreclosure by a trustee-plaintiff.^'' One delivered 
 a certificate of indebtedness in lieu of a bond secured by a 
 mortgage by a corporation to a trustee, until the bonds are 
 printed, is not deprived of his action to compel delivery of 
 the bond and to foreclose the mortgage on the theory that he 
 has no interest in the mortgage.^* 
 
 § 262. Id. : Of Purchaser to Form New Corporation. — The 
 subject of reorganization is more fully discussed in the subse- 
 quent chapter on ' ' Corporate Existence and Change." "When 
 the property and franchises of any domestic stock corpora- 
 tion are sold by virtue of a mortgage or deed of trust, duly 
 executed by it, and the purchaser, his assignee or grantee has 
 acquired title thereto in the manner prescribed by law, he 
 may associate with himself any number of persons (not less 
 than the number required by- law for an incorporation for 
 similar purposes, at least two-thirds of whom are citizens of 
 the United States and one a resident of New York 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 the property of 
 
 " O'Beirne v. Allegheny & Kinzua sey Ry. Co., 85 N. Y. 246 (1881) ; 
 
 R. R. Co., 151 N. Y. 372, 45 N. E. C. C. P. § 1207. 
 873 (1897). "Jenkins v. John Good Cordage 
 
 " Ettlinger v. Persian Rug & Car- & Machine Co., 56 A. D. 573, 68 
 
 pet Co., 142 N. Y. 189, 36 N. E. Supp. 239 (1900) ; aff'd 168 N. Y. 
 
 1055 (1894). 679, 61 N. B. 1130. 
 
 ^^Peck V. New York & New Jer- "See § 507, infra. 
 
288 BUSINESS CORPORATIONS IN NEW YORK § 262 
 
 which has 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: (a) They 
 shall describe by name and reference to the law under which 
 it was organized, the corporation the property and franchises 
 of which have been acquired, and (b) the court by authority 
 of which the sale has been made, with the date of the judg- 
 ment or decree authorizing or directing the sale and a brief 
 description of the property sold; and (c) give the name of the 
 new corporation intended to be formed by the filing of such 
 certificate; and (d) the place where its principal office is to 
 be located, and (e) the maximum amount of its capital stock, 
 and (f) the number of shares into which it is to be divided 
 specifying the classes thereof, whether common or preferred, 
 and the amount of and the rights pertaining to each class; 
 and (g) 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 (h) the names 
 .and postoffice addresses of the directors for the first year, 
 and (i) 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 
 pursuant to statute at or previous to the sale." Such corpo- 
 . ration is vested with and 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 is subject to all the pro- 
 visions, duties and liabilities imposed by law on that corpo- 
 ration." The Secretary of State collects a fee of twenty-five 
 dollars for filing a certificate of reorganization pursuant to 
 section nine of the Stock Corporation Law.''" The further 
 statutory provisions governing a reorganization of a corpora- 
 tion on foreclosure of its mortgage or deed of trust are iden- 
 tical with the provisions applying on reorganization after 
 other proceedings than foreclosure and are therefore con- 
 sidered in the chapter of this work devoted to " Corporate 
 Existence and Change," to which reference is made — 
 although the decisions dealing peculiarly with points arising 
 on corporate reorganization on foreclosure are treated in the 
 now immediately succeeding text.' Upon the filing by a new 
 
 '* St. 'Corp. L. § 9 (L. 1909, c. 61). and all incorporations based thereon 
 
 "St. Corp. L. § 9 (L. 1909, c. 61). are hereby ratified and confirmed." 
 
 "Any proceedings heretofore taken ^"Executive L. § 26 (L. 1917, 
 
 in substantial compliance with this c. 69). 
 
 section as hereby amended, and any ' See for reorganization of corpo- 
 
§ 262 BOND AND MORTGAGES 289 
 
 corporation of its certificate of incorporation pursuant to the 
 statute permitting a purchaser on mortgage foreclosure of 
 the property and franchises of an old corporation to associate 
 persons with him who ' ' may become a corporation, and take 
 and possess the property and franchises thus sold," and pro- 
 viding that " such corporation shall be vested with and be 
 entitled to exercise and enjoy all the rights, privileges and 
 franchises " of the old corporation, the new corporation does 
 not ipso facto be"come vested with the property acquired by 
 the purchaser at the sale, but only with the rights, privileges 
 and franchises of the old corporation.^ Sections 9 to 12 of the 
 Stock Corporation Law and section 55 of the Public Service 
 Commission Law must be construed together ; so that corpo- 
 rations sold under foreclosure may still reorganize their 
 property and franchises, while corporations formed on such 
 reorganizations are still liable to compliance tvith the Public 
 Service Commission Law's provisions.^ The Public Service 
 Commission is not justified in refusing its assent to the amount 
 of securities to be issued by a new corporation formed on the 
 purchase at foreclosure of the franchises, etc., of an old one, 
 merely because the value of the mortgaged property and the 
 amount of new capital to be invested were less than the 
 amount of securities to be issued; but only, probably, if the 
 corporation formed on the reorganization issues securities in 
 excess of those of the company to the property and franchises 
 of which it has succeeded and the new money put in.* A new 
 corporation formed to purchase the property of an old cor- 
 poration takes subject to such duties and liabilities as the law 
 of the time of its incorporation imposes on similar corpora- 
 tions." The statute vesting a corporate purchaser of assets 
 of another corporation on the latter 's reorganization with 
 the latter 's rights, etc., and subjecting it to the latter 's liabili- 
 ties, etc., ' ' relates only to obligations imposed by law and is 
 not . . . broad enough to impose upon " the successor- 
 rations in general, § 507 et seq., 1011 (1911) ; Pub. Serv. Comms. L. 
 infra. § 55. 
 
 ^ Mayer v. Metropolitan Traction ° Minor v. Erie R. R. Oo., 171 
 
 Co., 165 A. D. 497, 150 Supp. 1026 N. Y. 566, 64 N. E. 454 (1902) ; St. 
 (1914) ; St. Corp. L. § 3 as amended Corp. L. § 3, subd. 4; Mileage Book 
 L. 1892, e. 688, § 3. See now § 9. Act (L. 1895, c. 1027). This last 
 
 ^People ex rel. T. A. Ry. Co. v. act was held to apply to a corpora- 
 P. S. Oomm., 203 N. Y. 299, 96 N. E. tion formed after its enactment to 
 1011 (1901) ; St. Corp. L. §§ 9 to purchase the property of another 
 12; Pub. Serv. Comms. L. § 55. corporation not siubject to the Act's 
 
 * People ex rel. T. A. Ry. Co. v. operation. 
 P. S. Coram., 203 N. Y. 299, 96 N. E. 
 B. C. N. Y.— 19 
 
290 BUSINESS CORPORATIONS IN NEW YORK § 263 
 
 corporation " contractual obligations of its predecessor 
 which it never asstmied. ' ' * When certain stockholders, on 
 foreclosure of the property of their corporation, avail them- 
 selves of the statute permitting them to purchase such prop- 
 erty and the corporation's franchises, etc., and go on as 
 a new corporation, and accordingly form a plan to accomplish 
 this result, it is optional with any stockholder to come into 
 the new company under the plan ; but if he does not exercise 
 his option within the statutory limitation of- time so to do, or 
 such extension of that time as the plan may give him, equity 
 will afford him no relief.' Trustees acting under a plan to 
 form a new company on behalf of those interested in a corpo- 
 ration being foreclosed cannot give a stockholder seeking to 
 come in under the plan less than the time specified in the stat- 
 ute.' A creditor of an old corporation cannot by suing alone 
 a new corporation, formed solely by the bondholders of the 
 old on its reorganization, reach, to apply to his debt, the pro- 
 ceeds received by the new company from the sale at less than 
 par of its stock to stockholders of the old corporation." 
 
 § 263. Id.: Setting Sale Aside. — When a complainant has 
 no absolute legal right to have a sale on foreclosure of a cor- 
 porate mortgage set aside, and it cannot be said that the 
 court below was without discretion to deny the application, 
 or abused its discretion, the Court of Appeals has no jurisdic- 
 tion to review the order of the court below." An action to 
 set aside as fraudulent a judgment of foreclosure of a corpo- 
 rate mortgage and the consequent sale as fraudulent and 
 collusive cannot be grounded merely on the facts that a 
 director was the one who purchased on foreclosure (because a 
 corporate officer may honestly hold bonds of his corporation 
 and protect his holding by purchase on foreclosure), and that 
 his motives were bad to the knowledge of the mortgage trus- 
 tee (because what made the foreclosure to result was the 
 default solely)." 
 
 'Seventy-eighth St. & Broadway amended L. 1876, c. 446. See now 
 
 Co. V. Ptirssell Mfg. Co., 92 Misc. St. Corp. L. § 9. 
 
 178, 155 Supp. 259 (App. T. 1915) ; » Ferguson v. Ann Arbor R. R. 
 
 St. Corp. L. § 9. Co., 17 A. D. 336, 45 Supp. 172 
 
 'Vatable v. New York, Lake Erie (1897). 
 
 & Western R. R. Co., 96 N. Y. 49 ^Tarmers' Loan & Trust Co. v. 
 
 (1884); L. 1874, c. 430, § 2, as Bankers' and Merchants' Telegraph 
 
 amended L. 1876, e. 446. See now Co., 119 N. Y. 15, 23 N. E. 173 
 
 St. Corp. L. § 9. (1890). 
 
 ' Vatable v. New York, Lake Erie " Harpending v. Miunson, 91 N. Y. 
 
 & Western R. R. Co., 96 N. Y. 49 651 (1883). 
 (1884); L. 1874, e. 430, § 2, as 
 
§ 264 BOND AND MORTGAGES 291 
 
 § 264. Id.: Practice. — A complaint may properly in one 
 statement combine a cause of action to set aside a mortgage ■ 
 and bill of sale executed by a corporation-defendant to 
 defraud creditors, another cause to set aside a judgnaent 
 obtained coUusively, another cause to enforce the individual 
 liability of the corporation's directors for failure to file an 
 annual report, and a last cause to sequestrate the corpora- 
 tion's property and divide it among creditors." An injunc- 
 tion against a proposed issue of bonds and reduction of stock 
 cannot be joined with an award for damages for their issue 
 and its reduction." The only proper judgment in an action 
 by one stockholder as representative of all against directors 
 and their corporation to annul as ^dtra vires an arrangement 
 to exchange debenture mortgage bonds for new securities is 
 that the individual defendants account to the corporation for 
 the damages it has sustained through their illegal acts." 
 A cause of action in equity, as distinguished from one at law, 
 lies for a fraudulent inducement to make an agreement to 
 take bonds in a corporation in consideration of the surrender 
 of stock of its predecessor company and for a complete failure 
 of consideration." An action based on the illegality of a plan 
 to exchange new securities for debenture bonds because of the 
 plan being ultra vires the corporation and of personal inter- 
 est of the directors in it does not state two causes of action, 
 but only one with two grounds under it." In an action to 
 adjudge void corporate securities all the holders thereof 
 should be parties, either in person or by representation 
 through a trustee or otherwise." 
 
 ^^ Cuminings v. American Gear & *° Williams v. Billington, 150 
 
 Spring Co., 87 Hun, 508, 34 Supp. A. D. 439, 135 Supp. 32 (1912); 
 
 541 (1895) ; C. C. P. §§ 484, 1790. app. dism'd 211 N-. Y. 527, 105 N. E. 
 
 "Merz V. Interior Conduit & In- N. Y. Supp. 823 (1910). 
 
 sulation Co., 20 Misc. 378, 46 Supp. " Pollitz v. Wabash R. R. Co., 142 
 
 243 (1897). A. D. 755, 127 Supp. 782 (1911). 
 
 " Pollitz V. Wabash R. R. Co., 167 " Pollitz v. Wabash R. R. Co., 142 
 
 A. D. 669, 152 Supp. 803 (1915). A. D. 755, 127 Supp. 782 (1911). 
 
CHAPTEE VII. 
 
 DIRECTORS, OFFICERS AND AGENTS. 
 
 XII. Directors, Officers and Agents. 
 A. Directors. 
 
 1. De Facto and De Jure, § 265. 
 
 2. Election. 
 
 a. Governing Statutes, § 266. 
 
 b. In General, § 267. 
 
 c. Time, Place and Notice of, § 268. 
 
 d. Method of, § 269. • 
 
 e. Who May Vote and How, § 270. 
 
 f. Who May Be Elected, § 271. 
 
 g. New Election, § 272. 
 
 3. Acceptance, § 273. 
 
 4. Tenure of Office. 
 
 a. Holding Over, § 274. 
 
 b. Termination of Directorship, § 275. 
 
 c. Trying Out and Proving Title to Directorship, § 276.^ 
 
 5. Change in Number, § 277. 
 
 6. Meetings, § 278. 
 
 7. Salaries, § 279. 
 
 8. Personal Profit and Advantage. 
 
 a. In General, § 280. 
 
 b. Contracts with Corporation, § 281. 
 
 c. As Creditor, Stockholder or Purchaser, § 282. 
 
 9. Executive Committee, § 283. 
 , 10. Powers. 
 
 a. In General, § 284. 
 
 b. Contracts, § 285. 
 
 c. Beal Estate, § 286. 
 
 d. Actions, Service of Process, Counsel Fees, § 287. 
 11. Liabilities. 
 
 a. In General, § 288. 
 
 b. For Unauthorized Dividends, § 289. 
 
 c. For Dividend, Withdrawing, Paying or Reducing 
 
 Capital Stock, § 290. 
 
 d. For Assenting to Indebtedness Beyond Capital, § 291. 
 
 e. For Permitting Payment for Corporation's Stock by 
 
 Unauthorized Means, § 292. 
 
 f. On Corporate Dissolution, § 293. 
 
 g. For Sale of Stock Which Does Not Own, § 294. 
 
 h. For Increasing Capital Stock Beyond Amount Author- 
 ized, § 295. 
 L for Loans to Stockholders, § 296. 
 
 292 
 
DIRECTORS, OFFICERS AND AGENTS 293 
 
 XII. Directors, Officers and Agents— Continued: 
 
 A. Directors, 11,— Continued: 
 
 j. For Transfer to Officers, Directors or Stockholders 
 of Property of Corporation Not Paying Due Obli- 
 gations, § 297. 
 k. For Omitting to Disclose Service on Himself of 
 
 Injunction Against Corporation, § 298. 
 1. For Fraudulent Issue of Staphs and Bonds, § 299. 
 m. For Political Contributions, § 300. 
 n. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entry in 
 
 Books, § 301. 
 M). For Refusal or Neglect to Make Entries In, or 
 Allow Inspection of Stock Book, § 342. 
 O. With Regard to Making Certificates, Reports, State- 
 ments and Notices. 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement, § 303. 
 bb. For Falsity of or Omission In Statement of 
 
 Corporate Affairs, § 304. 
 cc. For Failure of, or False, Certificate of Payment 
 
 of Capital Stock, § 306. 
 dd. To One Becoming Creditor or Stockholder on 
 Faith of False Representation In, § 306. 
 p. For Misconduct and Mismanagement, § 307. 
 
 B. Officers. 
 
 1. Election or Appointment. 
 
 a. In General, § 308. 
 
 b. Compelling, § 309. 
 
 2. Tenure of Office. 
 
 a. Trying Out, and Proving, Title to Office, § 310. 
 • b. Holding Over, Removal and Resignation, § 311. 
 
 3. Salaries. 
 
 a. In General, § 312. 
 
 b. In Fraud of Creditors or Stockholders, § 313. 
 
 c. On Removal or Resignation, § 314. 
 
 4. Bond of, § 315. 
 
 5. Personal Profit and Advantage. 
 
 a. In General, § 316. 
 
 b. Of President, § 317. 
 
 c. Of Treasurer, § 318. 
 
 6. Powers and Duties. 
 
 a. In General. 
 
 aa. Of All Officers, § 319. 
 bb. Of President, § 320. 
 cc. Of Other Officers, § 321. 
 
 b. To Contract. 
 
 aa. In General, § 322. 
 
 bb. Of President, § 323. 
 
 ec. Of Secretary and Treasurer, § 324. 
 
294 BUSINESS COEPOEATIONS IN NEW YORK 
 
 XII. Directors, Officers and Agents — Continued: 
 B. Officers, 6, — Continued: 
 
 c. Commercial Paper. 
 
 aa. To Sign and Endorse. 
 
 aaa. In General, § 325. 
 
 bbb. Of President, § 326. 
 
 ccc. Of Treasurer, § 327. 
 
 ddd. Of Others, § 328. 
 bb. Accommodation Paper. 
 
 aaa. In General, § 329. 
 
 bbb. Of Secretary and Treasurer, § 330. 
 
 d. To Buy, Sell, Assign, Mortgage, Pledge and Lease, 
 
 aa. In General, § 331. 
 bb. By President, § 332. 
 cc. By Other Officers, § 333. 
 
 e. Actions and Service of Process On, §334. 
 
 7. Liabilities. 
 
 a. In General, § 335. 
 
 b. For Political Contributions, § 336. 
 
 c. For Omitting to Disclose Service on Himself of 
 
 Injunction Against Corporation, § 337. 
 
 d. For Fraudulent Issue of Stocks and Bonds, § 338. 
 
 e. For Fraud in Procuring Corporate Organization, 
 
 § 339. 
 
 f. On Corporate Dissolution, § 340. 
 
 g. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entry in 
 
 Books, § 341. 
 bb. For Refusal or Neglect to Make, Entries In, or 
 
 Allow Inspection of Stock Books, § 342. 
 h. With Regard to Reports or Statements. 
 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement, § 343. 
 bb. For Falsity of, or Omission in Statement of 
 
 Corporate of Affairs, § 344. 
 cc. For Failure to Make and File Annual Report, 
 
 §345. 
 
 8. Liabilities Common to Directors and Officers. 
 
 a. In General, § 346. 
 
 b. For Sale of Stock Which Do Not Own, § 347. 
 
 c. For Increasing Capital Stock Beyond Amount 
 
 Authorized, § 348. 
 
 d. For Loans to Stockholders, § 349. 
 
 e. For Transfer to Directors, Officers or Stockholders of 
 
 Property of Corporation Not Paying Due Obliga- 
 tions, § 350. 
 
 f. With Regard to Making Certificates, Reports, State- 
 
 ments, and Notices. 
 
 aa. For Failure, or Falsity, of Certificate of Pay- 
 ment, of Capital Stock, § 351. 
 
 bb. To One Becoming Creditor or Stockholder on 
 Faith of False Representations In, § 352. 
 
DIRECTORS, OFFICERS AND AGENTS 295 
 
 XII. Directors, Officers and Agents— Continued: 
 B. Officers, ^, —Continued: 
 
 g. For Misconduct and Mismanagement. 
 aa. Governing Statutes, § 353. 
 bb. In General, § 354. 
 cc. Grounds of Action. 
 
 aaa. In General, § 355. 
 bbb. Under Statute,''^ 356. 
 dd. Who May Sue. 
 
 aaa. In General, Stockholder, § 357. 
 bbb. Under Statute. 
 
 aaaa. Attorney-General, § 358. 
 bbbb. Corporation, § 359'. 
 cccc. Creditor, § 360. 
 dddd. Director, Trustee, Receiver or 
 Other Officer, § 361. 
 ee. Practice in Actions. 
 
 aaa. In General, § 362. 
 bbb. Under Statute, § 363. 
 ff. Belief Obtainable In Actions. 
 aaa. In General, § 364. 
 bbb. Under Statute, § 365. 
 G. Agents. 
 
 1. Employment and Compensation, § 366. 
 
 2. Proof of Authority, § 367. 
 
 3. Pov>ers in General, § 368. 
 
 4. Dealing With Corporation, § 369. 
 
 5. Service of Process Upon to Bind Corporation, 
 
 a. Governing Statute, § 370. 
 
 b. In General, § 371. 
 
 c. As Managing Agent, § 372. 
 
 d. As Officer, § 373. 
 
 e. When Corporation in Beceivership, § 374. 
 
 6. Liabilities In General, § 375. 
 
 7. Liabilities Common to Officers and Agents, For Fraud in 
 
 Procuring Organization and Increasing Stock of 
 Corporation, § 376. 
 
 8. Liabilities Common to Directors, Officers and Agents. 
 
 a. For Political Contributions and Practising Law, 
 
 § 377. 
 
 b. For Omitting to Disclose Service on Himself of 
 
 Injunction Against Corporation, § 378. 
 e. For Fraud in Issue and Sale of Stocks and Bonds, 
 § 379. 
 
 d. With Regard to Corporate Books. 
 
 aa. For Omission of, or Making False, Entry in 
 
 Books, § 380. 
 bb. For Refusal or Neglect to Make Entries In, and 
 
 Allow Inspection of, Stock Book, § 381.- 
 
 e. With Begard to Reports or Statements. 
 
 aa. For Refusal or Neglect to Make Report or 
 
 Statement, § 382. 
 bb. For Falsity of, or Omission in, Statement of 
 
 Corporate Affairs, § 383. 
 
296 BUSINESS CORPORATIONS IN NEW YORK § 265 
 
 § 265. Directors, Officers and Agents; Directors, De Facto 
 and De Jure. — " The de facto doctrine is one of those legal 
 makeshifts by which unlawful or irregular corporate and 
 public acts are legalized for certain purposes on the score of 
 necessity. It ' was introduced into the law,' said Chief Judge 
 Butler in the leading case of State v. Carroll (32 Conn. 449), 
 ' as a matter of policy and necessity, to protect the interests 
 of the public and individuals, where those interests were 
 involved in the official acts of persons exercising the duties of 
 an office, without being lawful officers.' The reason of the 
 rule upon which this policy is founded is stated to be that 
 ' third persons, from the nature of the case, cannot always 
 investigate the right of one assuming to hold an important 
 office, even so far as to see that he has color of title to it by 
 virtue of some appointment or election. If they see him 
 publicly exercising its authority, if they ascertain that this is 
 generally acquiesced in, they are entitled to treat him as such 
 officer, and, if they employ him as such, should not be sub- 
 jected to the danger of having his acts collaterally called in 
 question.' (Citations.) And the reason of this rule of neces- 
 sity would seem to imply that ' if the title of the assumed 
 officer be directly assailed by the State, in a proper proceed- 
 ing, it will be necessary for him to show himself something 
 more than an officer in fact, ' so that when an assumed officer 
 undertakes to enforce in a direct proceeding ' rights which 
 belong only to an officer de jwre, it may be necessary for him 
 to show himself to be such.' "^ Directors or trustees of a 
 corporation elected to fill vacancies by the votes, of others 
 who assumed to act as such but who were themselves disquali- 
 fied to hold the office (because they did not hona fide hold 
 stock) are directors de facto as to the public and third persons 
 dealing with the corporation; but as between themselves and 
 the corporation were never directors or trustees either in 
 fact or in law.^ A transfer of stock to an individual and his 
 election as director as successor to his transferrer make him 
 a director de facto and warrant him as such in joining in a 
 petition for dissolution of the corporation so as to give the 
 court jurisdiction to entertain the proceeding.' " The three 
 original directors [named in the certificate of incorporation 
 and not, therefore, stockholders], were directors de jure, 
 clothed with all the powers of the corporation and authorized 
 
 ^ Matter of Ringler & Co., 204 ^ MacMahon v. Stepney Spare 
 
 N. Y. 30, 97 N. E. 593 (1912). Wheel Agency, 140 A. D. 554, 125 
 
 2 Matter of Ringler & Co., 204 N. Y. Supp. 823 (1910). 
 N. Y. 30, 97 N. E. 593 (1912). 
 
§§ 266, 267 DIRECTORS, OFriCEES AND AGENTS 297 
 
 to make any contract in its behalf that it was capable of 
 making. ' ' * 
 
 § 266. Id.: Election, Governing Statutes. — The statutes 
 governing the election of directors are considered in the 
 immediately following sections, except such as do not fit the 
 particular subject matter of such sections, respectively, and 
 those are considered here. By-laws duly adopted at a meeting 
 of the members of a corporation control the action of its 
 directors; and no by-law adopted by the board of directors 
 regulating the election of directors or officers is 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.^ Every corporation 
 has power to make by-laws not inconsistent with any existing 
 law prescribing the manner of the appointment of the 
 inspectors of election." 
 
 § 267. Id.: In General. — ^Surprise and fraud upon the part 
 of the electors at a corporate meeting are sufficient to avoid 
 an election.' " The election of an unqualified person to a 
 corporate office is merely voidable and not void. ' ' ' When the 
 only method of electing an officer to a corporate board is, by 
 its charter, the vote, of a majority of his co-officers, and no 
 such majority is present at his election, he has no title to the 
 office, and the fact that the board later recognized him as one 
 of its members and elected him to an office which only a mem- 
 ber could hold does not make him any the more an officer.' 
 One present at a first election of directors who then voted 
 and was then elected a director cannot later object that no 
 notice was given of the first election of directors." An elec- 
 tion taking place under the appointment and authority of but 
 one inspector is void if the statute uses the plural word 
 * ' inspectors. " ^^ A statute exempting manufacturing cor- 
 porations from the provisions^of a law providing for a sum- 
 mary application and order for the establishment of a cor- 
 porate election, or for a new election, etc., relates simply to 
 
 * Hamilton Trust Oo. v. Clemes, * People v. Albany & Susquehanna 
 
 163 N. Y. 423, 57 N. E. 614 (1900). R. B. Co., 55 Barb. 344 (1869). 
 
 The question as to who are direct- ® People ex rel. NichoU v. N. Y. 
 
 ors d€ jure, is discussed in a note Infant Asylum, 122 N. Y. 190, 10 
 
 in 15 L.R.A. 418. L.R.A. 381, 25 N. E. 241 (1890). 
 
 = Gen. Corp. L. § 11 (L. 1909, "Schenectady & Saratoga Plank 
 
 c. 28). ' Road Co. v. Thatcher, 11 N. Y. 102 
 
 «St. Corp. L. § 31 (L. 1909, (1854). 
 
 c. 61). "Matter of Lighthall Mfg. Co., 
 
 ' People V. Albany & Susquehanna 47 Hun, 258 (1888) ; 2 R. S. (6th 
 
 R. R. Co., 55 Barb. 344 (1869). ed.) 399-400, §§ 6, 7. 
 
298 BUSINESS CORPORATIONS IN NEW YORK § 268 
 
 form and may be retroactive, as the remedy for testing the 
 corporate election still remains, though not in the summary 
 form provided by the law." To an action to restrain a corpo- 
 ration from permitting votes to be cast at a forthcoming 
 election on certain shares of its stock the holders thereof 
 must be made parties ; certainly if it be not certain that they 
 ■will be directors when the injunction is granted as they are 
 when the action is begun.^' 
 
 § 268. Id.: Time, Place and Notice. — Directors of every 
 stock corporation are to be chosen at the time and place fixed 
 by the by-laws of the corporation by a plurality of the votes 
 at such election." Notice of the time and place of holding 
 any election of directors must be either published at least 
 once in each week for two successive weeks immediately pre- 
 ceding such election, in a newspaper published in the county 
 where such election is to be held or delivered personally or 
 mailed, not less than ten nor more than twenty days before the 
 election, to Qach person who appears on the books of the cor- 
 poration as a stockholder ; if mailed, it must be directed to a 
 stockholder at his address as it appears on such books ; and 
 the by-laws may require such notice to be published and also 
 mailed or delivered as above provided." No by-law adopted 
 by the board of directors regulating the election of direct- 
 ors is 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." If the election has not been held on the day desig- 
 nated in the by-laws or by law the directors must forthwith 
 caU a meeting of the members of the cprporation for the pur- 
 pose of electing directors, giving notice thereof in the same 
 ]nanner as notice is given of the annual meeting for the elec- 
 tion of directors ; and if such meeting is not so called within 
 one month or if, though held, it results in a failure to elect 
 directors, any member of the corporation may call a meeting 
 for the purpose of electing directors by publishing a notice 
 of the time and place of holding such meeting at least once 
 in each week for two successive weeks immediately preceding 
 the election in a newspaper published in the county where 
 
 1^ Matter of New York Express "St. Corp. L. § 25 (L. 1909, 
 
 Co., 23 Hun, 615 (1881); L. 1880, e. 61). 
 
 c. 254, exempted corporation formed ^® St. Corp. L. § 25 (L. 1918, 
 
 under L. 1848 from 1 R. S. 603, c. 267). 
 § 5. See now Gen. Corp. L. § 32. " Gen. Corp. L. § 11 (L. 1909, 
 
 ^' Jones V. Nassau Suburban c. 281), 
 Home 'Co., 53 Misc. 63, 103 N. Y. 
 Supp. 1089 (1907). 
 
§ 268 DIRECTORS, OFFICERS AND AGENTS 299 
 
 the election is to be held and in such other manner as may be 
 prescribed in the by-laws for the publication of notice of the 
 annual meeting, and by serving upon each member either 
 personally or by mail directed to him at his last known post- 
 office address a copy of such notice at least two weeks before 
 the meeting." Such meeting (for the special election of 
 directors) must be held at the office of the corporation, or if 
 it has none, at the place in New York State where its principal 
 business has been transacted, or if access to such office or 
 place is denied or can not be had, at some other place in the 
 city, village or town where such office or place is or was 
 located; and at such meeting the members attending consti- 
 tute a quorum and may elect inspectors of election and direct- 
 ors 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 trans- 
 acted at an annual meeting of the members of the corpora- 
 tion/^ " Provisions in statutes and by-laws requiring the 
 election of directors to be had on a specified day are regarded 
 as directory, and the election, if not held on the regular day, 
 may be held at a later day, and the directors then chosen, if 
 there be no other irregularity or informity in their title, will 
 be directors de jure."^^ A statutory requirement of the 
 time after an annual election within which an election of cor- 
 porate directors shall be held is directory merely; so that if 
 such election be not held within the stipulated number of 
 days immediately after the failure to liold an annual election 
 it can lawfully be held at a later period.™ While the require- 
 ment of a thirty-day notice of a meeting to elect directors 
 pursuant to by-laws adopted by the corporation may be 
 waived by a stockholder, e. g., by attendance and participation 
 at a meeting held on less notice, yet if a less notice be given 
 any stockholder may have the courts summarily order a new 
 election.^ A statutory provision .that elections for directors 
 of corporations be held annually is equivalent to an express 
 requirement, in the absence of any by-law fixing a date within 
 the year, that the election be held upon the recurrence in the 
 
 "Gen. Corp. L. § 29 (L. 1909, ^Matter of Keller, 116 A. D. 58, 
 
 c. 61). 101 N. Y. Supp. 133 (1906); Gen. 
 
 ^« Gen. Corp. L. § 30 (L. 1909, Corp. L. § 24 (L. 1892, .c. 687) ; St. 
 
 e. 28). Corp. L. § 20 (L. 1901, c. 354) ; Gen. 
 
 " Beardsley v. Johnson, 121 N. Y. Corp. L. § 27. See now Gen. Corp. 
 
 224, 24 N. E. 380 (1890). L. § 11. 
 
 ^" Vandenburgh v. Broadway Rail- 
 way Co., 29 Hun, 348 (1883); L. 
 1854, c. 282, § 5. 
 
300 BUSINESS CORPORATIONS IN NEW YORK § 269 
 
 following year of the day on which the first election was held, 
 if that be a legal day.'' A statute requiring annual elections 
 of directors is iiot inoperative because no by-law has been 
 adopted regulating the manner of holding such elections, pur- 
 suant to a statute requiring such a by-law to be passed.^ The 
 statutory provision that if an election of directors is not held 
 on the day designated, the president must notify and cause 
 an election of directors to be held within sixty days there- 
 after is imperative, and on failure so to do, mandamus may 
 properly be resorted to; and that a corporation is incorpo- 
 rated under a general law, which provides that in such event 
 it shall be lawful to hold such an election in such manner as 
 shall be provided for by the corporate by-laws, does not make 
 it the less subject to the general statutory provision in 
 question.* 
 
 § 269. Id.: Method of. — Directors of every stock corporation 
 are to be chosen at the time and place fixed by the by-laws of 
 the corporation by a plurality of the votes at such election ; 
 and vacancies in the board of directors are to be filled in the 
 manner prescribed in the by-laws ; and at least one-fourth in 
 number of the directors of every stock corporation must be 
 elected annually.*^ If the number of directors of a stock corpo- 
 ration is increasfed pursuant to law the additional directors 
 authorized by such increase must be elected by the votes of a 
 majority of the directors in office at the time of the increase." 
 The statute provides for (1) the appointment, (2) the com- 
 pensation and (3) the oath of inspectors of the election of 
 directors. (1) Inspectors of election of every stock corpora- 
 tion must be appointed in the manner prescribed in the 
 by-laws, except that the inspectors of the first election of 
 directors (and of all previous meetings of the stockholders) 
 must be appointed by the board of directors named in the cer- 
 tificate of incorporation, and except, further, that if any 
 inspector refuses to serve or neglects to attend at the election 
 or his office becomes vacant, the meeting may appoint an 
 inspector in his place unless the by-laws otherwise provide.' 
 (2) Each inspector is entitled to a reasonable compensation 
 
 ^ Vandenburgh v. Broadway Rail- now Gen. Corp. L. § 29, changing 
 
 way Co., 29 Hun, 348 (1883) ; L. old statute somewhat. 
 
 1854, e. 282, § 5. =St. Corp. L. § 25 (L. 1909, 
 
 ^Vandenburgh v. Broadway Rail- e. 61). 
 
 way Co., 29 Hun, 348 (1883); L. "St. Corp. L. § 26 (L. 1909, 
 
 1854, c. 282, § 5. e. 421). 
 
 "People ex rel. Miller v. Cum- 'St. Corp. L. § 31 (L. 1909, 
 
 mings, 72 N. Y. 433 (1878) ; 1 R. S. e. 61). 
 604, § 8; L. 1848, c. 40, § 4. See 
 
§ 270 DIRECTORS, OFriCERS AND AGENTS 301 
 
 for his services, to be paid by the corporation. (3) The 
 inspectors appointed to act at any meeting of the stockholders 
 must, before entering upon the discharge of their duties, be 
 sworn faithfully to execute the duties of inspector at such 
 meeting with strict impartiality, and according to the best of 
 their ability, and the oath so taken must be subscribed by them 
 and immediately filed in the office of the clerk of the county in 
 which such election or meeting is held, with a certificate of 
 the result of the vote taken thereat.^ No by-law may require 
 that more than a plurality of the votes of the stockholders 
 voting at an election of directors shall be essential to a 
 choice." A corporation may hold an election for directors 
 though there be no by-law regulating such election, and a 
 statute requiring any by-law regulating elections to be pub- 
 lished before the elections if the latter were to be valid.^° 
 After an election has begun it is not improper for the inspect- 
 ors to keep it open as long, within a reasonable discretion, 
 as is necessary to receive the votes of all the stockholders 
 present, ready and offering to vote." ' ' The statute requiring 
 the oath of inspectors to be filed in the office of the clerk of 
 the county in which the election is held is directory only, and 
 the failure to file it does not invalidate the election. ' ' "^ 
 
 § 270. Id.: Who May Vote, and How.— The certificate of 
 incorporation of any stock corporation may provide that at 
 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 rnay cast all of such votes for a 
 single director or may distrilDute them among the number to 
 be voted for, or any two or more of them as he may see fit, 
 which right, when exercised, is termed cumulative voting. ^^ 
 When any foreign or domestic stock corporation, except a 
 moneyed corporation, becomes a stockholder in another 
 domestic or foreign corporation, pursuant to charter author- 
 
 = St. Ck)rp. L. § 31 (L. 1909, 53 A. D. 65, 66 N. Y. Supp. 145 
 
 c. 61). (1900); St. Corp. L. § 28. Now 
 
 "Matter of Rapid Transit Ferry § 31. 
 Co., 15 A. D. 530, 44 N. Y. Supp. " Gen. Corp. L. § 24 (L. 1909, 
 
 539 (1897); St.. Corp. L. § 20 (L. c. 28). "The stockholders of a cor- 
 
 1892, c. 688). See now § 25. poration heretofore formed, who, by 
 
 ^"Matter of David Jones Co., 67 the provisions of laws existing on 
 
 Hun, 360, 22 N. Y. Supp. 318 April thirtieth, eighteen hundred and 
 
 (1893) ; L. 1892, c. 687, § 11, subd. 5. ninety-one, were entitled to the ex- 
 
 ^^ People V. Albany & Susquehanna eroise of such right, may hereafter 
 
 R. R. Co., 55 Barb. 344 (1869). exercise such right according to the 
 
 ^^ Union National Bank v. Scott, provision of this section." 
 
302 BUSINESS CORPORATIONS IN NEW YORK § 270 
 
 ity or because the corporation the stock o-f which is acquired is 
 engaged in a similar business or in the construction or opera- 
 tion of works necessary or useful in the business of the first 
 corporation or in which or in connection with which the man- 
 ufactured articles, product or property of such first corpora- 
 tion are or may be used, or because the corporation the stock 
 of w:hich is acquired is one with which such first corporation 
 is or may be authorized to consolidate, the corporation hold- 
 ing such stock possesses and exercises in respect thereof all 
 the rights, powers and privileges of individual owners or 
 holders of such stock." In the absence at a meeting for the 
 special election of directors of the books of the corporation 
 showing who are members thereof, each person before voting 
 must present his sworn statement setting forth that he is a 
 member of the corporation and the number of shares of stock 
 owned by him and standing in his name on the books of the 
 corporation and, if known to him, the whole number of shares 
 of stock of the corporation outstanding; and on filing such 
 statement he may vote as a member of the corporation 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 ; 
 and the inspectors must return and file such statements, with 
 a certificate of the result of the election, verified by them, in 
 the ofiice of the clerk of the county in which such election is 
 held"; and the persons so elected are the directors of the corpo: 
 ration." Only stockholders of record are entitled to vote at 
 corporate elections; and that no stock is kept precisely as 
 prescribed by law is no objection to those persons voting who 
 are shown to be stockholders by a stock certificate book con- 
 taining the necessary information." If a statute providing 
 that, when an election for directors is not held on the day set 
 by chaj:ter, notice must be given of an election for directors 
 to be held within sixty days immediately thereafter, and that 
 no share shall be voted upon except by such as appear on the 
 books to have the right to vote on the day set in the charter 
 for the election, only those can vote at the election when it is 
 held who were stockholders at the time when the election 
 should have been held ; and persons becoming stockholders in 
 the interim cannot vote." 
 
 " St. Corp. L. § 52 (L. 1909, N. Y. Supp. 109 (1906) ; St. Corp. 
 
 c. 61). L. § 20 (L. 1901, c. 355). Now 
 
 " G«n. Corp. L. § 31 (L. 1900, § 25. 
 c. 28). " VaBdenttiTg^ v. Broadway Rail- 
 
 " Matter of Utica Fire Alarm way Co., 29 Hun, 348 (1883); 1 
 
 Telegraph Co., 115 A. D. 821, 101 E. S. 604, § 8. 
 
§ 271 DIEECrORS, OFFICERS AND AGENTS 303 
 
 The subject of voting by stockholders at all meetings has 
 already been discussed and reference is made to such discus- 
 sion for fuller treatment of the statutes and decisions.""^ 
 
 § 271. Id.: Who May Be Elected.— At least one of the 
 directors of the corporation must be a citizen of the United 
 States and a resident of New York State." Each director 
 shall be a stockholder unless otherwise provided in the cer- 
 tificate of incorporation, or in a by-law adopted at a 
 stockholders ' meeting." When any domestic or foreign stock 
 corporation, except a moneyed corporation, becomes a stock- 
 holder in another domestic or foreign corporation, pursuant 
 to charter authority or because the corporation the stock of 
 which is acquired is engaged in a similar business or in the 
 construction or operation of works necessary or useful in the 
 business of the first corporation or in which or in connection 
 with which the manufactured articles, product or property of 
 such corporation are or may be used, or because the corpo- 
 ration the stock of which is acquired is one with which such 
 first corporation is or may be authorized to consolidate, then 
 its president or other oflScers are eligible to the office of 
 director of such corporation the same as if they were indi- 
 vidually stockholders therein.^" " . . ~. a corporation may 
 have as its directors persons who are not stockholders, if pro- 
 vision to that effect be made by its charter or by-laws. " ^ "In 
 the nature of things there can be no stockholders at the date of 
 incorporation, and hence the provision that the directors shall 
 be chosen ' from the stockholders ... by a majority of 
 the votes of the stockholders voting ' has no application to 
 * the directors for the first year ' named in the certificate 
 pursuant to law.'"* Possession of the bare legal title to 
 stock, taken for the purpose of qualifying one to be a director, 
 does not constitute him a stockholder within the intent of the 
 statute prescribing that condition of eligibility to corporate 
 office.^ When a transfer of stock is made in good faith for the 
 purpose of qualifying a person to act as director, and the 
 transferee actually holds the stock during his incumbency of 
 
 "* See § 168j supra. ^ Buffalo Electro-Plating Co. v. 
 
 On the right of a director of a Day, 151 A. D. 237, 135 N. Y. Supp. 
 
 corporation to vote by proxy, see 1054 (1912) ; St. Corp. L. § 25. 
 
 note in 29 L.R.A. 848. ^Hamilton Trust Co. v. Clemes, 
 
 "Gen. Corp. L. § 34 (L. 1917, 163 N. Y. 423, 57 N. E: 614 (1900) ; 
 
 c 538). St. Corp. L. § 20, now § 25'. Bus. 
 
 " St. Corp. L. § 25 (L. 1909, Corp. L. § 2, par. 8. 
 
 c 61) '"Matter of Elias, 17 Misc. 718, 40 
 
 ^ St. Corp. L. § 52 (L. 1909, N. Y. Supp. 910 (1896) ; St. Corp. 
 
 c. 61). L. § 20, now § 25. 
 
304 BUSINESS CORPORATIONS IN NEW YORK §§ 272, 273 
 
 office, he is a stockholder within the purview of the law; but 
 when a transfer is made for that purpose to one who at once 
 retransfers it to the owner, before even he is elected director, 
 though his name appears on the books as a stockholder and 
 so concludes the inspectors of election, it does not conclude 
 the court inquiring into the validity of his tenure as director, 
 and such a one is not, therefore, a stockholder when elected 
 director, and is ineligible for that office.* Stock held by a 
 member of a reorganization committee in trust as such is a 
 sufficient holding to satisfy a requirement that a director be a 
 stockholder/ A stockholder in a corporation organized under 
 a statute decreeing that no person shall be a director of it 
 unless a stockholder, after sale and transfer of his stock 
 ceases to be a director de jwre, although he may be treated as 
 a director de facto if he continues and is allowed to act as 
 such ; but he cannot thereafter be legally chosen a director." 
 One who is director and stockholder in a corporation organ- 
 ized under a law requiring each director to hold at least five 
 shares of its stock is entitled to the benefit of the rule that 
 " as soon as a director parts with all the beneficial interest in, 
 and control over, the stock which he is required to hold, and 
 causes the officers of- the corporation to have knowledge of 
 such fact by a request that a proper transfer be made on the 
 books of the company, he no longer possesses the qualifica- 
 tions which the statute declares to be essential." ' 
 
 § 272. Id.: New Election. — The topic of a new election of 
 directors is discussed in the section which shortly follows 
 anent " Trying out and Proving Title."* 
 
 § 273. Id.: Acceptance. — In addition to election by stock- 
 holders, express or implied acceptance of the office is essential 
 to constitute one a director." "... in the absence of an 
 express declaration or any statute or controlling usage to the 
 
 * Matter of Ringlear & Co., 204 who accepted it and the statement 
 
 N. Y. 30, 97 N. E. 593 (1912) ; G«n. that the director's connection with 
 
 Corp. L. § 32. the company was severed, but did 
 
 ° Haines v. Kinderhook & Hudson not transfer it on the books as re- 
 
 Ry., 33 A. D. 154, 53 N. Y. Supp. quested, because there were no books. 
 
 368 (1898). He then issued a new oertiflcate to 
 
 ° Beardsley v. Johnson, 121 N. Y. the director without his knowledge 
 
 224, 24 N. E. 380 (1890) ; L. 1850, for five shares and another to him- 
 
 c. 149, § 5. self for the balance; and la,ter in- 
 
 ' Chemical Nat. Bank v. Colwell, duced the director to accept the five- 
 
 ]32 N. Y. 250, 30 N. E. 644 (1892) ; share certificate. 
 L. 1875, c. 611, § 10. The director * See § 276, infra. 
 
 assigned all his stock to the eorpo- ' United Growers Co. v. Eisner, 22 
 
 ration's secretary as an individual, A. D. 1; 47 N. Y. Supp. 906 (1896) 
 
§ 274 DIEECrOES, OPFICEES AND AGENTS 305 
 
 contrary, one elected a director is presumed to accept."^" 
 ' ' The facts that a person, as a stockholder, is eligible for elec- 
 tion as trustee, and is elected, do not alone invest him with 
 the character of trustee so as to charge him with the duties 
 and responsibilities of the office. There must in addition have 
 been an acceptance on his part of the office to which he M^as 
 elected. . . . His acceptance could be shown by conduct 
 on his part indicating an intention to accept the office, and 
 might be implied from circumstances. ' ' " 
 
 § 274. Id.: Tenure of Office, Holding Over,— If the directors 
 are not elected on the day designated in the by-laws, or by law, 
 the corporation is not for that reason dissolved; but every 
 director continues to hold his office and discharge his duties 
 until his successor has been elected.^^ "At common law, a 
 director holding over after the end of his term became an 
 officer de facto, and as such he could do acts binding the corpo- 
 ration (ciiaiiow). The only change effected as to that by . . . 
 [the statute permitting them to continue to act until their suc- 
 cessors were elected] is to make directors holding over and 
 acting, de jure directors until their successors shall be 
 elected. "^^ The omission to reelect directors or to elect 
 others in their place has the legal effect of continuing them in 
 office." Directors of a corporation formed under a statute 
 providing that directors elected should continue such until 
 others are elected in their places continue on after the time 
 set for another election of directors if no such election is then 
 held." A trustee of a manufacturing corporation is not bound 
 to hold over after the expiration of the term for which he was 
 elected, and is not bound to act after that time, but he may, 
 with the consent of the stockholders do so ; and if his sworn 
 statements show that he did, the fact that for five years he 
 had no notice of and did not attend any meetings will not 
 
 ^'' Halpin v. Mutual Brewing Co., porate property had been foreclosed 
 
 20 A. D. 583, 47 N. Y. Supp. 412 leaving $5,000 unpaid and no assets 
 
 (1897). • to pay it. ' 
 
 "Cameron v. Seaman, 69 N. Y. '^^Gen. Corp. L. § 28 (L. 1909, 
 
 396 (1877). The stockholder was e. 28). 
 
 sought to be held liable as trustee ^^Van Amburgh v. Baker, 81 
 
 for the corporate failure to file its N. Y. 46 (1880) ; Gen. Mfg. Act, 
 
 annual report, under L. 1848, c. 40, L. 1848, c. 40, § 4. See now Gen. 
 
 § 12. He was not present at his Corp. L. § 28 (L. 1909, c. 28). 
 
 election ; was told of it verbally by ^* Matter of Dolgeville El. L. & P. 
 
 the president whom he told he would Co., 160 N. Y. 500, 55 N. E. 287 
 
 not serve; never received a written (1899) ; Gen. Corp. L. now § 28. 
 
 notice of election said to have been ^^ Vandenburgh v. Broadway Eail- 
 
 sent him; before his election the cor- way Co., 29 Hun 348 (1883). 
 
 B. C. N. Y.— 20 
 
306 BUSINESS CORPORATIONS IN NEW YORK §275 
 
 relieve him from personal liability under a then-existing stat- 
 ute for failure of the. corporation to file its annual report." 
 § 275. Id.: Termination of Directorship. — The law permits 
 the division in a certificate of incorporation of the directors 
 of the corporation into two or more classes whose terms of 
 office shall respectively expire at different times." In the 
 absence of the election of his successor by the stockholders, 
 a director of a corporation has two methods by which he may 
 cease to be such: " First, by resigning the office, which he 
 could at .any time do, and, second, by an absolute sale of all of 
 his stock."" A corporate trustee need give no public notice, 
 or notice to anyone save his associates, of intent to resign, or 
 actual resignation." No acceptance or entry in the minutes 
 of a director's resignation is needed to make it effective.^ 
 Although by the general rule of law directors elected annually 
 for the term of one year under the corporate charter, which 
 does not, however, contain any provision as to their holding 
 over until their successors are elected, may so hold over ; ' ' yet 
 there is no rule which compels them to do so, and where . . . 
 a director sells out all of his stock in a corporation and ceases 
 to take any part in the management of its affairs or the meet- 
 ings of its directors, he is not bound to see that a successor is 
 elected in his place or to tender any formal resignation. " ^ A 
 director of a corporation the by-laws of which provide that its 
 directors shall serve for one year and until such time as their 
 successors are chosen continues such after his resignation has 
 been received if no successor has been chosen, so that service 
 upon him of process is good service on the corporation." 
 "... in the absence of any specific statutory authority 
 and in the absence of provisions in the articles of incorpora- 
 tion or in by-laws duly adopted by the stockholders of the cor- 
 poration providing therefor, the board of directors of a busi- 
 ness corporation . . . has no power to expel from the 
 board of directors a fellow-director, and hence, no power to 
 
 "First National Bank of Jersey "Bruce v. Piatt, 80 N. Y. 379 
 
 City V. Lamon, 130 N. Y. 366, 29 (1880) ; Gen. Mfg. Act, L. 1848, c. 
 
 N. E. 321 (1891). 40, § 12. 
 
 "St. Corp. L. § 26 (L. 1909, c. ^Chandler v. Hoag, 2 Hun, 613 
 
 421). (1874) ; aff'd 63 N. Y. 624; L. 1848, 
 
 "Sinclair v. Fuller, 158 N. Y. c. — (Feb. 17), § 4. 
 
 607, 53 N. E. 510 (1899); St. Corp. ^ Sturges v. Vanderbilt, 73 N. Y. 
 
 L. § 20, now § 25. This decision 384 (1878). 
 
 assumes no provision in the certifi- ^ Timolat v. The S. J. Held Co., 
 
 cate of incorporation pursuant to a 17 Misc. 556, 40 N. Y. Supp. 692 
 
 statute authorizing it that directors (1896) ; C. C. P. § 431. 
 need not be stockholders. 
 
§ 276 DIEECTORS, OFFICERS AND AGENTS 307 
 
 pass a valid amendment to the by-laws, under and by virtue 
 of which the directors may assume to exercise that power." ' 
 § 276. Id.: Trying Out and Proving Title to Directorship.— 
 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, the Supreme 
 Court must (1) upon notice thereof to the adverse party or to 
 those to be affected thereby, (2) forthwith and in a summary 
 way hear the affidavits, proofs and allegations of the parties, 
 or otherwise inquire into the matters or causes of complaint, 
 and (3) establish the election or order a new election or make 
 such order and give such relief as right and justice may 
 require.* " The statute providing for a summary inquiry by 
 the Supreme Court into a corporate election authorizes a 
 judicial investigation into elections made by a board of 
 directors or trustees to fill vacancies, as distinguished from 
 electioiis for full terms by the stockholders. " ^ It is not neces- 
 sary to annul the election of directors of a corporation that 
 the attorney-general proceed under nineteen hundred and 
 ■ forty-eighth section of the Code of Civil Procedure ; as the 
 court has such power of annulment under the thirty-second sec- 
 tion of the General Corporation Law.° A General Eule of 
 Practice that " contested motions shall not be noticed or 
 brought to a hearing at any special term held at the same time 
 and place with a circuit ' ' does not exclude a judge at special 
 term, engaged at the same time in holding a circuit, 
 from entertaining a motion noticed for such term, 
 such as an order to show cause why a petition for 
 inquiry into a corporate election should not be had 
 pursuant to statute.' Although by statute a petition by 
 one aggrieved to have inquiry made into a corporate elec- 
 tion is to be heard and decided by a judge in court, yet 
 an order to show cause thereon may be granted by a judge 
 out of court as well as by a court.' A proceeding by a party 
 
 ^Raub V. G«rken, 127 A. D. 42, 'Matter of Empire State Su- 
 
 111 N. T. Supp. 319 (1908); Gen. preme Lodge, 53 Misc. 344, 103 N. 
 
 Corp. L. § 11, subd. 5 (L. 1895, Y. Supp. 465 (1907) ; G«n. Corp. L. 
 
 c. 672), giving every corporation § 27, now § 532. 
 
 power to make by-laws not incon- ' Matter of Petition of Argus Co., 
 
 sistent with any existing law means 138 N. Y. 557, 34 N. E. 388 (1893) ; 
 
 not inconsistent with statutes and General Rule of Practice No. 38; 
 
 decisions of the courts as well. Gen. Corp. L. § 27, now § 32 (1 
 
 *Gen. Corp. L. § 32 (L. 1909, R. S. 603, § 5). 
 
 c. 28). "i^Tattfir nf Petition of Argus Co., 
 
 5 Matter of Ringler & Co., 204 138 N. Y. 557, 34 N. E. 388 (1893) : 
 N. Y. 30, 97 N. E. 593 (1912); Gen. , G«n. Corp. L. § 27, now § 32 (1 
 
 Corp. L. § 32. R. S. 603, § 5) ; C. C. P. §' 780. 
 
308 BUSINESS CORPORATIONS IN NEW YORK § 276 
 
 aggrieved to have the Supreme Court inquire into a corporate 
 election under the statutory authority vested in the court to 
 make such inquiry is not made invalid by the joining of 
 another party in the petition without authority." A statute 
 authorizing a proceeding to compel a new election of directors 
 of a corporation by any person that may " be aggrieved by, 
 or complain of ' ' any election, ' ' does not mean that any per- 
 son whomsoever who chooses to make a complaint may insti- 
 tute the proceeding, but it must be some person whose rights 
 have been infringed, and who is justly entitled to complain. ' ' 
 The statute permitting the Supreme Court to give relief 
 against an improper corporate election on the petition of a 
 person aggrieved does not authorize one not showing that he 
 or his assignor was a stockholder at the time of the election 
 complained of to seek relief under it.^" The necessity which 
 exists in a proceeding to set aside an election of a corporate 
 director, on the ground that he did not receive the necessary 
 number of votes, of showing that the one seeking to annul the 
 election has been injured by the result, does not exist when 
 the ground of the application is that no director at all could 
 be elected because the corporation had no proper constitution 
 and by-laws providing for directors." The statute requiring 
 notice of a proceeding to review the election of corporate 
 directors to be given ' ' to the adverse party, or to those to be 
 affected thereby " is satisfied by notice to the corporation 
 itself and the directors whose election is challenged.'^ A 
 statute intended to give relief to establish an election already 
 had or to set aside such an election and order a new one does 
 not permit mandamus to compel inspectors of election to 
 count votes they have refused to count." A summary inquiry 
 by the Supreme Court, pursuant to statute, into the validity 
 of corporate elections is not an action and is inappropriate 
 for determining equitable claims or questions not necessarily 
 involved in deciding the primary question." A stockholder 
 
 "Matter of Petition of Argus Co., Y. Supp. 465 (1907); Gen. Corp. L. 
 
 138 N. Y. 557, 34 N. E. 388 (1893) ; § 27, now § 32. 
 
 Gen. Corp. L. § 27, now § 32 (1 ^^ People ex rel. Putzel v. Simon- 
 
 R. S. 603, § 5). son, 61 Hun, 338, 16 N. Y. Supp. 
 
 "Matter' of Seheel, 134 A. D. 118 (1891); L. 1890, c. 563, § 15. 
 
 442, 119 N. Y. Supp. 295 (1909) ; See now Gen. Corp. L. § 32. 
 
 Gen. Corp. L. § 27, now § 32. " Matter of Utica Fire Alarm 
 
 " Matter of Empire State Su- Telegraph Co., 115 A. D. 821, 101 
 
 preme Lodge, 53 Misc. 344, 103 N. N. Y. Supp. 109 (1906) ; St. Corp. 
 
 Y. Supp. 465 (1907). L. § 20 (L. 1901, c. 355). See now 
 
 '2 Matter of Empire State Su- Gen. Corp. L. § 32. 
 preme Lodge, 53 Misc. 344, 103 N. 
 
§ 276 DIRECTORS, OFFICERS AND AGENTS 309 
 
 has no standing in court when seeking to enjoin a person, a 
 de facto director, under color of an election,^ from acting as 
 such, and to command the recognition of another person 
 whose resignation, under color of the action of the board, has 
 been accepted ; for a court of equity will not determine the 
 title to office of a director of a corporation." A determination 
 by the court in a proceeding under the statute to determine 
 the right of individuals to act as directors of a corporation 
 which depended on their ownership of its stock is not conclu- 
 sive as an adjudication of their right to the shares of stock in 
 another action involving title to such stock." The court adju- 
 dicating upon a special proceeding tO' review the validity of 
 an election of directors cannot in such proceeding decide that 
 proceedings to revoke an attempted settlement with a sub- 
 scriber to the corporation's stock was in violation of its pre- 
 vious order." Although it seems proper for the court to 
 appoint a referee to take testimony and report with his 
 opinion in a proceeding to inquire summarily into the validity 
 of a corporate election, yet the order of appointment is not 
 appealable.^' 
 
 An action may be maintained against one or more trustees, 
 directors, managers or other officers of a corporation to pro- 
 cure a judgment for the purpose of suspending a defendant 
 from exercising his office where it appears that he has abused 
 his trust; or of removing a defendant from his office upon 
 proof or conviction of misconduct and directing a new election 
 to be held by the body or board duly authorized to hold the 
 same, in order to supply the vacancy created by the 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 con- 
 sent of the senate, fill the vacancies." The court must, upon 
 the application of either party, make an order directing the 
 trial by jury of the issue of neglect or failure of defendants 
 to perform their duties ; and for that purpose the questions to 
 be tried must be prepared and settled as prescribed in section 
 nine hundred and twenty of the Code of Civil Procedure.'" 
 
 ^^Moir V. Provident Savings Life A. D. 630, 130 N. Y. Supp. 419 
 
 Assurance Society, 127 A. D. 591, (1911). 
 
 112 N Y. Supp. 57 (1908). ^^ Matter of Silaski, 175 A. D. 
 
 "Farmer v. Farmer & Son Type 199, 161 N. Y. Supp. 513 (1916); 
 
 Founding Co., 83 A. D. 218, 82 N. Gen. Corp. L. § 32 (L. 1909, c. 28). 
 
 Y. Supp. 228 (1903); Gen. Corp. "Gen. Corp. L. § 90 (L. 1909, 
 
 L. S 27, now § 32. c. 28). 
 
 ^^Matter of New York & West- '"G^n. Corp. L. § 90 (L. 1909, 
 
 Chester Town Sit« Co., No. 2, 145 c. 28). "As to any litigation pend- 
 
310 BUSINESS CORPORATIONS IN NEW YORK § 276 
 
 Such an action may be brought by the Attorney-General in 
 behalf of the People of the State.^ The statutory action by 
 the Attorney-General does not divest or impair any visitorial 
 power over a corporation which is vested by statute in a cor- 
 porate body or a public officer.^ An injunction order suspend- 
 ing from office or restraining from the performance of his 
 duties a trustee, director or other officer of a corporation can 
 be granted only by the court upon notice of the application 
 therefor to the trustee, director or other officer enjoined; and 
 if such an injunction is made otherwise it is void.' A trustee, 
 director or other officer of a corporation cannot be suspended 
 or removed from office by a court or judge otherwise than by 
 the final judgment of a competent court, in an action brought 
 by the Attorney-General as prescribed by statute.* An action 
 by the Attorney-General in the name of the People to try the 
 rights of two bodies each claiming to be directors of a corpo- 
 ration may be brought.^ A temporary injunction against cer- 
 tain defendants interfering with certain plaintiffs' acting as 
 officers of a corporation, granted on the ground that such 
 defendants had usurped the functions of such plaintiffs who 
 were de facto officers, will be vacated when it appears that, 
 just before bringing the action and securing the injunction, 
 plaintiffs had forcibly evicted defendants, who were properly 
 acting as the corporation's officers, and usurped the corporate 
 power themselves, but had concealed this fact from the court 
 granting the temporary injunction.* The doctrine of corpo- 
 
 ing prior to September one, nine- business within New York, or has 
 
 teen hundred and seven, the provi- within New York an agency, busi- 
 
 sions of this section as they existed ness, fiscal or for the transfer of 
 
 prior to thait date shall apply." its stock; see Gen. Corp. L. § 308. 
 
 ^Gen. Corp. L. § &1 (L. 1909, '^ People v. Albany & Susque- 
 
 c. 28). hanna R. R. Co., 55 Barb. 344 
 
 2G«n. Corp. L. § 92 (L. 1909, (1869); Code, §§ 428, 432. 
 
 c. 28) . ° Ciancimino v. Man, 1 Misc. 121, 
 
 'Gen. Corp. L. § 305 (L. 1909, 20 N. Y. Supp. 702 (1892). "A 
 
 o. 28) . This statute applies not only court of equity has no inherent 
 
 to a domestic corporation, but to a power to try the disputed title to 
 
 foreign corporation which does corporate office, and to enjoin one 
 
 business within the state or has in possession from the exercise of 
 
 within the staite an agency, business, its functions at the suit of a rival 
 
 fiscal or for the tranrfer of its claimant. . . . Such may be done 
 
 stock; see G«n. Corp. L. § 308. and judgment of ouster rendered 
 
 * Gen. Corp. L. § 307 (L. 19109 only in an action in the nature of 
 
 c. 28). The statute referred to is quo warranto, instituted by the at- 
 
 § 90, Gen. Corp. L. The statute re- tomey-general on behalf of, and in 
 
 ferred to in tbe text applies not only the name of, the people. 
 
 to a domestic corporation but to a Where, however, the particular case 
 
 foreign corporation which does presents other features calling for 
 
§ 276 DIEECTOES, OFFICEES AND AGENTS 311 
 
 rate officers de facto applies only in favor of third persons 
 and to protect innocent parties who have trusted to the 
 apparent title of an officer ; and not, as against the people, in 
 an action to try the title to the office/ 
 
 The Attorney-General may maintain an action upon either 
 his own information or the complaint ■ of a private person 
 against a person who usurps, intrudes into or unlawfully 
 holds or exercises within the State an office in a domestic cor- 
 poration.* In such action the Attorney-Greneral, besides stat- 
 ing the cause of action in the complaint, may in his discretion 
 set forth therein the name of the person rightfully entitled to 
 the office and the facts showing his right thereto, and obtain 
 an order from the court or judge to arrest the defendant upon 
 proof by affidavit that the defendant by means of his usurpa- 
 tion or intrusion has received fees or emoluments belonging 
 to the office.® The statute, hereinafter quoted, provides that 
 the portion of the Code of Civil Procedure governing arrest 
 applies in general to the order of arrest and the proceedings 
 thereon ; that judgment in the action may determine the right 
 of the defendant and relator or the defendant only; that the 
 action is triable as of right by a jury; that on rendition of 
 judgment for the relator he may execute his office after taking 
 oath and giving bond, and receive the books and papers from 
 the defendant; that relator may recover his damages from 
 defendant for the latter 's usurpation of office; that any num- 
 ber of persons claiming title to the same office may be sued in 
 one action by the Attorney-General ; that a temporary injunc- 
 tion against defendant may be had in certain cases and a final 
 one in others ; that the plea of incrimination will not avail a 
 witness ; and that final judgment may oust the defendant, sub- 
 ject him to costs, and a fine." The remedy of one alleging 
 that he has been ousted from his office as director of a corpo- 
 ration and that another in possession of that office as his suc- 
 cessor holds it unlawfully is not by mandamus but by action 
 by the Attorney-General either upon his own information or 
 the complaint of a private person under the nineteen hundred 
 and forty-eighth section of the Code, in the nature of a quo 
 
 relief, which are of equitable ao^- nor will it be permitted to have that 
 
 nizanee, and the trial of a disputed effect." 
 
 title to corporate office is only inci- ^ People v. Albany & Snsque- 
 
 dental thereto, the court may in- hanna E^ E. Co., 55 B'arb. 344 
 
 quire into the leg^ality of the elec- (1869). 
 
 tion, and grant such relief as the * C. C. P. § 1948. 
 
 special exigencies require . . . ; ° C. C. P. § 1949. 
 
 |but its .iudgment cannot go to the " C. C. P. §§ 1949-1956, both in- 
 
 extent of ousting a de facto officer, elusive. 
 
312 BUSINESS CORPORATIONS IN NEW YORK § 276 
 
 warranto?^ " ... when a person is already an officer 
 [of a corporation] by color of right, the court will not grant a 
 mandamus to admit another person who claims to have been 
 duly elected, and . . . the proper remedy is by an informa- 
 tion in the nature of a quo warranto." '^'^ The writ of man- 
 damus will not issue to accomplish the restoration of one to a 
 corporate office in case of doubtful right, and, if it is a ques- 
 tion of serious doubt whether such on-e have title to the office, 
 the Court of Appeals will not review the discretion exercised 
 by the court below it in refusing mandamus." 
 
 Who were elected directors of a corporation at a meet- 
 ing may be proven not only by the corporation's books but 
 by the testimony of witnesses who were present." To prove 
 one a trustee or director of a corporation more is necessary 
 than proof of his election as such." A man is not proven 
 to be a director of a corporation at a particular time when 
 he denies as a witness that he was and the only contra- 
 diction of his testimony is its certificate of incorporation 
 executed over a year before that time in which he was named 
 as an original director.^" It is not sufficient to prove that 
 one is a director of a corporation organized prior to 
 1892 under the Manufacturing Act of 1848 to show that 
 an answer to a complaint against him and others, alleging 
 he was such director, did not deny such allegation; that 
 the certificate of incorporation filed years ago was signed 
 and acknowledged by him, giving his name as one of its 
 directors for the first year; and that annual reports stated 
 he was a director, if not signed by him." " The- receipt of 
 illegal votes in favor of a candidate who also has received a 
 majority of the legal votes, does not defeat his election. It is 
 
 "People ex rel. Manice v. Pow- 629 (1878). Each year from 1866 
 
 ell, 201 N. Y. 194, 94 N. E. 634 to 1870 he was elected trustee. In 
 
 (1911) ; Gen. Corp. L. §§ 90, 91, 1871 there was no election but he 
 
 307; C. C. P. § 1948. " acted with the other trustees who 
 
 ^^ People V. Stevens, 5. Hill, 616, held over. In 1872 there was an 
 
 as quoted with approval in People election and he was elected with 
 
 ex rel. NichoU v. N. Y. Infant Asy- others but neither was present nor 
 
 lum, 122 N. Y. 190, 10 L.R.A. 381, had notice of it. He never acted as 
 
 25 N. E. 241 (1890). trustee after 187L Held, not a 
 
 ^^ People ex rel. Nicholl v. N. Y. trustee. 
 
 Infant Asylum, 122 N. Y. 190, 10 ^'Hanauer v. Bradstreet's CoUec- 
 
 L.R.A. 381, 25 N. E. 241 (1890). tion Bureau, 95 Misc. 211, 158 N. Y. 
 
 "Partridge v. Badger, 25 Barb. Supp. 918 (1916). 
 
 146 (1857). "Bank of the Metropolis v. 
 
 ^^ Osborne and Cheesman v. Faber, 38 A. D. 159, 56 N. Y. Supp. 
 
 Croorne, 14 Hun, 164, aff'd 77 N. Y. 542 (1899). 
 
§ 277 DIRECTORS, OFFICERS AND AGENTS 313 
 
 the rule of corporate elections in stock corporations that the 
 majority of legal votes determine the election."" 
 
 § 277. Id.: Change in Number. — An increase or reduction, 
 but not below the minimum number prescribed by law, in the 
 number of directors of any stock corporation may be effected 
 by unanimous consent without a meeting, in which case the 
 unanimous consent of the stockholders in writing, signed by 
 them or their duly authorized proxies, must be filed in the 
 offices where the original certificates of incorporation were 
 filed; but no such consent is valid unless there is annexed 
 thereto an affidavit of the custodian 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 such corporation issued 
 and outstanding. ^° The number of directors of any stock cor- 
 poration may be increased or reduced, but not below the 
 minimum number prescribed by law, when the stockholders 
 owning a majority of the stock shall so determine as follows: 
 (1) A meeting must be held on two weeks' notice in writing 
 to each stockholder of record served personally or by mail 
 directed to each stockholder at his last known postoffice 
 address; (2) proof of the service of such notice must be filed 
 in the office of the corporation at or before the time of such 
 meeting; (3) the meeting must be held; (4) the proceedings 
 of such meeting must be entered in the minutes of the corpo- 
 ration; (5) a transcript of the proceedings, .verified by the 
 president and secretary of the meeting, must be filed in the 
 offices where the original certificates of incorporation were 
 filed.^" If the number of directors of a stock corporation be 
 increased pursuant to law the additional directors authoriz-ed 
 by such increase must 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 a stock 
 corporation provides that its directors shall be divided into 
 
 "Matter of Petition of Argus ^° St. Corp. L. § 26 (L. 1909, 
 
 Co., 138 N. Y. 557, 34 N. E. 388 c. 421). "This section shall apply 
 
 (1893). to any stock corporation whether 
 
 ^'St. Corp. L. § 26 (L. 1909, organized under a general or spe- 
 c. 421). "This section shall apply cial law, and the number of direct- 
 to any stock corporation whether ors may be increased as hereby pro- 
 organized under a general or spe- vided notwithstanding the maximum 
 cial law, and the number of direct- number of directors now prescribed 
 ors may be increased as hereby pro- by law." 
 
 vided notwithstanding the maxi- ^ St. Corp. L. § 26 (L. 1909, 
 
 mum number of directors now pre- c. 421). 
 scribed by law." 
 
314 BUSINESS CORPORATIONS IN NEW YORK § 277 
 
 two or more classes whose terms of office shall respectively 
 expire at different times, and the number thereof is increased 
 pursuant to law, the additional directors must be divided 
 among such classes as nearly as practicable in proportion to 
 the respective numbers of directors constituting each class 
 prior to such increase/ The Secretary of State collects a fee 
 of ten dollars for filing a certificate of change of number of 
 directors pursuant to section twenty-six of the Stock Corpo- 
 ration Law.* Directors may be increased or decreased by 
 statutory means in two ways: (1) By action of the stock- 
 holders owning a majority of the stock at a meeting held on 
 two weeks' notice to the stockholders of record; and (2) by 
 unanimous consent of the owners of all the stock issued and 
 outstanding, without any meeting,* It is not competent for 
 stockholders to prescribe by by-law or otherwise that an 
 increase or decrease in the number of its directors can be 
 made only by a vote representing a larger per cent of the 
 stock than the statute requires for such purpose, any more 
 than it is competent for them to permit such change by a less 
 vote than the statute contemplates.' The statutory provision 
 permitting majority stockholders to increase or reduce the 
 number of the corporation's directors, if not above the legal 
 maximum or below the minimum number, does not permit an 
 increase of directors of a trading corporation by such 
 majority against the protest of a minority when the certificate 
 of incorporation provides that the number of directors shall 
 not be changed except by the unanimous consent of all the 
 stockholders." No by-laws passed by a corporate executive 
 committee concerning the number of directors to manage the 
 corporation or fixing their term of office bind the members 
 unless statutory publication thereof be made.' "... a 
 resolution to reduce the number of directors of a stock corpo- 
 ration under section 21 of the Stock Corporation Law does 
 not take effect unless a transcript of the proceedings of the 
 
 ^ St. Corp. L. § 26 (L. 1909, 1892, c. 688, amend. L. 1903, c. 320, 
 
 c. 421). L. 1904, c. 307, and L. 1905, 
 
 = Executive L. § 26 (L. 1917, c. 750). See now St. Corp. L. § 26. 
 c. 69). »Ripin v. U. S. Woven Label Co., 
 
 *Bond V. Atlantic Terra Cotta 205 N. Y. 442, 98 N. E. 855 (1912) ; 
 
 Co., 137 A. D. 671, 122 N. Y. Supp. St. Corp. L. 8 26; Gen. Corp. L. 
 
 425 (1910) ; St. Corp. L. § 26. § 10. 
 
 ^Katz V. H. & H. Manufacturing 'Matter of Empire State Su- 
 
 Co., 109 A. D. 49, 95 N. Y. Supp. preme Lodge, 53 Misc. 344, 103 
 
 663, aff'd 183 N. Y. 578, 76 N. E. N. Y. Supp. 465 (1907) : Gen, Coirp. 
 
 1098 (1905) ; St. Corp. L. § 49 (L. L. § 11, subd. 5. 
 
§ 278 DIRECTORS, OFFICERS AND AGENTS 315 
 
 meeting at which the resolution was adopted shall subse- 
 quently be filed in the proper offices. If the transcript is never 
 filed the resolution never becomes operative. . . . such a 
 resolution does not go into effect tmtil the filing of the tran- 
 scripts. . . . the number of directors cannot be deemed 
 to be reduced until the date of the filing of the transcripts." ' 
 A reduction or increase in the number of the directors of a 
 corporation does not take legal effect until after the filing of 
 the transcript of the minutes of the corporation, recording 
 the stockholders' vote to such effect, with the Secretary of 
 State and the county clerk.' If first stockholders in meeting 
 assembled increase the mmiber of the corporation's directors, 
 and secondly at the same meeting elect the increased number, 
 and thirdly the certificate of increase is filed in the offices of 
 the Secretary of State and county clerk, the occurrence of the 
 second act before the third does not invalidate the election of 
 the increased number of directors and a majority of them 
 composed of half of the increase and half of the old number 
 may validly fix salaries for the corporate officers." A proposed 
 decrease of the number of directors in a corporation formed 
 from several other corporations under an agreement that the 
 number of directors of the new company should be a number 
 which will be lessened by the proposed decrease does not 
 impair any vested property right of a stockholder of one of 
 the old companies becoming a stockholder in the new under 
 such agreement, although the decrease will make it necessary 
 for him to combine with the owners of one-third instead of 
 one-fifth of the stockholders in order to insure the election of 
 a director of their choice." 
 
 § 278. Id.: Meetings. — ^As to resolutions of directors in 
 every respect, see the sixtieth section of this work. If meet- 
 ings of the board of directors are to be held only within the 
 State of New York the certificate or by-laws must so provide." 
 Every corporation has power to make by-laws not inconsistent 
 with any existing law fixing the number of directors neces- 
 sary to constitute a quorum at a number less than a majority 
 of the board, but at least equal to one-third of its number.^* 
 
 * Matter of Westchester TrnsE "Bond v. Atlantic Terra Cotta 
 
 Co., 186 N. Y. 215, 78 N. E. 875 Co., 137 A. D. 671, 122 N. Y. Supp. 
 
 (1906) ; St. Corp. L. § 21, now § 26. 425 (1910). 
 
 " Matter of Dolgeville El. L, & P. ^^ Bus. Corp. L. § 2 (L. 1909, 
 
 Co., 160 N. Y. 500, 55 N. E. 287 e. 484). 
 
 (1899); Stock Corp. L. § 21, now "Gen. Corp. L. § 11 (L. 1909, 
 
 § 26. ' c. 2S). 
 
 "Lewis V. Matthews, 161 A. D. 
 107, 146 N. Y. Supp. 424 (1914). 
 
316 BUSINESS CORPORATIONS IN NEW YORK § 278 
 
 Unless otherwise provided a majority of the board of 
 directors of a corporation at a meeting duly assembled is 
 necessary to constitute a quorum for the transaction of busi- 
 ness and the act of a majority of the directors present at a 
 meeting at which a quorum is present is the act of the board 
 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, 
 regularly 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 is present, though held without notice, any 
 business may be transacted which might have been transacted 
 if the meeting had been duly called." Except when otherwise 
 required by law or the by-laws of the corporation, special 
 meetings of the members of the corporation may be called in 
 the same manner as the annual meeting thereof." " It is not 
 absolutely essential to the validity of a corporate act that the 
 trustees of a corporation should proceed according to any 
 particular form. If all are present, or have received due 
 notice of the proposed meeting, action taken by them, intended 
 to be a corporate act, although informally expressed, is as 
 valid as if it had been surrounded by all the formalities usual 
 and, it may be said, desirable in such cases. The law looks to 
 the substance rather than to the form of things." " Directors 
 or trustees of a corporation cannot vote at a meeting of the 
 board by proxy." The statutory mandate that the. action of 
 a majority of a board of directors at a lawful meeting shall 
 be the act of the board, unless otherwise provided, permits a 
 by-law demanding unanimity by the directors to do certain 
 things.™ The action of a quorum of a corporation's board 
 of directors in which several directors participated who were 
 disqualified, either because they were but de facto directors 
 
 "Gen. Corp. L. § 34 (L. 1917, Misc. 577, 33 N. Y. Supp. 1098 
 
 c. 538). (1895). 
 
 "Gen. Corp. L. § 43 (L. 1909, "Craig Medicine Co. v. Mer- 
 
 c. 28). chants' Bank, 59 Hun, 561, 14 N. Y. 
 
 "Gen. Corp. L. § 43 (L. 1909, Supp. 16 (1891). 
 
 c. 28). '■"IjeVm V. Mager, 86 Misc. 116, 
 
 "Gen. Corp. L. § 43 (L. 1909, 149 N. Y. Supp. 112 (1914); Gen. 
 
 c. 28). Corp. L. art. XI, § 34. 
 
 "Whitehead v. O'Sullivan, 12 
 
§ 278 DIEECTORS, OFFICERS AND AGENTS 317 
 
 through prior sale of their holdings of stock or because the 
 action involved purchase of their individual property by the 
 corporation, is nevertheless binding as to a third person 
 affected thereby, though the corporation itself might set it 
 aside.^ If corporate by-laws provide "that whenever, at a 
 regular meeting of the board, there shall be less than a quorum 
 attend, and three or more directors [of the nine provided for] 
 are present, those present shall have power to adjourn to such 
 time and place as they may deem proper, not passing over the 
 next regular meeting," and at a meeting so adjourned five 
 directors are present, the meeting is legal and " they had the 
 right to pass any resolution, and take any action which did 
 not violate the law of their organization, or exceed the powers 
 with which, as a corporate body, they were invested." ^ It is 
 not necessary that a corporation's by-laws should provide for 
 the calling of a special meeting of its directors to enable such 
 a meeting to be legally held, as, if they actually meet in special 
 meeting in a proper place and have all been notified or are all 
 present and do not object, a legal meeting may be held, and 
 any action of the corporation at such meeting is valid, if there 
 be no regulation forbidding the holding of such meeting.^ An 
 action by an individual as such who is president and holder of 
 the certificates of indebtedness of a corporation to restrain 
 the holding of a special meeting of its directors on the ground 
 that the call was not issued as prescribed in the by-laws and 
 with the ultimate purpose of preventing the adoption of cer- 
 tain amendments to the by-laws cannot be maintained unless 
 it be shown that some of the things proposed to be done at 
 the meeting will injure the interests of the corporation or its 
 certificate holders.* There is no general principle in the law 
 or statutory regulation requiring that the object of a 
 directors' meeting be specified in the notice thereof in order 
 to validate corporate action; and "when a meeting of 
 directors is notified without specification of the particular 
 purpose, it would naturally be understood that it was called 
 to consider any matters pertaining to the conduct of the 
 affairs of the corporation which might come before it. . . . 
 a general notice is all that is required to a valid meeting of 
 directors for the determination of matters pertaining to the 
 
 1 Wile & Brickner Co. v. Roches- 22 A. D. 1, 47 N. Y. Supp. 906 
 ter & Kettle Falls Land Co., 4 Misc. (1897). 
 
 570, 25 N. Y. Supp. 794 (1893). *Gilleran v. Springfield, L. I., 
 
 2 Smith V. Law, 21 N. Y. 296 Cemetery Society, 161 A. D. 597, 
 (1860). 146 N. Y. Supp. 828 (1914). 
 
 ^United Growers Co. v. Eisner, 
 
318 BUSINESS CORPORATIONS IN NEW YORK § 278 
 
 ordinary business affairs of the corporation. ' ' ° No formal 
 or regular meeting of the board of trustees of a corporation 
 is needed to make valid a certificate of the number of trustees 
 filed under a statute requiring " the existing trustees of any- 
 such corporation [as that in question] . . . [to] make 
 and sign a certificate, declaring how many trustees the corpo- 
 ration shall have in the future management of its business 
 . . . , which certificate shall be acknowledged . . . 
 and shall be filed in the office of the clerk of the county," etc' 
 A director — meaning by the word any of the persons having 
 by law the direction or management of the affairs of a corpo- 
 ration by whatever name described — of a corporation is 
 deemed to have such a knowledge of the affairs of the corpo- 
 ration as to enable him to determine whether any act, proceed- 
 ing or omission of its directors is a violation of the article of 
 the Penal Law relating to corporations, which covers fraud in 
 their organization, fraud in procuring their organization, 
 fraudulent issue of stocks and bonds, acting for foreign 
 corporations not authorized to do business in this State ; mis- 
 conduct of officers, directors, agents and employees ; unlawful 
 use of certain titles in connection with a corporate name; 
 presumption of knowledge of corporate condition and busi- 
 ness and of assent thereto by directors; and misconduct at 
 corporate elections/ If present at a meeting of the directors 
 at which any act, proceeding or omission of such directors in 
 violation of such provisions of the Penal Law 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; and 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 writing requiring his 
 
 * Matter of Petition of Argus Co., « Burden v. Burden, 159 N. Y. 
 
 138 N. Y. 557, 34 N. E. 388 (1893). 287, 54 N. E. 17 (1899) ; L. 1878, 
 
 " We need not determine whether a c. 316, § 2. 
 
 meeting of directors called to take 'Penal L. § 667 (L. 1909). The 
 
 action upon an extraordinary emer- sections of the Penal Law in the ar- 
 
 gency involving the exercise of un- tide (64) relating to corporations 
 
 usual power, might require a de- are numbered 660 to 670, both in- 
 
 parture from the ordinary rule. It elusive, 
 is sufficient to say that the adoption 
 of a new stock book was not an oc- 
 casion of this character . . . ". 
 
§ 279 DffiECrORS, OFFICERS AND AGENTS 319 
 
 dissent from such violation to be entered on such record of 
 minutes.^ 
 
 § 279. Id.: Salaries.—' ' It is the general rule that a director, 
 assuming office as such without any agreement as to compen- 
 sation, is presumed to render his official services gratuitously ; 
 for he assumes thereby, in a sense, a trust relation towards 
 the company, and it would be against sound policy to permit 
 him to assert claims for services which were within the line 
 of his duties. But, when he is employed to perform services 
 for the benefit of the corporation which are not within that 
 line, there is not the same reason for denying him the right to 
 be compensated. So far from there being any objection to 
 the employment by a board of directors of one of their num- 
 ber, as their agent to do something in the interest and for the 
 benefit of the corporation which, collectively, it would be 
 impossible, or inconvenient, for them to do, it may often 
 happen, from the nature of the business to be done, or in the 
 situation of affairs, that it is, essentially, preferable and 
 advantageous to do so. ' "* A corporate director is not entitled 
 to compensation for services performed by him as such unless 
 he has a pre-existing provision expressly giving him the right 
 thereto ; and if rendered without any intent of compensation 
 he cannot get payment therefor on the theory of an implied 
 promise to pay therefor." No presumption of a promise by 
 a corporation to pay a director for his services arises from 
 the mere fact of their rendition, or to pay an officer beyond 
 the salary provided him by the corporate by-laws.^^ Directors 
 certainly have no power to vote increases of salary (whether 
 disguised as extra dividends or not) to themselves for serv- 
 ices already performed under a stipulated salary: whether 
 they have authority, in the absence of some provision of 
 statute, by-law or charter, to vote salaries to each other as 
 mere incidents of their office is extremely doubtful; and a 
 resolution by them voting themselves salaries both for serv- 
 ices already performed and services to be performed, resting 
 in each case on the same basis, will be held tainted with fraud 
 and wholly void." An increase in the salaries of officers of a 
 corporation brought ahout by the necessary vote of the officers 
 
 « Penal L. § 667 (L. 1909, c. 88). "Gill v. New York Cab Co., 48 
 
 »Bagley v. Carthage, W. & S. Hun, 524, 1 N. Y. Supp. 202 
 
 R. R. Co., 165 N. Y. 179, 58 N. E. (1888). 
 
 895 (IQiOO). "Godley v. Crandell & Godley 
 
 " Stout V. Security Trust & Life Co., 212 N. Y. 121, L.R.A.1915D, 
 
 Ins. Co., 82 A. D. 129, 81 N. Y. 632, 105 N. E. 818 (1914). 
 
 Supp. 708 (1903). 
 
320 BUSINESS CORPORATIONS IN NEW YORK § 279 
 
 themselves as directors and stockholders is voidable, not void ; 
 and a stockholder and director who knew thereof and voted 
 against the increases but in no other way ever objected for a 
 number of years cannot complain of the salaries if they are 
 not improper." A stockholder in his individual and repre- 
 sentative capacity may make majority directors account for 
 salaries voted themselves in excess of the amount stipulated 
 in contracts for their services to the corporation." Directors 
 of a corporation cannot bind its stockholders to salaries voted 
 to their own number when those directors getting the salaries 
 participate in the board meeting at which they are voted.^' 
 An agreement to pay a director a salary as president, voted 
 at a board meeting in which he participated and at which he 
 presided, is voidable only, and the corporation must set up in 
 its answer to his complaint for such salary the facts showing 
 bad faith, if it claims it exists, and cannot have a dismissal of 
 the complaint upon the sole ground of such participation and 
 presiding.^* Corporate officers or directors cannot vote them- 
 selves salaries for services of which there is no proof but 
 which are accepted by themselves for their corporation." 
 Salaries paid officers of a corporation must ordinarily be cor- 
 rected within itself and may be ratified by a majority of the , 
 stockholders ; but not salaries paid directors as such by their 
 own action.^* " ... where the by-laws of a business cor- 
 poration provide that the salary or compensation of its 
 officers may be fixed by the board of directors an adoption of 
 such by-law does not deprive the court of its equitable juris- 
 diction to inquire into the reasonableness of the salaries voted 
 by the directors, and ... a minority stockholder in a 
 representative action is entitled to a decree requiring the 
 directors to return to the treasury all sxmtis received by them 
 in excess of reasonable compensation for the services they 
 rendered. " " A resolution by a board of directors authoriz- 
 ing a committee " to employ counsel to assist them in what- 
 ever action they may decide necessary " is broad enough to 
 authorize an action by the corporation against some of its 
 directors for wasting its assets ; and, if it be not, the action is 
 
 ^^ Murray v. Smith, 166 A. D. ^^Haas v. Universal Phonograph 
 
 528, 152 N. Y. Supp. 102 (1915). & Record Ck>., 75 Misc. 119, 132 N. 
 
 "Kreitner v. Burgweger, 174 A. Y. Supp. 767 (1912). 
 D. 48, 160 N. Y. Supp. 256 (1916). "Tilton v. Gans, 90 Misc. 84, 152 
 
 ^^Kelsey v. Sai^ent, 40 Hun, 150 N. Y. Supp. 981 (1915); aff'd 168 
 
 (1886). A. D. 910, 152 N. Y. Supp. 1146. 
 
 " Kearns v. New York & College " Tilton v. Gans, 90 Misc. 84, 152 
 
 Point Ferry Co., 19 Misc. 19, 42 N. Y. Supp. 981 (1915) ; afif'd 168 
 
 N. Y. Supp. 771 (1896). A. D. 910, 152 N. Y. Supp. 1146. 
 
§ 280 DIRECTORS, OFFICERS AND AGENTS 321 
 
 warranted without resolution if a majority of the directors 
 sanctioned the bringing of the action.'" 
 
 § 280. Personal Profit and Advantage, In General.— A cor- 
 porate director should not be permitted to use his trust 
 position to his personal advantage.^ "... directors and 
 trustees of a corporation act for the corporation and all its 
 stockholders ; they cannot deal with themselves for their own 
 benefit to the detriment of the corporation or the minority of 
 the stockholders." ' The rule forbidding those in a fiduciary 
 capacity from using it for their personal benefit works inde- 
 pendently of any question of fraud, but does not make void 
 ab initio all the fiduciary's transactions, rather rendering 
 them voidable at the injured party's election; so that though 
 a transaction is cons.ummated through the fraud of the 
 fiduciary, that will not permit the one obligated by it to escape 
 performance on his part while retaining the benefit to him.^ 
 The right of a beneficiary or one claiming under him to avoid 
 a deal between a director of a corporation and the corporation 
 itself, as a breach of trust, " does not depend upon the ques- 
 tion whether the trustee in fact has acted fraudulently, or in 
 good faith and honestly, but is founded upon the known weak- 
 ness of human nature, and the peril of permitting any sort of 
 collision between the personal interests of the individual and 
 his duties as trustee, in his fiduciary character . . . where 
 the trustee's act consists, not in possessing himself of the 
 property of the beneficiary as owner, but in taking collateral 
 security for a debt honestly due him, or a liability justly 
 incurred, the rule can have no application, since the payment 
 of the debt or the discharge of the liability is an essential pre- 
 requisite of the avoidance. And this is true whether the 
 pledge be taken for a present or precedent debt."* " The 
 illegality of a profit made by a director arises almost wholly 
 by reason of some undisclosed and secret bias on his part 
 
 '"' Pyro-Grxavure 'Co. v. Steber, 30 got one to lease the other to their 
 
 Misc. 658, 64 N. Y. Supp. 520 personal profit and in fraud of the 
 
 (1900). stockholders! of the lessor-company. 
 
 ^ Blake v. Buifalo Creek R. R. The lessee-company enjoyed the 
 
 Co., 56 N. Y. 485 (1874). benefits of the lease for years and 
 
 ^Robbins, Inc. v. Hill, 81 Misc. then, when sued by the lessor's 
 
 441, 142 N. Y. Supp. 637 (1913), stockholders for rent, sought to es- 
 
 aff'd 166 A. D. 899, 150 N. Y. Supp. cape liability on the ground of the 
 
 1074. fraud. 
 
 ^Barr v. New York, Lake Erie *Duneoinb v. New York, Housa- 
 
 & Western R. R. Co., 125 N. Y. tonic & Northern R. R. Co., 84 N. 
 
 263, 26 N. E. 145 (1891). Direct- Y. 190 (1881). 
 ors on the board of two railroads 
 B. C.N.Y.— 21 
 
322 BUSINESS CORPORATIONS IN NEW YORK § 280 
 
 against the interest of the corporation of which he is a 
 director. If a profit is made in a transaction that is honest 
 in itself, and is open and fully disclosed, and the transaction 
 is consummated after an honest statement of the facts to the 
 board of directors at a meeting, and to the stockholders at a 
 stockholders' meeting, there is no reason for criticism or for 
 charging such director with any profits that he may make." ° 
 The invalidity of dealings by corporate officers and directors 
 with corporate property " is founded upon the unwillingness 
 of the law to uphold contracts which bring into collision the 
 trust duty and the personal interest, and it is because of that 
 collision, and the temptations which surround it, that it 
 declares the contract voidable at the election of the beneficiary 
 without investigating the good or bad faith of the trustee. 
 The entire basis of the rule consists in this collision between 
 trust duty and personal interest, and the equitable prohibition 
 has no application where there is no such possible inconsist- 
 ency. There is no such conflict in the ordinary case of the 
 purchase by a director in a going corporation of its outstand- 
 ing obligations. . . . Unless some special fund has been 
 provided, or some special liquidation has been ordered, the 
 director owes no duty to his company to discharge or buy in 
 the outstanding bonds, and may purchase for himself because 
 no inconsistent trust duty has arisen. ... we are asked 
 to crowd the rule almost to the verge of an absurdity . . . 
 by tainting with invalidity the holding by a director of the 
 unmatured obligations of the corporation bought by him in 
 the open market and not put in liquidation or sought to be 
 extinguished." ° "A contract entered into by a corporation 
 by the authority or direction of its trustees, with themselves, 
 and for their benefit, or a transfer of its property by the 
 authority of the trustees to themselves, may be set aside, in 
 case it injures any public interest, or the private interest of 
 any shareholder or creditor, even though the contract or 
 transfer was executed in good faith by the trustees {eita- 
 
 ° Billings V. Shaw, 209 N. Y. 266, such two directors of the oorpora- 
 103 N. E. 142 (1913). The execu- tion in eonsideratiion of a sum paid 
 tor of a deceased holder of two- not by them but by the corporation, 
 thirds of a corporation's stock, and the corporation or other stock- 
 while acting as president and a di- holders never had a chance to buy 
 rector, gave an option to two other out the rights and properties sold 
 directors to buy the estate's and his and the other stockholders never 
 rights and properties in the corpo- knew of the deal, 
 ration which was exercised with ' Seymoiiir v. Spring Forest Cem- 
 the result that the obligations of eteiy Assn., 144 N. Y. 333, 26 
 the corporation were transferred to L.E.A. 859, 39 N. E. 366 (1895). 
 
§ 281 DIRECrOl^S, OrFICERS AND AGENTS 323 
 
 tions). But this rule is not broad enough to condemn as void 
 on the ground of public policy all contracts and transfers exe- 
 cuted by a purely private business corporation, with or to 
 its trustees in good faith, in case no public or private interest 
 is harmed thereby. Such contracts are not void but voidable 
 at the election of those who are affected by the fraud.'" 
 There is " no rule which prohibits a director of a corporation 
 engaging in a business similar to that carried on by the cor- 
 poration, either in his own behalf or for another corporation 
 of which he is likewise a director. ' ' ^ Wrongful taking and 
 division inter s^se by directors of the paid up capital of their 
 corporation gives a common law cause of action to the corpo- 
 ration against them which passes to its trustee in bankruptcy." 
 § 281. Id.: Contracts with Corporation. — " It is a general 
 rule that a director, trustee or an executive officer of a corpo- 
 ration is without power to bind it or its shareholders by a 
 contract authorized by or entered into with himself and for 
 his individual benefit. But if the contract so entered into is 
 in all respects just as between the parties, and all of the 
 shareholders and directors or trustees are competent to 
 assent, and with full knowledge of the terms of the contract, 
 do assent and direct tharf; it be made, it is binding on the cor- 
 poration and cannot be avoided by its shareholders or by per- 
 sons who subsequently become its creditors."" The rule 
 avoiding any contract made with a corporation insofar as a 
 director therein profits thereby personally does not hold if 
 it be made openly and to the stockholders' knowledge." 
 " ... while a contract entered into by a corporation by 
 the authority or direction of its trustees with themselves, 
 and for their benefit, or a transfer of its property by the 
 authority of the trustees to themselves, may be set aside in 
 case it injures any public interest or the private interest of 
 any shareholder or creditor, even though the contract or 
 transfer was executed in good faith by the trustees, yet this 
 rule is not broad enough to condemn as void, on the ground 
 
 ' Skinner v. Smith, 134 N. Y. 240, The director introduced one (-whom 
 
 31 N. E. ail (1892). he had told he intended to get a 
 
 ^New York Autoniiobile Com- commission from 'any sale resulting 
 
 pany v. Franklin, 49 Misc. 8, 97 from the introduction) to another 
 
 N. Y. Supp. 781 (1906). upon the latter's promise that if a 
 
 ° Bathbone v. Ayer, No. 1, 84 A. sale resulted from the introduction 
 
 D. 184, 82 N. Y. Supp. 239 (1903). he would get a commission. The 
 
 ^° Welch V. Importers' & Traders' person introduced latei: formed a 
 
 Nat. Bk., 122 N. Y. 177, 25 N. E. "one-man" corporation which 
 
 2G9 (1890). bought the property and from which 
 
 '^^ Goldshear v. Barron, 42 Misc. the commission was held reoover- 
 
 198, 85 N. Y. Supp. 395 (1903). able. 
 
324 BUSINESS CORPORATIONS In'nEW YORK § 281 
 
 of public policy, all contracts and transfers executed by a 
 purely private business corporation with or to its trustees in 
 good faith, in case no public or private interest is harmed 
 thereby, such contracts not being void but voidable at the 
 election of those who are affected thereby. "^^ The mere fact 
 that one party to a contract with a corporation was a director 
 in it when the contract was made does not make the agree- 
 ment void/^ A contract made by a corporation through the 
 vote of a majority of its directors in which the vote of that 
 one of their number was necessary to pass the resolution 
 who was the other party to the contract is void; because he 
 cannot bind the corporation to an agreement securing bene- 
 ficial results to himself." While a contract between a corpo- 
 ration and one of its directors or between the directors of 
 one corporation with another corporation of which they are 
 also directors is voidable by the corporation, it is not voidable 
 by a stockholder for that reason alone.^° The courts will not 
 decree specific performance of an executory contract between 
 individuals and a corporation for the sale of the property of 
 the former when one of the former at the time the contract 
 was made was a director of the purchasing corporation and 
 took part in making the contract upon which the action is 
 brought." In determining the propriety of a price paid by 
 a corporation for works built by a person who is a stockholder 
 and director in it, a charge for his personal service may 
 legitimately be considered as well as an amount paid by him to 
 another, interested too in the company, for services rendered ; 
 and an amount charged for interest and profit are likewise 
 allowable.^' A director of a corporation cannot recover any 
 sum agreed to be paid him by a contractor for securing a job 
 from the corporation for it." " ... a corporation in 
 order to defeat a contract entered into by directors, in which 
 one or more of them had a private interest, is not bound to 
 show that the influence of the director or directors having 
 the private interest, determined the action of the. board."" 
 
 ^^Marbirry v. Stone, 17 A. D. ^'Munson v. Syracuse, Geneva & 
 
 352, 45 N. Y. Supp. 184 (1897), Coming R. R. Co., 103 N. Y. 58, 8 
 
 aff'd 160 N. Y. 701, 57 N. E. 1116. N. E. 355 (1886). 
 
 ^' Vounoh V. Sixty-iSeventh St. " Gamble v. Queens Co. Water 
 
 Atelier Bldg., 55 Misc. 222, 106 N. Co., 123 N. Y. 91, 9 L.R.A. 527, 25 
 
 Y. Supp. 155 (1907). N. E. 201 (1890). 
 
 " Copeland v. Johnson Manufao- " Landes v. Hart,' 131 A. D. 6, 
 
 tnring Co., 47 Hun, 235 (1888). 116 N. Y. Supp. 337 (1909). 
 
 ^' Hart V. Ogdensbuig & Lake ^® Munson v. Syracuse, Geneva & 
 
 Champlain R. R. Co., 89 Hun, 316, Coming R. R. Co., 103 N. Y. 58, 8 
 
 35 N. y. Supp. 566 (1895). N. E. 355 (1886). 
 
§ 281 DIRECTORS, OmCERS AND AGENTS 325 
 
 That a voidable contract with a firm of which three members 
 are directors in the corporation which is the other party 
 thereto is amended by a meeting of five directors, of whom 
 three were those members of such firm, so as to be more favor- 
 able to that company, is no reason for avoiding it after the 
 contract ha/S been fully performed by the firm.^" A director 
 employed by his corporation under a contract for a term of 
 years prepared by himself, approved by the executive com- 
 mittee, signed by the officers at such committee's direction, 
 and approved at a board meeting at which the director em- 
 ployed was present, is liable to have his employment under 
 the contract terminated at any time by the board, and has 
 the burden of showing that the employment under the con- 
 tract was necessary, was for duties distinct from his duties 
 as director and that his services were worth the amount paid 
 therefor/ A contract by a director with his corporation will 
 not be set aside at the instance of its stockholders if to do 
 .work already agreed to be done by another at but a slightly 
 greater cost and if otherwise no one could in all probability 
 have been secured to do the work.^ An agent, director or 
 officer of a corporation who is secretly a partner with another 
 to whom he has work of the corporation sent to do must 
 account to the corporation for any profits he made in such 
 partnership/ Directors of a corporation cannot pay one of 
 their number a sum agreed upon as to be paid him on cancel- 
 lation of a contract made by it with him because of consolida- 
 tion by it with another corporation until the stockholders 
 shall have voted in favor .of the consolidation.* A contract 
 by which one is induced to invest money in another's business 
 for the considerations that it be incorporated, that the 
 investor receive stock in the corporation and that the inducer 
 agree to buy the investor's stock at its book value if the cor- 
 poration did not employ the investor at a stated salary for a 
 specified time, is not void as against public policy because 
 the inducer becomes a director of the corporation and it may, 
 therefore, obligate him as director to act against the corpo- 
 ration's best interests if they require a termination of the 
 contract/ A contract of indemnity by a corporation with its 
 
 ^° People V. Republic Sawngs & ^ The Lozier Motor Co. v. Ball, 
 
 Loan Assn., 97 A. D. 31, 89 N. Y. 53 Misc. 375, 104 N. Y. Snpp. 771 
 
 Supp. 582 (1904). (1907). 
 
 ^Merrill v. United Box Board & *Kelsey v. Sargent, 40 Hun, 150 
 
 Paper Co., 143 A. D. 833, 128 N. Y. (1886). 
 
 Supp. 9'59 (1911). ^Drucklieb v. Harris, 209 N. Y. 
 
 2 Strobel v. Brownell, 16 Misc. 211, 102 N. E. 599 (1913). 
 657, 40 N. Y. Supp. 702 (1895). 
 
326 BUSINESS CORPORATIONS IN NEW YORK § 282 
 
 director against loss to him from his guaranty in its behalf 
 is not void but voidable, and in the absence of fraud the right 
 of avoidance is in the holders of a majority of its stock — so 
 that the courts will not exercise their equitable powers on 
 motion of minority stockholders.* " It is neither void nor 
 voidable for the directors of a corporation to rent property 
 from an officer of the company, although the transaction, of 
 course, is subject to inquiry . . . ."' 
 
 § 282. Id.: As Creditor, Stockholder or Purchaser. — The 
 directors of a corporation cannot legally enable one of their 
 number, and a bona fide creditor of the company, to obtain 
 judgment by confession against it on its claim, on which exe- 
 cution is returned unsatisfied though it is amply able to sat- 
 isfy it, and whereupon its property is sequestrated and a 
 receiver appointed, with the result that a levy on a judgment 
 recovered by another creditor against it a few days after the 
 confession of the director's debt is prevented; and the good 
 motive of the directors in seeking to preserve the corporate 
 property for all creditors is immaterial.* " The disability 
 to seize upon the assets of a corporation attaches upon the 
 office of trustee or officer of the corporation, and while an 
 officer may bring his action against the corporation for the 
 purpose of securing an equal division of the assets amongst 
 the creditors of the corporation, he cannot use any judgment 
 obtained by him in such an action for the purpose of obtain- 
 ing a preference in the payment of his own debt," e. g., by 
 attachment.' One who is a director in and officer of a corpo- 
 ration and in control as proxy or trustee of a majority of its 
 stock will be compelled to return to it notes and stock bonus 
 resolved to be used to pay an indebtedness by it which he 
 took over as if in discharge of another resolution for the 
 issue of its notes for an indebtedness by it to him." There is 
 no breach in the fiduciary obligation of a director in a corpo- 
 ration by his securing security for a personal debt due him 
 from one who also has an account with or is indebted to the 
 corporation. " The relation between director and corpora- 
 
 °Hyde v. Equitable Life Assur- *Throop v. Hatch Lithographic 
 
 ance Soc, 61 Misc. 518, 116 N. Y. Co., 58 Hun, 149, 11 N. Y. Supp. 
 
 Supp. 219 (1908). 532 (1890); aff'd 125 N. Y. 530, 26 
 
 'Metzger v. Knox, 77 Misc. 271, N. E. 742. 
 
 136 N. Y. Supp. 681 (1912); aff'd i"> United Gtold & Platinum Mines 
 
 153 A. D. 911, 137 N. Y. Supp. Co. v. Smith, 44 Misc. 567, 90 N. Y. 
 
 1129, and 154 A. D. 953, 139 N. Y. Supp.. 199 (1904). 
 
 Supp. 1133. "Murray v. Smith, 166 A. D. 
 
 ^National Broadway Bank v. 528, 152 N. Y. Supp. 102 (1915). 
 Wessell Metal Co., 59 Hun, 470, 13 
 N. Y. Supp. 744 (1891). 
 
§ 282 DIEECTORS, OFFICERS AND AGENTS 327 
 
 tion is that of trustee and cestui que trust, and under " the 
 rule that one holding a position of trust cannot use it to pro- 
 mote his individual interests by buying, selling, or in any way 
 disposing of the trust property," the action of three of a 
 board of five directors in ordering paid the bill of one of such 
 three, greater in amount than was due, will be held void." 
 An arrangement by which persons who are directors of a 
 corporation loan money to it upon the pledge of securities in 
 order to preserve its credit and to tide it over its difficulties is 
 not against public policy, but will be supported between the 
 directors and the' company if fair and made in good faith." 
 ' ' Directors cannot, with secret knowledge of the existence of 
 a contract which they claim to be of great value, issue treas- 
 ury stock of the corporation and buy it in themselves, par- 
 ticularly when the transaction converts them from minority 
 to majority stockholders. . . . All stockholders should 
 be given knowledge of contracts affecting the value of the 
 stock and should be allowed to subscribe for their propor- 
 tional share of the new issue." " One controlling by proxies 
 and as trustee the stock of a corporation and a director and 
 officer therein will be compelled at the instance of a stock- 
 holder to return to the corporation a large block of its stock 
 voted to him at a special meeting of stockholders held pur- 
 suant to a notice not intimating the passage of a resolution 
 giving him such stock." Stockholders seeking to hold a 
 director, who purchases on foreclosure the corporate proj)- 
 erty, as trustee for their benefit, must first pay and discharge 
 his debt." One of several trustees appointed by creditors 
 to hold corporate stock for their benefit as security for an 
 indebtedness by the owner thereof to them cannot resign 
 after acting and personally buy in the stock on its sale by 
 the trustees pursuant to the trust agreement for the benefit of 
 himself and the remaining trustees." 
 
 "Butts V. Wood, 37 N. Y. 317 "United Gold & Platinum Mines 
 
 (1867). Co. V. Smith, 44 Misc. 567, 90 N. Y. 
 
 "Converse v. Sharpe, 161 N. Y. Supp. 190 (1904). The notice said 
 
 571, 56 N. E. 60 (1900). The loan the meeting was to consider a plan 
 
 ■was made in the honest belief that to amalgamate two companies "and 
 
 the company would pull through its for such other business in relation 
 
 difficulties, after a conference of thereto, as well as the general busi- 
 
 persons interested in it; and to se- ness of the company, as may be 
 
 cure present loans agreed to be presented to the meeting." 
 
 made on the faith of the pledge and " Harpending v. Mtmson, 91 N. 
 
 not to secure payment of some pre- Y. 651 (1883). 
 
 contracted debt. ^^ Jenkins v. Hammerschleg, 38 
 
 "Whitaker v. Kilby, 55 Misc. A. D. 209, 56 N. Y. Supp: 534 
 
 337, 106 N. Y. Supp. 511 (1907). (1899). 
 
328 BUSINESS CORPORATIONS IN NEW YORK § 283 
 
 § 283. Id.: Executive Committee. — " The board of directors 
 of a corporation do not stand in the same relation to the cor- 
 porate body which a private agent holds toward his principal. 
 In the strict relation of principal and agent, all the authority 
 of the latter is derived by delegation from the former, and if 
 the power of substitution is not conferred in the appoint- 
 ment, it cannot' exist at all. But in corporate bodies the 
 powers of the board of directors are, in a very important 
 sense, original and undelegated. The stockholders do not 
 confer, nor can they revoke those powers. They are deriva- 
 tive only in the sense of being received from the State in the 
 act of incorporation. The directors convened as a board are 
 the primary possessors of all the. powers which the charter 
 confers, and like private principals they may delegate to 
 agents of their own appointment the performance of any acts 
 which they themselves can perform. . . . the by-law in 
 question . . . was, in substance and effect, a regulation 
 which constituted a subordinate agency to conduct the ordi- 
 nary business of the corporation. The persons composing the 
 agency would change according as the quorum of five or more 
 directors attending the meeting might be constituted of dif- 
 ferent individuals. But if the board could delegate the power 
 of transacting business to five or more individuals named, 
 no doubt exists that the same authority might be imparted 
 to a shifting quorum, composed of the same number. ' ' " The 
 managers or directors of a corporation may, " undoubtedly, 
 clothe a conunittee, in the intervals between the sittings of 
 the board, with all their own authority to conduct the ordi- 
 nary business of the company (citation) ; but it does not 
 follow that the committee could delegate that power to one 
 of their number." " The board of directors of a business cor- 
 poration has power to appoint an executive committee of its 
 own number to transact the corporation 's business during the 
 interval between board meetings, including the giving of 
 negotiable notes for legitimate indebtedness incurred, even 
 though the indebtedness and note be to the corporation's 
 president.^" Under a statute requiring a manufacturing cor- 
 poration's business to be carried on by a board of trustees, 
 but^ empowering that board to appoint such subordinate 
 offiS^rs and agents as the corporation's business may require, 
 it may appoint an executive committee of its own members 
 
 '*Hoyt V. Thompson's Ex't'r, 19 ™ First National Bank v. Ck)m- 
 
 N. Y. 207 (1859). mercial Travelers' Assn., 108 A. D. 
 
 i»01cott V. Tioga R. R. Co., 27 78, 95 N. Y. Supp. 454 (1905), aff'd 
 
 N. Y. 546 (1863). 185 N. Y. 575, 78 N. E. 1103. 
 
§ 284 DIRECTORS, OFriCERS AND AGENTS 329 
 
 and give it power to transact the company's business dur- 
 ing the interval between meetings of the board; and a 
 power delegated by such 'committee to another to endorse 
 checks and receive money thereon, being purely ministerial, 
 may be legally exercised by the delegate.^ An executive com- 
 mittee of a corporate board of directors authorized by its 
 by-laws pursuant to statute to exercise the board's powers 
 when it was not in session cannot bind the corporation after 
 a session of the board has been so far moved by the calling of 
 a meeting ; and one dealing with such a committee is charge- 
 able with a knowledge of the law and the extent of the author- 
 ity conferred upon it.^ In the absence of sacrifice of a corpo- 
 ration's interests or intent to defraud, its executive commit- 
 tee of three may lawfully pass, to one of their number not a 
 stockholder who has advanced money to the corporation for 
 work it is doing, the title to its bonds as security for the loan, 
 even though the other two of the committee were liable indi- 
 vidually as guarantors of the debt by the corporation to the 
 third one of their number.^ A corporate executive committee 
 of a board of directors empowered to conduct the '' ordinary 
 business ' ' of the corporation may conduct any business with- 
 out any limit save business in which the corporation is not by 
 its charter authorized to engage.* 
 
 § 284. Id.: Powers, In General. — The affairs, of every corpo- 
 ration must be managed by its board of directors.^ The cer- 
 tificate of incorporation of any corporation may contain any 
 limitation upon the powers of its directors which does not 
 exempt them from the performance of any obligation or the 
 performance of any duty imposed by law.° By-laws duly 
 adopted at a meeting of the members of the corporation con- 
 trol the action of its directors.'' Subject to the by-laws, if any, 
 adopted by members of a corporation, the directors may make 
 necessary by-laws of the corporation.^ When the directors of 
 
 ^ Sheridan Electric Light Co. of posed contract " was under advise- 
 
 N. Y. V. Chatham Nat. B'k, 127 ment, and later disapproved it. 
 
 N. Y. 517, 28 N. E. 467 (1891) ; 1 ^ Duncomb v. New York, Housa- 
 
 R. S. 600, § 1, subd. 5; 2 id. (7th tonic & Northern R. R. Co., 88 N. 
 
 ed.) 1531, § 5. Y. 1 (1882). 
 
 2 Commercial Wood & C. Co. v. *Hoyt v. Thompson's Ex't'r, 19 
 
 Northampton Portland C. Co., 190 N. Y. 207 (1859). 
 
 N. Y. 1, 82 N. E. 730 (1907) ; Gen. = Gen. Corp. L. § 34 (L. 1917, 
 
 Corp. L. of Del. § 9. Executive c. 538). 
 
 committee made contract with "Gen. Corp. L. § 10- (L. 1909, 
 
 plaintifE earlier in the same day for c. 28) 
 which a board of directors' meeting 
 was called, and this board at such 
 meeting advised plaintiff " pro- 
 
 'Gen. 
 
 Corp. L. § 11 (L. 1909, 
 
 c. 281). 
 
 
 ^Gen. 
 
 Corp. L. § 34 (L. 1917, 
 
 c. 538). 
 
 
330 BUSINESS CORPORATIONS IN NEW YORK § 284 
 
 any corporation for the first year of its corporate existence 
 hold over and continue to be directors after the first year, be- 
 cause of their neglect 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, 
 must be held fraudulent and void.' 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, such agreement or action may be taken by such 
 directors, regularly convened as a board and acting by a 
 majority of a quorum, except when otherwise expressly 
 required by law or the by-laws of the corporation; and any 
 such agreement must be executed in behalf of the corporation 
 by such officers as are designated by the board of directors.'" 
 At any meeting at which every member of the board of direct- 
 ors is present, though held without notice, any business may 
 be transacted which might have been transacted if the meet- 
 ing had been duly called."" During the continuance of the war 
 any corporation organized under the laws of New York State 
 may co-operate with other corporations and with natural per- 
 sons in the creation and maintenance of instrumentalities con- 
 ducive to the winning of the war, and its directors may appro- 
 priate and. expend for such purposes such sum or' sums as 
 they may deem expedient and as, in their judgment, will con- 
 tribute to the protection of the corporate interests, provided 
 that whenever the expenditures for such purposes in any cal- 
 endar year in the aggregate amount to one per centum on 
 the capital stock outstanding, then, before any further expend- 
 iture is made during such year for such purposes by the cor- 
 poration, ten days' notice must be given to the stockholders 
 in such manner as the directors may direct of the intention 
 to make such further expenditures specifying the amount 
 thereof; and if written objection be made by stockholders 
 holding twenty-five per centum or more of the stock of the 
 corporation, such further expenditure cannot be made until 
 it has been authorized at a stockholders' meeting.*" Upon the 
 dissolution of any corporation its directors unless other per- 
 sons are appointed by the Legislature or by some court of 
 
 = St. Corp. L. 527 (L. 1909, c. 61). ^bQe^ Corp. L. § 43 (L. 1909, 
 ""Gen. Corp. L. § 43 (L. 1909, c. 28). 
 c. 28). »eL. 1918, c. 240. 
 
§ 284 DIRECTOES, OFFICERS AND AGENTS 331 
 
 competent jurisdiction are trustees of its creditors, stock- 
 holders or members, and have full power to settle its 
 affairs, collect and pay outstanding debts and divide among 
 the persons entitled thereto the money and other prop- 
 erty remaining after payment of debts and necessary 
 expenses; and such trustees have authority to sue for and 
 recover the debts and property of the corporation and are 
 jointly and severally personally liable to its creditors, stock- 
 holders or members to the extent of its property and 
 effects coming into their hands.^" ' ' Where the exercise of 
 corporate acts is vested in a select body, an act done by the 
 persons composing that body, in a meeting of all the 
 corporators, is not a valid corporate act. ' ' " The relation- 
 ship between a director and his corporation is that of 
 qitasi trustee but -between him and third parties it is that 
 of agent merely for the corporation.^^ The relation between 
 directors and their corporation is not that of agents to 
 principal but is fiduciary in character, though not strictly 
 that of trustee and cestui que trust}^ The judgment of the 
 board of directors pf a corporation controls its business irre- 
 spective of the views of the majority stockholders to the con- 
 trary." "While the ordinary rules of law relating to an ageni 
 are applicable in considering the acts of a board of directors 
 in behalf of a corporation wh^n dealing with third persons, 
 the individual directors making up the board are not mere 
 employees, but a part of an elected body of officers consti- 
 tuting the executive agents of the corporation. • They hold 
 such office charged with the duty to act for the corporation 
 according to their best judgment, and in so doing they cannol 
 be controlled in the reasonable exercise and performance oi 
 such duty. As a general rule the stockholders cannot act ir 
 relation to the ordinary business of the corporation, nor car 
 
 ^" Gen. Corp. L. § 35 (L. 1909, ciaiy capacity for the shareholders 
 
 e. 28). as it is to their oare that the share 
 
 ^^ Landers v. Frank St. M. E. holders, acting through the oorpo 
 
 Church, 114 N. Y. 626, 21 N. E. rate entity, intrust the control oj 
 
 420 (1889). its property and the management oJ 
 
 ^^Moran v. Vreeland, 81 Misc. its business." 
 
 664, 143 N. Y. Supp. 522 (1913) ; " Whitaker v. Kilby, 55 Misc 
 
 aff'd 162 A. D. 907, 146 N. Y. Supp. 337, afif'd 106 N. Y. Supp. 51] 
 
 1101. (1907). The powers of director 
 
 ^^Mabon v. Miller, 81 A. D. 10, exist independent of any action b^ 
 
 80 N. Y. Supp. 979 (,1903). "The the stockholders; and the director' 
 
 agency of the directors rests solely are the exclusive executive repre 
 
 in their dealings with third persons, sentatives of the corporation. Man 
 
 when they represent the corporation son v. Curtis, — N. Y. — (1918) 
 
 as its agents; but in dealings with N. Y. L. J. May 14, p. 533. 
 the corporation, they act in a fldu- 
 
332 BUSINESS CORPORATIONS IN NEW YORK § 284 
 
 they control the directors in the exercise of the judgment 
 vested in them by virtue of their office. The relation of the 
 directors to the stockholders is essentially that of trustee 
 and cestui que truest. The peculiar relation that they bear to 
 the corporation and the owners of its stock grows out of the 
 inability of the corporation to act except through such 
 managing officers and agents. The corporation is the owner 
 of the property, but the directors in the performance of 
 their duty possess it, and act in every way as if they owned 
 it. . . . Without some statute or provision of the char- 
 ter authorizing his removal or suspension, a director cannot 
 be removed or suspended from office until the end of his 
 term, at least without cause."" " The board of directors 
 represents the corporate body. It is provided by statute 
 in this State that the affairs of every corporation shall be 
 managed by its board of directors (General Corporation Law, 
 section 34). The directors are not ordinary agents in the 
 immediate control of the stockholders. The directors hold 
 their office charged with the duty to act for the corporation 
 according to their best judgment, and in so doing they cannot 
 be controlled in the reasonable exercise and performance of 
 such duty. The corporation is the owner of the property, but 
 the directors in the performance of their duty possess it and 
 act in every way as if they owned it (citation). They are 
 trustees clothed with the power of controlling the property 
 and managing the affairs of a corporation without let or 
 hindrance. As to third persons they are its agents, but as to 
 the corporation itself, equity holds them liable as trustees." ^° 
 " ... a corporation may be bound by the acts of its 
 duly authorized agents in the same way that a natural person 
 may be bound, and ... a formal resolution is not neces- 
 sary to establish an act which can only be performed by a 
 board or committee acting as a body. ' ' " The execution by a 
 corporation of a judgment note, i. e., a note empowering the 
 holder or his trustee to confess judgment upon default, does 
 
 ^^ People ex rel. Manice v. Powell, is called before its board of direct- 
 
 201 N. Y. 194, 94 N. E. 634 (1911) ; ors or a duly authorized committee 
 
 Gen. Oorp. L. §§ 90, 91, 307; and informed by one of their num- 
 
 C. C. P. § 1948. bar that they have decided to make 
 
 ^'Continental Securities Co. v. a stated increase in his salary to 
 
 Belmont, 206 N. Y. 7, 51 L.R.A. induce him to continue in the serv- 
 
 (N.S.) 112, 99 N. E. 138 (1912). ice of the corporation and he as- 
 
 ^' Young V. U. S. Mortgage & sents to the proposition and acts 
 
 Trust Co., 214 N. Y. 279, 108 N. E. upon it, it is not essential that the 
 
 418 (1915), holding that: "If an agreement be reduced to -Hrriting or 
 
 officer or employee of a corporation embodied in a formal resolution." 
 
§ 284 DIRECTORS, OFFICERS AND AGENTS 333 
 
 not involve a delegation of the discretion of the directors." 
 Although a settlement of points of difference between two cor- 
 porations pursuant to an agreement between their respective 
 boards of directors is voidable at the election of the stock- 
 holders of one of such corporations on the ground that the 
 majority of its directors were also directors in the other cor- 
 poration, yet such right to avoid a contract made by common 
 directors is in the corporation and not in minority stock- 
 holders; so that if it be ratified by the majority of the 
 stockholders, without fraud or the like, the minority has no 
 complaint to make." The statutory commission to directors of 
 the management of a corporation cannot be controlled by an 
 agreement between the officers while acting as such that each 
 shall have a salary for a term of years and that the profits 
 shall be distributed in a certain way, irrespective of the 
 stock held by them.™ Directors cannot, against the protest 
 of minority stockholders, do an act which changes the nature 
 of the corporation's business so as effectually to destroy 
 it for all the purposes for which it was formed, particularly 
 if they ultimately personally benefit by this exercise of their 
 trust powers.^ Directors seeking by majority vote to settle a 
 dispute as to ownership of stock which exists between two 
 stockholders will be enjoined from carrying their plan into 
 execution.^ A director of one corporation cannot cancel a 
 debt owing to it by another corporation though the latter be 
 composed of three officers of the former in their individual 
 capacity.^ When neither statute nor by-law regulating the 
 subject is shown, the power of a corporation to make a general 
 assignment resides in its directors; but a resolution by the 
 latter " that the company execute a general assignment " 
 gives the president, as executive officer, power to carry the 
 resolution into effect.* It is not within the apparent scope of 
 trustees of a corporation organized for manufacturing pur- 
 
 ^* Holmes v. St. Joseph Lead Co., ment of the corporate affairs from 
 
 84 Misc. 278, 147 N. Y. Supp. 104 the board of directors and secure it 
 
 (1914) ; aff'd 163 A. D. 885, 147 to one of themselves is void and un- 
 
 N. Y. Supp. 1117. enforcible. Manson v. Curtis, — 
 
 1^ Continental Insurance Co. v. N. Y. — (1918) ; N. Y. L. J. May 
 
 New York & Hudson River R. R. 14, p. 533. 
 
 Co., 187 N. Y. 225, 79 N. E. 1026 ^ Abbott v. American Hard Rub- 
 
 (1907). ber Co., 33 Barb. 578 (1861). 
 
 2° Abbott V. Harheson Textile Co., ^ jj,a^ii ^ Lg-y, 27 Misc. 602, 59 
 
 162 A. D. 405, 147 N. Y. Supp. 103 N. Y. Supp. 638 (1899). 
 
 (1914); Gen. Corp. L. § 34. An ^MeCloskey v. GioMman, 62 Misc. 
 
 agreement between two stockholders, 462, 115 N. Y. Supp. 189 (1909). 
 
 neither controlling the stock, of a * Rogers v. Pell, 154 N. Y. 518, 
 
 corporation, to divorce the manage- 49 N. E. 75 (1898). 
 
334 BUSINESS CORPORATIONS IN NEW YORK § 285 
 
 poses to make and sell its promissory notes in the market." 
 The. reason of the rule that one taking the negotiable paper 
 of a corporation in payment of an individual obligation of its 
 officer is chargeable with notice as to the authorized character 
 of the paper does not exist in the case of corporate paper pay- 
 able to its director; and, therefore, the rule is not applicable 
 to a director." A board of directors of a corporation invested 
 by its charter with all corporate powers not specifically 
 excepted may retire preferred stock, issued by the corpora- 
 tion upon condition that the company have the option to retire 
 it at par; and may determine the time of exercise of the 
 option.' Directors of a corporation selling all its assets to 
 another without giving any notice to creditors of such corpo- 
 ration of the proposed transfer, even though upon an agree- 
 ment by the latter to assume all the then existing debts and 
 liabilities of the former, make themselves liable for a judg- 
 ment recovered against their corporation upon a claim of 
 which they were ignorant at the time of the transfer.* 
 Directors need no special authority to enable them to transfer 
 to new subscribers stock of the company surrendered to it by 
 those to whom it has originally been issued.' 
 
 § 285. Id. : Contracts. — The liability of a corporation for its 
 directors ' contracts in its behalf is later discussed." Directors 
 may make a contract, which the law expressly permits their 
 corporation to make, without the authorization of the stock- 
 holders." Directors of a corporation may make a contract 
 pertaining to its ordinary business relations with another cor- 
 poration without fear of interference by the stockholders of 
 the former, even though such directors be also interested in 
 the other corporation, unless fraud or bad faith be charged." 
 
 "Close V. Potter, 5 Misc. 543, 25 ^^Beveridge v. New York Ele- 
 
 N. Y. Supp. 972 (1893). vated R. R. Co., 112 N. Y. 1, 2 
 
 'Orr V. South Amboy Terra Cotta L.R.A. 648, 19 N. E. 489 (1889). 
 
 Co., 113 A. D. 103, 98 N. Y. Supp. " Genesee Valley Ry. Co. v. Ret- 
 
 1026 (1906). sof Mining Co., 15 Misc. 187, 36 
 
 'Hackett v. Northern Pacific Ry. N. Y. Supp. 896 (1895). 
 
 Co., 36 Misc. 583, 73 N. Y. Supp. Time for which contracts of em- 
 
 1087 (1901). ployment may be made on behalf of 
 
 * Darcy v. Brooklyn & N. Y. Ferry corporation by its officers, directors, 
 
 Co., 196 N. Y. 99, 26 L.R.A.(N.S.) and agents, see notes in 49 L.R.A. 
 
 267, 89 N. E. 461 (1909); C. C. P. 471; 17 L.R.A.(N.S.) 177. 
 
 §§ 1781, 1782, substantially re-en- On implied authority of superin- 
 
 aeted in 1909 as §§ 90, 91, Gen. tendent of department to contract as 
 
 Corp. L. to matters relating to his depart- 
 
 ®City Bank of Columbus v. Bruce ment, see note in' 38 L.R.A.(N.S.) 
 
 & Fox, 17 N. Y. 507 (1858). 1135. 
 
 " See §§ 434, 436 and 438, infra. Secret bonus of officer or director 
 
§§ 286, 287 DIEBCTORS, OFFICERS AND AGENTS 335 
 
 § 286. Id.: Real Estate. — ^It is within the power of a board 
 to give the corporation's president the power to purchase 
 property as part of its legitimate business and to give the 
 company's obligation in payment for it.^' The directors of a 
 corporation organized to acquire and hold by purchase, lease 
 or otherwise, mineral land and other real property, and to 
 mine, transport and dispose of the mineral and other products 
 of such lands, may lease its property at a fixed rent, in order 
 to develop the property, instead of operating it directly ; and 
 in the absence of fraud the stockholders cannot insist that 
 their consent be obtained to such lease." 
 
 § 287. Id.: Actions, Service of Process, Counsel Fees. — The 
 service of process in actions against corporations is generally 
 discussed in the four hundred and forty-third section of this 
 book. The verification of pleadings in corporate actions is 
 generally discussed in the four hundred and forty-first section 
 of this book. Although an attorney retained by a director to 
 bring an action for him against an agent or officer of the cor- 
 poration who has misappropriated its money has no statutory 
 lien on the cause of action and recovery, yet, if the director 
 agree that the attorney have a lien on the cause of action and 
 recovery, the courts will enforce this contractual lien ; because 
 the director, as trustee, had a lien on the recovery which he 
 could transfer to the attorney." "As a general principle, 
 trustees of a corporation whose corporate existence is 
 attacked, should be afforded the means of resisting such 
 attack, so far as the facts justify and their duty demands. 
 . . . But the claim of the trustees to be protected in the 
 defense of the corporation they represent, or that of their 
 counsel to be paid out of the fund for opposing the appoint- 
 ment of a receiver, however just it may be, is not an absolute 
 right which can be enforced by an action in their behalf 
 against the receiver, but is a matter to be addressed to the 
 sound discretion of the court in which the proceeding is pend- 
 ing, and such discretion should be exercised in that proceed- 
 ing, and as part thereof, and upon a consideration of all the 
 
 of corporation as affecting right to porations were created for public 
 
 enforce contract against corpora- purposes, and there is no reason why 
 
 tion, see note in 7 L.R.A.(N.S.) 467. it should ever have been applied to 
 
 ^ Olcott V. Tic^a R. R. Co., 27 private corporations any more than 
 
 N. Y. 546 (1863). to the powers of individuals in a 
 
 " Hennesspy v. Muhleman, 40 A. D. partnership." 
 
 175, 57 N. Y. Supp. 854 '(1899'). ^^ Schoenherr v. V&n Meter, 215 
 
 " The doctrine of ultra vires origi- N. Y. 548, 109 N. E. 625 (1915) ; 
 
 nated at a time when nearly all cor- Judiciary L. § 475. 
 
336 BUSINESS CORPORATIONS IN NEW YORK § 288 
 
 circumstances."" A demand made of a corporation's 
 director at its office who is acting as the recognized agent of 
 the company in the matter is sufficient to authorize the mainte- 
 jiance against the corporation of an action for detinue.^^ Dis- 
 cussion will be found later in this work of service of process 
 on directors so as to bind their corporations and verification 
 by t"hem of their corporations' pleadings." 
 
 § 288. Id.: Liabilities, In General. — The legality of the acts 
 of directors of a corporation are to be determined by the laws 
 of the state of its incorporation." The acts of a board of 
 directors must be judged in the light of appearances existing 
 when they acted.^" Directors are not liable for mere errors 
 of judgment, whether as to law or facts, if they act without 
 corrupt intent.^ Directors of a corporation are not liable for 
 errors of judgment.^ The mere fact that one is a trustee of a 
 corporation does not make him chargeable with actual knowl- 
 edge of its business transactions and of the entries made on 
 its books.' " ... each director is only liable for his own 
 acts or omissions, and that one is not liable for the acts or 
 omissions of another unless he participated therein to the 
 injury of the corporation, or had some knowledge by which in 
 the exercise of reasonable care he could have prevented the 
 loss or connived at it, or failed to perform his duty of exercis- 
 ing the authority he possessed to prevent losses which should, 
 in the exercise of reasonable care and skill, have been fore- 
 seen and guarded against (citations). Nor are directors 
 liable for mere errors of judgment where they act without 
 corrupt intent and in good faith and are fairly competent to 
 discharge the duties of the position, at least not unless the 
 
 ^"Barnes v. Neweomb, 89 N. Y. net proceeds of sale of the mort- 
 
 108 (1882). gaged property after satisfying the 
 
 ^' Dunham v. Troy Union R. R. senior lien before the junior lienor. 
 
 Co., 42 N. Y. (3 Keyes) 543 (1867). ^ Holmes v. St. Joseph Lead Co., 
 
 "' See § 441, infra, as to verifiea- No. 1, 168 A. D. 685, 154 N. Y. 
 
 tion of pleadings, and § 443, infra, Supp. 517 (1915) ; afE'd without 
 
 as to service of process. opinion, 217 N. Y. 618, 111 N. E. 
 
 ^° Ottinger v. Bennett, 144 A. D. 1088 ; and same against same. No. 2, 
 
 525, 129 N. Y. Supp. 819 (1911) ; 168 A. D. 688, 154 N. Y. Supp. 513 
 
 rev'd on two certified questions only, (1915) ; afif'd 217 N. Y. 619, 111 
 
 203 N. Y. 554, 96 N. E. il23. N. E. 1088, without opinion. The 
 
 ^"Dwight V. Williams, 25 Misc. directors of one corporation controi- 
 
 667, 55 N. Y. Supp. 201 (1898). Mng another b^an an investigation 
 
 ^■Oass V. Realty Securities Co., into a loan by the latter to one of 
 
 148 A. D. 96, 132 N. Y. Supp. 1074 its directors and his son, but re- 
 
 (1911); aff'd 206 N. Y. 649. The fused to continue it or sne as asked 
 
 action was by a junior lienor to hold by its stockholders, 
 
 the directors of the senior lienor for ' Powell v. Conover, 75 Hun, 11, 
 
 paying general creditors from the 26 N. Y. Supp. 1028 (1894). 
 
§ 288 DIRECTORS, OFFICERS AND AGENTS 337 
 
 acts are unlawful or ultra vires.'"* " Directors of corpora- 
 tions act in a fiduciary capacity. In every action where the 
 interest of the corporation is involved, particularly where the 
 same is in conflict with the individual interest of the directors, 
 they act as trustees and are strictly accountable to the cred- 
 itors or stockholders of the corporation for their action."" 
 " The directors of corporations are trustees of the stock- 
 holders, and in a certain sense of its creditors. Any agree- 
 ment to influence their action for the benefit of others and to 
 the prejudice of the company is fraudulent and void. ' ' ' 
 " ' The directors of a corporation who willfully abuse their 
 trust or misapply the funds of the company, by which a loss 
 is sustained, are personally liable as trustees to make good 
 the loss, and they are also liable if they suffer the corporate 
 funds to be lost or wasted by gross negligence and inattention 
 to the duties of their trust. ' " ' A director is not liable in 
 damages for preventing the consummation of a contract by 
 his corporation when its abandonment was due to no act of 
 his as the proximate cause but to the report by an expert 
 made as the result of honest advice by him to friends that 
 material facts as to the company's condition had been con- 
 cealed from them.^ When directors relinquish to a corpora- 
 tion's president for a period of years the exclusive manage- 
 naent of its business, allowing him to give notes, etc., they can- 
 not, on resuming control, repudiate their agent's acts.' " If 
 the directors of a company, no matter whether through inat- 
 tention or otherwise, suffer its subordinate officers to pursue 
 a particular line of conduct for a considerable period, with- 
 out objection, they are as much bound to those who are not 
 aware of any want of authority, as if the requisite power had 
 been directly conferred."^" One who has accepted the office 
 and exercised the duties of a director of a corporation cannot 
 escape a statutory liability which attaches to that office on 
 
 * People V. Equitable Life Assur- its formation was held immaterial as 
 
 anee Society, 124 A. D. 714, 109 the presumption was' that the stock 
 
 N. 'Y. Supp. 453 (1908) ; C. C. P. ' wcmld become distributed after or- 
 
 §§ 1781, 1782; now Gen. Corp. L. ganization to others than themselves. 
 
 §§ 90, 91. '^ Brinekerhoff v. Bostwick, 88 
 
 '^ Billings V. Shaw, 209 N. Y. 265, N. Y. 52 (1882), quoting with ap- 
 
 103 N. E. 142 (1913). proval from Robinson v. Smith, 3 
 
 "Bliss V. Matteson, 45 N. Y. 22 Paige, 222. 
 
 (1871). The agreement was by de- , *Hale v. Mason, 160 N. Y. 561, 
 
 fendants to have directors of a com- 55 N. E. 202 (1899). 
 
 pany to be bought and run by them ' Olcott v. Tioga R. R. Co., 27 
 
 prefer payment of plaintiff's cou- _ N. Y. 546 (1863). 
 
 pons on bonds. The fact that they ^° Beers v. Phoenix Glass Co., 14 
 
 might control the new company on Barb. 358 (1852). Secretary. 
 B. C. N. Y.— 22 
 
338 BUSINESS CORPORATIONS IN NEW YORK § 288 
 
 the ground of irregularities in his election." A judgment for 
 damages for fraud against corporate directors for buying 
 with corporate funds valueless property from majority stock- 
 holders cannot be upheld by proof of negligence, such as 
 the recklessness of the directors in shutting their eyes when 
 making the purchase." Allegations that the vote of a director 
 to abandon an enterprise was negligent, fraudulent and in 
 furtherance of a conspiracy to deprive an individual of a 
 subsidy which he would have secured had the enterprise gone 
 through are not allegations of facts tending to show a viola- 
 tion by the director of his duty sufficient to make him liable 
 to account to the corporation for a breach of his duty as 
 director." Directors of a corporation who vote in favor of a 
 resolution to pay its president a salary, without specifying 
 how it shall be paid, though conunitting a wrongful act, are 
 not liable to suit by the corporation for recovery of the 
 amount of notes issued and negotiated to pay such salary by 
 another . resolution to which they were not assenters, but 
 those directors who did vote for the latter resolution are 
 liable to the corporation " upon the principle that a person 
 who fraudulently places in circulation the negotiable instru- 
 ment of another, whether made by him or by his apparent 
 authority, and thereby renders him liable to pay the same to 
 a hona fide purchaser, is guilty of a tort, and, in the absence 
 of special circumstances diminishing its value, is presump- 
 tively liable to the injured party for the face value thereof. ' ' " 
 A suit based upon the mis- or mal- feasance of directors of a 
 corporation in letting go from their hands money of the cor- 
 poration which they have received or interfered with or 
 acted upon is in equity ; but an action based upon their negli- 
 gence in appointing incompetent officers or permitting the 
 latter to deal improperly with the corporate funds is at law." 
 When an action is brought by a creditor of a corporation 
 and the law makes its stockholders, directors, trustees or 
 other officers, or any of them, liable in any event or contin- 
 gency for the payment of his debt, they may be made parties 
 defendant by the original or by a supplemental complaint and 
 their liability may be declared and enforced by the judgment 
 
 "Union National Bank v. Soott, Miller, 154 A. D. 437, 139 Supp. 
 
 53 A. D. 66, ee N. Y. Snpp. 145 166 (1913). 
 
 (1900). "Metropolitan Elevated Ry. Ck). 
 
 ^^ Polhenaius v. Polhemus, 114 v. Kneeland, 120 N. Y. 134, 8 L.R.A. 
 
 A. D. 781, 100 N. Y. Supp. 263 253, 24 N. E. 381 (1890). 
 
 (1906). i^Higgins v. Tefft, 4 A. D. 62 
 
 "Occidental Construction Co. v. 38 N. Y. Supp. 716 (1896). 
 
§ 288 DIRECTORS, OFFICERS AND AGENTS 339 
 
 in the action; or the plaintiff in the action may, instead of 
 making them parties, maintain a separate action against 
 them to procure a judgment declaring, apportioning and 
 enforcing their liability; and in. either kind of action the 
 court must when it is necessary cause an account to be taken 
 of the property and of the debts of the corporation and there- 
 upon the defendants' liability must be apportioned accord- 
 ingly, though 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 
 determine the amount of each defendant's liability, and 
 enforce the same accordingly." If it appears that the prop- 
 erty of the corporation and the sums collected or collectible 
 from the stockholders upon their stock subscriptions are or 
 will be insufficient to pay the debts of the corporation the 
 court must ascertain the several sums for which the directors, 
 trustees or other officers, or the stockholders of the corpora- 
 tion, being parties to the action, are liable ; and must adjudge 
 that the same be paid into court, to be applied, in such pro- 
 portions and in such order as justice requires, to the pay- 
 ment of the debts of the corporation," A suit in equity may 
 be brought by one creditor of a corporation against its direct- 
 ors to enforce their individual liability under its charter for 
 its debts incurred during their administrations up to a desig- 
 nated amount without making the corporation itself or all 
 creditors parties, if it appears that there are other creditors 
 about to start like suits." In an action against trustees for a 
 debt owing by their corporation, ' ' when it is proved that the 
 corporation has received property from others under a prom- 
 ise to pay^ under circumstancee which the law would adjudge 
 sufficient to charge the corporation with the purchase-price, a 
 debt is established which the trustees cannot dispute, although 
 perchance the corporation might, for any reason, have refused 
 to accept the property; and had it done so no legal liability 
 would have resulted." " There can be no better evidence of 
 the fraud of trustees toward their corporation and its credi- 
 tors in the sale of its assets than that they delivered to the 
 attorney of one suing them the process against the company, 
 to protect its interests.^" One who is director of a banking 
 
 "Gen. Corp. L. §§ 109, 110, 111 "Whitney Arms Co. v. Barlow, 63 
 
 (L. 1909, e. 28). N. Y. 62 (1875); Gen. Mfg. Act, 
 
 " Gen. Corp. L. § 114 (L. 1909, L. 1848, c. 40, § 12, as amended L. 
 
 c. 28). 1853, c. 333. 
 
 ^« Bauer v. Piatt, 72 Hun, 326, 25 2°. Whittlesey v. Delaney, 73 N. Y. 
 
 N. Y. Supp. 426 (1893). 571 (1878). 
 
340 BUSINESS CORPORATIONS IN NEW YORK § 289 
 
 corporation cannot, in a suit to rescind an agreement to buy 
 its stock from its cashier on the ground of fraudulent repre- 
 sentations, be held to the rule that one holding himself out 
 as manager and director of an institution cannot avail him- 
 self of the plea of ignorance, because this claim is between 
 officers inter sese. ^ 
 
 § 289. Id, For Unauthorized Dividends. — The directors of 
 a stock corporation must not make dividends except from the 
 surplus profits arising from the business of such corporation ; 
 and in case of any violation of this provision the directors 
 under whose administration dividends may have been so 
 made, except those who may have caused their dissent there- 
 from to be entered at large upon the minutes of such direct- 
 ors at the time or who were not present when the dividends 
 were made, are jointly and severally liable to such corpora- 
 tion and its creditors to the full amount of any loss sustained 
 by such corporation or its creditors by reason of such making 
 of dividends.^ But the statutory prohibition against making 
 dividends except from surplus profits does not prevent a 
 division and distribution of the assets of the corporation 
 remaining after the payment of all its debts and liabilities 
 upon the dissolution of such corporation or the expiration of 
 its charter ; nor does it prevent a corporation from accepting 
 shares of its capital stock in complete or partial settlement 
 of a debt owing to the corporation which by its board of 
 directors is deemed bad or doubtful.' A director of a stock 
 corporation is guilty of a misdemeanor who concurs in any 
 vote or act of the directors of such corporation, or any of 
 them, by which it is intended to make a dividend, except from 
 the surplus profits arising from the business of the corpo- 
 ration, and in the cases and manner allowed by law.* A 
 director of a corporation, i. e., any person having by law the 
 direction or management of the affairs of a corporation by 
 whatever name described, is deemed to have such a knowledge 
 of the affairs of the corporation as to enable him to deter- 
 mine whether any act, proceeding or omission of its directors 
 is a violation of the provision of law just stated.^ A director 
 is deemed to have concurred in the violation of such provision 
 of law either if present at a meeting of the directors at which 
 
 ^Lefewr v. Lefever, 30 N. Y. 27 ^ St. Corp. L. § 28 (L. 1909, c. 61). 
 
 (1864). ' St. Corp. L. § 28 (L. 1909, c. 61). 
 
 Generally on tte question o£ lia- * Penal L. § 664 (L. 1909, c. 88). 
 
 bility of the directors of a eorpo- ^ Penal L. § 667 (L. 1909, c. 88). 
 
 ration to the corporation, see notes 
 in 55 L.R.A. 751 and 39 L.R.A. 
 (N.S.) 17,S. 
 
§ 289 DIRECTORS, OFFICERS AND AGENTS 341 
 
 • 
 
 any act, proceeding or omission of such directors constituting 
 such violation occurs without at the time causing or in writ- 
 ing requiring his dissent therefrom to be entered on the 
 ' minutes of the directors, or if absent from such meeting and 
 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 there- 
 after without causing or in writing requiring his dissent 
 from such violation to be entered on such record of minutes." 
 The statutory provisions for making stockholders, directors 
 and officers parties defendant in an action by a corporate 
 creditor, or bringing separate actions against them, and the 
 judgment to be thereupon rendered are noted in the last para- 
 graph of the two hundred and eighty-eighth section of this 
 book. The statute precluding dividends save from surplus 
 profits and reduction of capital stock makes directors violat- 
 ing it liable only for the loss sustained by the corporation or 
 its creditors from the declaration and payment of dividends 
 and not for the full amount of such dividends should they 
 exceed such loss.^ Directors owning all the stock of the corpo- 
 ration may distribute its surplus profits as salaries to them- 
 selves if they be guilty of no fraud.® Ignorance of the financial 
 condition of his corporation is no protection to a director from 
 liability for declaring dividends when its net earnings do not 
 justify them; and the account books of the corporation, par- 
 ticularly its ledger, are admissible evidence of such financial 
 condition.^ Trustees are liable for a debt of the company 
 under a statute making them so on declaration of dividends 
 from capital if they transfer all its stock, practically, to an 
 individual while a debt of the company is still outstanding." 
 Trustees liable for corporate debts by reason of decreasing 
 the capital stock by dividends are not responsible for the 
 costs of a judgment for the debt had by the creditor against 
 the company." " The object of the statute [making trustees 
 individually liable for a debt due by their corporation if they 
 declare and pay to its stockholders a dividend diminishing 
 
 ° Penal L. § 667 (L. 1909, c. 88). 201 N. Y. 527, &4 N. E. 1100; St, 
 
 ^Shaw V. Ansaldi Co., Inc., 178 Corp. L. § 28. 
 A. D. 589, 166 N. Y. Supp. 872 ^"Rorke v. Thom«s, 56 N. Y. 55£ 
 
 (1917) ; St. Corp. L. § 28. (1874) ; Gen. Mfg. Act, L. 1848 
 
 ^ Shaw V. Ansaldi Co., Inc., 178 c. 40, § 13. 
 A. D. 589, 165 N. Y. Supp. 872 ^^ Rorke v. Thomes, 56 N. Y. 55£ 
 
 (1917). (1874); Gen. Mfg. Act, L. 1848, 
 
 ' Wesp V. Muekle, 136 A. D. 241, c. 40, § 13. 
 120 N. Y. Supp. 976 (1910) ; aff'd 
 
342 BUSINESS CORPORATIONS IN NEW YORK § 290 
 
 the amount of its capital stock] is to prevent the dissipation 
 of the fund designed for the security of creditors, and all who 
 have occasion to deal with these corporations ; and, although 
 the statute is highly penal, and a clear case must be estab-' 
 lished, yet the substance of the act, and not the mere form, 
 must he the test of liability. ' ' " An action to recover dam- 
 ages for alleged Ulegal declaration of dividends by a director 
 of a corporation survives the defendant's death and may be 
 continued against his personal representatives ; but they can- 
 not, if there is no property of the non-resident, deceased 
 defendant in this State, be served by publication or personally 
 outside the State." 
 
 § 290. Id.: For Dividing, Withdrawing, Paying or Reducing 
 Capital Stock. — The directors of a stock corporation must 
 not 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 ^.uthorized by law." In 
 case of any violation of the prohibition, against dividing, 
 withdrawing, in any way paying to stockholders any of a 
 corporation's capital stock or reducing it except as authorized 
 by law, the directors under whose administration it 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 it happened, 
 are jointly and severally liable to the corporation and its 
 creditors to the full amount of any loss sustained by it or 
 them respectively by reason of such withdrawal, division or 
 reduction." But such prohibition does not prevent a division 
 and distribution of the assets of any such corporation remain- 
 ing after the payment of all its debts and liabilities upon the 
 dissolution of such corporation or the expiration of its char- 
 ter; nor prevent a corporation from accepting shares of its 
 capital stock in complete or partial settlement of a debt 
 owing to the corporation which is deemed bad or doubtful by 
 its board of directors." A director of a stock corporation is 
 guilty of a misdemeanor who concurs in any vote or act of the 
 directors of such corporation, or any of them, by which it is 
 intended to divide, withdraw, or in any manner pay to the 
 
 "Rorke v. Thomes, 56 N. Y. 559 
 (1876); Oen. Mfg. Act, L. 1848, 
 e. 40, § 13. 
 
 " German- American Coffee Co. v. 
 Johnston, No. 1, 168 A. D. 31, 153 
 N. Y. Supp. 866 (1915) ; Deced. Est. 
 L. § 120; C. C. P. §§ 757, 1836a, 707, 
 1217. 
 
 "St. 
 
 Corp. 
 
 L. 
 
 § 
 
 28 
 
 (L. 
 
 1909, 
 
 61). 
 
 
 
 
 
 
 
 ^'St. 
 
 Corp. 
 
 L. 
 
 § 
 
 28 
 
 (L. 
 
 1909, 
 
 61). 
 
 
 
 
 
 
 
 "St. 
 
 Corp. 
 
 L. 
 
 § 
 
 28 
 
 (L. 
 
 1909, 
 
 61). 
 
 
 
 
 
 
 
§ 291 DIRECTORS, OFFICERS AND AGENTS 343 
 
 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." A director of a corporation, i. e., 
 any person having by law the direction or management of the 
 affairs of a corporation by whatever name described, is 
 deemed to have such a knowledge of the affairs of the corpo- 
 ration as to enable him to determine whether, any act, proceed- 
 ing or omission of its directors is a violation of the provision 
 of law just stated.^* A director is deemed to have concurred 
 in the violation of such provision either if present at a meet- 
 ing of the directors at which any act, proceeding or omission 
 of such directors constituting such violation occurs without 
 at the time causing or in writing requiring his dissent there- 
 from to be entered on the minutes of the directors, or if 
 absent from such meeting and the facts constituting such vio- 
 lation appear on the record or minutes of the proceedings of 
 the board of directors and he remains a director of the corpo- 
 ration for six months thereafter without causing or requiring 
 in writing his dissent from such violation to be entered on 
 such record of minutes.^" The statutory provisions for mak- 
 ing stockholders, directors and officers parties defendant in 
 an action by a corporate creditor, or bringing separate 
 actions against them, and the judgment to be thereupon ren- 
 dered, are noted in the last paragraph of the two hundred and 
 eighty-eighth section of this book. 
 
 § 291. Id.: For Assenting to Indebtedness Beyond Capital. — 
 There used to be a liability imposed by statute on directors 
 for consenting to an indebtedness by their corporation in an 
 amount exceeding its capital; but this liability no longer 
 exists. The cases collected in the note were decided under 
 the repealed statute.^ The statutes do, however, provide that 
 no corporation formed pursuant to the statute, permitting a 
 
 "Penal L. § 664 (L. 19'09, c. 88). of all, and their liability is in equity 
 ^^ Penal L. § 664 (L. 1909, c. 88). a fund to which all the creditors 
 "Penal L. §667 (L. 1909, c. 88). may resort for the satisfaction <A 
 On right to injunction against re- such debts as the corporation itself 
 duction of capital stock of corpora- fails to pay, to be shured in by all 
 tion, see note in 1 L.R.A.(N.S.) 571. in proportion to the debt remaining 
 ^"The statutory provision making unpaid. It follows that it must b* 
 corporate directors personally liable enforced in equity in a suit where 
 for a corporate debt in excess of its all the creditors and the corporation 
 paid up capital stock "imposes a itself are parties, or represented, 
 liability upon the trustees, creating where an accounting can be had, all 
 or assenting to debts in excess of the facts ascertained and the equi- 
 the capital, to the extent of such ex- ties adjusted. The liability is sec- 
 cess, not for the benefit of any par- ondary, to be resorted to only aftei 
 tieular creditor, but for the benefit the usual remedies against the cor- 
 
344 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 291 
 
 corporation upon its formation or reorganization to make 
 provision in its certificate of incorporation for the issuance 
 of shares of stock (other than preferred stock having a pref- 
 erence as to principal) without any nominal or par value, can 
 incur any debts until the amount of capital stated in such cer- 
 tificate has been fully paid in money or in property taken at 
 
 poration itself have been exhausted;" 
 it is not primary and contractual as 
 is the liability of a stockholder for 
 debts created before the capital stock 
 is paid in. National Bank v. Dilling- 
 ham, 147 N. Y. 603, 42 N. E. 338 
 (1895) ; St. Corp. L. § 24. A cred- 
 itor bringing a representative action 
 against directors of his corporate 
 debtor to enforce their personal lia- 
 bility because of increase in their 
 regime of the corporate debts above 
 its paid-up capital need not be a 
 judgment-creditor if he was enjoined 
 by an injunction operative when his 
 action was brought from obtaining a 
 judgment against the corporation. 
 Whitney v. Pugh, 58 A. D. 316, 68 
 N. Y. Supp. 992 (1901) ; St. Corp. 
 L. § 24 (L. 1892, e. 688). An action 
 against directors consenting to the 
 creation of an indebtedness by their 
 corporation which brings its total 
 indebtedness not secured by mort- 
 gage to a sum in excess of the 
 amount of its paid-up capital stock 
 to enforce their personal liability for 
 such indebtedness to the corpora- 
 tion's creditors may and should be 
 brought by one creditor as represen- 
 tative of himself and all other cred- 
 itors against all the directors liable 
 to contribute to the creditor's fund. 
 Whitney v. Pugh, 58 A. D. 316, 68 
 N. Y. Supp. 9«2 (1901) ; St. Corp. 
 L. § 24 (L. 1892, c. 688) : " . . . 
 otherwise that fund cannot be prop- 
 erly constituted, unless indeed it be 
 held that a multiplicity of suits will 
 lie to establish one fund, and that 
 in a case where the personnel of the 
 directorship has changed from year 
 to year, a creditor suing for himself 
 and all other creditors can only 
 bring his action to realize a part 
 of the fund, viz., that to be drawn 
 from the liability of one set of di- 
 
 rectors who were such when the in- 
 debtedness to the particular creditor 
 instituting the action arose." In 
 seeking to hold a director personally 
 Liable for consenting to the creation 
 of any debt of his corporation 
 whereby its total indebtedness not 
 secured by mortgage shall exceed 
 the amount of its paid-up capital 
 stock, it must be remembered that 
 " it is the creation of a debt not se- 
 cured by mortgage in excess of the 
 paid-up capital stock which makes 
 the directors liable, but not a debt 
 which is secured by mortgage." 
 Irving National Bank v. Moynihan, 
 84 A. D. 301, 82 N. Y. Supp. 705 
 (1903) ; St. Corp. L. § 24 (L. 1892, 
 c. 688). "The liability imposed by 
 statute upon directors for such in- 
 debtedness of their corporation not 
 secured by mortgage as exceeds its 
 paid-up capital stock must be en- 
 forced in a suit in equity for the 
 benefit of all creditors to which they 
 and the corporation are parties, and 
 if several actions have been brought 
 by different plaintiffs against the 
 same directors and all the plaintiffs 
 are represented by the same attor- 
 ney, the plaintiffs should be com- 
 pelled to elect in which of the ac- 
 tions they shall proceed, and pro- 
 ceedings in all the other actions 
 should be stayed until the further 
 order of the court, to the end that 
 when .judgment has been recovered 
 in the action in which the election 
 has been made, the plaintiffs in those 
 actions, as well as tbe other cred- 
 itors, may come in and prove their 
 claims in that action, and the rights 
 and liabilities of all parties be deter- 
 mined therein." American Grocery 
 Co. V. Flint, 5 A. D. 263, 39 N. Y. 
 Supp. 1 (1896). A statute making 
 trustees of a corporation who assent 
 
§ 292 DIRECTORS, OFFICERS AND AGENTS 345 
 
 its actual value, and that, if the amount of capital stated in 
 such certificate is increased, the corporation canpot increase 
 the amount of its indebtedness then existing until it has 
 received m money or property the amount of such increase 
 of its stated capital ; and that the directors of the corporation 
 assenting to the creation of any debt in violation of such 
 statutory prohibition are liable jointly and severally for such 
 debt, though no action can be brought on such liability unless 
 within one year after the debt has been incurred the creditor 
 has served upon the director written notice of intention to 
 hold him personally liable for such debt; but any director who 
 because of such liability pays any debt of the corporation is 
 subrogated to all rights of the creditor in respect thereof 
 against the corporation and its property and is also entitled 
 to contribution from all other directors of the corporation 
 similarly liable for the same debt, and the personal represen- 
 tative of any such director who has died before making such 
 contribution.^"* The statute further provides that a corpo- 
 ration organized under any general law which is reorgan- 
 ized so as to. permit of its issuing non-par value stock cannot 
 incur any debts subsequent to the filing of the certificate of 
 reorganization until it has assets of an actual value at least 
 equal to the amount of capital stated in such certificate of 
 reorganization as that with which it will carry on business ; 
 and that the directors of a corporation assenting to the crea- 
 tion of a debt in violation of such statutory provision are 
 jointly and severally liable for such debt in like manner as 
 directors of a corporation obtaining non-par value stock as 
 prescribed in the last sentence.^"" 
 
 § 292. Id.: For Permitting Payment for Corporation's Stock 
 by Unauthorized Means, — A director of a stock corporation 
 is guilty of a misdemeanor who concurs in any vote or act of 
 
 to an increase of its indebtedness statute, bonds of the corporation not 
 
 over the amount of its capital stock shown to have been issued or to have 
 
 personally liable for such excess to reached the hands of creditors ean- 
 
 the creditors of the company makes not be included, nor can a judgment 
 
 them liable only to such creditors to against the corporation predicated 
 
 whom the company owes such excess, on advances made by a director; 
 
 and not to creditors to whom it does, and, in any event, all the directors 
 
 not owe it. Patterson v. Robinson, at fault must be joined as defend- 
 
 37 Hun, 341 (1885) ; L. 1848, c. 40, ants. McClave v. Thompson, 36 
 
 § 23. In determining whether the Hun, 365 (1885); L. 1875, e. 611, 
 
 indebtedness of a corporation ex- § 22. 
 
 ceeds the amount of its capital stock ^"^ St. Corp. L. § 19 (L. 1917, 
 
 so as to make its directors creating c. 5£)0), and § 20 (L. 1912, c. 351). 
 
 the indebtedness individually liable 2°'' St. Corp. L. § 24 (L. 1917, 
 
 to creditors for the excess, under the c. 484), and § 24-b (L. 1917, c. 484). 
 
346 BUSINESS CORPORATIONS IN NEW YORK § 293 
 
 the directors of such corporation, or any of them, by which 
 it is intended to discount or receive any note or other evidence 
 of debt in payment of an instalment of capital stock actually 
 called in, and required to be paid, or with intent to provide 
 the means of making such payment; or to receive or dis- 
 count 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 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/ A director of a 
 corporation, i. e., any person having by law the direction or 
 management of any of the affairs of a corporation by what- 
 ever name described, is deemed to have such a knowledge of 
 the affairs of the corporation as to enable him to determine 
 whether any act, proceeding or omission of its directors is a 
 violation of the provision of law just stated.^ A director is 
 deemed to have concurred in the violation of such provision of 
 law either if present at a meeting of the directors at which 
 any act, proceeding or omission of such directors constituting 
 such violation occurs without at the time causing or in writ- 
 ing requiring his dissent therefrom to be entered on the min- 
 utes of the directors, or if absent from such meeting and 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 there- 
 after without causing or in writing requiring his dissent 
 from such violation to be entered on such record of minutes.* 
 § 293. Id.: On Corporate Dissolution. — Upon the dissolu- 
 tion of any corporation its directors are trustees for its cred- 
 itors, stockholders or members, unless othei-s be appointed 
 by legislature or court; and are jointly and severally per- 
 sonally liable to its creditors, stocHiolders or members to the 
 extent of the corporate property and effects which came into 
 their hands.* Upon the expiration of the term of a corpora- 
 tion's life pursuant to a limitation thereof in its charter its 
 property vests in its directors as trustees for the owners of 
 its stock, subject only to the payment of the claims of cred- 
 itors." The statutory provision making directors of a corpo- 
 ration its trustees on dissolution for creditors means " that 
 the corporate property should be held and administered upon 
 
 ' Penal L. § 664 (L. 1909, c. 88) = Miatter of rriedman, 177 A. D. 
 
 ^ Penal L. § 66t (L. 1909, c. 88). 755, 164 N. Y. Supp. 892 (1917). 
 'Penal L. § 667 (L. 1909, c. 88). 
 *G«n. Corp. L. § 35 (L. 19*09, 
 e. 28), 
 
§ 293 DIRECTORS, OFFICERS AND AGENTS 347 
 
 by the directors, where other persons were not appointed, for 
 the purpose of its distribution in the settlement of all exist- 
 ing claims upon it; whether the claimant was a creditor in 
 the legal sense, or not. The term ' creditor ' is broad enough, 
 in view of the evident purpose of this act and of the other pro- 
 vision we have mentioned [Business Corporation Law, § 5], 
 to include those persons to whom the corporation was under 
 any enforceable obligation, as well as those to whom it was 
 indebted. "° " The statute declaring that the directors and 
 managers of any corporation shall, upon its dissolution, be 
 the trustees of the creditors and stockholders . . . 
 expressly limits the liability to the extent of the property 
 and effects that shall come into their hands, " ^ It seems that 
 a way in which directors of a corporation virtually dissolving 
 it by transfer of all its assets may protect themselves from 
 claims of unknown creditors is to apply to the court for leave 
 to distribute and upon giving such notice as the court pre- 
 scribed to be relieved from personal liability for the distri- 
 bution.* The directors of a corporation who voluntarily dis- 
 solve it are liable to one to whom the corporation was contin- 
 gently liable at the time of the dissolution and who later makes 
 the liability absolute and may be compelled to account for 
 their management and disposition of the corporate assets, 
 although it is improper to appoint a receiver pendente lite 
 if the corporation has no property left and direct the direct- 
 ors to pay. over to him all property held by them.® In order 
 to hold individually an ofiScer of a dissolved corporation 
 responsible to creditors of the corporation to whom he had 
 stated he would undertake payment of its merchandise debts 
 with the intent of inducing such creditors to refrain from 
 making themselves parties to the dissolution proceeding and 
 from organizing to protect their interests or from bidding 
 for the property and by reason of which statements such 
 creditors let the property, go to such officer at unreasonable 
 prices at the sale on dissolution, no statutory provisions are 
 needed, and a judgement in equity that such officer holds the 
 property thus acquired impressed with a trust for the pay- 
 
 •Marstaller v. Mills, 143 N. Y. Perry Co., 127 A. D. 167, 111 N. Y. 
 
 398, 38 N. E. 370 (1894). The trus- Supp. 514 (1908) ; aff'd 196 N. Y. 
 
 tees on dissolution were held proper 99, 26 L.R.A.(N.S.) 267, 89 N. E. 
 
 defendants in a suit based on the 461; C. C. P. § 1781 et seq. Now 
 
 corporation's negligence resulting in Gen. Corp. L. § 90 et seq. 
 
 plaintiff's personal injury. ° Tapley Co. v. Keller, 133 A. D. 
 
 ^Hoffman v. Van Nostrand, 42 54, 117 N. Y. Supp. 817 (1909); 
 
 Barb. 174 (1864). St. Corp. L. § 28. 
 
 *Darcy v. Brooklyn & New York 
 
348 BUSINESS CORPORATIONS IN NEW YORK §§ 294^298 
 
 ment of such creditors ' just claims against the corporation is 
 proper. " It is not necessary to such a cause of action that 
 the plaintiff should allege the sale by the receiver to have 
 been fraudulent or that they should seek to have it set 
 aside. ' ' " The real as well as the personal property of a dis- 
 solved corporation is a fund for the benefit of creditors in the 
 hands of its directors as trustees." Stockholders of a corpo- 
 ration which has become dissolved by expiration of the time 
 limit of its life set forth in its charter cannot make one not a 
 director of the corporation but whom they allege to have 
 received its property from its directors, since deceased, who 
 had possession thereof at the time of the dissolution, account, 
 as such a step can be taken only through a receiver." Direct- 
 ors voting for voluntary dissolution of their corporation and 
 the employment of an attorney to conduct the necessary pro- 
 ceedings are not personally liable to him for his services 
 unless by special promise they undertake to pay him.^' 
 
 § 294. Id.: For Sale of Stock Which Does Not Own.— This 
 liability of a director is likewise a liability of an officer and is 
 considered under the same subheading as that given this sec- 
 tion but under the heading below of ' ' Liabilities Common to 
 Directors and Officers. ' ' " 
 
 § 295. Id.: For Increasing Capital Stock Beyond Amount 
 Authorized. — As this liability also pertains to officers it is 
 considered under the subsequent heading of " Liabilities 
 Common to Directors and Officers."" 
 
 § 296. Id.: For Loans to Stockholders. — As this liability 
 exists also on the part of corporate officers it is considered in 
 the section shortly following under the heading " Liabilities 
 Common. to Directors and Officers."" 
 
 § 297. Id.: For Transfer to Officers, Directors or Stock- 
 holders of Property of Corporation Not Paying Due Obli- 
 gations. — As this liability rests also upon officers of a corpora- 
 tion it is discussed under the heading which later follows of 
 ' ' Liabilities Common to Directors and Officers. ' ' " 
 
 § 298. Id.: For Omitting to Disclose Service on Himself of 
 Injunction Against Corporation. — As this liability is enjoyed 
 
 "lilienthal v. Betz, 185 N. Y. "DeMartini v. McCaldin, 101 
 
 153, 77 N. E. 1002 (1906). Action Misc. 304, 167 N. Y. Supp. 596 
 
 held not justified by C. C. P. (1917). 
 
 §§ 1781, 1782, but irrespective '^ Drew v. Longwell, 81 Hun, 144, 
 
 thereof (see now Gen. Corp. L. 30 N. Y. Supp. 733 (1894). 
 
 §§ 90, 91). "§ 347, infra. 
 
 "Owen V. Smith, 31 Barb. 641 "§ 348, infra. 
 
 (1860); 1 R. L. 248; 1 R. S. 600, "§ 349, infra. 
 
 §§ 9, 10. "§ 350, infra. 
 
§§ 299-304 DIEECTOES, OFriCERS AND AGENTS" 349 
 
 equally by directors, officers and agents it is appropriately 
 discussed under tlie later heading of " Liabilities Common to 
 Directors, Officers and Agents. ' ' " 
 
 § 299. Id.: For Fraudulent Issue of Stocks and Bonds.— As 
 the liability for fraudulent issue of stocks and bonds is suf- 
 fered alike by directors, officers and agents, it is considered 
 in a later heading of " Liabilities Common to Directors, Offi- 
 cers and Agents." " 
 
 § 300. Id.: For Political Contributions. — ^As this liability is 
 also placed upon officers and agents it is considered in a sub- 
 sequent section under the heading " Liabilities Common to 
 Directors, Officers and Agents. ' ' ^"^ 
 
 § 301. Id.: With Regard to Corporate Books; For Omission 
 of, or Making False Entry In. — ^As this liability is put equally 
 upon directors, officers and agents, it is discussed under a 
 later heading of " Liabilities Gammon to Directors, Officers 
 and Agents."^" 
 
 § 302. Id.: For Refusal or Neglect to Make Entries in and 
 Allow Inspection of Stock Books. — ^As this liability is put 
 equally upon directors, officers and agents, it is considered 
 under a later heading of " Liabilities Common to Directors, 
 Officers and Agents." ^ 
 
 § 303. Id.: With Regard to Making Certificates, Reports, 
 Statements and Notices; For Refusal or Neglect to Make 
 Report or Statement. — ^As this liability is common with direct- 
 ors, officers and agents it is treated under the heading here- 
 after entitled " Liabilities Common to Directors, Officers and 
 Agents."^ The statutes, and cases construing them, impos- 
 ing (before their repeal) liabilities upon directors for mak- 
 ing annual reports for the corporations will be found in an 
 extensive note to the three hundred and forty-fifth section of 
 this book. 
 
 § 304. Id.: For Falsity of or Omission in Statement of Corpo- 
 rate Affairs. — ^As this liability is put upon officers and agents 
 as well as directors it is discussed under a title, which comes 
 
 "§ 378, infra. ' ^§ 382, infra. 
 
 ^' § 379, infra. As to duty of purchaser of cor- 
 
 i9» § . 377, infra. porate stock to verify statements 
 
 '"' § 380, infra. made as to financial condition, see 
 
 i§ 381, infra. note in 14 L.R.A.(N.S.) 117^. 
 
 Tor a note on the question of snffi- As to duty of director toward one 
 
 ciency of demand and refusal to sus- from whom he purchases stock, see 
 
 tain remedy on right of stockholder note in L.B.A.1916B, 708. 
 
 to inspect corporate books, see 45 
 
 L.E.A. 446. 
 
350 BUSINESS CORPORATIONS IN NEW YORK §§ 305-308 
 
 later, of " Liabilities Common to Directors, Officers and 
 Agents. ' ' ' 
 
 § 305. Id.: For Failure or False Certificate of Payment of 
 Capital Stock. — ^As this liability is common to officers and 
 directors it is discussed in a later section under the heading 
 ' ' Liabilities Common to Directors and Officers. ' ' * 
 
 § 306. Id.: To One Becoming Creditor or Stockholder on 
 Faith of False Representation In. — As this liability is also 
 imposed upon officers it is discussed in a subsequent section 
 under the heading of " Liabilities Common to Directors and 
 Officers. " = 
 
 § 307. Id.: For Misconduct and Mismanagement. — As this 
 subject affects others than directors it is subsequently dis- 
 cussed.^ 
 
 § 308. Officers: Election or Appointment, In General. — 
 Every corporation as such has power, though not specified 
 in the law under which it is incorporated, to appoint such 
 officers as its business shall require.' No by-law adopted by 
 the board of directors regulating the election of officers is 
 valid unless published for at least once a week for two succes- 
 sive weeks in a newspaper in the county where the election is 
 to be held, and at least thirty days before such election.* The 
 directors of a stock corporation may appoint from their num- 
 ber a president, and (not necessarily from their number) 
 may appoint a secretary, treasurer and other officers, agents 
 and employees, who respectively have such powers and must 
 perform such duties in the management of the property and 
 affairs of the corporation, subject to the control of the direct- 
 ors, as may be prescribed by them or in the by-laws.* ' ' Who 
 shall act as officers of a corporation is and must be deter- 
 mined by the directors. " " If in addition to nominations 
 printed on a ballot for secretary of a corporation others may 
 be inserted on the day of election, and another nomination 
 
 ^ § 383, infra. holder, to appoint a receiver to 
 
 False statements in reports re- wind up a corporation because of 
 
 quired by statute to be made to pub- mismanagement or fraud of its of- 
 
 lic officer as basis of action by in- fleers, see notes in 39 L.R.A.(N.S.) 
 
 dividuals at common law for deceit 1032, L.R.A.1915A, 606. 
 against directors personally is dis- ' Gen. Corp. L. § 11 (L. 1909, 
 
 cussed in a note in 6 L.R.A.(N.S.) c. 28). 
 325. *Gen. Corp. L. § 11 (L. 1909, 
 
 *§ 351, infra. c. 28). 
 
 ^§ 352, infra. » St. Corp. L. § 30 (L. 1909, 
 
 "§ 353 et seq., infra. c. 61). 
 
 • On the question of inherent juris- "Abbott v. Harbeson Textile Co.j 
 
 diction of equity, independently of 162 A. D. 405, 147 N. Y. Supp. 
 
 statute, at the instance of stock- 1031 (1914). 
 
§§ 309, 310 DIRECTORS, OFFICERS AND AGENTS 351 
 
 is then presented, and if the meeting then decide, as directed 
 to do by the by-laws, that the new nominee 's name be written 
 after those printed on the ballots before the vote should be 
 taken, and some members neglect to make the insertion, but 
 most do and scratch out the new name or the printed names 
 according as they want to vote for one candidate or another, 
 but two ballots appear with the old and new candidate's 
 name all on and neither erased, those ballots should not be 
 counted as there is no presumption that the man whose name 
 was written in by hand was the one intended to be voted for." 
 
 § 309. Id.: Compelling Election. — Mandamus lies to com- 
 pel an election of the officers of a private corporation if a 
 proper case is made.^^ Mandamus to compel an election of 
 corporate officers lies in the court's discretion, but not its 
 arbitrary discretion; and while it will not be granted if the 
 omission to hold an election was accidental, it wiU be when 
 the neglect has continued for a number of years, as such 
 neglect is equivalent to a refusal." 
 
 §310. Id.: Tenure of Office, Trying Out and Proving Title to 
 Office.— The Attorney-General may maintain an action upon 
 either his own information or the complaint of a private per- 
 son against a person who usurps, intrudes into or unlawfully 
 holds or exercises within the State an office in a domestic cor- 
 poration." In such an action the Attorney-General, besides 
 stating the cause of action in the complaint, may in his dis- 
 cretion set forth therein the name of the person rightfully 
 entitled to the office and the facts showing his right thereto, 
 and obtain an order from the court or judge to arrest the 
 defendant upon proof by affidavit that the defendant by 
 means of his usurpation or intrusion has received fees or 
 emoluments belonging to the office." The statute hereinafter 
 quoted, provides that the portion of the Code of Civil Pro- 
 cedure governing arrest applies in general to the order of 
 arrest and the proceedings thereon; that judgment in the 
 action may determine the right of the defendant and relator 
 or the defendant alone ; that the action is triable as of right by 
 a jury; that on rendition of judgment for the relator he may 
 execute his office after taking oath and giving bond, and 
 receive the books and papers from the defendant ; that relator 
 
 " People ex rel. Thorn v. Pang- ^^ People ex rel. Walker v. Board 
 
 burn, 3 A. D. 456, 38 N. Y. Supp. of Governors of Albany Hospital, 
 
 248 (1896), aff'd 157 N. Y. 719. 61 Barb. 397 (1871). 
 
 "People ex rel. Walker v. Board " C. C. P. § 1948. 
 
 of Governors of Albany Hospital, ^^ C. C. P. § 1949. 
 61 Barb. 397 (1871). 
 
352 BUSINESS CORPORATIONS IN NEW YORK § 310 
 
 may recover his damages from defendant for the latter 's 
 usurpation of office; that any number of persons claiming 
 title to the same office may be sued in one action by the 
 Attorney-General; that a temporary injunction against 
 defendant may be .had in certain cases and a final one in 
 others ; that the plea of incrimination will not avail a witness 
 and that final judgment may oust the defendant and subject 
 him to costs and a fine." 
 
 An action may be brought by the Attorney-Genera,l in 
 behalf of the People of the State against one or more man- 
 agers or other officers of a corporation to procure a judgment 
 to suspend them from exercising their office, when it appears 
 that they have abused their trust; or to remove them from 
 office, upon proof or conviction of misconduct, and directing 
 a new election to be held by the body or board duly authorized 
 to hold the same, in order to supply the vacancy created by 
 the removal, or, when there is no such body or board or 
 when all the members thereof are removed, to direct the 
 removal to be reported to the Governor, who may, with the 
 advice and consent of the Senate, fill the vacancies.^' An 
 injunction order suspending from office or restraining from 
 the performance of his duties a trustee, director or other 
 officer of a corporation can be granted only by the court upon 
 notice of the application therefor to the trustee, director or 
 other officer enjoined; and if such an injunction is made 
 otherwise, it is void.^* A trustee, director or other officer of a 
 corporation cannot be suspended or removed from office by a 
 court or judge otherwise than by the final judgment of a com- 
 petent court, in an action brought by the Attorney-General 
 as prescribed by statute.^' 
 
 As this subject of title to office arises more frequently with 
 regard to directors than officers and has already been treated 
 in that regard, reference is made to the section in which such 
 treatment is f ound.^ 
 
 " C. C. P. §§ 1949-1956, both in- " Gen. Coip. L. § 307 (L. 1909, 
 
 elusive. e. 28.) The statute referred to 
 
 "Gen. Corp. L. §§ 90 and 91 is § 90, Gen. Corp. L. The stat- 
 
 (L. 1909, c. 28). ute referred to in the text applies 
 
 " Gren. Corp. L. § 305 (L. 1909, not only to a domestic corporation, 
 
 c. 28). This statute applies not but to a foreign corporation -which 
 
 only to a domestic corporation, but does business within New York, or 
 
 to a foreign corporation which does has within New York an agency, 
 
 business within the state or has business, fiscal or for the transfer 
 
 within the state an agency, busi- of its stock. See Gen. Corp. L. 
 
 ness, fiscal or for the transfer of § 308. 
 its stock, see Gen. Corp. L. § 308. ™§ 276, supra. 
 
§§ 611, Sia UIKECTORS, OFnCERS AND AGENTS 353 
 
 § 311. Id.: Holding Over, Removal and Resignation. — The 
 
 directors may remove at pleasure any president, . secretary, 
 treasurer or other officer, agent or employee of a corporation 
 appointed by them.^ " ... where officers of a corpora- 
 tion are elected annually or for a definite term, they continue 
 in office until others are elected in their place. ' ' " There is 
 nothing in the statute authorizing an action by the Attorney- 
 General to remove corporate trustees, directors, managers or 
 other officers on proof of misconduct " to warrant the doc- 
 trine that a man who is at the same time a director and an 
 executive officer of a corporation may, notwithstanding grave 
 misconduct in one capacity, still insist that he is entitled to 
 remain in partial control of the company in his other capac- 
 ity.'" A corporate officer's resignation duly tendered and 
 delivered is complete ; and its validity is not dependent upon 
 its acceptance by the directors or upon the election of his suc- 
 cessor.* As a general rule the officers and directors of a cor- 
 poration may resign at any time, and the validity of their 
 resignations does not depend upon their formal acceptance; 
 but, independently of statute, they cannot all simultaneously 
 resign for the purpose of enabling one of their number to go 
 into court and say that .the corporation is without officers to 
 preserve its assets, and so to have a receiver appointed ; and 
 a statute authorizing the appointment by a court of a receiver 
 for a corporation in an action by a stockholder to preserve its 
 assets when it has no officer empowered to hold them does hot 
 apply when' such simultaneous resignations are the basis for 
 its invocation.^ 
 
 § 312. Id.: Salaries, In General. — " ... the rule has 
 become quite well settled that an officer of a corporation is 
 not entitled to receive compensation, in the absence of an 
 agreement securing it, for his services performed in the legit- 
 imate discharge of the duties of his office. While, if other 
 
 ^ St. Corp. L. § 30 (L. 1909, 174 N. Y. 247, 66 N. E. 810 (1903) ; 
 
 c. 61). C. C. P. § 1810, subd. 3. 
 
 ^ Buell V. Baltimore & Ohio On right of attorney-general or 
 
 Southwestern R. R. Co., 39 A. D. other representative of state to 
 
 236, 57 N. Y. Supp. Ill ^1899). maintain suit or proceeding to re- 
 
 ^ People V. Lyon, 119 A. D. 361, move ofBoeis of private corporation, 
 
 104 N. Y. Supp. 319 (1907) ; aff'd see note in 18 L.R.A.(N.S.) 672. 
 
 189 N. Y. 544, 82 N. E. 1130; On power of directors to remove 
 
 C. C. P. § 1781, now Gen. Corp. L. their own appointee who is one of 
 
 590. the class of ofBcers to whom the 
 
 * Manhattan Co. v. Kaldenberg, management of the business is con- 
 
 165 N. Y. 1, 58 N. E. 790 (1900). flded, see note in 23 L.R.A.(N.S.) 
 
 'Zeltner v. Zeltner Brewing Co., 1293. 
 
 B. C. N. y.— 23 
 
354 BUSINESS CORPORATIONS IN NEW YORK § 312 
 
 services are performed by the officer acting in another and 
 different capacity than that of an officer, and it appears that 
 the right to compensation is conceded, then he may recover 
 compensation for those services, the same as though he held 
 no office whatever under the corporation. " ° An officer and 
 director of a corporation may recover for services rendered 
 the corporation outside the regular path of his duties; but 
 the fact that its by-laws give him no salary does not absolve 
 him from showing as a prerequisite to recovery that his 
 services were beyond the range of his official duties as well 
 as their character; nor need he show a specific resolution of 
 employment by the board of directors.' One who is a director 
 of a corporation and seeks to recover his salary as its 
 president cannot recover upon quantum meruit or any 
 implied contract, but is bound to show that the directors had 
 assented to his right to compensation or had authorized the 
 payment in some form.* It is permissible to conclude, from 
 the facts that one claiming salary as a corporate officer was a 
 stockholder, was interested as a banker in having the banking 
 business of the company to do, and accepted the office and per- 
 formed its duties without any express understanding that he 
 should be compensated, that he accepted the office and per- 
 formed its duties gratuitously.® A person, neither director 
 nor stockholder of a corporation of which he is appointed 
 secretary without any agreement, expressed or implied, as to 
 compensation, is entitled to a reasonable compensation for 
 his services, if not merely nominal but valuable ; and that he 
 rendered them during the hours of his employment by large 
 stockholders in the company and made no claim for compen- 
 sation therefor for a number of years does not preclude 
 recovery thereof." Salary to one acting as an officer of a cor- 
 poration is provided as compensation for the services which 
 he is expected to perform as such, and when, with his assent 
 and by his. co-operation, the company disposes of all its prop- 
 erty and business, so that he has no further duty to perform 
 or service to render as such officer, there is no basis in law or 
 equity for a claim that his salary should continue, as any con- 
 tract therefor must be deemed dissolved by the act and con- 
 
 * Barril v. Calender Water-Proof- tonic R. R. Co., 152 N. Y. 251, 46 
 ing Co., 50 Hun, 257, 2 N. Y. Supp. N. E. 504 (1897). 
 
 758 (1888). "Mather v. Eureka Mower Co., 
 
 'Bagley v. Carthage, W. & S. H. 118 N. Y. 629, 23 N. E. 993 (1890). 
 
 R. R. Co., 166 N. Y. 179, 58 N. E. " Smith v. Long Is. R. R. Co.,. 
 
 895 (1900). 102 N. Y. 190, 6 N. E. 397 (1886). 
 
 * Farmers' L. & T. Co. v. Housa- 
 
§ 312 DIRECTORS, OFFICERS AND AGEKTS 355 
 
 sent of the parties." One who is director and secretary of a 
 corporation and employed by its board of directors and 
 directed by its president to do certain work he was under no 
 duty as secretary or director to do is entitled to charge 
 therefor/^ One re-elected to the same corporate office which 
 he has till then held " for the ensuing year " by resolution 
 of the board of directors but without his salary being fixed 
 is entitled to a salary on the same basis as before; but not to 
 additional compensation originating in a former resolution 
 of the directors by which payment thereof was left to the 
 president's discretion." " ... a valid modification of a 
 by-law of a corporation fixing the salary of its officer can be 
 effected by an executed parol agreement between the com- 
 pany and the officer and . . . the conduct of the parties 
 is evidence on the question of such agreement. " " In order 
 to support a claim by a vice-president of a corporation for 
 services to it beyond his official duties it is insufficient to show 
 that they were rendered by express direction of its president 
 if its by-laws simply authorize the president to manage nego- 
 tiations with other corporations either himself or through 
 his corporation's proper subordinate officers, and make it the 
 vice-president 's duty to perform the president 's duties in 
 case of the latter 's incapacity." It may well be held that one 
 cannot recover from a corporation for services rendered it as 
 treasurer when he acted as such for a year without any claim 
 for compensation, he was a stockholder and a member of a 
 banking firm, his banking partner was a stockholder and pro- 
 moter, the banking firm secured the corporation's account 
 through such one being its treasurer, and no resolution or 
 by-law gave him any salary though they did to other officers." 
 A raise of salaries all round to officers of a company, otherwise 
 proper, is not invalidated because each officer involved agreed 
 beforehand to vote the increase to every other one if the 
 increase to him was voted in turn by them." A court cannot 
 
 "Long Island Ferry Co. v. Tier- Co., 14 Hun, 483 (1878). No offer 
 
 bell, 48 N. Y. 427 (1871"). was made to show the direction of 
 
 '- Bogart V. New York & Long the president was known to the 
 
 Island Railroad Co., 118 A. D. 50, board or that it was accompanied 
 
 102 N. Y. Supp. 1093 (1907).; aff'd by any agreement to pay the vice- 
 
 191 N. Y. 550, 85 N. E. 1106. president for his services. 
 
 "Eieke v. Wittemann Co., 157 ^"Mather v. Eureka Mower Co., 
 
 A. D. 412; 142 N. Y. Supp. 190 44 Hun, 333 (1887); aff'd 118 N. 
 
 (1913). Y. 629', 23 N. E. 993. 
 
 " Bowler v. American Box Strap " McNab v. MeNab & Harlin 
 
 Co., 22 Misc. 335, 49 N. Y. Supp. Mfg. Co., 62 Hun, 18, 16 N. Y. 
 
 153 (1898). Supp. 448 (1891); aff'd 133 N. Y. 
 
 1° Bailey v. Buffalo Crosstown Ry. 687, 31 N. E. 627. 
 
356- BUSINESS CORPORATIONS IN NEW YORK § 313 
 
 fix what salaries shall be paid corporate officers, though it may 
 review and disapprove salaries fixed by directors." If reso- 
 lutions of a board of directors of a corporation unde'r which 
 its president gets a salary are invalid, the corporation is 
 entitled to recover the sum paid." A judgment of a sister 
 state invalidating a resolution of the board of directors of a 
 corporation whereby a president gets a salary is binding in 
 this state in an action in this state by the corporation to 
 recover the salary."" 
 
 § 313, Id.: In Fraud of Creditors or Stockholders. — Majority 
 stockholders electing themselves directors and their officers 
 cannot distribute surplus earnings to themselves as excessive 
 salaries instead of as dividends if by so doing they break their 
 trust duty as directors toward the stockholders ; they will be 
 allowed to retain a salary conunensurate with the value of 
 their official services, but no more; but the distinction is to 
 be borne in mind that while a director, who is also an officer, 
 drawing a salary as such, through his vote in part as director, 
 is responsible for the excess salary paid, a director who is not 
 an officer is not responsible for excess salary paid an officer, 
 for the reason that in one case the relation to the company is 
 fiduciary and in the other contractual.^ Officers of a corpora- 
 tion will be restrained by the court from paying to themselves 
 salaries in excess of those to which they are entitled if a 
 minority stockholder shows the increase was made as a threat 
 to compel him to sell some of his stock to one of the majority 
 stockholders.^ Payments by a corporation to an 'officer as 
 salary when it is insolvent are void and must be returned 
 by him, leaving him to receive a pro rata with other creditors 
 of claims." An amount paid by a corporation to one of its 
 officers as salary after it had failed to pay rent due may be 
 set aside by its receiver.* 
 
 " Fitchett V. Murphy, 46 A. D. ^ Carr v. Kimball, 153 A. D. 825, 
 
 181, 61 N. Y. Supp. 182 (1899). 139 N. Y. Supp. 253 (1912); afif'd 
 
 " Atlanta Hill Gold Mining & 215 N. Y. 634, 109 N. E. 1068. 
 
 Milling Co. v. Andrews, 120 N. Y. " Ziegler ' v. Hoagland, 52 Hun, 
 
 58, 23 N. E. 987 (1890). 385, 5 N. Y. Supp. 305 (1889). 
 
 ^"Atlanta Hill Gold Mining & 'Dwight v. Williams, 25 Misc. 
 
 Milling Co. V. Andrews, 120 N. Y. 667, 55 N. Y. Supp. 201 (1898). 
 
 58, 23 N. E. 987 (1890). * Montague v. Hotel Gotham Co., 
 
 On right of officer de jure to sal- 149 A. D. 687, 133 N. Y. Supp. 954 
 
 ary for period during which de (1912) ; St. Corp. L. § 66. 
 
 fctcto officer has acted and received As to priority of claims against 
 
 pay, see notes in 19 L.R.A. 689; property in hands of receiver for 
 
 16 L.R.A.(N.S.) 794; 24 L.R.A. services of officers, see note in 2 
 
 (N.S.) 475. L.R.A.(N.S.) 1036, 10«0. 
 
1§ 314, 315 DIRECT'ORS, OFFICERS AND AGENTS 357 
 
 § 314. Id.: On Removal or Resignation.— One re-elected " for 
 the ensuing year " to a corporate office which he had pre- 
 viously held at an annual salary, on adoption some months 
 later of a directors' resolution removing him from office is 
 entitled only to compensation for the months he has served in 
 his new term.' One employed as an officer of a corporation 
 at an annual salary, payable monthly or quarterly, while a 
 corporate by-law of the corporation is in effect that the officers 
 hold their offices during the pleasure of the board and till 
 appointment of their successors, is not subject to discharge 
 only at the expiration of any year of service, but at any time, 
 by due action of the board and election of a successor ; and he 
 has no right to recovery of the balance due at discharge for 
 the balance of the year.® It seems there is no objection to an 
 agreement by a corporation to pay one of its officers who has 
 severed his relation with it an annual sum for his life if he 
 do not engage in a business competing with its own.'' An 
 agreement by a corporation to pay a recently resigned officer 
 a perpetual salary for life in consideration of past services 
 is ultra vires.^ 
 
 § 315. Id.: Bond Of. — The directors may require any presi- 
 dent, treasurer, secretary or other officer, agent or employee 
 of a corporation appointed by them to give security for the 
 faithful performance of his duties.' " It is well settled that 
 where an officer of a private corporation gives a bond con- 
 ditioned for the faithful performance of his duties, and 
 unlimited as to time, such bond is only for the term for which 
 the officer had been elected at the time it was given, and that 
 the sureties thereon are not liable for any breach of the con- 
 dition happening after the expiration of the term, although 
 the officer may be continued in office under the same or a new 
 appointment or election, unless the bond has been renewed 
 (citations), or- filing a stipulation that the sureties sKall be 
 liable during any successive term of office to which the officer 
 may be elected or appointed." " A bond for a corporation's 
 
 On effect of corporate dissolution * Beers v. New York Life Insur- 
 
 on employment contracts of officers, ance Co., 66 Hun, 75, 20 N. Y. 
 
 see note in 69 L.R.i^. 144. Supp. 788 (1892). 
 
 = Eicke V. Wittemann Co., 157 A. » St. Corp. L. § 30 (L. 1909, 
 
 D. 412, 142 N. Y. Supp. 190 (1913). e. 61). 
 
 ^ Douglass V. Merchants' Insur- ^° Order der Herrmann's Sohne v. 
 
 ance Co., 118 N. Y. 484, 7 L.R.A. Freifeld, 20 Misc. 276, 45 N. Y. 
 
 822, 23 N. E. 806 (1890). ' Supp. 420 (1897). Bond recited 
 
 ^ Stover V. Gamewell Fire Alarm that F. F. " is about to act as grand 
 
 Telegraph Co., 164 A. D. 155, 149 treasurer of the above-named O. der 
 
 N. Y. Supp. 650 (1914). U. S." and if discharged duties 
 
358 BUSINESS CORPORATIONS IN NEW YORK § 316 
 
 treasurer " during his continuance in office " does not cover 
 defaults of Ms occurring after the expiration of the term for 
 which he was elected, even though he acted as such after the 
 expiration of his elective term." 
 
 § 316. Id.: Personal Profit and Advanta,ge, In General. — 
 The rule that an agreement made by an officer of a corporation 
 with himself by which he derives a benefit is voidable at its 
 option, irrespective of whether or not the agreement is fair 
 to it, is subject to the exception that if creditors are not 
 involved the stockholders may with full knowledge of all the 
 facts ratify the agreement so as to estop the corporation from 
 claiming it to be invalid.^^ Not only an officer of a corporation 
 making a contract in which it is interested whereby he indi- 
 vidually obtains a secret profit, but all the directors failing to 
 prevent the wrong and actively participating in it, may bo 
 made in equity to account for their misconduct and to restore 
 to the corporation the entire sum which they diverted.^' 
 " Where in disregard of his duty an officer makes purchases 
 or enters into contracts whereby he acquires a personal advan 
 tage, the profits thus obtained belong not to him but to the 
 corporation ; ' ' and he is accountable therefor to it." Officers 
 of a corporation cannot buy in its stock at a large discount ; 
 for their individual account and then supply the subscribers 
 for shares, who had paid for them at par, with a part of their 
 shares, and make the corporation their debtor for the shares 
 so supplied at their par value.^' An officer of a corporation 
 may lend it money at six per cent, but not at any greater rate 
 of interest." One Avho while vice-president of a corporation 
 asked its bookkeeper, who also performed the duties of secre- 
 tary and assistant treasurer, for a copy of his account on its 
 books, cannot hold it thereon as on an account stated." When 
 the fajjts tend to show acquiescence by a -corporation in the 
 assertion by its wrongdoing officer of a right to act for it in 
 doing a thing for his personal benefit, the wholesome rule 
 
 " then this obligation to be void, Supp. 714 (1912) ; aff'd 210 N. Y. 
 
 otherwise to remain in full force 643, 105 N. E. 1008. 
 
 and effect." " Rickert v. White, 54 Misc. 114, 
 
 "Ulster Ck). Sav. Inst. v. Os- 105 N. Y. Supp. 653 (1907). 
 trander, 163 N. Y. 430, 57 N. E. ^=East New York & Jamaica R. 
 
 627 (1900). R. Co. v. Elmore, 5 Hun, 214 
 
 ^' Gloss & Co. V. Goss, No. 2, 147 (1875). 
 A. D^ 698, 132 N. Y. Supp. 76 ^» Tilton v. Gaus, 90 Misc. 84, 152 
 
 (1911) ; afE'd 207 N. Y. 742, 101 N. Y. Supp. 981 (1915) ; aff'd 168 
 
 N. E. 1099. A. D. 910, 152 N. Y. Supp. 1146. 
 
 ^' Asphalt Construction Co. v. " Harvey v. West-Side Elevated 
 
 Bouker, 150 A. D. 691, 135 N. Y. R. Co., 13 Hun, 392 (1878). 
 
§ 316 DIRECTORS, OFFICERS AND AGENTS 359 
 
 charging those dealing with a corporate officer under such 
 circumstances with the necessity of inquiring into his author- 
 ity should not preclude leaving the jury to pass on the ques- 
 tion of authority.'^ One taking in payment of a debt from an 
 individual the cheque of a corporation signed by him as an 
 officer which is not itself indebted to the individual's creditor 
 is put upon inquiry to ascertain if the corporation's funds are 
 being lawfully used." An officer of a corporation holding its 
 bonds to raise money for corporate purposes who pledges 
 them as collateral security for an individual loan becomes a 
 naked wrongdoer without title, even though he own all but 
 two shares of the corporate stock, and the bank making the 
 loan partidpates in an unauthorized diversion of the corpo- 
 rate property.^" " One who receives from an officer of a cor- 
 poration its money or property in payment of his personal 
 debt, does so at his peril ; and if the person receiving the same 
 knows — or facts are presented which, if acted upon, would 
 disclose — that such officer was thereby misappropriating 
 the funds of the corporation, he is liable to it for the amount 
 so received. ' ' ^ When it is shown that a note is signed by two 
 officers of a corporation in its name to the order of one of 
 them individually, a brother of the latter cannot recover 
 thereon when it is shown that it was issued to the payee with- 
 out consideration and the plaintiff paid for the note precisely 
 the amount loaned by his brother to the corporation and ten 
 per cent, less than its face value, as plaintiff was put on 
 inquiry when he found his brother was negotiating the note 
 for his personal benefit ; arid the fact that another corporate 
 officer joined in the note does not relieve him from making 
 inquiry.^ The power of corporate officers to sign and endorse 
 
 ^'Hanover National Bank v. N. E. 505 (1900). A resolution au- 
 
 American Dock Co., 75 Hun, 55, 26 thorizing the company to borrow to 
 
 N. Y. Supp. 1055 (1894) ; aff'd 148 pay its existing indebtedness and 
 
 N. Y. 612, 43 N. E. 72. for its other lawful purposes was 
 
 "Rochester & Charlotte Turn- spread on the face of the mortgage, 
 
 pike Road Co. v. Paviour, 164 N. Y. ^ Lanning v. Trust Co. of Amer- 
 
 281, 52 L.R.A.- 790, 58 N. E. 114 ica, 137 A. D. 722, 122 N. Y. Supp. 
 
 (1900). The cheques were given to 485 (1910). The creditor knew the 
 
 pay premiums of policies . issued on capital stock of M. Co. was $100,- 
 
 bttildings in New Mexico in the in- OOO, it had little or no surplus and 
 
 dividual's name. The payee had the debtor was president of M. Co., 
 
 never had dealings with the corpo- yet took M. Co.'s cheque for $35,- 
 
 ration and its name showed its kind 048.77 — though signed by another 
 
 of business did not include owning of its officers than the debtor — and 
 
 buildings in New Mexico. applied it to the debt. 
 
 2° Buffalo L., T. & S. D. Co. v. ^ Newman v. Newman, 160 A. D. 
 
 Medina Gas Co., 162 N. Y. 67, 56 331, 145 N. Y. Supp. 325 (1914). 
 
am BUSINESS corporations in new YORK § 317 
 
 commercial paper in the name of their corporation for various 
 uses is hereinafter fully discussed.' 
 
 § 317. Id.: Of President. — " The president of a corporation, 
 in the absence of bad faith, has the right to take obligations 
 or security from his corporation for an actual indebtedness to 
 himself."* An individual who has bought goods from a 
 corporation under an established custom that he should at 
 the end of certain established periods be refunded a sum suffi- 
 cient to make the amount paid by him no more than ' the 
 amount paid by any other customer of the company for like 
 goods for a like period may continue to deal with the company 
 in the same way after he becomes its president, so long as he 
 deals with it openly and fairly ; but once he has adjusted his 
 account with it for a certain period he cannot later claim 
 overpayment ; nor can he claim he did not know of such over- 
 payment because he left the adjustment to an employee dis- 
 tinctly his own.' "When contracts are made between two 
 corporations under such circumstances that they result greatly 
 to the advantage of one and its president individually, who 
 negotiated them, and are grossly inequitable and unconscion- 
 able as to the other, in which such president was director, 
 chairman of .its executive committee and influential generally, 
 the contracts may be repudiated at the option of such other, 
 and if the repudiation be accompanied by its offer to place 
 the first corporation in the same position in which it was 
 before the making of such contracts, they cease to be valid 
 and are unenforceable." A note given in the name of a cor- 
 poration by its president to pay an indebtedness of the presi- 
 dent individually and his wife contracted before the organiza- 
 tion of the corporation and evidenced by their note will bind 
 the corporation if he promised prior to incorporation that 
 
 ' See § 325, et seq., infra. X. Y. Supp. 24 (1912). « The right 
 
 On validity of contract to pay an of the corporation to avoid such 
 
 officer of a railroad company for dealings does not depend upon the 
 
 his own benefit conditioned on bad faith of the director. But the 
 
 specific location of road or a depot, acts of the director, in violation of 
 
 see notes in 6 L.R.A.(N.S.) 524; this rule, cannot be avoided, in the 
 
 25 L.R.A.(N.S.) 967. absence of proof of his bad faith, 
 
 * First National Bank v. Commer- without restoring to him what the 
 cial Travelers' Assn., 108 A. D. 78, corporation has received. 
 
 95 N. Y. Supp. 454 (1905) ; afE'd Nor is it important that plaintiff's 
 
 185 N. Y. 275, 78 N. E. 1103. president in the transaction in ques- 
 
 ° Consolidated Fruit Jar Co. v. tion represented the defendant si- 
 
 Weisner, 103 A. D. 453, 93 N. Y. lentlv, that he did not openly advo- 
 
 Supp. 128 (1905). cate or vote for the adoption of the 
 
 * Globe Woolen Co. v. L'tica Gas contracts." 
 & Electric Co., 151 A. D. 184, 136 
 
8 ox I UiKECTORS, OFFICERS AND AGENTS 361 
 
 the corporation would assume the debt and was in fact the 
 corporation and was entrusted with its entire business and 
 its management in every detail/ One advancing money to 
 another individually upon the faith of a Warehouse receipt 
 signed by the latter as president of a corporation cannot 
 claim the rights of a bona fide holder but is considered to 
 have notice that a corporate officer is using his official position 
 for his personal benefit.' An innocent bona fide holder of a 
 corporate note issued by its president for his own personal 
 benefit but under apparent if not actual ' authority from the 
 corporation so to do may hold the corporation liable on it.'' 
 " While a presumption arises that a check signed by a corpo- 
 ration is issued in connection with its business and only to be 
 used therefor, this presumption may be overcome, except as 
 against creditors, by proof of a course of conduct between the 
 corporation and its president, showing an authorization by 
 the corporation of the use of its checks for payment of per- 
 sonal debts by its president. " ^° A bank receiving, with full 
 notice that they were fraudulently drawn idtra vires the cor- 
 poration, cheques of a corporation signed by its president and 
 payable to the president's order as ah individual, is liable to 
 the corporation not only for the principal thereof but for 
 interest thereon from their date." If a corporate president 
 have no authority to endorse its cheques, a bank is chargeable 
 with notice that indorsements of corporate cheques by him 
 are in his handwriting and is bound at its peril to inquire into 
 his authority to endorse and deposit them to his individual 
 account." If cheques to a corporation's order are endorsed 
 by its president in its name, deposited by him with a bank to 
 his individual credit, the proceeds paid out on his cheques — 
 all without corporate authority and without any representa- 
 tion by the corporation to the bank misleading the latter as 
 to the president's authority — the bank is liable to the corpo- 
 ration for the amount of the cheques either in conversion or 
 for money had and received, irrespective of the bank's good 
 faith.^'' The power of the president of a corporation to sign 
 
 ' Quee Drug Co. v. Plant, 55 A. " Reynolds Elevator Co. v. Mer- 
 
 D. 87, 67 N. Y. Supp. 10 (1900). chants' National Bank, 55 A. D. 1, 
 
 ^Bank of N. Y. v. American Dock 67 N. Y. Supp. 397 (1900). 
 
 & Trust Co., 70 Hun, 152, 24 'N. Y. "Moch Co. v. Security Bank, 176 
 
 Supp. 406 (1893); aff'd 143 N. Y. A. D. 842, 163 N. Y. Supp. 277 
 
 559, 38 N. E. 713. (1917). 
 
 ° Schr^er v. Bailey & Co., 97 A. ' ^' Moch Co. v. Security Bank, 176 
 
 D. 185, 80 N. Y. Supp. 870 (1904). A. D. ■842-, 163 N. Y. Supp. 277 
 
 "Ehrlich, Inc., v. Levine, 83 (1917). 
 Misc. 136, 144 N. Y. Supp. 818 
 (1913). 
 
362 BUSINESS CORPORATIONS IN NEW YORK §§ 318-320 
 
 and endorse commercial paper of his corporation for various 
 purposes is hereinafter fully discussed." 
 
 § 318. Id. : Of Treasurer. — A bank receiving corporate stock 
 as security for a loan to its treasurer as an individual is not 
 charged with his knowledge that he had no authority to pledge 
 the stock, and will get good title thereto if it had no notice of 
 the infirmity in its pledgor 's title and the pledgor had become 
 possessed thereof lawfully .^° The power of a corporation's 
 treasurer to sign and endorse its commercial paper for vari- 
 ous uses is hereinafter discussed.^^ 
 
 § 319. Id.: Powers and Duties, In General, Of All OfiBcers.— 
 The president, treasurer and other officers, agents and 
 employees of a corporation have such powers and must per- 
 form such duties in the management of the property and 
 affairs of the corporation as may be prescribed by them or in 
 the by-laws." ' ' Officers of a corporation are special and not 
 general agents ; consequently they have no power to bind the 
 corporation except within the limits prescribed by the charter 
 and by-laws."'* " The presumption is that acts which an 
 officer of a corporation usually and customarily performs in 
 behalf of the company are authorized by the directors; and 
 the authority to act in a class of cases may be conferred by 
 a single resolution, as well as by a distinct resolution for each 
 case."" An injunction to restrain corporate officers from 
 acting as such granted in violation of law is not validated or 
 effectuated by a motion by the defendants to dissolve it for 
 irregularity, particularly if obtained in a stockholder's repre- 
 sentative action to collect a debt due the corporation in which 
 the complaint shows no application to or refusal by the corpo- 
 ration to itself bring the suit.^° There is no duty upon officers 
 of a corporation to put in an answer in an action brought 
 against it upon a debt which is confessedly due, even if such 
 corporation should happen to be insolvent.^ 
 
 § 320. Id.: Of President. — Every corporation has power to 
 make by-laws not inconsistent with any existing law prescrib- 
 ing the powers and duties of the president of the corporation.' 
 
 "See § 326, infra. ^"Elwell v. Dodge, 33 Barb. 336 
 
 ^^ Brady v. Mount Morris Bank, (1861). 
 
 65 A. D. 212, 73 N. Y. Supp. 532 '"Wilkie v. Rochester & State 
 
 (1901). Line Ry. Co., 12 Hun, 242 (1877); 
 
 "See § 327, infra. L. 1870, c. 151. 
 
 "St. Corp. L. § 30 (L. 1909, ^ Ridgway v. Symons, 4 A. D. 98, 
 
 c. 61). ' 38 N. Y. Supp. 895 (1896). 
 
 "Adriance v. Roome, 52 Barb. ^ St. Corp. L. § 30 (L. 1909, 
 
 399 (1868). c. 61). 
 
§ 321 DIRECrORS, OFFICERS AND AGENTS 363 
 
 A president having full personal charge of the business which 
 his corporation was organized to transact represents the cor- 
 poration and prima facie has power to do any act which the 
 directors could authorize or ratify/ " The general rule is 
 that an agreement by an officer or agent of a corporation who 
 assumes to act in its behalf can be enforced against the corpo- 
 ration where it has received the benefit of the agreement 
 (citations). The president of a corporation has prima facie 
 power to do any act which the board of directors could author- 
 ize or ratify."* The scope of the authority conferred by a 
 corporation upon its president, though it may not appear in 
 terms, may be iijiplied from the power he was accustomed to 
 exercise without the dissent of the company and with its 
 acquiescence/ A president has power to direct one employed 
 by a board of directors to do services within the line of the 
 services which he was employed to perform/ An instrument 
 executed by the president of a corporation and with its seal 
 affixed, supplemented by his affidavit that he was such and 
 was authorized by the directors to execute the instrument 
 and affix the seal, is prima facie duly executed to bind the cor- 
 poration; and this presumption of authority is not overcome 
 by the testimony of but one director who acted as clerk of the 
 board that the records contained no resolution giving the 
 president authority to execute the instrument and did not 
 know of -the passage of such a resolution/ In the absence of 
 evidence of want of authority in the president to represent 
 and act for the corporation, a tender by a stockholder of a 
 cheque for the amount of an assessment duly made on him, 
 to the president at the office of the company during business 
 hours, is properly made and the president 's refusal to accept 
 is the refusal of the corporation/ 
 
 § 321. Id.: Of Other Officers. — Every corporation has power 
 to make by-laws not inconsistent with any existing law pre- 
 
 ^ Oakes v. Cattaraugus Water Co., ® Chambers v. Lancaster, 160 N. 
 
 143 N. Y. 430, 36 L.R.A. 544, 38 Y. 342, 54 N. E. 707 (1899). 
 
 N. E. 461 (1894). The corporation «Bogart v. New York & Long 
 
 had resolved to do certain work and Island Railroad Co., 118 A. D. 50, 
 
 put it in charge of its president and 102 N. Y. Supp. 1093 (1907) ; 
 
 chief promoter who was on the aff'd 191 N. Y. 550, 85 N. E. 1106. 
 
 ground directing the work and 'Mutual Life Insurance Co. v. 
 
 adopted a contract pertaining to Yates County National Bank, 35 
 
 the work made by himself before A. D. 218, 54 N. Y. Supp. 743 
 
 the corporation was legally created. (1898). 
 
 * Davies v. Harvey Steel Co., 6 * Mitchell v. Vermont Copper 
 
 A. D. 166, 39 N. Y. Supp. 791 Mining Co., 67 N. Y. 280 (1876). 
 (1896). 
 
3«4 BUSINESS CORPORATIONS IN NEW YORK g 322 
 
 scribing the powers and duties of the secretary of the corpo- 
 ration." Every corporation has power to make by-laws not 
 inconsistent with any existing law prescribing the powers and 
 duties of the treasurer of the corporation." Every corpora- 
 tion has power to make by-laws not inconsistent with any 
 existing law prescribing the powers and duties of its officers.'^ 
 A treasurer of a corporation is not one " having a general 
 superintendence of its concerns " so as to permit him to sue 
 a former treasurer M^ho has gone from office without leaving 
 with or turning over to the corporation moneys which belong 
 to it, under the statute permitting an action against corporate 
 officers, etc., to account for corporate funds they have 
 acquired to be brought by such an one or a trustee, director, 
 etc." 
 
 § 322. Id.: To Contract, In General.— The liability of a cor- 
 poration for its officers' contracts in its behalf is later dis- 
 cussed.^' " ... persons dealing with the officers of a 
 corporation, or with persons assuming to represent it, are 
 chargeable with notice of the purpose of its creation and its 
 powers and with the authority, actual or apparent, of its 
 officers or agents with whom they deal ; and when they seek to 
 charge the corporation with liability upon a contract made 
 apparently in its behalf, the burden is upon them to prove the 
 authority of the person assuming to act as such officer or 
 agent to so make it;" and this authority depends ipon the 
 particular facts in each case." " ... if the officer assum- 
 ing to act for the corporation, in the making of a contract 
 with a third person, is one whose office is attended with 
 inherent general executive authority for the ordinary conduct 
 
 ° St. Corp. L. § 30 (L. 1909, turing water meters, of the kind in- 
 c. 61). vented by one Van Duzen, held, that 
 '" St. Corp. L. § 30 (L. 1909, it was within the scope of their au- 
 e. 61). thority to secure a patent in the 
 ^^ St. Corp. L. § 30 (L. 1909, name of Van Duzen, of his inven- 
 c. 61). tion, and, for this purpose, to era- 
 ^- Loughlin v. Wocker, 152 A. D. ploy plaintiff to advise and counsel 
 466, 137 N. Y. Supp. 257 (1912) ; the company in relation to the said 
 Gen. Corp. L. §§ 90, 91. meter, and to obtain a patent there- 
 Pollock V. Shultze, 1 Hun, 320 for, and that the corporation were 
 (1874). There is no opinion, but liable for his services, rendered in 
 only this head note : " The presi- pursuance of such employment." 
 dent and vice-president of the As to when vice-president may 
 N. I. W., having full authority to exercise authority of president, see 
 employ such persons, as, in their note in 14 L.R.A. 360. 
 judgment, were necessary in and ^' See §§ 434, 436 and 438, infra. 
 about the business of the company, ^* Wilson v. Kings Co. Elevated 
 and the company having resolved to R. R. Co., 114 N. Y. 487, 21 N. E. 
 enter upon the business of manufac- 1015 (1889). 
 
§ 322 DIRECT'ORS, OFFICERS AND AGENTS 365' 
 
 and management of the corporate business, and the contract 
 is one within the power of the corporation to make, and the 
 making of which could, therefore, be delegated to an officer 
 or agent, the officer so assuming to act is clothed with 
 apparent authority upon which such third person may rely in 
 the absence of notice of limitations upon the officer's authority 
 which are injposed by the by-laws or the proceedings of the 
 board of directors ; but if the officer, with a liability for whose 
 act the corporation is sought to be charged, is one to whose' 
 office there is attached no inherent executive authority, then, 
 and in that event, the third person dealing with the officer in 
 an executive capacity is chargeable with notice of an apparent 
 want of authority and so deals with the latter at his peril ; and 
 in such case, if the officer 's authority to make the contract is 
 disputed, it is incumbent upon such third person to establish 
 the authority by proper evidence. If the by-laws, which are 
 relied upon as evidence, impose certain limitations or restric-. 
 tions upon the exercise of the authority, such limitations or 
 restrictions may not be disregarded, but must be held to deter- 
 mine the extent of the authority. " .^^ " ... when the 
 directors permit its officers to hold themselves out as clothed 
 with full power to manage all its affairs for a long time, and 
 thus lead innocent persons to contract with them in the belief 
 that they had such powers, they cannot be heard to repudiate 
 such contracts by invoking a by-law which they themselves 
 allowed to fall into desuetude. " ^* A contract made by an 
 officer of a corporation within the apparent scope of his 
 powers raises such a presumption of his authority to act for 
 it as to put on it the task of proving the contrary." To show 
 the authority of one who signs a contract for a corporation as 
 its officer it is competent to prove he was in its offices, attend- 
 ing to its business and conversing with persons desiring to do 
 business with it.^* Persons signing a contract as a " building 
 committee " and sealing it with their individual seals may 
 nevertheless put liability therefor upon the corporation for 
 the benefit of which it was made." A guaranty by a corpora- 
 
 ^" Parmelee v. Associated Physi- president's signature besides the 
 
 eians & Surgeons, 9 Misc. 458, 30 secretary's. 
 N. Y. Supp. 250 (1894). " Dentz Lithographing Co. v. In- 
 
 ^* Parmelee v. Associated Physi- temational Registry Co., 32 Misc. 
 
 cians, 11 Misc. 363, 32 N. Y. Supp. 687, 66 N. Y. Supp. 540 (1900). 
 149 (1895). The secretary and ^^.Dentz Lithographing Co. v.In- 
 
 treasnrer of a foreign corporation temational Registry Co., 32 Misc. 
 
 made alone a contract by the cor- 687, 66 N. Y. Supp. 540 (1900). 
 poration, although its by-laws re- ^^ Haight v. Sahler, 30 Barb. , 218 
 
 quired a board resolution and the (1859). 
 
366 BUSINESS COKPORATIONS IN NEW YORK § 323 
 
 tion of a lease to its customer by a landlord, signed by its vice- 
 president in its name, does not bind it unless it be proven 
 either that the vice-president had power to bind it by such 
 signature or that it. had knowledge of such signing.™ 
 
 § 323. Id.: Of President. — A contract made by the president 
 of a corporation in its name which it had power to authorize 
 him to make or to ratify after he had made it is prima facie 
 one which he had power to make for it and it must show it 
 had not ratified it.^ If a contract by a corporation is one 
 which the board of directors or trustees has pow.er to 
 authorize its president to make, or to ratify after it is made, 
 the burden is on it to show that a contract executed by its 
 president was not authorized or ratified by its board." " If 
 the terms of a contract entered into in behalf of a corporation 
 by its officers are extraordinary or unusual, such as are not 
 ordinarily made by the president or other officer in the 
 ordinary course of the transaction of the current business of 
 the corporation, the party contracting with the officer is put 
 upon inquiry as to his authority. ' ' ^ Equity will not cancel 
 an agreement by the president of a corporation made for it 
 with a third person for commissions, determine the amount 
 of commissions which should be paid and enjoin actions by 
 such third person arising from such agreement, at the request 
 of a stockholder, however fabulous the commissions may 
 be, if the president had general management of the corporate 
 property and business.* " Prima facie, the president of a 
 $10,000 corporation could not, without express authorization 
 of the board of directors, bind the corporation by contracts 
 relating to the erection on another 's land of a building to cost 
 
 -" Aaronson v. David Mayer ^ Stanley v. Franco- American 
 
 Brewing Co., 29 Misc. 289, 60 N. Y. Ferment Co., 97 Misc. 401, 161 N. Y. 
 
 Supp. 523 (1899). Supp. 365 (1916). "A contract to 
 
 On implied power of employee pay interest at the rate of one hun- 
 
 of corporation to employ physician dred and thirty per cent per an- 
 
 to attend injured employee, see num, . . . the suras borrowed 
 
 notes in 4 L.R.A.(N.S.) 58; 34 amounting to as much as $30,000^ 
 
 L.R.A.(N.S.) 351, L.B.A.1915C, .cannot be held to be within the ap- 
 
 809. . .parent scope of the authority of the 
 
 Time for which contracts of em- president or general manager, hav- 
 
 ployment may be made on behalf of ing charge of the current business." 
 
 corporation by its officers, direct- " * Aetna Explosives Co., Inc., v. 
 
 ors and agents, see notes in 49 -Bassick, 176 A. D. 577, 163 N. Y. 
 
 L.R.A. 471; 17 L.R.A.(N.S.) 177. .Supp. 917 (1917). The by-laws 
 
 ^ Norman v. Loomis-Manning Fil- - gave the president general manage- 
 
 ter Co., 123 A. D. 739, 108 N. Y. ment. There was no resolution of 
 
 Supp. 261 (1908). its board authorizing the commission 
 
 ^ Patterson v. Robinson, 116 N. Y. agreement. 
 193. 22 N. E. 372 (1889). 
 
§ 323 DIRECTORS, OFFICERS AND AGENTS 367 
 
 many times the amount of the total capital stock of the corpo- 
 ration, which building, in the absence of an express agree- 
 ment to the contrary, would become the property of the owner 
 of the land. " ^ It is proper to permit a corporation sued on 
 a contract, signed simply with the name of its president with 
 the word " President " added, and without any corporate seal 
 or corporate acknowledgment, to put in evidence its by-laws 
 prohibiting any contract to be executed as its act save on its 
 being first passed by its board of trustees.* Acceptance by a 
 letter signed by the individual name only of the president of 
 a corporation of a contract contained in a letter addressed to 
 the corporation does not make the contract the personal obliga- 
 tion of the individual who is president ; but if the contract is 
 silent as to terms of payment, a promise by such individual to 
 pay the indebtedness to be incurred by the corporation under 
 the contract is not within the Statute of Frauds and entitles 
 the plaintiff to go to trial on his claim against the individual.'' 
 If one send a proposition to sell goods in a letter addressed 
 to another as president of a corporation, and three days later 
 receive a written order for such goods signed by the president 
 and secretary of such corporation individually, not mention- 
 ing the corporate name and referring to the place where the 
 goods are to be put as " my factory," one may nevertheless 
 hold the corporation for the price if such two officers and a 
 third person were the corporation's three directors, discussed 
 the sale and authorized the president to buy; and this in spite 
 of a provision in its certificate of incorporation that such a 
 contract should not bind the corporation unless ratified by its 
 board, as sucli ratification is assumed as the result of its 
 assent before the purchase.® A resolution by the directors of 
 a corporation which authorizes him in its behalf to make a 
 contract with a contractor to build a railway for it upon such 
 terms in cash, stock or bonds of the company as in his judg- 
 ment may be best for the most immediate construction of the 
 road and to the company's interests, is sufficient to empower 
 him to bind the company by a contract to build a whole rail- 
 way and to extend the time for its completion and pay in 
 advance therefor in the company's stock and bonds.' It is 
 
 = Thompson V. Marseillaise French Supp. 238 (1914). The letter of 
 
 Baking Co., 85 Misc. 3fl2, 147 N. Y. aooeptance was placed in the first' 
 
 Supp. 402 (1914). person plural. 
 
 *De Best V. Albert Palmer Co., 'Globe Gas Light Co. v. M'etro- 
 
 36 Hun, 386 (1885). politan Investment Co., 10 A. D. 
 
 'Richardson Press v. Vander- 342, 41 N. Y. Supp. 797 (1896). 
 
 grift, 166 A D. 180, 150 N. Y. 'Hudson River & Washington 
 
368; BUSINESS CORPORATIONS IN NEW YORK § 324 
 
 sufficient to warrant a finding that a contract by the president 
 of a corporatfon retaining an attorney at a retainer payable 
 in its stock was approved or acquiesced in by its board of 
 directors to show that the president had authority to contract, 
 that the corporation customarily had retained attorneys 
 through its president with the board's approval, that they 
 had been paid in stock, and that the attorney in question had 
 rendered the services required by the contract with the knowl- 
 edge of the directors." A president of a corporation has 
 general authority to employ counsel for it; and even if such 
 employment be ultra vires the counsel may recover for his 
 services if the contract is executed and the corporation has 
 received the benefits therefrom." A corporation's president 
 has power to cause an attorney to appear for it on an applica- 
 tion for appointment of receivers to wind it up and distribute 
 its assets in this State, notwithstanding by arrangement he 
 was by convention limited in his usual functions." 
 
 § 324. Id.: Of Secretary and Treasurer. — " There can be no 
 implied authority upon the part of the secretary and treasurer 
 of a corporation to execute an apparently ultra vires con- 
 tract ; ' ' and the burden is on one seeking to put in evidence, 
 as a contract of the corporation, an instrument signed by its 
 secretary and treasurer, which goes outside the widest scope 
 of its business as prescribed by its certificate of incorporation, 
 to prove special authority in him to execute it." Acceptance 
 and payment by a corporation of an individual's services for 
 one week is sufficient prima facie evidence of its treasurer's 
 authority to bind it by an alleged contract of employment of 
 the individual made by him orally for the corporation.'* 
 There is no implied authority in the treasurer of a corpora- 
 tion' to make an agreement binding upon it to issue treasury 
 stock as a commission to any one bringing about the purchase 
 
 County Midland R. R. Co. v. Han- right of a president of a corpora- 
 field, 36 A- D- 605, 55 N. Y. Supp. tion to contract, see note in 14 
 877 (1899). L.R.A. 356. 
 
 ^° Merrill v. Consumers' Coal Co., As to presumption that a contract 
 
 114 N. Y. 216, 21 N. E. 156 (1889). with a corporation is within the au- 
 
 " Potter V. New York Infant thority of its president, see note in 
 
 Asvlurn, 44 Hun, 367 (1887). 7 L.R.A.(N.S.) 376. 
 
 '- Moe V. McNally Co., 138 A. D. " Broadway Theatre Co. v. Des- 
 
 480, 123 N. Y. Supp. 71 (1910). sau Co., 45 A. D. 475, 61 N. Y. 
 
 On powers of president as to con- Supp. 335 (1899). 
 
 tracts generally, see note in 14 "Latimer v. Wonderland Amuse- 
 
 L.R.A. 356. ment Co., 161 A. D. 554, 146 N. Y. 
 
 For authorities discussing the Supp. 779 (1914). 
 
§ 325 DIRECTORS, OFFICERS AND AGENTS . 369 
 
 of its treasury stock.'^ Evidence may be given by parol that 
 one signing a contract in his personal name, adding the words 
 " Secretary • and Treasurer," was such officers of a corpo- 
 ration and that he was authorized to enter into such a con- 
 tract at a meeting of its officers ; and the fact that its minutes 
 show no such meeting or authorization, and that its by-laws 
 provided that the corporation 's contracts must be executed in 
 a certain way to bind it, will not prevent its being held on the 
 contract." 
 
 § 325. Id.: Commercial Paper, To Sign and Endorse, In 
 General. — " Where a negotiable promissory note has been 
 given for the payment of a debt contracted by a corporation, 
 and the language of the promise does not disclose the corpo- 
 rate obligation, and the signatures to the paper are in the 
 narties of individuals, a holder, taking bona fide and without 
 notice of the circumstances of its making, is entitled to hold 
 the note as the personal undertaking of its signers, notwith- 
 standing they affix to their names the title of an office. Such 
 an affix will be regarded as descriptive of the persons and not 
 of the character of the liability. Unless the promise purports 
 to be by the corporation, it is that of the persons who sub- 
 scribe to it; and the fact of adding to their names an 
 abbreviation of some official title has no legal signification as 
 qualifying their obligation, and imposes no obligation upon 
 the corporation whose officers they may be., . . . Unless 
 the language creates, or fairly implies, the undertaking of the 
 corporation, if the purpose is equivocal, the obligation is that 
 of its apparent makers. " " A note signed by an individual 
 with that word following his name which indicates his official 
 position in a corporation is on its face his individual obliga- 
 tion and not of the corporation, and by suing the corporation 
 the holder is not prevented from suing the individual.^^ In 
 law a note signed by individual names, though with the word 
 ' ' President ' ' after one and ' ' Treasurer ' ' after another and 
 with the name of a corporation in the margin, is the individual 
 note of each signer.^^ A note signed by the names of two indi- 
 viduals, after one of which is written the word ' ' President ' ' 
 
 1= Hill V. Troegerlith Title Co., 168 the company, " Ridgewpod Ice Co.," 
 
 A. D. 639, 154 N. Y. Supp. 535 was printed on. the margin. 
 
 (1915). • 1* First National Bank v. Wallis, 
 
 " Morrill V. C. T. Segar Mamifae- 84 Hun, 376, 32 N. Y. Supp. 382 
 
 .luring Co., 32 Hun, 543 (1884). (1895) ; aff'd 156 N. Y. 663, 50 N. E. 
 
 "Casco National Bank v. Clark, 1117. 
 
 1139 N. Y. 307, 34 N. E. 908 (1893). ^^ First National Bank v. Wallis, 
 
 :The language of the note was " we 150 N. Y. 455, 44 N. E. 1038 (1896). 
 '.promise to pay;" and the name of 
 B. C. N. Y.— 24 
 
370 BUSINESS CORPORATIONS IN NEW YORK § 325 
 
 and after the other the word " Secretary," followed by the 
 
 words " of the " (a corporation), and which makes 
 
 no reference in its body to the corporation as a promisor, is 
 upon its face the individual note of the two makers ; but, if an 
 action thereon is brought between the original parties thereto, 
 it is competent for the makers " to show that there was a cor- 
 poration by that name ; that the makers were its president and 
 secretary; that the corporation had the benefit of the con- 
 sideration ; that the makers were authorized to make the note 
 as the act of the corporation, and intended to do so, and that 
 the payee ' ' at the time he received the note knew these facts, 
 and took the note with the understanding that the corporation 
 was its maker." ^° A corporate officer cannot generally bind 
 the corporation on a promissory note without special author- 
 ity by specific directors ' resolution or corporate by-laws ; and 
 if there be no corporate seal on the note simple production of 
 the note does not make out a prima facie case against the cor- 
 poration, but power of the officer to execute the note must be 
 shown.^ It is doubtful if the mere fact that a note is signed 
 by the president and treasurer of a corporation is sufficient to 
 establish its validity, as ' ' there should be proof of the specific 
 authority to affix the corporate name to the note as its obliga- 
 tion, or that the corporation received the avails of the note 
 or that there was a course of business which justified the bank 
 in accepting it as the obligation of the corporation;" and 
 " even if proof of the execution of the note by the president 
 and treasurer were sufficient to bind the corporation on a note 
 for its benefit, such rule does not obtain if the note was in fact 
 accommodation paper, and the bank knew of this defect."'' 
 In spite of a promissory note of a corporation not having 
 been executed as prescribed by its by-laws, it is still a question 
 of fact if its execution was authorized, when the officer signing 
 it had signed other notes for its benefit, his act has not been 
 repudiated by its directors and it received the benefits of the 
 note.^ " Undoubtedly the general rule is that one who 
 receives from an officer of a corporation the notes or securi- 
 ties of such corporation, in payment of, or as security for, 
 a personal debt of such officer, does so at his own peril. Prima 
 facie the act is unlawful, and, unless actually authorized, the 
 purchaser wiU be deemed to have -taken them with notice of 
 
 ^"Bush V. Gilmore, 45 A. D. 89, * National Bank of Newport v. 
 
 61 N. Y. Supp. 682 (1899). Snyder Mfg. Co., 107 A. D. 95, 94 
 
 ^Westchester Mortgage Co. v. N. Y. Supp. 982 (1905). 
 
 Melntire, Inc., 171 A. D. 518, 157 ' Grant v. Treadwell Co., 82 Hun, 
 
 N. Y. Supp. 725 (1916). 591, 31 N. Y. Supp." 702 (1894). 
 
§ 325 DIRECl'ORS, OFFICERS AND AGENTS 371 
 
 the rights of the corporation. ' ' * When paper of a corpora- 
 tion signed by an officer and payable to himself is presented by 
 him it bears upon its face sufficient notice of his incapacity to 
 issue it; but when such paper is payable to another and 
 reaches an innocent holder, even though through the endorse- 
 ment of the endorsee of such other which is a firm of which 
 the officer is a member, the innocent holder is protected." One 
 receiving a corporate cheque in payment of an individual's 
 liability is not to be held liable for the amount thereof to the 
 corporation when the rights of none of its creditors are 
 involved if inquiry made by him (though he made none) of 
 the corporation would have disclosed that it, as a custom 
 known and consented to by its officers, accepted deposits from 
 such individual from his outside personal transactions and 
 credited his personal account with it with moneys owing him 
 by it against which it issued its corporate cheques for his 
 personal use.^ A bank or an endorsee is not required to 
 inquire into the correctness of a cheque of a corporation, 
 regular on its face and signed by a duly authorized officer to 
 his own order and endorsed by him, save when there are cir- 
 cumstances indicating the cheque is being used for the officer's 
 personal benefit, or the bank participates in the diversion to 
 its own benefit.' " The rule may be stated, generally, to be 
 that where a director or an officer has knowledge of material 
 facts respecting a proposed transaction, which his relations 
 to it, as representing the bank, have given him, then, as it 
 becomes his official duty to communicate that knowledge to 
 the bank, he will be presumed to have done so, and his knowl- 
 edge will then be imputed to that bank. But no such duty can 
 be deemed to have existed . . . where [the officers] . . . 
 have made and delivered a promissory note, purporting to be 
 their individual promise." * When a corporate cheque is pre- 
 sented to satisfy the individual indebtedness of the officer who 
 drew it to his corporate creditor which has representatives on 
 
 * Wilson V. Metropolitan Elevated 130 N. Y. 307, 34 N. E. 908 (1893). 
 Ry. Co., 120 N. Y. 145, 24 N. E. 384 By a note with " Ridgewood Ice Co." 
 (1890'). printed in the margin, " John Clark, 
 
 ^Cheever v. Pittsburgh, S. & L. Prest." and "E. H. Close, Treas." 
 
 E. R. R. Co., 150 N. Y. 59, 34 agreed to pay " Clark & Chaplin Ice 
 
 L.R.A. 69, 44 N. E. 701 (1896). Co.", of which Winslow was a di- 
 
 ^Martindale v. De Kay, 101 Misc. rector, as well as of the bank dis- 
 
 728, 166 N. Y. Siipp. 405 (1917). counting the note. Winslow's knowl- 
 
 ^ Thornton v. Netherlands- Ameri- edge that the note was a corporate 
 
 can Steam Navigation Co., 178 A. D. note, or otherwise, was held not im- 
 
 604, 166 N. Y. Siipp. 682 (1917). putable to the discounting bank. 
 
 * Caseo National Bank v. Clark, 
 
372 BUSINESS CORPORATIONS IN NEW YORK § 326 
 
 the board of directors of the former corporation, the latter 
 corporation is put upon inquiry, and, while it is entitled to the 
 benefit of facts which would have dispelled the presumption 
 of illegal use and which would have been discovered on reason- 
 able inquiry, yet it is also responsible for such unfavorable 
 facts as reasonable inquiry would have discovered." 
 
 § 326. Id.: Of President. — "When the nature of a corpora- 
 tion's business is such as to justify the giving of negotiabte 
 paper and the making of such instruments is an incident to 
 the business it carries on, the authority of its president, gen- 
 eral manager and financial agent to sign such paper need not 
 be shown in order to bind the corporation to paper signed by 
 him alone for it, even though its by-laws require its secretary, 
 too, to sign, if such by-laws be not known to the one dealing 
 with the paper.*" "When a promissory note of a trading cor- 
 poration is executed and delivered by its president in its iiame 
 and is such a note as it might authorize or ratify, it is not 
 necessary to show prima facie that the contract Avas in fact 
 authorized by specific authority of the corporation but want 
 of authority must be plead and proven as a defense." " It 
 being the usual custom of the company to transfer its notes 
 by the mere indorsement of the president, such indorsement 
 is all that is requisite to effect a transfer of the title, where 
 the transfer itself is authorized by a resolution of the 
 directors."*^ The fact of the uniform practice of a corpo- 
 ration to have its notes to raise money for its business 
 endorsed by its president for the purpose of passing title 
 justifies an inference of competent authority for such a pur- 
 pose in any certain case." A corporation, despite a by-law 
 requiring its treasurer and president or secretary to sign its 
 notes, is bound by the notes signed by its president alone like 
 others signed in the same way and the proceeds of which it 
 used, even if the only authorization by its directors for the 
 notes in question was by implication through their knowledge 
 that he was the only person trying to raise money for the 
 company and actually raising it in some way, and the entry 
 
 *Ward V. City Trust Co., 1'92 "Martin v. Niagara Falls Paper 
 
 N. Y. 61, 84 N. E. 585 (1908). M'fg. Co., 122 N. Y. 166, 25 N. E. 
 
 On power of agents to indorse -303 (1890). 
 
 negotiable paper, see note in 27 ^^ Westchester Mortgage Co. v. 
 
 L.R.A. 401. Melntire, Inc., 174 A. D. 446, 161 
 
 On right of one who takes com- N. Y. Supp. 390 (1916). 
 
 mereial paper of corporation in pay- ^^ Clark v. Titcomb, 42 Barb. 122 
 
 ment of note or as security for indi- (1864). 
 
 vidual debt of officer, see note in *^ Marine Bank of N. Y. v. Clem- 
 
 31 L.R.A.(N.S.) 169. ents, 31 N. Y. 33 (1865). 
 
§ 326 DIRECTORS, OFFICERS AND AGENTS 373 
 
 of the notes on the corporate books which were open to their 
 inspection." To hold a corporation on notes endorsed in its 
 name by an individual it is not sufficient simply to show that 
 such individual was its president, but acquiescence or ratifi- 
 cation of his assumption of power to endorse by the directors, 
 or proof of such a course of dealing by him and such negli- 
 gence by them as would estop it from denying his authority, 
 must be shown." A promissory note for value executed by a 
 corporation through its president but without the signature 
 of the treasurer as required by its by-laws creates a legal 
 obligation against it if not diverted from its original purpose, 
 in the hands of a bona fide holder if the proceeds be received 
 of the company.^^ " If the president should forge the name 
 of the treasurer to a check and countersign it and put it in 
 circurlation and use the proceeds for his individual benefit, we 
 apprehend it would not be doubted that this would be regarded 
 as a certificate of the due execution of the check, so far as to 
 render the company responsible to any person who innocently 
 and in good faith becanle the holder of it. ' ' " When a note 
 signed " James R.- Wilson, Prest. T. M. Co.," is proven to 
 have been signed by the company's president as such for its 
 benefit and to have accrued to its benefit in that it received the 
 proceeds and subsequently acknowledged its liability thereon, 
 the note is the company's.'' A draft signed " James E. 
 Wilson, Prest. T, M. Co.," on its face directing that its 
 acceptor " charge to motive power and account," will be 
 held that of the corporation and not of the individual who 
 signed it if the testimony shows it was in the power of the 
 president to sign drafts for the conipany." One signing a 
 promissory note with the name of a corporation " by " him- 
 self as its president impliedly warrants his authority so to 
 sign and if he signs without such authority becomes liable 
 upon such warranty for the damages resulting from the 
 breach.^" A bill purporting on its face to be that of the indi- 
 vidual who is president of a corporation, if shown by evidence 
 to have been drawn for its debt by an agent authorized to 
 
 " Grant v. Treadwell Co., 1 A. D. R. R. Co., 137 N. Y. 231, 19 L.R.A. 
 
 367, 37 N. Y. Supp. 392 (1896). 331, 33 N. E. 378 (1893). Dictum. 
 
 ^^ National Bank v. Navassa Phos- ^* Thompson v. Tioga R. R. Co., 
 
 phate Co., 56 Hun, 136., 8 N. Y. 36 Bark 79 (1861). 
 
 Supp. 929 (1890). "Olcott v. Tioga Rail Road Co., 
 
 "Bigelow Co. V. Automatic Gas 40 Barb. 179 (1862); aff'd 27 N. Y. 
 
 Co., 56 Misc. 389, 107 N. Y. Supp. 546. 
 
 S94 (1907). 2" Miller v. Reynolds, 92 Hun, 400, 
 
 "Fifth Avenue Bank of N. Y. v. 32 N. Y. Supp. 660 (1895). 
 Forty-second St. & Grand St. Ferry 
 
374 BUSINESS CORPORATIONS IN NEW YORK §§327,328 
 
 draw it, binds the corporation when, upon the 'whole instru- 
 ment, it can be collected that such was the intention.^ 
 
 § 327. Id.: Of Treasurer. — The treasurer of a business 
 corporation has no implied authority to make promissory 
 notes in its name and one holding them and attempting to 
 hold it must show either that the treasurer had authority or 
 that a course of dealing implied his authority or that the cor- 
 poration was estopped — through acceptance of the benefits 
 of the note or otherwise — from denying such authority.^ A 
 plaintiff suing on note of a corporation made by its treasurer 
 empowered by its by-laws simply to incur indebtedness in 
 the regular course of business, to establish the corporation's 
 liability on the note, must show either acquiescence or ratifi- 
 cation by the directors of the power assumed by the treasurer 
 or such a course of dealing by that officer and such negligence 
 on the part of the directors as could estop the corporation 
 from denying the treasurer's authority.' A corporation is 
 bound by a note executed in its name by its treasurer on 
 which a loan is made for its benefit if it consciously invested 
 him with such powers as a sole manager of its affairs would 
 have, and a by-law requiring another officer's countersigna- 
 ture to the corporation's notes will not affect its liability.'' 
 When one to whom a note is payable with the abbreviation 
 " Treas." after his name, is in fact treasurer of a corpo- 
 ration to the knowledge of an endorsee, to whom he endorses 
 it by signing his name and adding the word " Treasurer," 
 and such endorsee receives it on account of a demand against 
 the corporation, the treasurer is not individually liable.'* A 
 cheque in payment of salary alleged to be due the president 
 of a corporation, signed by the treasurer or assistant treas- 
 urer and appearing on its face to be the corporation's cheque 
 is evidence of the obligation of the corporation." 
 
 § 328. Id.: Of Others. — A note, given without authority, of 
 the vice-president and secretary of a corporation in its name 
 
 ^Olcott V. Tioga R. R. Co., 27 * Perry v. Council Bluffs Water- 
 
 N. Y. 546 (1863). Works Co., 67 Hun, 456, 22 N. Y. 
 
 On power of president or vice- Supp. 151 (IS^S) ; aff'd 143 N. Y. 
 
 president of corporation to make 637, 37 N. E. 826. 
 
 negotiable paper, see note in 14 ^ Babcock v. Beman, 11 N. Y. 
 
 L.R.A. 357. 20O (1854). 
 
 ^Hubbard v. Syenite-Trap Rock Tanners' L. & T. Co. v. Housa^ 
 
 Co., 178 A. D. 531, 156 N. Y. Supp. tonic R. R. Co., 152 N. Y. 251 
 
 486 (1917). (1897). 
 
 ^ Bangs V. National Macaroni Co., ° Farmers' L. & T. Co. v. Housa- 
 
 15 A. D. 522, 44 N. Y. Supp. 546 tonic R. R. Co., 152 N. Y. 251 
 
 (1897). (1897). 
 
§§ 329-331 DIRECTOES, OFFICERS AND AGENTS 375 
 
 and the benefits of which it did not receive is voidJ Proof of 
 endorsement of a note by the secretary of a corporation and 
 of his authority to do so prima facie establishes the corpora- 
 tion's liability; and the burden of showing it to be ultra vires 
 must then be pleaded and proven as an affirmative defense of 
 the corporation.* A brokerage firm accepting a corporation's 
 cheques signed by its manager to cover his individual account 
 with the firm is liable for the amount thereof.' 
 
 § 329. Id.: Accommodation Paper, In General. — ^When there 
 is nothing on the face of a note to indicate that it is not busi- 
 ness paper, an endorsement by the corporation payee by its 
 proper officer in the usual form, though for accommodation 
 of the borrower, binds the corporation as against one 
 discounting it in good faith and in the usual course of 
 business.^" An officer of a corporation, high in rank, who 
 agrees for it that if an individual will be party to a note it 
 will not hold him thereon, as he will sign solely to enable it 
 to make the loan to another corporation the note of which it 
 cannot take because it has already made it one loan, has power 
 to make such an agreement and the corporation is bound 
 thereby, particularly if it sues on it, as this is a ratification 
 by it of his authority." 
 
 § 330. Id. : Of Secretary and Treasurer. — It is essential for 
 one claiming that a domestic manufacturing corporation is 
 liable for an accommodation note made and endorsed by its 
 treasurer because of its previous acts and conduct to show 
 that he was influenced by and relied upon such acts and con- 
 duct in honoring the note." A corporation organized to dress 
 and manufacture stone is not bound by an accommodation 
 endorsement by its secretary having only general authority to 
 endorse notes and bills " in the prosecution of its business." " 
 
 § 331. Id.: To Buy, Sell, Assign, Mortgage, Pledge and 
 Lease, In General. — When a corporate resolution directs the 
 " proper officers '' of a corporation to execute an assignment 
 by it, it will be presumed, at least in favor of third persons, 
 
 ^ Emmet v. Northern Bank of ^"Banking Assn. v. White Lead 
 
 N. Y., 173 A. D. 840, 160 N. Y. Co., 35 N. Y. 505 (1866). 
 Supp. 183 (1916) ; afi'd 221 N. Y. " Simmons v. Thompson, 29' A. D. 
 
 Mem. 26. 559, 51 N. Y. Supp. 1018 (1898). 
 
 ^ Kersch v. Pettier & Stjrmus Mfg. ^^ Jacobus v. . Jamestown Mantel 
 
 & Improvement Co., 82 A. D. 230, Co., 211 N. Y. 154, 105 N. E. 210 
 
 81 N. Y. Supp. 782 (1903). (1914). 
 
 ^Huie V. Allen, 87 Hun, 516, 34 ^^ Central Bank v. Empire Stone 
 
 N. Y. Supp. 577 (1895) ; aff'd 156 Dressing Co., 26 Barb. 23 (1858). 
 N. Y. 658, 50 N. E. 1118. 
 
376 BUSINESS CORPORATIONS IN NEW YORK § 332 
 
 > 
 
 that the president and secretary are such." The president, 
 or cashier, or other officer of a corporation has generally no 
 power to mortgage, assign or dispose of its property, without 
 the assent and authority of the directors.'^' A sale of corpo- 
 rate property by an officer of the corporation in the habit of 
 making such sales, with the company's sanction though with- 
 out power so to do under the company's by-laws, binds the 
 corporation/® 
 
 § 332. Id.: By President. — One in complete and absolute con- 
 trol of the affairs of a corporation of which he is president 
 may make an agreement which will bind it to buy the goods 
 it sells for twenty years exclusively from one source.^' " If 
 the president of a corporation buys fittings for its place of 
 business and they are placed therein and adapted thereto, 
 and pass to its lessee, the principal's conduct indicates that 
 its president acted presumptively within the limits of his 
 powers, inasmuch as the appropriation of the objects of pur- 
 chase shows approval thereof. ' ' ^* The president of a member- 
 ship corporation has no authority, by virtue merely of his 
 office or resolutions empowering him to take charge of the 
 corporation's fiscal affairs and to sign and execute all docu- 
 ments, to purchase real estate for the corporation, as by stat- 
 ute such a purchase can be authorized only by the concurring 
 vote of a specified number or percentage of the corporation's 
 directors.^" Purchasers, for valuable consideration, without 
 any notice of any defect in title, from one who is president 
 of a corporation, of its property sold him, acquire good title 
 notwithstanding his title might have been impeached by its 
 creditors while such property remained in his hands because 
 it was insolvent at the time of the sale to him, and had refused 
 payment of its notes, and he was its president and took the 
 property in discharge of its antecedent debt.^° A sale of 
 property of a corporation by its president when not empow- 
 ered to do so by his position or vote of the directors to the 
 knowledge of the purchaser, is of no effect, even though he 
 applied the purchase price to the payment of its debts, if 
 such application was without the directors' knowledge and 
 
 ^* Carroll v. Cone, 40 Barb. 220 ^ Pearson v. ' Liberty Avenue 
 
 (1862) ; aff'd 41 N. Y. 216. Theatre Co., 152 A. D. 771, 137 
 
 ^^Hoyt V. Thompson, 5 N. Y. 320 N. Y. Supp. 712 (1912). 
 
 (1851). "Catholic Foreign Mission Soc. 
 
 "Phillips V. Campbell, 43 N. Y. of America v. Oussani, The, 215 
 
 (4 Hand) 271 (1870). N. Y. 1, 109 N. E. 80 (1915) ; Memb. 
 
 " Petrolia Mfg. Co. v. Jenkins, 29 Corp. L. § 13. 
 
 A. D. 403, 51 N. Y. Supp. 1028 ""Heroy v. Kerr, 41 N. Y. (2 
 
 (1898). Keyes) 582 (1866). 
 
§ 332 DIRECTORS, OFFICERS AND AGENTS 377 
 
 consent/ A corporate deed executed by its president without 
 complying with the requirements of the resolution of the 
 board authorizing the sale of the real estate conveyed thereby 
 does not make the conveyance absolutely void but at best only 
 voidable ; and the purchaser in good faith thereof is Safe, as 
 against any claim by the corporation which has received the 
 purchase price or any creditor subsequently obtaining judg- 
 ment against it, from any lien attaching on the property.^ A 
 general assignment by a president of a corporation to himself 
 as assignee pursuant to a resolution of its board of directors 
 " that the company execute a general assignment ", is not 
 void, but only voidable at the election of the corporation or 
 some one authorized to act for it.^ An assignment by the 
 president of a corporation of its assets for the benefit of 
 creditors, not authorized by its board of directors, is void as 
 against its creditors and stockholders.* A person taking a 
 lease of premises used by a corporation is not to be held to 
 have taken it for it, necessarily, simply because he is its presi- 
 dent and majority stockholder and one of its directors.^ A 
 pledge of corporate property participated in by the corpora- 
 tion 's president binds it, and the fact that the corporation was 
 insolvent when the pledge was made does not entitle the person 
 claiming to be owner of the property to the benefit of the 
 stiatute inhibiting transfers by a corporation of its property 
 while insolvent, unless it be shown that the transferee was. a 
 person to whom a transfer is forbidden, viz., an officer, 
 director or stockholder, and that the pledge was made to 
 secure a pre-existing debt." An agreement by a corporation 
 to give to one loaning it money a lien on its property enforce- 
 able on refusal by it to repay the advances, if made by its 
 president and resulting in its obtaining money enabling it to 
 do business, binds it although neither its directors nor stock- 
 holders by vote approve it.' 
 
 > Giebler Mfg. Co. v. Kranenberg, ^ Rogers v. Pell, 154 N. Y. 518, 49 
 
 102 A. D. 471, 92 N. Y. Supp. 843 N. E. 75 (1898). 
 
 (1905). *Schaefer v. Seott, 40 A. D. 438, 
 
 ^ White V. Sheppard, 41 A. D..113, 57 N. Y. Supp. 1035 (1899). 
 
 58 N. Y. Supp. 563 (18'99). The = Crooked Lake Navigation Co. v. 
 
 directors' resolution authorized the Keuka Navigation Co., 37 Hun, 9 
 
 sale subject to a bond and mortgage (1885). 
 
 which the grantee should agree to °Wood v. Simpson, No. 1, 149 
 
 pay, and a deed signed by the presi- A. D. 471, 133 N. Y. Supp. 1069 
 
 dent and attested by the secretary. (1912) ; St. Corp. L. § 66. 
 
 The deed was not attested by the ^Mathews v. Hardt, 79 A. D. 570, 
 
 secretary and did not contain an as- 80 N. Y. Supp. 462 (1903). 
 sumption by the buyer of the bond 
 and mortgage. 
 
378 BUSINESS CORPORATIONS IN NEW YORK §§ 333, 334 
 
 § 333. Id.: By Other Officers. — ^An assignment under seal, 
 signed by the vice-president and attested by the secretary, 
 made by the corporation for its own benefit in instituting suit, 
 under ^y-laws providing that its president or vice-president 
 is authorized to sign its name and affix its seal to all contracts 
 and conveyances by the company whenever necessary, is 
 prima facie the corporate act, and no vote of the directors 
 authorizing or approving it need be shown.* " ... the 
 secretary of a corporation has no implied, authority to execute 
 and deliver a lease on behalf of his corporation." " 
 
 § 334. Id.: Actions and Service of Process On. — The service 
 of process in actions against corporations is generally dis- 
 cussed in the four hundred and forty-third section of this 
 book. The verification of pleadings in corporate actions is 
 generally discussed in the four hundred and forty-first section 
 of this book. Process served on one as an officer of a corpo- 
 ration will not be set aside on proof that he was not elected 
 to any office at an election held prior to the service, if he was 
 such officer prior to such election, unless it be proven that new 
 officers were elected.^" Service of process on a person who 
 has been president and a director in a corporation but who 
 had resigned before the service (though no action had been 
 taken on his resignation) is not sufficient to justify the entry 
 of judgment against the corporation." Service of process en 
 one who had resigned as president of a corporation and whose 
 successor had been elected is not binding on the corporation." 
 Service of process on the president de facto of a corporation 
 concludes it.^^ Non-resident officers of a local corporation 
 coming to the State to take part in' bankruptcy proceedings of 
 such corporation are exempt from service of process by the 
 State courts, although merely notified in an order of reference 
 to appear." Service of process in actions against corpora- 
 tions is generally discussed in a succeeding section.^^ 
 
 ^Imbrie v. Schlieht Combustion Hotel Co., 14 Misc. 436, 36 N. Y. 
 
 Process Co., 130 A. D. 675, 115 Supp. 712 (1S95). 
 
 N. Y. Supp. 333 (190&). " Stillman v. Associated Lace 
 
 ' Fischer v. Motor Boat Club, 61 Makers' Co., 14 Misc. 503, 35 N. Y. 
 
 Misc. 66, 113 N. Y. Supp. 56 (1908). Supp. 1071 (1895). 
 
 ^° Fridenberg v. Lee Construction ^* Powell v. Pangbom, 161 A. D. 
 
 Co., 27 Misc. 661, 58 N. Y. Supp. 453, 145 N. Y. Supp. 1073 (1914). 
 
 391 (1809). 15 See § 443, infra. 
 
 11 Yorkville Bank v. Zeltner Brew- As to what service is sufficient as 
 
 ing Co., 80 A. D. 578, 80 N. Y. basis of judgment in personam 
 
 Snpp. 839 (1903) ; app. dism'd 178 against corporation, see note in 50 
 
 N. Y. 572, 70 N. E. 1111. L.R.A. 588. 
 
 1^ Buchanan v. Prospect Park On validity of statutes authoriz- 
 
§ 335 DIRECTORS, OFFICERS AND AGENTS 379 
 
 § 335. Id.: Liabilities, In General.—" The relatiou of an 
 oflScer of a corporation to it is fiduciary, and he must at all 
 times act in good faith and unselfishly toward the corpora- 
 tion. ' ' "_ The fact that an individual who refuses to give up 
 possession of chattels concededly belonging to another and 
 left in the possession of a corporation is president of such 
 corporation does not relieve him of personal liability for con- 
 version." " ... where the president of a corporation, 
 having knowledge and the management of its business affairs 
 and knowing that it is largely indebted and probably insol- 
 vent, makes statements of its affairs false in fact for the 
 purpose of obtaining credit on its behalf, he becomes per- 
 sonally liable for the consequences of the fraud he thus com- 
 mits ' ' ; and it is immaterial to the right of the creditor to sue 
 at once that the period of credit has not expired.^* The indi- 
 viduals who are ofiicers of a corporation are not immune from 
 criminal liability for conspiring on the theory that they are 
 but the many fingers of one corporate hand which, being 
 single, cannot conspire." A corporate officer ordered to pro- 
 duce the corporation's books on his examination before trial to 
 refresh his recollection is guilty of a contempt of court if he 
 refuse to produce them on the ground that they would tend to 
 incriminate him.^" An ofiicer of two corporations involved in 
 litigation in a foreign state is not compellable, in a proceeding 
 instituted in this State under the statute permitting a commis- 
 sion to take testimony, to testify as to things in the corporate 
 books not before the court to answer which would require an 
 
 ing constructive or substitute service ^^ MeCrea v. McClenahan, 131 
 
 on domestic corporation, see note in A. D. 247, 115 N. Y. Supp. 720 
 
 4 L.R.A.(N.S.) 117. (1909). 
 
 Service of process on servant or ^* Phillips v. Wortendyke, 31 Hun, 
 
 agent of lease of railroad corpora- 192 (1883). 
 
 tion, see notein4L.E.A.(N.S.) 272. ^"People v. Duke, 19 Misc. 292, 
 
 On admission or waiver of service 44N. Y. Supp. 336 (1897). "A trad- 
 
 by statutory agent of corporation ing corporation is entitled to all the 
 
 appointed to receive service, see note advantage it can secure under fair 
 
 in 2 L.R.A.(N.S.) 389. and free competition, but its officers 
 
 Service of process after appoint- and agents may become criminally 
 
 meht of receiver, upon person desig- liable if they confederate to secure a 
 
 nated by statute to receive service monopoly by threats and menaces 
 
 for corporation, see note in 47 directed against competitors to force 
 
 L.K.A.(N.S.) 179. and coerce them to relinquish the 
 
 Service of process on railroad or rights to the fullest enjoyment of 
 
 steamship company by delivery to which all are entitled." 
 
 station or ticket agent, see note in ^^ Pray v. Blanchard Co., 95 A. D. 
 
 L.R.A.1916F, 453. 423, 88 N. Y. Supp. 650 (1904) ; 
 
 "Billings V. Shaw, 209 N. Y. 266, C. C. P. §§ 870^876. 
 103 N. E. 142 (1913). 
 
380 BUSINESS CORPORATIONS IN NEW YORK § 336 
 
 outside examination, if he was not commanded so to do by the 
 subpoena served upon him: he can only be required to testify 
 to such facts as rest within his memory.^ When an action is 
 brought by a creditor of a corporation and the law makes its 
 stockholders, trustees or other officers, or any of them, liable 
 in any event or contingency for the payment of his debts, 
 they 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 ; or the plaintiff in 
 the action may, instead of making them parties, maintain a 
 separate action against them to procure a judgment declaring, 
 apportioning and enforcing their liability ; and in either kind 
 of action 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, though if it affirmatively appears that the corpo- 
 ration is insolvent and has no property to satisfy its creditors 
 the court may, without taking such an account, ascertain and 
 determine the amount of each defendant's liability, and 
 enforce the same accordingly.'' If it appears that the prop- 
 erty of the corporation and the sums collected or collectible 
 from the stockholders upon their stock subscriptions are or 
 will be insufficient to pay the debts of the corporation the 
 court must ascertain the several sums for which the directors, 
 trustees or other officers, or the stockholders of the corpora- 
 tion, being parties to the action, are liable ; and must adjudge 
 that the same be paid into court, to be applied, in such propor- 
 tions and in such order as justice requires, to the payment of 
 the debts of the corporation.' 
 
 § 336. Id.: For Political Contributions.— The liability of 
 officers for contributions for political purposes is shared by 
 directors and agents and is therefore treated in a subsequent 
 section under the heading " Liabilities Common to Directors, 
 Officers and Agents. ' ' * 
 
 ^ Matter of Dittman, 65 A. D. 343, of corporation include liability for 
 
 72 N. Y. Supp. 886 (1901). torts, see note in 22 L.R.A.(N.S.) 
 
 2 Gen. Corp. L. §§ 109, 110, 111 256. 
 (L. 1909, c. 28). Personal liability of officers for 
 
 ^ Gen. Corp. L. § 114 (L. 1909, torts or negligence of corporation, 
 
 c. 28). is discussed in a note in 28 L.R.A. 
 
 Authorities' discussing the question 421. 
 of garnishment of an officer or agent Personal liability of directors for 
 
 of a corporation to secure a demand personal injuries resmlting from 
 
 against the corporation, are collated tort, see notes in 39 L.R.A.(N.S.) 
 
 in a note in 36 L.R.A. 561. 901, and L.R.A.1915C, 874. 
 
 Does- statutory liability of officers * § 377, infra. 
 
§§ 337-343 DIRECTORS, OFFICERS AND AGENTS 381 
 
 § 337. Id.: For Omitting to Disclose Service on Himself of 
 Injunction Against Corporation.— This liability is shared by- 
 directors, officers and agents and is therefore discussed in a 
 subsequent section found under the heading "Liabilities 
 Common to Directors, Ofificers and Agents." ' 
 
 § 338. Id.: For Fraudulent Issue of Stocks and Bonds.— As 
 this liability is imposed equally upon directors, ofificers and 
 agents it is appropriately discussed in a subsequent section 
 found under the heading " Liabilities Common to Directors, 
 Ofificers a,nd Agents. ' ' ° 
 
 § 339 Id. : For Fraud in Procuring Corporate Organization. 
 — As this liability is imposed not only upon officers but upon 
 agents it is properly considered in a Subsequent section under 
 the heading " Liabilities Common to Ofificers and Agents."^ 
 
 § 340. Id.: On Corporate Dissolution. — The dissolution of a 
 corporation for any cause does not take away or impair any 
 remedy against its officers for any liabilities incurred previous 
 to its dissolution.' 
 
 § 341. Id.: With Regard to Corporate Books, For Omission 
 of, or Making False Entry in Books. — This liability is suffered 
 not only by officers but also by directors and agents and con- 
 sequently is discussed in a subsequent section under the head- 
 ing ' ' Liabilities Common to Directors, Officers and Agents. ' ' " 
 
 § 342. Id.: For Refusal or Neglect to Make Entries in, or 
 Allow Inspection of. Stock Books. — This liability is shared by 
 officers with directors and agents and is treated in a later sec- 
 tion under the heading " Liabilities Common to Directors, 
 Officers and Agents. ' ' " 
 
 § 343. Id.: For Refusal or Neglect to Make Report or State- 
 ment. — This liability is shared by officers with directors and 
 agents and is discussed in a later section under the heading 
 " Liabilities Common to Directors, Officers and Agents."" 
 The officers of a corporation required to keep a corporate book 
 by law and declared guilty by law of a misdemeanor if they 
 did not, have the burden of proving their claim, on an applica- 
 tion for production of such book, that they could not do so." 
 
 = § 378, infra. ^° § 381, infra. 
 
 ° § 379, infra. On right of corporation, corporate 
 
 ^ § 376, infra. oflficer, or other person having eus- 
 
 *Biis. Corp. L. § 5 (L. 1909, tody of its books and papers to rc- 
 
 c. 12). fuse to produce them on the ground 
 
 ° § 380, infra. that they may tend to incriminate. 
 
 False statements in reports re- see note in 30 L.R.A.(N.S.) 725. 
 
 quired to be filed with public officer *^ § 382, infra. 
 
 as fraud which will sustain an action ^^ Fenlon v. Dempsey, 50 ' Hun, 
 
 against corporation, see note in 35 131, 2 N. Y. Supp. 763 (1888) ; 
 
 L.R.A. 858. C. C. P; §§ 872, 873. 
 
382 
 
 BUSINESS CORPORATIONS IN NEW YORK §§ 344, 345 
 
 § 344. Id,: For Falsity of, or Omission In, Statement of Cor- 
 porate Affairs. — This liability is shared by officers with 
 directors and agents and is considered in a subsequent, section 
 under the heading " Liabilities Conmion to Directors, Officers 
 and Agents."" 
 
 § 345. Id.: For Failure to Make and File Annual Report. — 
 The statute requires every stock corporation except moneyed 
 and railroad corporations to file with the Secretary of State 
 annually a report made by its president or a vice-president or 
 treasurer or a secretary." Any president, vice-president, 
 treasurer or secretary oi' a stock corporation (except moneyed 
 and rq,ilroad corporations) who refuses or neglects, after its 
 annual report to the Secretary of State has not been filed 
 within the time limited by statute, to make and to file such 
 report within ten days after written request so to do has been 
 made by a creditor or stockholder of the corporation, forfeits 
 to the People of the State the sum of fifty dollars for every 
 day he so neglects or refuses." 
 
 ^'§ 383, infra. 
 
 On liability of corporate officers 
 for false statements in reports re- 
 quired by . statute to be made to 
 public officers, see note in 6 L.R.A. 
 (N.S.) 872. 
 
 "St. Corp. L. § 34 (L. 1909, 
 c. 61). 
 
 "St. Corp. L. § 34 (L. 1909, 
 c. 61). The present statute is sec- 
 tion 34 of the Stock Corporation 
 La.w; which is the same section of 
 chapter 61, Laws of 1909 (Consoli- 
 dated Laws) ; which is the same as 
 the same section of chapter 415, 
 Laws of 1905; which is the same 
 as section 30 of chapter 354, Laws 
 of 1901, except that the law of 1901 
 did not contain the subdivision 
 found in the later laws which is 
 numbered " 4 " ; which is the same 
 as section 30 of chapter 384, Laws 
 of 1897, except that' the last para- 
 graph read in the 1897 law : " Such 
 report shall be signed by a majority 
 of its directors, and verified by the 
 oath of the president or vice-presi- 
 dent and treasurer or secretary, and 
 filed in the office of the secretary of 
 state, and in the office of the county 
 clerk of the county within this state 
 where its principal business ofRee 
 
 may be located. If such report is 
 not so made and filed, all the direct- 
 ors of the corporation shall jointly 
 and severally be personally liable 
 for all the debts of the corporation 
 then existing, and for all contracted 
 before such report shall be made. 
 No director shall be liable for the 
 failure to make and file such report 
 if he shall file with the secretary of 
 state, within thirty days after the 
 first day of February, or the first 
 day of May, as the case may be, a 
 verified certificate, stating that he 
 has endeavored to have such report 
 made and filed, but that the officers 
 or a majority of the directors have, 
 refused and neglected to make and 
 file the same, and shall append to 
 such certificate a report containing 
 the items required to be stated in 
 such annual report, so far as they 
 are within his knowledge or are 
 obtainable from sources of infor- 
 mation open to him, and verified by 
 him to be true to the best of his 
 knowledge, information and belief." 
 The 1897 law is the same as chap- 
 ter 688, Laws of 1892, section 30, 
 except that the latter only says th". 
 report shall be filed " in the office 
 of the county clerk of the county" 
 
§345 
 
 DIEECT'OES, OFFICEES AND AGENTS 
 
 383 
 
 and does not then add the three 
 words "within this state" which the 
 1897 law does add. The laws of 1875, 
 chapter 611, section 18, differed ma- 
 terially from the succeeding laws 
 above mentioned and read in whole: 
 "Every such corporation shpll an- 
 nually, within twenty days after the 
 first day of January, make a report, 
 which shall state the amount of 
 capital, and the proportion actually 
 paid in, the amount and, in general 
 terms, the nature of its existing as- 
 sets and debts, and the names of its 
 then stockholders, and the dividends 
 if any declared since the last re- 
 port, which report shall be signed 
 by the president and a majority of 
 the directors, and shall be verified 
 by oath of the president or secre- 
 tary of such corporation, and filed 
 in the ofiice of the Secretary of 
 State, and if any such corporation 
 shall fail 'so to do, all the directors 
 thereof shall be jointly and sever- 
 ally liable for all the debts of the 
 corporation then existing, and for 
 all that shall be contracted before 
 such report shall be made. Pro- 
 vided that if any director shall file 
 with the Secretary of State, at any 
 time within thirty days after such 
 first of January, a certificate, veri- 
 fied by the oath of such director, 
 stating that he has endeavored to 
 have such report made and signed 
 as aforesaid, but that the officers 
 or a majority of the directors have 
 refused or neglected to make and 
 file such report; and shall append 
 to such certificate a report contain- 
 ing the items aforesaid, so far as 
 they are within his knowledge or are 
 obtainable from sources df informa- 
 tion open to him, which report shall 
 be verified by him as being true to 
 the best of his knowledge, informa- 
 tion and belief, in that case such 
 director shall not .be liable on ac- 
 count of such failure to make and 
 file such report upon making proof 
 of such facts in any action which 
 may be commenced against him, 
 upon the trial thereof. Whenever, 
 under this section, a judgment shall 
 
 be recovered against a director, sev- 
 erally, all the directors of the cor- 
 poration shall contribute a ratable 
 share of the amount paid by such 
 director on such judgment, and such 
 director shall have a right of action 
 against his co-directors, jointly or 
 severally, to recover from them the 
 proportion of the amount so paid 
 on such judgment." The Law of 
 1875 (the same year), but chapter 
 510, section 12, read in whole: 
 "Every such company shall within 
 twenty days from the first day of 
 January, if a year from the time 
 of the filing of the certificate of in- 
 corporation shall then have expired, 
 and, if so long a time shall not 
 have expired, then within twenty 
 days from the first day of January 
 in each year after the expiration of 
 a year from the time of filing such 
 certificate, make a report which shall 
 be published in some newspaper 
 published in the town, city or vil- 
 lage, or if there be no newspaper 
 published in said town, city or vil- 
 lage, then in some newspaper pub- 
 lished nearest the place where the 
 business of the company is carried 
 on, which shall state the amount of 
 capital, and of the proportion actu- 
 ally paid in, and the amount of its 
 existing debts, which report shall 
 be signed by the president and a 
 majority of the trustees, and shall 
 be verified by the oath of the presi- 
 dent or secretary of said company, 
 and filed in the office of the clerk 
 of the county where the business of 
 the company shall be carHed on, 
 and if any of the companies shall 
 fail so to do, all the trustees of the 
 company shall be jointly and sever- 
 ally liable for all the debts of the 
 company then existing, and for all 
 that shall be contracted before such 
 report shall be made; but whenever 
 under this section a judgment shall 
 be recovered against a trustee sev- 
 erally, all the trustees of the com- 
 pany shall contribute a ratable share 
 of the amount paid by such trustee 
 on such judgment, and such trustee 
 shall have a right of action against 
 
384 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 345 
 
 his co-trustees, jointly or severally, 
 to recover from them their propor- 
 tion of the amount so paid on such 
 judgment; provided that nothing in 
 this act contained shall affect any 
 action now pending." The Laws of 
 1848, chapter 40, section 12, read in 
 whole : " Every such company shall 
 annually, within twenty days from 
 the first day of January, make a re- 
 port which shall be published in 
 some newspaper, published in the 
 town, city or village, or if there 
 be no newspaper published in said 
 town, city or village, then in some 
 newspaper published nearest the 
 place where the business of said 
 company is carried on, which shall 
 state the amount of capital, and of 
 the proportion actually paid in, and 
 the amount of its existing debts, 
 which report shall be signed by the 
 president and a majority of the 
 trustees; and shall be verified by the 
 oath of the president or secretary 
 of said company, and filed in the 
 office of the clerk of the county 
 where the business of the company 
 shall be carried on; and if any of 
 said companies shall fail so to do, 
 all the trustees of the company shall 
 be jointly and severally liable for 
 all the debts of the company, then 
 existing, and for all that shall be 
 contracted before such report shall 
 be made." 
 
 The decisions under these various 
 statutes are collected in this note 
 because among their great number 
 are found principles of construction 
 of the expressions in the old statutes 
 which may be helpful in determining 
 the meaning of analogous expres- 
 sions in other statutes: 
 
 Decisions under L. 1901, c. 354, 
 § 1. 
 
 A law requiring directors of a 
 corporation to file an annual report 
 is not binding after the corporation 
 has abandoned its business and fran- 
 chise and is entirely without prop- 
 erty or means of continuing or re- 
 suming its business and has no in- 
 tention of so doing. Watertown 
 National Bank v. Bagley, 134 A. D. 
 831, 119 N. Y. Supp. 592 (1909); 
 
 St. Corp. L. § 30, now § 34; L. 1897, 
 c. 384, and L. 1901, c. 354, S 1- The 
 last-named act is identical with the 
 present statute except that the sub- 
 division numbered " 4 " in the exist- 
 ing law is not found in the 1901 law. 
 " To absolve directors from the lia- 
 bility imposed upon them by statute 
 for failure to file an annual report 
 of their corporation " it must ap- 
 pear that the corporation is insol- 
 vent, that it has ceased to exist by 
 dissolution or as a matter of fact 
 from a total abandonment of its 
 business and its being put in such 
 a position that it does not intend 
 to and cannot continue or resume 
 operations under its franchise." 
 Horrocks Desk Co. v. Fangel, 71 
 A. D. 313, 75 N. Y. Supp. 967 
 (1902) ; St. Corp. L. § 30, now § 34. 
 The corporation had made a general 
 assignment for creditors' benefit. 
 Held, insufficient to dispense with 
 filing of report. 
 
 Decisions under L. 1897, c. 384, 
 § 30. 
 
 The statute making directors of a 
 corporation liable for its debts if it 
 does not file an annual report is 
 penal in its nature and must be con- 
 strued strictly in their favor; and 
 a corporate creditor cannot sue them 
 thereunder "unless three things co- 
 exist: The default in making the 
 report; the fact that at the time of 
 such default the defendants were 
 trustees or directors, and a debt due 
 from the company." Hoboken Beef 
 Co. v. Hand, 104 A. D. 390, 93 N. Y. 
 Supp. 834 (1905) ; St. Corp. L. § 30 
 (L. 1897, c. 384), requiring a cor- 
 poration " doing business without 
 the United States " to file its report 
 "before the first day of May." The 
 beef company did business within the 
 U. S. A. and in England, Canada and 
 Germany. The defendants resigned 
 as directors April 21, 1900. The in- 
 debtedness arose from a sale in Au- 
 gust, 1899,' and the suit was for de- 
 fendants' corporation's failure to 
 make a report on or after -Tanuary 
 1, 19O0. Held, not liable. The con- 
 ditions upon which the liability of 
 directors for failure of their corpo- 
 
§ 345 
 
 DIRECTORS, OFFICERS AND AGENTS 
 
 385. 
 
 ration to file an annual report de- 
 pend under the statute are in the 
 nature of provisos and need not be 
 alleged and proved in a complaint 
 to establish that liability, but must 
 be averred and proved in the answer. 
 Boynton v. Sprague, 100 A. D. 443, 
 91 N. Y. Snpp. 839 (1905); afif'd 
 183 N. Y. 505, 76 N. E. 1089; St. 
 Corp. L. § 30 (L. 1897, e. 384). 
 " While a technical dissolution of 
 the company is not necessary to re- 
 lieve directors from the consequences 
 of not filing . an annual report, the 
 abandonment of the business and its 
 franchises must be certain and final, 
 and such as to put the company be- 
 yond the possibility of resuming 
 business." Stevenson v. Cowan, 84 
 A. D. 135, 82 N. Y. Supp. 78 (1903) ; 
 St. Corp. L. § 30 (L. 1897, c. 384). 
 It had no receipts and did no busi- 
 ness because a municipality under- 
 took a same business, but it sued .the 
 municipality. A liability of a cor- 
 poration on bonds becomes _ due and 
 the cause of action against its di- 
 rectors (because no corporate an- 
 nual report has been filed) for such 
 liability matures when the principal* 
 of the bonds becomes due, and a 
 director elected within three years 
 therefrom is liable to the penalty 
 for failure to file such report as the 
 debt on the bonds was " then exist- 
 ing", within the statute's meaning, 
 when he was elected. Morgan v. 
 Hedstrom, 164 N. Y. 224, 58 N. E. 
 26 (1900) ; St. Corp. L. § 30. The 
 statute making the directors of a ■ 
 corporation not filing an annual re- 
 port jointly and severally person- 
 ally liable for the corporate debts 
 then existing declares the legislative 
 policy in regard to the various laws 
 embraced in the revision made by 
 it; is but a continuation of prior 
 laws; include within its meaning 
 mortgage debts, and is remedial and 
 should be liberally construed if 
 necessary. Morgan v. Hedstrom, 
 164 N. Y. 224, 58 N. E. 26 (1900) ; 
 St. Corp. L. § 30. One purchasing 
 of a director who was in default in 
 filing the annual report required of 
 
 B. C. N. Y.— 25 
 
 a corporation is not liable to the 
 penalty of personal liability for tfa^ 
 corporation's debts put by statute on 
 such a defaulting director and is 
 not precluded (as would be his 
 transferrer) from holding his trans- 
 ferrer's co-directors to such per- 
 sonal liability. Morgan v. Hed- 
 strom, 164 N. Y. 224, 58 N. E. 26 
 (190O); St. Corp. L. § 30. "The 
 statute makes every director jointly 
 and severally liable for the penalty 
 incurred by the default of the board 
 of which he is a member, in flUng 
 the report. The liability is for debts 
 'then existing' — that is, vhether 
 due or not, . . . successive de- 
 faults by the same directors do not 
 renew as to them the penalty already 
 incurred, but when a new member 
 comes into the board a new default 
 makes him jointly and severally 
 liable for the debts ' then existing ' — 
 that is, he becomes jointly liable with 
 the old members of the new default- 
 ing board as they were already liable 
 because of their previous default, the 
 new member is jointly associated 
 with them in that liability, so long 
 as their several liability is concur- 
 rent." Morgan v. Hedstrom, 164 
 N. Y. 224, 58 N. E. 26 (1900) ; St. 
 Corp. L. § 30. "... . the di- 
 rectors who have failed to file a re- 
 port are liable for a judgment en- 
 tered for costs against the corpora- 
 tion, precisely to the same extent £is 
 they would be for any debt if the 
 judgment is entered while their de- 
 fault continues." Matty v. Simpson, 
 64 A. D. 1, 71 N. Y. Supp. 731 
 (1901). The statute making direct- 
 ors omitting to file corporate an- 
 nual reports personally liable for 
 all the corporation's debts " then ex- 
 isting, and for all contracted before 
 such report shall be made" means 
 "that the liability for default in 
 publishing the required annual re^ 
 port is limited to debts contracted 
 while the director continues in office, 
 and does ^ot include a debt in- 
 curred after he ceases to be a di- 
 rector, although the default con- 
 tinues." Sinclair v. Fuller, 158 
 
386 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 345 
 
 N. Y. 607, 53 N. E. 510 (1899); 
 St. Corp. L. § 30. 
 
 Decisions under L. 1892, c. 688, 
 § 30. 
 
 In seeking to hold a director liable 
 for a deposit made with his corpora- 
 tion on the grounds that its annual 
 reports had not been filed and that 
 it failed, the action must be brought 
 ■within the period limited by statute 
 for the recovery of a penalty com- 
 puting the time when the cause of 
 action arose from the moment it 
 received the deposit, if in doing so 
 it exceeded its corporate powers and 
 engaged in a business not authorized 
 fori it, irrespective of any demand 
 for the deposit. Chapman v. Lynch, 
 156 N. Y. 551, 51 N. E. 275 (1898) ; 
 C. C. P. § 383, subd. 3. Corporate 
 directors may validly waive the stat- 
 ute of limitations applicable to an 
 action against them under the stat- 
 ute to enforce their personal liabil- 
 ity for debts of a corporation for 
 which they failed to file an annual 
 report. Costello v. Outterson, 112 
 A. D. 680, 98 N. Y. Supp. 880 
 (1906) ; St. Corp. L. § 30 (L. 1892, 
 c. 688); repealed — see L. 1897, 
 c. 384; L. 1901, c. 354; L. 1905, 
 c. 415. Persons who have, after 
 election, accepted the office of cor- 
 porate directors, managed the cor- 
 porate affairs and assumed the duties 
 and emoluments of their office may 
 not raise the point that they are not 
 directors because they held no stock, 
 in order to escape a statutory lia- 
 bility imposed on directors. Don- 
 nelly V. Pancoast, 15 A. D. 323, 44 
 N. Y. Supp. 104 (1897). [Failure to 
 file annual report.] A corporation 
 ha", not ceased to do or abandoned 
 iis business, so as to absolve, from 
 his statutory liability for failure to 
 file a report, a director, " so long as 
 the trustees [directors] and the 
 stockholders still had the right and 
 the power to rescind former action 
 and continue the business." Brown 
 V. Clark, 81 Hun, 267, 30 N. Y. 
 Supp. 801 (1894). A majority of 
 acting directors, who have tried un- 
 availingly to fill up the membership 
 
 of their board and officers, comply 
 with a statute requiring a majority 
 of the corporation's directors to 
 sign a report yerifled by the oath of 
 the president or vice^resident and 
 treasurer or secretary, if they sign 
 the report and have it verified by 
 the only officer of the corporation 
 authorized to do so. Manhattan Co. 
 V. Kaldenberg, 166 N. Y. 1, 58 N. E. 
 790 (190O); L. 1892, c. 2, § 30. 
 " The recovery of a judgment and 
 the return of an execution are not 
 conditions precedent to the right of 
 a creditor to recover from the di- 
 rectors of the corporation for failing 
 to file reports." Rose v. Chadwick, 
 9 A. D. 311, 41 N. Y. Supp. -190 
 (1896); St. Corp. L. § 30 (L. 1892, 
 c. 688). " The right to maintain the 
 action [to hold a director individu- 
 ally liable for the debt of his cor- 
 poration by reason of failure to file 
 an annual report] depends upon the 
 existence of three facts: the failure 
 to make and file a report, a debt 
 against the corporation and the di- 
 rectorship of the defendant at the 
 time of the default." Union Na- 
 •tional Bank v. Scott, 53 A. D. 65, 
 66 N. Y. Supp. 145 (1900); St. 
 Corp. L. § 30 (L. 1892, c. 688). 
 " . . . in order to charge a di- 
 rector with a debt of the corpora- 
 tion, three elements must exist, di- " 
 rectorship, failure to make and file 
 the report, and a debt against the 
 corporation existing at some period 
 of the directorship and at the time 
 of the failure ... the debt must 
 be one existing in fact, and . . . 
 a director cannot be held liable for 
 unliquidated damages arising out of 
 a breach of contract made with the 
 corporation . . ." Hill v. Weid- 
 inger, 110 A. D. 683, 97 N. Y. 
 Supp. 473 (1906) ; St. Corp. L. § 30 
 (L. 1892, c. 688). The statute penal- 
 izing directors if the annual report 
 of their corporation be not filed in 
 the office of the clerk of the county 
 where its principal business office is 
 located refers to the business office 
 of the corporation in fact and not 
 to one existing because of a pre- 
 
§ 345 
 
 DIRECTORS, OFFICERS AND AGENTS 
 
 387 
 
 sumption arising in consequence of 
 the insertion of a locality in its cer- 
 tificate of incorporation. Uptegrove 
 V. Schwarzwaelder, 46 A. D. 20, 61 
 N. Y. Supp. 623 (1899); afl'd 167 
 N. Y. 587, eO N. E. 1121: St. Corp. 
 L. § 30 (L. 1892, c. 688). The 
 stockholders voted ,to change its 
 principal business office to another 
 county where, as a fact, its principal 
 business ofBce was thereafter lo- 
 cated. The filing of the report in 
 such county was held sufficient. An 
 officer of a corporation making a 
 false statement in an annual report 
 becomes liable for the damages 
 which naturally flow from or are 
 caused by the falsehood, and the 
 measure thereof is that applicable in 
 cases of fraud and breach of war- 
 ranty. Parsons v. Johnson, 28 A; D. 
 1, 50 N. Y. Supp. 780 (1898) ; St. 
 Corp. L. § 30 (L. 1892, c. 688). The 
 value at which land was taken for 
 stock was held properly considered 
 in determining the value of the 
 stock. One suing a director for a 
 corporate debt and alleging a cause 
 of action arising out of a breach of 
 his assignor's contract with the cor- 
 poration for which the director was 
 not liable cannot prove and recover 
 on a wholly different cause of ac- 
 tion, against objection and without 
 amendment of his pleadings ; and the 
 pleadings cannot be conformed to 
 the proof even though the defendant 
 was probably not misled. Hill v. 
 Weidinger, 110 A. D. 683, 97 N. Y. 
 Supp. 473 (1906); St. Corp. L. 
 § 30 (L. 1892, c. 688). 
 Decisions under L. 1875, e. 611, 
 
 § 18. 
 
 " It is essential to the liability of 
 directors, by virtue of the statute, 
 for default in filing a report, that 
 their occupancy of that relation, 
 such default and the debt of the 
 corporation have existence at the 
 same point of time. . . . It is 
 only necessary for the protection of 
 directors against liability upon a 
 particular debt against their corpo- 
 ration that the requisite report be 
 filed prior to the existence of such 
 
 debt." Gold V. Clyne, 134 N. Y. 
 262, 17 L.R.A. 767, 31 N. E. 980 
 (1802) ; L. 1875, e. 611, § 18. The 
 corporation's existence ended under 
 its charter before completion of the 
 contract under which the indebted- 
 ness arose. " The indebtedness of 
 the corporation was dependent upon 
 performance of the contract by the 
 plaintiff, and did not until then 
 arise." 
 
 Decisions under L. 1875, c. 510, 
 § 12. 
 
 A judgment for costs in an ac- 
 tion by a corporation rendered 
 against it is a debt which can be 
 enforced against one of its trustees 
 by reason of the company's failure 
 to make, publish and file its capital 
 stock report. Allen v. Clark, 108 
 N. Y. 269, 15 N. E. 387 (1888); 
 Gen. Mfg. Act, L. 1848, c. 40, § 12, 
 as amend'd L. 1875, c. 510. " Thfe 
 word ' indebtedness ' in this section 
 clearly includes, not only every debt 
 voluntarily contracted by the com- 
 pany, but every debt of every na- 
 ture however contracted or arising." 
 While the statutory liability im- 
 posed on trustees or directors for 
 their corporation's debts when the 
 corporation fails to file its annual 
 report is highly penal and not to 
 be extended by construction, so that 
 one seeking to hold them under it 
 must allege and prove affirmatively 
 every fact and circumstance upon 
 which his right to recover depends, 
 yet all the terms of the statute must 
 be substantially complied with to re- 
 lieve the directors from liability, 
 e. g., the report if made within the 
 statutory period may be filed or 
 published as soon as practicable 
 thereafter, but it must be filed or 
 published, and a delivery to the cor- 
 poration's secretary and his neglect 
 to file it does not relieve the direct- 
 ors. Whitney v. Cammann, 137 
 N. Y. 342, 33 N. E. 305 (1893); 
 Gen. Mfg. Act, L. 1848, c. 40, § 12, 
 as amend'd L. 1875, c. 510. To 
 show, in an action to hold a director 
 personally liable for his corpora- 
 tion's promissory note, that the debt 
 
388 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 345 
 
 was contracted while he acted as 
 such and was payable within one 
 year from the time it was con- 
 tracted, it is not sufficient that he 
 was a director when the note was 
 given. Straus v. Sage, 5 Misc. 255, 
 25 N. Y. Supp. 93 (1893) ; L. 1875, 
 c. 267, § 8. 
 
 Decisions under L. 1848, c. 40, 
 §12. 
 
 A complaint in an action against 
 corporate directors to recover a debt 
 due from it to the plaintiff because 
 of failure to make its annual report, 
 when the corporate charter from the 
 L^slature provides that directors 
 '• shall incur no personal liabilities 
 beyond the amount of the capital 
 stock held and owned by them re- 
 spectively" must all^e that such 
 directors are stockholders. Wright 
 V. Booth, 69 N. Y. 620 (1877) ; L. 
 1848, c. 40; L. 1873, c. 493. When 
 corporate trustees are sought to be 
 held liable for their corporation's 
 debts by reason of the falsity of one 
 or more of its statutory annual re- 
 ports, the reports should receive a 
 liberal interpretation and the benefit 
 of any doubt as to their true sense 
 and meaning should be given the 
 trustees in the absence of bad faith. 
 Whitney Arms Co. v. Barlow, 63 
 N. Y. 62 (1875); Gen. Mfg. Act, 
 L. 1848, c. 40, § 12, as amend'd 
 L. 1853, c. 333. " The [annual] re- 
 port [of a corporation] is to be 
 the act of the trustees, and the duty 
 of making it is devolved upon them. 
 The secretary is but the servant of 
 the company, performing such acts 
 and rendering such services as are 
 incident to the office or may be 
 specially imposed. He might, under 
 the direction of the trustees, pre- 
 pare the paper and verify it by his 
 oath in place of the president, but 
 he could not subscribe to it the 
 names of the trustees, or verify it 
 in any way to make it the act of 
 the corporation and a compliance 
 with the statute, so as to relieve the 
 trustees from their duty, or the lia- 
 bility resulting from an omission to 
 perform it." Bolen v. Crosby, 49 
 
 N. Y. 183 (1872); Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. Although an 
 action to recover the amount of a 
 claim against a manufacturing com- 
 pany on the ground of the failure 
 of the defendant as one of its 
 trustees to make and file its annual 
 report as required by statute would 
 have absolutely abated if either 
 party had died at any time before 
 verdict, because it is a penal action 
 and therefore properly characterized 
 as ex delicto, yet if it go to judg- 
 ment before the death of either 
 party, the reversal of the judgment, 
 followed by the death of either or 
 both parties, does not prevent ap- 
 peal from the judgment by the rep- 
 resentatives of the losing side, be- 
 cause while there could be no new 
 trial after the , reversal and death 
 the judgment still had a potential 
 existence till determined by appeal. 
 Carr v. Rischer, 119 N. Y. 117, 23 
 N. E. 296 (1890); Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. "An assignee 
 of a claim against a manufacturing 
 corporation may maintain an action 
 against a trustee thereof, to enforce 
 a liability for its debts ... be- 
 cause of failure to file an annual 
 report, or because of signing a false 
 report." Pier v. George, 86 N. Y. 
 613 (1881) ; Gen. Mfg. Act. Head- 
 note. No opinion reported. As an 
 action against an individual who is 
 trustee of a manufacturing corpora- 
 tion to hold him for a debt due by 
 it because of failure by him to make 
 its annual report is not to recover 
 a debt he owes but to impose on 
 him, as penalty for his default, its 
 debt, the action is one for a penalty 
 and his answer need not be verified. 
 Gadsden v. Woodward, 103 N. Y. 
 242, 8 N. E. 653 (1886) ; C. C. P. 
 §§ 523, 837; Mfg. Act, L. 1848, 
 c. 40, § 12. ". . . when a debt 
 against a corporation, owned by a 
 trustee, is assigned to him absolutely 
 for value, the assignee, on a default 
 by the company subsequently occur- 
 ring to make a report, may proceed 
 under the . . . [statute to hold 
 the trustees personally liable for 
 
§ 345 
 
 DIRECTORS, OFPICERS AND AGENTS 
 
 38& 
 
 the debt] although the assignor con- 
 tinued to bef a trustee up to the time 
 of the default." Cornell v. Roach, 
 101 N. Y. 373, 5 N. E. 52 (1886) ; 
 G«n. Mfg. Act, L. 1848, c. 40, § 12. 
 When a corporate lessee agrees' that 
 taxes are payable by it and if not 
 paid by a certain date shall be pay- 
 able as additional rent, they become 
 a debt of the company (for which 
 its directors or trustees are liable 
 on failure to file its annual report) 
 at the moment the tax authorities 
 impose the taxes, though the cause 
 of action against the company does 
 not accrue until the date set in the 
 lease; and if such date is subsequent 
 to the statutory limitation of time 
 within which the company's annual 
 report should have been, but was not 
 filed, the short statute of limita- 
 tions against the directors begins to 
 run from such date. Rector, etc., 
 of Trinity Church v. Vanderbilt, 98 
 N. Y. 171 (1885); Gen. Mfg. Act, 
 L. .1848, c. 40, § 12. The action 
 given by statute against a corporate 
 trustee to recover the penalty im- 
 posed upon the corporation for fail- 
 ure to make and file its annual re- 
 port is final and ex delicto in char- 
 acter and does not survive against 
 the personal representatives of the 
 trustee on his decease. Stokes v. 
 Stiekney, 96 N; Y. 323 (1884) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. One 
 named in a certificate of incorpora- 
 tion as a trustee for one year is not 
 liable (without proof that he held 
 over) to one who became a creditor 
 of the corporation after the expira- 
 tion of such year for the debt then 
 contracted by .the corporation to 
 such creditor on the ground that 
 the corporation failed to publish and 
 file the annual statutory report. 
 Philadelphia & Reading Coal & Iron 
 Co. v. Hotehkiss, 82 N. Y. 471 
 (1880) ; L. 1848, c. 40, § 12. Trus- 
 tees of a corporation elected for a 
 year during which it discontinues 
 business because of insolvency and 
 they resign cannot be held respon- 
 sible for filing a corporate annual 
 report or for any statutory conse- 
 
 quences resulting from such failure. 
 Van Amburgh v. Baker, 81 N. Y. 
 . 46 (1880) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 12. Even had they not re- 
 signed, but merely neglected to hold 
 over, they would not have been 
 liable. An action against trustees 
 of a corporation for its debt be- 
 cause of alleged failure to file an 
 annual report need not be com- 
 menced within three years after the 
 debt of the company arose, but may 
 be brought at any time within six 
 years from its appearing that the 
 company fails to file its report (pro- 
 vided that the time of bringing the 
 action be within three years of such 
 failure to file). Duckworth v. 
 Roach, 81 N. Y. 49 (1880); Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. Debt 
 arose April, 1873. Taiiure to file 
 report was in January, 1875. Held, 
 the action could be brought any 
 time to April, 1879. The liability 
 imposed on trustees of a corpora- 
 tion by statute for failure to file 
 an annual report " does not attach, 
 if a report is made in terms com- 
 plying with the statute, although 
 some of the representations be un- 
 true." Bonnell v. Griswold, 80 N. Y. 
 128 (1880) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 12. An action against a 
 trustee of a corporation to hold him 
 for its debt must be commenced 
 within three years after the date set 
 by statute for the filing of the cor- 
 poration's report. Knox v. Bald- 
 win, 80 N. Y. 610 (1880); Gen. 
 Mfg. Act, L. 1848, p. 40, § 12; 
 Code of Procedure, § 92, subd. 2. 
 The fact that a corporation is bank- 
 rupt and has ceased to do business 
 relieves its trustees from the obliga- 
 tion of making and filing the report 
 required by statute. Bruce v. Piatt, 
 80 N. Y. 379 (1880); Gen. Mfg. 
 Act, L. 1848, c. 40, § 12. The rea- 
 son for the resignation of a cor- 
 porate trustee is unnecessary to be 
 told, nor his motives or intentions 
 to be examined, in an action to hold 
 him for liability for corporate debts 
 by reason of failure to file its an- 
 nual report. Bruce v. Piatt, 80' 
 
'390 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 345 
 
 N. Y. 379 (1880); Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. " . . . . the 
 liability of ^ trustee [of a corpora- 
 tion for its debts for failure to file 
 its annual report] does not depend 
 upon the fact that he was such when 
 the debt was contracted, but upon 
 his being a trustee when the default 
 as to filing the report occurred." 
 Bruce v. Piatt, 80 N. Y. 379 (1880) ; 
 Gen. Mfg. Act, L. 1848, c. 40, § 12. 
 An action to hold a trustee liable 
 for a debt of his corporation evi- 
 denced by a judgment recovered 
 against it the year before failure to 
 file its annual report (on which his 
 liability is founded) occurred must 
 be brought within three years from 
 such failure,- i. e., from the time the 
 cause of action against him accriied. 
 Losee v. BuUard, 79 N. Y. 404 
 (1880) ; L. 1848, c. 40, § 12. One 
 who is proceeded against for a debt 
 of a corporation because of its fail- 
 ure to file its annual report should 
 be permitted to show that the cor- 
 porate enterprise was abandoned be- 
 fore final incorporation. DeWitt v. 
 Hastings, 69 N. Y. 578 (1877); L. 
 1848, c. 40, § 12. In a suit against 
 corporate directors based on an alle- 
 gation of omission to make, file and 
 publish any annual report the ques- 
 tion of the falsity of a report made 
 is not in issue. Whitnev Arms Co. 
 V. Barlow, 68 N. Y. 34 (1876); 
 L. 1848, c. 40, § 12. The allegation 
 by one seeking to hold trustees of a 
 corporation liable for its debts by 
 reason of its failure to file its an- 
 nual report that the company had 
 not made, filed and published its 
 report as required by law, puts upon 
 the one making it the duty of af- 
 firmatively proving it, even though 
 this can only be done by proof of a 
 negative. Whitney Arms Co. v. 
 Barlow, 68 N. Y. M (1876); L. 
 1848, c. 40, § 12. "For an omis- 
 sion to file any report all the trus- 
 tees are liable, jointly and severally, 
 to the creditors; for making and 
 filing a false report, only such of 
 the trustees as do the act are 
 liable;" so that to justify a union 
 
 in one complaint of causes of action 
 both for such omission and for 
 making a false report, each of the 
 causes of action must affect all the 
 parties to the action. Bonnell v. 
 Griswold, 68 N. Y. 294 (1877); L. 
 1848,^ e. 40, §§ 12 and 15; Code, 
 § 167. One who is creditor of a 
 corporation and as such seeks to 
 hold one of its trustees for the debt 
 on the ground of its failure to file 
 its annual report cannot succeed if 
 he be a co-trustee with the defend- 
 ant; and he will be held to be such 
 if he voluntarily assumed the char- 
 acter of trustee. Easterly v. Barber, 
 65 N. Y. 252 (1875) ; Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. The statutory- 
 liability of corporate trustees for all 
 debts existing or previously con- 
 tracted by the corpoi-ation at the 
 time of its default in making its 
 annual report " is coextensive and 
 concurrent with that of the corpora- 
 tion. It is subject to the same con- 
 ditions and qualifications that at- 
 tach to the original indebtedness and 
 whatever would defeat or abate an 
 action against the corporation will 
 serve as a shield and defense to the 
 trustees. . . . the trustees are 
 not liable to an action, except for 
 debts actually due, and for which 
 a present right of action exists 
 against the corporation." Jones v. 
 Barlow, 62 N. Y. 202 (1875) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. The 
 statute making corporate trustees 
 liable individually for the debts of 
 their corporation if it had failed to 
 make its annual report " was, no 
 doubt, intended to include all ordi- 
 nary debts which might be con- 
 tracted in the prosecution of the 
 legitimate business of the company, 
 but does not . . . embrace such 
 as might be imposed upon the com- 
 pany by fraud or improper practices 
 of the creditor." Adams v. Mills, 
 60 N. Y. 533 (1875); Gen. Mfg. 
 Act, L. 1848, e. 40, § 12. The al- 
 leged debt was of money credited 
 plaintiff on the corporate books 
 claimed to have been borrowed by 
 plaintiff's husband for the corpora- 
 
§ 345 
 
 DIEECT'ORS, OFFICERS AND AGENTS 
 
 391 
 
 tion's benefit, and was unknown to 
 anyone save plaintiff's husband who 
 was a trustee and secretary of the 
 company, and another, who was a 
 trustee and its treasurer. A trustee 
 whose term has expired but who 
 nevertheless continues to act, even 
 though after the affairs of the com- 
 pany are wound up by sale of its 
 property, is liable to suit for a cor- 
 porate debt if the company fails to 
 file its annual report. Sanborn v. 
 Lefferts, 58 N. Y. 170 (1874) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. In 
 an action against trustees of a cor- 
 poration to recover a debt due by it 
 because of its failure to make and 
 file its annual report, a judgment 
 for the debt recovered by the cred- 
 itor in an action against the cor- 
 poration is not conclusive against 
 the trustees, nor evidence against 
 them, as they are not privies or 
 parties to it, but should be person- 
 ally served with process and given 
 an opportunity of trying the ques- 
 tion of debt. Miller v. White, 50 
 N. Y. 137 (1872) ; Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. In determining 
 the right by one to recover from 
 trustees a debt due by their corpora- 
 tion because of failure to file its 
 annual report, " the right to the 
 debt, as evidenced by the judgment 
 against an insolvent corporation, and 
 the right to recover the same debt 
 from the defendants upon their per- 
 sonal liability, cannot exist in the 
 hands of different persons. The as- 
 signment of the judgment necessarily 
 carries the debt; they are insepa- 
 rable." Bolen v. Crosby, 49 N. Y. 
 183 (1892) ; Gen. Mfg. Act, L. 1848, 
 0. 40, § 12. An action against trus- 
 tees of a corporation to charge them 
 with its debt under the statute mak- 
 ing them liable when it fails to file 
 its annual report is limited by the 
 three year statute, because the lia- 
 bility is in the nature of a penaltv. 
 Merchants' Bank v. Bliss, 36 N. Y. 
 412 (1866) ; Gen. Mfe:. Act, L. 1848,' 
 c. — , § 12; Code, § 92, snbd. 2. In 
 order to hold a corporate trustee 
 liable for his corporation's debt by 
 
 reason of failure to make and file 
 its annual report " three circum- 
 stances must concur in point of time 
 . . . : the existence of the debt ; the 
 existence of the default in making 
 the report; and the trusteeship. 
 Where these concur, the trustee is 
 liable for all debts, if he was such 
 trustee when the default occurred. If 
 he was not a trustee at the time of the 
 default, but became such afterwards, 
 then his liability is limited to debts 
 created while he remains trustee, 
 and while the default continues." 
 Shaler & Hall Quarry Co. v. Bliss, 
 27 N. Y. 297 (1863); Gen. Mfg. 
 Act, L. 1848, c. 40, § 12. The object 
 of the statutory provision requiring 
 an annual report to be made and 
 filed by corporations " so far as re- 
 lates to creditors, or persons dealing 
 with the corporation, appears to 
 have been to give such notoriety to 
 the pecuniary condition of the com- 
 pany, through the publication of its 
 annual statement, as to deprive it 
 of credit, if it should be unworthy 
 of it, and to give to persons to whom 
 it might become indebted while the 
 statement should be withheld, the 
 personal responsibility of the trus- 
 tees for such indebtedness." Shaler 
 & Hall Quarry Co. v. Bliss, 27 N. Y. 
 297 (1863) ; Gen. Mfg. Act, L. 1848, 
 e. 40, § 12. Under a statute making 
 trustees of a corporation liable for 
 its debts existing and pre-existing its 
 default in making its annual report, 
 those guilty of such default in a 
 certain year are liable only for ante- 
 cedent debts and their successors, if 
 they continue the default for a year 
 till the next date for making an an- 
 nual report, and no longer, are liable 
 for the debts afterwards contracted 
 during that year, and no longer. 
 Bouehton V. Otis, 21 N. Y. 261 
 (1860) ; Gen. -Mfg. Act, L. 1848, 
 c. 40, § 12. " If the persons suc- 
 ceeding to office promptly obey the 
 requirement of the act they will 
 escape all liability. ... If they 
 do not, they very properly incur 
 the hazard of the debts which they 
 themselves as trustees contract." In 
 
392 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 346 
 
 § 346. Id.: Liabilities Common to Directors and Officers, In 
 General. — The mere fact that a director or officer has trans- 
 actions with his corporation, appearing on the books, which 
 show a credit balance at the time an action against him is 
 brought for official misconduct, but the correctness of which 
 are not successfully assailed, cannot be made the basis of a 
 decision and an interlocutory judgment directing an account- 
 ing by him." Intangible as well as tangible assets of a corpo- 
 ration constitiite a trust fund, and whoever wrongfully appro- 
 priates such assets, whether he be a director or officer or not, 
 may be charged therefor as constructive trustee." One who 
 is an officer and director.of a corporation is bound to account 
 to it for all moneys that come into his hands by virtue of his 
 official acts and cannot be permitted to shield himself from 
 
 determining the liability, of one for a 
 debt of a corporation as being a 
 trustee thereof (it having failed to 
 file its annual report), "a debt for 
 lumber furnished under . . . con- 
 tract, subsequent to its execution, 
 can [not] be said to have been con- 
 tracted when the agreement was 
 signed." Garrison v. Howe, 17 
 N. Y. 458 (1858); Gen. Mfg. Act, 
 L. 1848, c. 40, § 12. The debt of a 
 corporation for which a director is 
 liable by statute for failure to file 
 its report includes an unliquidated 
 claim arising out of breach of a con- 
 tract of employment, but not costs 
 of the action against the corporation 
 to recover therefor. Green v. Eas- 
 ton, 74 Hun, 329, 26 N. Y. Supp. 
 553 (1893); L. 1848, c. 40, § 12. 
 A statute requiring directors of a 
 corporation to see to it that its an- 
 nual report is filed should be con- 
 strued as though the words " during 
 their continuance in office " were at 
 its end, as the liability attaches to 
 the individuals, who may change, 
 and not to the office, which does not 
 change. The Shaler & Hall Quarry 
 Co. V. Bliss, 34 Barb. 309 (1861); 
 aflf'd 27 N. Y. 297; L. 1848, Act of 
 Feb. 27, § 12. A statute making 
 corporate directors individually lia- 
 ble "for all the debts of the com- 
 pany" existing at the time of fail- 
 ure to file the corporation's annual 
 
 report does not refer to claims of 
 the directors themselves against the 
 corporation. Briggs v. Easterly, 62 
 Barb. 51 (1872); L. 1848, c. 40, 
 § 12. Neither a trustee of a corpo- 
 ration nor his assignee can hold a 
 co-trustee for liability for the corpo- 
 rate debts (incurred while they w^re 
 both trustees) by reason of failure 
 to file the statutory report, because 
 if this could be done, he could profit 
 by his own default. Knox v. Bald- 
 win, 80 N. Y. 610 (1880) ; Gen. Mfg. 
 Act, L. 1848, c. 40, § 12. To con- 
 stitute a liability upon a corporate 
 trustee for its debts because of its 
 failure to file its annual report it 
 must be averred that th« debts ex- 
 isted at the time the default in mak- 
 ing the report was made, or that they 
 were contracted afterwards and be- 
 fore such report was published. 
 Chambers v. Lewis, 28 N. Y. 454 
 (1863) ; Gen. Mfg. Act, § 35. 
 
 The question qf liability of corpo- 
 rate officers who fail to fll« report 
 required by statute, to surety or 
 guarantor of corporate paper, is dis- 
 cussed in a note in 35 L.B.A.(N.S.) 
 855. 
 
 "Stokes V. Stokes, 91 Hun, 605, 
 36 N. Y. Supp. 350 (1895) ; C. C. P. 
 '§ 1781; now Gen. Corp. L. § 90. 
 
 "Godley v. Crandall & Godley 
 Co., 212 N. Y. 121, L.R.A.1915I), 
 632, 105 N. E. 818 (1914). 
 
§§ 347, 348 DIRECTORS, OFFICERS AND AGENTS 393 
 
 such liability under the claim that his acts were illegal and 
 unauthorized." 
 
 § 347. Id.: For Sale of Stock Which Do Not Own.— A 
 director or officer of a stock corporation is guilty of a mis- 
 demeanor punishable by imprisonment for not less than six 
 months or by a fine not exceeding five thousand dollars or by 
 both, who sells, or agrees to sell, or is directly or indirectly 
 interested in the sale of any share of stock of such corpora- 
 tion, or in any agreement to sell the same, unless at the time 
 of such sale or agreement he is an actual owner of such 
 share." A director of a corporation, i. e., any person having 
 by law the direction or management of the affairs of a corpo- 
 ration by whatever name described, is deemed to have con- 
 curred in the violation of the provision of law just stated, 
 either, if present at a meeting of the directors at which any 
 act, proceeding or omission of such directors constituting such 
 violation occurs without at the time causing or in writing 
 requiring his dissent therefrom to be entered on the minutes 
 of the directors, or if absent from such meeting and 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 writing requiring his dissent from such violation 
 to be entered upon such record of minutes.^" A director is 
 also deemed to have such a knowledge of the affairs of the 
 corporation as to enable him to determine whether any act, 
 proceeding or omission of its directors is a violation of the 
 provision of law just stated.^ 
 
 § 348. Id.: For Increasing Capital Stock Beyond Amount 
 Authorized. — The increase of corporate capital stock has been 
 already discussed.^ A director or officer of a stock corpora- 
 
 ^^MeClure v. Law, 161 N. Y. 78, is all subscribed, see note in 35 
 
 55 N. E. 388 (1899). The defend- L;R.A.(N.S.) 453. 
 
 ant took money from those whom he On liability of directors directly 
 
 had elected as directors and had to creditors of the corporation, suing 
 
 given the control of the corporation, in their own right for n^ligence or 
 
 On personal liability of officers other breach of duty owed primarily 
 
 for act or transaction in excess of to the corporation, see note in 45 
 
 corporate powers or in violation of L.R.A.(N.S.) 421. 
 
 law, see note in 6 ,L.R.A.(N.S.) On liability of the directors of a 
 
 1003. corporation to the corporation, see 
 
 On liability of officers of mutual notes in 55 L.R.A. 751; 39 L.R.A. 
 
 insurance company to members for (N.S.) 173. 
 
 permitting diversion of funds, see ^° Penal L. § 664 (L. 1909, c. 88). 
 
 note in 2 L.R.A.(N.S.) 165. ^^ Penal L. § 667 (L. 1909, c. 88). 
 
 ■ On liability of directors for per- ^ Penal L. § 667 (L. 1909, e. 88). 
 
 matting business before capital stock ^ See § 102 et seq., supra. 
 
394 BUSINESS CORPORATIONS IN NEW YORK § 349 
 
 tion 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 who issues, participates in issu- 
 ing, 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.^ A director of a corpo- 
 ration, i. e., any person having by law the direction or manage- 
 ment of the affairs of a corporation by whatever name 
 described, is deemed to have concurred in the violation of the 
 provision of law .just stated, if either present at a meeting of 
 the directors at which any act, proceeding or omission of such 
 directors constituting such violation occurs without at the 
 time causing or in writing requiring his dissent therefrom to 
 be entered on the minutes of the directors, or absent from 
 such meeting and 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 writing requiring his 
 dissent from such violation to be entered on such record of 
 minutes.* A director of a corporation, i. e., any person having 
 by law the direction or management of the affairs of a corpo- 
 ration by whatever name described, is deemed to have such a 
 knowledge of the affairs of the corporation as to enable him 
 to determine whether any act, proceeding or omission of its 
 directors is a violation of the provision of law just stated.' 
 
 § 349. Id. : For Loans to Stockholders. — The power of a cor- 
 poration to loan money is hereinafter treated." A director or 
 officer making or assenting to a loan of moneys by a stock 
 corporation or any officer thereof out of its funds to any stock- 
 holder therein, or receiving or discounting any note or other 
 evidence of debt discounted by any such corporation or officer 
 thereof or received by any such corporation or officer thereof 
 in payment of any installment or any part thereof due or to 
 become due on any stock in such corporation to enable any 
 stockholder to withdraw any part of the money paid in by him 
 on his stock, is jointly and severally personally liable to the 
 extent of such loan and interest for all the debts of the corpo- 
 ration contracted before the repayment of the sum loaned, 
 and to the full amount of the notes or other evidences of 
 indebtedness so received or discounted, with interest from the 
 time such liability accrued.' A creditor of a corporation may 
 
 'Penal L. § 664 (L. 1909, c. 88). "See § 399, infra. 
 
 * Penal L. § 667 (L. 1909, c. 88). ''St. Corp. L. § 29 (L. 1909, 
 
 ^ Penal L. § 667 (L. 1909, c. 88). c. 61). 
 
§ 350 DIRECTORS, OFFICERS AND AGENTS 395 
 
 recover from its officers and directors the amount of a loan by 
 the corporation to a stockholder to which they assented.' 
 
 § 350. Id.: For Transfer to Directors, Officers or Stock- 
 holders of Property of Corporation Not Paying Due Obliga- 
 tions.— The transfer, while insolvent or after failure to pay 
 liabilities, by a corporation of its property is hereinafter dis- 
 cussed.* Every director or officer violating or concerned in 
 the violations of the statute prohibiting the transfer by a cor- 
 poration, its officers or directors, of any of its property to 
 any of its officers, directors or stockholders, directly or indi- 
 rectly, for the payment of any debt or upon any other con- 
 sideration than the full value of the property paid in cash, 
 when such corporation has refused to pay any of its notes or 
 other obligations when due in lawful money of the United 
 States, i§ personally liable to the creditors and stockholders 
 of the corporation of which he is director or officer to the full 
 extent of any loss they may respectively sustain by such vio- 
 lation." The Municipal Court has jurisdiction of an action 
 against directors of a corporation to hold them individually 
 liable for transfers of its property by them while it was insol- 
 vent." Those receiving money of a corporation are the ones 
 from whom recovery must be had under the statute making 
 every person receiving any property of a corporation by 
 means of a transfer to its officers, directors, stockholders or 
 creditors with intent to give a preference; and if the trans- 
 feree is not in one of such groups and has received none of 
 the corporate property, the statute does not apply.^^ A judg- 
 ment creditor of a corporation, without assets as a result of a 
 transfer thereof by its directors to themselves as stockholders, 
 may have relief that the directors themselves personally pay 
 his judgment against the corporation, and, if they do not, that 
 the property transferred be held by them in trust for the cor- 
 poration and subjected to satisfaction of his judgment by 
 proper process." In order to perinit a recovery by a creditor 
 of a corporation against a director, officer and stockholder for 
 a transfer to him of corporate property while the corporation 
 
 ^Helmsley & Co., Ltd. v. Duncan 370 (1917); Mun. Ct. Code, §§ 6, 
 
 & Co., Inc., 98 Misc. 338, 164 N. Y. subd. 1, and 7; St. Corp. L. § 66. 
 
 Supp. 282 (1917); St. Corp. L. ^Kiendl v. Cochrane", 153 A. D. 
 
 § 29. 802, 138 N. Y. ^upp. 630 (1912) ; 
 
 " See § 402 et seq., infra. St. Corp. L. § 66. 
 
 "St. Corp. L. § 66 (L. 1909, ^^Flaum v. Kaiser Bros. Co., 66 
 
 c. 61). Misc. 586, 122 N. Y. Supp. 100 
 
 " Trustees of Masonic Hall v. Fon- (1910) ; aff'd 144 A. D. 897, 129 
 
 tane, 99 Misc. 497, 164 N. Y. Supp. N. Y. Supp. •1122; 
 
396 BUSINESS CORPORATIONS IN NEW YORK § 350 
 
 is insolvent, there must be alleged and proven the loss sus- 
 tained by the creditor from the transfer, the amount of which 
 will be the difference between the amount he would have 
 received from the corporation if its property had not been 
 diverted and the amount which he can obtain from the corpo- 
 ration after its diversion." A judgment against a corporation 
 conclusively, in the absence of fraud or coUusion, establishes 
 the status of the plaintiff as a creditor of the corporation and 
 the amount of his claim, and is competent evidence against the 
 officers and directors of the corporation to enforce the per- 
 sonal liability imposed upon them by statute for any loss 
 sustained by creditors or stockholders of the corporation by 
 reason of a transfer of the corporation's property to any of 
 its officers, directors or stockholders for the payment of its 
 debt while insolvent." In the statement of a cause of action 
 against an officer or director of a corporation to impose upon 
 him, pursuant to statute, personal liability for a loss sustained 
 by a creditor or stockholder by reason of a transfer of its 
 property while insolvency exists or is imminent to an officer, 
 director or stockholder, it is not necessary to allege that the 
 defendant officer or director violated, or was concerned in the 
 violation of the statute, in his capacity as officer or director, 
 as " an officer may, without acting officially, violate the statute 
 by inducing other officers to transfer assets of the corporation 
 in violation of law to himself or to another." " A trustee in 
 bankruptcy may join all the officers and directors of a corpo- 
 ration and others as defendants in a single action to make 
 them account individually for transfers of its property when 
 they knew it was insolvent." In an action to compel officers 
 to account individually for property of their corporation 
 transferred while it was insolvent it is not necessary for the 
 plaintiff to allege that the corporation has defaulted in the 
 
 ^* Agnelli v. Shatzin, 68 Misc. 329, papers, and as individual benefited.. 
 
 123 N. Y. Supp. 797 (1910); St. Caesar v. Bernard, 156 A. D. 737, 
 
 Corp. L. § 66. 141 N. Y. Supp. 668; aflf'd 209 N. Y. 
 
 1= Caesar v. Bernard, 156 A. D. 570, 103 N. E. 1122; St. Corp. L. 
 
 724, 141 N. Y. Supp. 659 (1913); § 66. Defendant not director but 
 
 aff'd 209 N. Y. 570, 103 N. E. 1122; stockholder and treasurer when mort- 
 
 St. Corp. L. § 66. gage complained of was executed ; as 
 
 *° Caesar v. Bernard, 156 A. D. stockholder signed consent to execu- 
 
 736, 141 N. Y. Supp. 668; aff'd 209 tion of mortgage; and received there- 
 
 N. Y. 570, 103 N. E. 1122; St. Corp. from $2,500 corporate note. 
 L. § 66. Defendant was director; " Sherwood v. Holbrook, 178 A. D. 
 
 voted as such to authorize mortgage 462, 165 N. Y. Supp. 514 (1917) ; 
 
 said to be m-ade against the stat- Gen. Corp. L. § 591-a; St. Corp. L. 
 
 ute; as secretary executed necessary § 66. 
 
§§ 351, 352 DIRECTORS, OFFICERS AND AGENTS 397 
 
 payment of its notes or other obligations within the con- 
 templation of the statute.^* 
 
 § 351. Id.: For Failure or Falsity of Certificate of Payment 
 of Capital Stock. — The statute requires one-half of a corpo- 
 ration's capital stock to be paid in within one year of incor- 
 poration on penalty of its dissolution, and its directors within 
 thirty days after such payment to make a certificate of the 
 fact of such payment, signed and acknowledged by a majority 
 of themselves and verified by the president or vice-president 
 and secretary or treasurer, and to file it in the offices where 
 the certificates of incorporation are filed; but the statute 
 imposes no penalty upon them for not making and filing such 
 certificate, though it does provide that the corporation's dis- 
 solution for any cause does not take away or impair any 
 remedy against it, its stockholders or officers ' ' for any lia- 
 bilities incurred previous to its dissolution." ^° 
 
 § 352. Id.: To One Becoming Creditor or Stockholder on 
 Faith of False Representation In. — The officers and directors 
 of a stock corporation signing any certificate, report or public 
 notice made or given by them which is false in any material 
 representation are jointly and severally personally liable to 
 any person who has become a creditor or stockholder of the 
 corporation upon the faith of any such certificate, report, 
 notice or any material representation therein, and such lia- 
 bility exists to the amount of the debt contracted upon the 
 faith thereof if not paid when due or of the damage sustained 
 by any purchaser of or subscriber to its stock upon the faith 
 thereof, and whether the contents of such certificate, report or 
 notice or of any material representation therein has been 
 communicated directly or indirectly to the person so becoming 
 
 ^* Sherwood v. Holbrook, 178 A. D. in a corporation's report of its capi- 
 
 462, 165 N. T. Supp. 514 (1917) ; tal stock is not equivalent to an en- 
 
 St. Corp. . L. § 66. tire failure of the company to make 
 
 "Bus. Corp. L. § 5 (L. 1909, the required report, and does not 
 
 c. 12). In this note are collected per se render all the trustees liable, 
 
 cases under former statutes which Pier v. Hanmore, 86 N. Y. 95 
 
 imposed penalties for failure to file (1881) ; Gen. Mfg. Act, L. 1848, 
 
 or falsely to make a corporation's c. 40, §§ 12, 15; L. 1853, c. 333 § 14. 
 
 report of payment of its capital The report stated : " Capital stock, 
 
 stock: A report, whether true or $60,000; capital paid in, $36,500; 
 
 false made by a corporation, pur- amount existing debts, $30,130.24." 
 
 suant to statute, as to payment of As to false statements in reports 
 
 its capital stock, is a compliance with required by statute to be made to 
 
 so much of the law as requires it to public officer as basis of action at 
 
 be made. Bonnell v. Griswold, 89 common law for deceit against offi- 
 
 N. Y. 122 (1882) ; Gen. Mfg. Act, cers or directors personally, see note 
 
 L. 1848, c. 40, § 15. A misstatement in 6 L.R.A.(NjS.) 872. 
 
398 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 352 
 
 a creditor or stockholder, provided he became such on the 
 faith thereof ; but no action can be maintained for a cause of 
 action created by the liability aforesaid unless brought within 
 two years from the time the certificate, report or public notice 
 has been made, or give^ by the officers or directors of such 
 corporation.^" 
 
 '"St. Corp. L. § 35 (L. 1909, 
 c. 61). "The directors generally 
 cannot know, and have not the abil- 
 ity or knowledge requisite to learn, 
 by their own efforts, the true condi- 
 tion of the affairs of the company. 
 They select agents in whom they 
 have confidence, and largely trust to 
 them. They publish their statements 
 and reports, relying upon the figures 
 and facts furnished by such agents; 
 and if the directors, when actually 
 cognizant of no fraud, are to be 
 made liable in an action for fraud 
 for any error or misstatement in 
 such statements and reports, then 
 we have a rule by which every di- 
 rector is made liable for any fraud 
 that may be committed upon the 
 company in the abstraction of its 
 assets and diminution of its capital 
 by any of its agents, and he becomes 
 substantially an insurer of their 
 fidelity;" and such is not the law. 
 Wakeman v. Dalley, 51 N. Y. 27 
 (1872). 
 
 The following eases are instruc- 
 tive in considering the liability of 
 directors and officers under the 
 present statute because they were 
 decided on an earlier law basically 
 similar to the present statute (L. 
 1875, c. 611, § 21). The specific sec- 
 tion under the earlier law read in 
 whole : " If any certificate or re- 
 port made, or public notice given, 
 by the officers of any such corpora- 
 tion, shall be false in any material 
 representation, all the officers who 
 shall have signed the same shall be 
 jointly and severally liable for all 
 the debts of the corporation con- 
 tracted while they are officers 
 thereof." 
 
 A statute making a corporate 
 
 officer liable while such for the cor- 
 porate debts if a certificate, report 
 or public notice is made or given by 
 him which is " false in any material 
 representation " is not unconstitu- 
 tional. Huntington v. Attrill, 118 
 N. Y. 366, 23 N. E. 544 (1890); 
 L. 1875, c. 611, § 21. In order to 
 hold a corporate officer to his statu- 
 tory liability while such for the cor- 
 porate debts by reason of a certifi- 
 cate, report or public notice made 
 or given by him which is " false in 
 any material representation," it is 
 not necessary that he have knowl- 
 edge of the false statement. Hunt- 
 ington V. Attrill, 118 N. Y. 366, 23 
 N. E. 544 (1890); L. 1875, c. 611, 
 § 21. The statute making corporate 
 officers signing a false report or 
 certificate liable for all corporate 
 debts contracted while they are 
 officers does not " cover debts of the 
 corporation contracted before the 
 raaldng of the certificate or repwrt." 
 Torbett v. Godwin, 62 Hun, 407, 17 
 N. Y. Supp. 46 (1891); L. 1875, 
 c. 611, § 21. "Thus, the intention 
 was, first, to compel the filing of the 
 report, to make the directors liable 
 for all debts in case of failure in 
 this particular and to continue this 
 liability until compliance; then, 
 upon compliance, to create a new 
 liability in favor of all subsequent 
 creditors who might possibly be af- 
 fected by the falsity of any material 
 representation in the report as filed." 
 Torbett v. Godwin, 62 Hun, 407, 17 
 N. Y. Supp. 46 (1891); L. 1875, 
 c. 611, § 21. An action against a 
 director of a corporation by one of 
 its creditors to recover statutory pen- 
 alties for making and recording a 
 false certificate that the corpora- 
 
§ 352 
 
 DIRECTORS, OFFICERS AND AGENTS 
 
 399 
 
 tion's capital stock had all been 
 paid in must be tried in the county 
 where the certificate is to be re- 
 corded. Taylor v. Attrill, 31 Hun, 
 132 (1883) ; L. 1875, c. 611, §§ 21, 
 
 . The following decisions were ren- 
 dered under an act (L. 1848, e. 40, 
 § 15, i. e., the Gen. Mfg. Act) in 
 effect prior to the present statute 
 and the later L. 1875, c. 611, § 21, 
 supra; but similar in some degree 
 to both such prior statutes; and the 
 decisions may, therefore, be of help 
 in interpreting the present law. The 
 particular section of the act of 1848 
 read in whole: "If any certificate 
 or report made, or public notice 
 given, by the officers of any such 
 company, in pursuance of the pro- 
 visions of this act, shall be false in 
 any material representation, all the 
 officers who shall have signed the 
 same, knowing it to be false, shall 
 be jointly and severally liable for 
 all the debts of the company eon- 
 traxrfad while they are stockholders 
 or officers thereof." In seeking to 
 hold a corporate officer individually 
 liable for the corporation's debts on 
 the ground that he joined in making 
 and filing a false certificate that its 
 capital stock had been paid in the 
 plaintiff has the burden of estab- 
 lishing: "First, that the certifi- 
 cate filed was in point of fact false, 
 and second, that with knowledge of 
 its falsity the defendant signed it." 
 Ferguson v. Gill, 74 Hun, 566, 26 
 N. Y. Supp. 596 (1893); L. 1848, 
 c. 40, § 15. A pefson is not liable 
 to suit for the debt of a corporation 
 of which he is trustee because of 
 the falsity of the report filed of its 
 affairs unless the report was false, 
 or the trustee signed it knowing it 
 to be false, or he was guilty of fraud 
 or bad faith. Butler v. SmaUey, 101 
 N. Y. 71, 4 N. E. 104 (1885) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 15. In 
 an action against trustees of a cor- 
 poration to enforce their liability 
 under the statute for making a false 
 report of payment of its capital 
 
 stock, the" question is whether' they 
 signed the report " knowing it to 
 be false ", within the meaning of the 
 statute; and they do not so sign it 
 if they merely know that the whole 
 capital has not been paid in, in cash, 
 when the report says the capital has 
 been fully paid in, but bad faith 
 and an intent to deceive must also 
 be shown. Bonnell v. Grjswold, 89 
 N. Y. 122 (1882); Gen. Mfg. Act, 
 L. 1848, c. 40, § 15; L. 1853, c. 333. 
 In order that a trustee of a corpo- 
 ration be held to have signed a re- 
 port of its capital stock " knowing 
 it to be false", so as to make him 
 liable for corporate debts, there must 
 be " a willful misrepresentation, 
 with actual knowledge of its falsity, 
 and not merely such constructive 
 knowledge as can be imputed from 
 the presumption that the officer sign- 
 ing the report knew the law and 
 comprehended the precise import of 
 the language used, when construed 
 with reference to statutory provi- 
 sions. ... a general statement 
 that so much capital had been paid 
 in would not, in common parlance, 
 be very far from correct, even 
 though the capital had not been all 
 paid in cash." Pier v. Hanmore, 86 
 N. Y. 95 (1881); Gen. Mfg. Act, 
 L. 1848, c. 40, §§ 12, 15; L. 1853, 
 c. 333, § 14. The report stated: 
 " Capital stock, $60,000; capital paid 
 in, $36,500; amount existing debts, 
 $30,130.24." A report of a com- 
 pany's capital stock that a certain 
 amount of its capital stock is paid 
 contains an untrue representation 
 and material misrepresentation that 
 it has been paid in cash, unless it is 
 specified that the alleged payment 
 consists of the issue of stock for 
 property purchased. Pier v. Han- 
 more, 86 N. Y. 95 (1881) ; Gen. Mfg. 
 Act. L. 1848, c. 40, §§ 12, 15; L. 
 1853, c. 333, § 14. The report 
 stated: "Capital stock, $60,000; 
 capital paid in, $36,500; amount ex- 
 isting debts, $30,130.24." A report 
 stating that a corporation's capital 
 stock is a stated amount and that 
 
400 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 352 
 
 it has been " paid up in ' full " im- 
 ports that it lias been paid in cash, 
 if it be not specified that the whole 
 or part of it has been paid in prop- 
 erty, and if some has been so paid, 
 the report contains an untrue repre- 
 sentation as to the amount of capi- 
 tal paid in, which is material. Bon- 
 nell V. Griswold, 89 N. Y. 122 
 (1882); Gen. Mfg. Act, L. 1848, 
 c. 40, § 15; L. 1853, c. 333. In de- 
 termining whether a director had 
 knowledge of the falsity of a report 
 that his corporation's capital stock 
 had been fully paid in, in an action 
 to hold .him for its indebtedness, the 
 facts that he had seen the property 
 for which the stock was issued, that 
 he knew its character, that he knew 
 a conduit passed title thereto to his 
 corporation, that this conduit gave 
 him a lot of stock gratis (as well as 
 his corporation), and that he voted 
 to pledge $70,000 of its bonds and 
 $100,000 of its stock for a loan of 
 $35,000, are all admissible. Blake 
 V. Griswold, 103 N. Y. 429, 9 N. E. 
 434 (1886) ; Gen. Mfg. Act, L. 1848, 
 e. 40, § 15. An action under the 
 statute imposing liability upon cor- 
 porate officers for the corporation's 
 debts as a penalty for a false report 
 is penal and must be tried in the 
 county where the cause of action 
 arose, which is the county in which 
 the false report is filed. Veeder v. 
 Baker, 83 N. Y. 156 (1880); Gen. 
 Mfg. Act, L. 1848, c. 40, § 15; 
 C. C. P. § 983. But under a more 
 recent statute it has been held that 
 an action against a treasurer of a 
 corporation by one who bought its 
 stock on the faith of a report of its 
 affairs made by him pursuant to 
 statute and alleged to be false is 
 not penal, and need not be brought 
 in the county where the cause of 
 action arose. Hutchinson v. Young, 
 SO A. D; 246, 80 N. Y. Supp. 259 
 (1903) ; St. Corp. L. § 31 (L. 1892, 
 c. 688) ; C. C. P. § 983. The right to 
 enforce the liability imposed by stat- 
 ute on an officer for the debts of his 
 corporation ooniracted while he is 
 
 such if any certificate signed by him 
 be materially false is not dependent 
 upon the creditor's reliauee upon 
 such certificate or upon the creditor 
 being the original creditor rather 
 than the latter's assignee. Ferguson 
 V. Gill, 64 Hun, 284, 19 N. Y. Supp. 
 149 (1892); L. 1848, c. 40, § 15. 
 An action by a creditor of a cor- 
 poration against its officers to re- 
 cover the indebtedness by reason 
 of their false statement of the 
 amount of its capital paid in dies 
 with the creditor. Brackett v. Gris- 
 wold, 103 N. Y. 425, 9 N. E. 438 
 (1886); Gen. Mfg. Aot, L. 1848, 
 c. 40, § 15. In an action to recover 
 from a director the amount of his 
 corporation's debt to the plaintiff 
 because of a false annual report 
 the corporate books are admissible 
 to prove the falsity of the state- 
 ment in the r^wrt of full pay- 
 ment of capital stock to some extent ; 
 the stock-book as presumptive evi- 
 dence of the facte recorded and 
 the minute books to show the- cor- 
 porate action as to the mode of 
 payment of the capital stock, though 
 not to show that the director in 
 question was charged with actual 
 knowledge of what transpired in his 
 absence. Blake v. Griswold, 103 
 N. Y. 429, 9 N. E. 434 (1886) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 15. It is 
 not essential, to relieve a oorporate 
 trustee from liability for his corpo- 
 ration's debts, for failure to make 
 and file its annual report, that it be 
 both made and filed within twenty 
 days after the first of the year; it is 
 sufficient if it be made within that 
 time, and then'filed within a reason- 
 able time after the expiration of 
 such period. Butler v. Smalley, 101 
 N. Y. 71, 4 N. E. 104 (1885) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 15. "To 
 prepare a report for filing and pub- 
 lication, to place it in good faith in 
 the hands of the secretary for de- 
 posit in the clerk's office and in the 
 office of a newspaper," and its fil- 
 ing on rebruaiy 13th, is a reason- 
 able filing. 
 
§ 363 DIRECTORS, OFFICERS AND AGENTS 401 
 
 § 353. Id.: For Misconduct and Mismanagement, Governing 
 
 Statutes. — An action may be maintained against one or more 
 trustees, directors, managers or other officers of a corporation 
 to procure a judgment compelling the defendants to account 
 for their official conduct, including any neglect of or failure to 
 perform their duties, in the management and disposition of 
 the funds and property committed to their charge ; compelling 
 the defendants to pay to the corporation which they repre- 
 sent, or to its creditors, any money and the value of any prop- 
 erty which they have acquired to themselves or transferred to 
 others or lost or wasted, by or through any neglect of or fail- 
 ure to perform, or by any other violation of, their duties; 
 setting aside an alienation of property made by one or more 
 trustees, directors, managers or other officers of a corporation 
 contrary to a provision of law or for a purpose foreign to the 
 lawful business and objects of the corporation, where the 
 alienee knew of the purpose of the alienation ; restraining and 
 preventing such an alienation, where it is threatened or where 
 there is good reason to apprehend that it will be made.^ The 
 Supreme Court also has and exercises jurisdiction in equity 
 at the suit of a corporation or of a receiver or of a trustee in 
 bankruptcy thereof, to compel one or more trustees, directors, 
 managers or other officers of the corporation to account for 
 injury to or losses of the funds, assets or property of the cor- 
 poration caused by or through any neglect or failure of the 
 defendants to perform, or for violation of, their duties.' 
 When the Attorney-General has good reason to believe that 
 an action can be maintained in behalf of the People of the 
 State against the trustees, directors, managers or other 
 officers of a corporation to procure a judgment to compel them 
 to account for their official conduct; to pay over what they 
 have acquired, transferred, lost or wasted through neglect of 
 their duties ; to suspend them for abuse of their trust ; to 
 remove them for misconduct and require a new ielection; to 
 set aside or restrain alienation of property by them contrary 
 to law, 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 interest requires that 
 an action should be brought, and if the case be one in which 
 the action can be brought only by the Attorney-General in 
 behalf of the People, if a creditor, stockholder, director or 
 trustee of the corporation applies to him for that purpose and 
 furnishes the security required by law, he must bring the 
 
 ^Gen. Corp. L. § 90 (L. 1909, 'Gen. Corp. L. § 96 (L. 1913, 
 c. 28). c. 633). 
 
 B. C. N. Y.— 26 . 
 
402 BUSINESS CORPORATIO'NS IN NEW YORK § 354 
 
 action, or apply for leave to bring it, if he has good reason to 
 believe that it can be maintained, and when such an applica- 
 tion is made section nineteen hundred and eighty-six of the 
 code of civil procedure applies thereto and to the action 
 brought in pursuance thereof.^ A defendant may be arrested 
 in an action when it is brought to recover for money received 
 or to recover property or damages for the conversion or mis- 
 application of property and it is alleged in the complaint that 
 the money was received or the property was embezzled or 
 fraudulently misapplied by an officer or agent of a corpora- 
 tion in the course of his employment.^ 
 
 § 354. Id.: In General. — "The relations of trust and fidelity 
 existed between the corporation and the directors, and not 
 between the latter and the shareholders, and they could be 
 held liable on the ground of negligence only for such damages 
 sustained by the corporation as were the natural and proxi- 
 mate result of their acts or omissions ": e. g., directors of a 
 company which did business for but one month cannot be 
 held liable to stockholders for all the money the latter had 
 invested and which was represented by stock; nor for all 
 debts on the theory that the shareholders personally were 
 legally liable theref or.° A stockholder pf a corporation can- 
 not hold a director and officer thereof to account for a trans- 
 action between the latter and the corporation which is 
 beneficial to the corporation and its stockholders and is 
 approved by a majority thereof at a meeting at which the com- 
 plaining stockholder was present but at which he expressed 
 no opinion.' Minority stockholders who have neither 
 assented to mismanagement of the directors of the corpora- 
 tion resulting in turning it over to a rival nor done anything 
 to estop themselves from demanding an accounting from the 
 directors, may demand it even from those directors who may 
 
 * Gen. Corp. L. § 304 (L. 1909, curity to indemnify the people 
 c. 28). Section 1986, C. C. P. pro- against the costs and expenses 
 vides: "Where an action is brought thereof. Where security is so given, 
 by the attorney-general, as pre- all costs and disbursements taxed in 
 scribed in this title, on the relation favor of the plaintiff shall be pay- 
 or information of a person, having able to the relator." (As amend'd 
 an interest in the question, the com- L. 1918, c. 104, effective Sept. 1, 
 plaint must allege, and the title of 1918.) 
 the action must show, that the ac- ^ C. C. P. § 549, subd. 2. 
 tion is brought upon the relation of ° Bloom v. Nat. Sav. & Loan Co., 
 that person. In such a case, the 152 N. Y. 114, 46 N. E. 166 (1897). 
 attorney-general must, as a condi- ' Steinway v. Steinway, 2 A. D. 
 tion of bringing the action, require 301, 37 N. Y. Supp. 742 (1896) ; 
 the relator to give satisfactory se- aff'd 157 N. Y. 710, 53 N. E. 1132. 
 
§ 365 DIRECTORS, OFFICERS AND AGENTS 403 
 
 have acted in good faith.* A stockholder cannot maintain an 
 action to recover damages from waste by his corporation's 
 directors after the appointment of a receiver for it, even 
 though the latter has refused to bring the action, if the 
 receiver, with approval of court, has transferred the corpo- 
 rate property under a contract which, among other things, 
 released the directors from any personal liability for their 
 acts as such.' An action by a stockholder ' ' in his own behalf 
 . . . and in behalf of all others similarly situated, against 
 defendants, who were directors . . . , to call them to 
 account as trustees for the manner in which they have dis- 
 charged their trust " is one of which a court of equity has 
 jurisdiction, although there may be issues which ought to be 
 tried by jury and may be ordered to be so tried.^° An action 
 prosecuted in the name of the People by the Attorney-General 
 pursuant to statute to compel directors to account for their 
 conduct and disposition of corporate funds is in the right of 
 the corporation and for its benefit, and the statute gives 
 rise to no new cause of action except with respect to the 
 removal or suspension of directors." " The effect of this 
 statute [giving the Supreme Court equity jurisdiction over 
 accountings by corporate officers] is to do away with the 
 distinctions recognized . . . between strict actions for an 
 accounting of property actually received and Jor wrongful 
 acts, and to authorize a single comprehensive action in equity 
 in which the directors or officers of a corporation may be 
 called to account for all of their acts while in office, whether 
 the said acts consisted of the actual misappropriation of 
 funds or mere negligence or neglect of duty, resulting in 
 damage." ^^ 
 
 § 355. Id.: Grounds of Action, In General. — " The officers 
 and directors of a corporation may not be called to account by 
 a stockholder as a matter of right, but only for some specific 
 act of negligence or misconduct in the management of the 
 affairs of the corporation, or in the disbursement of its 
 funds;" and it is therefore incumbent on the plaintiff to 
 
 * Jacobus V. Diamond Soda Water §§ 1781, 1782; now Gen. Corp. L. 
 
 Mfg. Co., 94 A. D. 366, 88 N. Y. § 90 et seq. 
 
 Supp. 302 (1904). ^' German- American Coffee Co. v. 
 
 " Ci-aig V. James, 71 A. D. 238, 7.5 Diehl, 86 Misc. 547, 149 N. Y. Supp. 
 
 N. Y. Supp. 813 (1902). 413 (1914) ; aff'd 168 A. D. 913, 152 
 
 " Brinckerho£E v. Bostwick, 105 N. Y. Supp. 1113; Gen. Corp. L. 
 
 N. Y. 567, 12 N. E. 58 (1887). § 91-a (L. 1913, c. 633). 
 
 ^'^ People V. Equitable Life Assur- Generally on liability of directors 
 
 ance Society, 124 A. D. 714, 109 of a corporation to the corporation, 
 
 N. Y. Supp. 453 (1908) ; C. C. P. see note in 55 L.R.A. 751. 
 
404 BUSINESS CORPORATIONS IN NEW YORK § 355 
 
 allege the particulars of his complaint, and he may be required 
 to give a specific bill of particulars, particularly if he has had 
 a complete examination by accountants of the corporation's 
 books and record." A payment by an officer of an amuse- 
 ment corporation to hush up one about to take steps to pre- 
 vent it from operating on Sunday is not merely ultra vires 
 but malum prohibitum or malum in se, and a stockholder may 
 in a representative action compel the officer to account for 
 the payment even though he knew of it and acquiesced." A 
 suit may be maintained by a stockholder on a complaint alleg- 
 ing that the officers of the corporation are helping themselves 
 to the corporate property and intend so to sell what is left 
 that they shall individually acquire it, and that they so control 
 the corporation as to make application to them or it for 
 redress unavailing, and asking an accounting and payment by 
 them to it of their misappropriations, an injunction against 
 the sale and a receiver, as such a suit is not for dissolution." 
 The mere fact that a creditor of a corporation secured by its 
 mortgage is also one of its directors and officers and fore- 
 closes is not enough to give the stockholders a cause of action 
 against him for an account of the corporate property on the 
 ground of its fraudulent acquisition by him.^° A stockholder 
 transferring to the president of the corporation individually 
 certain of his corporate stock " to be disposed of by him as 
 occasion may require for the prosecution of the interests of 
 the corporation " cannot complain of a transfer thereof by 
 such transferee to another stockholder, not fraudulently, but 
 to recompense the latter for sacrifice of his holdings of stock 
 in the company made for its benefit pursuant to the former's 
 promise, as president, that his sacrifice would be recognized 
 and his stock restored to him." " It is well settled that in 
 case the directors of a corporation combine with others to 
 defraud a shareholder of his interest in the corporation by 
 acts of spoliation, such conduct is actionable, and all persons 
 so combining may be made parties defendant in an equitable 
 action brought by a shareholder to restrain the consummation 
 of the wrong, and recover the damages occasioned by the 
 acts ' ' ; and the ' ' acts of directors and of third persons, 
 
 "Tilton V. Gaus, 155 A. D. 612, "Michel v. Betz, 108 A. D. 24], 
 
 140 N. Y. Supp. 782 (1913). 95 N. Y. Supp. 844 (1905). 
 
 ^* Roth V. Robertson, 64 Misc. 343, " Playa de Ora Mining Co. v. 
 
 118 N. Y. Supp. 351 (1909). Gage, 60 A. D. 1, 69 N. Y. Supp. 
 
 ^^Watkins v. Watkins & Turner 702 (1901); afE'd 172 N. Y. 630. 
 Lumber Co., 11 A. D. 517, 43 N. Y. 
 Supp. 41 (1896). 
 
§ 365 DIRECTORS, OrFICERS AND AGENTS 405 
 
 though constituting several independent causes of action in 
 favor of a corporation, may be so connected as to constitute a 
 single cause of action in favor of a shareholder against all of 
 the wrongdoers . . . ".^' For acts of nonfeasance cor- 
 porate directors are liable to an action at law for damages 
 and not to a suit in equity, for an accounting, etc. ; though if 
 the complaining stocMiolders have to come into equity any- 
 way, they may obtain relief in that suit against those direct- 
 ors.^^ A corporation may sue one of its directors who was a 
 stockholder in one of its subsidiary corporations for damage 
 caused it through depreciation in the value of stock in the sub- 
 sidiary corporation due to the alleged embezzlement* by the 
 rnanager of the subsidiary company of moneys of the plain- 
 tiff corporation and their application by him, with the alleged 
 acquiescence of such defendant director, and the latter 's 
 failure to advise the plaintiff corporation thereof. Such an 
 action does not contravene the rule that a stockholder, merely 
 as such, cannot have an action in his own behalf against one 
 who has injured the corporation, however much the wrongful 
 acts h.ave depreciated the value of his shares, because in such 
 case the stockholder sues another's agent, e. g., the directors 
 of a company, while in an action such as the one approved, 
 the stockholder is suing its own agent on the ground that its 
 agent (a director) is liable to it for failure to take the same 
 care of its property that men of ordinary and average pru- 
 dence take of their own property.^" " ... where the 
 action is to hold persons responsible to the receiver of a cor- 
 poration for a neglectful and wrongful performance of their 
 duties as directors and to recover the losses sustained by the 
 corporation, the action is one at law and . . . something 
 more is required to warrant the intervention of a court of 
 equity, than mere allegations showing that the acts com- 
 plained of are numerous and complicated ; that they are diffi- 
 cult of ascertainment, without a discovery with respect to 
 them, and that a multiplicity of actions would be necessary, 
 if all the directors, who were in office during the whole or a 
 part of the time within which the acts complained of were 
 committed, could not be associated as defendants in one 
 action, . . . That an action in equity will lie by a stock- 
 
 " Gray v. Fuller, 17 A. D. 29, 44 ^ General Rubber Co. v. Benedict, 
 
 N. Y. Supp. 883 (1897). . 215 N. Y. 18, L.R.A.1915F, 617, 109 
 
 ^'Moran v. Vreeland, 81 Misc. N. E. 96 (1915). 
 664, 143 N. Y. Supp. 522 (1913); 
 afi'd 162 A. D. 907, 146 N. Y. Supp. 
 1101. 
 
406 BUSINESS CORPORATIONS IN NEW YORK § 356 
 
 holder against the directors of his corporation, for violations 
 of their duties, or breaches of the trust committed to them, is 
 well settled .... But . . . there is a wide and vital 
 difference between such a case and one where the action is 
 
 by the corporation against its delinquent directors 
 
 In such actions as these the defendants, as directors, are not 
 proceeded against, strictly, as trustees, but as agents acting 
 for a principal and for any damage caused by their neglect 
 and violation of duty the remedy at law is adequate. . . . " * 
 A stockholder in a corporation owning a controlling interest 
 in another corporation cannot hold the directors of his corpo- 
 ration individually liable for negligence on the ground that 
 they did not prevent or seek tc recover a loan made by. such 
 other corporation to some of its directors in an alleged illegal 
 manner, unless it be alleged and proven that the directors 
 of such stockholder's corporation were guilty of a breach of 
 trust in failing to embark on a litigation to prevent or recover 
 such loan.^ 
 
 § 356. Id.: Under Statute — The grounds for an action 
 against a corporation 's trustees, directors, managers or other 
 offiqers are to make them account for their official conduct, 
 including any neglect of or failure to perform their duties, in 
 the management and disposition of the funds and property 
 committed to their charge ; to make them pay to the corpora- 
 tion or its creditors any money and the value of any property 
 they have acquired to themselves or transferred to others or 
 lost or wasted, by or through any neglect of or failure to per- 
 form or other violation of their duties ; to set aside an aliena- 
 tion of property made by them contrary to a provision of law 
 or for a purpose foreign to the lawful business and objects of 
 the corporation, where the alienee knew the purpose of the 
 alienation, or to restrain and prevent such an alienation, 
 where it is threatened, or where there is good reason to appre- 
 hend that it will be made f and to compel them to account for 
 injury to or losses of the funds, assets or property of the 
 corporation caused by or through any neglect or failure of the 
 defendants to perform, or for violation of, their duties.* In 
 order to hold a director liable for official misconduct under the 
 statute not merely misfeasance but actual malfeasance in 
 
 ^Dykman v. Keeney, 154 N. Y. ^ Gen. Corp. L. § 90 (L. 1909, 
 
 483, 48 N. E. 894 (1897). e. 28). 
 
 ^Holmes v. St. Joseph Lead Co., *Gen. Corp. L. § 91-a (L. 1913, 
 
 No. 2, 168 A. D. 688, 154 N. Y. Supp. e. 633). 
 513 (1915) ; aff 'd without opinion 
 217 N. Y. 619, 111 N. E. 1088. 
 
§ 356 DIRECTORS, OFFICERS AND AGENTS 407 
 
 office must be proven, i. e., " something more tlian the mere 
 impropriety or unlawfulness of the act," and, rather, " the 
 unjust performance of some act which the party had no 
 right, or which he had contracted not to do, in other words, 
 the performance of the act, the party being aware of the fact 
 that the right to act did not exist. " ° A cause of action for 
 damages caused by the mere neglect of directors properly to 
 perform their duties is contemplated by the statute permit- 
 ting a suit against them by the Attorney-General in the name 
 of the People." " The acquiescence of all the stockholders of a 
 corporation in the action of the directors in dealing with its 
 assets for the purpose of depriving future creditors of pay- 
 ment for their just claims, will not avail as a defense to a 
 suit brought by an officer under section 1781 of the Code of 
 Civil Procedure. ' ' '' An action may be maintained by the 
 Attorney-General under the ninetieth section of the General 
 Corporation Law when the purpose is to charge negligent 
 officers and directors with a loss sustained by the corporation 
 through their misfeasance as well as through their malfeas- 
 ance.* The statute permitting action by the Attorney-General 
 against corporate officers and directors makes no distinction 
 between an accounting for the fruits of fraud and for damages 
 arising from the loss of funds through official neglect.' 
 Directors who sell and transfer corporate assets without tak- 
 ing the steps provided for the protection of corporate cred- 
 itors by statute do so at their peril, and ' ' to set aside a fund 
 for the purpose of paying debts but without paying them is 
 no defense against a creditor whose judgment has been made 
 worthless by the sale of all of the debtor's property without 
 notice and the division of the proceeds among the stock- 
 holders and directors. ' ' ^° Though it is true that corporate 
 assets are a trust fund for payment of its debts, yet mere 
 failure by it formally to go through dissolution proceedings 
 does not entitle a creditor, in the absence of proof of fraud 
 
 'Stokes V. Stokes, 23 A. D. 552, * People v. Equitable Life Assur- 
 
 48 N. Y. Supp. 722 (1897) ; C. C. P. ance Society, 51 Misc. 339, 101 N. Y. 
 
 § 1781; now Gen. Corp. L. § 90. Supp. 354 (1906) ; C. C. P. §§ 1781, 
 
 ° People V. Equitable Life Assur- 1782; now Gen. Corp. L. § 90. 
 
 anoe Society, 124 A. D. 714, 109 "People v. Equitable Life Assur- 
 
 N. Y. Supp. 453 (1908) ; C. C. P. ance Society, 51 Misc. 339, 101 N. Y. 
 
 §§ 1781, 1782; now Gen. Corp. L. Supp. 354 (1906); C. C. P. §§ 1781, 
 
 § 90. 1782; now Gen. Corp. L. § 90. 
 
 ' Halpin V. Mutual Brewing Co., " Shalek v. Jetter, 171 A. D. 364, 
 
 20 A. D. 583, 47 N. Y. Supp. 412 155 N. Y. Supp. 975 (1915); Gen. 
 
 (1897); C. C. P. § 1781; now Gen. Corp. L. §§ 90, 91, 221; St. Corp. 
 
 Corp. L. § 90. L. §§ 16, 17. 
 
408 BUSINESS CORPORATIONS IN NEW YORK § 357 
 
 or bad faith, to recover from the directors the amount of his 
 claim when it affirmatively appears that he would not have 
 been entitled to the payment of any part had the corporation 
 been thus dissolved ; his remedy extends only to the property 
 which, but for the directors' action, would have been applic- 
 able to payment of his claim." A judgment creditor of a cor- 
 poration may compel to account for official misconduct and 
 pay his judgment such of the directors of the corporation as 
 transferred corporate property exceeding in value the amount 
 of such judgment to one of themselves and then dissolved it 
 without making provision for its creditors, but not such per- 
 sons as were at one time directors but not at the time 
 of the transfer of its property (having sold their stock) pro- 
 vided property was left in the corporation exceeding the 
 amount of the judgment." One cannot be directed to account 
 if the action against him is for fraud or official misconduct in 
 the management of corporate property and no such fraud or 
 misconduct is shown ; the action must be for an accounting.^' 
 § 357. Id.: Who May Sue, Stockholder.— "Where the objec- 
 tion to the acts of a corporation is that they are idtra vires, 
 without being either mala prohibita or mala in se, a stock- 
 holder cannot maintain an action in his own behalf based on 
 such objection, where he himself, with knowledge of the char- 
 acter of the acts, has acquired and accepted pecuniary bene- 
 fits thereunder. . . . The officers of a corporation who 
 are sued by stockholders for damages due to carrying on 
 business not authorized by its charter may defend by show- 
 ing the stockholders' acquiescence in or assent to the business, 
 express or implied."" A stockholder may not bring an 
 action directly against the officers of a corporation to make 
 them account to him personally for property which belongs 
 to the corporation: if fraud of .the officers or managers of a 
 corporation, whereby its assets are misappropriated, is 
 alleged, redress should be had by an action brought either by 
 the corporation to which the assets belonged or a stockholder 
 derivatively in behalf of the corporation.^' To warrant a 
 stockholder in bringing a representative action to redress 
 alleged wrongs of the corporation's officers, a refusal by the 
 board of directors to bring the action in the corporation's 
 
 " Curran v. Oppenheimer, 164 36 N. Y. Supp. 350 (1895) ; C. C. P. 
 
 A. D. 746, 150 N. Y. Supp. 369 § 1781; now Gen. Coip. L. § 90. 
 
 (1914) ; Gen. Corp. L. §§ 90, 91. "Wormser v. Metropolitan St. 
 
 " Cullen V. Friedland, 152 A. D. Ry. Co., 184 N. Y. 83, 7.6 N. E. 1030 
 
 124, 136 N. Y. Supp. 659 (1912); (1906). 
 
 Gen. Corp. L. § 90. "Brock v. Poor, 216 N. Y. 387, 
 
 1^ Stokes V. Stokes, 91 Hun, 605, 111 N. E. 229 (1915). 
 
§ 357 DIRECTORS, OFFICERS AND AGENTS 409 
 
 name is needed.'' " The liability of the directors of corpo- 
 rations for violations of their duty or breaches of the trust 
 committed to them, and the jurisdiction of courts of equity to 
 afford redress to the corporation, and in a proper case to its 
 shareholders, for such wrongs exist independently of any 
 statute.^ . . . The action to recover such losses . . . 
 should in general be brought in the name of the corporation, 
 but if it refuses to prosecute, the stockholders, wl;io are the 
 real parties in interest, will be permitted to sue in their own 
 names, making the corporation a defendant {citation). And 
 that course of proceeding is also allowed if it appears that 
 the corporation is still under the control of those who must 
 be made the defendants in the suit."" The right of the 
 stockholder to court relief for waste of corporate assets by 
 directors and officers does not depend on the extent of his 
 holdings.^* A minority stockholder waiting eight years to 
 attack a transaction of his corporation's directors as consti- 
 tuting a spoliation of its property is debarred from relief by 
 his laches." One who was a stockholder in a corporation at 
 the time of misconduct by its directors detrimental to its 
 interests but who had ceased to.be a stockholder at the time 
 of the commencement of a representative stockholder 's action 
 to hold the directors liable therefor is not a proper party 
 plaintiff.^" One who was a stockholder when he brought a 
 representative action against his corporation's directors for 
 fraudulent breach of trust though not so when the fraud was 
 committed may nevertheless maintain the action; and need 
 not first apply to the corporation to sue if it is still controlled 
 by such directors.^ A stockholder may, on behalf and for the 
 benefit of himself and other stockholders, compel restitution 
 
 ^* Leslie v. Lorillard, 31 Hun, 305 payments provided for in said con- 
 
 (1883). The following allegation in tract." 
 
 a complaint was held insufficient and " Brinekerhoff v. Bostwick, 8S 
 
 demurrable: " That heretofbre, and N. Y. 52 (1882). The receiver, who 
 
 before the commencement of this ac- had been a director, of a National 
 
 tion the plaintiff requested' the de- Bank, and who as director was al- 
 
 fendant. The 0. D. S. Co., of D., leged to be liable for misconduct, 
 
 to pay no more money to said J. L., was held not the proper plaintitf. 
 
 or his assigns, under said contract, U. S. R. S. § 5239. 
 
 marked B, and to commence an ac- ^^Nash v. Hall, 11 Misc. 468, 32 
 
 tion to procure the cancellation of N. Y. Supp. 701 (1895). 
 
 said contract and to recover from ^^ Norman v. Federal Mining & 
 
 said J." L. all sums of money paid to Smelting Co., 180 A. D. 325, 167 
 
 him under the same and under the N. Y. Supp. 794 (1917). 
 
 contract first herein mentioned. ^° Hanna v. Lyon, 179 N. Y. 107, 
 
 That said defendant has neglected 71 N. E. 778 (1904). 
 
 to bring such action and threatens ^ Young v. Drake, 8 Hun, 61 
 
 to continue to make the monthly (1876). 
 
410 BUSINESS CORPORATIONS IN NEW YORK § 358 
 
 to the corporation by directors of an amount paid by them to 
 an individual for services rendered it as secretary and treas- 
 urer which were pretended only.^ A stockholder in a corpo- 
 ration, in behalf of himself and other stockholders similarly 
 situated, may maintain an action against such corporation 
 and its directors, to set aside and enjoin transactions done 
 by such directors, in the name of the corporation, for their 
 own personal gain and benefit, and in fraud of the rights of 
 the plaintiffs and other bona fide stockholders, when the 
 directors have been requested to bring such action and 
 refused.^ " If the corporation failed to enforce the causes of 
 action [for an accounting against its directors], a stockholder, 
 on account of his personal interest as equitable owner of an 
 undivided share in the assets (citation), is permitted in 
 equity, although he has no standing at law, to bring an action 
 in the right of the corporation for the benefit of all. stock- 
 holders as well as himself, to enforce the causes of action, 
 whether of a legal or of an equitable nature; and in such 
 cases . . . because he is obliged to sue in equity, causes 
 of action both at law and in equity may be joined, but . . . 
 the defendants will be entitled to have issues settled and a 
 trial before a jury as to the charges which would otherwise 
 be of a legal nature . . ." ^ A stockholder will not be pre- 
 cluded from relief asked by him in the way of setting aside a 
 transfer of the assets of his corporation by its directors as 
 fraudulent because he also asks relief in the way of suspend- 
 ing its officers/ 
 
 § 358. Id.: Under Statute, Attorney-General. — The Attor- 
 ney-General, in behalf of the People of the State, may bring 
 
 ° Butts V. Wood, 38 Barb. 181 agreement on ground that it tends 
 
 (1862) ; aff'd 37 N. Y. 317. to promote monopoly, see note in 
 
 ^ Gray v. New York & Virginia 26 L.R.A.(N.S.) 153. 
 Steamship Co., 3 Hun, 383 (1875). On right of stockholder to attack 
 
 * People V. Equitable Life Assur- fraudulent transaction occurring be - 
 
 ance Society, 124 A. D. 714, 109 fore he acquired his stock, see note 
 
 N. Y. Supp. 453 (1908); C. C. P. in 38 L.E.A.(N.S.) 988. 
 §§ 1781, 1782; see now Gen. Corp. The necessity of applying to board 
 
 L. § 90. of directors as a condition of right 
 
 ° Whitman v. Holmes Publishing of stockholder to sue on behalf of 
 
 Co., 33 Misc. 47, 68 N. Y. Supp. the corporation^ is discussed in a 
 
 167 (1900) ; C. C. P. §§ 1781-2; see note in 51 L.R.A.(N.S.) 99, and the 
 
 now Gen. Corp. L. § 90. question of necessity of appl3ring to 
 
 As to whether corporation or body of stockholders as a condition 
 stockholder is real party in interest of right of stockholder to sue on be- 
 by whom action must be brought, half of the corporation, is discussed 
 see note in 64 L.R.A. 609. in note in 51 L.R.A.(N.S.) 112. 
 
 On right of stockholder to assail 
 
§§ 359, 360 DIRECTORS, OFFICERS AND AGENTS 411 
 
 an action to compel trustees, directors, managers or other offi- 
 cers of a corporation to account for their official conduct, 
 including any neglect of or failure to perform their duties, in 
 the management and disposition of the funds and property 
 committed to their charge ; of to compel them to pay to the 
 corporation or its creditors any money and the value of any 
 property they have acquired to themselves or transferred to 
 others or lost or wasted, by or through any neglect of or 
 failure to perform or any other violation of their duties ; or to 
 set aside an alienation of property made by them contrary to 
 a provision of law or for a purpose foreign to the lawful busi- 
 ness and objects of the corporation, when the alienee knew the 
 purpose of the alienation, or restraining and preventing such 
 an alienation when it is threatened or there is good reason to 
 apprehend that it will be made.® 
 
 § 359. Id. : Corporation. — The corporation may sue in the 
 Supreme Court in equity to compel one or more trustees, 
 directors, managers or other officers of the corporation to 
 account for injury to or losses of the funds, assets or property 
 of the corporation, caused by or through any neglect or fail- 
 ure of the defendants to perform, or, for violation of, their 
 duties.^ 
 
 § 360. Id.: Creditor. — A creditor of a corporation may 
 maintain an action against its trustees, directors, managers or 
 other officers to compel them 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 ; or to compel them to pay 
 to the corporation or 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 of by other violation, of their 
 duties; or to set aside any alienation of property made by 
 them contrary to a provision of law or for a purpose foreign 
 to the lawful business and objects of the corporation, when the 
 alienee knew the purpose, of the alienation; or to restrain and 
 prevent such alienation when it is threatened or there is good 
 reason to apprehend that it will be made." Only a judgment 
 as distinguished from an ordinary creditor may bring an 
 
 «Gen. Corp. L. § 90 (L. 1909, see note in 18 L. R. A.(N.S.) 664. 
 
 c. 28). ■ 672. 
 
 On right of Attorney-General, or ' Gen. Corp. L. § 91-a (L. 1913, 
 
 other representative of Sfcgte, to c. 633). 
 
 maiintain suit or proceeding to re- 'Gen. Corp. L. § 90 (L. 1909, 
 
 move oflScer of private corporation, c. 28). 
 
412 BUSINESS CORPORATIONS IN- NEW YORK § 361 
 
 equitable, representative suit under the statute to compel 
 the directors and officers of his corporate debtor to account 
 for their transactions.^ A certificate of incorporation author- 
 izing a company to buy and sell laces " and generally to carry 
 on any other business . . . which may seem . . . 
 capable of being carried on in connection with " the lace busi- 
 ness does not authorize stock gambling, and the directors 
 and stockholders cannot escape accountability to corporate 
 creditors for corporate funds used in such speculation by 
 authorizing the company to so speculate." 
 
 § 361. Id.: Director, Trustee, Receiver or Other Officer. — A 
 trustee, director, manager or other officer of a corporation, 
 having a general superintendence of its concerns, may main- 
 tain an action against its trustees, directors, managers or 
 other officers to compel the latter to account for their official 
 conduct, including any neglect of or failure to perform their 
 duties in the management and disposition of the funds and 
 property committed to their charge ; or to compel them to pay 
 to the corporation or its creditors any money and the value 
 of any property they have acquired to themselves or trans- 
 ferred to others or lost or wasted, by or through any neglect 
 or failure to perform, or by other violation of, their duties; 
 or to set aside an alienation of property made by them con- 
 trary to a provision of law or for a purpose foreign to the 
 lawful business and objects of the corporation, where' the 
 alienee knew the purpose of the alienation; or to restrain and 
 prevent such an alienation when it is threatened or there is 
 good reason to apprehend it will be made." A receiver 
 or trustee in bankruptcy of a corporation may sue in equity 
 in the Supreme Court its trustees, directors, managers or 
 other officers to make them account for injury to or losses 
 of its funds, assets or property caused by or through 
 any neglect or failure of the defendants to perform, or for 
 violation of, their duties.^^ A director has the statutory 
 right to maintain an action against an officer of his corpo- 
 ration for misappropriation of its funds." A director, as 
 distinguished from a stockholder', may bring an action for 
 an accounting by other directors of their acts and for 
 
 " Steele v. Isman, 164 A. D. 146, ^^ Gen. Corp. L. § 90 (L. 1909, 
 
 149 N Y. Supp. 488 (1914); Gen. c. 28). 
 
 Corp. L. § 91. 12 Gen. Corp. L. § 91-a (L. 1913, 
 
 I'Hehnsley & Co., Ltd. v. Dun- c. 633). 
 
 can Co., Inc., 98 Misc. 338, 164 N. Y. ^ Sehoenherr v. Van Meter, 215 
 
 Supp. 282 (1917); Gen. Corp. L. N. Y. 548, 109 N. E. 625 (1915); 
 
 §§ 90, 91, 91-a. Gen. Corp. L. §§ 90, 91. 
 
§ 362 DIRECTORS, OFFICERS AND AGENTS 413 
 
 the recovery of corporate moneys they have wasted, with- 
 out making the corporation a plaintiff, or alleging demand 
 of it to begin the action, or making any creditor a party 
 defendant, though he must make the corporation a party 
 defendant." An action by an individual director of a foreign 
 as well as of a domestic corporation may be brought in the 
 courts of the State to compel other individuals who, while 
 directors, had become wrongfully possessed of the corporate 
 funds and property, to account therefor.'" The right of one 
 who is a director to bring the statutory action against his 
 co-directors to obtain relief appropriate to their acts of mis- 
 conduct in managing the corporate affairs depends wholly 
 upon his holding the office of director ; so that on his ceasing 
 to be such the action abates.'^ Directors of a corporation 
 failing to perform their trust duty of administering its affairs 
 honestly and with reasonable prudence, not through excusable 
 neglect but by actual misfeasance in appropriating corporate 
 funds to their personal use, are responsible to a receiver of 
 such corporation, as the representative of both the corpora- 
 tion and its creditors, for damages which their misconduct has 
 occasioned to the corporation." Directors of one corporation 
 purchasing all the rights of incorporators of another company , 
 and paying therefor with the money of the company of which 
 they were directors are individually liable to a receiver of the 
 last named corporation for a waste of its funds, and are not 
 entitled to any right of subrogation against such incorpo- 
 rators to which the company of which they were directors 
 might have been entitled." 
 
 § 362. Id. : Practice in Actions, In General. — Equity will in 
 one suit compel various directors of a corporation to account 
 for their waste of its assets, though damages be asked as the 
 result of their official misconduct, and though they be not 
 equally culpable." " Except where it is sought by, or in 
 behalf of, the creditors of the corporation to hold its stock- 
 holders to some liability imposed by law, that persons, who are 
 stockholders, should be sued as defendants in a stockholder 's 
 
 " Miller V. Barlow, 78 A. D. 331, 825, 130 N. Y. Supp. 684 (1911) ; 
 
 79 N. Y. Supp. 964 (1903); C. C. Gen. Corp. L. §§ 90, 91; C. C. P. 
 
 P. §§ 447, 448, 1782. . See now Gen. § 756. 
 
 Corp. L. §§ 91, 91-a. " Bowers v. Male, 186 N. Y. 28, 
 
 ^= Miller v. Quincy, 179 N. Y. 294, 78 N. E. 577 (1906). 
 
 72 N. E. 116 (1904) ; C. C. P. " Gilbert v. Finch, 173 N. Y. 455, 
 
 §§ 1781, 1782, are not applicable. 61 L.R.A. 807, 66 N. E. 133 (1903). 
 
 only to domestic corporations. See ^^Mahon v. Miller, 81 A. D. 10, 
 
 now Gen. Corp. L. §§ 91, 91-a. 80 N. Y. Supp. 979 (1903). 
 
 ^« Hamilton v. Gibson, 145 A. D. 
 
414 BUSINESS CORPORATIONS IN NEW YORK § 362 
 
 action, merely, upon the allegation of their status as such, is 
 an extraordinary proceeding " ; and " the necessary defend- 
 ants to an action, where . . . the complainant charges 
 misconduct and malversation of funds on the part of some 
 one, or more, of the officers, or directors, of a corporation, are 
 the defaulting officials and the directors, or the trustees, who 
 direct, and are responsible for, the corporation " : not 
 other stockholders on whose behalf it is not suggested even 
 that the action is brought.^" A stockholder cannot sue some of 
 his' corporation's directors for waste without making the 
 corporation itself and the other stockholders parties/ In a 
 complaint by a stockholder against directors of the corpo- 
 ration for what they did or failed to do in respect of one of 
 its officer's and stockholder's acts in misusing the corporate 
 property, such officer need not be a party defendant, nor 
 those directors who have not countenanced such acts; but 
 possibly the refusal of the corporation itself to bring the 
 suit must be alleged." It is improper to sue individually 
 directors of a corporation not in existence at the time the lia- 
 bility of another corporation which is sued upon arose, merely 
 because such directors' corporation is a consolidation of the 
 other corporation and contracted to pay off the obligations 
 of its constituent companies ; as the consolidated corporation 
 is the proper defendant in an action against which all neces- 
 sary relief may be had.' A derivative action by a stockholder 
 to recover for his corporation. money from its directors is 
 equitable and causes thereof may be joined against several 
 directors with varying liability.* " In case A and B, directors 
 in a corporation, waste its funds during one year, and B and 
 C, directors, by some act not connected with a first devas- 
 tavit, waste its funds in another year, the three cannot be 
 joined in an equitable action brought by or in behalf of the 
 corporation to compel them to account for and pay the dam- 
 ages sustained by these independent, wrongful acts."" It is 
 
 ^"McCrea v. Robertson, 192 N. Y. Supp. 446 (1906) ; aff'd 112 A. D. 
 
 150, 84 N. E. 960 (1908). 760, 98 N. Y. Supp. 1052. 
 
 1 Smith V. Rathbun, 66 Barb. 402 = Nash v. Hall Signal Co., 90 Hun, 
 
 (1873). 354, 35 N. Y. Supp. 940 (1895), 
 
 ^ Smith V. Rathbun, 22 Hun, 150 ' ' wasting the property of a corpora- 
 
 (1880); dism'd 88 N. Y. 60. tion by its directors is a. tort. A 
 
 ' Chase v. Vanderbilt, 62 N. Y. is not liable for the acts of B and C, 
 
 307 (1875) The action was to re- and C is not liable for the acts of 
 
 cover guaranteed dividends of the A and B, and these independent, 
 
 old company. tortious acts constitute distinct 
 
 * Young V. Equitable Life Assur- causes of action which cannot be 
 
 ance Society, 49 Misc. 347, 99 N. Y. united in one complaint." 
 
§ 362 DIRECTORS, OFFICERS AND AGENTS 415 
 
 proper to make a stockholder a party defendant to an action 
 brought by his corporation against its president and treas- 
 urer, at his. request, to recover for their mismanagement, if 
 he has discontinued a representative action against it and 
 them because he failed to make a demand that it bring such an 
 action ; if his request that he be permitted, on giving bond of 
 indemnity to the corporation, to conduct the present action 
 by the corporation, instituted at his request, be refused ; and 
 if the attorney employed by the corporation as plaintiff be 
 the same as represented it and the president and treasurer 
 as defendants in the stockholder's discontinued action.® 
 
 In a representative stockholders' action by one stockholder 
 on behalf of the corporation against its officers for dereliction 
 of duty by them, seeking substantially a legal remedy, though 
 necessarily brought in equity because the corporation itself 
 ■will not sue, another stockholder against whom no relief is 
 sought cannot intervene as a party defendant/ In an action 
 by a stockholder against the officers and directors of his own 
 company to prevent them from calling a stockholders' meet- 
 ing to approve a sale of the corporate property to a second 
 corporation at a less price than has been offered therefor by 
 a third corporation, the second corporation cannot intervene ; 
 if such stockholders' meeting is essential to the sale.* It is 
 proper to grant an order bringing in as party defendant a 
 receiver of a company appointed after the action was begun 
 if it is by certain stockholders representing all stockholders 
 based on the mis- and mal-feasance of the corporate directors, 
 as the recovery inures to the corporation's benefit and the 
 receiver is entitled to possession of any such recovery.® 
 
 A cause of action to set aside a written contract entered 
 into between a corporation and one trf its directors inpaxtial 
 execution of a conspiracy whereby assets were wrongfully to 
 be diverted to him is properly united with a cause of action 
 to compel the corporate directors to account for the injurious 
 results of the arrangement of which the agreement was a 
 part." A cause of action by a shareholder to compel an 
 accounting by corporate directors for their acts and restitu- 
 tion by them of property wrongfully received by them cannot 
 
 * Ithaca Gas-Light Co. v. Treman, ' Seagrist v. Reid, 171 A. D. 755, 
 30 Hun, 212 (1883) ; C. C. P. § 452. 157 N. Y. Supp. 979 (1916). 
 
 'Hay V. Brookfield, 160 A. D. 277, " Bosworth v. Allen, 168 N. Y. 
 
 145 N. Y. Supp. 543 (1914). 157, 55 L.R.A. 761, 61 N. E. ^63 
 
 * Lewisohn Bros. v. Anaconda (1901) . 
 Copper Co., 29 A. D. 552, 51 N. Y. 
 
 Supp. 1089 (1898) ; C. C. P. §§ 447, 
 452. 
 
416 BUSINESS CORPORATIONS IN NEW YORK § 362 
 
 be joined with a cause of action by a shareholder to recover 
 damages he has personally sustained by reason of the 
 directors ' wrongful acts." In an action by a stockholder for 
 an accounting from individuals for salaries received as 
 officers of the corporation the question of the validity of the 
 election of the board of directors which voted the salaries 
 cannot be raised.^^ 
 
 "As between the directors of a corporation and a stock- 
 holder insisting upon his legal right to the protection of his 
 interests against an ill-advised or illegal act of the corpora- 
 tion, no relation exists which calls for the application of the 
 rule . . . which holds a suitor to his once stated objec- 
 tions, when asserting the default of a party with whom he 
 has contracted."" Directors answering a complaint based 
 on fraud and deceit in misconducting themselves by giving 
 out a false written report of their corporation's condition 
 need not verify their answer." Where an action is brought by 
 a stockholder against directors of a corporation whereby they 
 may be compelled to account for property of the corporation, 
 a proceeding to compel them to account is strictly an equitable 
 action-, and in determining the sufficiency or correctness of the 
 pleadings reference is to be had to the more liberal rule as to 
 joinder of causes of action and of defendants that prevails in 
 equity suits ; but when the action is brought against such 
 directors to recover damages for injury to or destruction or 
 appropriation of property of the corporation by its employee 
 while they were acting as directors with damage resulting to 
 the stockholder suing by reason of negligence and want of 
 proper care on their part, then the action is a legal one, and 
 the rules of pleading and procedure governing legal actions 
 apply." An action by receivers of an insolvent corporation 
 to recover against its directors for alleged misconduct and 
 breaches of trust remains one at law and cannot be held one 
 in equity though it allege that a multiplicity of suits will be 
 required in case the plaintiffs have to sue each director, join- 
 ing with him only those who aided him in the wrongful acts 
 which would make them liable, as the multiplicity of suits 
 which gives equity jurisdiction is a multiplicity against one 
 
 ^'^ Brown v. Utopia Land Co., No. ^* Thompson .v. McLaughlin, 138 
 
 2, 118 A. D. 364, 103 N. Y. Supp. A. D. 711, 123 N. Y. Supp. 762 
 
 59 (1907). (1910); St. Corp. L. § 31; C. C. P. 
 
 "Lewis V. Matthews, 161 A. D. § 837. 
 
 107, 146 N. Y. Supp. 424 (1914). i= Sayles v. White, 19 A. D. 590 
 
 i^PolIitz V. Wabash Railroad Co. 46 N. Y. Supp. 385 (1897); afE'd 
 
 No. 1, 150 A. D. 709, 135 N. Y. 154 N. Y. 763. 
 Supp. 785 (1912). 
 
§ 362 DIRECTORS, OFFICERS AND AGENTS 417 
 
 person and not against a multitude of people.'^ ' ' Where an 
 equitable action is commenced to require the oificers or 
 trustees of a corporation to account to the corporation for a 
 breach of their trust, allegations as to the dealings of the 
 officers or trustees of the corporation with the corporate 
 property would seem to be material and proper allegations in 
 the complaint ' ' ; and the court should be careful about order- 
 ing them stricken out." Granting that a corporation may sue 
 its directors in equity to recover losses sustained through their 
 negligence, and also granting (what- is most doubtful) that 
 the facts plead in a particular case suffice to support the 
 action as an equitable one as well as one at law, yet if the 
 prayer for relief be appropriate only to an action at law, it 
 will be held such.^^ In an action by a stockholder as represen- 
 tative of all others similarly situated for an accounting 
 because of misfeasance by defendants it mnst be alleged that 
 the latter are, or were at the time complaint is made of the 
 corporate action, directors of the corporation, as the fact 
 that they were stockholders does not make them liable." 
 
 " ... a stockholder has a remedy for losses sustained 
 by the fraudulent acts, and for the misapplication or waste of 
 corporate funds and property by an officer of a corporation : 
 but ... an action for injuries caused by such miscon- 
 duct must be brought in the name of the corporation, unless 
 such corporation or its officers, upon being applied to for such 
 a purpose by a stockholder, refuse to .bring such action. In 
 that contingency, and then only, can a stockholder bring an 
 action for the benefit of himself and others similarly situated, 
 and in such an action the corporation must necessarily be 
 made a party defendant. When a stockholder brings such an 
 action, the complaint should allege that the corporation, on 
 being applied to, refuses to prosecute ; and as tbis averment 
 constitutes an essential element of the cause of action, the 
 complaint is defective and insufficient without.it." It is not 
 only when the stockholder seeks to recover his share of the 
 loss which might be recovered from the company or when the 
 loss is caused by depreciation of market value that the com- 
 pany must be made a party.^° When redress is sought by a 
 
 "O'Brien v. Fitzgerald, 6 A. D. "Brown v. Utopia Land Co., No. 
 
 509, 39 N. Y. Supp. 707 (1896) ; 2, 118 A. D. 364, 103 N. Y. Supp. 
 aff'd 160 N. Y. 572, 44 N. E. 1126. 50 (1907). 
 
 " Seharf V. Warren-Scharf Pav- ™ Greaves v. Gouge, 69 N. Y. 154 
 
 ing Co., 15 A. D. 480, 44. N. Y. Supp. (1877). 
 491 (1897). 
 
 "O'Brien v. Fitzgerald, 143 N. Y. 
 377, 38 N. E. 371 (1894). 
 B. C. N. Y.— 27 
 
418 BUSINESS COEPORATlONS IN NEW YORK § 362 
 
 stockholder for " the loss of the corporate funds, resulting 
 from the misconduct of " individual directors, the cause of 
 action primarily is in the corporation and no stockholder can 
 maintain an action for the loss he has individually suffered 
 in the depreciation of the value of the share stock held by him ; 
 but " the action must be brought not only on behalf of the 
 plaintiff [stockholder], but also on behalf of all the other 
 stockholders of the company . . . It is quite plain that 
 the complaint in such an action should set forth but two 
 things : First, the cause x)f action in favor of the corporation, 
 which should be stated in exactly the same manner and with 
 the same detail of facts as would be proper in case the corpor 
 ration itself had brought the action; second, the facts which 
 entitle the plaintiff to maintain the action in place of the cor- 
 poration, that he is a stockholder therein, and that the corpo- 
 ration itself has either refused or unreasonably failed to, bring 
 the action.".^ In a stockholder's representative suit against 
 the corporation's directors based on fraud and a substantial 
 misappropriation of the corporation's stock through, a nomi- 
 nal purchase of property and the payment of a pretended 
 claim foj services two things must be set foj:th; "first, a cau^. 
 of action in favor of the corporation with, the game detaH of 
 facts as would be proper in case the corporation itself h^g, 
 brought the action ; second, the facts which (^ntitle the plaintjiff 
 to niaintain the action in place of the corporation.'"' Xv 
 actio]q.]3y astockholder seekifig to reeoverijfor the. corporation 
 from its < directors money owing it from, tliein.. can b,e,,ma|ia- 
 tained only by establishment of a cause qf actiop in th^.Qorpoj, 
 ration's favox and of the facts entitling the stockhpldex to Sj*e 
 in.its stead.' The coiwplaint in a, representative, ac|j.pit by a 
 siockholder tq enjoin acts of the officers of the corporajtion, and 
 to compel thpm to account, ^.s, such shquld allege "(1). tH^j 
 cause qf action in favor of th^ corporation, which s)iquld be 
 stated in exactly the s^me manner and with, the samedetaii 
 of facts as, would be, .proper iij, case the corporation^ had 
 brought the action; (2) the facts "Vi^h,ich entitle the plaintiff.. t.q; 
 
 "■ Kavaaaugli v. Conunonwealtli " Continental Securities Co. v. 
 
 Trust Co., 181 N. t. 121, 73 N. E. Belmont, 206 N. Y. 7,' 51 LiR'.i.' 
 
 562 (1905). The striking out of (N.S.) 112, 99 N. E. 138 (1912). 
 
 the ' statements in the complaint of * Young v. Equitable Life'Assiir- 
 
 the amount plaintiff' paid for his ance Society, 49 Misc. 347, '99 N. Y'. 
 
 stock and that its value had been Supp. 446 (igO^e); aff'd ll2 A. t). 
 
 reduced whefeby plaintiff had lost 760, 98 N. Y. Supp. 1052. 
 the sum sued for was upheld as 
 immaterial. 
 
§ 362 DIRECTORS, OFFICERS AND AGENTS 419 
 
 maintain the action in place of the corporation. ' ' * Ordinarily 
 no allegations are material or necessary to an action by a 
 stockholder to recover from individuar directors of a corpo- 
 ration damages for illegal acts whereby its assets have been 
 lost or wasted than the cause of action in its favor (stated in 
 exactly the same manner and detail as if the corporation itself 
 were suing), the facts which entitle the plaintiff to maintain 
 the action in place of the corporation, the statement that he is 
 a stockholder in the corporation and the allegation that the 
 corporation itself either has refused or unreasonably fails to 
 bring the action.' In a stotekholder 's representative suit it is 
 not necessary to altege in the complaint, in addition to a 
 demand upon and a tefiisal by the corporation and its board 
 of directors to bring the suit, that notice has been given of the 
 alleged fraud xtpon which the suit is based to the body of 
 stockholders ; that demand has been made of them that some 
 action be taken to redress the wrong ; and that such body has 
 refused to take action.* A stockholder's action against' his 
 corporation 's directors to recover damages sustained by it 
 bexjause of their mismanagement is a tepresent£ttive action and 
 the claim is arcorporate asset with the right of iaction thereon 
 primarily in fithe corpotatidn; so that'*' the eohaplaint should 
 allege a demand and express refusar [dfi the corporation] to 
 bring the actional or facts which ejtcuse the plaintiff from mak- 
 ing such a demahd, or stich 6ther facts as will Warrant' the 
 conclusion that the corpbration^s failure and' neglect to bring 
 the a&tioii after demand is so: unreasonable^ afeHb amount to a 
 refusal to act." ' A stockholder must're(!i^est his corporation' 
 to: bising an action ior misconduct of Jits 'directors before he 
 can. do so inrhis own name, unless' ithley are in control' of the 
 corporation.* In a represeMative actiShrby a stbckhblder f or 
 an accounting by dtreetors because of misfeasance there must 
 be 5afif allegation that a demand has been made upon ttte'cdrpo- 
 ratioff to bring the action or facts stated enabling' 'the stock^-' 
 holder t6 sue without such demand." Under a S'^iecified notice' 
 to a corporation, its officers and directors, allegations of a 
 complaint, in a stockhold6r's representative suit a'^^fhst such 
 directors (to recover its stock alleg^4il0: have beeii fraudu- 
 
 ■ * Weingreen v. Mieheffiaeher, 139 ' Kavanaugh v. Commonwealth' 
 
 A. ,D. ,931,, 124 N. Y. Supp. 41 Trust, Co., 103 A. D. 95, 92 N. Y. 
 
 (l'9ld). . . , ,, Supp: 543 (1905). • , . 
 
 ^ Kolb V. Mortimer, 135 A. D. 542,, ,« Polhemus v. Polhemus, 114 A,. D. 
 
 120 N. Y, Supp.. 543 (1909). , 781, 100 N. Y. Supp. 263 (1906). . 
 
 * Cojitingntal Securities Co. ,v., ,"■ Brown- v. Utopia Land Co., No. 2, 
 
 Belmont, 206 N. Y. 7, 51 L.R.A. 118 A.,D. 364, 103 N. ,Y. Supp. 50 
 
 (N.S.) 112, 99 N. E. 138 (1912). (1907). 
 
420 BUSINESS CORPORATIONS IN NEW YORK § 362 
 
 lently issued to them) of a request to the corporation, its 
 officers and directors, to bring the suit and of their refusal so 
 to do, were held sufficient.'" An action in behalf of one plain- 
 tiff stockholder and all other stockholders and creditors of a 
 corporation in behalf of the corporation, seeking an account- 
 ing by directors for waste, is in equity and must have the cor- 
 poration as a defendant and must allege a request of and 
 refusal by the directors to bring the suit, unless they con- 
 tinued such up to the commencement of the action." A 
 demand on the corporation to bring an action brought against 
 its directbrs by a stockholder is not necessary if the directors 
 sued for mis- or non-feasance are the same as control the cor- 
 poration when the suit is brought." A demand of a corpora- 
 tion to sue an officer to compel him to account for a payment 
 of corporate funds made by him illegally need not be made 
 when he controls the majority of its stock and elected its 
 directors." A stock- or bond-holder of an insolvent corpo- 
 ration may seek redress in equity for waste of its assets with- 
 out first demanding of the corporation that it bring the suit 
 if it is under the control of the very persons who must be 
 defendants in the suit." A demand on a corporation to bring 
 an action which a stockholder wishes to bring as representa- 
 tive of other stockholders similarly situated need not be made 
 as a prerequisite to institution of suit when the individual 
 persons against whom the wrong which is the subject of the 
 action is charged are the executive officers of the corporation 
 and also constitute a. majority of its acting board of 
 directors." The courts will restrain corporate officers and 
 compel them to render account of their acts at the instance of 
 one owning a minority of the stock in an equity suit in his own 
 name without asking the corporation to bring it in its own 
 name when such officers exclusively control the corporation.'* 
 A trustee of a corporation is not subject to the rule applic- 
 able to a stockholder that demand of and refusal by it to sue 
 trustees for their wrongful acts are conditions precedent to a 
 
 ^° Continental Securities Co. v. himself was one director, his brother 
 
 Belmont, 206 N. Y. 7, 51 L.B.A. another and his uncle the third. 
 
 (N.S.) 112, 99 N. E. 138 (1912). "Currier v. New York, West 
 
 " Corning v. Barrett, 22 Misc. 241, Shore & Buffalo R. R. Co., 35 Hun, 
 
 48 N. Y. Supp. 1013 (1898). 355 (1885). 
 
 ^^ Young V. Equitable Life Assur- " Jacobson v. Brooklyn Lumber 
 
 ance Society, 49 Misc. 347, 99 N. Y. Co., 184 N. Y. 152, 76 N. E. 1075 
 
 Supp. 446 (1906); aff'd 112 A. D. (1906). 
 
 760, 98 N. Y. Supp. 1052. "Lawrence v. Weber, 65 Misc. 
 
 "Roth V. Robertson, 64 Misc. 343, 603, 120 N. Y. Supp. 289 (1910). 
 118 N. Y. Supp. 351 (1909). He 
 
§ 362 DIRECTORS, OFFICERS AND AGENTS 421 
 
 suit by him ; and the following is, therefore, sufficient for an 
 action by a trustee against co-trustees to restrain them from 
 dealing with the corporate funds: " The existence of the cor- 
 poration is set forth; the character of the plaintiff as a trustee 
 and that of the defendants as co-trustees are alleged, together 
 with facts and circumstances justifying a conclusion that the 
 defendant trustees, if not restrained, will make an unlawful 
 alienation of the corporate property to the injury of the cor- 
 poration and its stockholders. " " To sustain an action by a 
 corporation against its treasurer to recover moneys received 
 by him it is not necessary to prove a demand before suit was 
 begun if the defendant asserts rights in himself to the money 
 in hostility to plaintiff's right/* 
 
 Directors not parties to an action cannot be examined 
 because their corporation is a party." When the claim of one 
 suing directors for waste of assets is in his complaint that he 
 is a stockholder (as well as other thiiigs) and the directors 
 deny his standing as stockholder, an order for their examina- 
 tion before trial cannot be limited to the sole issue of his 
 standing as stockholder but should perinit their examination 
 as to the waste alleged, within reasonable limits.^" Before an 
 obligation to disclose the affairs of a corporation to a stock- 
 holder suing directors for waste can arise which they must 
 satisfy in his attempt to secure their examination before trial 
 to frame his complaint, a demand and proper reason must be 
 shown.^ 
 
 If one creditor of a corporation bring a representative 
 action after its dissolution to hold its directors to personal 
 liability under its charter and the action is discontinued after 
 being dismissed on appeal, the plaintiff need not pay to other 
 creditors money received by him in settlement from the 
 defendants after such dismissal.^ 
 
 "Green v. Compton, 41 Misc. 21, fraud enough by the directors; they 
 
 83 N. Y. Supp. 588 (1903). gave as reasons for ordering the ex- 
 
 ^* East New York & Jamaica R. amination that the exact terms of 
 
 R. Co. V. Elmore, 5 Hun, 214 (1875). the agreements under which the di- 
 
 "Boorman v. Atlantic & Pacific rectors operated were unknown to 
 
 R. R. Co., 17 Hun, 555 (1879) ; aff'd plaintiff; that he did not know if 
 
 78 N. Y. 599 ; C. C. P. § 870. the corporate property had been di- 
 
 ^° Eckman v. Lindbeck, 178 A. D. verted to persons other than def end- 
 
 720, 165 N. Y. Supp. 145 (1917) ; ants ; that he did riot know the cor- 
 
 C. C. P. § 870; G. R. P. 82. poration's exact financial condition; 
 
 ^ Elmes V. Duke, 39 Misc. 244, 79 and the affidavits, too, failed to 
 
 N. Y. Supp. (1902) ; C. C. P. § 872, show the infonnation sought was 
 
 subd. 4; G. R. P. No. 82. The aflB- exclusively in .defendant's knowl- 
 
 davits on which the motion for the edge, 
 
 examination were based showed " Davids v. Bauer, 155 A. D. 97, 
 
422 BUSINESS CORPORATIONS IN NEW YORK § 362 
 
 An action by one stockholder in behalf of himself and other 
 stockholders against directors as trustees to call them to 
 account for the manner in which they discharged their trust 
 is an equitable action governed by the ten year statute of 
 limitations, and not by the three year statute of limitations 
 governing " an action against a director ... to enforce 
 a liability created by law," as the " law " referred to in this 
 latter statute is a statute law and not the common law under 
 which such an equitable accounting is had.' When other 
 stockholders become parties to a representative action by one 
 of their number to call directors to account for the discharge 
 of their trust the same limitation of time is applicable to them 
 for bringing the action as is applicable to the original plain- 
 tiff.* An action for recovery of damages by a receiver of a 
 corporation against its directors because of their waste of its 
 assets is barred by the six year statute of limitations." "A 
 corporation may have a cause of action in equity for an 
 accounting against one or more directors for an accounting 
 with respect to property of the corporation that has actually 
 came into his or their hands, or for a fraudulent breach of 
 trust with respect to the management of the corporation or its 
 property, and for the recovery of property lost and incidental 
 damages (citations) . It may also have one or more causes of 
 action at law against one or more directors for damages sus- 
 tained by the corporation in consequence of his or their 
 wrongful or negligent official acts falling within the terms 
 misfeasance or nonfeasance (citations). A suit in equity may 
 not be joined with an action at law against the same directors 
 (citation). In some of the cases, on the particular facts aris- 
 ing therein, it has been held that there is a concurrent remedy 
 at law and in equity, and in such cases equity applies the 
 statute of limitations that would govern at law."° The 
 statute of limitations and not laches determines if a cause of 
 action is barred, if it seeks to enforce a legal right, to wit, the 
 right of a corporation to recover from individuals damages 
 resulting from their misuse of its assets, even though the 
 enforcement of such right is sought in equity (where an 
 accounting maybe had to ascertain the sum of the damages.)' 
 
 140 N. Y. Supp. 55 (1913) ; afE'd N. Y. 530, 46 N. E. 837; C. C. P. 
 
 209 N. Y. 539, 102 N. E. 1101. § 382, subd. 6. 
 
 ^ BrinckerhoflE v. Bostwick, 99 * People v. Equitable Life Assur- 
 
 N. Y. 185, 1 N. E. 663 (1885); ance Society, 124 A. D. 714, 109 
 
 C. C. P. §§ 388, 394. N. Y. Supp. 453 (1908) ; C. C. P. 
 
 ^BrinckerhoflE v., Bostwick, 99 §§ 1781, 1782; now Gen. Corp. L. 
 
 N. Y. 185, 1 N. E. 663 (1885). §§ 90, 9L 
 
 = Mason v. Henry, 83 Hun, 546, 31 '' Pollitz v. Wabash R. R. Co., 207 
 
 N. Y. Supp. 1068 (1895); aflf'd 152 N. Y. 113, 100 N. E. 721 (1912^. 
 
§ 383 DIRECTORS, OFFICERS AND AGENTS. • 433 
 
 § 363. Id.: Under Statute. — In all actions against corporate 
 directors, trustees, managers or other officers for their mis- 
 conduct or negligence, whether in equity by the corporation, 
 its receiver or its trustee in bankruptcy, or by the Attorney- 
 General in behalf of the People of the State or a corporate 
 creditor or a corporate trustee, director, manager or other 
 officer having a general superintendence of its concerns, the 
 court, upon the application of either party, must make an 
 order directing the trial by jury of the issue of negligence or 
 neglect or failure to perform their duties ; and for that pur- 
 pose the questions to be tried must be prepared and settled as 
 prescribed in section nine hundred and seventy of the Code of 
 Civil Procedure.' In an action brought to procure a judgment 
 to compel the trustees, directors, managers or other officers 
 of a corporation to account for their official conduct, or to pay 
 oyer what they have themselves acquired, wasted, etc., or to 
 suspend them for abuse of trust, or to remove them for mis- 
 conduct and direct a new election, or to set aside or restrain 
 an alienation of property unlawfully made or contemplated 
 by them, or to account for injury or loss resulting from their 
 failure to perform, or violation^ of, their duties, a stockholder 
 is not excused from answering a question relating to the man- 
 agement 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 aiiy 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 must not be 
 used as evidence against him in a criminal action or special 
 proceeding." In an action brought to procure a judgment to 
 compel the trustees, directors, managers or other officers of 
 a corporation to account for their official conduct, or to pay 
 over what they have themselves acquired, wasted, etc., or to 
 suspend them for abuse of trust, or to remove them for mis- 
 conduct and direct a new election, or to set aside or restrain 
 an alienation of property unlawfully made or contemplated by 
 them, or to account for an injury or loss resulting from their 
 failure to perform, or violation of, their duties, 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 with- 
 out security grant an injunction order restraining the cred- 
 itors of the corporation from bringing actions against the 
 defendants or any of them for the recovery of a sum of money, 
 or from taking any further proceedings in such actions there- 
 
 «Gen. Corp. L. § 90 (L. 1909, 'Gen. Corp. L. § 301 (L. 1909, 
 
 e. 28), and § 91-a (L. 1913, e. 633). c. 28). 
 
424 BUSINESS CORPORATIONS IN NEW YORK § 363 
 
 tofore commenced ; and such an injnnction has the same effect, 
 and 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." In an action brought to 
 procure a judgment to compel the trustees, directors, man- 
 agers or other officers of a corporation to account for their 
 official conduct, or to pay over what they have themselves 
 acquired, wasted, etc., or to suspend them for abuse of- trust, 
 or to remove them for misconduct and direct a new election, 
 or to set aside or restrain an alienation of property unlaw- 
 fully made or contemplated by them, or to account for an 
 injury or loss resulting from their failure to perform, or 
 violation of, their duties, the court may, at any stage of the 
 action, before or after final judgment, make an order requir- 
 ing all the creditors of the corporation to exhibit and prove 
 their claims, and thereby make themselves parties to the 
 action, in such 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 there- 
 under ; except that, notwithstanding such order any such cred- 
 itor who may exhibit and prove his claim in the manner 
 directed by the order, with proof by affidavit or otherwise that 
 he has had no notice or knowledge thereof in time to comply 
 therewith, is entitled at any time before an order is made 
 directing a final distribution of the assets of such corporation 
 to have his claim received, and has the same rights and bene- 
 fits 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." Notice of the order must be given by publication in 
 such newspapers and for such length of time as the court 
 directs.^^ 
 
 An action in the name of the People brought by the 
 Attorney-General pursuant to statute to compel directors to 
 account for their conduct and disposition of corporate funds 
 is subject to the general rules of pleading." An action under 
 statutory authority brought by the Attorney-General in the 
 name of the People for removal or suspension of a director 
 
 " Gen. Corp. L. § 302 (L. 1909, ^ People v. Equitable Life Assur- 
 
 e. 28). anee Society, 124 A. D. 714, 109 
 
 "Gen. Corp. L. § 303 (L. 1909, N. Y. Supp. 453 (1908); C. C. P. 
 
 e. 28). §§ 1781, 1782; now Gen. Corp. L. 
 
 "Gen. Corp. L. § 303 (L. 1909. §§ 90, 91. 
 c. 28h 
 
§ 363 DIRECTORS, OFnCERS AND AGENTS 425 
 
 must be in equity because of the nature of the relief demanded, 
 and doubtless may be joined with a cause of action against 
 the same director for an accounting." In decreeing that 
 directors may be brought to account in action by the People 
 the Legislature did not intend that they be required when sued 
 to account as trustees of an express trust, without need of 
 specifying anything more than the fact that they are 
 directors ; because, while directors who have gone out of office 
 as well as those in office may be compelled to account, it is 
 incumbent on the plaintiff to allege the facts constituting the 
 negligence, misconduct, mal- or non-feasance for which the 
 directors are sought to be held." A judgment creditor 
 unknown to his corporate debtor at the time of a transfer of 
 all its assets, amounting in effect to its dissiolution, may hold 
 its directors for the value of the property transferred by them 
 equal to the amount of his claim and is not bound to go against 
 the transferee which agreed to assume the debts of the trans- 
 ferrer." While it is doubtless true that an action cannot be 
 maintained under the statute by a creditor individually to 
 compel the officers, etc., of the debtor corporation to account 
 for their acts and to pay anything they have acquired or trans- 
 ferred to others in violation of their duties, but must be 
 brought as a representative action, if it is made to appear that 
 the rights of other creditors are involved or should be pro- 
 vided for, yet such a point must be raised by the answer, and 
 cannot be considered if not put in issue until the appeal is 
 taken." One seeking to hold a stockholder and president of 
 a corporation for a claim against it under the statute cannot 
 do so by seeking only to recover the exact balance due on his 
 claim, irrespective of the rights of other creditors or of the 
 proportion -which his claim may bear to the total corporate 
 indebtedness, but must bring a representative action, describ- 
 ing himself in his representative capacity." In attempting to 
 join causes of action aganst directors in a statutory action to 
 
 "People V. Equitable Life Assur- N. Y. Supp. 514 (1908); aff'd 196 
 
 ance Society, 124 A. D. 714, 109 N. Y. 99, 26 L.R.A.(N.S.) 267, 89 
 
 N. Y. Supp. 453 (1908); C. C. P. N. E. 461; C. C. P. § 1781 et seq.; 
 
 §§ 1781, 1782; now Gen. Corp. L. now Gen. Corp. L. § 90 et seq. 
 
 §§ 90, 91. " Buckley v. Stansfield, 155 
 
 1^ People V. Equitable Life Assur- A. D. 735, 140 N. Y. Supp. 953 
 
 ance Society, 124 A. D. 714, 109 (1913); aff'd 214 N. Y. 679, 108 
 
 N. Y. Supp. 453 (1908); C. C. P. N. E. 1090; Gen. Corp. L. §§ 90, 91. 
 
 §§ 1781, 1782; now Gen. Corp. L. ^^ Davis v. Wilson, 150 A. D. 704, 
 
 §§ 90, 91. 135 N. Y. Supp. 825 (1912) ; Gen. 
 
 " Darcy v. Brooklyn and New Corp. L. § 90, subd. 2, and § 91. 
 York Ferry Co., 127 A. D. 167, 111 
 
426 BUSINESS CORPORATIONS IN NEW YORK § 364 
 
 compiel them to account for their oonduet it must be borne in 
 mind that a cause of action against all the members of the 
 board for their individual acts during a particular period 
 would not affect defendants who were members of a preceding 
 or succeeding board and that official acts of directors, whether 
 of mal- or non-feasance, separate and disconnected, cannot be 
 said either to have arisen out of the same transaction or out 
 of transactions connected with the same subject of action, the 
 subject of each cause of action being the particular loss or 
 damage sustained by the official misconduct of the directors 
 in office at a given time, who may be jointly and severally, or 
 only severally, liable and accountable to the corporation." 
 The statutory liability of corporate. directors to account for 
 their acts and pay anything they have acquired or transferred 
 in violation of their duties is several, -dnd a creditor may pro- 
 ceed against one or more of them Who are liable without 
 joining them all.^° The statute authorizes an action against a 
 single guilty director, without joining his co-directors.^ In an 
 action by the Attorney-General under the statute all officers 
 or directors who have, by their acts or omissions, caused a 
 loss to result, although at different times, may not be joined 
 and the separate instances of loss are to be treated as separate 
 causes of action, not as necessary allegations of fact to sup- 
 port one cause of action for an accounting.^ A reference 
 cannot be ordered in an action to compel corporate officers to 
 account for official misconduct until some proof of such mis- 
 conduct has been adduced and a determination to that effect 
 is reached by the trial judge and put in the form of an inter- 
 locutory judgment directing the account.^ 
 
 § 364. Id.: Relief Obtainable In Actions, In General. — 
 *' ... the directors of a corporation are charged with 
 
 "People V. Equitable Life Assur- 735, 140 N. Y. Supp. 953 (1913); 
 
 ance Society, 124 A. D. 714, 109 aff'd 214 N. Y. 679, 108 N. E. 1090; 
 
 N. Y. Supp. 453 (1908) ; C. C. P. Gen. Corp. L. §§ 90, 91. 
 
 §§ 1781, 1782, 484. "The rule is, I 'German-American Coffee Co. v. 
 
 think, well settled by decisions in Diehl, 86 Misc. 547, 149 N. Y. Supp. 
 
 analogous cases that whether the 413 (1914) ; aff'd 168 A. D. 913, 152 
 
 action be at law or in equity, the N. Y. Supp. 1113; Gen. Corp. L. 
 
 causes of action must affect all of § 91-a (L. 1913, c. 633). 
 
 the defendants, although it is not ^People v. Equitable Life Assur- 
 
 essential in equity that they shall all ance Society, 51 Misc. 339, 101 N. Y. 
 
 be affected alike; and those affected Supp. 354 (1906); rev'd 124 A. D. 
 
 by all of the causes of action, as well 714. See Gen. Corp. L. §§ 90, 91. 
 
 as those affected only by one or ' Stokes v. Stokes, 87 Hun, 152, 33 
 
 more, may properly demur upon N. Y. Supp. 1024 (1895) ; C. C. P. 
 
 this ground." § 1781, now Gen. Corp. L. §§ 90, 
 
 ™ Buckley v. Stansfleld, 155 A. D. 1013, 1015. 
 
§ 364 ■ DIRECTORS, OPFICERS AND AGENTS 427 
 
 the duties of trustees and bound to care for its property and 
 manage its affairs in good faith, and for a violation of that 
 duty resulting in waste of its assets, injury to its property, 
 or unlawful gain to themselves, they are liable to account m 
 equity the same as ordinary trustees." * "A court of equity 
 has power, at the instance of the proper party, through its 
 flexible and comprehensive action for an accounting, to inquire 
 into every official act of the officers and directors, and testing 
 them by the standard of good faith and the absence of gross 
 negligence, to compel restitution of property withheld, with 
 compensation for assets wasted, and to award damages for 
 the natural consequences of official misconduct, when such 
 damages are claimed, in connection with equitable relief, on 
 account of a general course of injurious action or a con- 
 spiracy to despoil the corporation. Even if part of the 
 relief could be had in actions at law, still, when it is sought 
 in connection with strictly equitable relief, such as the 
 discovery of trust property and the recovery thereof, and 
 the right to all relief springs from a common cause, such 
 as a conspiracy, all may be included in the sweeping action 
 for an accounting. " ° A prayer for judgment in an 
 action by a corporation or its receivers against its directors 
 for recovery of money lost to it through their negligence, 
 mis- or mal-feasance, cannot be said to be for equitable relief 
 if no accounting or discovery is demanded, and the relief 
 asked is that the damages be ascertained and when ascer- 
 tained that the plaintiff have judgment against the defend- 
 ants therefor." " ... while ... a receiver should 
 not be appointed to take possession of the property of 
 a corporation on the application of a stockholder charging 
 fraud against some of the trustees or directors, . . . such 
 directors may ... be restrained by injunction, from 
 committing any such fraudulent acts, on the application of a 
 stockholder; but such injunction should not apply to the 
 general business of the corporation, but to the particular acts 
 complained of . " ^ A receivership of a corporation and an 
 injunction against creditors prosecuting their claims should 
 not be continued in an action for waste of its assets and mis- 
 management and accounting by its directors after they have 
 
 * Bosworth V. Allen, 168 N. Y. 157, ' Howe v. Deuel, 43 Barb. 504 
 
 55 L.U.A. 751, 61 N. E. 163 (1901). (1865); R. S. 2d vol. pp. 462-3, 
 
 = Bosworth V. Allen, 168 .N. Y. 157, §§ 35-6. 
 55 L.R.A. 751, 61 N. E. 163 (1901). 
 
 ° Higgins V. Tefft, 4 A. D. 62, 38 
 N. Y. Supp. 716 (1896). 
 
428 BUSINESS CORPORATIONS IN NEW YORK § 365 
 
 retired and others have been elected in their places.* An 
 order, made in an action by one director to compel his 
 co-directors to account for mismanagement and waste, which 
 prevents collection from stockholders and directors person- 
 ally by corporate creditors, in that it restrain any action 
 against the corporation and so prevents the judgment and 
 execution against it which are conditions precedent to holding 
 the stockholders and directors to their statutory personal lia- 
 bility, is legally invalid.® 
 
 § 365. Id.: Under Statute. — The statutes permit judgment 
 that the corporate trustees, directors, managers or other 
 ofiScers account for their official conduct, including any neglect 
 of or failure ix) perform their duties, in the management and 
 disposition of the funds and property, . committed to their 
 charge; that they pay the corporation or its creditors any 
 money and the value of any property they have acquired to 
 themselves or transferred to others or lost or wasted, by or 
 through any neglect of, a failure to perform, or by other 
 violation of, their duties ; that an alienation of property made 
 by them be set aside if made contrary to a provision of laAv 
 or for a purpose foreign to the lawful business and objects of 
 the corporation, when the alienee knew the purpose of the 
 alienation; that such an alienation be restrained and pre- 
 vented, when it is threatened or there is good reason to appre- 
 hend that it will be made; and that they be compelled to 
 account for injury to or losses of the funds, assets or property 
 of the corporation caused by or through any neglect or failure 
 of the defendants to perform, or for violation of, their duties 
 — depending in each case upon who brings the suit.'" ' ' The 
 suspension or removal of the directors [of a corporation 
 can] . . . only be had in an action brought by the Attor- 
 ney-General . . . , but it is competent for a court of 
 equity at the suit of a stockholder to enjoin threatened acts 
 of mismanagement or waste or to appoint a receiver of the 
 corporate property to hold and manage it until a new election 
 of directors, where it satisfactorily appears that the directors 
 are acting fraudulently or in bad faith and in their own 
 interest and contrary to the plain interests of the corporation 
 and that such relief is necessary to the protection of the rights 
 of stockholders in the interim (citations) ; but it is manifest 
 that the appointment of a receiver for such purpose, as dis- 
 
 *Halpin v. Mutual Brewing Co., ^ Mason- v. New York Silk Mfg. 
 
 91 Hun, 220, 36 N. Y. Supp. 151 Co., 27 Hun, 307 (1882). 
 
 (1895); app. dism'd 148 N. Y. 744. "Gen. Corp. L. § 90 (L. 1909, 
 
 42 N. E. 1093. c. 28) ; § 91 (L. 1913, c. 633). 
 
§ 366 DIRECTORS, OFFICERS AND AGENTS • 429 
 
 tinguished from a receiver of the corporation itself in a pro- 
 ceeding for its dissolution, would be justified only in an 
 extreme case very satisfactorily shown. . . . it is compe- 
 tent for stockholders to bring an action against directors both 
 for an accounting and for the appointment of a receiver and 
 . . . any allegations of fact bearing upon the right to 
 relief in either respect is relevant. " ^^ A corporate creditor 
 suing corporate directors under the statute for an accounting 
 of their acts and payment of anything they have acquired or 
 transferred to others in violation of their duties is entitled t6 
 recover not the full amount of his judgment against the cor- 
 poration but such proportion of the value of the property 
 transferred as his claim as a creditor, in connection with other 
 creditors existing at that time, bears to the value of the prop; 
 erty transferred.^^ In the absence of fraud or bad faith or 
 evidence of sacrifice or loss of assets a stockholder cannot 
 compel a majority of corporate directors to close out the cor- 
 poration by statutory dissolution instead of sale in course of 
 business, even though the by-laws require unanimous vote by 
 the directors for selling out." 
 
 § 366. Agents: Employment and Compensation. — The 
 courts will not review the propriety of compensation to be 
 paid by a corporation to a manager under a contract made by 
 stockholders." One made general manager of a corporation 
 immediately before passage of a resolution of its board that 
 " the salary of the general manager for the ensuing year is 
 fixed at $2,000, payable in monthly installments " is engaged 
 for a year, if a general manager is not provided for in the 
 by-laws, and is not employed for a period terminable at the 
 board's pleasure." In the absence of being able to ascertain 
 from the language of the contract itself what the intent of the 
 parties was, it is a question of fact for the jury to decide 
 whether or not, after one has entered into a contract of 
 employment with a corporation by the terms of which he is to 
 receive by way of compensation a certain share of its profits, 
 it can, without his consent, increase its capital stock and 
 thereby deprive him of a certain proportion of the profits 
 which he would have been entitled to receive had the capital 
 
 ^^ Weleke v. Trageser, No. 1, 131 " Levin v. Mayer, 86 Misc. 116, 
 
 A. D. 731, 116 N. Y. Supp. 166 149 N. Y. Supp. 112 (1914); Gen. 
 
 (1909) ; C. C. P. §§ 1781, 1782, now Corp. L. art. xi, §§ 34, 11, subd. 5. 
 
 Gen. Corp. L. §§ 90, 91, 1811. " Warner v. Morgan, 81 Misc. 685, 
 
 "Buckley v". Stansfield, 155 143 N. Y. Supp. 516 (1913). 
 
 A. D. 735, 140 N. Y. Supp. 953 ^= Hough taling v. Upper Kittaning 
 
 (1913) ; afe'd 214 N. Y. 679, 108 Brick Co., 92 Misc. 228, 155 N. Y. 
 
 N. E. 1090; Gen. Corp. L. §§ 90, 91. Supp. 540 (App. T. 1915). 
 
430 BUSINESS CORPORATIONS IN NEW YORK § 367 
 
 remained at the same amount as when the contract was 
 entered into.^° " Where a person is employed for a corpo- 
 ration by persons assuming to act in its behalf, and renders 
 services, with the knowledge of its officers, and' without 
 objection on their part, and without notice that the contract 
 is not recognized, and the corporation accepts the benefits of 
 the services, the corporation will be held to have sanctioned 
 the contract and will be compelled to pay for the services 
 (citations) . Even if the corporation were not in existence at 
 the time of the employment, and the . . . persons were 
 not the agents of an existing corporation, but only promoters 
 of a prospective corporation, the . . . corporation would 
 seem to be liable, as it has been held that a preliminary agree- 
 ment made by promoters, the promoters and incorporators 
 being the same persons and the only stockholders of the cor- 
 poration, is binding on the corporation. " " " . . . where 
 a person is employed for a corporation, by one assuming If. 
 act in its behalf, and goes on and renders the services accord- 
 ing to the agreement, with the knowledge of its officers, and 
 without notice that the contract is not recognized as valid and 
 binding, such corporation will be held to have sanctioned and 
 ratified the contract, and be compelled to pay for the services, 
 according to the agreement." " 
 
 § 367. Id.: Proof of Authority.—" Every one knows that 
 corporations are artificial creations existing by virtue of law, 
 and organized for purposes defined in their charters ; and he 
 who deals with one of them is chargeable with notice of the 
 purpose for which it was formed; and when he deals with 
 agents or officers of one of them, he is bound to know their 
 powers and the extent of their authority. Corporations, like 
 natural persons, are bound only by the acts and contracts of 
 their agents done and made within the scope of their authority 
 (citation). ... It can never be presumed that an agent 
 of a corporation had authority to transact business which the 
 corporation itself was not, by its charter, authorized to 
 engage in. " "" " . . . where a person enters the business 
 place of a corporation, and is referred by the person found in 
 
 " Bradiburn v. Solvay Process Co., " Tister v. La Rue, 15 Barb. 323 
 
 18 A. D. 542, 46 N. Y. Supp. 161 (1853). 
 
 (1897). "Alexander v. Cauldwell, 83 
 
 '' Bernstein v. Lispenard Realty N. Y. 480 (1881). The corporation 
 
 Co., 53 Misc. 273, 103 N. Y. Supp. was oi^anized to mine coal on 
 
 210(1907). The services -were those leased property outside the State, 
 
 of a lawyer. The case referred to bring it to market and sell it — 
 
 is Burden v. Burden, 8 A. D. 160, in fact only to its stockholders ac- 
 
 40 N. Y. Supp. 499. cording to the amount of their sub- 
 
§367 DIRBCTORS, OFFICERS AND AGENTS 431 
 
 charge of the office to some particular party as a proper per- 
 son for the transaction of the particular business in hand, the 
 presumption must be that such person is authorized to bind 
 the corporation. " ^° Applying the familiar doctrine of agency 
 (to a claim that an act done in a corporation's name and under 
 corporate seal by its subordinate agents is void because with- 
 out due authority from it) that a principal cannot dispute an 
 agent's power if he approve it or ratify the act done, " the 
 ratification need not be declared in express terms. Mere 
 silence and acquiescence will in many cases be sufficient. So 
 it may be inferred from the acts and proceedings of the prin- 
 cipal in pais. "When he receives and appropriates the pro- 
 ceeds of a transaction done in his name and by his assumed 
 authority, there exists the highest possible evidence of his 
 approval. These rules . . . are also as plainly applic- 
 able to corporate as to other transactions where the dealing is 
 within the powers of the corporation." ^ "... in order 
 to bind a corporation it is necessary to prove that the one who 
 it is claimed acted for the corporation had authority, either 
 express or implied, to do so ; and where it is sought to hold a 
 corporation in any transaction, it is incumbent upon the one 
 alleging the fact to show that the person who claimed to act 
 for it had authority, express or implied, to represent and 
 bind it. " ^ One suing a corporation on a contract on the 
 ground that it was made by its authorized agent may prove 
 the latter 's authority by circumstances and conditions which, 
 would lead a reasonable man to conclude that he was acting 
 within the authority apparently recognized by the corpora- 
 tion.^ An approval by a corporation of a special contract 
 arranged by a manager of one of its departments with one of 
 its employees results from payment by it of the expenses of 
 exhibiting the goods agreed to be made by such cfDntract.* 
 
 scriptions, on a mutual plan. The and did part of his work under the 
 
 treasurer got plaintiff to sell . coal supervision of another of its em- 
 
 to various non-stoekholders with- . ployees. Held, the corporation 
 
 out the knowledge of other ofBeers could not get out of paying the 
 
 of the corporation. Held, the plain- undertaker's bill by pleading ultra 
 
 tiff could not hold the corporation vires. 
 
 for the price of the coal. ^ Curtis v. Leavitt, 15 N. Y. 2 
 
 2° Noll V. Aroher-Pancoast Co., 60 (1857). 
 
 A. D. 414, 69 N. Y. Supp. 1007 ^ Coney Island Automobile Co. v. 
 
 (1901). An undertaker was sent Boyton, 87 A. D. 251, 84 N. Y. Supp. 
 
 for by an officer of a eoi^oration to 347 (1903). 
 
 take charge of the body of its em- ^Goldstein v. Godfrey Co., 70 
 
 ployee killed in its plant; was en- Misc. 235, 126 N. Y. Supp. 622 
 
 gaged by such officer and referred (1911). 
 
 to another who agreed to his price, * Manne v. Siegel-Cooper Co., 20 
 
432 BUSINESS CORPORATIONS IN NEW YORK § 368 
 
 " ... it is not to be inferred as a matter of law that an 
 agent who was a mere general manager of a business, by 
 which term is meant one charged with the executive admin- 
 istration of the current business of the corporation, has the 
 authority to bind his principal to any contract [of employ- 
 ment] to run for a series of years, in the absence of proof of 
 authority to make such a contract; " and " while such an 
 authority may be inferred from evidence of acts of the general 
 manager, known to and acquiesced in by the ofiBcers of the 
 corporation," yet proof that its president was in and out 
 and saw the employed person rendering services and that the 
 letter of the manager containing the contract was copied in 
 the corporation's letter-book is insufficient to show ratification 
 by it.° A resolution by a corporate board of directors ratify- 
 ing an act of its agent is competent evidence of his authority ; 
 and although it may never have been communicated to the 
 other party to the transaction, yet an acquiescence by the cor- 
 poration in the transaction results from its acting under it 
 on the terms proposed by the other party.* " The recognition 
 by a corporation of acts on the part of an agent, similar in 
 character to those which may be in dispute, tends strongly to 
 establish the agent's authority." ' " The powers of the agent 
 of a corporation are such as he is allowed by the directors or 
 managers of the corporation to exercise within the limits of 
 the charter; and ihe silent acquiescence of the directors or 
 managers may be as effectual to clothe the agent with power 
 as an express letter of attorney. " * " The authority of the 
 agent could be properly proved only by the production of the 
 power of attorney issued to him by the company upon his 
 appointment, or by a resolution of the defendant's board of 
 directors, under which agents were employed by them and 
 prescribing their powers and duties. ' ' ° 
 
 § 368. Id.: Powers in General. — The liability of a corpora- 
 tion for its agents ' contracts in its behalf is later discussed.'" 
 The verification of pleadings in corporate actions is generally 
 discussed in the four hundred and forty-first section of this 
 
 Misc. 592, 46 N. Y. Supp. 352 » Olcott v. Tioga R. R. Co., 27 
 
 (1897). N. Y. 546 (1863). 
 
 ° Cemacho v. Hamilton Bank " Benninghoff v. Agricultural Ins. 
 
 Note & Engraving Co., 2 A. D. 369, Co., 93 N. Y. 495 (1883). The ques- 
 
 37 N. Y. Supp. 725 (1896); dism'd tion was of the authority of an 
 
 158 N. Y. 663, 52 N. E. 1123. insurance company to issue a policy. 
 
 " Dent V. North American Steam- ^^ See §§ 434, 436, 438, infra. 
 ship Co., 49 N. Y. 390 (1872). 
 
 'Olcott V. Tioga R. R. Co., 27 
 N. Y. 546 (1863). 
 
§ 368 DIRECTORS, OFFICERS AND AGENTS 433 
 
 book. Every corporation has power to make by-laws not 
 inconsistent with any existing law prescribing the powers and 
 duties of its agents and employees." ' ' There is no difference 
 in principle or precedent between the powers, duties and lia- 
 bilities of the agents of corporations and those of natural per- 
 sons, unless expressly made by the act of incorporation or 
 by-laws. " " ' ' The declarations of an agent or officer of a 
 corporation are not admissible, except when made as a part 
 of the res gestae, or in the performance of his duties as agent 
 or officer. "^^ " It cannot ... be maintained that the 
 bare appointment of an agent by words in praesenti, but hav- 
 ing reference to a business to be entered upon at some future 
 time, confers any authority on the agent in the interim to bind 
 the principal, although the appointment does not state that 
 the agency is not to become effective until a future time. ' ' " 
 To justify reliance by one dealing with a corporation on the 
 implied authority of an individual to make a contract with 
 him for the corporation, the making of the contract must be 
 practically indispensable to the execution of the duties dele- 
 gated to such individual by the corporation." ' ' Third per- 
 sons dealing with the agent of a mining or similar company, 
 who has been constituted its general resident manager, and 
 who is engaged in carrying on the business of the foreign 
 principal in a distant land, would have a right to assume, in 
 the absence of notice, that the manager's authority extends to 
 all such usual dealings as were necessary to carry on the busi- 
 ness from day to day, such as procuring the necessary sup- 
 plies or ordinary implements for the work, and to pledge the 
 credit of the principal for the payment of debts contracted 
 for these purposes."" Under a statute permitting a trustee 
 of an express trust to sue without joining with him the person 
 
 ^' St. Corp. L. § 30 (L. 1909, prevented his making the contract 
 
 c. 61). in question. The man was to sell 
 
 " New York, Providence & Boston out his property to the corporation 
 
 R. R. Co. V. Dixon, 114 N. Y. 80, after he had done certain work 
 
 21 N. E. 110 (1889). which was a condition to his own- 
 
 ^^ Cosgray v. New England Piano ing it. Before this happened he 
 Co., 22 A. D. 455, 48 N. Y. Supp. 7 orally represented to a vendor that 
 (1897). In an action for improper he was such corporate manager, 
 discharge plaintiff tries to prove ad- The suit was for the purchase price, 
 ■missions by his corporate employ- '^^ Miner v. Edison Electric li- 
 ar's treasurer to other persons. luminating Co., 22 Misc. 543, 50 
 
 i*Rathbun V. Snow, 123 N. Y. N. Y. Supp. 218 (1898); aff'd 26 
 
 343, 10 L.R.A. 355, 25 N. E. 379 Misc. 712, 56 N. Y. Supp. 801. 
 
 (1890). A corporate resolution ap- ^"Rathbun v. Snow, 123 N. Y. 
 
 pointed a man in foreign parts its 343, 10 L.R.A. 355, 25 N. E. 379 
 
 resident manager there. A by-law (1890). 
 B. C. N. Y.— 28 
 
434 BUSINESS CORPORATIONS IN NEW YORK § 369 
 
 for whose benefit the action is prosecuted, the executive agent 
 of a corporation may sue in his own name to recover on sub- 
 scription notes purporting on their faqe to be made with him 
 as executive agent of a corporation AVhereby the defendant 
 promised to pay money in exchange for stock." An auditor of 
 a corporation authorized by its president to settle an alleged 
 cause of action against it for a stated sum acts within the 
 scope of his apparent authority so as to bind it when he agrees 
 also to pay the expenses of the claimant's recovery from 
 injuries suffered by the alleged negligence of the company on 
 which the action is based.^' Authority from a corporation to 
 an agent to negotiate its bonds at not less than par and 
 accrued interest for the purpose of raising money to pay its 
 floating debts empowers him only to sell them for money or to 
 dispose of them so as to pay the company's debts, and does 
 not permit him to pledge them to secure its prior debts ; and if 
 such pledge is made, the pledgee cannot share in the proceeds 
 of the mortgage sale, as the bonds pledged are not the com- 
 pany's legal obligations." It seems that the position of sales- 
 man for a corporation gives the incumbent no implied 
 authority to make a contract by the year for the advertise- 
 ment of its goods by another.^" 
 
 § 369. Id.: Dealing with Corporation. — The power of a cor- 
 porate agent to deal with his corporation and the validity of 
 such dealings has been considered earlier in this book in con- 
 nection with the right of directors and officers to derive per- 
 sonal profit and advantage from their dealings with their cor- 
 poration.^ " The doctrine that when a person in the employ 
 of another in a certain line of work devises an improved 
 method or instrument for doing that work and uses the prop- 
 erty of his employer and the service of other employees to 
 develop and put in practicable form his invention, and 
 explicitly assents to the use by the employer of such inven- 
 tion, a jury or court trying the facts is warranted in findjng 
 that he has so far recognized the obligations of service flow- 
 ing from his employment and the benefits resulting from his 
 use of the property as to have given to such employer an 
 irrevocable license to use such invention (citations) is not 
 
 " Considerant v. Brisbane, 22 ^" Cook & Bemheimer Co. v. Haan, 
 
 N. Y. 389 (1860) ; Code, § 113. 21 Misc. 346, 47 N. Y. Supp. 131 
 
 " Maloney v. Hudson River Water (1897). 
 
 Power Co., 133 A. D. 499, 17 N. Y. On power of agent of corporation 
 
 Supp. 601 (1909). to indorse negotiable paper, see note 
 
 ^*Shaw V. Saranac Horse Nail in 27 L.R.A. 401. 
 
 Co., 144 N. Y. 220. 39 N. E. 73 ^ See § 280, supra, as to Directors, 
 
 (1894). and § 316. supra, as to Officers. 
 
§§370-372 DIRECTORS, OFFICERS AND AGENTS -435 
 
 applicable . . . where the acts of the parties preclude 
 any such finding." ^ 
 
 § 370. Id.: Service of Process Upon To Bind Corporation, 
 Governing Statutes. — The service of process in actions 
 against corporations is generally discussed in the four hun- 
 dred and forty-third section of this book. Personal service of 
 a summons upon a defendant domestic stock corporation must 
 be made by delivering a copy of it within New York State 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.^ 
 
 § 371. Id.: In General. — The court has no power, in an 
 action initiated by service of process upon an individual as 
 sole defendant, to substitute a corporation as defendant and 
 order that the service on the individual stand as personal 
 service on the corporation of which he is president and prin- 
 cipal stockholder.* 
 
 § 372. Id.: As Managing Agent. — Personal service of a 
 summons on a defendant domestic corporation may be made 
 by delivering a copy thereof within the state to its managing 
 agent.^ A general superintendent of the work of operating 
 the lines of a corporation, given that title to distinguish him 
 from superintendents of divisions of its lines and from super- 
 intendents o.f other departments of business, is a managing 
 agent of the company within the meaning of the code pro- 
 vision permitting service of process on a domestic corporation 
 upon its managing agent.° " ... when the corporation 
 has an oflSce in this State where a substantial portion of its 
 business is transacted by a person designated by itself as a 
 general agent, although followed by words indicating some 
 one department," the corporation is properly served with 
 process by service thereof upon him as a " managing 
 agent."' One designated as a domestic corporation's 
 " Assistant Superintendent," who has no general authority 
 
 ^Doseher v. Phelps Guardant agent of lessee of railroad corpora- 
 Time Lock Co., 89 Misc. 561, 153 tion, see note in 4 L.R.A.(N.S.) 272. 
 N. Y. Supp. 710 (1915)-, afl'd 172 »C. C. P. § 431, subd. 3. 
 A. D. 954, 157 Supp. 1123. « Barrett v. American Telephone 
 
 ^ C. C. P. § 431. & Telegraph Co., 138 N. Y. 491, 34 
 
 *Licausi v. Ashworth, 78 A. D. N. E. 289 (1893); C. C. P. § 431. 
 
 486, 79 N, Y. Supp. 631 (1903); ' Tuehband v. Chicago & Alton 
 
 C. C. P. § 723. The effect of the E. R. Co.,. 115 N. Y. 437, 22 N. E. 
 
 refusal to permit the change was to 360 (1889) ; C. C. P. § 432. The 
 
 make the Statute of Limitations an railroad's time-table, etc, described 
 
 effective bar to suing the corpora- him as its " general agent, passen- 
 
 tion. ger department." 
 
 Service of process on servant or 
 
436 BUSINESS COBPOBATIONS IN NEW YORK § 372 
 
 in the conduct of its business but whose authority*is limited 
 by such orders as the general superintendent gives him, is 
 not a " managing agent " on whom service of process against 
 the corporation may be made.' One introduced by a treasurer 
 and director of a corporation as the person in charge of the 
 company's affairs or its superintendent in a certain locality 
 is properly served with process against it as its managing 
 agent.' One is not a managing agent of a corporation upon 
 whom process against it may legally be served who was 
 employed for no stated time by its president to superintend 
 the running of its cars on part of its road not yet completed, 
 makes no contracts for it save for horses and feed for such 
 portion, hired two men by such president's direction, never 
 sells tickets or takes fares, has no control over or knowledge 
 of the corporation or its books or affairs.^" One who is fore- 
 man at a milk station or cheese factory maintained in one of 
 the counties of the State by a domestic corporation, in charge 
 when no one else was there, contracts with farmers for their 
 milk, employs needed help, verifies the answer in the action 
 as ■' agent " of the corporation, is a " managing agent " on 
 whom process against the corporation may be legally served, 
 though acting under general directions from headquarters." 
 An injunction against a railroad corporation binds it if served 
 on its division superintendent within whose division and 
 under whose direction the work is being done which is sought 
 to be enjoined." The division superintendent of a large and 
 important division of a railway company's road, remote from 
 its general offices, is a managing agent upon whom process 
 against it may be legally served." A person held out by a 
 domestic corporation as its manager and who occupies the 
 relation of a managing agent within this State, or any other 
 State where it may have business to transact, may be bind- 
 ingly served with process against the corporation as its 
 " managing agent " while within New York." 
 
 * Kramer v. Buffalo Union Eur- ^^ Rochester, Hornellsville & Lack- 
 
 nace Co., 132 A. D. 415, 116 N. Y. awanna R. R. Co. v. New York, 
 
 Supp. 1101 (1909) ; app. dism'd 196 Lake Erie & Western R. R. Co., 48 
 
 N. Y. 532, 89 N. E. 1103; C. C. P. Hun, 190 (1888); C. C. P. § 431. 
 
 § 431, subd. 3. " Brayton v. New York, Lake 
 
 " Behan v. Phelps, 27 Misc. 718, Erie & Western R. R. Co., 72 Hun, 
 
 59 N. Y. Supp. 713 (1899) ; C. C. P. 602, 25 N. Y. Supp. 264 (1893) ; 
 
 § 2879, and § 431, subd. 3. C. C. P. § 431, subd. 3. 
 
 '"Emerson v. Auburn & Owasco "Young & Fletcher Co. v. Wels- 
 
 Lake R. R., 13 Hun, 150 (1878). bach Light Co., 55 A. D. 16, 66 
 
 " Wesley v. Beakes Dairy Co., 72 N. Y. Supp. 1024 (1900) ; C. C. P. 
 
 Misc. 260, 131 N. Y. Supp. 212 § 432. 
 (1911) ; C. C. P. § 431. 
 
S§ 37S-^5 DIRECTORS, OFFICERS AND AGENTS 437 
 
 § 373. Id.: As Officer. — One employed in this State as man- 
 ager of a corporation at an annual salary of six thousand 
 dollars, with authority to act as its treasurer, and who has so 
 acted for a long time, will not be held a person on whom 
 process against it may not be served, simply because he 
 swears he has had no connection with the company for 
 several months." " ... where the officer served is the 
 general manager of a corporation, and as such manager is in 
 attendance in the State where service is made on the business 
 of the corporation, no matter to what extent that business 
 may be, service upon the manager would confer juris- 
 diction."'" 
 
 § 374. Id.: When Corporation in Receivership. — Actions 
 against receivers are fully discussed hereinafter." Service 
 of process against a corporation Upon a managing agent 
 after the appointment of receivers who had retained him is 
 good enough to bind the company.'* 
 
 § 375. Id. : Liabilities, In General. — In the absence of a per- 
 sonal promise or covenant, one signing a contract, who therein 
 represents himself to be the agent of a disclosed principal 
 and assumes to contract for such principal only, cannot be 
 held personally liable upon the covenants contained in such 
 contract ; so that if individuals sign their names to a contract 
 without any, indication added thereto of their official charac- 
 ter they are nevertheless not individually liable thereon if it 
 appears on the face of the contract that they contracted with 
 reference to corporate business and that they had authority 
 to make such contract on behalf of the corporation, even 
 though the contract is sealed with their individual seals.'* 
 A corporation acting as agent of an undisclosed foreign prin- 
 cipal to issue in this country certificates which could be trans- 
 ferred abroad into certificates of stock of a foreign company 
 is liable for failure to deliver in due course to the purchaser 
 valid certificates of such foreign company's stock when the 
 transfer agent corporation had opportunities for knowing 
 
 ^^ Persons v. Buffalo City Mills, 29 Admission or waiver of service by 
 
 A. D. 45, 51 N. Y. Supp. 645 (1898). statutory agent of corporation ap- 
 
 '®Rudd v.* McLean Arms & Ord- pointed to receive service see note 
 
 nance Co., 54 Misc. 49, 105 N. Y. in 2 L.R.A.(N.S.) 389. 
 
 Supp. 387 (1907). Service of process after appoint- 
 
 " See § 562, infra. ment of receiver, upon person des- 
 
 ^' Faltiska v. New York, Lake ignated by statute to receive service 
 
 Erie & Western R. R. Co., 12 Misc. for corporation see note in 47 
 
 478, 33 N. Y, Supp. 679, aff'd 151 L.R.A.(N.S.) 179. 
 
 N. Y. 650, 46 N. E. 1146; C. C. P. "Whitford v. Laidler, 94 N. Y. 
 
 § 431. . 145 (1883). 
 
438 BUSINESS CORPORATIONS IN NEW' YORK §§ 376^, 377 
 
 :^cts ^n]^r\owable to the purchaser.^ Irf attempting to hold 
 one f or -criiBmal libel as manager of a coxporation issuing a 
 newspaper under a penal statute charging such a manager 
 with, the publication of any matter contained in such news- 
 paper, , criminal intent is an essential element, the statute 
 must he, construed strictly in the accused's favor, and the 
 mere fapt that such an one held the oflBce of president, treas- 
 nrer or secretary is not sufficient to constitute him manager 
 within the statute.^ 
 
 § 376i Id.: Liabilities Common to Officers and Agents, For 
 Fraud in Procuring Organization of Corporation. — An offi- 
 cer, agent or clerk of a corporation, or of persons 
 proposing to organize a corporation, or to increase 
 the capital stock of a corporation, 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.^ 
 
 § 377. Id.: Liabilities Common to Directors, Officers and 
 Agents, For Political Contributions and Practising Law. — 
 Any director, officer, stockholder, attorney or agent of any 
 corporation which violates the statutory provision forbid- 
 ding any non-political stock corporation doing business in 
 New York from directly or indirectly paying or using or 
 offering, consenting or agreeing to paying or using any 
 money or property for or in aid of any political party, com- 
 mittee 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 reimbursement or indemni- 
 fication of any person for moneys or property so used; or 
 who participate in, aids, abets or advises or consents to any 
 such violation; and any person who solicits or knowingly 
 receives any money or property in violation of such provisions 
 — each and every one of them is guilty of a misdemeanor and 
 is punishable by imprisonment in a penitentiary or county 
 
 ^"McClure v. Central Trust Co., 128 N. Y. Supp. 837 (1911); afE'd 
 
 165 N. Y. 108, 53 L.R.A. 153, 58 212 N. Y. 612, 106 N. E. 1030; Penal 
 
 N. E. 777 (1900). Code, § 246. 
 
 ^People ex rel. Carvalho v. War- "Penal L. § 661 (L. 1909, c. 88). 
 den of City Prison, 144 A. D. .24, 
 
§ 378 DIRECTORS, OFFICERS AND AGENTS 439 
 
 jail for not more than one year and by a fine of not more than 
 one thousand dollars.' Every officer, trustee, director, agent 
 or employee of any corporatiijn (except one lawfully engaged 
 in a business authorized by the provisions of any existing 
 statute or one lawfully engaged in. the examination and insur- 
 ing of titles to real property or one employing an attorney 
 or attorneys solely in and about its own immediate affairs or 
 in any litigation to which it is or may be a party, or one organ- 
 ized for benevolent or charitable purposes or for the purpose 
 of assisting persons without means in the pursuit of any civil 
 remedy the incorporation of which may be approved by the 
 Appellate Division of the Supreme Court of the department 
 in which its principal office may be located) who directly or 
 indirectly engages in any of the acts prohibited for a corpo- 
 ration on the ground that they savour of the practice of law, 
 or who assists such corporation to do such prohibited acts is 
 guilty of a misdemeanor, and the fact that he is a duly and 
 regularly admitted attorney-at-law does not permit or allow 
 such fact as a defense upon his trial for violation of the stat- 
 utory prohibitions/ 
 
 § 378, Id.: For Omitting to Disclose Service On Himself of 
 Injunction Against Corporation. — A director, officer, agent 
 or employee of any corporation is guilty of a misdemeanor 
 who, if a notice of an application for an injunction affecting 
 the property or business of such 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.' A director of a corporation, i. e., 
 . any person having by law the direction or management of the 
 affairs of a corporation by whatever name described, is 
 deemed to have, such a knowledge of the affairs of the corpo- 
 ration as to enable him to determine whether any act, pro- 
 
 ^ Gen. Corp. L. § 44 (L. 1909, no person shall be prosecuted or 
 
 c. 28). " No person shall be ex- subjected to any penalty or forfeit- 
 
 cused from attending and testifying, ure for or on account of "any trans- 
 
 or producing any books, papers or action, matter or thing concerning 
 
 other documents before any court which he may so testify. or produce 
 
 or magistrate, upon any investiga- evidence, documentary or otherwise, 
 
 tion, proceeding or trial, for a vio- and no testimony so given or pro- 
 
 lation of any of the provisions of duced shall be received against him 
 
 this section, upon the ground or for upon any criminal investigation or 
 
 the reason that the testimony or -proceeding. 
 
 evidence, documentary or other- * Penal L., § 280 (L. 1916, c. 246). 
 
 wise, required of him may tend to See § 433, infra, for more detailed 
 
 convict him of a crime or to subject discussion, 
 
 him to a penalty or forfeiture; bat '^ Penal L., § 665 (L. 1909, e. 88). 
 
440 BUSINE&S CORPORATIONS IN NEW YORK § 379 
 
 ceeding or omission of its directors is a violation of the pro- 
 vision of the law just stated.' 
 § 379. Id.: For Fraud in Issue and Sale of Stocks and Bonds. 
 
 — An oflScer, agent or other person in the service of any cor- 
 poration formed or existing under the laws of New York 
 State or of the United States or of any state or territory 
 thereof or of any foreign government or country, who wil- 
 fully and knowingly, with intent to defraud: 1. Sells, pledges 
 or issues, or causes to be sold, pledged or issued, or signs or 
 executes, or causes to be signed or executed with intent to 
 sell, pledge or issue, or causes to be sold, pledged or issued, 
 any certificate or instrument purporting to be a certificate 
 or evidence of the ownership of any. share or shares of such 
 corporation, or any bond or evidence of debt, or writing pur- 
 porting to be a bond or evidence of debt of such corporation, 
 without being first thereto duly authorized by such corpo- 
 ration, or contrary to the charter or laws under which such 
 corporation exists, or in excess of the power of such corpo- 
 ration or of the limit imposed by law or otherwise upon its 
 power to create or issue stock or evidences of debt; or (2) 
 reissues, sells, pledges or disposes of, or causes to be reissued, 
 sold, pledged or disposed of, any surrendered or canceled 
 certificates, 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 exceed- 
 ing three thousand dollars, or by both.' 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, therein falsely indicated as an agent or officer 
 of such corporation, is forgery in the same degree as if that 
 person were in truth such officer or agent of the corporation 
 or association, state or government.' An officer, agent or 
 other person employed by any domestic or foreign corpora- 
 tion 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 
 script, certificate or other evidence of the ownership or trans- 
 fer of any share or shares of the capital stock of such corpo- 
 ration, or a bond or other evidence of debt of such corpo- 
 ration, or a certificate or other evidence of the ownership or of 
 
 'Penal L. § 667 (L. 1909, c. 88). 'Penal L. § 882 (L. 1909, c. 88). 
 
 'Penal L. § 662 (L. 1909, c. 88). 
 
§ 379 DIRECTORS, OrFICERS AND AGENTS 441 
 
 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 prescribed in section eight hun- 
 dred and ninety-three of the Penal Law for that offense, may 
 also be sentenced to pay a fine not exceeding three thousand 
 dollars.' Corpor-ate officers who have issued " false certifi- 
 cates of stock authenticated by them as genuine, and cast 
 them upon the market with fraudulent intent, are liable 
 to every holder to whose hands they may come by fair 
 purchase. ' ' " 
 
 The subject of fraud and deceit in the purchase and sale of 
 stock has been previously considered." 
 
 There is no basis for an action against an officer of a cor- 
 poration in his individual capacity for the recovery of dam- 
 ages sustained by a subscriber to the corporation's stock 
 through his fraud and deceit in inducing purchase of the 
 stock when he but made a written statement of its indebted- 
 ness for the purchaser even though he omitted therefrom the 
 amount involved in a pending action against the company 
 for the reason that he opined it would not be held in final judg- 
 ment; because the mere presentation of such a statement 
 doe^ not amount to an affirmation that it is true to his knowl- 
 edge." " The mere fact of being a director and stockholder 
 is not per se sufficient to hold a party liable for the frauds 
 and misrepresentations of the active managers of a corpo- 
 ration. Some knowledge of and participation in the act 
 claimed to be fraudulent must be brought home to the person 
 charged. . . . It is only when a director lends his name 
 and influence to promote a fraud upon the community, or is 
 guilty of some violation of law or other mismanagement, 
 that he is personally liable."" The rule that the mere fact 
 of being a director is not per se sufficient to render a party 
 liable for the fraud and misrepresentation of the active man- 
 agers of a corporation or the fraudulent representations of 
 an agent employed to market its stock has no application 
 when the inference is not permissible from the evidence that 
 the managers or agents in question were those of the corpo- 
 ration rather than of those promoting it." "It is hardly 
 necessary to say that a director of a company who knowingly 
 
 'Penal L. § 890 (L. 1909, c. 88). ^^ Arthur v. Gxiswold, 55 N. Y. 
 
 "Bruff v.'Mali, 36 N. Y. 200 400 (1874). 
 
 (1867). "Downey v. Finucane, 205 N. Y. 
 
 "See § 141 et seq., supra. 251, 40 L.R.A.(N.S.) 307, 98 N. E. 
 
 " Kountze v. Kennedy, 147 N. Y. 391 (1912) 
 124, 29 L.R.A. 360, 41 N. E. 414 
 (1895). 
 
442 BUSINESS CORPORATIONS IN NEW YORK § 379 
 
 issues or sanctions the circulation of a false prospectus, con- 
 taining untrue statements of material facts, the natural tend- 
 ency of which is to mislead and deceive the community, and 
 to induce the public to purchase its stock, is responsible to 
 those who are injured thereby. Mere exaggerated statements 
 of the prospectus of a new enterprise will not subject those 
 who make them to liability . . . that . . . trustees 
 . . . allowed their names and credit to be used to float, 
 what afterwards turned out to be a worthless stock . . . 
 alone does not constitute actionable fraud;" but if a trustee 
 is an originator and promoter of the company who had 
 examined its title to the property spoken of in the prospectus, 
 he stands in a different position.'^ One induced to sell his 
 stock in a corporation at one price which brings him less, 
 because of fraudulent representations by the corporate offi- 
 cers and directors as to the corporation's solvency, than he 
 would have received had he sold at another price offered him, 
 may hold his informants liable by an action for the difference." 
 Corporate directors not members of an executive committee 
 of their number appointed by them which employed an agent 
 to sell stock in an enterprise described in a pamphlet pre- 
 pared by it are not liable to suit based on false statements in 
 such pamphlet if they are not shown to have had any knowl- 
 edge of or any hand in preparing the booklet." "... a 
 director who knowingly issues or sanctions the circulation of a 
 false prospectus containing untrue statements of material 
 facts, the natural tendency of which is to deceive and mis- 
 lead the community and induce the public to purchase, the 
 stock, is responsible to those who are injured thereby."" 
 A director of a corporation may be held liable to one sub- 
 scribing to its stock if he became a director knowing it to be 
 insolvent, in order to facilitate sale of its stock by lending 
 his name to it, and if he was so negligent in permitting an 
 
 ^•■'Morgan v. Skiddy, 62 N. Y. A. D. 674, 120 N. Y. Supp. 501 
 
 319 (1875). (1909); afE'd 202 N. Y. 524, 95 
 
 '" Rothmiller v. Stein, 143 N. Y. N. E. 1125. The circular in part 
 
 581, 26 L.R.A. 148, 38 N. E. 718 said: " the Company has purchased 
 
 (1894). It does not follow that " if [described land] . . . net cost 
 
 a person simply refrains from act- of land $550,000;" but nowhere 
 
 ing, induced thereto by the fraud said the company had acquired title 
 
 of another, he can in no ease re- or paid said net cost. " I think any 
 
 cover damages sustained by him on one reading such a statement ■would 
 
 account of such fraud." be justified in assuming that the 
 
 " Ottmann v. Blaugas Co., 171 defendant company had paid that 
 
 A. D. 197, 157 N. Y. Supp. 413 cost of $550,000 and owned ' the 
 
 (1916). land . . ." 
 
 " Lehman-Cherley v. Bartlett, 135 
 
§ 3&0 DIRECTORS, OmCERS AND AGENTS 443 
 
 agent to run the corporation that the sale of the stock was 
 accomplished by false statements, as the obligation of a 
 director applies to prospective as well as existing stockhold- 
 ers." One purchasing the stock control of a corporation 
 through negotiations with its directors who in turn obtained 
 the consent of the stockholders individually to sell their hold- 
 ings at the agreed price cannot hold one of the directors who 
 took no active part in the management of the corporation and 
 no part at all in such negotiations and consent purely as an 
 individual to sell him stock for fraudulent representations 
 made in such negotiations.^" Neglect of duty, misconduct and 
 indifference in their position as directors may subject those 
 who are directors to any statutory penalty and to liability to 
 one who became stockholder by reason of fraud perpetrated 
 under color of their names for any losses- sustained by him; 
 but to admit of such directors being compelled to return to him 
 not only his damages but his entire investment and to assume 
 his holdings, the law requires that he should establish he was 
 the intfentional and not merely the incidental victim of such 
 directors ' delinquency.^ 
 
 § 380. Id.: For Omission of, or Making False Entry in Books. 
 — A director, officer, agent or employee of any corporation 
 either domestic or foreign and carrying on business or keep- 
 ing an office therefor in New York State is guilty of a misde- 
 meanor who (1) knowingly receives or possesses himself of 
 any of its property otherwise than in payment for a just 
 demand, and with intent to defraud omits to make or to cause 
 or to 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 and accounts.^ A director of a corporation, 
 i. e., any person having by law the direction or management 
 of the affairs of a corporation by whatever name described, is 
 deemed to have such a knowledge of the affairs of the corpo- 
 ration as to enable him to determine whether any act, pro- 
 ceeding or omission of its directors is a violation of the pro- 
 vision of law just stated.' 
 
 "Childs V. White, 158 A. D. 1, ^ Penal L., § 665 (L. 1907, c. 88). 
 142 N. Y. Supp. 732 (1913). ^ Penal L. § 667 (L.1909, c. 88). 
 
 ^° Garrett Co. v. McComb, 58 Injunction to enforce stockhold- 
 
 A. D. 419, 68 N. Y. Supp. 996 er's right to inspect corporate 
 (1901). books, see note in 45 L.R.A. 458. 
 
 ^ Lyon V. James, 97 A. D. 385, 90 
 N. Y. Supp. 28 (1904); affi'd 181 
 N. .Y. 512, 73 N. E. 1126. 
 
444 BUSINESS CORPORATIONS IN NEW YORK §§381-383 
 
 § 381. Id.: For Refusal or Neglect to Make Entries in and 
 Allow Inspection of Stock Book. — If any officer or agent of a 
 stock corporation wilfully neglects or refuses to make any 
 proper entry in its stock book or neglects or refuses to exhibit 
 it or allow it to be inspected and extracts taken therefrom as 
 permitted by statute, he and the corporation must each for- 
 feit and pay to the party injured a penalty of fifty dollars for 
 every such neglect or refusal and all damages resulting to 
 him therefrom.* A director, officer, agent or employee of any 
 corporation is guilty of a misdemeanor who, having the cus- 
 tody or control of its books, wilfully refuses or neglects to 
 make any proper entry in the stock book of such corporation 
 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 there- 
 from.= 
 
 § 382. Id.: For Refusal or Neglect to Make Report or State- 
 ment. — A director, officer, agent or employee of any corpora- 
 tion is guilty of a misdemeanor who refuses or neglects to 
 make any report or statement lawfully required by a public 
 officer." 
 
 § 383. Id. : For Falsity of or Omission in Statement of Cor- 
 porate Affairs. — If any certificate or report made or public 
 notice given by the officers or directors of a stock corpora- 
 tion is false in any material representation, the officers and 
 directors signing it are jointly and severally personally liable 
 to any person who has become 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, and such lia- 
 bility exists in all cases where the contents of any such certifi- 
 cate, report or notice or of any material representation 
 therein has been communicated either directly or indirectly 
 to the person so becoming a creditor or stockholder and he 
 became such creditor or stockholder upon the faith thereof; 
 but no action can be maintained for a cause of action arising 
 
 * St. Corp. L. § 32 (L. 1916, any stock list for any such purpose, 
 c. 127). " It shall be a defense to Nothing herein impairs the power 
 any action for penalties under this of the courts to compel by man- 
 section that the person suing there- damns or judgment the production 
 for has within two years sold or for examination by any stockholder 
 offered for sale any list of stock- of the stock books of a corpora- 
 holders of such corporation or of tion." 
 
 any other corporation, or has aided * PenaJ L. § 665 (L. 1909, c. 88). 
 
 or abetted any person in procuring * Penal L. § 665 (L. 1909. e. 88i. 
 
§ 383 DIRECTORS, OFFICERS AND AGENTS 445 
 
 from STich representation unless brought within two years 
 from the time the certificate, report or public notice has been 
 made or given by the officers or directors of such corporation/ 
 A director, officer, agent or. employee of any corporation is 
 guilty of a misdemeanor who knowin.gly (a) concurs in mak- 
 ing or publishing any written report, exhibit or statement of 
 its affairs or pecuniary condition containing any material 
 statement which is false, or (b) omits or concurs in omitting 
 any statement required by law to be contained therein.* A 
 director of a corporation, i. e., any person having by law the 
 direction or management of the affairs of a corporation by 
 whatever name described, is deemed to have such a knowledge 
 of the affairs of the corporation as to enable him to deterniine 
 whether any act, proceeding or omission of its directors is a 
 violation of the provision of law just stated.® 
 
 *St. Corp. L. § 35 (L. 1909, c. 61). 'Penal L. § 667 (L. 1909, c. 88). 
 •Penal L. § 665 (L. 1909, c. 88). 
 
CHAPTER Vni. 
 
 POWERS, DUTIES AND LIABILITIES OF CORPORATIONS. 
 
 XIII. Powers, Duties and Liabilities of Corporations. 
 
 A. In General, § 384. 
 
 B. Under Charter, § 385. 
 
 C. Under Statute, § 386. 
 
 D. Ultra Vires. 
 
 1. In General, § 387. 
 
 2. Specific Examples. 
 
 a. In General, § 388. 
 
 b. Helping Customers, § 389. 
 
 3. Plea of No Defense to Corporation if not Subserve Justice 
 
 or if Benefits Have Been Beeeived. 
 
 a. In General, § 390. 
 
 b. When Corporation Estopped', § 391. 
 
 c. Whey Other Party Estopped, § 392. 
 
 4. Defense of, Must Be Pleaded, § 393. 
 
 E. Dealings Affecting Debtors and Creditors. 
 
 1. Governing Statutes, § 304. 
 
 2. In General, § 394-a. 
 
 3. Borrowing Money. 
 
 a. In General, § 395. 
 
 b. Usury, § 396. 
 
 4. Assigning and Distributing for Benefit of Creditors, § 397. 
 
 5. Debtors in General, § 398. 
 
 6. Loaning Money, § 399. 
 
 7. Execution, Attachment and Garnishment. 
 
 a. As to Creditors, § 400. 
 
 b. As to Debtors, § 401. 
 
 8. Transfer While Insolvent or After Failure to Pay Lia- 
 
 bilities. 
 
 a. Governing Statutes, § 402. 
 
 b. In General, § 403. 
 
 c. What Constitutes Preferential Transfer. 
 
 aa. In General, § 404. 
 bb. Mortgage, § 405. 
 ec. Judgment, § 406. 
 dd. Intent to Prefer, § 407. 
 ee. When Does Insolvency Exist, § 408. 
 ff . Transfer By What Persons Prohibited, § 409. 
 gg. Transfer To What Persons Prohibited, § 410. 
 
 d. Who May Question Transfer, § 411. 
 
 e. Who Liable to Account for Property Transferred, 
 
 §412. 
 
 446 
 
POWERS, DUTIES AND LIABILITIES 447 
 
 ^ni. Powers, Duties and Liabilities of Corporatiohs — Continued: 
 r. Dealings With Other Corporations. 
 
 1. In General, § 413. 
 
 2. Interlocking Directorates, § 414. 
 
 3. Acquiring and Disposing of Stocks and Bonds of Another 
 
 Corporation. 
 
 a. Governing Statutes, § 415. 
 
 b. In General, § 416. 
 
 4. Combinations in Restraint of Trade. 
 
 a. Governing Statutes, § 417. 
 
 b. In General, § 418. 
 
 c. What is Trade or Commerce, § 419. 
 
 d. What Constitutes Restraint or Combination, § 420. 
 Gr, Internal Management, § 421. 
 
 H. Contracts, § 422. , 
 I. Commercial Paper. 
 
 1. In General, § 423. 
 
 2. Accommodation Paper, § 424. 
 J J. Torts. 
 
 1. Nuisance, § 425.- 
 
 ?. Libel .aV'd Slander, § 426. , . 
 "/ '^\ 3. Trespass, § 427., 
 ■' • 4:. False Representation, % 4:28. 
 
 ' • , .; ■ '■■■ 5. Maliciouls Prosecution, § 429. 
 ,• Kit; Crimes and Contempt, § ^30. 
 Li. Aniiual Report; § 431. 
 Mi Political Contributions, § ,432, 
 N. Practising Law and Medicine, § 433, 
 €K Liability for Others' Acts. 
 ;..'• 1. M ■•GeneM, % AZ4L ' ■ '■ ■<■'"■ 
 ;-,'r:2.ForTortsof,§4^.. b .'. -f. . 
 
 ,,,.,, .3. .For Oonfrocte, .%,.§' 436. 
 ^jl./ 4. For Crimes -By, ^ 437., ..y 
 
 5. TTfeew &orj!!or'^i!^o»j, iJetams benefit q/, § 438. . 
 P. ^ctio»7s 5j/ awd iLgriainst Corporations. 
 
 5;l. (JowrMWi^ y^ytMies, § 43. ' •-.,';: 
 
 2. 7n ff«itjeroZ>-§.439«.j . ' • .' ' . 
 
 ^. 3- 4i)eri»e»* and-Pro,of of Corporate Existence,.^ 440. ; 
 
 4. Verific(itionpf Pleadings, § 4;41. . . • 
 
 5. JMm3«ciioreiasZ §Mestio»is,.§ 442. .^.j. .. 
 
 6. Service of Process On, § 443. '. '' ' " ; 
 
 7. Cessation and Revivor, § 444. 
 
 8. ^c*io»S on is/otes, § 445.' • ■• '■■■''■ 
 mJ. . S. Costs an«''S'eew*% /or Coste,§ 446. ;■ 
 
 • :,• . 10. Examin^ion Before T,rial, § 447. 
 
 11. Inspection of Corporate Books, § 448. "■' '' 
 
 12. Wtoe'sses, §449. ■ > ' • ' '■' 
 
 13. Supplementctr^- Proceedings, § 450. 
 
 § 384. Powers, Duties and Liabilities of Corporations, In 
 General. — rKo , cprporation can possess or exercise any cor- 
 porate powers not given by law or not necessary to the exer- 
 cise of the powers so given ; but the certificate of incorpora- 
 tion of any corporation may contain any provision for the 
 
448 BUSINESS CORPORATIONS IN NEW YORK § 384 
 
 regulation of the business and the conduct of the affairs of 
 the corporation, and any limitation upon its powers or 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/ An injunction 
 order suspending the general and ordinary business of a 
 corporation can be granted only by the court upon notice of 
 the application therefor to the proper officer of the corpo- 
 ration; and if such an injunction order is made otherwise 
 than this way it is void.^ No corporation engaged in carrying 
 on public work under contract with the State or with any 
 municipal corporation of the State, either as a contractor or 
 subcontractor therewith, can directly or indirectly conduct 
 or carry on what is commonly known as a company store if 
 there is at the time any store selling supplies within two 
 miles of the place where such contract is being executed ; and 
 any corporation violating the prohibitions recited is guilty of 
 a misdemeanor.' The powers and contracts of a corpbration 
 incorporated in this State are to be determined by New York 
 law/ " Acts done by a corporation, which presuppose the 
 existence of other acts to make them legally operative, are 
 presumptive proofs of the latter." ° The acts of corporations 
 may be proved in the same manner as the acts of individuals ; 
 and if there be no record evidence they may be proved by the 
 testimony of witnesses, and even by facts and circumstances 
 from which the acts may be inferred, when no direct evidence 
 of them can be given.* " The powers of corporations are 
 those enumerated in the statutes under which they are incor- 
 porated, in general statutes, in the articles of association, and 
 like instruments executed in' pursuance of the statutes 
 . . . , and also such powers as flow from or are incidental 
 and necessary to the exercise of the enumerated powers.'" 
 " ... corporations, in the absence of restrictions 
 imposed by statute, have the power necessary to enable them 
 
 ^Gen. Corp. L. § 10 (L. 1909, ing Co., 150 A. D. 582, 135 N. Y. 
 
 c. 28). Supp. 900 (1912); app. dism'd 211 
 
 ' Gen. Corp. L. § 305 (L. 1909, N. Y. 578, 105 N. E. 1086. 
 
 c. 28). This statute applies not only 'Demings v. Supreme Lodge, K. 
 
 to a domestic corporation but to a of P., 131 N. Y. 522, 30 N. E. 572 
 
 foreign one which does business in (1892). 
 
 New York or has within New York 'Trustees of St. Mary's Church 
 a business or fiscal agency or an v. Cagger, 6 Barb. 576 (1849). 
 agency for the transfer of its stock; 'National Park B'k v. German- 
 see Gen. Corp. L. § 308. American Mutual W. & S. Co., 116 
 
 'Labor L. § 10 (L. 1909, c. 36). N. Y. 281, 5 L.R.A..673, 22 N. E. 
 
 *Hauk V. Consumers' Park Brew- 567 (1889). 
 
§ 384 POWERS, DUTIES AND LIABILITIES 449 
 
 to transact the business authorized by their charter.'" 
 " When we speak of the powers of a corporation, the term 
 only expresses the privileges and franchises which are 
 bestowed in the charter ; and when we say it cannot exercise 
 other powers, the just meaning of the language is, that as an 
 attempt to do so is without authority of law, the performance 
 of unauthorized acts is a usurpation which may be a wrong 
 to the State, or, perhaps, to the shareholders. But the usur- 
 pation is possible."" "Corporations, together with the 
 express and substantive powers conferred by their charters, 
 take by implication all the reasonable modes of executing 
 such powers which a natural person may adopt in the exercise 
 of similar powers."^" "Corporations possess only such 
 powers as are expressly granted by legislative enactment, 
 together with such others as are necessarily or fairly implied 
 in or are incidental to the powers thus granted or essential to 
 the declared objects and purposes of the corporation. The, 
 only exception to this rule is furnished by private corpora- 
 tions, which may exercise many extraordinary powers, pro- 
 vided all its stockholders assent and none of its creditors are 
 injured. Under these circumstances there is no one to com- 
 plain except the State, and the business being entirely private 
 the State does not interfere. " " A stock corporation may 
 guarantee the purchases made under a trust by which ven- 
 dors sell equipment to a trustee which leases it to such corpo- 
 ration and other corporations controlled by it which pay the 
 trustee such rentals as eventually to pay off certificates issued 
 by the trusts to purchase the equipment.^* Corporations may 
 agree to arbitrate and their submissions to arbitration need 
 not be under their corporate seals." It is unlawful for a cor- 
 poration to make a lease of all its property for a period of 
 over one year to an individual so as to suspend its business 
 for the term of the lease and make itself a mere instrument 
 in the hands of the lessee." " Bills confiscating the property 
 
 * Hope Mutual Life Ins. Co. v. " Fifth Ave. Coach Co. v. City of 
 
 Perkins, 38 N. Y. 404 (1868). The New York, 58 Misc. 401, 111 N. Y. 
 
 company sued on a note it had re- Supp. 759 (1908) ; aff'd 126 A. D. 
 
 ceived from an individual for the 657, 110 N. Y. Supp. 1037. 
 
 purpose of creating a fund to se- ^^ Venner v. New York Central & 
 
 cure the payment of losses incurred H. R. R. R. Co., 160 A. D. 127, 145 
 
 upon policies issued by it. N. Y. Supp. 725 (1914); aff'd 217 
 
 "Bissell V. Michigan Southern & N. Y. 615, 617, 111 N. E. 487; St. 
 
 Northern Indiana R. R. Co., 22 N. Y. Corp. L. § 6. 
 
 258 (1860). "Brady v. The Mayor, etc., of 
 
 " Snow, Church & Co. v. Hall, 19 Brooklyn, 1 Barb. 584 (1847). 
 
 Misc. 655, 44 N. Y. Supp. 427 " Conro v. Port Henry Iron Co., 
 
 (1897). 12 Barb. 27 (1851). 
 B. C. N. Y.— 29 
 
450 BUSINESS CORPORATIONS IN NEW YORK § 385 
 
 of citizens, or of associations, without judicial process are 
 forbidden by the Constitution ; and no person, corporation or 
 association authorized to acquire and hold property, can be 
 divested of, it by the fiat of any organization, nor in any way 
 without its consent, or by due process of law. ' ' " 
 
 § 385. Id.: Under Charter. — No corporation possesses or 
 can exercise any corporate powers not given by law or not 
 necessary to the exercise of the powers so given; but the 
 certificate of incorporation of any corporation may contain 
 any provision for the regulation of the business and the con- 
 duct of the affairs of the corporation and any limitation 
 upon its powers or the powers of its directors and stockhold- 
 ers which does not exempt them from the performance of 
 any obligation or the performance of any duty imposed by 
 law." " Where privileges are granted or exemptions con- 
 ferred by the legislature, in the shape of charters or grants to 
 , third parties, the grantees are to take only what is clearly 
 granted, and they shall take nothing by implication which is 
 not necessary for the full and fair enjoyment of the thing 
 granted."" " When we speak of what a corporation may, 
 or may not, do within its grant of powers, we have in mind 
 the reasonable intendments of its charter, as well as its clear 
 expressions of authority. We search, in a doubtful case of 
 an exercise of power, not in terms conferred, for what may 
 be deemed to be reasonably implied as a means of carrying 
 out the powers specifically given and so as to permit of the 
 amplest exercise thereof, which is consistent with the object 
 and purpose of the public grant. " ^° " Corporations are 
 artificial creations existing by virtue of some statute and 
 organized for the purpose defined in their charters. A person 
 dealing with a corporation is chargeable with notice of its 
 powers and the purposes for which it is formed, and when 
 dealing with its agents or officers is bound to know the extent 
 of their power and authority. A corporation necessarily car- 
 ries its charter wherever it goes, for that is the law of its 
 existence. ' ' ^° The legislature cannot legally incorporate a 
 body of individuals and convey to the corporation for private 
 purposes land under all the tide waters within the jurisdiction 
 
 "Wicks V. Monihan, 130 N. Y. ^^ Brooklyn Heights R. R. Co. v. 
 
 232, 14 L.R.A. 243, 29 N. E. 139 City of Brooklyn, 152 N. Y. 244, 46 
 
 (1891). N. E. 509 (1897). 
 
 ^^Gen. Corp. L. § 10 (L. 1909, "Jennison v. Citizens' Savings 
 
 c. 28). Bank of Jefferson, 122 N. Y. 135, 
 
 "Mayor, etc., of New York v. 9 L.R.A. 708, 25 N. E. 264 (1890). 
 Manhattan Rv. Co., 143 N. Y. 1, 37 
 N. E. 494 (1894). 
 
I 386 POWERS, DUTIES AND LIABILITIES 451 
 
 of the State, as the State holds title thereto as part of its 
 sovereignty and cannot alienate it except for some public 
 purpose or some reasonable use which can fairly be said to 
 be for the public benefit.^" A corporation accepting its char- 
 ter at a time when it is subjected to a burden cannot be heard 
 to object to its legality.^ 
 
 § 386. Id.: Under Statute.— No corporation possesses or 
 can exercise any corporate powers not given by law or not 
 necessary to the exercise of the powers so given; but 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 the powers of its directors and stock- 
 holders which does not _exempt them from the performance 
 of any obligation or the performance of any duty imposed 
 by law,^ Any provision in any corporate law in conflict 
 with any provision in the General, or Stock Corpo- 
 ration Law prevails, and such provision relating to a 
 matter embraced in the General, or Stock Corporation Law, 
 but not in conflict with it, is deemed to be an addition to the 
 provision in the General, or Stock Corporation Law, and 
 both provisions are in such case applicable.^ Nothing in the 
 General Corporation Law is to 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 has or was subject to on the 
 date when the General Corporation Law took effect, by virtue 
 of any special act of the Legislature creating such corpora- 
 tion, or creating or defining any such right or liability, unless 
 such special act is repealed by such General Corporation 
 Law or the other general laws mentioned.* "Any one who 
 knows how statutes are passed must be aware that the inten- 
 tion of the legislature would be extremely dififictilt to ascer- 
 tain, if, indeed, in the minds of many of the legislators any 
 such thing existed at all. ' ' ^ An enactment that ' ' words in 
 the singular number include the plural, and in the plural num- 
 ber include the singular " does not mean that always and 
 under all circumstances a word in the singular has a plural 
 
 "" Coxe V. State, 144 N. Y. 396, 39 ^ Gen. Corp. L. § 321 (L. 1909, 
 
 N. E. 400 (1895). c. 28). 
 
 ^ Mayor v. Broadway & Seventh * Gen. Corp. L. § 331 (L. 1909, 
 
 Ave. E. E. Co., 17 Hun, 242 (1879) ; c. 28). 
 
 L. 1860, c. 513, § 2, subjecting cor- ^People v. Delaware & Hudson 
 
 poration to license fee. Canal Co., 54 Hun, 598, 7 N. Y. 
 
 2 Gen. Corp. L. § 10 (L. 1909, Supp. 890 (1869); aff'd 121 N. Y. 
 
 c. 28). 666, 24 N. E. 1093; L. 1881, c. 361. 
 
452 BUSINESS CORPORATIONS IN NEW YORK § 386 
 
 meaning, as rules of construction are invoked only when the 
 language used leaves its purpose and intent uncertain or 
 questionable ; and they cannot be resorted to for the purpose 
 of enabling the courts to enlarge or extend the legislative 
 design or intent." The word " person " or " persons," when 
 used in a statute, includes corporations.' A corporation is a 
 " person " entitled to file a lien.* " Where the Legislature 
 has once provided a special rule for a particular case, a gen- 
 eral statute thereafter enacted, though broad enough in its 
 terms to be applicable to the case, will not, from that fact 
 alone, alter the special rule (citation) ; though, if there be a 
 general clause in the same statute with a special clause, the 
 latter shall not restrain the signification of the former (cita- 
 tion). It is still more reasonable, that where there has been 
 a general enactment covering the subject in general, in terms 
 which include the particular case, and there is a subsequent 
 enactment which makes a rule for that particular, that the 
 latter shall be held to be all that the legislature, at least, 
 meant for the regulation of that case. " ° " When a statute 
 amends a former statute ' so as to read as follows ' it oper- 
 ates as a repeal by implication of inconsistent provisions 
 therein omitted in the latter. When the amendatory act re- 
 enacts provisions of the former law either ipsissimis verbis 
 or by the use of equivalent though different words, the law 
 will be regarded as having been continuous, and the new ena.ct- 
 ment, as to such parts, will not operate as a repeal, so as to 
 affect a duty accrued under a prior law, although, as to all 
 new transactions, the later law wiU be referred to as the 
 ground of the obligation. The effect upon a prior statute of a 
 subsequent amendment ' so as to read as follows ' is not to be 
 determined in all cases by any fixed and absolute rule, but 
 frequently becomes a question of legislative intent to be 
 determined from the nature and language of the amendment, 
 from other acts passed at or about the same time and from all 
 the circumstances of the case. The duty of the courts is to 
 give effect to the legislative intent rather than the literal 
 
 ° People ex rel. New York Central ® Excelsior Petroleum Co. v. 
 
 & Hudson River R. R. Co. v. Wood- Laeey, 63 N. Y. 422 (1875) ; Gen. 
 
 bury, 208 N. Y. 421, 102 N. E. 565, Mfg. Act, L. 1848, c. 40, § 13; 1 
 
 566 (1913) ; Gen. Construct. L. § 35. R. S. 601, § 2. The penalty imposed 
 
 ' United States Telegraph Co. v. by the former but later statute for 
 
 Western Union Telegraph Co., 56 declaring dividends diminishing 
 
 Barb. 46 (1865). capital stock was held to overrule 
 
 ' Gaskell v. Beard, 58 Hun, 101, the penalty prescribed by the latter 
 
 11 N. Y. Supp. 399 (1890) ; L. 1882, but earlier act. 
 c. 410, § 1824. 
 
§ 387 POWERS, DUTIES AND LIABILITIES 453 
 
 terms of the act."" Broad words in a sta-tute conferring 
 powers and privileges on " a corporation " or on " any cor- 
 poration " apply only to corporations organized under the 
 laws of this State." "As a corporation can act only in the 
 mode and within the limitations prescribed by the law creat- 
 ing it, the same law may impose upon parties dealing with the 
 corporation such restrictions as the enacting power deems 
 proper, in preserving, applying, or subjecting its assets to 
 the discharge of its obligations, and may, among other things, 
 provide that any one, or more, of the usual remedies of cred- 
 itors against a debtor, shall in certain cases be withheld. ' ' " 
 A corporation organized to print, publish and sell newspapers 
 under statutes prohibiting the exercise of any power not 
 necessary to the exercise of powers given it by its charter is 
 not bound by its published agreement to pay the heir of any- 
 one found dead, with a copy of the advertised agreement in 
 bis pocket, a stated sum, as the agreement is ultra vires." 
 A stock corporation organized under the Business Corpora- 
 tion Law cannot have the rights of a cemetery corporation." 
 § 387. Id.: Ultra Vires, In General. — " The term ultra vires 
 is the modern legal nomenclature for acts of a corporation 
 through any of its instrumentalities which are beyond the 
 powers conferred by law upon the legal entity."" " When 
 acts of corporations are spoken of as ultra vires, it is not 
 intended that they are unlawful or even such as the corpora- 
 tion cannot perform, but merely those which are riot within 
 the powers conferred upon the corporation by the act of its 
 creation, and are in violation of the trust reposed in the man- 
 aging board by the shareholders, that the affairs shall be 
 managed and the funds applied solely for carrying out the 
 objects for which the corporation was created."" " The 
 
 " Bank of Metropolis v. Faber, attachment by a State court against 
 
 150 N. Y. 200, 44 N. E. 779 (1896). a national bank. U. S. R. S. 
 
 Determining the liability of a di- § 5798. 
 
 rector of a corporation which failed ^' Brisay v. Star Co., 13 Misc. 349, 
 
 to file its annual report under L. 35 N. Y. Supp. 99 (1895). 
 
 1890, c. 564, § 30, as amended " Grace v. Repose Mausoleums, 
 
 L. 1892, e. 2, which in turn was re- Inc., 78 Misc. 213, 139 N. Y. Supp. 
 
 pealed by L. 1892, c. 687, § 34, 300 (1912). 
 
 which in turn became effective the ^° Fifth Ave. Coach Co. v. City of 
 
 same day as L. 1892, c. 688, amend- New York, 58 Misc. 401, 111 N. Y. 
 
 ing § 30 above. Supp. 759 (1908) ; aff'd 126 A. D. 
 
 " Muck V. Hitchcock, 212 N. Y. 657, 110 N. Y. Supp. 1037. 
 
 283, 106 N. E. 75 (1914). "Whitney Arms Co. v. Barlow, 
 
 i^Nat. Shoe & Leather B'k v. 63 N. Y. 62 (1875); Gen. Mfg. Act, 
 
 Mechanics' Nat. B'k, 89 N. Y. 467 L. 1848, c. 40, § 12, as amend 'd L. 
 
 (1882). The question was of an 1853, c. 333. 
 
454 BUSINESS CORPORATIONS IN NEW YORK § 387 
 
 contracts of corporations are said to be idtra vires when they 
 involve some adventure or undertaking not within the scope of 
 their charter, which is their rule of corporate action. ' ' " 
 *' The term ultra vires is used in more than one sense. In 
 the first place an act of a corporation is said to be ultra vires 
 when it is not within the scope of the powers of the corpora- 
 tion to perform it under any circumstances, or for any pur- 
 pose. An act is also said to be ultra vires, with reference to 
 the rights of certain parties, when the corporation is not 
 authorized to do the act without their consent, and the third, 
 with reference to some specific purpose, when the corporation 
 is not authorized to perform the act for that particular pur- 
 pose, although the act itself may be for some purposes fully 
 within the scope of the general powers of the corporation. 
 In the last two cases, onfe who deals in good faith with a cor- 
 poration having the apparent right to do the act, and who 
 parts with anything of value to the corporation as a con- 
 sideration for its promise, is permitted to say that the cor- 
 poration is estopped from insisting that the act which was 
 done for its benefit was beyond its power, and he will be at 
 liberty to recover the value of the articles furnished or the 
 work done for the corporation (citations). But every one 
 who deals with a corporation is bound to take notice of its 
 corporate powers, and if a reference to its charter shows that 
 the act is not within the scope of its corporate- authority, he 
 must know that such act is void and that it cannot be made 
 the basis of any claim against the corporation (citation), for 
 . . . no sort of a ratification can make good the act which 
 is without the scope of corporate authority."" 
 
 " The words ultra vires and illegality represent totally 
 different and distinct ideas. It is true a contract may have 
 both those defects, but it may also have one without the other. 
 . . . A corporation is not an agent of the State, or, in any 
 strict sense, of the shareholders. But it derives its powers 
 from the State, and it may transcend those powers for pur- 
 poses which, in themselves considered, involve no public 
 wrong. Contracts so made may be defective in point of 
 authority, and may contemplate a private wrong to the share- 
 holders; but they are not -illegal, because they violate no pub- 
 lic interest or policy . . . the illegality of an act is deter- 
 mined in its quality and does not depend on the person or 
 being who performs it. ' ' " 
 
 " Leslie v. Lorillard, 110 N. Y. " Brisay v. Star Co., 13 Misc. 349, 
 
 519, 1 L.R.A. 456, 18 N. E. 363 35 N. Y. Supp. 99 (1895). 
 (1888). "Bissell v. Michigan Southern & 
 
§ 387 POWERS, DUTIES AND LIABILITIES 455 
 
 " It is the undoubted right of stockholders to complain of 
 any diversion of the funds to purposes unauthorized in the 
 charter. . . . The original subscribers contribute the cap- 
 ital invested, and they and those who succeed to their shares 
 are always, in equity, the owners of that capital. But, legally, 
 the ownership is vested in the corporate body, impressed with 
 the trusts and duties prescribed in the charter. In these 
 relations we have the only true foundation of the plea of vltra 
 vires. . . . It is not to be understood as an absolute and 
 peremptory defence in all cases of excess of power, without 
 regard to other circumstances and considerations. . . . 
 If the person dealing with a corporation knows of the wrong 
 done or contemplated, and he cannot show the acquiescence 
 of the shareholders, he ought not to complain if he cannot 
 enforce the contract. ' ' '" 
 
 " The real ground upon which the defence of idtra vires 
 rests, and the only one upon which it has ever, to any extent, 
 been judicially based is, that the contracts of corporations 
 which are unauthorized by their charters are to be regarded 
 as illegal, and, therefore, void. There are three classes of 
 illegal contracts, viz. : those which are malum in se, i. e., which 
 embrace something which the law deems in and of itself crim- 
 inal or immoral ; second, those which violate the provisions of 
 some statute, and are hence called mala prohihita; and, third, 
 those which contravene some principle of public policy. Cor- 
 porations may make contracts falling within either of the two 
 first of these classes, and such contracts "are no doubt subject 
 ■ to the same rules as if made by individuals. . . . But the 
 contracts of corporations which are not authorized by their 
 charters are illegal, because they are niade in contravention 
 of public policy."^ " In suits between the corporation and 
 strangers dealing with it, the question is whether the act is 
 one the corporation is not authorized to perform under any 
 circumstances ; or one that it may perform for some purposes 
 or under certain conditions. In the first case it is ultra vires 
 and there can be no recovery ; because the party dealing with 
 the corporation is bound to know, from the law of its exist- 
 ence, that it has no power to perform it. In the second case, 
 the issue will turn upon whether the party dealing with it is 
 aware of the intention to perform the act for some unauthor- 
 
 Northern Indiana R. E. Co., 22 N. Y. ^ Bissell v. Michigan Southern & 
 
 258 (1860). Northern Indiana E. E. Co., 22 N. Y. 
 
 ^"Bissell V. Michigan Southern & 258 (1860). 
 Northern Indiana E. E. Co., 22 N. Y. 
 258 .(I860). 
 
456 BUSINESS CORPORATIONS IN NEW YORK § 388 
 
 ized purpose, or whether the attendant circumstances justify 
 its performance. In actions by stockholders, which assail 
 the acts of their directors or trustees, courts will not interfere 
 ■unless the powers have been illegally or unconscientiously 
 executed, or unless it be made to appear that the acts were 
 fraudulent or collusive and destructive of the rights of the 
 stockholders. Mere errors of judgment are not sufficient as 
 grounds for equity interference; for the powers of those 
 entrusted with corporate management are largely discretion- 
 ary." ^ "It has been pointed out that the doctrine of ultra 
 vires originated at a time when nearly all corporations were 
 created for public purposes, and that there is slight reason 
 why it should ever have been applied to private corpora- 
 tions — more than to individuals in a copartnership. ' ' ° 
 
 § 388. Id.: Specific Examples, In General, — The use by a 
 subway company of part of the subway property for weighing 
 and candy and chewing gum vending machines is not ultra 
 vires or in violation of a general lease of such property by a 
 municipality to it for a term of years.^ A school, established 
 to promote the sale by a corporation organized to manu- 
 facture and sell a novel instrument (a clavier), is not iiltra 
 vires the corporation." The fact that a moneyed, railroad or 
 transportation corporation is empowered to issue an identical 
 or similar instrument as that issued by a business corporation 
 is not proof that its issuance by the latter is ultra vires.^ A 
 corporation organized ' ' for the purpose of raising, and smelt- 
 ing lead ore " which for a time did only the raising may 
 legally later do the smelting, buying out, if need be, the agency 
 through which it formerly did the latter ; and may do what is 
 necessary to transport their lead to market.' A purchase by 
 a corporation of a contract by which it becomes the exclusive 
 agent of another corporation to sell in certain states elec- 
 trical supplies manufactured by the latter, in consideration 
 wherefor it issues four-fifths of its stock, is ultra vires to 
 
 ^Leslie v. Lorillard, 110 N. Y. * City of New York v. Interbor- 
 
 519, 1 L.R.A. 456, 18 N. B. 363 ough Rapid Transit Co., 53 Misc. 
 
 (1888). . 126, 104 N. Y. Supp. 157 (1907). 
 
 ^ Virgil V. Virgil Practice Clavier ° Virgil v. Virgil Practice Clavier 
 
 Co., 33 Misc. 200, 68 N. Y. Supp. Co., 33 Misc. 201, 68 N. Y. Supp. 
 
 335 (1900). 335 (1900). 
 
 As to whether competition with ° Jacobs v. Monaton R. I. Corp., 
 
 one's business which results from 212 N. Y. 48, 105 N. E. 968 (1914). 
 
 the ultra vires act of a corporation ^ Moss v. Averell, 10 N. Y. 449 
 
 entitles him to challenge the power (1853). 
 of the corporation to engage therein, 
 is discussed in a note in 12 L.B.A 
 (N.S.) 757. 
 
§ 388 POWERS, DUTIES AND LIABILITIES 457 
 
 manufacture electric machinery, and the issue of such stock 
 is unlawful/ A fair construction of a certificate of incorpo- 
 ration which gives the company's objects as being " to manu- 
 facture soaps and oils and to sell the. same " permits it to sell 
 soaps other than those of its own manufacture.* It is not 
 ultra vires a corporation which has power to acquire plays, 
 opera, theatrical houses and costumes and other property 
 incidental to theatrical productions to purchase the good will 
 of an operatic or theatrical business/" A discussion of what 
 acts of a manufacturing corporation of musical instruments 
 are ultra vires is found in, the case cited in the note." A cor- 
 poration empowered by its charter only to produce its own 
 coal by mining and to sell that which was so obtained is liable 
 for the price of coal delivered by an outsider to its customers 
 by order of its officers but not of its directors in order to fill 
 such customers' orders because of its own inability to obtain 
 the necessary coal from its own mines, especially if a great 
 part of the money owing^by its customers for such coal has 
 been collected by it and applied to its own use.^^ A convey- 
 ance of realty to a corporation incompetent by its charter to 
 take title to real estate is not void, but only voidable ; and it 
 is good until assailed by the sovereign in a direct proceeding 
 for that purpose." " The right to take and grant property, 
 was and is of the essence of every corporation, whether 
 created by license, or prescription, or by legislative act, and 
 in the absence of any statutory prohibition, they may take by 
 all the usual modes of acquiring property. They always had 
 the right at common law to take personal property by bequest 
 (citations) ; and . . . they have that right under our 
 statutes. " " A corporation which has become party with 
 other corporations to an illegal trust and pursuant to the trust 
 agreement has assigned to the trustee a contract by it to 
 supply goods which it manufactures to a third party cannot, 
 after the goods have been delivered and accepted pursuant to 
 the trust agreement and it has repudiated such trust, itself 
 
 * Powell V. Murray, 3 A. D. 273, 17 Misc. 43, 40 N. Y. Supp. 718 
 
 38 N. Y. Supp. 233 (1896) ; aff 'd 157 (1896). 
 
 N. Y. 717, 53 N. E. 1130. ^^ Alexander v. Brown, 9 Hun, 641 
 
 'Petrolia Mfg. Co. v. Jenkins, 29 (1877). 
 
 A. D. 403, 51 N. Y. Supp. 1028 "Burden v. Burden, 159 N. Y. 
 
 (1898). 289, 54 N. E. 117 (1899). 
 
 ^° Metropolitan Co. v. Hammer- " Sherwood v. American Bible 
 
 stein, 162 A. D. 691, 147 N. Y. Supp. Society, 40 N. Y. (1 Keyes), 561 
 
 532 (1914). (1864), 
 
 " Steinway v. Steinway & Sons, 
 
458 BUSINESS CORPORATIONS IN NEW YORK § 389 
 
 receive the purchase price paid by the third party on the 
 ground that the trust was void.'' 
 
 § 389. Id.: Helping Customers. — "A corporation dealing in 
 manufactured goods and needing them for sale, may, as a 
 proper incident to its business, extend financial aid to a manu- 
 facturer by advancing him money to enable him to furnish 
 the goods. This aid may be extended by a loan of its own 
 money, or it may take his notes and by its credit raise money 
 thereon, and advance such money looking for reimbursement 
 out of the goods to be manufactured and delivered to it. ' ' " 
 A corporation formed to manufacture and sell malt liquors 
 is bound by its guaranty of payment by a customer of the 
 rent of his saloon, even though the guaranty be not under 
 seal." A corporation in the business of " manufacturing and 
 selling beer has power to enter into a contract to indemnify 
 a lessor of premises to a saloon-keeper who has not been its 
 customer but agrees to become so if the indemnity be given.'' 
 A corporation organized to make- and sell merchandise is 
 within its incidental powers in advancing a customer to whom 
 it has sold goods upon the understanding that they should 
 remain its property till paid for, money to, prevent the cus- 
 tomer from failing in business or to enable the customer to 
 carry on business, or to secure the payment of any advances 
 made to enable the customer to carry on such business." 
 
 ^° Pittsburg Carbon Co. v. Mc- corporation shall make one contract 
 
 Millin, 119 N. Y. 46, 7 L.R.A. 46, or another, so long as it advances 
 
 23 N. E. 530 (1890). the purposes for which the oorpora- 
 
 ^® Holmes v. Willard, 125 N. Y. tion was organized, is absolutely 
 
 75, 11 L.R.A. 170, 25 N. E. 1083 unimportant; and so the rule has 
 
 (1890). come to be laid down that, except 
 
 " Holm V. Claus Lipsius Brewing as restrained by law, trading cor- 
 
 Co., 21 A. D. 204, 47 N. Y. Supp. porations have the implied power 
 
 518 (1897). to make all such contracts as will 
 
 '* Koehler & Co. v. Reinheimer, 26 further the objects of their creation, 
 
 A. D. 1, 49 N. Y. Supp. 755 (1898). and their dealings in this regard 
 
 " The doctrine of ultra vires took may be likened to those of an in- 
 
 its rise at a very early day in the dividual seeking to- accomplish the 
 
 history of corporations, at a time same ends." 
 
 when they were not common and "Hess v. Sloane, 66 A. D. 522, 
 were created for quasi public pur- 73 N. Y. Supp. 313 (1901) ; a£f 'd 
 poses and regarded to a certain ex- 173 N. Y. 616, 66 N. E. 1110. 
 tent as public in their nature. ... "... a manufacturing corpora- 
 Corporations are now organized to tion, engaged in the manufacture of 
 carry on every kind of business goods on credit, has, as an incident 
 which may be performed by indi- to that business, a power to take 
 viduals. The purposes of trading such measures as are reasonably 
 corporations are in no way public proper to protect its debtors so as 
 in their nature. So far as the to enable it to realize the amount 
 people are concerned, whether a of their indebtednes. " 
 
§1 39€, 391 POWERS, DUTIES AND LIABILITIES 459 
 
 § 390. Id.: Plea of, No Defense to Corporation if Not Sub- 
 serve Justice or if Benefits Have Been Received, In General. — 
 " ... the plea of ultra vires cannot be availed of to 
 defend against an obligation incurred, when the contract has 
 been in good faith performed by the other contracting party 
 and the corporation has had the benefit of it. . . . That a 
 corporation has engaged in a business foreign to its chartered 
 powers, might afford ground for complaint and action by its 
 stockholders; but not for a defense to its liability to others, 
 who have acted ... in good faith in their dealings with 
 its agents "under circumstances warranting their belief in 
 the right of the agents to act for the corporation.^" " The 
 courts will not permit the plea of ultra vires to prevail 
 whether interposed for or against a corporation, where it 
 would not advance justice, but would accomplish a legal 
 wrong. " ^ " . . . the plea of ultra vires should not pre- 
 vail when it would not advance justice, but, on the contrary, 
 would accomplish legal wrong. "^ " The rule is well settled 
 that the plea of ultra vires should not, as a general rule, pre- 
 vail, whether interposed for or against a corporation, when 
 it would not advance justice, but, on the contrary, would 
 accomplish a legal wrong. " ^ " The plea of ultra vires should 
 not as a general rule prevail, whether interposed for or 
 against a corporation, when it would not advance justice, but 
 on the contrary would accomplish a legal wrong. ' ' * 
 
 § 391. Id.: When Corporation Estopped.— " When the 
 officers of a corporation engage in an ultra vires business for 
 the benefit of a corporation, and the corporation has the actual 
 benefit thereof, and when the business is so carried on with the 
 acquiescence of the stockholders that it actually, although 
 illegally becomes the business of the corporation, it cannot 
 maintain an action against such officers for any damages it 
 
 ^o Linkhauf v. Lombard, 137 N. Y. 519, 1 L.R.A. 456, 18 N. E. 363 
 
 417, 20 L.E.A. 48, 33 N. E. 472 (1888). 
 
 (1893). ''The Rider Life Raft Co. v. 
 
 ^Holmes & Gri^s- Mfg. Co. v. Roaeh, 97 N. Y. 378 (1884). 
 Holmes & Wessell Metal Co., 127 " Some of the decisions also hold 
 N. Y. 252, 27 N. E. 831 (1891). A that this plea can only be inter- 
 company sold out to a new corpora- posed by a corporation and not by 
 tion and. took the latter 's stock in an individual dealing with such oor- 
 payment, which it sold and sued on poration." 
 
 the note for the purchase price. * Whitney Arms Co. v. Barlow, 
 
 The purchaser said his vendor had 63 N. Y. 62 (1875) ; Gen. Mfg. Act, 
 
 no power to buy the stock. L. 1848, c. 40, § 12, as amend 'd L. 
 
 ''Leslie v. Lgrillard, 110 N. Y. 1853, c. 333. 
 
460 BUSINESS CORPORATIONS IN NEW YORK § 391 
 
 has suffered in such business. " ^ A contract ultra vires a cor- 
 poration is not so executed as to prevent it from setting up 
 its lack of power, in order to avoid it, if delivery of the goods 
 contracted for has never been made to it but they have been 
 bought and held in the name of the other party though for 
 the corporation's account.' " It is now very well settled that 
 a corporation cannot avail itself of the defense of ultra vires 
 when the contract has been, in good faith, fully performed by 
 the other party, and the corporation has had the full benefit 
 of the performance and of the contract. " ' " . . . when 
 a sale of a chattel, made to a corporation, is executed and com- 
 plete in all things, except the performance of its own promise 
 to pay the price, a plea that it ought not to have made the 
 purchase is not to be entertained, especially so long as it 
 retains, and insists upon retaining, all the benefit of the con- 
 tract. . . . Contracts with corporations, made in excess 
 of their powers, which are purely executory on both sides, 
 and where no wrong will be done if the parties are left in 
 their previous situation . . . should not be enforced, 
 because such contracts contemplate an unauthorized diversion 
 of corporate funds, and, therefore, a breach of private trust. 
 But the executed dealings of corporations must be allowed to 
 stand for and against both the parties, when the plainest rules 
 of good faith so require. " ° A corporation cannot plead a 
 defense of ultra vires against liability on a contract by it with 
 another who has done his part so that it has received the 
 entire benefit contracted for." " The company contracted, it 
 obtained that for which it contracted, and no person or corpo- 
 ration then in existence, or which subsequently came . into 
 existence as an interested party, can be heard in complaint of 
 a transaction by which no person was defrauded, and each 
 obtained what it contracted to obtain;" and particularly a 
 stockholder who does not offer to return to the one contracting 
 with the corporation what he supplied to the corporation 
 under the contract and what it has enjoyed and used. A cor- 
 poration cannot be allowed to repudiate its obligation to an 
 
 ^Holmes v. Willard, 125 N. Y. N. Y. 62 (1875); Gen. Mfg. Act, 
 
 75, 11 L.R.A. 170, 25 N. E. 1083 L. 1848, c. 40, § 12, as amended L. 
 
 (1890). The manager and treas- 1853, c. 333. 
 
 urer financed a concern £he output * Parish v. Wheeler, 22 N. Y. 
 
 of which his corporation ultra vires 494 (1860). 
 
 sold. ' De Groflf v. American Linen 
 
 ^Jennison v. Citizens' Savings Thread Co., 21 N. Y. 124 (1860). 
 
 Bank of Jefferson, 122 N. Y. 135, ^^ Drake v. New York Suburban 
 
 9 L.R.A. 708, 25 N. E. 264 (1890). Water Co., 26 A. D. 499, 50 N. Y. 
 
 ^ Whitney Arms Co. V. Barlow, 63 Supp. 826 (1898). 
 
§ 392 POWERS, DUTIES AND LIABILITIES 461 
 
 individual, e. g., its guaranty of payment of dividends on its 
 stock, upon the ground that such obligation was ultra vires, 
 and at the same time retain the consideration, e. g., its promis- 
 sory note to him, that it had received for giving the guaranty." 
 A corporation the principal officers of which agreed with an 
 individual to sell realty and accepted part of the purchase 
 price, just as it had done in other transactions with other per- 
 sons, may be compelled by him specifically to perform the 
 agreement even though it may claim the contract was ultra 
 vires.^^ A corporation, the property of which is in effect all 
 owned by an individual, cannot repudiate a transaction of 
 which the benefits have already accrued to the individual and 
 the nature of which he fully comprehended when he acquired 
 the stock, even though the transaction was ultra vires^^ A 
 corporation which has entered into a contract, with the con- 
 sent of all who were its stockholders at the time, to deliver to 
 another portions of its stock and bonds for work to be done, 
 etc., cannot, after full performance by the other party and 
 acceptance thereof by it, procure a cancellation of the con- 
 tract in equity while retaining all benefits received under it, 
 both because he who seeks must do equity and because it is 
 equitably estopped." If a contractor has in good faith pei-- 
 lormed a contract with a corporation and the result of his 
 performance has gone into its possession, it cannot defeat his 
 claim for compensation by the plea of idtra vires, however 
 true the plea may be.^^ 
 
 § 392. Id.: When Other Party Estopped.— One who has 
 retained the benefit of a contract with a corporation cannot 
 raise the question that the contract is ultra vires the corpo- 
 ration's powers." "A purchaser who acquired by contract, 
 and under an agreement to pay for it, the property of a cor- 
 poration, cannot defeat the claim for the purchase price by 
 impeaching the right of the corporation to become the owner 
 of the property. One who has received from a corporation 
 the full consideration of his engagement to pay money, either 
 
 "McVity V. Albro Co., 90 A. D. 20 Misc. 484, 46 N. T. Supp. 633 
 
 109, 86 -N. Y. Supp. 144 (1904); (1897). 
 
 aff'd 180 N. Y. 554, 73 N. E. 1126. ^^ Cunningham v. Massena Springs 
 
 ^^ Davidson v. Cannabis Mfg. Co., & Eort Covington R. R. Co., 63 Hun, 
 
 113 A. D. 664, 99 N. Y. Supp. 1018 439, 18 N. Y. Supp. 600 (1892) ; 
 
 (1906) ; app. dism'd 187 N. Y. 576, afif'd 138 N. Y. 614, 33 N. E. 1082. 
 
 80 N. E. 1121. Estoppel to deny validity of pre- 
 
 ^^ Remington & Son Pulp & Paper f erred stock, see note in 27 L.R.A. 
 
 Co. V. Casewell, 126 A. D. 142, 110 139. 
 
 N. Y. Supp. 556 (1908). ^'= Diamond Match Co. v. Roeber, 
 
 "Pocanfcico Water Works v. Low, 106 N. Y. 473, 13 N. E. 419 (1887). 
 
462 BUSINESS CORPORATIONS IN NEW YORK §§ 393, 394 
 
 in services or property, cannot avail himself of the objection 
 that the contract thus fully performed by the corporation was 
 ultra vires, or not within its chartered privileges and 
 powers. ' ' " After performance by a corporation of an ultra 
 vires contract and receipt by another of the benefit thereof, 
 the latter is estopped from raising this question.^* After full 
 performance of a contract by a corporation with the other 
 party to it and acceptance by the latter of the contract's 
 benefits the latter cannot put up the claim that the contract 
 was ultra vires the corporation/' 
 
 § 393. Id.: Defense of, Must Be Plead.— The question 
 whether a contract is ultra vires a corporation is not raised 
 unless by the pleadings.^" The claim by a corporation that an 
 act for which it is sued was ultra vires is an affirmative 
 defense which must be plead to be taken advantage of .^ 
 
 § 394. Id.: Dealing With Creditors, Governing Statutes. — 
 No business corporation can 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, has been 
 paid in money or property.'^ No corporation formed with 
 provision in its certificate for the issuance of the shares of its 
 stock (other than preferred stock having a preference as to 
 principal) without any nominal or par value can begin to 
 carry on business or incur any debts until the amount of 
 capital stated in its certificate of incorporation has been fully 
 paid in money, or in property taken at its actual value ; and, 
 in case the amount of capital stated in such certificate is 
 increased as provided by statute, such corporation must not 
 
 " Whitney Arms Co. v. Barlow, =" Stanton v. Erie R. R. Co., 131 
 
 63 N. Y. 62 (1875) ; Gen. Mfg. Act, A. D. 879, 116 N. Y. Supp. 375 
 
 L. 1848, c. 40, § 12, as amend 'd L. (1909) ; app. dism'd 199 N. Y. 529, 
 
 1853, c. 333. 92 N. E. 1100. 
 
 ^* Booth Brothers v. Baird, 83 ^ Keating v. American Brewing 
 
 A. D. 495, 82 N. Y. Supp. 432 Co., 62 A. D. 501, 71 N. Y. Supp. 
 
 (1903). 95 (1901). "The defense of ultra 
 
 " Bowers v. Ocean Accident & vires, when interposed by a business 
 
 Guarantee Corp., Ltd., 110 A. D. corporation, is never looked upon 
 
 691, 97 N. Y. Supp. 485 (1906) ; with favor, and indeed in these days 
 
 aff'd 187 N. Y. 561, 80 N. E. 1105. when corporations are organized for 
 
 Estoppel to deny validity of con- so many and various purposes, and 
 
 tract of foreign corporation because their business extends in so many 
 
 of failure to comply' with statute, directions, it would be difficult to say 
 
 see note in 24 L.R.A. 320. that any business act is not within 
 
 On estoppel of building associa- the power of a business corpora- 
 tion to assert ill^ality of its by- tion." 
 
 law or stipulation in stock that ^*Bus. Corps. L. § 3 (L. 1909, 
 
 stock will mature at a fixed time, c. 12). 
 see note in 15 L.R.A. (N.S.) 503. 
 
§ 394 POWERS, DUTIES AND LIABILITIES 463 
 
 increase the amount of its indebtedness then existing until it 
 has received in money or property the amount of such increase 
 of its stated capital.^'' No corporation reorganized under the 
 statute permitting reorganization of a stock corporation 
 organized under any general law so that it may acquire and 
 enjoy the rights, privileges, powers and exemptions of a cor- 
 poration having stock without nominal or par value must 
 incur any debts subsequent to the filing of the certificate of 
 reorganization until it has assets of an actual value at least 
 equal to the amount of capital stated in its certificate of 
 reorganization as that with which it will carry on business -j^" 
 and the liability of the corporation for corporate debts con- 
 tracted or obligations incurred prior to the filing of such 
 certificate of reorganization is uneffected thereby, but for the 
 purpose of enforcing and recovering upon such claims cred- 
 itors have the same right of recourse against the corporation 
 that they would have had if the corporation had not been 
 reorganized, and all of the rights and benefits conferred by 
 sections fifty-six to fifty-nine, inclusive, of the Stock Corpo- 
 ration Law are especially reserved and saved to such cred- 
 itors, subject to the limitations and restrictions imposed by 
 those sections.^* 
 
 Upon proof by affidavit or other competent written evidence 
 to the satisfaction of the judge that an execution against prop- 
 erty has been issued as prescribed by statute and either has 
 not been returned or has been returned unsatisfied at least in 
 part, and that any corporation has personal property of the 
 judgment debtor exceeding ten dollars in value or is indebted 
 to him in a sum exceeding ten dollars, the judgment creditor 
 is entitled to an order requiring the corporation to attend and 
 be examined concerning the debt or other property at a time 
 and place specified in the order.^ Upon an examination of a 
 corporation having property of a judgment debtor at the 
 instance of the latter 's judgment creditor each answer of a 
 party or witness examined must be under oath, and the cor- 
 poration must attend by and answer under the oath of an 
 officer thereof, and the judge may in his discretion specify 
 the officer.' At any time after the commencement of a pro- 
 ceeding to compel an examination of a corporate debtor of a 
 judgment debtor and before the appointment of a receiver 
 
 i*St. Corp. L. § 20 (L. 19a3, « g^. Corp. L. § 24-c (I. 1917, 
 
 c. 361). e. 484). 
 
 1" St. Corp. L. § 24-b (L. 1917, '■^ C. C. P. § 2441. 
 
 c. 484). ' C. C. P. § 2444. 
 
464 BUSINESS CORPORATIONS IN NEW YORK § 394 ' 
 
 therein or the extension of a receivership thereto the judge 
 by whom the order or warrant was granted or to whom it is 
 returnable may in his discretion upon proof by aflSdavit to his 
 satisfaction that a corporation is indebted to the judgment 
 debtor and upon such a notice given to such persons as he 
 deems just or without notice make an order permitting the 
 corporation to pay to a sheriff designated in the order a sum 
 on account of the alleged indebtedness not exceeding the sum 
 which will satisfy the execution, and a payment so made is 
 to the extent thereof a discharge of the indebtedness except 
 as against a transferee from the judgment debtor in good 
 faith and for a valuabl?i consideration of whose rights the 
 corporation had actual or constructive notice when the pay- 
 ment was made." Service of an injunction order or an order 
 requiring attendance and examination in proceedings to com- 
 pel an examination of a corporate debtor of a judgment debtor 
 upon the corporation is sufficient if made upon an officer to 
 whom a copy of the summons must be delivered when a sum- 
 mons is personally served upon the corporation unless the 
 officer is specially designated by the judge as prescribed by 
 statute.' If the officer of a corporation required to attend in 
 its behalf in proceedings to examine it as a debtor of a judg- 
 ment debtor is at the time of the service of the order upon 
 him a resident of New York State or then has an office within 
 New York State for the regular transaction of business in 
 person, he cannot be compelled to attend pursuant to the order 
 or to any adjournment at a place without the county wherein 
 his residence or place of business is situated." 
 
 Every manufacturing, mining, quarrying, mercantile, rail- 
 road, street railway, canal, steamboat, telegraph and tele- 
 phone company, every express company, every corporation 
 engaged in harvesting and storing ice, and every non- 
 municipal water-company, and every corporation engaged in 
 or upon any public work for the State or municipal corpo- 
 ration thereof, either as a contractor or a subcontractor there- 
 with, must pay to each employee engaged in its business the 
 wages earned by such employee in cash and no such corpora- 
 tion can pay such employees in scrip, commonly known as 
 store money-orders ; and any corporation violating the pro- 
 hibitions recited is guilty of a misdemeanor.'' Every corpo- 
 ration must pay weekly to each employee the wages earned 
 by him to a day not more than six days prior to the date of 
 
 * C. C. p. § 2446. « C. C. P. § 2459. 
 
 ^C. C. p. § 2452. 'Labor L. § 10 (L. 1909, e. 36). 
 
§ 394-a POWERS, DUTIES AND LIABILITIES 465 
 
 silcli payment.* Under a statute requiring corporations to 
 ' ' 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," and defining " employee" to mean " a mechanic, 
 workingman or laborer who works for another for hire," a 
 chauffeur, matron, office-boy and blue-printer are employees, 
 while a stenographer, accountant, typist, chainman, levelman, 
 ciyU engineer, bookkeeper, draftsman, structural engineer, 
 and rodman who assist the civil engineer are not ; and a civil 
 engineer may therefore be paid by cheque instead of in cash." 
 § 394-a. Id.: In General. — ^It is an essential and inherent 
 characteristic of a corporation that it alone is primarily 
 liable for its debts, because it alone contracts them, except 
 as that natural and necessary consequence of its creation is 
 modified in the act of its creation by some explicit com- 
 mand of the statute which either imposes an express liability 
 upon the corporators in the nature of a penalty, or affirma- 
 tively retains and preserves what would have been the 
 common-law liability of the members from the destruction 
 involved in the corporate creation. . . . Exactly the 
 opposite is true of joint-stock companies. Their formation 
 destroys no part or portion of their common-law liability 
 for the debts contracted."" One receiving with notice and 
 without consideration property of a judgment debtor cor- 
 poration is liable to the judgment creditor to account and 
 pay so much of the claim as may be satisfied by the 
 amount he received." If the officers of a corporation, while 
 it is in debt, agree to transfer substantially all its assets 
 to another corporation which is thereafter to continue the 
 business and which issues in payment some of its capital stock, 
 not to the selling corporation but to the latter 's principal 
 stockholder individually, subsequently, however, on assertion 
 by a creditor of the selling corporation of his, claim, reissuing 
 it to the late treasurer of the selling corporation (who has 
 become president of the purchasing corporation) for distribu- 
 tion without regard to the claims of creditors, an accounting 
 will be compelled by the purchasing corporation as to the 
 assets received by it from the selling corporation so that a 
 
 ^ Labor L. § 11 (L. 1909, c. 36). "People ex rel. Winchester v. 
 
 = People V. Inte];borougli Rapid Coleman, 133 N. Y. 279, 16 L.R.A. 
 
 Transit Co., 169 A. D. 32, 154 N. Y. 183, 31 N. E. 96 (1892). 
 
 Supp. 627 (1915) ; Labor L. art. 2, ^^ Cullen v. Friedland, 152 A. D. 
 
 §§ 10, 11. 124, 136 N. Y. Supp. 659 (1912). 
 B.C.N.Y.— 30 
 
466 BUSINESS CORPORATIONS IN NEW YORK § 395 
 
 money judgment may be recovered." One who is a creditor 
 of one corporation the property of which is bought out on fore- 
 closure by its creditors under an agreement to which neither 
 the corporation nor its stockholders were parties cannot claim 
 to follow such property after its transfer to another corpo- 
 ration, organized by such creditors to hold it, on the theory 
 that such property is in equity a trust fund for the payment 
 of its debts, because the purchasing creditors occupy no rela- 
 tion of trust toward the corporation bought out or its other 
 creditors." An injunction restraining creditors from pro- 
 ceeding against a corporation to enforce their demands can- 
 not be granted at the same time that an order to show cause 
 why an application for its voluntary dissolution is granted." 
 A trustee in bankruptcy cannot sue the officers of the bank- 
 rupt corporation to nullify an alienation of its property at a 
 time when there were no corporate creditors unless his plead- 
 ings allege the transfer was made with a design to defraud 
 persons subsequently becoming creditors." 
 
 § 395. Id.: Borrowing Money, In General. — The power of a 
 corporation to borrow money by means of its bonds and mort- 
 gages is treated in the sixth chapter of this work, beginning 
 with section two hundred and twenty-seven. In addition to 
 the powers conferred by the General Corporation Law every 
 stock corporation has the power to borrow money and con- 
 tract debts, when necessary for the transaction of its business 
 or for the exercise of its corporate rights, privileges or fran- 
 chises 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 con- 
 tracted for such purposes." The power of a corporation to 
 borrow money, and more particularly to give its obligation to 
 evidence the loan and its mortgage to secure it, has already 
 been fully discussed." It seems that " whenever a corpora- 
 tion can lawfully contract a debt for borrowed money, or 
 otherwise, in the course of its business, it can give a time 
 
 ^^Hurd V. N. Y. & C. Steam On right of creditor to complain 
 
 Laundry Co., 167 N. Y. 89, 60 N. E. of purchase by corporation of its 
 
 327 (1901). own shares of stock, see notes in 
 
 "Vose V. Cowdrey, 49 N. Y. 336 61 L.R.A. 621, 25 L.R.A.(N.S.) 50, 
 
 (1872). 30 L.R.R(N.S.) 694, 44 L.R.A.(N.S.) 
 
 "Matter of French Manufactur- 156. 
 
 ing Co., 12 Hun, 488 (1878) ; 2 i» St. Corp. L. § 6 (L. 1909, c. 61). 
 
 R. S. 466, §§ 56, 65. "See chapter sixth on " Bonds 
 
 ^° Lummis v. Crosby, 176 A. D. and Mortgages," § 227 et seq., supra. 
 315, 162 N. Y. Supp. 444 (1916). 
 
§ 395 POWEBS, DUTIES AND LIABILITIES 467 
 
 engagement to pay the debt, and such engagement may be in 
 any form which does not come within the prohibition of some 
 particular statute." " " The right of coi-porations in general 
 to give a note, bond or other engagement to pay a debt is so 
 nearly identical or so inseparably connected with the right to 
 contract the debt that no doubt upon the question ought to be 
 admitted. When a corporation can lawfully purchase prop- 
 erty or procure money on loan in the course of its business, 
 the seller or the lender may exact, and the purchaser or bor- 
 rower must have the power to give, any known assurance 
 which does not fall within the prohibition, express or implied, 
 of some statute."" "The word 'obligation' has many 
 meanings and when used in a statute its significance must be 
 gathered from and governed by the purpose and context of 
 the enactment. In this statute [the sixth section of the Stock 
 Corporation Law] it embraces all instruments in writing, 
 however informal, and with or without seal, whereby the bor- 
 rowing corporation contracts with a lender for the repayment 
 of the sum borrowed. To borrow is the reciprocal action with 
 to lend, and the idea of a borrowing is not filled out unless 
 there is in the transaction a promise or understanding that 
 what is borrowed will be repaid or returned, with or without 
 compensation for the use of it in the meantime (citations). 
 The right to borrow money given by the statute is a power to 
 create an indebtedness and procure for its payment funds 
 from others to be paid at a future date, with the power to 
 issue obligations for the payment of the funds procured or 
 •borrowed. In substance, the money is borrowed from the pur- 
 chasers of the obligations." ^^ A corporation has the implied 
 power to borrow money from its stockholders as well as others 
 if necessary to the conduct of its business.^ It cannot be held 
 as part of the implied power of a corporation to borrow money 
 for the conduct of its business that it may give annually to 
 such of its stockholders as advance money to it a fixed com- 
 pensation, if there be no right to the stockholder ever to be 
 repaid his advance.^ A corporation cannot escape liability for 
 a loan secured for it by an officer acting on behalf of it within 
 the general scope of his powers of which it has received the 
 benefit upon the ground that it had but two trustees whereas 
 
 ^« Smith V. Law, 21 N. Y. 296 ^ Jacobs v. Monaton E. I. Corp., 
 
 (1860). A bond. The quotation is 212 N. Y. 48, 105 N. E. 968 (1914). 
 
 from Bacon, J. 's, interpretation of ^ Kent v. Quicksilver Mining Co., 
 
 a holding in Curtis v. Leavitt, 15 78 N. Y. 159 (1879). 
 
 N. Y. 9, 62. ^Kent v. Quicksilver Mining Co., 
 
 "Curtis V. Leavitt, 15 N. Y. 2 78 N. Y. 159 (1879). 
 (1857). 
 
468 BUSINESS CORPORATIONS IN NEW YORK § 396 
 
 the statute regarding like corporations provides that there 
 shall be at least three.^ It is for the jury to say if a loan made 
 in the presence of the secretary of a corporation who was 
 intrusted with its general management to an individual for 
 the corporation's use which was so used by it was secured by 
 rents from its property which such individual in such secre- 
 tary's presence undisputedly said were to be such security.* 
 § 396. Id.: Usury. — The validity of a contract, questioned 
 as usurious, depends on the institutions of the place where it 
 is made, unless the loan is made by a corporation, when, if it 
 be found that the contract is one it is forbidden by its act of 
 incorporation to make, the loan and all the securities taken to 
 enforce its reimbursement are necessarily void.° No corpo- 
 ration can interpose the defense of usury in any action.* It 
 seems that the statute providing that " no corporation shall 
 hereafter interpose the defense of usury " must be construed 
 " as a repeal of the statutes of usury as to all contracts of 
 corporations stipulating to pay interest, thus leaving the con- 
 tracts in full force according to their terms ; ' ' and the statute 
 is constitutional.^ The statute forbidding a corporation to 
 interpose the defense of usury also denies it the right to main- 
 tain an action to set aside any of its obligations as usurious.* 
 The effect of the statute prohibiting the interposition by cor- 
 porations of the defense of usury is " to prevent the avoidance 
 by a corporation of its own contract, for the reason that it 
 was made in contravention of the laws against usury ; ' ' and 
 not merely that it cannot set up usury as a defense in an action 
 against it.° A corporation is precluded from resisting pay- 
 ment of its own obligations on account of the fact that they 
 have been discounted at a larger rate of interest than that 
 authorized by law." The statute providing that " no corpo- 
 
 ^ Castle V. Lewis, 78 N. T. 131 'Curtis v. Leavitt, 15 N. Y. 2 
 
 (1879); L. 1848, as amend 'd L. (1857); L. 1850, c. 172, see now 
 
 L. 1860, c. 269, § 1. Gen. Bus. L. § 374. 
 
 * Barkin Construction Co. v. * MacQuoid v. Queens Estates, 
 
 Goodman, 221 N. Y. 156, 116 N. E. 143 A. D. 134, 127 N. Y. Supp. 867 
 
 770 (1917). (1911); Gen. Bus. L. § 374. 
 
 'Bard v. Poole, 12 N. Y. 495 'Merchants Exchange National 
 
 (1855). Bank v. Commercial Warehouse 
 
 " Gen. Bus. L. § 374 (L. 1909, Co., 49 N. Y. 635 (1872) ; L. 1850, 
 
 c. 25) : " The term corporation, as c. 172; now Gen. Bus. L. § 374. 
 
 used in this section, shall be eon- ^^ Frazier v. Traw's Printing & 
 
 strued to include all associations Bookbinding Co., 24 Hun, 281 
 
 and joint-stock companies having (1881) ; aff'd 90 N. Y. 678; L. 1850, 
 
 any of the powers and privileges of c. 172; now Gen. Bus. L. § 374. A 
 
 corporations not possessed by indi- cheque. 
 Anduals or partnerships." 
 
§ 396 POWERS, DUTIES AND LIABILITIES 469 
 
 ration shall hereafter interpose the defense of usury in any 
 action " is retroactive." The fact that a corporation is doing 
 business as administrator and trustee under special legisla- 
 tive enactment does not release it from the prohibition against 
 pleading ^usury as a defense to a transaction in which it is 
 involved.'^ The statute prohibiting corporations from inter- 
 posing the defense of usury includes collateral contracts of 
 individuals as sureties,- guarantors or indorsers for a corpo- 
 ration." Neither a corporation nor its receiver can by action 
 recover the excess paid upon a usurious transaction by it; 
 because the statute prohibiting a corporation from interpos- 
 ing the defense of usury takes away from the corporation 
 altogether all benefit or advantage resulting from the statute 
 of usury .^* Neither a corporation-maker nor an individual- 
 indorser of a usurious note can avail itself or himself of the 
 defense of usury.^^ An agreement by a corporation guar- 
 anteed by an individual to pay six per cent interest to a given 
 date when the principal is due and seventeen per cent more 
 thereafter on so much as remains unpaid Until paid binds the 
 corporation and also the individual within the obligations of 
 his guaranty." Assuming that bills of exchange are a New 
 York contract oh which a corporate maker cannot plead 
 usury, then the indorsers thereon, it would seem, are also pre- 
 cluded from pleading usury." A statute prohibiting any cor- 
 poration from interposing the defense of usury in any action 
 likewise prevents guarantors of a note of a corporation from 
 setting up usury as a defense to an action against them or 
 their guaranty.^^ The effect of a statute permitting any com- 
 pensation agreed upon in writing to be received for an 
 advance payable o'n demand and made on certificates of stock, 
 etc., is to remove from the operation of the usury laws all 
 such loans, whether the agreement be oral or written, 
 " though it would seem that a contract in writing is necessary 
 
 " Southern Life Insurance & ^° Stewart v. Bramhall, 11 Hun, 
 Trust Co. V. Packer & Prentice, 17 139 (1877) ; affi'd 74 N. Y. 85. 
 N. Y. 51 (1858) ;L. 1850, c. 172; ^« Union Estate Co. v. Adlow Con- 
 now Gen. Bus. L. § 374. struction Co., 221 N. Y. 183, 116 
 
 "De-Moltke-Huilfeldt v. Gamer N. E. 984 (1917); Gen. Bus. L. 
 
 & Co., 145 A. D. 766, 130 N. Y. § 370' et seq. (L. 1909, e. 20). 
 
 Supp. 558 (1911). "Union National Bank v. 
 
 ^^ Stewart v. Bramhall, 74. N. Y. Wheeler, 60 N. Y. 612 (1875). 
 
 85 (1878); L. 1850, c. 172; now Gen. ^^Rosa v. Butterfleld, 33 N. Y. 
 
 Bus. L. § 374. 665 (1865); L. 1850, c. 172, § 10; 
 
 " Butterwo'rth v. O'Brien, 23 Gen. Bus. L. § 374. 
 N. Y. 275 (1861); L. 1850, c. 172; 
 now Gen. Bus. L. § 374. 
 
470 BUSINESS CORPORATIONS IN NEW YORK § 397 
 
 in order to enable the lender to collect more than six per 
 cent."" 
 § 397. Id.: Assigning and Distributing For Benefit Of. — 
 
 Transfers by corporations while insolvent or after failing to 
 pay their liabilities are shortly considered.^ It seems that a 
 corporation may make a valid general assignment for benefit 
 of creditors.^ " The power of a corporation to assign its 
 property in trust for the payment of its debts cannot at this 
 day be doubted. " ^ " ... at common law an insolvent 
 corporation could make a general assignment for the benefit 
 of creditors ; and under the laws of this State . ... a gen- 
 eral assignment made by any debtor, whether a natural person 
 or the creature of a statute having its domicile in a sister 
 state, should and would be recognized here as valid if made 
 without preference and without imposing conditions upon the 
 creditor. " ^ A stock corporation may make a general assign- 
 ment for benefit of creditors without preferences ; but if made 
 while insolvent to defraud creditors the assignment is void.* 
 " The only statutory restriction now existing upon the com- 
 mon-law right of a corporation to make an assignment is, that 
 it shall be without preferences. " ^ A corporation has a right 
 to make an assignment for the benefit of creditors without 
 preferences; and no receiver in sequestration proceedings 
 should be appointed while the assignee acts, unless for cause 
 shown." One claiming under an alleged assignment by a cor- 
 poration signed by an individual who was treasurer of the 
 corporation when he signed it must prove that the assignment 
 was the corporate act if it is undated, mentions no specific con- 
 sideration, has not the corporate seal afiSxed, and is not 
 attested or acknowledged.' An agreement by a solvent cor- 
 poration to distribute the proceeds from disposition of its 
 
 " Hawley v. Kountze, 6 A. D. 217, =' Workum v. Caldwell, 27 Misc. 
 
 39 N. Y. Supp. 897 (1896) ; L. 1882, 72, 58 N. Y. Supp. 175 (1899). 
 
 c. 237. A gave his note to the firm *Home Bank v. Brewster & Co., 
 
 of B & C for a loan of $15,000 at 17 Misd. 442, 41 N. Y. Supp. 203 
 
 6 per cent., secured by certificates of (1896) ; St. Corp. L. § 48 (L. 1892) ; 
 
 stock; and an option to B to sell now § 66. 
 
 such stock at less than their value. ^People v. United States Law 
 
 Held, not void for usury. Blank & Stationery Co., 24 Misc. 
 
 On effect of statute forbidding 535, 53 N. Y. Supp. 852 (1898). 
 
 corporation to plead usury, see note * CroU v. Empire State Knitting 
 
 in 62 L.R.A. 79. Co., 17 A. D. 282, 45 N. Y. Supp. 
 
 2"" See § 402 et seq., infra. 680 (1897). 
 
 ^ Hurlbut V. Carter, 21 Barb. 221 ^ Maroney v. Cole, 52 Misc. 451, 
 
 (1855). 103 N. Y. Supp. 560 (1907). 
 
 ' De Ruyter v. St. Peter's Church, 
 3 N. Y. 238 (1850). 
 
§§ 398, 399 POWERS, DUTIES AND LIABILITIES 471 
 
 assets equitably among its creditors is merely what the law 
 requires and is not a sufficient consideration to support an 
 agreement by a creditor to " forbear forcing coUectioti " of 
 his claim.® As a general rule the assets of a corporation 
 should upon its insolvency be distributed pro rata among all 
 the shareholders ; but the rule has no application when there 
 is an express contract between the holders of one class of 
 stock and the corporation that they, should not share equally 
 with the other shareholders." 
 
 § 398. Id.: Debtors, In General. — The same law in general 
 governs the rights, powers and liabilities of a corporation 
 toward its debtors as controls the rights, powers and liabili- 
 ties of an individual toward its debtors. 
 
 § 399. Id.: Loaning Money. — A corporation's power to loan 
 money should be limited to and for the appropriate business 
 of the company and is possessed as an incidental, and not as a 
 principal power .^° It may be that a business corporation may 
 legally loan money from its surplus to one not holding its 
 stock, as " there is a distinction between, a temporary loan of 
 the surplus funds of a corporation when not otherwise 
 required, and the practice of lending the moneys of the corpo- 
 ration as if the corporation were a bank. ' ' " If, through all 
 the facts, irrespective of the form, it appears that a corpo- 
 ration's money was used with the knowledge of an individual 
 to settle private stock dealings between himself and so-called 
 third parties, he is liable for the return of the money .'^ ,An 
 individual endorsing notes of a corporation given for his 
 benefit is bound by his endorsement though the notes be 
 invalid as against the corporation.^^ No loan of money can 
 be made by any stock corporation (except a moneyed corpo- 
 ration) or by any officer thereof out of its funds to any stock- 
 
 * Mount Vernon Rattan Co. v. from the creation of these shares;" 
 
 Joachimson, 119 A. D. 71, 103 N. Y. the sums paid for such stock should 
 
 Supp. 1045 (1907). not be withdrawable, "but shall 
 
 'People V. New York Building- constitute the Guaranty^ Fund of 
 
 Loan Banking Co., 119 A. D. 830, the said Company and sKall be and 
 
 104 N. Y. Supp. 892 (1907); aff'd stand as a guarantee for the pay- 
 
 189 N. Y. 547, 82 N. E. 1131. The ment of all the obligations of the 
 
 class of stock was issued under a Company." 
 
 resolution: "Whereas it is desir- i° Beeife v. Phoenix Glass Co., 14 
 
 able that this Company shall have a Barb. 358 (1852). 
 
 permanent capital that shall serve ^^ Murray v. Smith, 166 A. D. 
 
 as a guarantee of the performance 528, 152 N. Y. Supp. 102 (1915). 
 
 of its obligations;" such stock "Erie Railway Co. v. Vanderbilt, 
 
 should have further dividends "in 5 Hun, 123 (1875). 
 
 consideration of the guarantee to ^^ Donphoe v. Meeker, 35 A. D. 
 
 the other classes of shares arising 43, 54 N. Y. Supp. 286 (1898). 
 
472 BUSINESS CORPORATIONS IN NEW YORK § 400 
 
 holder therein." The liability of oflBcers and directors of 
 corporations for a corporate loan to a stockholder and for 
 discounting any evidence of debt or receiving it in payment 
 of any amount due on stock in the corporation and for receiv- 
 ing or discounting any evidence of debt to enable any stock- 
 holder to withdraw any money paid in by him on his stock, 
 has already been treated." A loan of money by a corporation 
 to its stockholder is malum prohibitum; but to others is 
 neither malum prohibitum nor malum in se, though it may be 
 ultra vires.^^ A loan by a business corporation of its money 
 to one of its stockholders cannot be ratified because it is 
 malum, prohibitum." 
 
 § 400. Id.: Execution, Attachment and Garnishment, as to 
 Creditors. — The sheriff may satisfy an execution by selling 
 rights or shares of the defendant in the stock of a corporation, 
 or a bond or other instrument for the payment of money 
 executed and issued, with the interest coupons annexed, if 
 any, by any corporation, which is in terms negotiable, or 
 otherwise, whether past due or yet to become due.'* To entitle 
 the plaintiff in an action brought before a justice of the peace 
 to a warrant of attachment when the defendant is a domestic 
 corporation he must show by afiSdavit to the satisfaction of 
 the justice that the defendant has removed or is about to 
 remove property from the county where it last kept its prin- 
 cipal office or from the county in which the action is brought 
 with intent to defraud its creditors, or has assigned, disposed 
 of or secreted or is about to assign, dispose of or secrete prop- 
 erty with like intent." "... a domestic corporation at 
 all times has its exclusive residence and domicile in the juris- 
 diction of origin, and ... it cannot be garnisheed in 
 another jurisdiction for debts owing by it to home creditors, 
 so as to make the attachment effectual against its creditors in 
 the absence of jurisdiction acquired over the person of such 
 creditor. ' ' ^ Mere averment of facts as upon personal knowl- 
 edge in an affidavit made to procure an attachment against a 
 corporation is not sufficient unless circumstances are stated 
 from which the inference can be fairly drawn that the affiant 
 has personal knowledge of the facts which he avers.' In 
 
 " St. Corp. L. § 29 (L. 1909, c. 61). " C. C. P. § 906. 
 
 ^° See § 349, supra. ^ Douglas v. Phoenix Insuiance 
 
 " Murray v. Smith, 166 A. D. 528, Co., 138 N. Y. 209, 20 L.R.A. 118, 
 
 152 N. Y. .Supp. 102 (1915); St. 33 N. E. 938 (1893). 
 
 Corp. L. § 29. ' Shuler v. Birdsall Mfg. Co., 17 
 
 " Murray v. Smith, 166 A. D. 528, A. D. 228, 45 N. T. Supp. 725 
 
 162 N. Y. Supp. 102 (1915). (1897). 
 
 "C. C. P. § 708. 
 
§§ 401, 402 POWEBS, DUTIES AND LIABILITIES 473 
 
 attachment proceedings involving a trading corporation, the 
 affidavit of its president is insufficient to show that he has 
 any personal knowledge of the transactions at issue if it 
 simply shows that he is president: he must set out the sources 
 of his information.^ Evidence that a domestic corporation is 
 boxing up its stock in hand, correspondence, records, etc., and 
 has rented its office in. New York, all with a view to moving its 
 business to another state, may serve to prove it is about to 
 move its property outside the State, but is no proof at all that 
 this is done with a view to defrauding its creditors, and is, 
 therefore, not sufficient for a resident creditor to obtain an 
 attachment against its property.^ 
 
 § 401. Id.: As to Debtors.-^A^ affidavit by one stating that 
 he is an officer of a plaintiff corporation and has personal 
 knowledge of all the facts necessary to the statement of a 
 cause of action is sufficient to support a warrant of attach- 
 ment issued against the defendant, even though it do not 
 unequivofeally show he was officer of the plaintiff at the time 
 defendant became indebted to it.* An affidavit warrants an 
 attachment in favor of a corporation if it alleges the unpaid 
 balance due it " over and above all counterclaims existing in 
 favor of the defendant against the plaintiff, known to the 
 deponent, ' ' is made by the person who had been secretary of 
 the corporation when the transaction with the defendant 
 arose, and if its present secretary makes a similar statement.^ 
 An attachment may be granted in favor of a corporation on 
 an affidavit by its assistant cashier positively stating that it is 
 entitled to recover the sum mentioned, with interest, over and 
 above all counterclaims known to it.® 
 
 § 402. Id.: Transfer While Insolvent or After Failure to Pay 
 Liabilities, GovMning Statutes. — Every transfer, assignment, 
 conveyance or other act by a corporation of any of its prop- 
 erty' is void (1) if made (a) after it has refused to pay any 
 of its notes or other obligations when due in lawful money of 
 
 ^ Manufacturers ' National Bank * Barstow Stove Co. v. Darling, 81 
 
 V. Hall, 60 Hun, 466, 15 N. Y. Supp. Hun, 564, 30 N. Y. Supp. 1033 
 
 208 (1891); aff'd 129 N. Y. 663, (1894). 
 
 30 N. E. 65. In the case of a bank- ^ E. W. Bliss Company v. Opera 
 
 ing corporation, however, the aflS- Glass Supply Co., 60 Hun, 438, 15 
 
 davit of the cashier need not state N. Y. Supp. 6 (1891) ; C. C. P. § 636, 
 
 the source of his information. subd. 1. 
 
 ^Diek«y v. Pindeisen & Kropf * National Park Bank v. Whit- 
 
 Mfg. Co., 177 A. D. 861, 164 N. Y. more, 40 Hun, 499 (1886); dism'd 
 
 Supp. 989 (1917). 104 N. Y. 297, 10 N. E. 524. 
 
 On garnishment of officer or agent 
 of corporation by creditor of corpo- 
 ration, see note in 36 L.B.A. 561. 
 
474 BUSINESS CORPORATIONS IN NEW YORK § 403 
 
 the United States, (b) directly or indirectly to any of its 
 officers, directors or stockholders, (c) for payment of any debt 
 or, upon any consideration other than the full value of the 
 property paid in cash; or (2) if made (a) when the corpora- 
 tion is insolvent or its insolvency is imminent, (b) with, the 
 intent of giving a preference to any particular creditor over 
 other creditors of the corporation (except that laborers' 
 wages for services are preferred claims and are entitled to 
 payment before any other creditors out of the corporation's 
 assets in excess of valid prior liens or encumbrances)/ Such 
 a transfer after the corporation has refused to pay its obliga- 
 tions though made by the corporation's officers or directors 
 instead of by it is equally void ; and such a conveyance, assign- 
 ment or transfer made when the corporation is insolvent or 
 its insolvency is imminent though made by an officer, director 
 or stockholder thereof instead of by the corporation itself is 
 equally void, as well as any payment made, judgment suffered, 
 lien created or security given, whether by the corporation or 
 an officer, director or stockholder thereof.* Every person 
 receiving by means of any such prohibited act or deed any 
 property of the corporation is bound to account therefor to 
 its creditors or stockholders or other trustees; but no such 
 conveyance, assignment or transfer is void in the hands of a 
 purchaser for valuable consideration without notice.* 
 
 § 403. Id.: Transfer While Insolvent or After Failure to 
 Pay Liabilities, In General. — An assignment by a corporation 
 made in contemplation of insolvency is void." An assignment 
 made by a corporation while insolvent to give the assignee a 
 preference over its other creditors is void." The statute of 
 New York State avoiding any transfer of a corporation's 
 property while its insolvency is imminent applies only to 
 domestic and not to foreign corporations." The statutory 
 inhibition against an assignment by a corporation of its prop- 
 erty in contemplation of insolvency rfefers solely to domestic 
 corporations; and the courts of this State will therefore 
 recognize as valid, so far as respects property within their 
 jurisdiction, a general assignment, vaUd at conmion law and 
 by the law of its domicile, made by an insolvent foreign corpo- 
 
 ' St. Corp. L. § 66 (L. 1909, c. 61). ^^ Dudensing v. Jones, 27 Misc. 69, 
 
 « St. Corp. L. § 60 (L. 1909, c. 61). 58 N. Y. Supp. 178 (1899). 
 ^ St. Corp. L. § 66 (L. 1909, c. 61). " Standard National Bank v. Gar- 
 
 " Sibell V. Remsen, 33 N. Y. 95 field National Bank, 56 A. D. 43, 67 
 
 (1865) ; 1 R. S; 603, § 24; see now N. Y. Supp. 472 (1900) ; St. Corp. L. 
 
 St. Corp. L. § 66. § 48 (L. 1892, c. 688) ; now § 66. 
 
§ 403 POWERS, DUTIES AND LIABILITIES 475 
 
 ration for the benefit of its creditors." The statute forbidding 
 transfer of a corporation's property to its officers, directors 
 or stockholders except for full value after it has refused to 
 pay any of its obligations relates only to corporations which 
 are financially embarrassed or in danger of so becoming." 
 In order that an act by a corporation may come within the 
 prohibition imposed by statute upon it of a transfer by it of 
 property in contemplation of insolvency, ' ' the prohibited act 
 must itself accomplish or at least enter into the actual transfer 
 or assignment of the property. "^^ " Now the scheme of this 
 [sixty-sixth] section [of the Stock Corporation Law] is to pro- 
 tect the creditor from the misconduct of the officers, directors 
 a;nd stockholders of a corporation ; to insure those who trust 
 either to the solvency of the corporation, to the honor of its 
 officers, or to the liability of stockholders, from being 
 defrauded by the officers, the directors or stockholders of such 
 corporation. There are corporate situations in which the 
 stockholders are liable, within certain limitations, for the 
 debts of the corporation, and there have been instances in 
 the past where stockholders, realizing that the insolvency of 
 the corporation is inuninent, and that they are likely to lose 
 not only the amount already invested in the shares, but pos- 
 sibly much more besides, have secured for. the shares an 
 apparent purchaser, who, being himself in a state of insolv- 
 ency, was willing for a very trifling, temporary consideration, 
 to add to his obligations. Transfers of such a character, made 
 for the purpose of relieving the shareholder from his stat- 
 utory or contractual liability, are aimed at by this provision 
 of the statute . . . there was nothing to prevent the 
 defendant [director] from making absolute disposition of 
 his shares . . . It matters not that he may have been of 
 the opinion that ultimately the corporation would fail and that 
 the effect of the sale of his stock would be to relieve- himself 
 from liability as a director. It was his right, if he saw fit, to 
 get rid of the office of director for the purpose of avoiding 
 liability for debts thereafter to be contracted, and he could 
 accomplish that result either by resigning or by an absolute 
 sale and transfer of his stock. "^^ The two essentials which 
 vitiate an assignment by an alleged insolvent corporation 
 
 ^^ Vanderpoel v. Gorman, 140 ^^ French v. Andrews, 81 Hun, 272, 
 
 N. Y. 563, 24 L.R.A. 548, 35 N. E. 30 N. Y. Supp. 796 (1894) ; aff'd 
 
 932 (1894); L..1890, c. 564, § 48; 145 N. Y. 441, 40 N. E. 214; St. 
 
 now § 66 of St. Corp. L. Corp. L. § 48 (L. 1890, c. 564) ; 
 
 " Shaw V. Ansaldi Co., Inc., 178 now § 66. 
 
 A. D. 589, 165 N. Y. Supp. 872 " Sinclair v. Fuller, 158 N. Y. 607, 
 
 (1917); St. Corp. L. § 66. 53 N. E. 510 (1899). 
 
476 BUSINESS CORPORATIONS IN NEW YORK § 404 
 
 ' ' are the insolvency or pending insolvency of the corporation 
 and the intent to create a preference."" The statute pro- 
 hibiting the giving of a preference to any creditor by an 
 insolvent corporation, its officers, directors or stockholders 
 has this effect: "(1) It prohibits officers and directors of an 
 insolvent corporation, or of one about to become insolvent, 
 from using their knowledge of its condition and their domi- 
 nant position for their individual benefit in collecting their 
 own claims, either through a voluntary payment or through 
 collusive and preferential liens to the prejudice of other cred- 
 itors, not so favorably situated. (2) It prohibits a preferen- 
 tial general assignment by a corporation, though it does not 
 forbid assignments without preferences. (3) It prohibits a 
 transfer of any of the corporate assets to an officer, director 
 or stockholder upon any other consideration than the pay- 
 ment of the full value of the property in cash."" The rule 
 of strict construction applicable to highly penal statutes 
 should not be applied to the statute making officers and 
 directors of a corporation personally liable for loss accruing 
 to its stockholders and creditors by reason of a transfer of its 
 property while insolvency is imminent or existing." In con- 
 sidering the effects of the statute making invalid a transfer of 
 corporate property pending insolvency " the rule is that in 
 cases where the creditor innocently receives payment from the 
 principal debtor, which he is afterwards required to repay 
 because it constituted an unlawful preference, the debt will 
 not, therefore, be considered as having been paid so as to 
 release the surety, but the creditor may pursue his remedy 
 against the surety as if no payment had been made. ' ' ^° 
 
 § 404. Id.: What Constitutes Preferential Transfer, In 
 General. — If a creditor of an insolvent corporation makes an 
 agreement by which it sells its goods to a t*hird person and 
 turns over to him such third person 's obligation to pay in satis- 
 
 ^' Matter of Rogers Construction ''" Wright v. Gansevoort Bank, 118 
 
 Co., 79 A. D. 419, 79 N. Y. Supp. A. D. 281, 103 N. Y. Supp. 548 
 
 444; aff'd 175 N. Y. 509, 67 N. E. (1907) ; St. Corp. L. § 48 (L. 1901, 
 
 1089; St. Corp. L. § 48 (L. 1892, c. 354); now § 66. 
 
 c. 688) ; now § 66. On liability of corporation to as- 
 
 ^ 'Brien v. East River Bridge signee of true owner for unauthor- 
 
 Co., 161 N. Y. 539, 48 L.R.A. 122, ized transfer of stock on its books, 
 
 56 N. E. 74 (1900); St. Corp. L. see note in 45 LR.A.(N.S.) 1076. 
 
 § 48; now § 66. On duty of corporation as to 
 
 ^° Caesar v. Bernard, 156 A. D. transfer of stock held in trust, gen- 
 
 724, 141 N. Y. Supp. 659 (1913) ; erally, see note in 15 L.R.A. 643. 
 aff'd 209 N. Y. 570, 103 N. E. 1122; 
 St. Corp. L. § 66. 
 
§ 404 POWERS, DUTIES AND LIABILITIES 477 
 
 faction of its indebtednesg to him, this is as much a preference 
 to him as if the goods were given to him direct.^ A prima 
 facie case to set aside an assignment by a corporation as made 
 while insolvent and for an injunction against the assignee's 
 collection of the property assigned is made out if such prop- 
 erty consisted of good accounts due in eleven days and worth 
 more than the amount paid therefor and the assignment was 
 made after recovery of a judgment against the assignor for 
 more than was received for the accounts.^ A transfer of a 
 ■ claim by a corporation to an officer thereof — though after it 
 has refused to pay its obligations — made simply to permit a 
 more effective enforcement of the claim and not to vest the 
 property in the officer, who sues solely on behalf and for the 
 benefit- of the corporation, is not void.^ In the absence of 
 fraud, the act of a corporation in paying a contract debt by 
 transferring some of its property on which there were large 
 prior incumbrances cannot be said to prejudice one who later , 
 becomes a judgment creditor, on the ground that the transfer 
 was made when corporate insolvency existed or was imminent, 
 particularly if the property encumbered would hardly have 
 brought the amount of the encumbrances if sold.* A payment 
 made by officers of a corporation in violation of the statute 
 prohibiting a corporation and its officers from giving a prefer- 
 ence does not invalidate an assignment without preferences 
 subsequently made by the corporation for the benefit of cred- 
 itors.° A company having notes made by a corporation later 
 adjudged bankrupt, endorsed by a good endorser, without 
 knowledge forbidding it so to do, which gives up such notes, 
 in consideration of the transfer of certain property to it by 
 the corporate maker of the notes, and thus loses the security 
 of its endorsement, cannot be asked to return such property 
 on the ground that such transfer of property is a preference 
 within the ban of the statute.^ A transfer by a corporation 
 to one of its stockholders of all of its property, with the right 
 in him to collect all accounts and run the company until its 
 indebtedness to him should have been paid, continuing while 
 
 1 Salt V. Ensign, 79 Hun, 107, 29 Co., 109 A. D. 838, 96 N. T. Supp. 
 
 N. Y. Supp. 659 (1894). 717 (1905); St. Corp. L. § 48 (L. 
 
 ^ Kemp V. Able Realty Mainte- 1901, e. 354) ; now § 66. 
 
 nance Co., Inc., 174 A. D. 242, 160 ' ^Creteau v. Foote «fc Thome Glass 
 
 N. Y. Supp. 1055 (1916) ; St. Corp. Co., 54 A. D. 168, 66 N. Y. Supp. 
 
 L. § 66 (L. 1909, c. 61). 370 (1900); St. Corp. L. § 48 (L. 
 
 ' Sanders v. Barnaby, 173 A. D. 1890, c. 564) ; now § 66. 
 
 244, 159 N. Y. Supp. 579 (1916) ; " Perry v. Van Norden Trust Co., 
 
 St. Corp. L. § 66 (L. 1909, c. 61). 192 N. Y. 189, 84 N. E. 804 (1908) ; 
 
 * Gordon v. Southgate Building St. Corp. L. § 48; now § 66. 
 
478 BUSINESS CORPORATIONS IN NEW YORK § 405 
 
 it was insolvent to his knowledge, is. void though he had trans- 
 ferred his stock to employees with the understanding that 
 they should derive from it only what might accrue from it 
 after repayment to him of all indebtedness owing him from 
 the company/ " ... the action of a corporation, by 
 which payment in part of a note by the maker, and the sur- 
 render and cancellation by him of the corresponding contract 
 of the corporation, were received by it in satisfaction and 
 extinguishment of the note " cannot be considered a " trans- 
 fer ' ' within a statute making all transfers of any of a corpo- 
 ration 's estate, after the filing of a petition for its dissolution, 
 in payment of or as security for any existing or prior debt, 
 or for any other consideration, void as against receivers 
 appointed on such petition, or as against corporate creditors.* 
 § 405. Id.: Mortgage. — " The claims of general creditors 
 of a mortgagor are in general postponed to the mortgage, 
 even when their debts were contracted prior to its execution. 
 . . . expenses incurred by receivers in the management 
 and preservation of the property which is the subject of the 
 receivership may, by order of the court, be made a primary 
 charge and displace the priority of lien which, in ordinary 
 cases, attaches to a mortgage security existing at the time of 
 the insolvency. The courts have assumed to go still further, 
 and to adjudge priority of payment of debts contracted by 
 a failing corporation within a few months prior to its 
 adjudged insolvency for labor, supplies and necessary current 
 expenses incurred in the struggle to keep itself alive. There 
 is a sound equity which supports the doctrine that when the 
 nature of the property is such that the business to which it 
 has been devoted cannot be discontinued without great prob- 
 able loss, the court may authorize it to be continued by its 
 oflScer and receiver, pending the closing up of the affairs of 
 the insolvent corporation. Expenses incurred by a receiver 
 under such circumstances may be justly said to be expenses 
 of preservation for the benefit of bondholders or other per- 
 sons entitled to share in the final distribution, which ought to 
 be first paid. . . . The right of a creditor of an insolvent 
 corporation in the hands of a receiver to have a preference 
 over bondholders under a first mortgage is strictissimi 
 juris." ^ The prohibition against the transfer by a corpo- 
 
 ' Olney v. Baird, 7 A. D. 95, 40 " Farmers' Loan & Trust Co. v. 
 
 N. Y. Supp. 202 (1896); St. Corp. Bankers' & Merchants' Telegraph 
 
 L. § 48 (L. 1890, c. 564) ; see now Co., 148 N. Y. 315, 31 L.R.A. 403, 
 
 § 66. 42 N. E. 707 (1896). 
 
 'Sands V. Hill, 55 N. Y. 18 
 (1873) ; 2 R. S. 469, § 71. 
 
§ 405 POWERiS, DUTIES AND LIABILITIES 479 
 
 ration of its property to its officers or stockholderg is founded 
 upon its refusal to pay its debts or upon its existing or pend- 
 ing insolvency and an intent to give a preference; so that a 
 chattel mortgage given by the directors to one loaning the 
 corporation money, under the bona fide belief that the loan 
 will enable the corporation to swim is not void." A prefer- 
 ence by a corporation to any particular creditor over other 
 creditors is not to be inferred from its execution three months 
 before a petition against it in bankruptcy is filed of a mort- 
 gage for a term of years to a trustee to secure bonds issued 
 to some creditors, unless it is shown that it was given in view 
 of insolvency." An order requiring a temporary receiver of 
 a corporation, appointed on a showing by its directors of 
 insolvency, and empowered to continue the corporate busi- 
 ness, to hold the rents and profits of premises in his hands, 
 which the corporation had mortgaged and which had been 
 foreclosed before his appointment, subject to the further 
 direction of the court, does not create a lien prohibited by the 
 statute against preferences by an insolvent corporation." In 
 an action by a judgment creditor of a corporation to require 
 a stockholder to account for personalty of the corporation 
 conveyed to him by chattel mortgage on the ground that when 
 mortgaged the personalty constituted the sole assets of the 
 corporation and its liabilities exceeded its assets, it must be 
 alleged that the mortgage was given upon inadequate or non- 
 existent consideration or for an antecedent debt due the stock- 
 holder, as well as that at the date of the transfer the plaintiff 
 was a creditor of the corporation or held a claim against it." 
 A mortgage given by a corporatioii does not violate the stat- 
 utory prohibition against corporate transfers in contempla- 
 tion of its insolvency when its execution, though while the 
 corporation was concededly insolvent, was but the observance 
 of contractual obligations entered into when there was no 
 question as to its absolute soundness." When, under a con- 
 
 " Swan V. Stiles, 94 A. D. 117, 87 Supp. 354 (1912) ; St. Corp. L. § 66. 
 
 N. Y. Supp. 1089 (1904) ; St. Corp. The judgment was by a personal 
 
 L. § 48 (L. 1892, c. 688) ; now § 66. representative for damages for his 
 
 ^^ Wills V. Venus Silk Glove Mfg. decedent 's death through the corpo- 
 
 Cc, Inc., 170 A. D. 352, 156 N. Y. ration's negligence and it was not 
 
 Supp. 115 (1915) ; St. Corp. L. § 66. shown by the complaint that dece- 
 
 ^^ Matter of Busch Brewing Co., dent 's death happened before the 
 
 41 A. D. 204, 58 N. Y. Supp. 812 transfer. 
 
 (1899); St. Corp. L. § 48 (L. 1890, "Black v. Ellis, 197 K Y. 402, 
 
 c. 564) ; now § 66. * 90 N. E. 958 (1910) ; St. Corp. L. 
 
 ^^ Ginsberg v. Automobile Coach- § 48 ; now § 66. 
 ing Co., 151 A. D. 627, 136 N. Y. 
 
480 BUSINESS CORPORATIONS IN NEW YORK § 406 
 
 tract mader with a corporation prior to the appointment of a 
 temporary receiver in proceedings for its dissolution, a mort- 
 gage is given by it to a trustee to secure bondholders and the 
 trustee has started foreclosure, the court has no power on 
 appointing the temporary receiver to enjoin the prosecution 
 of the foreclosure proceedings." In order that a mortgage 
 by a corporation violate the statute making " any transfer or 
 assignment in contemplation of the insolvency of such com- 
 pany ' ' void, the fact of insolvency is not conclusive that the 
 mortgage was made in contemplation thereof, but the act must 
 be in anticipation or in view of insolvency." 
 
 § 406. Id.: Judgment. — The statute making void all sales, 
 transfers, mortgages, etc., of a corporation's property in pay- 
 ment for its debts, etc., and all judgments confessed by it, 
 after the filing of a petition for its dissolution " was aimed, 
 not at the disposition of the corporate property made under 
 the order of the court by its receiver, or even by the corpo- 
 ration, but at the voluntary disposition of its property by the 
 insolvent corporation ; and the confession of judgment pro- 
 hibited was one made by the corporation as its voluntary act 
 without the interference of the court, and not a judgment 
 . . . which rests upon no confession, nor even consent, but 
 upon the action and order of the court . . . " " The mean- 
 ing of the statute prohibiting corporate ofiBcers from suffering 
 a judgment against the corporation is that " when a corpora- 
 tion is insolvent or its insolvency is imminent, no judgment 
 shall be valid which is suffered by any of its officers, directors 
 or stockholders with the intent of giving a preference to any 
 particular creditor over other creditors. . . . But where 
 a creditor has a just claim to which the corporation has no 
 defense, and he adopts the ordinary process and procedure of 
 the court to enforce it, which results in a judgment by default, 
 it cannot be properly held to be within the condemnation of 
 the statute." The purpose of the statute making void any 
 transfer of a corporation's property in contemplation of its 
 insolvency is to prevent unjust discrimination among cred- 
 itors of an insolvent company, but ' ' only in one way, to wit. : 
 by restraint upon the action of the corporation and its 
 officers ; so that mere silence or omission on their part, such as 
 
 " Matter of Hamilton Park Co., 1 " Herring v. N. Y., Lake Erie & 
 
 A. D. 375, 37 N. Y. Supp. 310 Western R. R. Co., 105 N. Y. 340, 
 
 (1896) J C. C. P. § 2423. 12 N. E. 763 (1887). 
 
 "Paulding v. The Chrome Steel ^^ Lopez v. Campbell, 163 N. Y. 
 
 Co., 94 N. Y. 334 (1884) ; 1 R. S., 340, 57 N. E. 501 (1900) ; St. Corp. 
 
 part 1, c. 18, tit. 4, § 4, p. 603; see L. § 48; now § 66. 
 now St. Corp. L. § 66. 
 
§ 406 POWEBiS, DUTIES AND LIABILITIES 481 
 
 letting creditors take judgments by default against the corpo- 
 ration on claims to which there are no just defenses, does not 
 offend against the statute, although if discrimination results 
 from affirmative action of the corporation taken for the 
 express purpose of giving certain creditors some advantage 
 in its property the statute might apply."" A judgment 
 obtained by a creditor of a corporation against it is not 
 avoided as preferential by " the mere fact that the officers of 
 the corporation do not oppose the creditor in his effort to get 
 the judgment, but remain passive " ; though if the corporation 
 suffered the creditor to take the judgment with the intent of 
 giving him a preference, the judgment is void.^" " Merely 
 permitting a creditor [not a stockholder or officer] to obtain 
 a judgment in the regular course of legal proceedings is not 
 on the part of the officers of the corporation a transfer or 
 assignment of the property of the corporation within the 
 meaning of the statute " prohibiting the assignment of the 
 property of a corporation which has refused to pay its obliga- 
 tions when due or in contemplation of insolvency; nor the 
 fact that the indebtedness was changed from one note for the 
 full amount to several notes for smaller amounts so that judg- 
 ments might be had thereon in a shorter time in a court which 
 would have no jurisdiction of a single suit for the whole 
 amount of the indebtedness.^ Whether insolvency be defined 
 as a present inability to pay current obligations as they 
 mature or inadequacy of property to pay debts, a corporation 
 which is unable to meet a note and permits the payee to obtain 
 judgment thereon under such circumstances as to conceal its 
 entry from other creditors is guilty^of the statutory wrong of 
 giving a preference to one creditor over another and the judg- 
 ment will be set aside.^ The facts of each case must be exam- 
 ined to determine whether a judgment against a corporation 
 is void as having been suffered by an officer, director or stock- 
 holder with the intent to prefer a creditor.' In determining 
 whether or not judgments against an insolvent corporation 
 are void, as being equivalent to assignments or transfers by 
 it of its property in contemplation of insolvency, the judg- 
 
 " Vamum v. Hart, 119 N. T. 101, ^ Lodi Chemical Co. v. Chas. H. 
 
 23 N. E. 183 (1890). Pleasanis Co., 25 Misc. 97, 51 N. Y. 
 
 ^ Milbank V. de Riesthal, 82 Hun, Supp. 668 (1898); St. Corp. L. 
 
 537, 31 N. Y. Supp. 522 (1894) ; St. § 48 (L. 1890, e. 564, as amended) : 
 
 Corp. L. § 48 (L. 1892, c. 688) ; now now § 66. 
 
 § 66. * SpeUman v. Loosehen, 162 N. Y. 
 
 1 French v. Andrews, 145 N. Y. 268, 56 N. E. 741 (1900) ; St. Corp. 
 
 441, 40 N. E. 214 (1805) ; St. Corp. L. § 48; now § 66. 
 L. § 48; now § 66. 
 
 B. C. N. Y.— 31 
 
482 BUSINESS CORPORATIONS IN NEW YORK § 407 
 
 ments will be held void if entered upon offers therefor by the 
 corporation, made when it knew it was insolvent; the judg- 
 ments will be held void if in favor of an officer and director of 
 the corporation while it was insolvent; but the judgments will 
 be held valid if recovered by a bona fide creditor in regular, 
 legal course, in an action to which there was no defense and 
 in which judgment could be had before a receiver could have 
 been appointed in any proceedings which the directors of the 
 corporation might seek to take for its voluntary dissolution/ 
 A judgment is " suffered " by a corporation with intent to 
 prefer a particular creditor' while it is insolvent, so as to 
 invalidate it, if a new loan is obtained for the corporation with 
 intent to give such creditor security not only for such loan 
 but for loans previously made when the corporation to its 
 knowledge was insolvent ; the obligations given by it for such 
 loan were split up in such amounts as to enable the creditor to 
 sue in the City Court of New York without waiting the time 
 necessary for an action in the Supreme Court ; and the presi- 
 dent prevented proceedings for a receiver of the corporation 
 by seizing process and pleadings to be used therefor and 
 holding them till such creditor got judgment, issued execution 
 and levied on the corporate property." 
 
 § 407. Id.: Intent to Prefer. — "An assignment or transfer 
 with intent to delay the collection of a debt is condemned by 
 the statute and the conunon law, no less than a transfer or 
 assignment into which the element of actual fraud enters. ' ' " 
 A corporation has the right to transfer its property as 
 security for its debts and to make pledges of it for the same 
 object, when such transfers and pledges are not made with 
 the intent of hindering arid delaying its other creditors; and 
 in order that fraud should be established, there must be evi- 
 dence froiri which no inference of an honest purpose can be 
 drawn.' Under the statute making void any transfer by a 
 corporation "when insolvent or in contemplation of insolv- 
 ency, with the intent to give a preference to any particular 
 creditor over other creditors of the company ", the intent to 
 give a preference is fundamental and must be proven and 
 alleged like any other fact ; and ' ' so long as the debtor corpo- 
 
 *Kmgsley v. Eirst National Bank "Buell v. Rope, 6 A, D. 113, 39 
 
 of Bath, 31 Hun, 329 (1884); § 4, N. Y. Supp. 475 (1896). 
 tit. 4, e. 18, pt. 1, R. S. See now ^Merriam v. Wood & Parker 
 
 St. Corp. L. § 66. Lith<^aphing Co., 19 A. D. 329, 46 
 
 = Ro9sman v. Seaver, 41 A. D. 603, N. Y. Supp. 484 (1897). 
 58 N. Y. Supp. 677 (1899); St. 
 Corp. L. § 48 (L. 1892, c. 688) ; now 
 S 66. 
 
§ 407 POWERS, DUTIES AND LIABILITIES 483 
 
 ration, notwithstanding the pressure of great embarrassment, 
 entertains an honest expectation, in the exercise of a reason- 
 able intelligence, of going on with its business and paying all 
 its debts, its acts cannot be brought' within the operation of 
 this statute." * A transfer of corporate property is not void 
 as made in contemplation of insolvency if when made the cor- 
 poration's officers, its dreditors and the trustee-transferees 
 believed the' company solvent, though this belief was found 
 later to be erroneous.' An assignment of property by a cor- 
 poration which is subsequently found to have been insolvent 
 when the assignment was made and continued so, is not pre- 
 ferred: it must_ further be proven that the assignment was 
 made with the intent of giving a preference ; and if the evi- 
 dence ' ' is capable of an interpretation which makes it equally 
 consistent with the absence as with the presence of a wrongful . 
 act, that meaning must be ascribed to it which accords with 
 its absence." ^° The statute making invalid a transfer of cor- 
 porate property pending insolvency " applies whenever a 
 corporation is insolvent or its insolvency is imminent, if the 
 payment or transfer is made with intent on the part of the 
 debtor to give a preference, without regard to the creditor's 
 intent or even his knowledge as to the actual or imminent 
 insolvency of the debtor. ' ' " The intent to create a preference 
 in favor of one creditor over another must be present and 
 proven to enable a creditor to take advantage of the statute 
 making invalid any transfer of a corporation's property while 
 its insolvency is imminent or exists." To avoid an assign- 
 ment of corporate property under the statute making it void 
 
 ' Curtis V. Leavitt, 15 N. Y. 2 ° New Britain National Bank v. 
 
 (1857) ; 1 R. S. 588, § 9. See now Cleveland Co., 91 Hun, 447, 36 N. Y. 
 
 St. Corp. L. § 66. " The term insolv- Supp. 387 (1895) ; aff'd 158 N. Y. 
 
 ency can mean nothing less than the 722, 53 N. E. 1128. 
 
 inability of the company and the in- ^° Van Slyek v. Warner, 118 A. D. 
 
 adequacy of its property to pay its 40, 103 N. Y. Supp. 1 (1907) ; aff'd 
 
 debts, and not a present inability to 192 N. Y. 547, 84 N. E. 724; St. 
 
 pay in cash or its equivalent. . . . Corp. L. § 48 (L. 1892, c. 688); 
 
 [f the property is sufficient to pay now § 66. 
 
 all, the payment to one does not ^^ Wright v. Gansevoort Bank, 118 
 
 prejudice the others. The assets may A. D. 281, 103 N. Y. Supp. 548 
 
 be presently unavailable, because (1907); St. Corp, L. § 48 (L. 1901, 
 
 presently inconvertible. That is not c. 354) ; now § 66. 
 
 insolvency which furnishes sufficient ^^ Abrams v. Manhattan Consumers 
 
 means for the ultimate liquidation of Brewing Co., 142 A. D. 392, 126 
 
 all the debts. An undue preference N. Y. Supp. 844 (1911) ; St. Corp. 
 
 imongst creditors means the giving L. § 66. 
 to some that which the debtor with- 
 lioMs from and has not the ability to 
 nve to others." 
 
484 BUSINESS CORPORATIONS IN NEW YORK § 408 
 
 if given while the corporation is insolvent, unless the assignee 
 is "an officer or director or stockholder of the corporation 
 making the assignment, it must be alleged and proved that 
 when the assignment was made the corporation was insolvent 
 or its insolvency was imminent, and that the assignment was 
 made with the intent of giving a preference to a particular 
 creditor over other creditors of the . corporation. ' ' ^^ 
 " ... where a corporation merely fails -to put in a 
 defense to a just debt it is not to be inferred from that fact 
 alone that the judgment was suffered with intent to give a 
 preference, and the judgment thus entered is not invalid. ' ' " 
 ' ' The transfer by an insolvent firm of all their tangible prop- 
 erty to a corporation formed by the members of the partner- 
 ship for the purpose of acquiring such firm assets, without 
 giving any consideration save the issue of stock therefor, and 
 without assuming any of the debts of the firm, is about as 
 suspicious a circumstance and as indicative of an intent to 
 hinder the firm creditors as anything that can readily be 
 imagined. It requires a satisfactory explanation, to say the 
 least . . . ."'^^ An intent by a corporation to prefer a 
 creditor while insolvent is shown by proof that he was paid 
 while it knew it could not with the moneys it then had meet 
 its obligations in the ordinary course of business as they 
 became due, that two days after such payment a suit against 
 it was brought by a friendly creditor at its instigation and 
 that four days after such payment another suit against it was 
 brought by its secretary on its demand note held by him." 
 
 § 408. Id.: When Does Insolvency Exist. — In order to invali- 
 date the title of an assignee of personal property of a corpo 
 ration under an assignment by it to him made before the com- 
 mencement of an action for its dissolution, the insolvency 
 must be proven." The word " insolvent " in the statute 
 avoiding a transfer of property by a corporation in contem- 
 plation of insolvency means " a general inability to pay obli- 
 gations as they become due in the regular course of busi- 
 ness. ' ' " The statutory liability imposed upon corporate 
 
 "Dill & OoUins Co. v. Morison, c. 688, § 48; see now St. Corp. L. 
 
 159 A. D. 583, 144 N. Y. Supp. 894 § 66. 
 
 (1913); St. Corp. L. § 66. " "Higgins v. Worthington, 90 
 
 "Matter of Mnehlfeld & Haynes Hun, 436, 35 N. Y. Supp. 815 
 
 Piano Co., 12 A. D. 492, 42 N. Y. (1895). 
 
 Supp. 802 (1896) ; St. Corp. L. § 48 " French v. Andrews, 81 Hun, 272, 
 
 (L. 1892, c. 688) ; now § 66. 30 N. Y. Supp. 796 (1894) ; aff'd 
 
 ^=Buell V. Rope, 6 A. D. 113, 39 145 N. Y. 441, 40 N. E. 214; St. 
 
 N. Y. Supp. 475 (1896). Corp. L. § 48 (L. 1890, c. 564) ; now 
 
 ^^ Baker v. Emerson, 4 A. D. 348, § 66. 
 38 N. y, Supp. 576 (1896) ; L. 1892, 
 
S 408 POWERS, DUTIES AND LIABILITIES 485 
 
 directors and officers personally for losses sustj^ined by its 
 creditors or stockholders by reason of a transfer of its prop- 
 erty while insolvency exists or is imminent to its officers, 
 directors or stockholders, is not limited to corporations which 
 have defaulted in the payment of notes or other obligations." 
 Payments and transfers by a stock corporation to a creditor 
 will be set aside as constituting an illegal preference when 
 made while the corporation was indebted to its other creditors 
 in an amount which it was unable to pay and never did pay.^" 
 That its assets are less than its liabilities does not make a 
 corporation insolvent: the test is its general inability to pay 
 is obligations as they become due, because a going corpora- 
 tion may have an honest expectation, in the exercise of reason- 
 able intelligence, entertained sincerely and in good faith, of 
 going on with its business and paying all its debts ; but if it 
 has abandoned its business, this test no longer holds good-^ 
 Accounts based on written agreements fixing the rate of pay- 
 ment for certain services rendered a corporation are not its 
 " obligations " in the sense in which that word is used in the 
 statute avoiding the transfer of any of its property by a cor- 
 poration to its officers, and others, which has refused to pay 
 any of its obligations.^ " A corporation cannot be said to 
 have committed an act of bankruptcy or insolvency, or to 
 have neglected or refused to pay and discharge its obligations, 
 because its demand notes remain outstanding and unpaid, 
 until payment has been demanded- " ' A corporation owing 
 overdue claims of $30,000 on express contract obligations 
 upon which suits to which it had no defense had been brought 
 or were pending, not to mention other matured or maturing 
 obligations on which suits were threatening, and having assets 
 of but a few thousand dollars save for a very heavily niort- 
 gaged apartment house is insolvent, in the sense that its 
 " stock, effects and other property . . . are insufficient 
 to pay all just demands for which it is liable or to afford a 
 reasonable security to 'those who may deal with it ' ', so as to 
 warrant the appointment of a temporary receiver in a pro- 
 ceeding for its voluntary dissolution ; and the entry nunc pro 
 
 '° Caesar v. Bernard, 156 A. D. N. Y. Supp. 844 (1911); St. Corp. 
 
 724, 141 N. Y. Supp. 669 (1913) ; L. § 66. 
 
 aff'd 209 N. Y. 570, 103 N. E. 1122; ^Munzinger v. United Press, 52 
 
 St. Corp. L. § 66. A. D. 338, 65 N. Y. Supp. 194 
 
 ^"Montague v. Hotel Gotham Co., (1900); St. Corp. L. § 48 (2 R. S., 
 
 208 N. Y. 442, 102 N. E. 513 (1913) ; 9th ed., 1022) ; now § 66. 
 
 St. Corp. L. § 66. "Denike v. New York and Rosen- 
 
 ^ Abrams v. Manhattan Consumers dale Lime and Cement Co., 80 N. Y. 
 
 Brewing Co., 142 A. D. 392, 126 599 (1880). 
 
486 BUSINESS CORPORATIONS IN NEW YORK §§ 409, 410 
 
 tunc by the court of an order correcting the defect in its 
 original order appointing the receiver in omitting to recite 
 that insolvency had been satisfactorily shown.* 
 
 § 409. Id.: Transfer By What Persons Prohibited.— Neither 
 a corporation nor any of its officers, stockholders or directors 
 must transfer its property.^ The statute prohibits an assign- 
 ment by the corporation as well as by its officers and stock- 
 holders of corporate property and stock in contemplation of 
 insolvency.* An assignment by an officer of a corporation of 
 his claim against it to secure or pay his bona fide creditors, in 
 good faith, is no violation of a statute making it unlawful for 
 a corporation situated as the one in question to transfer its 
 property to any officer or stockholder for payment of its debts 
 or to make any transfer in contemplation of its insolvency.' 
 The statute prohibiting the transfer by a corporation, or its 
 officers, directors and stockholders, of its property, during its 
 insolvency, in order to prefer any creditor, does not mean that 
 a depositor in a bank who has withdrawn the deposit on learn- 
 ing that the bank was about to close is liable to be sued for 
 the money whenever it can be shown that he acted upon infor- 
 mation given to him by a director of the bank, even though 
 the latter be the president of the depositor and signed the 
 latter 's corporate check withdrawing the money in question.^ 
 
 § 410. Id.: Transfer to What Persons Prohibited.— The 
 transfer of the corporate property must be made neither to 
 the corporate officers nor to its directors nor to its stock- 
 holders.' " The general object of the statute [against trans- 
 fers of its property by an insolvent corporation] is plain, 
 viz., to secure equality among creditors and to prevent fraud- 
 ulent transfers in fraud of their, rights. The statute provides 
 
 * Matter of Lenox Corporation, 57 evidences of debt, in specie, or law- 
 
 A. D. 515, 68 N. Y. Supp. 103 ful money of the United States, it 
 
 (1901) ; afif'd 167 N. Y. 623, 60 N. E. shall not be lawful for such com- 
 
 1115; C. C. P. §§ 2423, 2419, 2429. pany, or any of its officers, to assign 
 
 ° St. Corp. L. § 66 (L. 1909, c. 61). or transfer any of the property or 
 
 ° Troy Waste Mfg. Co. v. Harri- choses in action of such company to 
 
 son, 73 Hun, 528, 26 N. Y. Supp. any officer or stockholder of such 
 
 109 (1893) ; St. Corp. L. § 48 (L. company, directly or indirectly for 
 
 1890, c. 564) ; now § 66. the payment of any debt ; and it shall 
 
 ^ Jefferson County Bank v. Town- not be lawful to make any transfer 
 
 ley, 159 N. Y. 490, 54 N. E. 74 or assignment in contemplation of 
 
 (1899) ;■ 1 R. S. 603, § 4. See now insolvency." 
 
 St. Corp. L. § 66; The assignment ^ O'Brien v. East River Bridge Co., 
 
 was by husband to wife. The stat- 161 N. Y. 539, 48 L.R.A. 122, 56 
 
 ute was: "Whenever any ineorpo- N. E. 74 (1900); St. Corp. L. § 48; 
 
 rated company shall have refused the now § 66. 
 
 ji'aymeht of any of its notes, or other ' St. Corp. L. § 66 (L. 1909, c. 61). 
 
§ 410 POWERS, DUTIES AND LIABILITIES 487 
 
 for two cases, first, where the corporation has refused pay- 
 ment of its notes, or other evidence of debt, and is in default, 
 it prohibits any subsequent assignment or transfer by the 
 corporation or any of its officers, directly or indirectly, of 
 any of its property, to any officer or stockholder, in payment 
 of a debt, and, se'cond, it prohibits any transfer or assignment 
 whatever on any consideration, to an officer, stockholder or 
 other person in contemplation of insolvency."" Both an' 
 assignment by a corporation or its officers to its stockholders 
 or officers after it has refused to pay its debts and an assign- 
 ment to anyone in contemplation of its insolvency are void." 
 " To a stockholder or director a transfer of corporate prop- 
 erty is forbidden, if the corporation shall have refused to 
 pay any of its notes or obligations when due, but to other 
 creditors a transfer of corporate property in payment of its 
 debts is only prohibited, ' 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.'"" '* ... the true construction of 
 the statute [making it illegal for a corporation which has 
 refused payment of any evidence of its debt to transfer its 
 property to its officers, etc., or to anyone in contemplation of 
 insolvency] prohibits the acquisition by a director of an insol- 
 vent corporation, who is also a creditor, through the process 
 of attachment, of a preferential lien on the corporate 
 assets."" An assignment by a corporation to its directors 
 for the benefit of creditors without preference is not invalid 
 
 ^° Throop V. Hatch Lithographic " Every ' such ' transfer and assign- 
 Co., 125 N. Y. 530, 26 N. E. 742 ment, that is, every transfer and as- 
 (1891) ; 1 R. S. 603, § 4. See now signment coming mthin either pro- 
 St. Corp. L. § 66. hibition, is declared to be utterly 
 
 ^^ Harris v. Thompson, 15 Barb, void." See now St. Corp. L. § 66. 
 
 62 (1853) ; 1 R. S. 603, § 4, 4th ed., "Milbank v. Welch, 74 Hun, 497, 
 
 p. 1175, says: " Whenever any in- 26 N. Y. Supp. 705 (1893); St. 
 corporated company shall have re- ' Corp. L. § 48; L. 1892, c. 688; now 
 
 fused the payment of any of its § 66. "In the latter case the plain- 
 
 . . . evidences of debt ... it tiff does not sustain the burden of 
 
 shall not be lawful ... to assign proof resting upon him by merely 
 
 or transfer any of the property . . . showing a transfer of property to a 
 
 to any officer or stockholder . . . creditor in payment of a just debt 
 
 for the payment of any debt; and after the corporation has failed to 
 
 it shall not be lawful to make any meet at maturity one or more of its 
 
 transfer ... in contemplation obligations." 
 
 of the insolvency of such company, " Throop v. Hatch Lithographic 
 
 to any person . . . ; and every Co., 125 N. Y. 530, 26 N. E. 742 
 
 such transfer and assignment to such (1891) ; 1 R. S. 603, § 4. ■ See now 
 
 officer, stockholder, or other person St. Corp. L. § 66. 
 . . . shall be utterly void." Held : 
 
488 BUSINESS CORPORATIONS IN NEW YORK § 411 
 
 nnder the statute prohibiting a transfer by a corporation of 
 its property to its directors, and others, if it has refused to 
 pay any of its obligations." An assignment by a corporation 
 for the benefit of creditors is not void under the statute pro- 
 hibiting preferences to a corporation's officers by itself when 
 insolvent if the assignee was neither a director nor stock- 
 . holder at the time of the assignment." The statute prohibit- 
 ing a corporation which has refused payment of its evidences 
 of debt from transferring its property to any of its officers or 
 stockholders is intended to protect general corporate cred- 
 itors and to prevent officers and stockholders who happen also 
 to be corporate creditors from securing a preference to them- 
 selves ; and a stockholder cannot be shielded from the penalty 
 of the statute because he happens to be a member of a co-part- 
 nership to which the corporation is indebted." The legislature 
 intends that a trustee of a insolvent corporation's property 
 on its being wound up shall be selected by the court ; so that 
 an assignment by it of all its property for the benefit of cred- 
 itors in contemplation of insolvency to an individual selected 
 by its directors is void." " . . . . When the corporation 
 becomes insolvent, or when it is known or apparent to the 
 directors that it is unable to continue business, so that sus- 
 pension is imminent or inevitable, the assets become a trust 
 fund for equal distribution among the creditors, and the 
 directors must hold the assets for that purpose and have no 
 right to appropriate the same in payment of their individual 
 claims "; so that a trustee in bankruptcy of the corporation 
 may in equity cancel an agreement whereby it gave moneys 
 to its president and direct and compel him to account there- 
 for.^' 
 
 § 411. Id.: Who May Question Transfer. — Persons who 
 while not judgment creditors are yet tort creditors of a cor- 
 poration at the time of conveyance and assignment of its prop- 
 erty are creditors within the purview of the statute making its 
 
 "Munzinger v. United Press, 52 the statute. . . . The vice aimed 
 
 A. D. 338, 65 N. Y. Supp. 194 at is evidently a transfer for the 
 
 (1900'); St. Corp. L. § 48 (2 R. S., benefit of the director or stoek- 
 
 9th ed., 1022); now § 66. holder." 
 
 "Linderman v. Hastings Card & "Jones v. Blun, 145 N. Y. 333, 
 
 Paper Co., 38 A. D. 488, 56 N. Y. 39 N. E. 954 (1895) ; 1 R. S. 603, 
 
 Supp. 456 (1899) ; St. Corp. L. § 4. See now St. Corp. L. § 66. 
 
 § 48 (L. 1892, c. 688); now § 66. "Harris v. Thomi)9on, 15 Barb. 
 
 "If he had been, and had not re- 62 (1853). 
 
 signed, the assignment would still be " Joseph v. Raff, 82 A. D. 47, 81 
 
 valid, because it is not such a trans- N. Y. Supp. 546 (1903) ; aff'd 176 
 
 fer as is intended to be prohibited by N. Y. 611, 68 N. E. 1118. 
 
§ 411 POWERS, DUTIES AND LIABILITIES 489 
 
 officers and directors personally liable for any loss sustained 
 by its creditors and stockholders through a transfer of its 
 property to any of its oflScers, directors or stockholders while 
 insolvency exists or is imminent." One who has obtained 
 a judgment against a corporation for personal injuries 
 sustained through its negligence, after various mortgages 
 by it in contemplation of insolvency have been made, may 
 sue to set such mortgages aside, as the statute prohibiting 
 preferential assignments by a corporation in contemplation 
 of its insolvency relates as well to a transfer by the corpora- 
 tion itself as to a transfer by its ofScers, directors or stock- 
 holders.^ One who has recovered a judgment against a cor- 
 poration after it has made an assignment for the benefit of 
 creditors, but ia an action begun before that time, is a cred- 
 itor ' ' to the extent at least that he could bring an action to 
 set aside the assignment on the ground of fraud." ^ A cred- 
 itor assenting to a transfer of property of a corporation by 
 its president's signature, subject to its directors' approval, 
 is estopped from claiming it was made in contemplation of 
 insolvency if its directors remained passive, knowing of the 
 transfer, even though they never ratified the consent.^ One 
 judgment creditor of a corporation cannot, it seems, set aside 
 for his own sole benefit a transfer by it as being made with 
 intent to give a preference.^ A judgment creditor of a corpo- 
 ration whose execution has been returned unsatisfied may, 
 pending the trial of his action brought, before sale by its 
 assignee for the benefit of creditors of its assets, to hold the 
 assignment void as a preference given while it was insolvent, 
 enjoin the assignee from disposing of so much of the corpo- 
 rate assets as may be sufficient to satisfy his judgment should 
 he prove the preference given during insolvency.* In an 
 action in equity by a judgment creditor of a corporation who 
 has executions in the hands of the sheriff not returned unsat- 
 isfied in whole or in part, to set aside various transfers and a 
 
 " Caesar v. Bernard, 156 A. D. Cleveland Co., 91 Hun, 447, 36 N. f . 
 
 724, 141 N. Y. Supp. 669 (1913) ; Supp. 387 (1895) ; aff'd 158 N. Y. 
 
 afE'd 209 N. Y. 570, 103 N. E. 1122; 722, 53 N. E. 1128. 
 
 St. Corp. L. § 66. *Koehl v. Leibinger & Oehm 
 
 ^ Munson v. Grenesee Iron & Brewing Co., 24 Misc. 298, 52 N. Y. 
 
 Brass Works, 37 A. D. 203, 56 N. Y. Supp. 982 (1898) ; St. Corp. L. 
 
 Supp. 139 (1899); St. Corp. L. § 48 (L. 1892, e. 688) ; now § 66. 
 
 § 48 (L. 1890, c. 564) ; now § 66. * Koehl v. Leibinger & Oehm 
 
 1 Munzinger v. United Press, 52 Brewing Co., 26 A. D. 573, 50 N. Y. 
 
 A. D. 338, 65 N. Y. Supp. 194 Supp. 568 (1898) ; St. Corp. L. § 48 
 
 (1900). (L. 1890, c. 564); now § 66. 
 
 ^New Britain National Bank V. 
 
490 BUSINESS CORPORATIONS IN NEW YORK § 412 
 
 general assignment made by. the corporation on the ground 
 that they were made with intent to hinder and defraud its 
 creditors, the court can set them aside as to plaintiff's claim 
 so f iar as they affected specific property of the corporation in 
 the city and county where the executions were issued and the 
 action commenced; hut it cannot set them aside as. against 
 other parties or other property, or appoint a receiver of oW 
 the corporation's property." A creditor of a corporation 
 suing to set aside a preference made by such corporation in 
 contemplation of insolvency, contrary to the statute avoiding 
 such an act, is not entitled, upon setting aside such preference 
 as void under the statute, to secure to himself priority of 
 payment over other creditors, even though the action be 
 brought on behalf of all other creditors of such corporation, 
 some of whom are unknown, and none of whom appeared in the 
 action.* An action by a receiver of a corporation to set aside 
 transfers made by it while insolvent with intent to prefer cred- 
 itors and in fraud of creditors which asks judgment avoiding 
 the transfers, for an accounting of the property transferred 
 and delivery thereof to the receiver, and for injunctions 
 against disposition by the transferees of the property, is equi- 
 table in its nature and the complaint may not be dismissed 
 simply because the only relief practicable is the award of a 
 money judgment.' 
 
 § 412. Id.: Who Liable to Account for Property Transferred. 
 — Every person receiving by means of any prohibited trans- 
 fer, act or deed any property of the corporation is bound to 
 account therefor to its creditors or stockholders or other 
 trustees, and every transfer, assignment or other such act is 
 void; and every director or ofiBcer of a corporation who vio- 
 lates or is concerned in the violation of the statute prohibit- 
 ing such act or deed is personally liable to the creditors and 
 stockholders of the corporation to the full extent of any loss 
 they may respectively su' ' "in by such violation.' The lia- 
 bility of directors, officers and stockholders under the statute 
 prohibiting transfers of the property of corporations which 
 have failed to pay their liabilities has been heretofore 
 discussed.* 
 
 ^ Home Bank v. Brewster & Co., 14 A. D. 371, 43 N. Y. Supp. 1()12 
 
 15 A. D. 338, 44 N. Y. Supp. 54 (1897) ; St. Corp. L. § 48 (L. 1892, 
 
 (1897). c. 688) ; now § 66. The point should 
 
 ' Lodi Chemical Co. v. National be raised by answer or demurrer in- 
 Lead Co., 41 A. D. 535, 58 N. Y. stead of motion to dismiss at the 
 Supp. 717 (1899) ; St. Corp. L. § 48 trial. 
 (L. 1892, c. 688) ; now § 66. * St. Corp. L. § 66 (L. 1909, e. 61). 
 
 ' Stief el V. New York Novelty Co., ° See § 350, supra. 
 
§§ 413, 414 POWERS, DUTIES AND LIABILITIES 491 
 
 § 413. Id.: Dealing With Other Corporations, In General.'— 
 " The lg,w permits no siieh anomaly as one corporation organ- 
 ized by another corporation, which furnishes all its capital, 
 takes all its shares of stock and holds them for sale."^" 
 Assuming that a guaranty by one corporation of payment of 
 the bonds of another is ultra vires, yet the guaranty may 
 nevertheless be enforced by one taking the bonds as a quid 
 pro quo of his claim against the guarantor company." A 
 corporation is not liable upon notes given by another corpo- 
 ration prior to the incorporation of the former unless it 
 received some benefit from the goocjs for wliich the notes 
 were given or /some other consideration than such goods 
 given for the notes." A contract between a corporation con- 
 trolled by certain individuals and another corporation formed 
 and owned by them is presumptively fraudulent, particu- 
 larly if they fraudulently conspired to accomplish the con- 
 tract; and, if the contract was a mere scheme to avoid the 
 issue of stock for money or property, it is void.^^ " The 
 rule is well settled that an injunction will not be granted or. 
 sustained against a private corporation in a suit brought by^ 
 an individual in the interest of a rival private corporation. ' ' " 
 During the continuance of the World War any corporation 
 organized under the laws of the State of New York may 
 co-operate with other corporations and with natural persons 
 in the creation and maintenance of instrumentalities conducive 
 to the winning of the war."'^ 
 
 § 414. Id.: Interlocking Directorates. — When any stock 
 corporation becomes a stockholder in another pursuant to the 
 
 ^'' Schwab V. Potter Co., 194 N. Y. whenever the expenditures for such 
 
 409, 87 N. E. 670 (1909). purposes in any calendar year shall 
 
 "Arnot V. Erie Ry. Co., 67 N. Y. in the aggr^ate amount to one per 
 
 315 (1876). centum on the capital stock out- 
 
 ^^ Ginsburg v. Union Cloak & Suit standing, then, before any further 
 
 Co., 35 Misc. 389, 71 N. Y. Supp. expenditure is made during such 
 
 1030 (1901). year for such purposes by the cor- 
 
 ^^ Currier v. New York, West poration, ten days' notice shall be 
 
 Shore & Buffalo R. R. Co., 35 Hun, given to the stockholders in such 
 
 355 (1885). manner as the directors or trustees 
 
 ^* Jenkins v. Auburn City Ry. Co., may direct of the intention to make 
 
 27 A. D. 553, 50 N. Y. Supp. 852 such further expenditure, specifying 
 
 (1898). the amount thereof, and if written 
 
 ^^^ L. 1918, c. 240 : " and its di- objection to be made by stockholders 
 
 rectors or trustees may appropriate holding twenty-five per centuin or 
 
 and expend for such purposes such more of the stock of the corporation, 
 
 sum or sums as they may deem ex- such further expenditures shall not 
 
 pedient and as, in their judgment, be made until it shall have been au- 
 
 will contribute to the protection of thorized at a stockholders' meeting." 
 the corporate interests, provided that 
 
492 BUSINESS CORPORATIONS IN NEW YORK § 415 
 
 statute permitting it to become such stockholder, its president 
 or other officers are eligible to the office of director of such 
 other corporation the same as if they were individually stock- 
 holders therein.^^ "It is undoubtedly a well-settled rule of 
 law that executory contracts entered into by corporations 
 having common directors are voidable at the instance of 
 either corporation, and the court will not inquire into the 
 question whether or not it is beneficial to the corporation 
 seeking to avoid it. This right is vested in the corporation 
 and not in the individual stockholder. A stockholder cannot 
 enjoin the execution of a contract intra vires unless fraud is 
 shown. ' ' '° When an agreement is executed by two corpora- 
 tions having nearly identical directorates, the second con- 
 trolling the first and having a large pecuniary interest in the 
 non-performance of the agreement by the first, as well as in 
 expenditure of moneys under the agreement, the law will 
 invalidate the agreement at the instance of the first corpo- 
 ration even though there be no suggestion of actual fraud." 
 A corporation controlled by the same board of directors 
 which controls it and the corporation holding its stock cannot 
 be estopped from complaining of an agreement ratified by 
 action of such board as stockholders, when, acting as direct- 
 ors, such board could not have bound the first corporation to 
 the agreement.^' A small stockholder and bondholder in a 
 corporation may himself in his own name and without prior 
 demand of the corporation call it to account in equity, as well 
 as individual defendants owning a large majority of the 
 stock, who practically are its sole directors and managers, if 
 it is alleged that they as officers and trustees took from 
 themselves as officers and trustees of another corporation a 
 lease of the latter to the defendant corporation at an exorbi- 
 tant rent, to deplete the corporate funds and injure the plain- 
 tiff ; and if it averred that they have taken from the defend- 
 ant corporation's funds large sums on account of loans alleged 
 to have been made by them as individuals to the defendant 
 corporation." 
 
 § 415. Id.: Acquiring and Disposing of Stocks and Bonds of 
 Another Corporation, Governing Statutes. — The power of one 
 corporation to buy another's stock is discussed in the one 
 
 '"St. Corp. L. § 52 (L. 1909, ^^ Brooklyn Heights R. R. Co. v. 
 
 c. 61). Brooklyn City R. R. Co., 151 A. D. 
 
 "Burden v. Burden, 159 N. Y. 465, 135 N. Y. Supp. 990 (1912). 
 
 287, 54 N. E. 17 (1899). ^^Sage v. Culver, 147 N. Y. 241, 
 
 "Brooklyn Heights R. R. Co. v. 41 N. E. 513 (1895). 
 Brooklyn City R. R. Co., 151 A. D. 
 465. 135 N. Y. Supp. 990 (1912). 
 
§ 416 POWERS, DUTIES AND LIABILITIES 493 
 
 hundred and thirty-third section of this book. Any domestic 
 or foreign stock corporation (except a moneyed corporation) 
 may purchase, acquire, hold and dispose of *he stock, bonds 
 and other evidences of indebtedness of any domestic or for- 
 eign corporation and issue in exchange therefor its stock, 
 bonds or other obligations, (1) if authorized to do so by a 
 provision in any certificate of incorporation of such stock 
 corporation or in any certificate amendatory thereof or sup- 
 plemental thereto filed in pursuance of law; or (2) if the cor- 
 poration, the stock of which is so purchased, acquired, held or 
 disposed of is (a) engaged in a business similar to that of 
 such stock corporation, or (b) engaged in the manufacture, 
 use or sale of the property or in the construction or operation 
 • of works necessary or useful in the business of such stock 
 corporation or in which or in connection with which the man- 
 ufactured articles, product or property of such stock corpo- 
 ation are or may be used, or (c) a corporation with which 
 such stock corporation is or may be authorized to consoli- 
 date.^" When any such corporation is a stockholder in any 
 other corporation as just stated, its president or other officers 
 are eligible to the office of director of such corporation the 
 same as if they were individually stockholders therein; and 
 the corporation holding such stock possesses and exercises 
 in respect thereof all the rights, powers and privileges of 
 individual owners or holders of such stock,^ 
 
 § 416. Id.: In General. — The statute permitting a corpora- 
 tion to hold stock of and consolidate with another corporation 
 must be construed together with the statute prohibiting com- 
 binations of corporations in restraint of trade or for the pur- 
 pose of monopoly.^ " It is doubtless true that a corporation 
 cannot purchase, or deal in stocks of other corporations unless 
 expressly authorized by law so to do (citations). It is equally 
 true, however, that it may do whatever may be necessary 
 in the exercise of its corporate franchises. The selling of 
 property and collection of debts is among the powers given ; 
 and hence, it may take title to all kinds of property, even the 
 stock of another company, in the payment of a debt. ' ' ' The 
 
 ^°St. Corp. L. § 52 (L. 1909, oly Acts (L. 1897, c. 383; L. 1890, 
 
 c. 61). >j. 690). 
 
 'St. Corp. L. § 52 (L. 1909, 'Holmes & Griggs Mfg. Co. v. 
 
 c. 61). Holmes & Wess'ell Metal Co., 127 
 
 ^Matter of Attomey-aeneral, 124 N. Y. 252, 27 N. E. 831 (1891). 
 
 A. D. 401, 108 N. Y. Supp. 823 L. 1848, e. 40, § 8, under which the 
 
 (1908) ; St. Corp. L. § 40 (L. 1902, company was incorporated, provided 
 
 c. 601) ; § 7 (L. 1897, c. 384) ; see that " it shall not be lawful for such 
 
 now St. Corp. L. § 52; Anti-Monop- company to use any of their funds 
 
494 BUSINESS CORPORATIONS IN NEW YORK § 416 
 
 statutory authority to a corporation of holding stock in 
 another " does not permit one corporation to create another, 
 endow it with capital from its own assets and take all its 
 shares of stock in exchange."* " There is no limit to which 
 one stock corporation may purchase and hold the stock of 
 another stock corporation, no limit to the extent to which the 
 corporation as such stockholder may intrude its officers into 
 the directorate of the company whose stock is thus purchased 
 . . . ."° Equity will not intervene to enjoin the acquisi- 
 tion of the stock of one corporation by another, at the behest 
 of a stockholder in the former, simply because the purchasing 
 corporation confesses its desire to obtain a majority of the 
 other company's stock.* A corporation empowered to buy 
 the stocks and bonds of any corporation in exchange for its 
 own stocks and bonds may buy the stocks and bonds of a cor- 
 poration controlling a franchise ruinous in its operation to the 
 purchasing corporation.' The burden of proof is on one com- 
 plaining that a corporation unlawfully holds stock of other 
 companies to show the stocks are illegally held, and in the 
 absence of such proof the court will assume the action of the 
 corporation is legal.^ It is the business of one corporation 
 owning the majority of the stock of another to so operate the 
 latter as to make its stock of the highest possible value to the 
 holding company.' " ... A corporation cannot acquire 
 the majority of the stock of another corporation, obtain con- 
 trol of its affairs, divert the income of its business, refuse 
 business which would have enabled the defaulting company to 
 pay its interest, and then institute an action in equity to 
 enforce its obligations against such company, with the avowed 
 purpose of obtaining control of its property at less than its 
 value to the injury of the minority stockholders. . . . "" 
 
 in the purchase of any stock in any ' Rafferty v. Buffalo City Gas Co., 
 
 oth«r corporation." It sold out, by 37 A. D. 618, 56 N. Y. Supp. 288 
 
 unanimous consent of its stockhold- (1899) ; St. Corp. L. § 40 (L. 1892, 
 
 ers, to a new corporation and took c. 688) ; now § 52. 
 
 its stock in payment. ' Burden v. Burden, 159 N. Y. 
 
 * Schwab V. Potter Co., 194 N. Y. 287 (1899). 
 
 40O, 87 N. E. 670 (1909); St. Corp. »Venner v. New York Central & 
 
 L. § 40; now § 52. Hudson R. R. R. Co., 160 A. D. 
 
 = Venn«r v. New York Central & 127, 145 N. Y. Supp. 725 (1914); 
 
 H. R. R. R. Co., 160 A. D. 127, 145 aff'd 217 N. Y. 615 and 617, 111 
 
 N. Y. Supp. 725 (1914) ; aff'd 217 N. E. 487. 
 
 N. Y. 615 and 617, 111 N. E. 487; "Farmers' Loan & Trust Co. v. 
 
 St. Corp. L. § 52. New York & N. R. Co., 150 N. Y. 
 
 "Phelan v. Edison Electric Elu- 410, 34 L.R.A. 76, 44 N. E. 1043 
 
 minating Co., 24 Misc. 109, 53 N. Y. (1896) ; St. Corp. L. § 40; now § 52. 
 Supp. 505 flSQS). 
 
i 417 POWERS, DUTIES AND LIABILITIES 495 
 
 One corporation cannot disaflSrm a transaction by which 
 it acquires the stock of another corporation in an unau- 
 thorized and unlawful manner, or recover the money it paid 
 therefor, without either returning or offering to return 
 the stock; and a receiver of a corporation is under the 
 same obligation in this regard as is the corporation itself." 
 A stockholder of a holding corporation, formed by agreement 
 of stockholders of several constituent companies and others 
 who became the sole stockholders of the holding company, has 
 no cause of action against those who became stockholders in 
 the holding company for the recovery of alleged secret profits 
 retained by tjiem in transactions toward the organization of 
 the holding company, when no one else interested in the 
 holding or constituent companies disputes the validity of its 
 organization and the gravamen of the action is fraud of the 
 rights of the stockholders of such companies, as even if there 
 be overcapitalization it will not avail plaintiff because the 
 rights of the public are not involved.^^ 
 
 § 417. Id.: Combinations in Restraint of Trade, Governing 
 Statutes.- — Neither a domestic stock corporation nor a foreign 
 corporation doing business in New York State may combine 
 with any other corporation or person for the creation of a 
 monopoly or the unlawful restraint of trade or for the pre- 
 vention of competition in any necessary of lif e.^^ Every con- 
 tract, agreement, arrangement or combination is against pub- 
 lic policy, illegal and void, and any corporation or officer or 
 agent thereof who makes or attempts to make or enter into it 
 or who within New York State does any act pursuant thereto 
 or in, toward or for the consunamation of it (wherever it may 
 have been made) is guilty of a misdemeanor punishable as 
 to the corporation by a fine of not exceeding twenty thousand 
 dollars and as to the individual agent or officer by a fine not 
 exceeding five thousand dollars or by imprisonment for not 
 longer than one year or both, if such contract, agreement, 
 arrangement or combination (1) creates, establishes or main- 
 tains or may create, establish or maintain a monopoly in the 
 manufacture, production or sale in New York State of any 
 article or commodity of common use, or (2) restrains or pre- 
 vents or may restrain or prevent competition in New York 
 State in the supply or price of any such article or commodity, 
 
 " Pierson v. MeCurdy, 33 Hun, whole details should be seen in the 
 
 520 (1884) ; aff'd 100 N. T. 608, 2 report itself. 
 
 N. E. 615. " St. Cor. L. § 14 (L. 1900, 
 
 "Blum V. Whitney, 185 N. Y. c. 61). 
 232, 77 N. E. 1159 (1906). The 
 
496 BUSINESS CORPORATIONS IN NEW YORK § 417- 
 
 or (3) restricts or prevents or may restrict or prevent the 
 free pursuit in this State of any lawful business, trade or 
 occupation for the purpose of creating, establishing or main- 
 taining a monopoly within this State of the manufacture, 
 production or sale of any such article or connmodity." The 
 statute provides for an action by the Attorney-General in the 
 People 's name against a corporation, director, officer or agent 
 violating its provisions; and the procedure for the action; 
 and the statutory provisions are hereinafter quoted." During 
 the continuance of the World War any corporation organized 
 under the laws of the State of New York may co-operate with 
 other corporations and with natural persons in the creation 
 and maintenance of instrumentalities conducive to the winning 
 of the war, and its directors or trustees may appropriate and 
 expend for such purposes such sum or sums as they may deem 
 expedient and as, in their judgment, will contribute to the pro- 
 tection of the corporate interests, provided that whenever the 
 expenditures for such purposes in any calendar year shall in 
 the aggregate amount to one per centum on the capital stock 
 outstanding, then, before any further expenditure is made 
 during such year for such purposes by the corporation, ten 
 days ' notice shall be given to the stockholders in such manner 
 as the directors or trustees may direct of the intention to make 
 such further expenditure, specifying the amount thereof, and 
 if written objection be made by stockholders holding twenty- 
 five per centum or more of the stock of the corporation, such 
 further expenditure shall not be made until it shall have been 
 authorized at a stockholders' meeting."* 
 
 The text of the Federal, Sherman Anti-Trust Act and of 
 the act forbidding trusts by importers is given in the note." 
 
 ^*Geii. Bus. L. §§ 340, 341 (L. prisomnent not exceeding one year, 
 
 1909, c. 25). or by both said punishments, in the 
 
 "Gen. Bus. L. §§ 342-346, both discretion of the court." Act of 
 
 inclusive (L. 1909, c. 25). July 2, 1890, c. 647; 26 Stat. L. 
 
 ""L. Ifll8, c. 240. 209. 
 
 16 § 1. " Every contract, combi- § 2. " Every person who shall 
 
 nation in the form of a trust or monopolize, or attempt to monopo- 
 
 otherwise, or conspiracy, in restraint lize, or combine or conspire with 
 
 of trade or commerce among the any other person or persons, to 
 
 several States, or with foreign na- monopolize any part of the trade or 
 
 tions, is hereby declared to be ille- commerce among the several States, 
 
 gal. Every person who shall make or with foreign nations, shall be 
 
 any such contract or engage in any deemed guilty of a misdemeanor, 
 
 such combination or conspiracy, and, on conviction thereof, shall be 
 
 shall be deemed guilty of a misde- punished by a fine not exceeding five 
 
 meanor, and, on conviction thereof, thousand dollars, or by imprison- 
 
 shall be punished by fine not exceed- ment not exceeding one year, or bj 
 
 ing five thousand dollars, or by im- both said punishments, in the dis 
 
§ 417 
 
 POWERS, DUTIES AND LIABILITIES 
 
 497 
 
 cretion of the court." Act. of July 
 2, 1890, ch. 647; 26 Stat. L. 209. 
 
 § 3. " Every contract, combination 
 in form of trust or otherwiwse, or 
 conspiracy, in restraint of trade or 
 commerce in any Territory of the 
 United States or of the District of 
 Columbia, or in restraint of trade or 
 commerce between any such Terri- 
 tory and another, or between any 
 such Territory or Territories and 
 any State or States or the District 
 of Columbia, or mth foreign na- 
 tions, is hereby declared illegal. 
 Every person who shall make any 
 sueh contract or engage in any such 
 combina,tion or conspiracy, shall be 
 deemed guilty of a misdemeanor, 
 and, on conviction thereof, shall be 
 punished by fine not exceeding five 
 thousand dollars, or by imprison- 
 ment not exceeding one year, or by 
 both said punishments, in the dis- 
 cretion of the court." Act of July 
 2, 1890, ch. 647; 26 Stat. L. 209. 
 
 § 4. " The several circuit courts 
 of the United States are hereby in- 
 vested with jurisdiction to prevent 
 and restrain violations of this act; 
 and it shall be the duty of the sev- 
 eral district attorneys of the United 
 States, in their respective districts, 
 under the direction of the .Attorney- 
 General, to institute proceedings in 
 equity to prevent and restrain such 
 violations. Such proceedings may 
 be by way of petition setting forth 
 the ease and praying that such vio- 
 lation shall be enjoined or otherwise 
 prohibited. When the parties com- 
 plained of shall have been duly noti- 
 fied of such petition the court shall 
 proceed, as soon as may be, to the 
 hearing and determination of the 
 case; and pending such petition and 
 before final decree, the court may at 
 any time make such temporary re- 
 straining order br prohibition as 
 shall be deemed just in the prem- 
 ises." Act of July 2, 1890, c. 647; 
 26 Stat. L. 209. 
 
 § 5. " Whenever it shall appear to 
 the court before which any proceed- 
 ing under section four of this act 
 may be pending, that the ends of 
 B. C.N.Y.— 32 
 
 justice require that other parties 
 should be brought before the court, 
 the court may cause them to be sum- 
 moned, whether they reside in the 
 district in which the court is held 
 or not; and subpoenas to that end 
 may be served in any district by the 
 marshal thereof." Act of July 2, 
 1890, c. 647; 26 Stat. L. 209. 
 
 § 6. "Any property owned under 
 any contract or by any combination, 
 or pursuant to any conspiracy (and 
 being the subject thereof) mentioned 
 in section one of thds act, and being 
 in the course of transportation from 
 one State to another, or to a foreign 
 country, shall be forfeited to the 
 United States, and may be seized 
 and condemned by like proceedings 
 as those provided by law for the 
 forfeiture, seizure, and condemna- 
 tion of property imported into the 
 United States contrary to law." Act 
 of July 2, 1890, c. 647; 26 Stat. li. 
 209. 
 
 § 7. "Any person who shall be in- 
 jured in his business or property by 
 any other person or corporation by 
 reason of anything forbidden or de- 
 clared to be unlawful by this act, 
 may sue therefor in any circuit 
 court of the United States in the 
 district in which the defendant re- 
 sides or is found, without respect 
 to the amount in controversy, and 
 shall recover three fold the damages 
 by him sustained, and the costs of 
 suit, including a reasonable attor- 
 ney's fee." Act of July 2, 1890, c. 
 647; 26 Stat. L. 209. 
 
 § 8. " That the word ' person,' or 
 ■' persons,' wherever used in this act 
 shall be deemed to include corpora- 
 tions and associations existing under 
 or authorized by the laws of either 
 the United. States, the laws of any 
 of the Territories, the laws of any 
 State, or the laws Of any foreign 
 country." Act of July 2, 1890, c. 
 647; 26 Stat. L. 209. 
 
 § 73. " That every combination, 
 conspiracy, trust, agreement, or con- 
 tract is hereby declared to be con- 
 trary to public policy, ill^al, and 
 void when the same is made by or 
 
498 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 417 
 
 between two or more persons or cor- 
 porations either of whom, as agent 
 or principal, is engaged in import- 
 ing any article from any foreign 
 country into the United States, and 
 when such combination, conspiracy, 
 trust, agreement, or contract is in- 
 tended to operate in restraint of 
 lawful trade, or free competition 
 in lawful trade or commerce, or to 
 increase the market price in any 
 part of .the United States of any 
 article or articles imported or in- 
 tended to be imported into the 
 United States, or of any manufac- 
 ture into which such imported article 
 enters or is intended to enter. Every 
 person who is or hereafter shall be 
 engaged in the importation of goods 
 or of any commodity from any 
 foreign country in violation of this 
 section of this Act, or who shall 
 combine or conspire with another to 
 violate the same, is guilty of a mis- 
 demeanor, and on conviction thereof 
 in any court of the United States 
 such person shall be fined in a sum 
 not less than one himdred dollars 
 and not exceeding five thousand dol- 
 lars, and shall be further punished 
 by imprisonment, in the discretion 
 of the court, for a term not less 
 than three months nor exceeding 
 twelve months." Act of Eeb. 12, 
 1913, c. 40, 402; 37 Stat. L. 667. 
 
 § 74. " That the several circuit 
 courts of the United States are 
 hereby invested with jurisdiction to 
 prevent and restrain violations of 
 section seventy-three of this Act; 
 and it shall be the duty of the sev- 
 eral district attorneys of the United 
 States in their respective districts, 
 under the direction of the Attorney- 
 General, to institute proceedings in 
 equity to prevent and restrain such 
 violations. Such proceedings may 
 be by way of petitions setting forth 
 the case and praying that such vio- 
 lations shall be enjoined or other- 
 wise prohibited. Where the parties 
 complained of shall have been duly 
 notified of such petition the court 
 shall proceed, as soon as may be, 
 to the hearing and determination of 
 the case; and pending such petition 
 
 and before final decree, the court 
 may at any time make such tempo- 
 rary restraining order or prohibition 
 as shall be deemed just in the 
 premises." Act of Aug. 27, 1894, 
 c. 349; 28 Stat. L. § 70. 
 
 § 75. " That whenever it shall ap- 
 pear to the court before which any 
 proceeding under the seventy-fourth 
 section of this act may be pending 
 that the ends of justice require that 
 other parties should be brought be- 
 fore the court, the court may cause 
 them to be summoned, whether they 
 reside in the district in which the 
 court is held or not; and subpoenas 
 to that end may be served in any 
 district by the marshal thereof." Act 
 of Aug. 27, 1894, c. 349; 28 Stat. 
 L. 570. 
 
 § 76. " That any property owned 
 under any contract or by any com- 
 bination, or pursuant to any con- 
 spiracy, and being the subject 
 thereof, mentioned in section sev- 
 enty-three of this Act, imported into 
 and being within the United States 
 or being in the course of transporta- 
 tion from one State to another, or 
 to or from a Territory or the Dis- 
 trict of Columbia, shall be forfeited 
 to the United States, and may be 
 seized and condemned by like pro- 
 ceedings as those provided by law 
 for the forfeiture, seizure and con- 
 demnation of property imported 
 into the United States contrary to 
 law." Act of Feb. 12, 1913, c. 40; 
 37 Stat. L. 667. 
 
 § 77. " That any person who shall 
 be injured in his business or prop- 
 erty by any other person or corpo- 
 ration by reason of anything for- 
 bidden or declared to be unlawful 
 by this Act may sue therefor ir\ 
 any circuit court of the United 
 States in the district in which the 
 defendant resides .or is found, with- 
 out respect to the amount in con- 
 troversy, and shall reoqj'er threefold 
 the damages by him sustained, and 
 the costs of the suit, including a 
 reasonable attorney's fee." Act of 
 Aug. 27, 1894, c. 349; 28 Stat. L. 
 570. 
 
§§ 418-420 POWERS, DUTIES AND LIABILITIES 499 
 
 § 418. Id.: In General. — The Anti-Monopoly Law is but. a 
 codification of the common law and does not limit the statu- 
 tory right of corporations to acquire stock of other corpora- 
 tion§ even to the last share and the resultant merger." ' ' The 
 Anti-Monopoly Act is really aimed at combinations between 
 independent concerns for the purpose of regulating prices and 
 production, and what is abhorrent and repugnant to the stat- 
 ute are contracts, agreements, arrangements or combinations 
 which tend toward a control of the sale or production of a 
 'thing of common use, and so prevent competition in supply 
 or price. ' ' ^* A covenant in partial and reasonable restraint 
 of trade is in the nature of a property right and assignable, 
 at least in connection with a sale of the property and business 
 of the assignor." The courts are not prevented from giving 
 equitable relief by injunction p gainst breach of a contract in 
 restraint of trade because a bond, with a stipulation for liqui- 
 dated damages, was executed in connection with the cove- 
 nant.™ A vendor corporation delivering goods under an 
 agreement illegal for the reason that it is against public policy 
 cannot recover for the price.^ An injunction will not lie to 
 prevent stockholders of one corporation from selling their 
 holdings to another corporation on the mere assumption that 
 the latter corporation seeks to obtain control of the former 
 one for purposes inimical to the former's minority stock- 
 holders.^ 
 
 § 419. Id.: What Is Trade or Oommerce. — The production of 
 opera is not trade or commerce so as to make a contract by 
 one corporation with another in that business not to produce 
 it in a couple of cities for a decade void under the Sherman 
 Anti-Trust Act, even though incidentally some acts or trans- 
 actions of inter-state nature are involved.^ 
 
 § 420. Id.: What Constitutes Restraint or Combination. — 
 ' ' No contracts are void as being in general restraint of trade, 
 where they operate simply to prevent a party from engaging 
 
 ^'Matter of Consolidated Gas Co., ^Amot v. Pittston and Elmira 
 
 56 Misc. 49, 106 N. Y. Supp. 407 Coal Co., 68 N. Y. 558 (1877). 
 
 (1907); aff'd 124 A. D. 401, 108 ^Ingraham v. National Salt Co., 
 
 Supp. 823; L. 1899, c. 690. 72 A. D. 582, 74 N. Y. Supp. 388 
 
 "Matter of Consolidated Gas Co., (1902); aff'd 179 N. Y. 556, 71 
 
 56 Misc. 49, 106 N. Y. Supp. 407 N. E. 1131. 
 
 (1907) ; aff'd 124 A. D. 401, 108 ^ Metropolitan Opera Co. v. Ham- 
 
 Supp. 823; L. 1899, e. 690. merstein, 162 A. D. 691, 147 N. Y. 
 
 "Diamond Match Co. v. Ebeber, Supp. 532 (1914). 
 106 N. Y. 473 (1867). 
 
 ^° Diamond Match Co. v. Roeber, 
 106 N. Y. 473, 13 N. E. 419^ (1887). 
 
500 BUSINESS CORPORATIONS IN NEW YORK § 420 
 
 or competing in the same business."* " If the business of a 
 private individual or corporation is threatened with compe- 
 tition it is not illegal or immoral if one can persuade his 
 competitor to abandon an enterprise in which both cannot 
 succeed, and take employment with the one remaining in the 
 business at a stated compensation. " ° A covenant supported 
 by a good consideration and constituting a partial and not a 
 general restraint of trade, which is reasonable in view of the 
 circimistances disclosed, is valid.* " Briefly, contracts in 
 restraint of trade are void if they are so unreasonable as 
 unduly to interfere with the rights of the public. The test 
 is not whether the corporation has the right of eminent 
 domain, or whether its property is impressed with a semi- 
 public use, but whether or not such rights are unduly 
 affected."^ "When a combination of corporations is accom- 
 plished through the acquisition of many by one without intent 
 to restrain commerce but only to more conveniently operate, 
 the combination is not illegal if the acquiring corporation 
 previously controlled the acquired corporations in another 
 way.* A contract by one corporation to purchase stock of 
 others to prevent competition is not of itself necessarily 
 illegal unless it result in limiting the supply and enhancing 
 the cost of the commodity dealt in by the corporations ; and 
 in a commodity such as gas this danger is not present because 
 the Legislature can control its price." A corporation having 
 a by-law permitting its board of directors to fix the market 
 price of the commodity in which it deals at which it shall be 
 purchased by its stockholders, and largely controlling the 
 market in that commodity in and about New York City, which 
 fixes the price of the commodity accordingly, is guilty of a 
 combination inimical to trade and commerce, and, therefore, 
 unlawful, and may be annuled at suit of the attorney-general." 
 
 * Leslie v. Lorillard, 110 N. Y. *Venner v. New York Central & 
 
 519, 1 L.R.A. 456, 18 N. E. 363 Hudson River R. R. Co., 177 A. D. 
 
 (1888). 296, 164 N. Y. Supp. 626 (1917). 
 
 ^ Oakes v. Cattaraugus Water Co., ° Matter of Attomey-Q-eneral, 124 
 
 143 N. Y. 430, 26 L.R.A. 544, 38 A. D. 401, 108 N. Y. Supp. 823 
 
 N. E. 461 (1894). The agreement (1908); St. Corp. L. § 7 (L. 1897, 
 
 was for only one of the two parties c. 384) ; Anti-Monopoly Acts (L. 
 
 to make application for a certain 1897, e. 383; L. 1899, c. 690). See 
 
 franchise. now St. Corp. L. § 14 and Gen. 
 
 ° Diamond Match Co. v. Roeber, Bus. L. § 340. 
 
 106 N. Y. 473, 13 N. E. 419 (1887). i° People v. Milk. Exchange, 145 
 
 ^ Whitaker v. Kilby, 55 Misc. 337, N. Y. 267. 27 L.R.A. 437, 39 N. E. 
 
 106 N. Y. Supp. 854 (1907); Cen- 1062 (1895). 
 tral ■ New York Telephone & Tele- 
 graph Co. V. Averill, id., 346, 105 
 N. Y. Supp. 378. 
 
§ 421 POWERS, DUTIES AND LIABILITIES 501 
 
 A by-law by an association of newspaper owners providing 
 that the associates should not take news from any other asso- 
 ciation is not in restraint of trade or restriction of the liberty 
 of the press." Telegraph companies each reaching some 
 points not reached by any of the others, though not owning 
 precisely parallel lines or lines running exactly between the 
 same places, may lawfully combine under the law." A cor- 
 poration dealing in a public commodity such as coal, has the 
 right to use all legitimate efforts to obtain the best price for 
 the article in which it deals ; but when it endeavors artificially 
 to enhance prices by suppressing or keeping out of market the 
 products of others, and to accomplish that purpose by means 
 of contracts binding them to withhold their supply, the com- 
 bination is illegal as against public policy." Joint purchase 
 of equipment for affiliated railroads operating lines is not 
 violative of the Sherman Anti-Trust Act or the New York 
 Stock Corporation Law." "A telephone corporation may, 
 where such a course is not expressly or impliedly prohibited 
 by its charter, where its charter permits it to do practically 
 any business anywhere at any time, agree to limit a part of 
 its activities within a certain district. " " A corporation 's act 
 by which it buys the worthless notes of a competitor to 
 embarrass the latter 's business and injure his credit by a law 
 suit and pays a bonus to induce his printers to refuse to do 
 his printing is ultra vires.^" 
 
 § 421. Id.: Internal Management. — ^^The interference of a 
 court between minority and majority stockholders in their 
 squabbles as to the internal management of their corporation 
 has already been discussed." Every corporation has power 
 to make by-laws not inconsistent with any existing law for 
 the management of its property and the regulation of its 
 affairs.'^ ". . . in the absence of fraud or bad faith courts 
 have nothing to do with the internal management of business 
 corporations, provided they keep within their corporate 
 
 "Matthews v. Associated Press of N. Y. Supp. 725 (1914); aff'd 217 
 
 the Siate of N. Y., 136 N. Y. 333, N. Y. 615 and 617, 111 N. E. 487; 
 
 32 N. E. 981 (1893) ; L. 1867, c. 754. St. Corp. L. § 14; 26 U. S. Stat, at 
 
 " Williams v. Western Union Tele- Large, 209, c. 647. 
 
 graph Co., 93 N. Y. 162 (1883); "Whitaker v. Kilhy, 55 Misc. 
 
 L. 1848, c. 265, as amend'd K 1851, 337, 106 N. Y. Supp. 854 (1907). 
 
 c. 98, L. 1853, c. 471, L. 1862, e. 426, " CoUes v. Trow City Directory 
 
 L. 1870, c. 568, L. 1875, c. 319. Co.. 11 Hun, 397 (1877). 
 
 ^^ Amot V. Pittston and Elmira " See § 184, supra. 
 
 Coal Co., 68 N. Y. 558 (1877). ^«Gen. Corp. L. § 11 (L. 1909, 
 
 ^*Venner v. New York Central & c. 28). 
 H. R. R. R. Co., 160 A. D. 127, 145 
 
502 BUSINESS CORPORATIONS IN NEW YORK i; 422 
 
 powers. " " " The visitorial supervision inherent in the 
 courts (when not regulated by statute) over the affairs of 
 public or private corporations, extends to the investigation 
 of their proceedings for the purpose of keeping them within 
 their chartered powers and protecting the rights of members 
 against usurpation of the governing body to their preju- 
 dice."^" " The jurisdiction which courts of equity exercise 
 over individuals extends equally to acts done, or omitted to be 
 done, by private or municipal corporations." ^ An action for 
 the judicial supervision of a business corporation, its officers 
 and members, can be maintained by the attorney-general in 
 the name of the People without a relator, and the question as 
 to what the public interests require is committed to his abso- 
 lute discretion which cannot be inquired into by the courts.^ 
 " ... the question whether or not a corporation shall 
 redeem its property from mortgages is entirely a question 
 for the corporation to decide and not for the courts to 
 decide ", and the courts will not entertain an action by a 
 stockholder, after refusal at his request by the corporation to 
 bring it, to secure such redemption.' The cost of publishing 
 a notice of a special meeting of stockholders to pass on a 
 dispute between directors and the president of a corporation, 
 authorized by resolution of the board, may properly be 
 charged against the corporation, even if its by-laws contem- 
 plated only notice by mail ; but the expense of publication of 
 other notices urging stockholders to execute and return 
 proxies to such directors, and replying to a circular by the 
 president for proxies, though signed by a majority of those 
 acting as directors, cannot be charged to the corporation.'' 
 § 422. Id.: Contracts. — " Unless restrained by law, every 
 corporation has the incidental power to make any contract 
 necessary to advance the objects for which it was created." ° 
 " When a corporate contract is not on its face necessarily 
 beyond the scope of the power of the corporation, it will^ in 
 the absence of averment and proof to the contrary, be pre- 
 
 " Schwab V. Potter Co., 194 N. T. ^ People v. Ballard, 134 N. Y. 269, 
 
 409, 87 N. E. 670 (1909). 17 L.R.A. 737, 32 N. E. 54 (1892). 
 
 ^° People ex rel. Johnson v. New ^ Lefl v. Nachod, 64 Misc. 497, 119 
 
 York Produce Exchange, 149 N. Y. N. Y. Supp. 470 (1909). 
 
 401, 44 N. E. 84 (1896). The ae- * Lawyers' Ad. Co. v. Consoli- 
 
 tion of the defendant in disciplining dated Ry. L. & R. Co., 187 N. Y. 
 
 its member was held within its char- 395, 80 N. E. 199 (1907). 
 
 ter powers and not subject to judi- 'Legrand v. Manhattan Mercan- 
 
 cial review. tile Assn., 80 N. Y. 638 (1880). 
 
 ''- Cushman v. Thaver Mfg. Jew- Headnote — no opinion reported. 
 elry Co., 76 N. Y. 365 (1879). 
 
§ 422 POWERS, DUTIES AND LIABILITIES 5l*a 
 
 sumed to be valid. " ° " The presumption is that all contracts 
 made by corporations are within their power, unless the con- 
 trary appears on the face of the contract, or unless it is shown 
 affirmatively, by way of defense, that the corporation had no 
 power to make the contract."'' "A corporation may become 
 bound by a contract, express or implied, under the same cir- 
 cumstances as an individual. To make a corporation liable, 
 it is not necessary to show an express resolution passed at a 
 nieeting of its directors. Where a party does work or fur- 
 nishes materials to a corporation under a contract with ono 
 assuming to act as its agent, to the knowledge of its officers, 
 without dissent on the part of the corporation, it will be held 
 to have ratified the contract, and to be liable thereunder.'" 
 A court is not called upon to declare a corporate contract 
 ineffectual for illegality if its validity is recognized by the 
 corporation which has accepted the performance of it by the 
 other party to it, unless it be inherently illegal pr contrary to 
 public policy.* The general rule is that corporations have 
 such powers only as are specifically granted by the act of 
 incorporation and as are necessary to carry into effect the 
 powers expressly granted, and it is true that a corporate con- 
 tract malum in se is void and that a corporation cannot bind 
 itself by a contract expressly prohibited by statute or its 
 charter, however lawful the contract might be but for the 
 prohibition ; but a contract of lease entered into by a corpo- 
 ration as lessee, terminated as to the future and unperformed 
 solely as to payment of rent, may be enforced against the 
 corporation by the lessor, as it is not in the true sense of the 
 word illegal." An agreement by a corporation to buy back 
 from its employee stock of it which he has bought upon his 
 leaving its employ is not necessarily void as contravening 
 public policy." " It is settled law that a corporation has no 
 power, by contract or indorsement, to become a surety or 
 guarantor for any other person except in the course of the 
 authorized business of a guarantor or indorser. ' ' ^^ Where 
 
 ^ Jacobs V. Monaton R. I. Co., 212 tery, 122 N. Y. 429, 25 N. E. 983 
 
 N. Y. 48, 105 N. E. 968 (1914). .(1890). 
 
 ' Mutual Life Insurance Co. v. ^° Bath Gas Light Co. v. ClafEy, 
 
 Yates County National Bank, 35 151 N. Y. 24, 36 L.R.A. 664, 45 
 
 A. D. 218, 54 N. Y. Supp. 743 N. E. 390 (1896). 
 
 (1898). "Strodl v. Earish-Stafford Co., 
 
 * Cunningham v. Massena Springs 145 A. D. 406, 130 N. Y. Snpp. 35 
 
 & Fort Covington R. R. Co., 63 (1911). 
 
 Hun, 439, 18 N. Y. Supp. 600 ^^ Harms Co. v. Michel Brewing 
 
 (1892) ; affi'd 138 N. Y. 614, 33 Co., 176 A. D. 235, 162 N. Y. Supp. 
 
 N. E. 1082. 1071 (1916). 
 
 'Palmer v. Cypress Hill Cerae- 
 
504 BUSINESS CORPORATIONS IN NEW YORK ?; 422 
 
 a corporation has made a contract many years ago, within 
 its power to make and as it would have been had a statute 
 then existing and authorizing it been observed, it will be 
 assumed that the circumstances essential to a due execution 
 of the power existed." The signature " Louis Rosenberg, 
 Inc." by a corporation " L. Eosenberg, Incorporated" if 
 made with intent to bind the corporation will do so." An 
 assignment by a corporation to an individual to be signed, 
 according to resolution by it, by two of its officers is valid 
 though dated and signed by one of them before the adoption 
 of such resolution." A company-lessee agreeing to pay all 
 taxes on a corporation-lessor's property and business except 
 the ',' present income tax " on the rent (paid direct to the 
 lessor's stockholders as dividends on their stock-holdings), 
 referred to in the lease as " interest and dividends ", or any 
 tax imposed or to be imposed thereon, is not bound to pay an 
 income tax subsequently imposed after a lapse of time from 
 the repeal of such ' ' present income tax. ' ' " An agreement 
 approved by stockholders with an attorney who has extri- 
 cated their company from difficulties by exercising dictatorial 
 powers to pay him a percentage of net earnings applicable to 
 dividends, later paid by the directors, is good." In order to 
 set aside an intra vires corporate contract it is not sufficient 
 that some stockholders believe it unwise, but fraudulently 
 oppressive conduct at least must be shown." The law of that 
 state in which a contract of employment and an accident 
 injuring the employee happened governs the liability of the 
 corporate employer." To make out a ease of asswmpsit 
 against a corporation the plaintiff must prove that the defend- 
 ant either contracted as a corporation or was incorporated 
 and incurred the indebtedness so as to raise an implied 
 
 ^^ Marklove v. Utica, Clinton & An income tax is not a tax upon 
 
 Binghamton R. R. Co., 48 Misc. 258, specific property, but is a tax upon 
 
 % N Y. Supp. 795 (1905). the annual net gain of the indi- 
 
 " Van Norden Trust Co. v. Rosen- vidual or corporation received from 
 
 berg, 62 Misc. 285, 114 N. Y. Supp. its business, the use of its property 
 
 1025 (1909). or otherwise." 
 
 "Carroll v. Cone, 40 Barb. 220 "Dupignec v. Bemstrom, 76 
 
 (1862) ; aff'd 41 N. Y. 216. A. D. 105, 78 N. Y. Supp. 705 
 
 " Renssela«r & Saratoga R. R. Co. (1902). 
 
 V. Delaware & Hudson Co., 168 A. D. ^' Holmes v. St. Joseph Lead Co., 
 
 699, 154 N. Y. Supp. 739 (1915) ; 84 Misc. 278, 147 N. Y. Supp. 104 
 
 aff'd 217 N. Y. 692, without opinion, (1914) ; aff'd 163 A. D. 885, 147 
 
 112 N.' E. 1072; Income Tax L. N. Y. Supp. 1117. 
 
 § 2. " There is a broad distinction ^° Voshefskey v. Hillside Coal & 
 
 between a tax upon leased property Iron Co., 21 A. D. 168, 47 N. Y. 
 
 and an income tax upon the rental. Supp. 386 (1897), 
 
§ 423 POWERS, DUTIES AND LIABILITIES 505 
 
 assumpsit.'^'' If one having a contract with a corporation oust 
 all its officers, as a stockholder, take the presidency and 
 appoint his clerk as secretary and treasurer, he assumes such 
 officers' duties, including payment of the company's obliga- 
 tions to himself and the preservation of the corporation's con- 
 tract right; and if he transfer all such corporation's property 
 and interest to a newly organized company in exchange for 
 its stock which he appropriates, he puts it out of the old corpo- 
 ration's power to perform its contract with him and must be 
 deemed to have undertaken to look to the new company for 
 discharge of the old company's obligations.^ In the absence 
 of fraud neither a corporation nor a cestui que trust may 
 'rescind a contract of purchase made with its trustee and com- 
 pel the latter to pay for improvements put upon the premises 
 either by the corporation or cestui que trust J' 
 
 § 423. Id.: Commercial Paper, In General. — The powers and 
 duties of corporate officers with respect to the commercial 
 paper of their corporation have already been discussed.' 
 " . . . a corporation, not restricted by its charter, has 
 the same right to give notes as evidence of its indebtedness 
 that an individual possesses."* A corporation may without 
 special authority make a note or draft or accept a draft for 
 a debt contracted in its legitimate business, or borrow money 
 for any of its lawful purposes.^ A corporation which has 
 received the benefits of a loan made upon a note by it cannot 
 question its liability on the note." The fact that a promissory 
 note signed by a corporation by its president is not also 
 signed by its treasurer as required by its by-laws is no defense 
 to its liability thereon if the note is not diverted from its 
 original purpose, went into the hands of a bona fide holder 
 and the corporation received the benefit of the proceeds.' A 
 
 ^° Stoddard v. Onondaga Annual doing so, and without any express 
 
 Conference, 12 Barb. 573 (1851) ; power in its charter for that pur- 
 
 2 R. S. 458, § 3. pose, may make a negotiable prom- 
 
 ^ Grant v. Cobre Grande Copper issory note payable either at a future 
 
 Co,, 193 N. Y 306, 86 N. E. 34 day, or upon demand when such note 
 
 (1008). is given for any of the legitimate 
 
 ^ Paine v. Irwin, 16 Htm, 390 purposes for which the company 
 
 (1878). The fact that the trustee was incorporated." 
 
 was one of a committee authorized ' Partridge v. Badger, 25 Barb, 
 
 by the corporation to make the im- 146 (1857). 
 
 provements . does not change the ° Gaitley v. Albany Foundry Co., 
 
 rule. 157 A. D. 10, 141 N. Y. Supp. 676 
 
 'See § 325 et seq., supra. (1913); aff'd 216 N. Y. 603, 110 
 
 *Moss V. Averell, 10 N. Y. 449 N. E. 1041. 
 (1853). "No question is better set- 'National Spraker Bank v. Tread- 
 tied upon authority, th"an that a cor- well Co., 80 Hun, 363, 30 N. Y. 
 poration, not prohibited by law from Supp. 77 (1894) . 
 
506 BUSINESS CORPORATIONS IN NEW YORK § 423 
 
 note given by a corporation chartered to raise and snaelt lead 
 ore, which has only raised it, for the purpose of buying the 
 equipment to smelt it, too, is within the powers of its officers 
 to give.* Merely writing a corporation's name on the back of 
 a negotiable instrument payable to it is not an endorsement 
 by it, as it can act only through its officer or agent and must 
 aaname so to do in endorsing the instrument.* To create a 
 liability in a corporation for a draft it is not necessary that 
 the corporate name should be used thereon, but it is enough 
 that it be drawn or accepted under a name adopted by it by a 
 party authorized for that purpose by the company by writing, 
 by. resolution of its board of directors or by conduct of its 
 officers." A corporate note with its seal is still negotiable and • 
 not a specialty until shown that the parties intended the seal 
 to make it a specialty and non-negotiable." A note and chattel 
 mortgage given in the name of a corporation to pay for prac- 
 tically all its stock bought by an individual are not merely 
 idtra vires but void, even in the hands of an innocent holder.^^ 
 A counterclaim by the maker of notes to a firm is available 
 against a corporation which is a mere successor to the rights 
 of the firm, as distinguished from a holder of the paper for 
 value before maturity." 
 
 No corporation, domestic or foreign, other than a corpora- 
 tion formed under or subject to the banking laws of New York 
 State or of the United States, except as permitted by such 
 laws, is by any implication or construction to be deemed to 
 possess the power of carrying on the business of discounting 
 bills, notes or other evidences of debt, of receiving deposits, 
 of buying and selling bills of exchange, or of issuing bills, 
 notes or other evidences of debt for circulation as money, or 
 of engaging in any other form of banking.^'* 
 
 = Moss V. McCullough, 7 Barb. 279 (1893) ; afiE'd 149 N. Y. 632, 35 
 
 (1849). • L.R.A. e05, 44 N. E. 164. 
 
 ° Moch Co. V. Security Bank, '^ Republican Art Printery, Inc., 
 
 166 A. D. 121, 151 N.Y. Supp. 756 v. David, 173 A. D. 726, 159 N. Y. 
 
 (1915). The cheque was to the Supp. 1010 (1916). 
 order of " E. Moch Company ", en- ^^ McElwee Mfg. Co. v. Trow- 
 
 dorsed " E. Moch Co.", underneath bridge, 62 Hun, 471, 17 N. Y. Supp. 
 
 "Eugene Moch"; the company's 3 (1891). 
 
 charter gave its president (Eugene "*Gen. Corp. L. § 22 (L. 1911, 
 
 Moch) no power to endorse its c. 771) : " nor shall any such cor- 
 
 cheques ; the cheque was deposited poration, except an express company 
 
 to his individual account. having contracts with railroad com- 
 
 " Conro V. Port Henry Iron Co., panics for the operation of an ex- 
 
 12 Barb. 27 (1851). press service upon the lines of such 
 
 " Chase National Bank v. Faiirot, railroad companies, or a transat- 
 
 72 Hun, 373, 26 N. Y. Supp. 447 lantie steamship company, or a tele- 
 
§ 424 • POWERS, DUTIES AND LIABILITIES 507 
 
 " • • . when a corporation opens an account with a 
 banking institution it confers upon that institution the power 
 to determine whether any check drawn upon the account con- 
 forms to the contract between the depositor and the deposi- 
 tary. When it makes a mistake in the determination of such 
 a question the depositary may be liable to the depositor ; but 
 the depositor cannot recover back the money paid on such 
 check to a third person who has received it in good faith, 
 relying on the representation of the deposit bank that the 
 check was all right and has subsequently parted with the 
 money." ^* If one taking a corporation's note assumes the 
 legality of its negotiation, he is protected, even though he 
 made no inquiry, if, on the question of its authorization com- 
 ing up, it develops that there was authority." One dealing, 
 by taking its notes, with a railroad company which has a right 
 to, and ordinarily does, pay its president a salary need not, in 
 order to ascertain if the salary is legally payable, go beyond 
 an assertion by its directors in a resolution that the corpora- 
 tion was indebted to the president for salary, and authorizing 
 the issue of notes to pay it." A corporation at the request of 
 the president of which and for the alleged benefit of which a 
 note on which it was the last indorser is discounted is liable 
 on its endorsement in the absence of knowledge by the dis- 
 counter that the proceeds were to be used otherwise than for 
 the corporation's benefit." 
 
 § 424. Id.: Accommodation Paper. — The powers and duties 
 of corporate officers with respect to accommodation paper of 
 their corporation have already been discussed.^^ A domestic 
 manufacturing corporation, or its treasurer, has no power to 
 make or indorse notes for the accommodation of others, and 
 
 graph company,' or a corporation in- bank, which presented them for pay- 
 
 corporated prior to the year eigh- ment to the B. bank and then let 
 
 teen hundred and fifty, to promote the treasurer draw out such sums 
 
 the welfare of emigrants, possess the from his individual account with it. 
 
 power of receiving money for trans- ^° Wilson v. Metropolitan Ele- 
 
 mission or of transmitting the same, vated Ry. Co., 120 N. Y. 145, 24 
 
 by draft, traveler's check, money N. E. 384 (1890). 
 
 order or otherwise." ^° Wilson v. Metropolitan Ele- 
 
 " Havana C. R. R. Co. v. Knick- vated Ry. Co., 120 N. T. 145, 24 
 
 erbocker T. Co., 198 N. Y. 422, N. E. 384 (1890). 
 
 L.R.A. 1015B, 720, 92 N. E. 12 " Orvis v. Warner & Co., 75 
 
 (1910). The A. corporation depos- A. D. 463, 78 N. Y. Supp. 328 
 
 ited money with the B. bank to be (1902). 
 
 drawn by cheques signed a certain On liability of corporation on 
 
 way by its treasurer who drew negotiable paper executed by officer 
 
 amounts by cheques signed in that or agent, see note In 21 L.R.A. 
 
 way but to his own individual order (N.S.) 1046. 
 
 and deposited them with the C. ^* See § 329 et seq., supra. 
 
508 BUSINESS CORPORATIONS IN NEW YORK § 424 
 
 is not in general liable thereon." Endorsements for accom- 
 modation are ultra vires a corporation.™ An accommodation 
 endorsement by a corporation, not authorized by its charter, 
 is ultra vires and void.^ ' ' So far as we know no corporations 
 organized under the statutes of this State are authorized to 
 bind the property of their shareholders by accommodation 
 indorsements, except corporations organized under ^he stat- 
 ' utes providing for the incorporation of guaranty and indem- 
 nity companies, and we know of no statute authorizing such 
 corporations to make accommodation indorsements without 
 receiving a valuable consideration. " '^ " ... a corpora- 
 tion cannot become surety, either as an accommodation 
 indorser, or in any other form, unless the note has been dis- 
 counted in good faith, in consequence of representations made 
 by its proper officers that it was their own note, (the note of 
 the corporation), or unless it has passed into the hands of a 
 bona fide holder without notice, who has paid valuable con- 
 sideration for it.'" The power to issue accommodation paper 
 " is not incidental to the powers expressly conferred on cor- 
 porations organized under statutes authorizing the formation 
 of corporations for banking, insuring, manufacturing and like 
 business corporations."* A manufacturing corporation has 
 no power to bind itself as an accommodation party to 
 negotiable paper and the burden is not upon it to show that 
 one accepting the paper knew of its accommodation character, 
 but is rather upon the acceptor to show its character as holder 
 for value and its ignorance of the accommodation character 
 of the paper.° A corporation empowered by its board of 
 directors to issue promissory notes signed or endorsed by its 
 president to transact its authorized business cannot bind itself 
 by making or endorsing promissory notes for the accommoda- 
 tion of the makers, for a consideration paid." Although as a 
 rule corporations cannot bind themselves as accommodation 
 
 ^'Jacobs V. Jamestown Mantel Stone Dressing Co., 30 Barb. 421 
 
 Co., 211 N. Y. 154, 106 N. E. 210 (1859). 
 
 (1914). * National Park B'k v. German- 
 
 ^"A. D. Farmer & Son Co. v. American Mutual W. & S. Co., 116 
 
 Humboldt Publishing Co., 27 Misc. N. Y. 281, 5 L.R.A. 673, 22 N. E. 
 
 314, 57 N. Y. Supp. 821 (1809). 567 (1889). 
 
 ^ Carlaftes v. Goldmeyer Co., 72 ° National Bank of Newport v. 
 
 Misc. 75, 129 N. Y. Supp. 396 Snyder Mfg. Co., 117 A. D. 370, 
 
 (1911). 102 N. Y. Supp. 478 (1907). 
 
 2 Fox V. Rural Home Co., 90 * National Park B'k v. G€rman- 
 
 Hun, 365, 35 N. Y. Supp. 896 American Mutual W. & S. Co., 116 
 
 (1895) ; aflPd 167 N. Y. 684, 51 N. Y. 281, 5 L.R.A. 673, 22 N. E. 
 
 N. E. 1090. 567 (1889). 
 
 ' Bridgeport City Bank v. Empire 
 
§§ 425, 426 POWERS, DUTIES AND LIABILITIES 509 
 
 parties and a holder of a note to which they are such parties 
 must show he became such for value and without notice of the 
 accommodation, yet they are bound if the note was given for a 
 valuable consideration.' The knowledge of one of three mem- 
 bers of the investment committee of a trust company, acting 
 entirely in his individual capacity or as an officer of another 
 corporation, that a note of a third party, which he presented 
 to the trust company for discount and which it discounted, 
 was an accommodation note, is not imputable to the trust 
 company.^ 
 
 § 425. Id.: Torts, Nuisance. — The State cannot bring in 
 equity, under the common-law, a suit to abate a public 
 nuisance by a corporation in the State's highways, even 
 though it involve the public safety or convenience, when the 
 matter can be dealt with effectually by the local authorities 
 to whom the State has delegated a portion of its authority 
 (although otherwise perhaps it might) ; nor- can the State 
 bring an action against a corporation for such a nuisance 
 under a statute permitting an action against persons acting 
 as a corporation without being duly incorporated or exercis- 
 ing corporate powers not granted by law." It is no bar to the 
 maintenance by one . of an action against a corporation to 
 abate a nuisance by it that he is a stockholder and director in 
 it unless he actually co-operated with others to cause the 
 nuisance.^" " Where franchises are conferred upon a corpo- 
 ration the terms of the statute giving the authority are not 
 necessarily imperative or permissive, and the mere fact of 
 the delegation of the right to manufacture does not confer a 
 license to commit a nuisance, although what is contemplated 
 by the statute cannot be done without it. " " A railroad cor- 
 poration is as liable for a nuisance committed by it as is an 
 individual." 
 
 § 426. Id.: Libel and Slander.— "A corporation may sue for 
 a libel upon it as distinct from a libel upon its individual mem- 
 bers, and a corporation engaged in business may maintain an 
 action for libel upon such business without proof of special 
 
 ' Durbrow v. Swedish Iron & " Leonard v. Spencer, 108 N. Y. 
 
 Steel Corporation, 95 Misc. 160, 338, 15 N. E. 397 (1888). 
 
 158 N. Y. Supp. 701 (1916), Sup. "Rosenheimer v. Standard Gas 
 
 Ct. App. T. Light Co., 36 A. D. 1, 55 N. Y. 
 
 * Jacobus V. Jamestown Mantel Supp. 192 (1898). 
 
 Co., 211 N. Y. 154, 105 N. E. 210 "First Baptist Church in Sehe- 
 
 (1914) . nectady v. Troy R. R. Co., 5 Barb. 79 
 
 'People V. Equity Gas Light Co., (1848). 
 141 N. Y. 232, 36 N. E. 194 (1894) ; 
 C. C. P. § 1948. 
 
510 BUSINESS CORPORATIONS IN NEW YORK § 426 
 
 damage where the language used concerning it is defamatory 
 in itself and injuriously and directly affects its credit and 
 necessarily and directly occasions pecuniary injury ' ' ; but 
 ' ' it cannot maintain an action for slander or libel upon words 
 spoken or published solely of and concerning its officers or 
 stockholders."" " ... a corporation engaged in busi- 
 ness may maintain an action for libel without allegation and 
 proof of special damage, where the language used concerning 
 it is defamatory in itself and injuriously and directly affects 
 its credit and necessarily and directly occasions pecuniary 
 injury ' ' ; but a corporation ' ' having no character to be 
 affected by libel and no feelings to be injured, to be libelous 
 per se the article must be such as directly to affect the credit 
 or property of the corporation and to occasion it pecuniary 
 injury, and unless such is the necessary result of the publica- 
 tion, to sustain the action the corporation must allege special 
 damage."" " The true rule ... is that a corporation 
 is liable for torts committed by its officers or agents when act- 
 ing within the actual or implied scope of their employment, 
 or by ratification may become responsible for such acts when 
 committed in excess of their authority. Within the content of 
 this rule a corporation may be held liable for a slander. ' ' " 
 A corporation may legally be sued for tortious slander of 
 another corporation's business; and it is proper to state the 
 acts complained of as being those of the corporation itself." 
 A corporation is not liable for a libel written on its letter by an 
 attorney employed by trustees to whom the corporate prop- 
 erty has been transferred under a statute permitting this and 
 their continuance of its business." The dictation by the gen- 
 eral manager of a corporation to a stenographer of the corpo- 
 ration of a libelous letter which is sent by mail after tran- 
 scription by the stenographer and signature by the manager 
 to the addressee, who is the person suing for the libel, is not a 
 publication of the libel." In a complaint against a corpora- 
 tion for slander it is not necessary to allege that a duly 
 
 ^' Hapgoods V. Crawford, 125 ^° Lubricating Oil Co. v. Standard 
 
 A. D. 856, 110 N. Y. Supp. 122 Oil Co., 42 Htin, 153 (1886). 
 
 (1908). "Thompson v. American Optical 
 
 "Kemble Mills, Inc., v. Kaighn, Co., 173 A. D. 123, 159 N. Y. Supp. 
 
 131 A. D. 63, 115 N. Y. Supp. 809 412 (1916). 
 
 (1909). i«Owen v. Ogilvie Publishing Co., 
 
 "Kharas v. Collier, Inc., 171 32 A. D. 465, 53 N. Y. Supp. 1033 
 
 A. D. 388, 157 N. Y. Supp. 410 (1898). 
 (1916) ; overruling Eichner v. Bow- 
 ery Bank, 24 A. D. 63, 48 N. Y. 
 Supp. 978. 
 
§§ 427-429 POWERS, DUTIES AND LIABILITIES 511 
 
 authorized agent of the corporation uttered the defamatory 
 words or that the corporation authorized, ratified or insti- 
 gated the speaking of the slanderous words, as " the ultimate 
 facts are to be pleaded and not the evidence that would tend 
 to substantiate those facts. "^' An answer by a eorporation 
 to a verified complaint for libel need not be verified if it con- 
 tain a general denial.^" 
 
 § 427. Id.: Trespass. — A private corporation is liable in 
 damages for trespass to an individual on whose land water 
 backs up from an insufiicient dam built by it ; and it cannot 
 (as could a public corporation) acquire the right to maintain 
 the dam, as by payment of compensation after condemna- 
 tion.^ 
 
 § 428. Id.: False Representation. — Causes of action against 
 a corporation arising from false representations contained in 
 a prospectus issued by it are assignable so that the assignee 
 may join them all in one complaint.^ A corporation is charge- 
 able with liability for false representations contained in a 
 prospectus issued by it.^ 
 
 § 429. Id. : Malicious Prosecution. — There is no reason why 
 in a proper case an action should not be brought against a 
 corporation to recover damages for the malicious prosecution 
 of a civil action.* A corporation may be held liable in a proper 
 case for malicious prosecution/ The president of a corpora- 
 tion which is sued for malicious prosecution should be per- 
 mitted to testify as to the intent or motive that characterized 
 the transaction directed or guided by him on behalf of the 
 corporation." 
 
 "Kharas v. Collier, Inc., 17l ^Benedict v. Guardian Trust Co., 
 
 A. D. 388, 157 N. Y. Supp. 410 58 A. D. 302, 68 N. Y. Supp. lOta 
 
 (1916). (1901). 
 
 ^"Batterman v. Journal Co., 28 *Willard v. Holmes, Booth & 
 
 Misc. 375, 59 N. Y. Supp. 965 Haydens, 142 N, Y. 492, 37 N. E. 
 
 (1899). 480 (1894). 
 
 On the question of liability of a ^Morton v. Metropolitan Life 
 
 corporation for slander by an Ins. Co., 34 Hun, 366 (1884) ; aff'd 
 
 agent or employee, see notes in 9 103 N. Y. 645. 
 
 L.R.A.(N.S.) 929, 21 L.R.A.(N.S.) « Sehwarting v. Van Wie N. Y. 
 
 873, and L.R.A.1916E, 774. • Grocery Co., 60 A. D. 475, 69 N. Y. 
 
 ^ Brown v. Ontario Talc Co;, 81 Supp. 978 (1901). 
 
 A. D. 273, 80 N. Y. Supp. 837 On liability of eorporation for 
 
 (1903) ; C. C. P. §§ 3357-3384. exemplary damages in action for 
 
 ^Benedict v. Guardian Trust Co., malicious prosecution or abuse of 
 
 58 A. D. 302, 68 N. Y. Supp. 1082 process in suin^ out attachment for 
 
 (1901) ; C. C. P. §§ 1910, 484, 3343, collection of debt only, see note in 
 
 subd. 10. 29 L.R.A.(N.S.) 2S0. 
 
512 BUSINESS CORPORATIONS IN NEW YORK §§ 430, 431 
 
 § 430. Id.: Crimes and Contempt. — A corporation cannot be 
 held liable for the crime of manslaughter in New York.' A 
 corporation may be fined as punishment for a civil contempt 
 of court as defined by statute.* A corporation directed by 
 judgment in an action to which it is a party to pay over to 
 receiver in sequestration proceedings may be punished for 
 contempt, and its president also, if it refuse to make such pay- 
 ment, even though it may have been adjudicated bankrupt 
 prior to the rendition of such judgment, if it did not plead its 
 discharge in bankruptcy.* 
 
 § 431. Id.: Annual Report. — Every domestic corporation 
 (except moneyed and railroad corporations) must (1) annu- 
 ally (2) during the month of January (unless doing business 
 without the United States when the time is before the first 
 day of May), (3) make a report (4) as of the first day of 
 January stating: (a) The amount of its capital stock, (b) 
 the proportion of its capital stock actually issued, (c) the 
 amount of its debts or an amount which they do not exceed, 
 (d) the amount of its assets or an amount which its assets at 
 least equal, (e) the names of all the directors and officers of 
 the company, and (f) the addresses of all the directors and 
 officers of the company; (5) made by the president or a vice- 
 president or the treasurer or a secretary of the corporation ; 
 and (6) filed in the office of the Secretary of State." Under 
 a statute requiring the filing of a corporation 's report " as of 
 the first day of January," it is not required to state literally, 
 in the precise words of the statute, that the report is made 
 as of the first day of January, but the statute is complied with 
 when, by fair intendment, the report speaks as of the pre- 
 scribed date." The requirement, under a former statute, of 
 annual filing of a report by every corporation has no applica- 
 tion to a company practically abandoned and broken up, even 
 though not technically dissolved." A corporate annual report 
 signed by the corporation's president and actually verified 
 
 'People V. Rochester Railway & "St. Corp. L. § 34 (L. 1909, 
 
 Light Co., 59 Misc. 347, 112 N. T. c. 61). 
 
 Supp. 362; aff'd 129 A. D. 843, 144 "Ameriean Grocery Co. v. Pratt, 
 
 N. Y. Supp. 755. 36 A. D. 152, 55 N. Y. Supp. 467 
 
 «C. C. P. § 2284. (1899); aff'd 161 N. Y. 649, 57 
 
 « Schreiber v. Garden, 152 A. D. N. E. 1103; L. 1892, c. 688, § 30. 
 
 817, 137 N. Y. Supp. 747 (1912). See now St. Corp. L. § 34. 
 
 On criminal prosecution of cor- ^^Losee v. BuUard, 79 N. Y. 404 
 
 ]x»ration for acts or omissions while (1880) ; L. 1848, c. 40, § 12. See 
 
 in hands of receiver, see note in 26 now St. Corp. L. § 34. 
 L.RA.(N.S.) 710. 
 
§431 
 
 POWERS, DUTIES AND LIABILITIES 
 
 513, 
 
 before a proper officer" complies with the statute." Decisions 
 under former statutes requiring and regulating the filing of 
 annual reports of corporations are collated in the note." 
 
 ^'Bonnell v. Griswold, 80 N. T. 
 128 (188O0 ; Gen. Mfg. Act, L. 1848, 
 c. 40. See now St. Corp. L. § 34. 
 
 "A corporation need file no an- 
 nual report when no acts other than 
 formal ones were performed by it 
 in furtherance of the objects of its 
 organization and " it never got into 
 business;" so that its trustees can- 
 not be held liable for its debts for 
 failure to file such a report. Kirk- 
 land v. Kille, 99 N. Y. 390, 2 N. E. 
 36 (1885) ; G«n. Mfg. Act, L. 1848, 
 c. 40, § 12. " When the .condition 
 of the company is such that the end 
 and object for which it was formed 
 are destroyed and there is neither 
 an ability or intention on its part 
 at any time to further prosecute its 
 business, it is no longer required to 
 make the report mentioned in sec- 
 tion 12 of the Manufacturing Act. '•' 
 First Nat. Bank of Jersey City v. 
 Lamon, 130 N. Y. 366., 39 N. E. 321 
 (1891); Gen. Mfg. Act, § 12 (L. 
 1848, c. 40). The statute requiring 
 the filing annually by corporations 
 of a capital stock report, being 
 penal in its nature, must not be 
 enlarged by construction; so long 
 as the report be in form a complete 
 compliance with the statute it need 
 not specify how much of the stock 
 was paid for in cash and how much 
 in property; and its failure so to 
 do will not subject the trustees to 
 liability for its debts. Whitaker v. 
 Masterton, 106 N. Y. 277, 12 N. E. 
 604 (1887) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 12, L. 1853, c. 333, § 2. The 
 statutory requirement that every 
 mamifacturing corporation file a 
 report of the amount of its capital 
 stock paid in " within twenty days 
 from the first day of January " does 
 not mean "that the section may be 
 complied with by making a report 
 within twenty days before or after 
 the first day of January;" but only 
 after. Cincinnati Cooperage Co. v. 
 B.C.N.Y.— 33 
 
 O'Keefe, 120 N. Y. 603, 24 N. E. 
 993 (1890) ; Gen. Mfg. Act, L. 1848, 
 c. 40, § 12. The statutory annual 
 report required to .be made by a 
 corporation need only be prepared, 
 signed and verified within the twenty 
 days from the first of each year; 
 and may be filed or published within 
 any reasonable time after such 
 twenty days. Cameron v, Seaman, 
 69 N. Y. 396 (1877) ; L. 1848, c. 40, 
 § 12. The requirement of statute 
 that stock issued for property shall 
 not be stated in a corporation's an- 
 nual report as being issued for cash 
 but according to the fact is directory 
 only, subjecting one disobeying it to 
 no penalty; and no penalty else-, 
 where prescribed can be made ap- 
 plicable on its violation. Bonnell 
 V. Griswold, 80 N. Y. 128 (1880); 
 Gen. Mfg. Act, L. 1853, c. 333, § 2. 
 A corporate annual report which 
 states the capital stock of the com- 
 pany and " that it has been paid up 
 in full" is the same as if it said 
 that the capital has been paid in, 
 and satisfies the statute. Bonnell v. 
 Griswold, 80 N. Y. 128 (1880); 
 Gen. Mfg. Act, L. 1848, c. 40, § 12. 
 A statute requiring a stock corpora- 
 tion annually to make a capital 
 stock report "verified by the oath 
 of the' president or vice-president 
 and treasurer or secretary" calls 
 for verification by either the presi- 
 dent or vice-president with either 
 the treasurer or secretary. Manhatr 
 tan Co. v. Kaldenberg, 165 N. Y. 1, 
 58 N. E. 790 (1900) ; L. 1892, c. 2, 
 § 30. A corporate report required 
 by. statute to be verified by the 
 president or vice-president and 
 treasurer or secretary is properly 
 verified by the president alone with- 
 out stating that he signs it also ais 
 other officers whose positions he also 
 occupies as the de facta incumbent. 
 Manhattan Co. v. Kaldenberg, 165 
 N. Y. 1, 58 N. E. .790 (1900) : L. 
 
514 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 432 
 
 § 432. Id.: Political Contributions. — The liability of direct- 
 ors and officers of a corporation for political contributions has 
 been heretofore discussed." No corporation doing business in 
 
 1892, c. 2, § 30. The duty imposed 
 by statute upon manufacturing cor- 
 porations -to make a report is a 
 corporate duty to be discharged by 
 making a report signed by the 
 president and a majority of the 
 trustees. Cornell v. Roach, 101 
 N. Y. 373, 5 N. E. 52 (1886) ; Gen. 
 Mfg. Act, L. 1848, c. 40, § 12. An 
 annual report of a corporation veri- 
 fied solely by its president as such 
 is sufficient if prior to the time when 
 it was made the person who was 
 treasurer and secretary had re- 
 signed, though his resignation was 
 not formally accepted till after that 
 date; and if, further, the president 
 since such other's resignation had 
 exercised the duties of secretary and 
 treasurer pursuant to the by-laws. 
 Noble V. Euler, 20 A. D. 548, 47 
 N. Y. Supp. 302 (1897); St. Corp. 
 L. § 30 (L. 1892, e. 688). When 
 by statute a corporate report must 
 be made and verified in duplicate 
 and filed both with the Secretary 
 of State and the County Clerk, the 
 fact that one of the duplicates filed 
 with one of such officials is verified 
 while the other is not does not make 
 the verification insufficient. Man- 
 hattan Co. V. Kaldenberg, 165 
 N. Y. 1, 58 N. E. 790 (1900); L. 
 1892, c. 2, § 30. If no newspaper is 
 published in the place named in a 
 corporation's certificate of incorpo- 
 ration as that where its operations 
 are to be carried on, and it has, 
 therefore, to publish its annual re- 
 port, according to the statute "in 
 some newspaper published nearest 
 the place where the business of the 
 company was carried on," it is not 
 essential that it be published in a 
 newspaper of the village in that 
 iown if a village in another town 
 is equally near, as a publication in 
 a paper in the latter village is, suf- 
 ficient. Cameron v. Seaman, 69 
 N. Y. 396 (1877); L. 1848, c. 40, 
 
 § 12. (The company's mines and 
 operations were in the village of 
 East Eishkill. No newspaper was 
 there published, but one was pub- 
 lished in the village of Fishkill, in 
 the town of Fishkill, adjoining the 
 village of East Mshkill, and an- 
 other in Poughkeepsie, to which one 
 part of East FishMll was nearer 
 than to Fishkill village. A publica- 
 tion in the newspaper either in 
 Poughkeepsie or Fishkill village is 
 sufficient.) The continuance of the 
 default to file a corporate report in 
 successive years does not have the 
 effect of renewing the liability of 
 the corporation's trustees for its 
 debts so as to make them liable for 
 a x^eriod longer than three years 
 after the first default happened. 
 Losee v. Bullard, 79 N. Y. 404 
 (1880) ; L. 1848, c. 40, § 12. " When, 
 in an action to recover a statutory 
 penalty for failure to file a report 
 and for filing a false report, the 
 plaintiff dies after judgment and 
 during the pendency of the appeal, 
 and judgment is affirmed without 
 knowledge of plaintiff's death, sub- 
 stitution, on motion, of plaintiff's 
 personal representative will be made 
 on the ground that the cause of ac- 
 tion after judgment is merged in 
 the judgment, which itself may be 
 assigned, and passes as assets to 
 the representatives of a deceased 
 party." Blake v. Griswold, 104 
 N. Y. 613, 11 N. E. 137 (1887). 
 An annual report which states that 
 its assets do not exceed a certain sum 
 is not equivalent to a statement that 
 the assets at least amount to such 
 a sum, and directors filing it are 
 equally as liable as if they had not 
 filed any report. Lilienthal v. Batz, 
 61 A. D. 601 (1901); aff'd 172 
 N. Y. 643; St. Corp. § 30 (L. 1892, 
 c. 688). 
 "See §§ 300, 336, supra. 
 
§ 433 POWERS, DUTIES AND LIABILITIES 515 
 
 New York State except one organized or maintained for 
 political purposes only must directly or indirectly pay or use, 
 or offer, consent or agree to pay or use any money or prop- 
 erty for or in aid of any political party, committee or 
 organization, or for or in aid of any corporation, joint-stock 
 company 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 purpos'e whatever, or for the reimbursement or 
 indemnification of any person for moneys or property so 
 used ; and no person is 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 this prohibition upon the ground or 
 for the reason that the testimony or evidence, documentary or 
 otherwise, required of him, may tend to convict him of a crime 
 or to subject him to a penalty or forfeiture; but no person 
 must be prosecuted or subjected to any penalty or forfeiture 
 for or on account of any transaction, matter or thing concern- 
 ing which he may so testify or produce evidence, documentary 
 or otherwise, and no testimony so given or produced inust be 
 received against him upon any criminal investigation or 
 proceeding." 
 
 § 433. Id.: Practising Law, and Medicine. — In considering 
 the statutes prohibiting corporations from practising law and 
 doing things incidental thereto, it must be borne in mind that 
 the prohibitions do not apply to any corporation lawfully 
 engaged in a business authorized by the provisions of any 
 existing statute, nor to a corporation lawfully engaged in the 
 examination and insuring of titles to real property; nor do 
 they prohibit a corporation from employing an attorney or 
 attorneys in and about its own immediate affairs or in any 
 litigation to which it is or may be a party ; nor do they apply 
 to any corporation organized for benevolent or charitable pur- 
 poses or for the purpose of assisting persons without means 
 in the pursuit of any civil remedy when such corporation's 
 incorporation is approved by the Appellate Division of the 
 Supreme Court of the department in which the principal office 
 of such corporation may be located ; nor do such prohibitions 
 prevent a corporation from furnishing to any person lawfully 
 engaged in the practice of the law such information or clerical 
 services in and about his professional work as, except for such 
 prohibitions, may be lawful — provided that at all times the 
 
 "Gen. Corp. L. § 44 (L. 1909, c. 28). 
 
516 BUSINESS COEPORATIONS IN NEW YORK § 433 
 
 lawyer receiving such information or such services maintain 
 full professional and direct responsibility to his clients for 
 the information and services so rendered ; but no corporation 
 is permitted to render any services which cannot lawfully be 
 rendered by a person not admitted to practice law in New 
 York State nor to solicit directly or indirectly professional 
 employment for a lawyer." A corporation engaged in the 
 business of conducting litigation and providing counsel there- 
 for must not directly or indirectly buy or be in any manner 
 interested in buying a bond, promissory note, bill of exchange, 
 book-debt or other thing in action with the intent and for the. 
 purpose of bringing an action thereon, or by itself or in the 
 name of another person either before or after action brought- 
 promise or give or procure to be promised or given a valuable 
 consideration to any person as an inducement to placing or in 
 consideration of having placed in its hands or the hands of 
 another person a demand of any kind for the purpose of bring- 
 ing an action thereon or of representing the claimant in the 
 pursuit of any civil remedy for the recovery thereof (except 
 an agreement to divide compensation to be received) ; and a 
 corporation which violates these prohibitions is guilty of a 
 misdemeanor and on conviction thereof must be punished 
 accordingly ; but these prohibitions do not prohibit the receipt 
 of a bond, promissory note, bill of exchange, book-debt or 
 other thing in action in payment for property sold or for 
 services actually rendered or for a debt antecedently con- 
 tracted, or from buying or receiving a bill of exchange, draft 
 or other thing in action for the purposes of remittance and 
 without intent to violate these prohibitions." 
 
 No corporation can be organized or created under the pro- 
 visions of the Business Corporations Law for the purpose or 
 purposes of conducting any branch of the practice of law or 
 of retaining or employing 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, per- 
 sons 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, per- 
 sons or corporation ; and the statement of the purpose or pur- 
 poses of a corporation in any certificate filed under the 
 provisions of the Business Corporations Law, in whatsoever 
 language set forth, must not be held or construed to confer on 
 
 "Penal L. S 280 (L. 1916, c. 254). "C. C. P. §§ 73, 74, 76, 76. 77. 
 
§ 433 POWERS, DUTIES AND LIABILITIES 517 
 
 the corporation the power to transact any law business, as a 
 purpose for which the creation of a corporation under the 
 Business Corporations Law is prohibited, and particularly 
 when the stated objects of a corporation include the collection 
 of debts or accounts, in words or substance, they must not be 
 construed to include the employment or furnishing of attor- 
 neys to prosecute any action or pursue any legal or equitable 
 remedy in aid of sUch collections." 
 
 It is unlawful for any corporation to practice or appear as 
 an attorney-at-law for any person other than itself in any 
 court of New York State or before any judicial body, or to 
 make it a business to practice as an attorney-at-law for any 
 person other than, itself in any of the courts of New York 
 State, or to hold itself out to the public as being entitled to 
 practice law or render or furnish legal services or advice or 
 to furnish attorneys or counsel or to render legal services of 
 any kind in actions or proceedings of any nature or in any 
 other way or manner, or in any other manner to assume to be 
 entitled to practice law or to assume, use or advertise the title 
 of lawyer or attorney, attorney-at-law, or equivalent terms in 
 any language in such manner as io convey the impression that 
 it is entitled to priactice law or to furnish legal advice, services 
 or counsel, or to advertise that either alone or together with 
 or by or through any person whether a duly and regularly 
 admitted attorney-at-law, or not, it has, owns, conducts or 
 maintains a law ofi&ce or an office for the practice of law or for 
 furnishing legal advice, services or counsel.™ It is 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 purpose of 
 so representing any person in the pursuit of any civil remedy.^ 
 Any corporation violating the statutory prohibitions given in 
 the last two sentences is liable to a fine of not more than five 
 thousand dollars.' The fact that an officer, director, trustee, 
 
 "Bus. Corp. L. § 2 (L. 1900, agent or employee of such corpora- 
 
 e. 484).' ti<>ii • • • '^^° directly or indi- 
 
 ' =°Penal L. § 280 (L. 1916, c. 254). rectly engages in any of the acts 
 
 1 Penal L. §280 (L. 1916, c. 254). herein prohibited or assists such 
 
 2 Penal L. § 280 (L. 1916, c. 254) ; corporation . . . to do such pro- 
 " and every officer, trustee, director, hibited acts is guilty of a misde- 
 
518 BUSINESS CORPORATIONS IN NEW YORK § 433 
 
 agent or employee of the corporation is a duly and regularly 
 admitted attorney-at-law is not held to permit or allow the 
 corporation to do the acts prohibited.' 
 
 " • • . it is unlawful for a corporation, whether 
 domestic or foreign, to practice law in this State. ' ' ^ The stat- 
 utory permission that " three or more persons may become a 
 stock corporation for any lawful business " looks to " a busi- 
 ness lawful to all who wish to engage in it;" and does not 
 permit a corporation to practice law.^ The statute prohibit- 
 ing a corporation from rendering legal services embraces 
 other services than those connected with litigation.' If 
 services of a legal nature ar* rendered by an attorney to any- 
 one because employed by a corporation, that corporation is 
 practising law.' ' ' The vice is that the employee of the corpo- 
 ration, serving it for pay, owes his duty to the corporation. 
 As he cannot serve two masters, so he cannot serve both the 
 client and his corporation employer. ' ' * An agreement of 
 retainer of a corporation to represent an individual in legal 
 proceedings and to furnish legal services therein is illegal on 
 its face.* A contract by a corporation with an individual to 
 undertake legal proceedings on his behalf is illegal, as is its 
 contract with a lawyer to conduct such litigations; but this 
 will not avail the lawyer in an action by the corporation 
 against him for an accounting of moneys advanced to him by 
 the corporation and collections made by him for it in such pro- 
 ceedings.^" Preparation of papers requisite to incorporation 
 
 meaner. The fact that such officer, gage and it was held to be practis- 
 
 trustee, director, agent or employee ing law. 
 
 shall be a duly and regularly ad- ''People v. People's Trust Co., — 
 
 mitted attemey-at-law, shall not A. D. — (1917), N. Y. L. J. Dec. 
 
 . . . be a defense upon the trial 14; Penal L. § 280. 
 
 of any of the persons mentioned 'People v. Title Guarantee & 
 
 herein for a violation of the pro- Trust Co., — A. D. — (1917), N. Y. 
 
 visions of this section." L. J. Dec. 22, 2d Dept., 1 Penal L. 
 
 'Penal L. § 280 (L. 1916, c. 254). § 280. But see Snow, Church & Co. 
 
 * Matter of Pace, 170 A. D. 818, v. Hall, 19 Misc. 655, 44 N. Y. Supp. 
 
 156 N. Y. Supp. 641 (1915); Penal 427 (1897). "While it is true that 
 
 L. § 280. a corporation as such cannot practice 
 
 'Matter of Co-operative Law Co., law, it is within the scope of its 
 
 198 N. Y. 479, 32 L.R.A.(N.S.) 55, powers to employ lawyers to con- 
 
 92 N. E. 15 (1910) ; Bus. Corp. L. duct suits upon claims placed with 
 
 § 2; decided under facts not con- it for collection, the same as any 
 
 trolled by L. 1909, c. 483. unincorporated agency might." 
 
 "People V. Title Guarantee & "Matter of City of New -York 
 
 Trust Co., — A. D. — (1917), N. Y. (Avenue A, etc.), 144 A. D. 107, 
 
 L. J. Dec. 22, 2d Dept.; Penal L. 128 N. Y. Supp. 999 (1911). 
 
 5 280. Employee of corporation ^"United States Title Guarantee 
 
 drew a bill of sale and chattel mort- Co. v. Brown, 166 A. D. 688, 152 
 
§ 434 POWERS, DUTIES AND LIABILITIES 519 
 
 and the incidental advice necessarily given in connection 
 therewith constitute practice of the law so as to make a corpo- 
 ration guilty thereof come within the statutory prohibition 
 against practice of law by corporations." A corporation can- 
 not legally render the services incident to representing a cred- 
 itor and enforcing his claim in bankruptcy matters, as this is 
 practicing law.'' The business of reducing real estate tax 
 assessments contemplates and necessarily includes the prac- 
 tice of law and cannot be done by a corporation." A 
 corporation holding itself out to the public and assuming to 
 discharge the same duties as an individual conveyancer or 
 attorney has the same duties and responsibilities in such 
 transactions as an individual." 
 
 A. corporation not organized as a hospital, dispensary or 
 similar corporate body is a " person ' ' within the meaning of 
 a statute prohibiting any person not a registered physician 
 from advertising to practice medicine.'^ 
 ,§ 434. Id.: Liability for Others, Acts, In General — The 
 powers of corporate directors, officers and agents have 
 already been discussed." " The true rule . . . is to hold 
 the corporation liable for negligence or want of proper care 
 in respect to such acts and duties as it is required to perform 
 and discharge as master or principal, without regard to the 
 rank or title of the agent intrusted with their performance." " 
 "... a corporation is liable for the consequences of 
 its wrongful acts and omissions, and for the acts of its 
 agents while engaged in the business of their agency, to the 
 same extent and under the same circumstances as natural 
 
 N. Y. Supp. 470 (1915) ; afPd, with- "Ehmer v. Title Guarantee & 
 
 out opinion, 217 N. Y. 628, 111 Trust Ck)., 156 N. Y. 10, 50 N. E. 
 
 N. E. 828; Penal L. § 280. 420 (1898). 
 
 "Matter of Pace, 170 A. D. 818, ^= People v. Woodbury D«rma- 
 
 156 N. Y. Supp. 641 (1915) ; Penal tologieal Inst., 192 N. Y. 454, 85 
 
 L. § 280. N. E. 697 (1908); L. 1907, e. 344, 
 
 ^^M'eisel & Co. v. National Jew- § 15; Statutory Construction L. § 5. 
 
 elers Board of Trade, 90 Misc. 19, On right to practice law or medi- 
 
 152 N. Y. Supp. 913 (1915) ; aff'd cine by corporation, see note in 32 
 
 173 A. D. 889, 157 Supp. 1133; L.R.A.(N.S.) 56. 
 
 Penal L. § 280. }^ As to directors, see § 284 et, seq., 
 
 ^^ People ex rel. Trojan Realty supra ; as to officers, see § 319 et seq., 
 
 Corporation v. Purdy, 174 A. D. supra; as to agent, see § 368, supra. 
 
 702, 162 N. Y. Supp. 56 (1916) ; " Flike v. Boston & Albany R. R. 
 
 Bus. Corp. L. § 2-a (L. 1909, c. 484) ; Co., 53 N. Y. 549 (1873). Agent 
 
 Penal L. § 280 (L. 1911, c. 317) ; sent out train with insufficient num- 
 
 'People ex rel. Floersheimer v. ber of brakemen, and the corpora- 
 
 Purdy, 174 A. D. 694, 162 N. Y. tion was held for damages resulting. 
 Supp. 70. 
 
520 BUSINESS CORPORATIONS IN NEW YORK § 434 
 
 persons." " " When an agent or oflBeer of a person or corpo- 
 ration acts within the apparent scope of his authority the 
 principal is estopped from effectually asserting the want of 
 power in the particular case against another who in reliance 
 on such authority has in good faith proceeded upon it and 
 would suffer injury by the repudiation of the act of the agent 
 or officer. In such case the principal is concluded by the 
 representation of the agent as to any extrinsic fact which 
 rests peculiarly within his knowledge, although false, and 
 which is not ascertainable by reference to the power in rela- 
 tion to the act so done by the agent (citations). The party 
 thus dealing with an agent is presumed to have ascertained 
 his power, and that his. act corresponds with it. He may then 
 take his representation of the fact dehors the power unknown 
 to him, although misrepresented by the agent who, by reason 
 of the falsity of the fact, is denied the right to do the act 
 which he assumes to perform as such agent. " " "In these 
 days, when corporations may be formed for the transaction 
 of any business, where a party is held out by the corporation 
 as occupying a position to answer for the corporation 
 . . . , the corporation will be bound by any action of his 
 coming within the ordinary executive duties pertaining to the 
 transaction of the business of the corporation; and no reso- 
 lution of the board of directors will be necessary to clothe 
 with vitality every word that he utters or letter that he 
 writes."^" A corporation running a hotel is bound by the 
 acts of its hotel clerk in the usual course of Ijusiness.'^ "... 
 when an agent forms the purpose of dealing with his prin- 
 cipal's property for his own benefit and advantage, or for the 
 benefit and advantage of other persons who are opposed in 
 interest, he ceases in fact to be an agent acting in good faith 
 for his principal, and the presumption that he has disclosed 
 all the facts that have come to his knowledge no longer pre- 
 vails," e. g., if a corporate lessee refuses to abide by a lease 
 from a corporate lessor on the ground that the lease was part 
 of a plan to create a monopoly, the knowledge of the lessor's 
 president of the plan, by reason of his relations with the 
 lessee, is not attributable to the lessor." 
 
 ^^Fishkill Savings Institution Hun, 280, 35 N. Y. Supp. 769 
 
 V. National Bank, 80 N. Y, 162 (1895); afE'd 157 N. Y. 694, 51 
 
 (1880). N. E. 1091. 
 
 ^°Van Wagenen v. Genesee Falls ^Hoffman House v. Jordan, 28 
 
 Sav. Assn., 88 Hun, 43, 34 N. Y. Mise. 193, 58 N. Y. Supp. 1091 
 
 Supp. 491 (1896). (1899). 
 
 2° Hall V. Herter Brothers, 90 "Brooklyn Distilling Co. v. Stand- 
 
I 435 POWERS, DUTIES AND LIABILITIES 521 
 
 § 435. Id.: For Torts Of.—" Neither an individual or a corr 
 poration, by ■ appointing a general agent, authorizes him to 
 commit a wilful trespass, or to authorize or approve of such 
 a trespass, any more than such authority is conferred by the 
 appointment of a special agent." " A corporation which has 
 put it within the power of its employee — whether he be a 
 general or special agent — to defraud a third person by inter- 
 mingling fraudulent and genuine bills and collecting money 
 therefrom, should be held responsible to an innocent third 
 party for the employee 's dishonesty, irrespective of whether 
 or not the act of the agent be tdtra vires.^ Evidence of 
 declarations and representations of goods sold, made by 
 a superintendent of a corporation, having all the usual powers 
 of .a salesman except that of fixing prices, to a purchaser is 
 admissible in an action based on the sale against it.° A corpof 
 ration is bound by the oral representation as to the validity 
 of a mortgage made by its employee who had its written 
 authorization to act for it in the transaction, if the corpor 
 ration receives the proceeds of the sale in which the represen- 
 tation was made.* A corporation is liable for the loss suffered 
 by brokers in making good under a rule of the Stock Exchange 
 their guaranty of an endorsement on a certificate of stock 
 presented to them for sale by an employee of the corporation 
 who had forged the holder's name and the endorsement 
 thereof if the corporation duly executed the certificate after 
 all its stock had already been issued, knew of the Stock 
 Exchange rule in question, had listed its stock on the Stock- 
 Exchange, and assured the brokers prior to their guarantee- 
 ing and selling the certificate that the title of the holder was 
 good.' When an act causing an injury to an employee is an 
 independent one, and is done by ordfer of a corporation or its 
 alter ego, the liability of the corporate employee is settled, 
 particularly when it is within the principle that it owes its 
 
 ard Distilling & D. Co., 193 N. Y. Supp. 594 (1907) ; alE'd 192 N. Y. 
 
 551, 86 N. E. 564 (1908). 580, 85 N. E. 1109. 
 
 On liability of corporation for ^Decker v. Guttli,. Percha & Rub- 
 
 aets of special police officer ap- ber Co., 61 Hun, 516, 16 N. Y. 
 
 pointed bv public authority, see Supp. 352 (1891). 
 
 notes in 23 L.R.A.(N.S.) 289; 30 "Akberg v. John Kress Brewing 
 
 L.R.A.(N.S.) 481; 39 L.R.A.(N.S.) Co., 65 Hun, 182, 19 N. Y. Supp. 
 
 122; 43 L.R.A.(NjS.) 1164, L.R.A. 656 (1892); afE'd 138 N. Y. 648, 34 
 
 1915C, 1184. N. E. 513. 
 
 'Vanderbilt v. Richmond Tiim- ^ Jarvis v. Manhattan Beach Co., 
 
 pike Co., 2 N. Y. 479 (1849'). 53 Hun, 362, 6 N. Y. Supp. 703 
 
 *Wilderming v. Postal Telegraph- (188S). 
 Cable Co., 118 A. D. 685, 103 N. Y. 
 
522 BUSINESS CORPORATIONS IN NEW YORK § 436 
 
 servant the duty of furnishing him a safe and proper place to 
 prosecute his work.* 
 
 § 436. Id.: For Contracts By. — The power of directors, 
 officers and agents of a corporation to bind it by contracts has 
 been previously discussed." In general, a corporation is bound 
 by a contract made by its agent if it appears either from the 
 contract itself or the contract coupled with the conduct of the 
 parties thereto that credit was given not to the agent but to 
 the corporation." " Corporations can act only through their 
 officers and agents ; and if a person has been entrusted by the 
 officers to carry on the business, the acts of that person must 
 be deemed to be binding upon the corporation in all cases 
 where the parties dealing with him have not notice or knowl- 
 edge of his want of actual authority. ' ' " Corporations are 
 bound not only by their contracts under their conomon seal, 
 but by their simple contracts and those resulting from other 
 acts of their officers and agents performed in the discharge 
 of their ordinary duties — the essential point is not the form 
 of the contract but that it should appear that the corporation 
 and not its agent or officer is the contracting party and got 
 the credit." " ... When officers or other agents con- 
 tract for a corporation, and have full authority to do so, and 
 the work to be done, or the property purchased, is for the 
 exclusive benefit of the corporation, and that is known at the 
 time of the making of the contract, the agent is not bound 
 personally, unless he binds himself by some particular, per- 
 sonal contract, or fails to make a contract binding upon his 
 principal. ' ' " That a check for stock of a corporation made 
 out to its order was deposited to its credit and that it 
 transferred such stock with knowledge of a guaranty thereof 
 by an individual are sufficient facts to justify a holding that 
 the individual guaranteeing the stock and who sold it was 
 acting for the corporation so as to make it liable on the guar- 
 anty." An individual cannot hold a corporation liable for 
 
 * Tendnip V. John Stephenson Co., ^^ Watson v. Bennett, 12 Barb. 
 
 51 Hun, 462, 3 N. Y. Supp. 882; 196 (1851). 
 
 aff'd 121 N. Y. 681, 24 N. E. 1097. "Bellinger v. Bentley, 1 Hun, 
 
 *As to directors, see § 285 et seq., 562 (1874). One of those contract- 
 
 supra; as to officers, see § 322 et seq., ing with the corporation was a stock- 
 
 supra; as to agents, see §§ 366, 367, holder therein. 
 
 supra. "Maleomson v. Monaton Realty 
 
 ^°Lake Shore National Bank v. Investing Corporation, 154 A. D. 
 
 Butler Colliery Co., 51 Hun, 63, 3 694, 139 N. Y. Supp. 405 (1913); 
 
 N. Y. Supp. 771 (1889). afE'd 214 N. T. 677, 108 N. E. 1100. 
 
 "Craig Medicine .Co. v. Merch- 
 ants' Bank, 59 Hun, 561, 14 N. Y. 
 Supp. 16 (1891). 
 
§ 437 POWERS, DUTIES AND LIABILITIES 523 
 
 breach of an alleged contract that he should be employed by 
 another corporation to be formed, partly through his efforts, 
 if the ground of his claim is simply the promise by the for- 
 mer corporation's president that he should be so employed 
 in the event that such corporation should take up through the 
 corporation to be formed the business contemplated for it, 
 and it did not do so, although some of its stockholders did go 
 into a new corporation organized to do such business, with 
 which, however, the individual in question had nothing t'd 
 do." A corporation is bound by an agreement made by its 
 claim agent with one injured through its negligence to employ 
 him for life in consideration of his releasing it from liability 
 if the evidence justifies the inference the corporation's officers 
 knew of the agreement and did not repudiate it." In the 
 absence of proof to show what the duties are of one who is 
 " general manager" Qf a corporation for manufacturing and 
 selling alcohol, a contract signed by him as such imports 
 simply that he is a general executive officer for all the ordi- 
 nary business of the corporation and does not bind the corpo- 
 ration to the purchase of an automobile." A traveling sales- 
 man of a corporation has no authority to make an agreement 
 for the giving of commissions binding on it.^* The question 
 whether a contract, signed in the name of an individual fol- 
 lowed by the words ' ' Mgr. " of a corporation, which does not 
 in terms purport to be that of the corporation but refers to 
 its subject matter as " our advertisement " and states " we 
 will pay " the price named, is that of the corporation or not is 
 ordinarily for the jury to determine." 
 
 § 437. Id.: For Crimes By. — A corporation is liable not only 
 for a libel but for punitive damages therefor if written in 
 its name by an employee having the general management 
 and exclusive control for it of all that department of its busi- 
 ness in the management of which and as part of which man- 
 agement the letter containing the libel was written.^" ' ' An indi- 
 vidual cannot hold a corporation for false imprisonment on 
 a warrant issued by a police magistrate in part reliance on 
 
 i^riaherty V. Murray, 60 A. D. ^* Jones v. Keder, 40 Misc. 221, 
 
 92, 69 N. Y. Supp. 675 (1901); 81 N. Y. Supp. 648 (1903). 
 
 dism'd 172 N. Y. 646, 66 N. E. 1116. " Conant v. American Rubber 
 
 "Montevil v. American Loeomo- Tire Co., 48 A. D. 327, 62 N. Y. 
 
 tive Co., 173 A. D. 387, 159 N. Y. Supp. 974. 
 
 Supp. 21 (1916). ™Rose v. Imperial Engine Co., 
 
 " Studebaker Bros. Co. v. Rose 127 A. D. -885, 112 N. Y. Supp. 8 
 
 Co., 66 Misc. 322, 119 N. Y. Supp. (1908) ; aff'd 195 N. Y. 515, 88 
 
 970 (1909). N. E. 1130. 
 
524 BUSINESS CORPORATIONS IN NEW YORK §§ 438, 439 
 
 the affidavit of the. corporation's superintendent."^ A cor- 
 poration is responsibe for the act of its agent within the gen- 
 eral scope of the matter intrusted to him, even if unlawful, 
 e. g., his attempt to bribe a witness on the other side of an 
 action against the corporation; and no proof of a corporate 
 act expressly authorizing the act is needed to make the cor- 
 poration liable.^ 
 
 §438. Id.: When Corporation Retains Benefit of. — " . . . 
 Where persons, either officers in fact or agents, assume to 
 act in behalf of a corporation, employ a person to perform a 
 service for the corporation, and it is performed with a knowl- 
 edge of the directors and principal officers of the corporation, 
 and such corporation receives the benefit of such service 
 without objection, the corporation is liable under an implied 
 assumpsit." ' A corporation is bound by a four-months' oral 
 lease made by its manager who had general control of its 
 business and of the benefits of which it availed itself.* An 
 agreement by an officer or agent of a corporation who assumes 
 to act in its behalf may be enforced against it when it has 
 received the benefit of the agreement although it could not 
 have been enforced had it been wholly executory because of 
 lack of authority in the officer or agent to execute the agree- 
 ment.^ 
 
 § 439. Id. : Actions By and Against Corporations, Governing 
 Statutes. — All corporations have the right to sue and are sub- 
 ject to be sued in all courts in like cases as natural persons." 
 An action for the determination of a claim to real property 
 may be maintained as prescribed by the statute by or against 
 a corporation as if it was a natural person.'' A domestic 
 corporation which would have been liable to an action in 
 favor of a decedent by reason of its wrongful act, neglect or 
 default if death had not ensued, is liable to an action by his 
 
 ^ Lubliner v. Tiffany & Co., 54 ' Prindle v. Washington Life Ins. 
 
 A. D. 326, 66 N. Y. Supp. 659 Co., 73 Hun, 448, 26 N. Y. Supp. 
 
 (1900). 474 (1893) ; aflf'd 149 N. Y. 614, 43 
 
 ^Nowack V. Metropolitan St. Ry. N. E. 1124. Retainer of attorney. 
 
 Co., 166 N. Y. 433, 54 L.R.A. 592, * William Wicke Co. v. Kalden- 
 
 60 N. E. 32 (1901). berg Mfg. Co., 21 Misc. 79, 46 N. Y. 
 
 The question as to whether a cor- Supp. 937 (1897). 
 
 poration may be convicted of homi- 'Dill & Collin's Co. v. Morison, 
 
 cide, is discussed in notes in 21 159 A. D. 583, .144 N. Y. Supp. 894 
 
 .L.R.A.(N.S.) 998 and 45 L.R.A. (1913) ; St. Corp. L. § 66. 
 
 (N.S.) 344. "N. Y. Const, of 1894, art. 8, § 3. 
 
 On criminal responsibility of cor- ' C. C. P. § 1650. 
 poration for acts of servant or 
 agent, see note in 43 L.R.A. (N.S.) 
 40. 
 
㤠439-a POWERS, DUTIES . AND LIABILITIES 525 
 
 legal representative.* A proceeding for condemnation of real 
 property must be instituted by the presentation of a petition 
 by plaintiff, if it is a corporation, setting forth its principal 
 place of business within New York State, the names and resi- 
 dences of its principal officers and of its directors, and the 
 object or purpose of its incorporation, quite aside, from other 
 matters.' An attachment may be levied upon a cause of action 
 arising upon a 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 domestic or foreign corporation, either within or without 
 New York State, which is found within the county and belongs 
 to the defendant; and the method of levy is prescribed by the 
 statute, as well as. the certificate which the proper officer of 
 the corporation must give the sheriff specifying the rights of 
 the_ defendant in such corporate property." The statute pre- 
 scribes when peremptory and when alternative writs of man- 
 damus issue in actions to which corporations, their officers, 
 directors and agents are parties ; the notice to be given them ; 
 the procedure and practice ; and the method of service of the 
 writs." When the defendant enjoined was an officer of a 
 corporation and the damages sustained by him are less than 
 the sum specified in the undertaking the court or the referee 
 may also separately ascertain and determine the damages sus- 
 tained by reason of the injunction by the corporation which 
 the defendant represents to an amount not exceeding the 
 surplus of the sum specified in the undertaking, and those 
 damages may be recovered in a separate action brought 
 according to statute." When execution has issued against the 
 earnings of a judgment debtor and has been presented to the 
 corporate employer of the debtor, such corporation must pay 
 over the amount of its indebtedness to the judgment debtor 
 for earnings as such execution prescribes; and if such cor- 
 poration fails or refuses so to pay over, it is liable to action 
 by the judgment creditor."^ 
 
 § 439-a, Id.: In General. — Ordinarily an officer of a corpora- 
 tion cannot decide that it shall bring an action, but such 
 
 * C. C. p. § 1902. incorporated under the laws of New 
 
 ° C. C. P. § 3360. York, which has a factory in another 
 
 '" C. C. P. §§ 648, 649. State as well as in New York, but pays 
 
 " C. C. P. §1 2070, 2071. the judgment debtor in the foreign 
 
 "C. C. P. §"624. State where he works for it, is a 
 
 ^^^ C. C. P. § 391. For the pur- resident of New York. Morris Plan 
 
 pose of garnishment, a corporation Co. v. Miller, 102 Misc. 470 (1918). 
 
 « 
 
526 BUSINESS CORPORATIONS IN NEW YORK § 439-a 
 
 decision must be made by its directors." An attorney in good 
 faith bringing suit for a non-existent corporate client (which 
 had once existed but had gone out of existence) is liable for 
 the costs imposed." An individual and a corporation to 
 which he sold out for his stock cannot join in an action to 
 recover damages because of bankruptcy proceedings mali- 
 ciously instituted against him to injure him and the cor- 
 poration.^^ When an individual defendant answers a cor- 
 porate complaint against him as guarantor that the guaranty 
 was not to be effective, by agreement with another individual, 
 until certain conditions, of which the plaintiff had notice 
 were fulfilled, and that such fulfillment never came about, 
 the corporation is entitled, on showing ignorance (by affi- 
 davit) of such agreement, to a bill from the defendant par- 
 ticularizing if the agreement is in writing or oral, the names 
 of its officers who had the knowledge thereof, the time and 
 place when such knowledge was acquired." A complaint by 
 a corporation in an action at law to recover money by con- 
 spiracy obtained by its officer and his son though employ- 
 ment of the latter 's firm as agent for the company at exorbi- 
 tant commissions and of the latter as superintendent of the 
 corporation at an exorbitant salary states but one cause of 
 action though renewals of the agreement of employment at 
 increased commissions are alleged, if said to have been pur- 
 suant to the original conspiracy." A suit in equity by a cor- 
 poration against its officer for an accounting will be enter- 
 tained though the allegations be no more definite as to the 
 sums he received or the dates of their receipt or the trusts 
 upon which received than the knowledge possessed by the 
 corporation permits it to alleg6; because if the company's 
 property came into the officer 's control as such and was with- 
 drawn with his connivance and disbursed illegally, his official 
 capacity per se imposes upon him trust duties giving equity 
 
 ^' Greater Pictures Corp'n v. tion for an injunction and receiver 
 
 Crystal Film Co., • — Misc. — will be denied." 
 
 (1918), N. Y. L. J. Jan. 21, City Ct., "Attleboro National Bank v. 
 
 Sp. T. Pt. I. O'Brien V. O'Connell, "Wendell, 64 Hun, 208, 19 N. Y. 
 
 7 Hun, 228 (1876). No opinion but Supp. 45 (1892). 
 
 only this headnote: "An action ^° Lawrence v. McKelvey, 80 A. D. 
 
 for the protection of a private cor- 514, 81 N. Y. Supp. (1903) ; C. C. P. 
 
 poration should be brought by it, § 446. 
 
 and not by an individual, unless its ^° Knickerbocker Trust Co. v. 
 
 refusal to prosecute such an action, Packard, 109 A. D. 421, 96 N. Y. 
 
 or its collusion with the defendants Supp. 412 (1905). 
 
 be shown. If a person have no di- " Mutual Life Ins. Co. v. McCurdy 
 
 rect individual interest in the fund and McCurdy, 118 A. D. 827, 103 
 
 and property claimed, his applica- N. Y. Supp. 837 (1907). 
 
§ 439-a POWERS, DUTIES AND LIABILITIES 537 
 
 jurisdiction." Allegations by a corporation in a complaint 
 against its officer for recovery of damages for unauthorized 
 and unlawful payments of its funds for political purposes 
 aUege but one cause of action, viz. for breach of duty in 
 office, although several negligent acts in this regard are set 
 forth and although the allegations are alternative, that he 
 expressly authorized and personally participated in the pay- 
 nients or that his neglect properly to supervise and perform 
 his official duties enabled the payments to be made by others." 
 Under a statute making registration a condition precedent to 
 the right of any " person " to engage in the business of 
 plumbing, a corporation must plead and prove registration 
 as part of its case in an action to foreclose a mechanic's lien 
 for plumbing work, and as it must have a certificate of com- 
 petency, which cannot be issued to a corporation, it cannot 
 lawfully do business as a plumber.^" 
 
 ' * A corporation, like a natural person, may appear volun- 
 tarily by attorney, and such appearance gives jurisdiction to 
 the same extent as if there was actual service of process."^ 
 In a representative action by a creditor of a corporation to 
 set aside certain judgments and mortgages, and appropriate 
 the corporate property to payment of its debts, the creditor 
 may in the one complaint sue the corporation and its directors 
 and state allegations sufficient to reach the property of the 
 corporation, to obtain judgment against the directors for 
 failure to pay for stock subscribed for by them'and to make 
 them personally liable because they made and caused to 
 be filed a false certificate of the payment of the capital stock.^ 
 A corporation defendant in an action by a stockholder to 
 recover for it moneys received by its officers who had them- 
 selves refused to bring the suit may appeal from the judg- 
 ment against the plaintiff if pending the trial its officers had 
 changed so that it backed the plaintiff on the trial.^ A corpora- 
 tion sued for damages resulting from a conspiracy in which 
 the complaint alleges its officers, agents and servants for it 
 took part and its authorized agents made false statements is 
 
 ^* Mutual Life Ins. Co. v. Mc- ^ Attorney-General v. Guardian 
 
 Curdy, No. 2, 118 A. D. 822, 103 Mutual Life Ins. Co., 77 N. Y. 272 
 
 N. Y. Supp. 840 (1907). (1879). 
 
 ^^ Mutual Life Ins. Co. v. Me- ^ Barley & Sewall Co; v. Lennig, 
 
 Curdy, No. 1, 118 A. D. 815, 103 61 A. D. 26, 70 N. Y. Supp. 242 
 
 N. Y. Supp. 829 (1907). (1901).. 
 
 ^''Sehnaier & Co. v. Grigsby, 132 ^Sheridan v. Sheridan Electric 
 
 A. D. 854, 117 N. Y. Supp. 455 Light Co., 38 Hun, 396 (1886); 
 
 (1909) ; aff'd 199 N. Y, 577, 93 C. C. P. § 1294. 
 N. S. 1125; L. 1893, e. 803. 
 
528 BUSINESS CORPOitATIONS IN NEW YORK § 440 
 
 entitled to a bill of particulars of their names.* One receiving 
 stock of a New York corporation in exchange for stock of a 
 foreign corporation issued pursuant to an agreement in viola- 
 tion of the laws of New York cannot enforce such agreement 
 against the New York corporation.' One suing to recover 
 agreed compensation for selling shares of the stock of a cor- 
 poration cannot recover if the sales were made during periods 
 in which the corporation was not allowed to do business in 
 this state and contrary to law.° 
 
 § 440. Id.: Averment and Proof of Corporate Existence. — 
 The subject of proof of corporate existence is considered 
 generally in the four hundred and fifty-second section of this 
 book. In an action brought by a corporation the complaint 
 must aver that the plaintiff is a corporation; must state 
 whether it is a domestic or foreign corporation ; but the plain- 
 tiff need not set forth or specially refer to any act or proceed- 
 ing by or under which the corporation was created. In an 
 action brought against a domestic corporation the complaint 
 must aver that it is such but need not set forth or specially 
 refer to any act or proceeding by or under which it was 
 created.' 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 maybe, is not a corporation.' In an action or special 
 proceeding 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." The certifi- 
 cate of incorporation of any corporation duly filed is presump- 
 tive evidence of its incorporation, and any amended certificate 
 
 * Riker v. Erlanger, 87 A. D. 137, On the effect of insolvency of cor- 
 
 84 N. y. Supp. 69 (1903). poration or appointment of receiver, 
 
 ^ Haule V. Consumers' Park Brew- as affecting its right to sue, see note 
 ing Co., 150i A. D. 582, 135 N. Y. in 50 L.R.A.(N.S.) 383. 
 Supp. 900 (1912) ; app. dism'd 211 On effect of adjudication of in- 
 N. Y. 578, 105 N. E. 1086. The solvency and of proceedings for dis- 
 agreement was by a West Virginia solution of corporation upon its 
 corporation in consideration of rights of action, see note in 15 
 money received from an individual L.R.A. 627. 
 to issue to him its bonds, meanwhile ^ C. C. P. § 1775. 
 transferring its stock to him as * C. C. P. § 1775. 
 security. . » C. C. P. § 1776. 
 
 « Lowey v. Granite State Provi- " C. C. P. § 1777. 
 dent Assn., 8 Misc. 319, 28 N. Y. 
 Supp. 560 (1894); L. 1890, e. 146, 
 § 9- 
 
S ■'^^ JTUVVILJID, JJUliJiiS AINJJ JjlAISXljJLiiJl/iS 0£ii) 
 
 or other paper duly filed or recorded relating to the incorpora- 
 tion of any corporation or its existence or management, and 
 containing facts required or authorized by law to be stated 
 therein, is presumptive evidence of the existence of such facts ; 
 and when two or more corporations have been or hereafter 
 are consolidated and merged into a new corporation, a certifi- 
 cate- 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 oh file in his office, the date of the filing of the consoli- 
 dation 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, is 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 other facts so certified by him."" 
 
 Since the statute the plea of mil tiel corporation in an action 
 by a corporation is good; but not in one against a corpora- 
 tion." No plaintiff or defendant corporation in an action can 
 deny its corporate existence at the time of the commencement 
 of the action unless it sets up the fact affirmatively in a veri- 
 fied pleading." 
 
 " ... the bringing of an action, in a name purporting 
 to be a corporate name, is a sufficient averment of the exist- 
 ence of the plaintiff as a corporation. " " A plaintiff need not 
 establish its corporate existence if there be no affirmative 
 allegation that it is not a corporation." "... a corpo- 
 
 "* Gen. Corp. L. § 9, subds. 1, 3 its existence at the time of the com- 
 
 (L. 1909, e. 28). The statute also mencement of the action, from prov- 
 
 permits the use as evidence of a oer- ing under a general denial that con- 
 
 tified copy of the charter of a tracts alleged to have been made in 
 
 foreign corporation. its name were made at a time when 
 
 ^^ Stoddard v. Onondaga Annual it had no corporate existence." 
 
 Conference, 12 Barb. 573 (1851). " Canandaigua Academy v. Mc- 
 
 ^^Galdieri & Co., Inc., v. Waist Kechnie, 19 Hun, 62 (1899). 
 
 Co 98 Misc. 612, 163 N. Y. Supp. "Atlantic Construction Co. v. 
 
 154 (1917) ; C. C. P. § 1776. " This Kreusler, 40 A. D. 268, 57 N. Y. 
 
 would preclude any !such corpora- Supp. 983 (1899) ; C. C. P. § 1776. 
 tion, even though impliedly admitting 
 B.C.N.Y.— 34 
 
530 
 
 BUSINESS CORPORATIONS IN NEW YORK § 440 
 
 ration, when suing, need not aver or prove its corporate exist- 
 ence, upon the trial, unless it be expressly pleaded that it is 
 not a corporation."" "... a corporation need not set 
 forth its title in the pleadings, but may show on the trial its 
 corporate existence, and that it had power to make the con- 
 tract it seeks to enforce or make available." " Once a defend- 
 ant has answered in such form as to admit the corporate exist- 
 ence of a plaintiff he is estopped in law from denying the 
 corporate existence." The existence of a corporation cannot 
 be put in issue save as permitted by statute, and a defendant 
 not affirmatively alleging in his answer the contrary of the 
 existence of the corporation alleged in the complaint admits 
 the allegation and cannot at the trial put in evidence the cer- 
 tificate of incorporation of the plaintiff to show that the 
 corporation was not in existence at the time in issue." By 
 answering on the merits a complaint by a corporation a 
 defendant waives its omission to state in its complaint 
 whether or not it was a corporation." Advantage must be 
 taken of failure of a complaint which alleges that defendant 
 is a corporation to state whether it is domestic or foreign by 
 motion and not by demurrer.^" A complaint stating a good 
 cause of action but omitting to state that the plaintiff is incor- 
 porated and has capacity to sue cannot be taken advantage of 
 by demurrer which specifies as its only ground that the com- 
 plaint does not state facts suflBcient to constitute a cause of 
 action, as the demurrer omits to specify the ground of objec- 
 tion that the plaintiff has no capacity to sue.^ " If it appears 
 upon the face of the complaint, that a plaintiff suing as a 
 corporation is not such in fact, a demurrer is the proper 
 remedy of the defendant ... If the complaint does not 
 show the plaintiff is not a corporation on its face, the objec- 
 tion that it is not such must be taken by answer . . . ■ . " ^ 
 An allegation by a plaintiff's complaint that it is and was a 
 
 ^'La Fayette Ins. Co. of Brook- ^*Noye Manufacturing Co. v. 
 
 lyn V. Rogers, 30 Barb. 491 (1859). Raymond, 8 Misc. 353, 28 N. Y. 
 
 " Camden & Amboy R. R. & T. Supp. 693 (1894) ; C. C. P. §§ 1775, 
 
 Co. V. Remer, 4 Barb. 127 (1848). 488, subds. 3, 8. 
 
 " Loaners' Bank v. Jacoby, 10 ^ Harmon v. Vanderbilt Hotel 
 
 Hun, 143 (1877). Also put on Co., 79 Hun, 392, 29 N. Y. Supp. 
 
 ground that defendant had prevented 783 (1894) ; aff'd 143 N. Y. 666, 39 
 
 plaintiff from getting possession of N. E. 20; C. C. P. § 1775. 
 
 property it sought to replevy by ^P\ilton Fire Ins. Co. v. Baldwin, 
 
 executing an undertaking, and had 37 N. Y. 648 (1868) ; Code, §§ 144, 
 
 not questioned the incorporation. 145, 147, 148. 
 
 "Schmidt v. Nelke 'Art Litho- ^ The Phoenix Bank v. Donnell, 
 
 graphic Co., 17 Misc. 124, 39 N. Y. 40 N. Y. (1 Hand), 410 (1869); 
 
 Supp. 353 (1896); C. C. P. § 1776. Code, §§ 144, 147. 
 
440 POWERS, DUTIES AND LIABILITIES 531 
 
 iomestic corporation is not so controverted by an answer 
 Uegmg the defendant has no knowledge or information 
 ufficient to form a belief as to such allegation as to require 
 Toof on the trial: the defendant should affirmatively allege 
 he plaintiff is not a corporation to put the corporate exist- 
 nce m issue.' An answer alleging that the defendant has no 
 nowledge or information sufficient to form a belief as to 
 'hether plaintiff is a corporation -or not created under the 
 iws referred to in the complaint which alleges that plaintiff 
 s a corporation created under a designated act of the legis- 
 iture is " not sufficient to put plaintiff upon proof of its 
 srporate existence. The language used certainly has no 
 reater force than a general denial of the whole complaint 
 ould have. It is not tantamount to an affirmative allegation 
 lat the plaintiff is not a corporation." * A mere denial in an 
 Qswer to a complaint by a corporation properly averring the 
 laintiff's .corporate character is not sufficient to raise an 
 sue of the corporate character; but the answer must con- 
 lin an affirmative allegation to the effect that the plaintiff is 
 at a corporation.^ The court should grant a motion by a 
 iaintiff to amend its complaint so as to show the plaintiff to 
 i a corporation rather than an association organized pur- 
 lant to statute." Contracts put in evidence in an action by a 
 )rporation against an individual made between the two which' 
 icessarily assumed the corporation's corporate character 
 Derate as against the individual to prove that the plaintiff 
 a corporation as stated in the contracts.' 
 If a complaint contain no distinct averment that the defend- 
 it is a corporation, it cannot be demurred to on the ground 
 at it does not comply with the code requirements of what 
 ust be averred in a complaint in an action against a corpo- 
 ,tion.* Lack of denial by a defendant that it is a corporation 
 1 alleged relieves the plaintiff from the duty of proving 
 ifendant's incorporation." A defendant's incorporation 
 !ed not be proven if the answer does not put it in issue.^° All 
 
 'Snow, Church & Co. v. HaU, 19 Schlegel, 143 N. Y. 537, 38 N. E. 
 
 sc. 655, 44 N. Y. Supp. 427 729 (1894). 
 
 397) ; C. C. P. § 1776. * Adams v. Lamison Store-Service 
 
 'Concordia Savings and Aid Co., 59 Hun, 127, 13 N. Y. Supp. 
 
 s'n V. Read, 93 N. Y. 474 (1883) ; ll8 (1891) ; C. C. P. § 1775. 
 
 C. P. § 1776. " Goldsmith v. Wells Co., 86 Hun, 
 
 United States Vinegar Co. v. 489, 33 N. Y. Supp. 727 (1895); 
 
 il^el, 143 N. Y. 537, 38 N. E. C. C. P. § 1776. 
 
 ) (1894) ; C. C. P. § 1776. ^° Dentz Lithographing Co. v. In- 
 
 Dean v. Gilbert, 92 Hun, 427, 36 temational Registry Co., 32 Misc. 
 
 Y. Supp. 1004 (1895) ; C. C. P. 687, 66 N. Y. Supp. 540 (1900) ; 
 
 723, 1919. C. C. P. § 1776. * 
 United States Vinegar Co. v. 
 
532 BUSINESS CORPORATIONS IN NEW YORK § 441 
 
 that need be alleged in a declaration or reply in an action 
 against a corporation is the general fact of incorporation: 
 how it took place is matter of evidence." The first step in a 
 trial in which the corporate existence of the defendant is an 
 issue is to prove it." To prove the existence of a corporation 
 de. facto both the existence of a charter and a use of rights 
 claimed to be conferred thereby or by law must be shown." 
 § 441. Id.: Verification of Pleadings. — The verification of 
 corporate pleadings by the corporation's directors, officers 
 and agents is discussed in the two hundred and eighty- 
 seventh, three hundred and thirty-fourth and three hundred 
 and sixty-eighth sections, respectively, of this book. The 
 verification to a pleading by a party which is a domestic cor- 
 poration must be made by an officer thereof, except that the 
 corporation's agent or attorney may verify if none such officer 
 is within the county where the corporate party's attorney 
 resides, or if he be a nonresident of New York State the 
 county where he has his office, and capable of making the 
 affidavit, or there are two or more parties united in interest 
 and pleading together and neither of them acquainted with 
 the facts is within that county and capable of making the 
 affidavit, or the action or defence is founded upon a written 
 instrument for the payment of money only which is in the 
 possession of the agent or attorney, or all the material allega- 
 tions are within the personal knowledge of the agent or 
 attorney." A director of a corporation may legally verify 
 a pleading by it in an action to which it is a party." ' ' Section 
 525 of the Code of Civil Procedure provides that the verifica- 
 tion of a pleading ' must ' be made by a ' party ', ' except ' 
 (only what is applicable being here cited) that where the 
 ' party ' is a domestic corporation it ' niust ' be made by an 
 officer thereof, and that where a foreign corporation is, ' may ' 
 be made by ' the agent of or the attorney for the party. ' This 
 terminology shows that an ' officer ' of a corporation party is 
 not to be deemed a ' party.' If otherwise, this distinction 
 between a corporation ' party ' and its ' officer ' would be a 
 contradiction of terms. An officer of a foreign corporation is 
 an agent thereof in law, and within the meaning of the code 
 provision. The secretary of this corporation can therefore 
 verify this answer ; but to do so he must comply with section 
 
 " Stoddard v. Onandaga Annual " C, C. P. § 525. 
 
 Conference, 12 Barb. 573 (1851). ^^ Eastham v. York State Tele- 
 
 " Van Buren v. Reformed Church phone Co., 86 A. D. 562, 83 N. Y. 
 
 of Gansevoort, 62 Barb. 495 (1872). Supp. 1019 (1903); C. C. P. § 525. 
 
 "Van Biiren v. Reformed Church 
 of Gansevoort,' 62 Barb. 495 (1872). 
 
§ 442 POWERS, DUTIES AND LIABILITIES 533 
 
 526, i. e., ' set forth in the affidavit the grounds of his belief 
 as to all matters not stated upon his knowledge. ' He need not 
 set forth ' the reason why it is not made by the party, ' for that 
 would be senseless in the case of a corporation, which cannot 
 take an oath." ^^ An officer of a domestic corporation is to be, 
 considered a party to an action against it for the purpose of 
 verifying pleadings; so that a verification of a corporation's 
 pleading by an officer is sufficient though it do not state the 
 source of his information and belief." A verification of a cor- 
 poration's pleading may be made by its president without a 
 statement of the sources of his knowledge regarding the 
 matters in suit.'* A pleading of a domestic corporation may 
 properly be verified by its attorney when it appears by his 
 verification that all its officers are absent from the county 
 where he resides." 
 
 § 442. Id.: Jurisdictional Questions.— The jurisdiction of 
 the city court of the City of New York extends to an action 
 against a domestic or foreign corporation wherein the com- 
 plaint demands judgment for a sum of money only, or to 
 recover one or more chattels, with or without damages for the 
 taking or detention thereof, provided the judgment if demand- 
 ing a sum of money only do not require a judgment of over 
 two thousand dollars.^" For the purpose of determining the 
 jurisdiction of a county court in an action to which a corpo- 
 ration is a party, a domestic corporation the principal place of 
 business of which is established by or pursuant to a statute 
 or its articles or is actually located — or any part of its 
 plants, shops, factories or offices is actually located — in the 
 county, is deemed a resident of the county, provided that a 
 city including more than one county is not deemed a domestic 
 corporation so as to give the county court jurisdiction.^ An 
 action cognizable by a justice of the peace may be brought by 
 or against a corporation.^ The jurisdiction of the city court 
 of Yonkers extends to a civil action against a domestic corpo- 
 ration wherein the complaint demands judgment for a sum of 
 
 ^* Robinson v. Ecuador Develop- & Sons, 31 Misc. 275, 64 N. Y. 
 
 ment Co., 32 Misc. 106, 65 N. Y. Supp. 42 (1900'); C. C. P. § 525, 
 
 Supp. 427 (1900). subd. 3. • 
 
 "Henry v. Brooklyn Heights R.- Is affidavit or verification by 
 
 R. Co., 43 Misc. 589, 89 N. Y. Supp. officer of a corporation to be re- 
 
 525 (1904) ; C. C. P. § 526. See 13 garded as made by an a^ent of the 
 
 Daly 200, in accord; and 32 Misc. corporation,, see note in 16 L.R.A. 
 
 106, contra. (N.S.) 703. 
 
 ^8 Dnryea, Watts & Co. v. Rayner, ^ C. C. P. §§ 315, 316. , 
 
 11 Misc. 294, 32 N. Y. Supp. 247 ^ C. C. P. § 341. 
 
 (1805). => C. C. P. § 2866. 
 
 " Climax Specialty Co. v. Smith 
 
534 BUSINESS CORPORATIONS IN NEW YORK § 442 
 
 money only or to recover one or more chattels with or without 
 damages for the taking, withholding or detention thereof.' 
 "... corporations are citizens of the states which 
 create them, irrespective of the residence of the corpo- 
 ,rators."* A corporation practically controlled by aliens, 
 residents of a country with which this country is at war, may 
 nevertheless sue in our courts, especially if a treaty between 
 the two nations permits.' All applications (relating to cor- 
 porations) must 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 must be made 
 in the judicial district in which the action is triable." For the 
 purpose of the venue of an action to which a corporation is a 
 party, the county stated in its certificate of incorporation as 
 that in which its principal place of business is to be and in 
 which it files its annual reports, is to be considered the county 
 of its residence.' The residence of a domestic corporation for 
 the purpose of determining the venue of an action against it 
 is where its principal oflSice and place of business is.* In 
 deciding whether there is proof that an execution against a 
 domestic corporation was issued to the sheriff of the county 
 where it has " a place for the regular transaction of busi- 
 ness," pursuant to statute, the corporation must be held to 
 reside ' ' where its principal place of business is situated and 
 an allegation that it has its principal place of business in the 
 county of New York is equivalent to an allegation that it 
 resides in that county."' An objection by a corporate 
 defendant to the jurisdiction of the court may be taken by 
 answer if the allegations of the complaint as to its residence 
 are sufBcient." The County Court of one county has not juris- 
 diction of an action against a domestic corporation the prin- 
 cipal place of business of which is in another county and which 
 
 * C. C. P. § 3203. * Speare v. Troy Laundry M'achin- 
 
 * Cooke V. State Nat. B'k of Bos- ery Co., 44 A. D. 390, 60 N. Y. Supp. 
 ton, 52 N. Y. 96 (1873). 1080 (1899). 
 
 ^ Sehultz, Jr., Co., Inc., v. Raines, ' Groshut v. Kinetophote Corpora- 
 
 & Co., 99 Misc. 626, 104 N. Y. tion, 93 Misc. 558, 157 N. Y. Supp. 
 
 Supp. 454 (1917) ; afl'd, with opin- 312 (App. T. 1st Dept. 1916) ; 
 
 ion, 100 Misc. 697, 166 N. Y. Supp. C. C. P. § 2458, subd. 1; Bradley 
 
 567 (1917). V. Certigue Mining & Dredging Co., 
 
 »Gen. Corp. L. § 314 (L. 1907, 93 Misc. 519, 157 N. Y. Supp. 275. 
 
 c, 28). same court. 
 
 ' Rossie Iron Works v. Westbrook, " Heenan v. New York, West 
 
 59 Hun, 345, 13 N. Y. Supp. 141 Shore & Buffalo Ry. Co., 34 Hun, 
 
 (1891). 602 (1885); C. C. P. 5 498, 
 
§ 443 POWERS, DUTIES AND LIABILITIES 535 
 
 was not served with process within its county." A repre- 
 sentative action by a stockholder against the corporation and 
 certain individuals to recover money for the company will be 
 removed from a rural county to New York county if the cor- 
 poration's books and papers are more accessible to New York 
 county, the witnesses convenienced by trial in New York 
 county exceed those convenienced by trial in the rural county 
 and the cause of action arose in New York City." A question 
 as to whether or not a court acquires jurisdiction of an action 
 against a corporation because brought by a non-resident can- 
 not properly be raised on a motion to set aside service of the 
 summons on the ground that the court had not acquired juris- 
 diction of the person of the defendant; but should be raised 
 by demurrer or answer.^^ The courts of this State will enter- 
 tain a suit in equity by a non-resident judgment creditor of a 
 corporation whose judgment is founded on a cause of action 
 arising in a foreign state in order to compel an accounting 
 and the restoration of corporate assets by one who is a resi- 
 dent of the State who has transferred the corporate assets in 
 this State in fraud of creditors." 
 
 § 443. Id.: Service of Process In. — The service of process, 
 on corporations through their directors, officers and agents is 
 discussed in the two hundred and eighty-seventh, three hun- 
 dred and thirty-fourth and three hundred and seventieth to 
 seventy-fourth sections, respectively, of this book. Personal 
 service of a summons within a county or of a mandate com- 
 mencing a special proceeding is sufficient service upon a 
 domestic corporation, wherever it is located, to give the 
 county court jurisdiction.^^ An attempt to commence an 
 action in a court of record is equivalent to the commencement 
 thereof against a corporate defendant within the meaning of 
 each provision of the Code of Civil Procedure limiting the 
 time for commencement of an action when the sununons is 
 delivered with the intent that it shaU actually be served to the 
 sheriff, or if the sheriff is a party to the coroner, of the county 
 in which the corporation is established by law or wherein its 
 general business is or was last transacted or wherein it keeps 
 
 "HftPnan v New York, West "Trotter v. Lisman, 209 N. Y. 
 
 Shore & Buffaio Ry. Co., 34 Hun, 1/4 102 N..E. f5 (1913) 5 C, C P 
 
 602 (1885) § 17^*^ ^°^ ^^* affect the right of 
 
 ^^Cate v risk, 175 A. D. 235, the Supreme Court to exercise its 
 
 161 N Y Supp. 441 (1916); equitable jurisdiction when proper. 
 
 C. C. P. § 987. "-C- C. P. § 341. 
 
 "Mabon v. Ongley Eleetne Co., 
 No. 2, 24 A. D. 50, 48 N. Y. Supp. 
 973 (1897) ; C. C. P. § 1780. 
 
536 BUSINESS CORPOEATIONS IN NEW YORK § 443 
 
 or last kept an office for the transaction of business; but in 
 order to entitle the plaintiff to the benefit of this procedure 
 the delivery of the summons to an officer must be followed 
 withm sixty days after the expiration of the time limited for 
 the actual commencement of the action by personal service 
 thereof upon the corporate defendant or by the first publica- 
 tion of the summons as against that defendant pursuant to an 
 order for service upon him in that manner." The same holds 
 true of an attempt to commence an action in a court not of 
 record when the summons is delivered to an officer authorized 
 to serve it within the city or town wherein the corporation is 
 located, except as to the provision requiring a publication or 
 service of the summons within sixty days, provided actual 
 service thereof is made with due diligence." When a sum- 
 mons is issued in any court of record, an order for its service 
 upon a domestic corporation having its principal office or 
 place of business in New York State may be made by the court 
 or a judge thereof or the county judge of the county where 
 the action is triable upon satisfactory proof by the affidavit 
 of a person not a party to the action or by the return of the 
 sheriff of the county where such office or place of business is 
 that proper and diligent effort has been made to serve the 
 summons upon the corporate defendant but that none of the 
 persons mentioned in the statute as those upon whom service 
 can be made against the corporation can be found." The 
 order must direct that service of the summons be made by 
 leaving a copy of it and of the order at its principal office or 
 place of business with a person of proper age if upon reason- 
 able application admittance can be obtained and such person 
 found who will receive it, or if admittance cannot be so 
 obtained nor such a person found, by affixing the same to the 
 outer or other door of such place of business or office and by 
 depositing another copy thereof properly enclosed in a post- 
 paid wrapper addressed to the defendant at such principal 
 office or place of business in the postoffice where such office or 
 place of business is located." An order directing the service 
 of a summons by publication upon a defendant which is a 
 domestic corporation may be made when after diligent effort 
 service cannot be made within New York State upon the presi- 
 dent or other head of the corporation, the secretary of or 
 clerk to the corporation, its cashier, treasurer, director or 
 managing agent, or when an attempt was made to commence 
 the action against it as required by statute before the expira- 
 
 " C. C. P. § 399. " C. C. P. § 435. 
 
 " C. C. P. § 400. " C. C. P. § 436. 
 
§ 443 POWERS, DUTIES AND LIABILITIES 537 
 
 tion of the limitation applicable thereto as fixed by statute 
 and the limitation would have expired within sixty days next 
 preceding the application if time had not been extended by 
 the attempt to commence the action.^" The order may be made 
 by the court or by a judge thereof or the county judge of the 
 county where the action is triable ; and must direct that serv- 
 ice of the summons upon the defendant named or described in 
 the order be made by publication thereof in two newspapers 
 designated in the order as most likely to give notice to the 
 defendant for a specified time which the judge deems reason- 
 able not less than once a week for six successive weeks ; and 
 must contain either a direction that on or before the day of 
 the first publication the plaintiff deposit in a postoffice one or 
 more sets of conies of the summons, complaint and order each 
 contained in a'' securely closed post-paid wrapper directed to 
 the defendant at a place specified in the order, or a statement 
 that the court or judge being satisfied by the affidavits upon 
 which the order was granted that the plaintiff cannot with 
 reasonable diligence ascertain a place or places where the 
 defendant would probably receive matter transmitted through 
 the postoffice, dispenses with the deposit of any papers 
 therein.^ Service of an injunction order upon a corporation 
 may be made as prescribed in the Code of Civil Procedure for 
 making personal service of a summons upon a corporation 
 and copies of the papers upon which the order was granted 
 must be delivered with the copy of the order.^ A precept in 
 summary proceedings to recover the possession of real prop- 
 erty directed to a corporation must be served by delivering 
 to an officer thereof, upon whom a summons issued out of the 
 ■Supreme Court in an action against the corporation might be 
 served, a copy of the precept together with a copy of the peti- 
 tion and at the same time showing him the original precept, 
 or if service cannot with reasonable diligence be so made, by 
 affixing a copy of the precept and petition upon a conspicuous 
 part of the property ; and if the precept is returnable on the 
 day on which it is issued it must be served at least two hours 
 before the hour at which it is returnable, and in every other 
 case at least two days before the day on which it is return- 
 able.^ Personal service of a citation within New York State 
 must be made upon a corporation by delivering a copy thereof 
 in the manner prescribed for personal service of a summons 
 upon such a corporation.* When a defendant to be served in 
 
 2°C. C. p. § 438. 'C. C. P. § 2240. 
 
 ^ C. C. P. § 440. * C. C. P. § 2525. 
 
 ^C. C. P. § 610. 
 
538 BUSINESS CORPORATIONS IN NEW YORK § 443 
 
 an action in a court of a justice of the peace is a corporation 
 doing business in another county than that in which it resides 
 the summons may be personally served upon it 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 
 corporation in the Supreme Court might be delivered as pre- 
 scribed in the statute, or to any director, managing agent or 
 trustee of the corporation by whatever official title he or it is 
 called.' 
 
 " Corporations are intangible, incorporeal existences, and 
 service of process upon them can only be made by service upon 
 some one of their agents or officers. The legislature has 
 power to determine how and upon whom service shall be made 
 . . . The object of all service of process is said to be to 
 give notice to the party on whom service is made, that he 
 may be aware of and resist what is sought of him, and it is a 
 general rule that any service must be deemed sufficient which 
 renders it reasonably probable that the party proceeded 
 against will be apprised of what is going on against him, and 
 have an opportunity to defend. . . . But where a service 
 is authorized by the legislature which is not according to com- 
 mon experience reasonably calculated, according to the cir- 
 cumstances of the case, to reach the party intended to be 
 affected, and to give him an opportunity to defend, it may be 
 challenged as a violation of the constitutional provision, that 
 no person shall be deprived of his personal rights or property 
 without due process of law . . . "* "A service on a 
 director of a corporation is regular." ^ A corporation is not 
 bound by process served on one who had been its director but 
 had presented or filed his resignation prior to being served.* 
 Service of process on one after he has sold and transferred 
 his stock and the election of someone in his place as director 
 does not bind the corporation." . A director who has resigned 
 as such before being served with process against it cannot be 
 used as a means of service upon the corporation although his 
 resignation has not been formally accepted and his resigna- 
 tion reduced the number of directors to less than the statutory 
 minimum of three." 
 
 = C. C. P. § 2879. Gayley, — Misc. — (1918); N. Y. 
 
 •Hiller v. Burlington and Mis- L. J. Feb. 26, Sp. T. N. Y. Co. 
 
 souri River R. R. Co., 70 N. Y. 223 » Beardsley v. Johnson, 121 N. Y. 
 
 (1877). 224, 24 N. E. 380 (1890).; C. C. P. 
 
 ' Curtis V. Avon, Geneseo and § 431, subd. 3. 
 
 Mount Morris Co., 49 Barb. 148 " Wilson v. Brentwood Hotel Co., 
 
 (1867). 16 Misc. 48, 37 N. Y. Supp. 655 
 
 * Barber Asphalt Paving Co. v. (1896). The president remained as 
 
§§ 444, 445 POWERS, DUTIES AND LIABILITIES 539 
 
 § 444. Id.: Cessation and Revivor. — ^An action for personal 
 injuries against a corporation dies upon its dissolution and 
 does not survive as against its receiver, unless, perhaps, it 
 was incorporated under the Business Corporations Law." 
 One claiming stock in a corporation as a result of an agree- 
 ment of a predecessor partnership to the corporation may 
 not revive a long discontinued action against the corporation 
 against a receiver thereof, when the indebtedness of the cor- 
 poration is such that its stock is worthless." 
 
 § 445. Id.: Actions on Notes. — A civil cause of action 
 against a corporation founded upon a note or other evidence 
 of debt for the absolute payment of money is entitled to a 
 trial preference.^^ In an action against a domestic corpo- 
 ration to recover damages for the non-payment of a promis- 
 sory 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 cannot be granted 
 except by the court upon notice to the plaintiff's attorney; 
 and 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 there- 
 for, or if the service of the summons was otherwise than per- 
 sonal, at the expiration of twenty days after the service is 
 complete; unless the defendant serves with a copy of his 
 answer or demurrer a copy of an order of a judge directing 
 that the issues presented by the pleadings be tried." 
 
 If a corporation sued on its note does not serve with its 
 answer a copy of an order directing the issues to be tried the 
 plaintiff is entitled to take judgment as upon a default, with- 
 out returning the answer or taking any other step." The 
 statute requiring a corporation sued on its note to serve an 
 order directing trial of the issues with its answer in order to 
 avoid judgment against itself as in default applies only to a 
 case in which the note itself is defended and not when the note 
 is admitted but a counterclaim is set up : when this is the case 
 
 an available person to be served and 12 (1897) ; Bus. Oorp. L. § 5 (L. 
 
 there was no suggestion of resigna- 1892, c. 691). 
 
 tion to defeat service. ^^ Marshall v. Wendell, 45 A. D. 
 
 For a note on the question of 120, 61 N. Y. Supp. 13 (1899). 
 
 validity of statutes authorizing con- ^^ C. C. P. § 791, subd. 8. 
 
 structive or substitute service on , " C. C. P. § 1778. 
 
 domestic corporation see note in '4 ^^Watertown National Bank v. 
 
 L.R.A.(N.S.) 117. Westchester County Water Works, 
 
 "Matter of Yuengling Brewing 19 Misc. 685, 44 N. Y. Supp. 1101 
 
 Co., 24 A. D. 223, 49 N. Y. Supp. (1897) ; C. C. P. § 1778. 
 
540 BUSINESS CORPORATIONS IN NEW YORK § 445 
 
 no proper issue can be said to be joined until the plaintiff 
 replies." The statutory permission to a plaintiff in an action 
 against a corporation on its evidence of debt to take judgment 
 by default, unless it serve with its answer or demurrer a 
 judge's order directing trial of the issues, does not apply to 
 an answer so served in a suit against a corporation as 
 indorser." The statutory provision that judgment may be 
 taken by default against a corporation in an action on its note 
 or other evidence of debt unless it serves with its answer or 
 demurrer a copy of an order directing trial of the issue is 
 constitutional and applies to a municipal corporation.^^ The 
 statute permitting judgment by default in an action against 
 a corporation on its note or other evidence of debt unless with 
 its answer or demurrer it serve a copy of a judge's order 
 directing trial of the issues applies to an action in the 
 Municipal Court of New York City." It is not necessary that 
 a domestic corporation sued in a justice's court should file 
 with its verified answer to the summons and verified com- 
 plaint an order of a judge directing that the issues presented 
 by the pleadings be tried as required by statute.^" The stat- 
 utory provision giving priority on the trial calendar to " an 
 action against a corporation, founded upon a note or other 
 evidence of debt for the absolute payment of money " does 
 not apply to an action against a corporation based on an 
 agreement by it with another corporation primarily liable 
 upon a note to be liable for payment thereof.^ An allegation 
 in a complaint that drafts were accepted by a defendant cor- 
 poration by its treasurer includes an averment of authority 
 to the treasurer to so accept, as the company could not accept 
 by him unless he had such authority.^ If a complaint allege 
 that a note was endorsed by a corporate defendant, it implies 
 that it was lawfully endorsed and throws the burden on it of 
 showing it was not lawfully done.^ A complaint setting. out 
 
 " Pennypacker v. Levis & Co., 63 ^ Center v. Hoosick River Pulp 
 
 Misc. 384, 116 N. Y. Supp. 771 Co., 43 Misc. 247, 88 N. Y. Supp. 
 
 (1909) ; C. C. P. § 1778. 548 (1904) ; C. C. P. § 1778. 
 
 ^' Shorer v. Times Printing and ^ Polhemus v. Fitchburg R. R. 
 
 Publishing Co., 119 N. Y. 483, 23 Co., 113 N. Y. 617, 20 N. E. 601 
 
 N. E. 979 (1890) ; C. C. P. § 1778. (1889) ; C. C. P. § 791, subd. 8. 
 
 " Moran v. Long Island City, 101 ^ Partridge v. Badger, 25 Barb. 
 
 N. Y. 439, 5 N. E. 80 (1886); 146 (1857). 
 
 C. C. P. § 1778. 'Mechanics' Banking Assn. v. 
 
 " Duke v. Mount Morris Construe- Spring Valley Shot & Lead Co., 25 
 
 tion Co., 127 A. D. 39, 111 N. Y. Barb. 419 (1857). 
 Supp. 313 (1908); C. C. P. § 1778; 
 old Mun. Ct. Act, § 20. 
 
§§ 446, 447 POWERS, DUTIES AND LIABILITIES 541 
 
 a note and averring that the defendant corporation duly 
 endorsed it to the plaintiff by writing tliat it should be paid 
 to plaintiff, adding simply the name of the defendant com- 
 pany, is sufficient, as the addition of the name of the agent of 
 the corporation by whom the indorsement was written is 
 unnecessary, though on the trial the plaintiff would be bound 
 to prove that the corporate name was endorsed by someone 
 authorized to sign the corporate name.* 
 
 § 446. Id.: Costs and Security for Costs.— When an action 
 is brought by the Attorney-General in the name of the People 
 upon the relation of a private corporation having an interest 
 in the question, a judgment awarding costs to the defendant 
 must award them against the relator in the first instance, and 
 against the People only in case an execution issued thereupon 
 against the property of the relator is returned unsatisfied." 
 Under a statute permitting a defendant in an action in the 
 county court to require security for costs when the plaintiff 
 is a person residing in that county, such security may be 
 required of a plaintiff which is a corporation and has its prin- 
 cipal place of business there.* 
 
 § 447. Id.: Examination Before Trial. — One desiring to take 
 a deposition in which the party sought to be examined is a 
 corporation must state in his affidavit the name of the officers, 
 directors or managing agents thereof, or any of them whose 
 testimony is necessary and material, or the books and papers 
 as to the contents of which an examination or inspection is 
 desired, and the order to be made in respect thereto must 
 direct the examination of such persons and the production of 
 such books and papers, and on such examination the books or 
 papers or any part or parts thereof may be offered and 
 received in evidence in addition to the use thereof by the wit- 
 ness to refresh his memory.'' There is no rule by which, as a 
 condition precedent to the right of an examination of a 
 defendant corporation before trial, the plaintiff is required to 
 request the corporation for a copy of the records and papers 
 desired,' An order for examination before trial of a corpo- 
 ration by its officers may direct the production of books and 
 papers for the use of the witness without need of a subpoena 
 duces tecum, but not for an inspection by the adverse party." 
 
 * Youngs V. Perry, 42 A. D. 247, * Jacobs v. Mexican Sugar Refin- 
 
 59 N. Y. Supp. 19 (1899). ing Co., Ltd., No. 1, 112 A. D. 655, 
 
 = C. C. P. § 3242. 98 N. Y. Supp. 541 (1906). 
 
 'Sherin Special Agency v. Sea- ^Matter of Sands, 98 A. D. 148, 
 
 man, 49 A. D. 33, 63 N. Y. Supp. 90 N. Y. Supp. 749 (1904) ; C. C. P. 
 
 407 (1900) ; C. C. P. § 3268. § 872, subd. 7. 
 
 ' C. C. P. § 872, subd. 7. 
 
542 BUSINESS COEPORATIONS IN NEW YORK § 447 
 
 " There is no authority to examine an officer of a corporation 
 as such, apart frohi the examination of the corporation. 
 . . . The proper practice ... is to authorize the exam- 
 ination of the party, and then, the party being a corporation, 
 the order should provide that the information is to be elicited 
 by an examination of certain of its officers." " An order for 
 the examination before trial of a corporation should in form 
 provide for the examination of the corporation by its proper 
 officer ; but if it direct the examination of a named person, as 
 a specified officer of the corporation, it is an irregularity 
 merely, which is properly cured by an amendment of the order 
 by the court at Special Term." An order not purporting to 
 require a corporation but its officers individually to be exam- 
 ined is improper.^^ Persons having personal knowledge at 
 the time they happened of facts which a party to an action 
 to which a corporation later incorporated of which they 
 became officers also is a party may be compelled as such 
 officers to be examined before trial, though the order for 
 examination call technically for the examination of the corpo- 
 ration through them as its officers." A corporation of which 
 receivers have been appointed cannot be examined through 
 its officers by a. judgment creditor in proceedings supple- 
 mentary to execution when the real purpose of the examina- 
 tion is to find out if the plaintiff has any right of action 
 against the officers individually under a statute." An affidavit 
 on which an order for examination of a corporation before 
 trial is based must name the officer whose examination is 
 sought and a copy of it and the order must be served on the 
 corporation's attorney if it has appeared in the action." It is 
 for the party applying for an order for examination before 
 trial of a corporation through one of its officers to show that 
 the person to be examined, described as " managing agent " 
 is in fact an officer of the corporation." An officer of a 
 defendant corporation may be examined when it is a party to 
 
 " Jacobs V. Mexican Sugar Re- ^* Matter of Jones v. Standard 
 
 fining Co., Ltd., No. 2, 112 A. D. Plunger Elevator Co., 167 A. D. 
 
 657, 98 N. Y. Supp. 542 (IMfi). 178, 152 N. Y. Supp. 910; affi'd 215 
 
 "Palumbo v. L'Araldo Italiano N. Y. 692, 109 N. E. 1080 (1915); 
 
 Publishing Co., 150 A. D. 221, 134 Gen. Corp. L. §§ 90, 91. 
 
 N. Y. Supp. 655 (1912). ^^ Turk v. Koehler & Co., 144 
 
 " Herrman v. Tapley Co., 64 Misc. A. D. 53, 128 N. Y. Supp. 809; C. C. 
 
 466, 118 N. Y. Supp. 803 (1909). P. § 872, subd. 7, and § 875. 
 
 '^ New York Assets Realization ^° Herzig v. Washington Fire Ins. 
 
 Co. V. Pforzheimer, 158 A. D. 700, Co., 144 A. D. 174, 128 N. Y. Supp. 
 
 143 N. Y. Supp. 898 (1913); C. C. 988 (1911); C. C. P. § 872, subd. 7. 
 P. § 870 et seq. 
 
§ 447 POWERS, DUTIES AND LIABILITIES 543 
 
 an action even if it has made default in answering the com- 
 plaint; but a copy of the order for examination should be 
 served on the attorney for the defendant, if he has appeared 
 in the action." An order for examination before trial of indi- 
 viduals to find if a contract signed " Co. by 
 
 [one of such individuals], manager," was 
 
 signed by a corporation or a co-partnership is proper.^* In an 
 examination before trial of a corporation and its officers the 
 order should not compel the production of the corporate books 
 for the purpose of inspection by the adverse party but simply 
 for use in connection with the examination of a witness who 
 would be able to testify therefrom and unable to thwart the 
 purposes of the examination by claiming he could not give the 
 information without having his recoUectionK refreshed by an 
 inspection of the books." An order vacating the examination 
 of a corporation by its officers should not be vacated if made 
 after another order staying all proceedings by the corporation 
 pending the production and examination of such officers.^" 
 The word ' ' necessary ' ' in the statute permitting an examina- 
 tion of a defendant before trial does not mean " absolutely 
 necessary " or " indispensable," but is used in the sense of 
 ' ' needful ' ' ; and it is no answer to an application for an exam- 
 ination of a corporate defendant through its officers that the 
 plaintiff might prove by the testimony of others what he seeks 
 to prove by the examination asked.^"* In an action in 
 which the main question involved is the authority of a cor- 
 poration's employee to make a contract for it, the plain- 
 tiff, on submitting an affidavit, complying with the statute, 
 is entitled to an order for the examination of the corpo- 
 ration's officers.^ That officers of a corporation which is a 
 party to an action intend to be present upon the trial is of no 
 import insofar as their examination before trial is concerned.^ 
 On an examination before trial of a corporation sued for an 
 accounting and damages for using a business name of another 
 
 " New York, Lake Erie & West- 2°" Terry v. Ross Heater & Mfg. 
 
 em R. R. Co. v. Carhart, 36 Hun, Co., Inc., 180 A. D. 714 (1917); 
 
 288 (1885) ; C. C. P. § 873. C. C. P. § 870 et seq. 
 
 15 Clark V. Wilcklow, 75 Hun, 290, ^ Wood v. Mott Iron Works, 114 
 
 27 N. Y. Supp. 43 (1894) ; C. C. P. A. D. 10«, 99 N. Y. Supp. 677 
 
 § 872. (1906) ; C. C. P. §§ 872, 873. 
 
 " Duffy V. Consolidated Gas Co:, ^ Press Publishing Co. v. Star Co., 
 
 59 A. D. 580, 69 N. Y. Supp. 635 33 A. D. 242, 53 N. Y. Supp. 371 
 
 (1901) ; C. C. P. § 872, subd. 7. (1898) ; C. C. P. § 872. 
 
 ^"Dennis v. Stock, Grain & Pro- 
 vision Co. of N. Y., Ltd., 144 A. D. 
 585, 129 N. Y. Supp. 760 (1911). 
 
544 BUSINESS CORPORATIONS IN NEW YORK § 448 
 
 for purposes of unfair trading only such officers should be 
 required by order to appear as are likely to have the knowl- 
 edge necessary to the plaintiff and the examination should be 
 limited to showing the use of the name and the relations 
 between the parties material to the question of the defend- 
 ant's liability.' An executor may obtain an order for an 
 examination of the persons who were the officers of a corpo- 
 ration at the time of the transaction in question against which 
 he is prosecuting a claim in favor of his testator against it, so 
 that he may give a bill of particulars.* A witness in an action 
 to which a corporation is a party cannot stay proceedings 
 therein, in order to save himself from an examination before 
 trial, on the theory that by reason of the dissolution of the 
 corporation, the action had abated.^ Under a statute provid- 
 ing that a party to an action may be examined on his own 
 behalf, the same as any other witness, subject to the qualifica- 
 tion that the opposite party in interest be living, and exclud- 
 ing such testimony when the opposite party was the assignee, 
 administrator, executor or legal representative of a deceased 
 person, the testimony of an individual plaintiff in an action 
 against a corporate defendant is admissible, as the corpora- 
 tion must be considered a living person within the meaning 
 of the statute.* 
 
 § 448. Id.: Inspection of Corporate Books. — ^Inspection of 
 corporate books is discussed in the fifty-third to fifty-seventh 
 sections of this book. The production upon a trial of a book 
 or paper belonging to or under the control of a corporation 
 may be compelled in like manner as if it was in the hands or 
 under the control of a natural person and for that purpose a 
 subpoena duces tecum or an order made according to statute, 
 as the case requires, must be directed to the president or other 
 head of the corporation, or to an officer thereof, in whose 
 custody the book or paper is; but the subpoena or order is 
 deemed to be sufficiently obeyed if the book or paper is pro- 
 duced by a subordinate officer or employee of the corporation 
 who possesses the requisite knowledge to identify it and to 
 testify respecting the purposes for which it is used, and if the 
 personal attendance of a particular officer of the corporation 
 
 ^ Solar Baking Powder Co. v. ° Sterne v. Metropolitan Tele- 
 
 Roval Baking Powder Co., 128 A. D. phone Co., No. 2, 33 A. D. 169, 53 
 
 550, 112 N. Y. Supp. 1013 (1908). N. Y. Supp. 467 (1898); C. C. P. 
 
 * Chittenden v. San. Domingo Im- g 872. 
 provement Co., 132 A. D. 169, 116 ' 'La Farge v. Exchange Eire In- 
 
 N. Y. Supp. 829 (1909); C. C. P. suranoe Co., 22 N. Y. 352 (I860); 
 
 § 871. Code of 1857, § 399. 
 
§ 448 POWERS, DUTIES AND LIABILITIES 545 
 
 is required, a subpoena without a dv^es tecum clause, must 
 also be served upon him/ The statutory provision permitting 
 an order for production of corporate books on examination 
 of a corporation through its officers is not intended to replace 
 the statute permitting discovery of books and the order 
 should, therefore, only direct production of such books as 
 appear from the papers to be necessary for the proper exam- 
 ination of the party in question.* It is not sufficient to thwart 
 an otherwise rightful demand for discovery of a corporation 
 adversary's papers, etc., that its officer swears he believes the 
 discovery is only a scheine to devise technical. defenses to 
 avoid an honest liability." "... a corporation ought 
 not to be required to produce its books upon the examination 
 of one of its officers before trial, to enable him to refresh his 
 memory therefrom while on the stand, unless he requires their 
 assistance in order to testify concerning the matters in regard 
 to which he is to be examined." " One claiming as a litigant 
 and not in the right of a stockholder to examine a corpora- 
 tion's books must show what specific books contain entries 
 necessary for him to see before he can proceed to trial." A 
 plaintiff who states that he intends to begin an action and 
 serve a summons, cannot, by moving for the examination of 
 a defendant corporation's president, who knows nothing of 
 the facts involved, under the guise of such an examination, 
 obtain an inspection of the defendant's books.^^ A stock- 
 holder cannot have discovery and inspection of his corpo- 
 ration's books in an action pending by him against it and one 
 of its directors and officers for an account and repayment of 
 corporate property wasted, in which he has only served a 
 summons, for the purpose of framing his complaint, if all the 
 specific charges of waste are on information and belief save 
 one occurring while he himself was a director, and the only 
 specific information sought i« the money received by the cor- 
 poration from advertisers and the money kept by the indi- 
 vidual defendant, and he does not aver any more than that he 
 
 'C. C. P. § 869. A. D. 248, 94 N. Y. Supp. 304 
 
 * Secayno v. Vulcan Steel Products (1905). 
 
 Co., — Misc. — (1918) ; N. Y. L. J. " Snyder v. De Forest Wireless 
 
 Mch. 13, 1918, p. 1885; C. C. P. Telegraph Co., 113 A. D. 840, 99 
 
 §§ 803, 872. N. Y. Supp. 644 (1906). 
 
 "Title Guaranty & Surety Co. v. "Matter of Thompson, 95 A. D. 
 
 Culgin Pace Contracting Co., 66 542, 89 N. Y, Supp. 4 (1904) ; C. C. 
 
 Misc. 157,- 121 N. ,Y. Supp. 226 P. § 872, subd. 7. Under C. C. P. 
 
 (1910) ; C. C. P. §§ 803, 804. §§ 803-809 discovery of corporate 
 
 "Bruen v. Whitman Co., 106 books may be had. 
 B. C.N.Y.— 35 
 
546 BUSINESS CORPORATIONS IN NEW YORK § 449 
 
 thinks such retention will be shown." A corporation cannot 
 be compelled to give access without limitation to all its busi- 
 ness books and papers for the benefit of a discharged 
 employee seeking to recover salary based on a percentage of 
 his sales: the plaintiff should either examine one of the corpo- 
 rate officers to find what books and papers contain the needed 
 information and then apply for a limited order for discovery 
 and inspection, or obtain such information by an examination 
 of the proper officer before trial using a subpoena duces tecum 
 to have the books there available to enable the ofiicer to testify 
 accurately." When the relation between an individual plain- 
 tiff and a corporate defendant is that of employee and 
 employer with compensation to be measured by an amount 
 equal to a certain proportion of the receipts of a certain kind, 
 less expenses, the plaintiff after discharge cannot in his action 
 to recover his compensation have an inspection and examina- 
 tion of the defendant's books, but is confined to an exam- 
 ination before trial of the defendant's appropriate officer and 
 to having a subpoena duces tecum at the examination for such 
 corporate books as the officer needs accurately to testify.^' 
 An employee of a corporation entitled to a percentage of its 
 net profits each year in addition to a fixed compensation who 
 sues to recover a percentage of net profits due him is entitled 
 to an inspection and discovery of its books almost as a matter 
 of right.'" 
 
 § 449. Id.: Witnesses. — The admission of a member of an 
 aggregate corporation who is not a party cannot be received 
 as evidence against the corporation unless it was made con- 
 cerning and while engaged in a transaction in which he was 
 the authorized agent of the corporation or unless it was made 
 while a member of such corporation and testifying as a wit- 
 ness concerning a transaction of the corporation, when the 
 official record of such testimony is to be received." Stock- 
 holders of a corporation are interested witnesses in favor of 
 it in an action by or against it, and cannot, therefore, testify 
 as to personal transactions between them and a decedent 
 wh'ose personal representative is suing the corporation.'^ 
 
 '^ Walsh V. Press Co., 48 A. D. " Thomas v. Waite Co., 113 A. D. 
 
 333, 62 N. Y. Supp. 833 (1900). 494, 99 N. Y. Supp. 297 (1906). 
 
 "Funger v. Brooklyn Bottle " C. C. P. § 839. 
 
 Stopper Co., 132 A. D. 837, 117 ^^ Andrews v. Beiners, 112 A. D. 
 
 N. Y. Supp. 799 (1909). 378, 98 N. Y. Supp. 668 (1906); 
 
 i^Harburgh v. Middlesex Securi- C. C. P. § 829. 
 ties Co., 110 A. D. 633, 97 N. Y. 
 Supp. 350 (1906). 
 
§ 450 POWERS, DtFTIES AND LIABILITIES 547 
 
 § 450. Id.: Supplementary Proceedings. — The statutory 
 provisions permitting a judgment creditor whose execution 
 against his judgment debtor's property has been returned 
 unsatisfied to sue to compel discovery of the debtor's prop- 
 erty do not apply when the judgment debtor is a domestic 
 corporation.^" A domestic corporation, or a foreign corpo- 
 ration doing business in New York, is not subject to proceed- 
 ings supplementary to execution; but the remedy of a judg- 
 ment creditor of such corporation is proceedings under 
 sections 1784 and 1809-1812 of the Code of Civil Procedure.'" 
 
 " C. C. P. § 1879. Misc. 145, 39 N. Y. Supp. 409 
 
 2° Levy V. Swick Piano Co., 17 (1896). 
 
CHAPTEE IX. 
 
 CORPORATE EXISTENCE AND CHANGE. 
 
 (Existence, Expiration, Vacation, Annulment, Sequestration, Dissolution, 
 Forfeiture, Sale, Merger, Consolidation and Reorganization.) 
 
 XIV. Corporate Existence and Change. 
 
 A. Existence. 
 
 1. In General, § 451. 
 
 2. Proof Of, § 452. 
 
 B. Expiration and Extension. 
 
 1. By Charter Time-Limit, § 453. 
 
 2. By Failure for Two Years to Organize or Undertake 
 
 Duties, § 454. 
 
 C. Vacation, Annulment and Injunction. 
 
 1. Governing Statute, § 455. 
 
 2. In General, § 456. 
 
 3. Grounds. 
 
 a. Procuring Incorporation on Fraudulent Suggestion or 
 
 Material Concealment, § 457. 
 
 b. Offending against Law or Creating Act; Failure of, 
 
 or Unauthorized Exercise, or Surrender of Rights, 
 §458. 
 
 4. Leave of Court, § 459. 
 
 5. Who May Take Steps For, § 460. 
 
 6. Trial and Testimony,^ 461. 
 
 7. Injunction, Receiver, Account, Distribution, Judgment and 
 
 Practice, § 462. 
 
 8. Creditors' Rights and Liabilities, § 463. 
 
 D. Sequestration, Dissolution and Forfeiture. 
 
 1. Distinction, § 464. 
 
 2. Sequestration. 
 
 a. Governing Statutes, § 465. 
 
 b. In General, § 466. 
 
 c. Injunction and Receiver, § 467. 
 
 d. Trial and Testimony, § 468. 
 
 e. Creditors, § 469. " 
 
 f. Practice, Judgment and Subsequent Proceedings, 
 
 §470. 
 
 3. Dissolution and Forfeiture. 
 
 a. In General, § 471. 
 
 b. Forfeiture for Maintaining Nuisance, § 471-a. 
 
 c. Voluntary Dissolution. 
 
 aa. Before Payment of Capital Stock, § 472. 
 bb. By Unanimous Consent, § 473. 
 ce. By Court Proceedings. 
 
 aaa. Petition and Grounds, § 474. 
 bbb. Schedule and Affidavit, § 475. 
 ccc. Practice: Notice to Attorney-General, 
 Order to Show Cause; Receivers, In- 
 junction, Referee, Hearing, Report, 
 Decision, Final Order, § 476. 
 ddd. In General, § 477. 
 548 
 
CORPORATE EXISTENCE AND CHANGE 549 
 
 XIV. Corporate Existence and Change — Contintted: 
 
 D. Sequestration, Dissolvtion and Forfeiture, 3, — Continued: 
 
 d. Compulsory Dissolution. 
 
 aa. Governing Statutes, § 478. 
 bb. In General, § 479. 
 cc. Grounds, § 480. 
 dd. Who May Initiate, § 481. 
 ee. Where To Be Initiated, § 482. 
 ff. Trial and Testimony, §»483. 
 gg. Process, Injunction, Receiver, Keeping Attor- 
 ney-General Advised, § 484. 
 hh. Creditors, § 485. 
 
 ii. Judgment, Distribution and Subsequent Prac- 
 tice, § 486. 
 4. Effect of Dissolution. 
 
 a. In General, § 487. 
 
 b. On Actions, § 488. 
 
 c. On Creditors, § 489. 
 
 d. On Judgments, § 490. 
 
 e. On Contracts, § 491. 
 
 f. On Liabilities of Directors, Officers and Stockholders, 
 
 §492. 
 
 E. Voluntary Sale of Property and Franchise. 
 
 1. In General, § 493. 
 
 2. To What Corporation and of What, § 494. 
 
 3. Stockholders' Consent, § 496. 
 
 4. Stockholders' Dissent and Procedure Thereon, § 496. 
 
 5. Effect of Sale Pursuant to Statute, § 497. 
 r. Merger and Consolidation. 
 
 1. Distinction, § 498. 
 
 2. Merger, § 499. 
 
 3. Consolidation. 
 
 a. In General, § 500. 
 
 b. What Corporations May Consolidate, § 501. 
 
 c. The Agreement of Consolidation, § 502. 
 
 d. Stockholders' Consent, § 503. 
 
 e. Stockholders' Dissent or Failure to Surrender Stock 
 
 and Procedure Thereon, § 504. 
 
 f. Filimg, and Evidentiary Value, of Consolidation 
 
 Agreement cmd Proceedings, § 505. 
 
 g. Effect of, § 506. 
 G. Reorga/nieation. 
 
 1. In General, % 507. 
 
 2. Under Business Corporations Law, § 507-a. 
 
 3. To Provide for Stock Without Nominal or Par Value, 
 
 § 507-b. 
 
 4. Reorganization Agreement. 
 
 a. Construction of, § 508. 
 
 b. Modification or Rescission of, § 509. 
 
 6. Rights, Powers and Liabilities of Parties. 
 
 a. Of Bondholders, § 510. 
 
 b. 'Under Reorganization Agreement, § 511. 
 
 c. Of Old and New Corporation, § 512. 
 
550 BUSINESS CORPORATIONS IN NEW YORK § 451 
 
 § 451. Corporate Existence and Change, Existence, In 
 General. — ^A stock corporation's certificate of incorporation 
 must contain its duration.^ Every corporation has power, 
 though not specified in the law under which it is incorporated, 
 to have succession for the period specified in its by-laws or 
 certificate of incorporation ; and perpetually when no period 
 is specified.^ " Corporate charters are not forfeited in frag- 
 ments, or annulled as damages for the violation of private 
 contracts. . . . the corporate life and power, once fully 
 granted and completely existing, may be lost in two ways: 
 sometimes because the charter itself provides for self-execut- 
 ing causes of forfeiture which, whenever established, effect at 
 once the corporate death; and sometimes where no such pro- 
 visions exist, the forfeiture comes and can only come from a 
 judicial decree at the suit of the state.'" Corporate existence 
 is not lost through mere corporate inaction or transfer of 
 property; and its dissolution is not effected by a failure to 
 elect officers, a sale and assignment of all its corporate prop- 
 erty or a cessation of all corporate acts: a corporation by 
 virtue of proceedings against it or by reason of its pecuniary 
 condition may cease to exist for all practical purposes for 
 which it was created or for which a corporation may exist, 
 but cannot be held to be actually dissolved till so adjudged 
 and determined either by judicial sentence or the sovereign 
 power.* The trustees or directors of a corporation cannot, 
 even with the consent of the majority of the stockholders, so 
 dispose of its property to a foreign corporation organized for 
 the purpose as to end its existence and put the foreign cor- 
 poration in its place: "A corporation cannot cease to exist 
 of its own will. Its life continues until either the charter 
 period has expired or the court has decreed a dissolution. 
 . . . While a corporation may sell its property to pay debts, 
 or to carry on its business, it cannot sell its property in order 
 to deprive itself of existence. It cannot sell all its property 
 to a foreign corporation organized through its procurement, 
 with a majority of non-resident trustees, for the express pur- 
 pose of stepping into its shoes, taking all its assets and carry- 
 ing on its business. ' ' ° Delivery of a deed to a mortgagee, of 
 the property mortgaged to it by a corporation with the 
 
 ^Bus. Corps. L. § 2 (L. 1909, * Broek v. Poor, 216 N. Y. 387, 
 
 e. 484). Ill N. E. 229 (lO'lS). 
 
 ^Gen. Corp. L. § 11 (L. 1909, = People v. Ballard, 134 N. Y. 269, 
 
 c. 28). 17 L.R.A. 737, 32 N. E. 54 (1892), 
 
 ^ Matter of Long Island R. R. Co., 
 143 N. Y. 67, 37 N. E. 636 (1894). 
 
§ 4&a CORPORATE EXISTENCE AND CHANGE 651 
 
 consent of its stockholders, pui'suant to an agreement by which 
 the mortgagee delayed foreclosure and agreed to accept less 
 than the amount due on the mortgage if payment' we-re made 
 within the time delayed provided such deed were given if such 
 payment were not made at the deferred date, will not be 
 enjoined at the instance of a stockholder on the ground that it 
 amounts to a cessation of the corporation's life by its own 
 act.° The corporate liability of one of several constituent 
 companies out of which an association was to be formed which 
 was, however, held to have no legal capacity to exist as a cor- 
 poration, remains/ One who participates in the organization 
 of a corporation, delivers his note for the purpose of perfect- 
 ing such organization, and receives the benefit from such note 
 on the theory that the corporation had a legal existence, can- 
 not evade liability on the note by pleading that the corpora- 
 tion never wa$ a legal organization.' In a suit to distribute 
 the assets of a defunct corporation among its creditors neither 
 the taxable costs nor the fees of counsel of intervening 
 creditors will be charged upon the fund.° 
 
 § 452. Id.: Proof of. — This subject is considered at greater 
 length in a preceding section dealing with the averment and 
 proof of a corporation's existence in actions by and against 
 it,^" A corporation having in form a proper charter and exer- 
 cising its corporate powers as to third persons need only 
 prove, to establish its existence, such facts." " To make proof 
 of the existence of a de facto corporation, it is necessary to 
 show not only that there is a law under which the corporation 
 might be organized and an attempt to organize it, but that 
 corporate powers have been exercised. That is, that the cor- 
 poration has exercised its particular franchise by doing busi- 
 ness under it."" 
 
 ° Wolf V. Armimes Copper Mine ^^ See § 440, supra. 
 
 Co., 6 Misc. b&% 27 N. Y. Supp. 642 " Jones v. Dane, 24 Barb. 395 
 
 (1894). (1855). 
 
 ' Latham v. Boston, Hoosac Tun- ^^ Emery v. De Peyster, 77 A. D. 
 
 nel & Western Ey. Co., 38 Hun, 265 65, 78 N. Y. Supp. 1066 (1902). 
 
 (1885). Suit to enforce liability of director 
 
 * Raegener v.. MeDougall, 33 A. D. to one rendering services to corpo- 
 
 231, 53 N. Y. Supp. 484 (1898). ration which had not filed annual 
 
 ° Attorney-General v. Continental jreport. Certificate of incorporation 
 
 Life Ins. Co., 27 Hun, 195, dism'd filed in office of secretary of state 
 
 90 N. Y. 45 (1882). but not of county clerk. No busi- 
 
 Generally on the question of ness was done in time defendant 
 
 period of existence and charter littii- was director save one directors' 
 
 tations of private corporation, see meeting after such filing authorizing 
 
 note in 33 L.R.A. 576. issue of stock to individual , for his 
 
552 BUSINESS CORPORATIONS IN NEW YORK § 453 
 
 § 453. Id.: Expiration and Extension, By Charter Time- 
 Limit. — The certificate of incorporation of a stock corpora- 
 tion must set forth its duration." The certificate of incorpora- 
 tion of any corporation the duration of which is limited by 
 such certificate or by law may require that the consent of the 
 stockholders owning a greater percentage than two-thirds of 
 the stock shall be requisite to effect an extension of corporate 
 existence beyond the time specified in such certificate or by- 
 law, or in any certificate of extension of corporate existence." 
 Any domestic stock corporation at any time before the expira- 
 tion thereof may extend the term of its existence beyond the 
 time specified in its original certificate of incorporation or by 
 law or in any certificate of extension of corporate existence 
 by the consent of the stockholders owning two-thirds in 
 amount of its capital stock given either in writing or by vote 
 at a special meeting of the stockholders called for that pur- 
 pose upon the same notice as that required for the annual 
 meetings of the corporation ; and a certificate under the seal 
 of the corporation that such consent was given by the stock- 
 holders in writing or by vote at such a meeting must be sub- 
 scribed and acknowledged by the president or a vice-president, 
 and by the secretary or an assistant secretary of the corpora- 
 tion and filed in the oflSce of the Secretary of State and be by 
 him duly recorded and indexed in a book specially provided 
 therefor, and a certified copy of such certificate, with a certifi- 
 cate of the Secretary of State of such filing and record, or a 
 duplicate original of such certificate must be filed and simi- 
 larly recorded and indexed in the office of the clerk of the 
 county wherein the corporation has its principal place of busi- 
 ness and be noted in the margin of the record of the original 
 certificates of such corporation, if any, in such offices; and 
 thereafter the term of the existence of such corporation is 
 extended as designated in such certificate.^" The Secretary of 
 State collects a fee of twenty-five dollars for filing a certificate 
 of extension or revival of corporate existence." At the end 
 of the term for which a corporation is incorporated the corpo- 
 ration ceases to exist and no adjudication of a court is neces- 
 sary to terminate the corporate life." "... a corpora- 
 interest in a paper needed by cor- ^"Gen. Corp. L. § 37 (L. 1913, 
 poration; but nothing else was done. c. 306). 
 Held, defendant not liable. "Executive L. § 26 (L. 1917, 
 
 "Bus. Corps. L. § 2 (L. 1909, c. 69). 
 e. 484). "Matter of Friedman, 177 A. D. 
 
 "Gen. Corp. L. § 37 (L. 1913, 755, 164 N. T. Supp. 892 (19X7). 
 c. 306). 
 
§ 453 CORPORATE EXISTENCE AND CHANGE 553 
 
 tion at the end of the term for which it is incorporated ceases 
 to exist by virtue of the expiration of its term merely. No 
 adjudication ol a court is necessary to terminate its corporate 
 life. " " A corporation with life limited by its charter to a 
 stated number of years cannot reincorporate under the Busi- 
 ness Corporations Law so as to extend its life, alter and extend 
 its business and increase the number of shares of its stock,' 
 which could not otherwise be accomplished except by comply- 
 ing with provisions of the General Corporation Law and the 
 Stock Corporation Law." An action in the name of the 
 People, on the relation of persons directly interested to 
 obtain the relief sought, may be brought to restrain persons 
 made individual defendants from acting as a corporation or 
 exercising corporate rights, on the theory that the corporar 
 tion's term of life has expired, whether the public have any 
 interest in the relief sought or not.^° When those who have 
 been stockholders in a corporation which has become extinct 
 by the expiration of the time limited for its existence by its 
 charter agree among themselves to continue the business, 
 appoint an agent to continue it and furnish money pro rata to 
 their holdings, it is obvious that they are tp participate in the 
 profits in the same proportion ; and the agreement constitutes 
 a partnership, as to third persons, irrespective of any partic- 
 ular agreement between the partners themselves limiting the 
 right of each to make contracts binding on the firm and of the 
 ignorance of the third persons that they are no longer dealing 
 with a corporation.^ A corporation is not a proper party 
 defendant to an action by the People on the relation of a 
 stockholder to restrain individual persons defendant from 
 acting as a corporation without being incorporated, or from 
 exercising corporate rights, privileges or franchises not 
 
 ^* People ex rel. Haberman v. corporation under this new act, with 
 
 James, 5 A. D. 412, 39 N. Y. Supp. the same rights, privil^es and fran- 
 
 313 (1896). chises as it originally had, and nol 
 
 ^° People ■ ex rel. Haberman v. to change or enlarge such rights, 
 
 James, 5 A. D. 412, 39 N. Y. Supp. privileges and franchises, and that 
 
 313 (1896) ; Bus. Corp. L. § 4 if the corporation d«sired to make 
 
 (L. 1892, e. 691), now § 4;, Gen. any such changes it should do i\ 
 
 Corp. L. § 32 (L. 1892, c. 687), now under and pursuant to the provi- 
 
 § 37; St. Corp. L. § 32 (L. 1892, sions of the other acts, expresslj 
 
 c. 688), now § 18, and § 56 (L. 1893, providing therefor." 
 
 c. 196), now § 65. ". . . the ^"People ex rel. Haberman v 
 
 real theory of the reincorporation James, 5 A. D. 412, 39 N. Y. Supp 
 
 provided for by this section 4 [of 313 (1896) ; C. C. P. § 1948, subd. '3 
 
 the Business Corporations Law] was ^ The National Union Bank oJ 
 
 to enable the corporations organized Watertown v. Landon, 45 N. Y. 41( 
 
 under former statutes to become a (1871). 
 
554 BUSINESS CORPORATIONS IN NEW YORK § 454 
 
 granted to them by law, on the theory that the corporation's 
 term of life has expired.^ It is no ground for granting an 
 application by the Attorney-General to start proceedings for 
 dissolution of a corporation that its charter has expired if it 
 be a legal amalgamation of constituent companies having 
 perpetual life.' An action against a corporation for a tort 
 may be revived against its directors as statutory trustees if 
 its charter expires by its own limitation while the action is at 
 issue and untried.* 
 
 § 454. Id.: By Failure for Two Years to Organize or Under- 
 take Duties. — If any corporation except a raUroad, turnpike, 
 plankroad or bridge corporation does not organize and com- 
 mence 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 cease." The stat- 
 utory forfeiture of the powers of any corporation which does 
 not organize and commence to transact business or to dis- 
 charge its duties within two years from the date of its incor- 
 poration is self-executory, requires no action to complete the 
 loss of its corporate powers and applies to all corporations, 
 whether created under general or special laws (save those 
 companies excepted in the statute itself.)" A corporation 
 incorporated under a special act containing nothing incon- 
 sistent with the general statute putting an end to the powers 
 of a corporation not commencing business within two years 
 of its incorporation per se terminates on failure to comply 
 with such statute; and the Attorney-General may bring suit 
 against the incorporators and their successors.'' It seems 
 that the true construction of a statute enacting that the 
 powers of a corporation not organizing and commencing busi- 
 ness within a year of incorporation shall cease is that business 
 which it might lawfully do is referred to; so that if it has 
 never done any such business — though it has done unauthor- 
 
 ^ People ex rel. Haberman v. Abatement of action by or against 
 
 James, 5 A. D. 412, 39 N. Y. Supp. corporation in absence of a saving 
 
 313 (1896) ; C. C. P. § 1948, subd. 3, statute by expiration of charter, see 
 
 and § 447. " note in 32 L.R.A.(N.S.) 446. 
 
 'Matter of ConsoUdated Gas Co., "Gen. Coi^. L. § 36 (L. 1909, 
 
 56 Misc. 49, 106 N. Y. Supp. 407 e. 28). 
 
 (1907) ; aff'd 124 A. D. 401, 108 « People v. Stilwell, 157 A. D. 839, 
 
 N. Y. Supp. 823; C. C. P. § 1797 142 N. Y. Supp. 881 (1913) ; Gen. 
 
 et seq. See now Gen. Corp. L. § 130. Corp. K § 36. 
 
 •Hepworth v. Union Terry Co., ^People v. Stilwell, 78 Misc. 96, 
 
 62 Hun, 257, 16 N. Y. Supp. 692 138 N. Y. Supp. 693 (1912) ; Gen. 
 
 , (1891) ; app. dism'd 131 N. Y. 645, Corp. L. § 36; C. C. P. § 1948, 
 
 30 N. E. 867. subd. 3. 
 
§§ *55, 456 ;COEPORATE EXISTENCE AND CHANGE 555 
 
 ized business — the statute applies.^ An action cannot be 
 maintained to effect a forfeiture of a corporate, charter for 
 non-user within a year, under a statutory provision forfeiting 
 it if not organized in a year; and such an action should, it 
 seems, in any event not be brought by a stockholder but by 
 the Attorney-General.* -A clause in a legislative enactment 
 incorporating a company that it and all rights and privileges 
 granted by it should be null and void unless the work con- 
 templated should be begun within two years of its passage 
 does not disclose a legislative intent that the clause shall be 
 self-executing, but the word ' ' void ' ' should be held to mean 
 " voidable," so that the corporation could be dissolved only 
 after action by the Attorney-Greneral.^" 
 
 § 455. Id.: Vacation, Annulment, and Injunction, Govern- 
 ing Satutes. — An action may be brought by the Attorney- 
 General against a domestic corporation to procure a judgmeiit 
 (1) vacating the act of incorporation, or charter, (2) annulling 
 the act of incorporation or the existence of the corporation or 
 any act renewing the corporation or continuing its corporate 
 existence ; but only under certain circumstances which differ 
 according to the relief to be sought." The Attorney-General 
 may maintain an action upon his own information or upon 
 the complaint of a private person against and enjoin one or 
 more persons who act as a corporation within New York State 
 without being duly incorporated or exercise within New York 
 State any corporate rights, privileges or franchises not 
 granted to them by the law of New York State.^^ 
 
 § 456. Id.: In General. — This subject has been generally 
 considered in the four hundred and fifty-first section of this 
 book. The statute authorizing an action " to procure a judg- 
 ment vacating the charter or annulling the existence " of a 
 corporation does not permit an action to forfeit or take away 
 from it any of its rights or property." The discretion of a 
 court applied to by the Attorney-General for the dissolution 
 of a corporation in the public interest that leave should be 
 granted him to bring the action for dissolution is not review- 
 
 * The People v. Troy House Com- Island Bridge Co., 148 N. Y. 540, 
 
 pany, 44 Barb. 625 (1865); 1 N. Y. 42 N. E. 1088 (1896). 
 
 Stats, at Large, 557, § 7. See now " Gen. Corp. L. § 130 (L. 1909, 
 
 Gen. Corp. L. § 36, c. 28). 
 
 » Gilman v. Green Pinnt Sugar " C. C. P. § 1948. 
 
 Co., 61 Barb. 9 (1871); 2 R. S. 464, "People v. Westchester Traction 
 
 § 38; Id. 706, § 46, 4th ed. See now Co., 123 A. D. 689, 108 N. Y. Supp. 
 
 Gen. Corp. L. § 36. 59 (1908); C. C. P. § 1798. See 
 
 " Matter of New York & Long now Gen. Corp. L. § 13L 
 
556 BUSINESS CORPORATIONS IN NEW YORK § 456 
 
 able in the Court of Appeals." An action by the Attorney- 
 General to dissolve a corporation in the public interest as 
 distinguished from an action by him to protect the interest of 
 an individual is one simply between the People and the corpor 
 ration, involving no person's interests, in which no relator is 
 needed and in which it is of no legal consequence that the 
 corporate officers or stockholders have misconducted them- 
 selves in any way." In an action by the Attorney-General to 
 have a corporation's existence annulled it is " incumbent upon 
 the State to show upon the trial of the action that a cause of 
 forfeiture had not only been incurred by the defendant, but 
 that it continued to exist, and that its existence involved some 
 public interest, and also that the court had authorized the 
 bringing of the action. An action thus commenced is, even 
 then, necessarily always within the control of the State, as the 
 sole party interested, to prosecute or abandon;" and a law 
 passed making a certificate filed by a commission determina- 
 tive of the public interest to have the action continued or 
 dropped, instead of the discretion of the Attorney-General, 
 followed by the filing of a certificate against continuance, com- 
 pels abandonment of the action," When the State asks the 
 court to end the life of a corporation created under its laws 
 two questions must be answered affirmatively to permit the 
 judgment of death to be entered: " first, has the defendant 
 corporation exceeded or abused its powers, and, second, does 
 that excess or abuse threaten or harm the public welfare." " 
 ' ' The general principle is not disputed that a corporation, by 
 omitting to perform a duty imposed by its charter or to com- 
 ply with its provisions does not ipso facto lose its corporate 
 character or cease to be a corporation, but simply exposes 
 itself to the hazard of being deprived of its corporate char- 
 acter and franchises by the judgment of the court in an action 
 instituted for that purpose by the Attorney-General in behalf 
 
 ^* People V. Buffalo Stone & and stockholders who omitted to 
 
 Cement Co., 131 N. Y. 140, 15 L.R.A. pay for their stock. 
 
 240, 29 N. E. 947 (1892) ; C. C. P. "People v. Ulster & Delaware R. 
 
 § 1798. See now Gen. Corp. L. R. Co., 128 N. Y. 240, 28 N. E. 635 
 
 § 131. (1891) ; C. C. P. § 1798. See now 
 
 "People V. Buffalo Stone & Gen. Corp. L. § 131; L. 1874, e. 430, 
 
 Cement Co., 131 N. Y. 140, 15 L.R.A. as amend'd L. 1889, c. 236. 
 
 240, 29 N. E. 947 (1892); C. C. P. "People v. North River Sugar 
 
 § 1798. See now Gen. Corp. L. Refining Co., 121 N. Y. 582, 9 L.R.A. 
 
 § 131. Some of those who applied 33, 24 N. E. 834 (1890) ; C. C. P. 
 
 to the attorney-general to bring the § 1798. See now Gen. Corp. L. 
 
 action were trustees who omitted to § 131. 
 make the annual corporate report 
 
§§ 457, 458 CORPORATE EXISTENCE AND CHANGE 557 
 
 of the People ; but it cannot be denied that the legislature has 
 the power to provide that a corporation may lose its corporate 
 existence without the intervention of the courts by any omis- 
 sion of duty or violation of its charter or default as to limita- 
 tions imposed, and whether the legislature has intended so to 
 provide in any case depends upon the construction of the 
 language used. ' ' " 
 
 § 457. Id.; Grounds: Procuring Incorporation on Fraudu- 
 lent Suggestion or Material Concealment. — The action to 
 vacate or annul the act of incorporation or any act renewing 
 the corporation or continuing its corporate existence must be 
 brought (1) upon the ground that the act was procured (a) 
 upon a fraudulent suggestion or (b) the concealment of a 
 material fact, made by or with the knowledge and consent of 
 any of the persons incorporated, and (2) whenever the Attor- 
 ney-General is so directed by the legislature." 
 
 § 458. Id.: Offending Against Law or Creating Act; Failure 
 of, or Unauthorized Exercise, or Surrender of, Rights. — The 
 action by the Attorney-General to enjoin one or more persons 
 from acting as a corporation or exercising corporate rights 
 not granted by law must be brought on the ground that they 
 are so acting or exercising such rights.^" The word " fran- 
 chise " in the statute authorizing the Attorney-General to sue 
 a person who unlawfully exercises a franchise within the 
 State should not be construed to permit an action enjoining 
 a corporation from exercising special grants or consents 
 conferred by local authorities and attaching to franchises con- 
 ferred by the legislature and together forming the franchises 
 of the corporation.^ 
 
 The action to vacate the charter or annul the existence of 
 the corporation must be brought (1) upon the ground that it 
 has either (a) offended against some provision of an act by 
 or under which it was created, altered or renewed, or an act 
 amending such act, and applicable to the corporation, or (b) 
 violated some provision of law, whereby it has forfeited its 
 charter, or become liable to be dissolved, by the abus,e of its 
 powers, or (c) forfeited its privileges or franchises by a 
 
 ^* Brooklyn Steam Transit Co. v. end to the corporation if the track 
 
 City of Brooklyn, 78 N. Y. 524 was not so laid. 
 
 (1879). One mile of railroad was '° Gen. Corp. L. § 130 (L. 1909, 
 
 to be laid within a specified time, c. 28). 
 
 otherwise " this act and all the 2° C. C. P. § 1948. 
 
 powers . . . granted, shall be ' People v. Consolidated Gas Co., 
 
 deemed forfeited and terminated." 130 A. D. 626, 115 N. Y. Supp. 393 
 
 This language per se held to put an (1909) ; C. C. P. § 1948, subd. 1. 
 
558 BUSINESS CORPORATIONS IN NEW YORK § 458 
 
 failure to exercise its powers, or (d) done or omitted any 
 act which amounts to a surrender of its corporate rights, 
 privileges and franchises, or (e) exercised a privilege or fran- 
 chise not conferred upon it by law, and (2) upon leave being 
 granted by the court which may before granting it in its dis- 
 cretion require such previous notice of the application as it 
 thinks proper to be given to the corporation or any ofiScer 
 thereof, and may hear the corporation in opposition thereto.* 
 The statutory provision for an action to dissolve a corpora- 
 tion ' ' contains no rule of liability whatever, but simply points 
 out a mode of procedure to enforce duties or punish miscon- 
 duct elsewhere and otherwise settled and determined. . . . 
 The Attorney-General, with leave of the court obtained, may 
 sue for a forfeiture in five enumerated cases. First, where 
 the corporation has ' offended against ' the law of its crea- 
 tion; what constitutes such an offense the section does not 
 declare or affirm, but leaves us to look elsewhere for the 
 proper and lawful test. Second, when the corporation ' has 
 violated any provision of law whereby it has forfeited its 
 charter or become liable to be dissolved by an abuse of its 
 powers.' Here again the violation must be one whereby for- 
 feiture follows, and we must go outside of the section to ascer- 
 tain what violations will produce the result and what acts 
 constitute an abuse of powers conferred. Third, ' where it 
 has forfeited its privileges or franchises by a failure to exer- 
 cise its powers.' When such failure works a liability to 
 forfeiture the section does not undertake to determine. 
 Fourth, where the corporation has ' done or. omitted any act 
 which amounts to a surrender of its corporate rights, privi- 
 leges and franchises, ' but what acts do amount to such a sur- 
 render, we must go beyond the section itself to ascertain. 
 Fifth, where the corporation has * exercised a privilege or 
 franchise not conferred upon it by law.' Here again what 
 acts, or how long continued or how material or important, 
 shall bring the penalty of dissolution we are not told. . . . 
 the section does not establish or pretend to establish any rule 
 of liability, but simply to fix and enumerate the classes of 
 cases in which, if liability does exist, the Attorney-General 
 may move, having first obtained the assent of the court. That 
 section relates, therefore, merely to procedure, and does not 
 determine, much less enlarge, existing rules of corporate lia- 
 bility." ^ While an action to declare a corporation's franchise 
 
 = Gen. Corp. L. §§ 131, 132 (L. Co., 125 N. Y. 513, 26 N. E. 622 
 1909, c. 28). (1891); C. C. P. § 1798. See now 
 
 'People V. Atlantic Avenue R. R. Gen. Corp. L. § 131. 
 
158 CORPORATE EXISTENCE AND CHANGE &5tf 
 
 rf eited by non-user can only be brought by the People 
 ting through the Attorney-General, an action to abate a 
 iblic nuisance may be maintained by a municipality.* The 
 arter of a corporation organized under the Business Corpo- 
 tions Law will be vacated and its existence annulled as 
 tempting to do an insurance business without complying 
 .th the Insurance Law if it cares for plate glass and replaces 
 if broken, for a consideration and for a specified period.^ 
 a action may be brought by the People on the relation of a 
 irty, by the Attorney-General, to declare judicially dead a 
 rporation which for more than two years from incorpora- 
 )n has been dormant or inactive/ A complaint against a 
 •ivate corporation by the Attorney-General that it has not 
 led its powers given by charter but has done other illegal 
 ings not permitted by its certificate of incorporation, under 
 iver of such certificate, is sufficient to demonstrate the public 
 terest that it be dissolved/ " If there is any defect in the 
 :oceedings for the organization of a corporation, or any 
 )use of its powers, or of the statute authorizing the forma- 
 an of corporations under general or special laws, the ques- 
 on is o,ne of law, and it is for the state alone to take steps to 
 ssolve such corporation or forbid the exercise by it of 
 •rporate rights and franchises."^ A failure by a corpora- 
 on to observe a law regulating the number of hours ' work to 
 ; exacted from its employees is not reason for annulling its 
 larter.' The subsequent abuse or perversion of powers of a 
 •rporation perfectly legal when created, though such abuse 
 id perversion were intended by the organizers of it, do not 
 jstroy the body corporate." 
 
 * City of New York v. Montage, " Clancey v. Onondaga Tine Salt 
 5 A. D. 172, 129 N. Y. Supp. 1084 Mfg. Co., 62 Barb. 395 (1862). The 
 .911). failure of a company to make an 
 ° People V. Standard Plate Glass annual report required by statute is 
 Salvage Co., Ltd., 174 A. D. 501, cause for action for its dissolution 
 
 i6 N. Y. Supp. 1012 (1916). in the public interest by the attor- 
 
 ° People ex rel. Hearst v. Ramapo ney-general, even though the stat- 
 
 ■ater Co., 51 A. D. 145, 64 N. Y. ute make its trustees liable for its 
 
 ipp. 532 (1900) ; Gen._ Corp. L. debts on failure to file such report, 
 
 31, now § 131 (L. 1892, e. 687, as such liability, while it may pro- 
 
 iw L. 1909', c. 28) ; C. C. P. § 1798. vide the only consequence to the 
 
 ' People V. Milk Exchange, Ltd., trustees, leaves the consequence to 
 
 13 N. Y. 565, 30 N. E. 850 (1892). the corporation to be determined by 
 
 * Doyle V. Peerless Petroleum the general statutory provisions, 
 jmpany, 44 Barb. 239 <1865). People v. Buffalo Stone & Cement 
 ' People V. Atlantic Avenue R. R. Co., 131 N. Y. 140, 15 L.R.A. 240, 
 J., 57 Hun, 378, 10 N. Y. Supp. 29 N. E. 947 (1892) ; Gen. Mfg. Act, 
 17 (1910), aff'd 125 N. Y. 513, 26 § 12 (L. 1848, c. 40). If the attor- 
 . E. 622; L. 1887, e. 529. ney-general and the court to which 
 
560 BUSINESS CORPORATIONS IN NEW YORK § 459 
 
 § 459. Id.: Leave of Court. — It is not necessary to obtain 
 leave to bring an action under the nineteen hundred and forty- 
 eighth section of the Code of Civil Procedure for enjoining 
 per-sons from acting as a corporation, but it is necessary in an 
 action under the one hundred and thirty-first section of the 
 General Corporation Law for vacating or annulling a corpo- 
 rate charter." The court need not require previous notice in 
 an action under the one hundred and thirty-first section of 
 the General Corporation Law, and an ex parte order granting 
 leave to bring the action is not, therefore, void." Before the 
 court grants leave to the Attorney-General to bring an action 
 against a domestic corporation to vacate its charter or annul 
 its existence because it has offended against the act creating, 
 altering or renewing it, or an act amendatory thereto ; or has 
 so violated a law that it has forfeited its charter or become 
 liable to be dissolved by the abuse of its powers ; or has for- 
 feited its privileges or franchises by failure to exercise its 
 powers; or has done or omitted an act amounting to a sur- 
 render of its corporate rights, privileges and franchises; or 
 has exercised a privilege or franchise not conferred upon it by 
 law, it may in its discretion require such previous notice of 
 the application as it thinks proper to be given the corporation 
 or any officer thereof, and may hear the corporation in oppo- 
 sition thereto.^' While the consent of court is necessary to an 
 action by the People to annul a corporation, it is not to an 
 action to oust a corporation from the unlawful exercise of a 
 franchise; for while the legislature may reasonably have 
 intended to leave it discretionary with the court whether an 
 action should be brought which might kill it, it is not reason- 
 able to suppose that the court should have discretion to decide 
 if a corporation shall be permitted to exercise franchises not 
 conferred upon it." Whether or not leave should be given 
 by the court to the Attorney-General to bring a statutory 
 
 he applies exercise their discretion ^^ People v. Boston, Hoosac Tun- 
 in favor of an action for forfeiture nel & Western Ry. Co., 27 Hun, 528 
 of a corporation's charter in the (1882). 
 
 public interest for failure by the ^^ People v. Boston, Hoosac Tun- 
 corporation to have its capital stock nel & Western Ry. Co., 27 Hun, 528 
 paid in within the time limited by (1882); C. C. P. §§ 1798, 1799, now 
 statute, the provision of the statute Gen. Corp. L. § 131. 
 that the corporation "shall be dis- "Gen. Corp. L. § 132 (L. 1909, 
 solved " is imperative and no further c. 28). 
 
 discretion is left to the court. Peo- " People v. Bleecker Street & Ful- 
 
 ple V. Buffalo Stone & Cement Co., ton Ferry R. R. Co., 140 A. D. 611, 
 
 131 N. Y. 140, 15 L.R.A. 240, 29 125 N. Y. Supp. 1045 (1910) ; Gen. 
 
 N. E. 947 (1892); Gen. Mfg. Act, Corp. L. § 131; C. C. P. § 1948, 
 
 ^ 10 (L. 1848, c. 140). subd. 1. 
 
m CORPOEATE EXISTENCE AND CHANGE 561 
 
 tion to vacate a corporation's charter and to annul its exist- 
 ce rests in each case in the sound discretion of the court." 
 an action by the Attorney-General against a corporation to 
 .cate its charter, he is to determine if the public interests 
 e to be served by instituting the action and the court is not 
 ncerned with the wisdom of instituting the action but with 
 e inquiry whether or not he alleges against the corporation 
 prima facie case, or a case of such gravity that it seems 
 •oper that the court should determine it upon a trial." 
 jfore an order can be had permitting an action to annul a 
 rporation's charter the written application of the Attorn ey- 
 3neral with his opinion that the action should be begun for 
 ated reasons must be presented." " ... leave should 
 >t be granted to bring an action to annul the charter of a 
 rporation without the written application of the Attorney- 
 3neral to the court stating that, in his opinion, the action 
 uld and ought to be maintained for reasons given;" and 
 before authority should be given to bring an action to vacate 
 e charter, or to annul the existence of a corporation, the 
 ttorney-General should point out in his application to the 
 urt the particular act or acts done or omitted, which, in his 
 dgment, are sufficient to justify the, bringing of such an 
 ition, and should allege in his petition wherein the corpo- 
 ition has violated the laws of the State — what it has done 
 • omitted — which allegations should be supported by 
 ifficient evidence to render it probable that a cause of action 
 ists."" 
 
 § 460. Id.: Who May Take Steps For.— When the Attorney- 
 eneral has good reason to believe that an action can be 
 aintained in behalf of the People of the State against a 
 )mestic corporation to procure a judgment vacating its 
 larter or annulling its existence upon the ground that it has 
 fended against the act creating it, or an act amending or 
 langing such act ; or that it has violated a law whereby it has 
 irfeited its charter or becoiiie liable to be dissolved by abuse 
 
 '^ Matter of Attorney-General, 124 Gen. Corp. L. § 131. An affidavit 
 
 D. 401, 108 N. Y. Supp. 823 by an attorney giving his opinion is 
 
 908) ; C. C. P. § 1798, see now insufficient, though an opinion of the 
 
 m. Corp. L. § 131. attorney-general in the record says 
 
 ^° Matter of Attorney-General, 50 he may apply in his name, if the 
 
 an, 511, 3 N. Y. Supp. 464 (1888) ; attorney applied in his own. 
 
 C. P. § 1798, see now Gen. Corp. ^* Matter of Attorney-General, 81 
 
 8 131. Hun, 541, 30 N. Y. Supp. 1093 
 
 "Matter of Attorney-General, 79 (1894) ; C. C. P. § 17S8, see now 
 
 an, 369, 29 N. Y. Supp. 449 Gen. Corp. L. § 131. 
 894); C. C. P. § 1978, see now 
 B. C.N.Y.— 36 
 
562 BUSINESS CORPORATIONS IN NEW YORK § 461 
 
 of its powers ; or that it has forfeited its franchises by failure 
 to exercise its powers ; or that it has done or omitted any act 
 amounting to a surrender of its franchises, he must bring an 
 action, or apply to a competent court for leave to bring an 
 action, as the case requires, if in his opinion the public interest 
 requires that an action should be brought ; and if the case be 
 one in which the action can be brought only by the Attorney- 
 General in behalf of the People, if a creditor, stockholder, 
 director or trustee of the corporation applies to him for that 
 purpose and furnishes the security required by law, he must 
 bring the action, or apply for leave to bring it, if he has good 
 reason to believe that it can be maintained, and when such 
 an application is made section nineteen hundred and eighty- 
 six of the code of civil procedure applies thereto and to the 
 action brought in pursuance thereof." 
 
 § 461. Id.: Trial and Testimony .^^In the trial of an action by 
 the Attorney-General on his own or an individual's motion 
 against persons acting as a corporation without being duly 
 incorporated or exercising corporate rights not granted them 
 by law, a party or a witness is not excused from answering a 
 question on the ground that such answer will tend to incrim- 
 inate him; but such answer cannot be used as evidence against 
 the person so answering, in a criminal action or criminal pro- 
 ceeding.^" An action to vacate or annul a corporate charter 
 or its existence, 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.^ In an action brought by the 
 Attorney-General to procure a judgment vacating or annulling 
 the act of incorporation, or any act renewing the corporation, 
 or continuing its corporate existence upon the ground that the 
 act was procured by fraudulent suggestion or concealment, or 
 that it has offended against its charter or any provision of 
 law forfeiting its charter or rendering it liable to dissolution 
 by abuse of its powers, or that it has forfeited its franchises 
 by failure to exercise its powers, or that it has done or omitted 
 an act amounting to a surrender of it franchises, or that it has 
 exercised a franchise not conferred upon it by law, a stock- 
 holder, 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 
 
 "Gen. Corp. L. § 304 (L. 1909, ^Gen. Corp. L. § 133 (L. 190y. 
 
 c. 28). c. 28). 
 
 ^»C. C. P. § 1955. 
 
§ 462 CORPORATE EXISTENCE AND CHANGE 563 
 
 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 for- 
 feiture, but his testimony cannot be used as evidence against 
 him in a criminal action or special proceeding.^ 
 
 § 462. Id.: Injunction, Receiver, Account, Distribution, 
 Judgment and Practice. — In an action by the Attorney-General 
 on his own or an individual's motion against persons acting 
 as a corporation without being duly incorporated or exer- 
 cising corporate rights not granted them by law, a temporary 
 injunction to restrain the commission or continuance of the 
 act or acts complained of may be granted upon proof by affi- 
 davit that the defendants have violated the statutory pro- 
 hibition in question.^ In an action by the Attorney-General 
 on his own or an individual's motion against persons acting 
 as a corporation without being duly incorporated or exercising 
 corporate rights not granted them by law, the final judgment 
 in favor of the plaintiff must perpetually restrain the defend- 
 ants from the commission or continuance of the act or acts 
 complained of.* When in an action by the Attorney-General 
 to vacate or annul an act incorporating a domestic company 
 or any act renewing it or continuing its corporate existence 
 upon the ground that the act was obtained by fraudulent sug- 
 gestion or concealment of a material fact; or to vacate the 
 charter or annul the existence of a domestic corporation on 
 statutory grounds, the matters provided by statute as grounds 
 for the action are established, the court may render final judg- 
 ment that the corporation and each of its officers be perpet- 
 ually enjoined from exercising any of its corporate rights, 
 privileges and franchises, and that it be dissolved, and must 
 also provide for the appointment of a receiver, the taking of 
 an account and the distribution of the property of the corpora- 
 tion among its creditors and stockholders, as where a corpora- 
 tion is dissolved upon its voluntary application as prescribed 
 by statute.^ In an action brought to annul a corporation upon 
 the grounds stated in the statute and as therein prescribed 
 an injunction order may be granted at any stage of the action 
 restraining the corporation and any or all of its directors, 
 
 ^ Gren. Corp. L. § 301 (L. 190O, provision is otherwise made in this 
 
 c. 28). title for that purpose. 
 
 /C. C. P. § 1955: "The provi- * C. C. P. § 1955. 
 
 sions of title second of chapter sev- ° Gen. Corp. L. § 134 (L. 1909, 
 
 enth of this act apply to such a c. 28). The statute referred to is 
 
 temporary injunction, and the pro- Art.. 9 of c. 28, L. 1909. 
 ceedings thereupon, except where 
 
564 BUSINESS CORPORATIONS IN NEW YORK § 463 
 
 trustees or 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; 
 and such an injunction is deemed one of those specified in sec- 
 tion six hundred and three of the Code of Civil Procedure to 
 which all- the provisions of title second of chapter seventh of 
 such Code applicable to an injunction specified in that section 
 apply, except that it can be granted only by the court." The 
 subject of receivers on vacation and annulment is considered 
 in the subsequent chapter on ' ' Receivers. ' ' ' When final 
 judgment to annul a corporation upon the»grounds specified 
 by statute and in an action brought as therein prescribed is 
 rendered against the corporation the Attorney-General must 
 cause a copy of the judgment-roll to be forthwith filed in the 
 office of the Secretary of State, who must cause a notice of the 
 substance and effect of the judgment to be published for four 
 weeks in a newspaper printed in the county wherein the prin- 
 cipal place of business of the corporation was located.* 
 
 § 463. Id.: Creditors' Rights and Liabilities. — In an action 
 brought by the Attorney-General to procure a judgment vaca- 
 ting or annulling the act of incorporation, or any act renewing 
 the corporation, or continuing its corporate existence upon the 
 ground that the act was procured by fraudulent suggestion or 
 concealment, or that it has offended against its charter or any 
 provision of law forfeiting its charter or rendering it liable 
 to dissolution by abuse of its powers, or that it has forfeited 
 its franchises by failure to exercise its powers, or that it has 
 done or omitted an act amounting to a surrender of its fran- 
 chise, or that it has exercised a franchise not conferred upon 
 it by law, 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 defendants or any of them for the 
 recovery of a sum of money or from taking any further pro- 
 ceedings in such actions theretofore commenced ; and such an 
 injunction has the same effect and is subject to the same pro- 
 visions of law as if each creditor upon whom it is served was 
 named therein and was a party to the action in which it was 
 
 "Gen. Corp. L. § 135 (L. 1909, * Gen. Corp. L. § 136 (L. 1909, 
 
 c. 28). ■ c. 28). 
 
 ' See § 513 et seq., infra. 
 
§ 464 CORPORATE EXISTENCE AND CHANGE 565 
 
 granted.® In an action brought by the Attorney-General to 
 procure a judgment vacating or annuUing.the act of incorpora- 
 tion, or any act renewing the corporation, or continuing its 
 corporate existence upon the ground that the act was procured 
 by fraudulent suggestion or concealment, or that it has 
 offended against its charter or any provision of law forfeiting 
 its charter or rendering it liable to dissolution by abuse of its 
 powers, or that it has forfeited its franchises by failure to 
 exercise its powers, or that it has done or omitted an act 
 amounting to a surrender of its franchise, or that it has 
 exercised a franchise not conferred upon it by law, the court 
 may at any stage of the action, before or after final judgment, 
 make an order requiring all the creditors of the corporation 
 to exhibit and prove their claims, and thereby make themselves 
 parties to the action, in such 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 bene- 
 fit of the judgment and from any distribution which may be 
 made thereunder, except that, notwithstanding such order, any 
 such creditor who may exhibit and prove his claim in the man- 
 ner directed by the order, with proof by affidavit or otherwise, 
 that he has had no notice or knowledge thereof in time to 
 comply therewith, is entitled at any time before an order is 
 made directing a final distribution of the assets of such cor- 
 poration to have his claim received, and has 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," Notice of the order must be given by publi- 
 cation in such newspapers and for such length of time as the 
 court directs." 
 
 § 464. Id.: Sequestration and Dissolution, Distinctions. — 
 A distinction exists between an action to dissolve and to 
 sequestrate the property of a corporation and it is only in the 
 former that its officers will be absolutely restrained from exer- 
 cising their corporate privileges; so that whUe a corporation 
 after judgment of sequestration cannot prosecute (save 
 through its receiver), it may defend, and appeal from a 
 judgment rendered against it.^^ " Sequestrate is defined to 
 
 'G«n. Corp. L. § 302 (L. 1909, "Gen. Corp. L. § 303 (L. 1909, 
 
 c. 28). e. 28). 
 
 " Gen. Corp. L. § 303 (L. 1909, " Auburn Button Co. v. Sylvester, 
 
 c. 28). -68 Hun, 401, 22 N. Y. Supp. 891 
 
566 BUSINESS CORPORATIONS IN NEW YORK § 465 
 
 mean ' The act of taking property from the owner for a time, 
 till the rents, issues and profits satisfy a demand.' " " 
 
 § 465. Id.: Sequestration, Governing Statutes. — ^An action 
 to procure a judgment sequestrating the property of a 
 domestic corporation and providing for a distribution thereof 
 may be maintained (1) by a judgment creditor, (2) when final 
 judgment for a sum of money has been rendered against it, 
 (3) an execution has been issued thereupon to the sheriff of 
 the county where it transacts its general business or where its 
 principal office is located, and (4) such execution has been 
 returned wholly or partly unsatisfied." When the Attorney- 
 General has good reason to believe that an action can be 
 maintained in behalf of the People of the State to procure a 
 judgment sequestrating the property of a domestic cor- 
 poration and providing for a distribution thereof, he 
 must bring an action accordingly, or apply to a competent 
 court for leave to bring an action, as the ease requires, if in 
 his opinion the public interest requires that an action should 
 be brought ; and if the case be one in which the action can be 
 brought only by the Attorney-General in behalf of the People, 
 if a creditor, stockholder, director or trustee of the corpora- 
 tion applies to him for that purpose and furnishes the security 
 required by law, he must bring the action, or apply for leave 
 to bring it, if he has good reason to believe that it can be main- 
 tained, and when such an application is made section nineteen 
 hundred and eighty-six of the Code of Civil Procedure applies 
 thereto and to the action brought in pursuance thereof.'^ An 
 action or proceeding brought by the Attorney-General on 
 behalf of the People of the State against any corporation for 
 the purpose of the sequestration of its property may be 
 brought in any county of the State to be designated by the 
 Attorney-General." The statute dealing with dissolution of 
 a corporation and sequestration of its property does not 
 repeal or affect any special provision of law prescribing that 
 a particular kind of corporation shall cease to exist or shall 
 be dissolved in a ease or in a manner not prescribed in such 
 statute ; or any special provision of law prescribing the mode 
 
 (1893) ; C. C. P. § 1784 et seq., see " Qen. Corp. L. § 100 (L. 1909, 
 
 now Gen. Corp. L. § 100 et seq. c. 28). 
 
 "Proctor V. Sidney Sash & Fur- "Gen. Corp. L. § 304 (L. 1909, 
 
 niture Co., 8 A. D. 42, 40 N. Y. e. 28). 
 
 Supp. 454 (1896); C. C. P. § 1784, "G^n. Corp. L. § 315 (L. 1909, 
 
 see now Gen. Corp. L. § 100. Quot- c. 28). 
 ing the definition given in the Cen- 
 tury Dictionary. 
 
§§ 466-468 CORPORATE EXISTENCE AND CHANGE 567 
 
 of enforcing the liability of the stockholders of a particular 
 kind of corporation." 
 
 § 466. Id.: In General. — " It has long been the settled law 
 of this State that the jurisdiction of chancery does not extend 
 to the sequestration of the property of the corporation by 
 means of a receiver (citations). The proceedings to dissolve 
 a corporation, either voluntary or involuntary, rest wholly 
 upon the provisions of the statute."" A judgment creditor 
 of a corporation may bring suit under the statute to seques- 
 trate its property and join with the corporation as defendants 
 not only its directors but others to whom he alleg&s its officers 
 have made separate and illegal transfers of its property.^" 
 
 § 467. Id.; Injunction and Receiver. — The subject of 
 receivers on sequestration is considered in the subsequent 
 chapter on ' ' Eeceivers. " ^° In an action for such sequestra- 
 tion the court may upon proof of the facts authorizing the 
 action to be maintained grant an injunction order restraining 
 the corporation, its trustees, directors, managers and other 
 officers during the pendency of the action except by express 
 permission of the court (a) from collecting or receiving any 
 debt or demand, and (b) from paying out or in any way trans- 
 ferring or delivering to any person any money, property or 
 effects of the corporation.^ Except that it can be gra,nted only 
 by the court, the granting, vacating or modifying of an injunc- 
 tion order so granted is governed by the provisions of title 
 second of chapter seventh of the Code of Civil Procedure.^ 
 
 § 468. Id.: Trial and Testimony. — In an action brought to 
 procure a judgment sequestrating the property of a corpora- 
 tion and providing for distribution thereof, a stockholder, 
 officer, alienee or agent of the corporation is not excused from 
 answering a question relating to the management of the cor- 
 poration, or the transfer or disposition of its property, on the 
 ground that his answer may expose the corporation to a for- 
 feiture 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 cannot be used as evidence 
 against him in a criminal action or special proceeding.^ A 
 
 " Gen. Corp. L. § 115 (L. 1909, ^° See § 513 et seq., infra. 
 
 e. 28). ^Gen. Corp. L. § 103 (L. 1909, 
 
 "Matter frf Coleman, 174 N. Y. c. 28). 
 
 373, 66 N. E. 983 (1903). ^Gen. Corp. L. § 103 (L. 1909, 
 
 "Proctor V. Sidney Sash & Fur- c. 28). 
 
 niture Co., 8 A. D. 42, 40 N. Y.. 'Gen. Corp. L. § 301 (L. 1909, 
 
 Supp. 454 (1896) ; C. C. P. § 1784 c. 28). 
 et seq., see now Gen. Corp. L.' § 100 
 et seq. 
 
568 BUSINESS CORPORATIONS IN NEW YORK § 469 
 
 corporation about to bring an action to dissolve and seques- 
 trate the property of a successor corporation formed by the 
 same individuals as composed a corporation against which it 
 had obtained a judgment should be allowed to examine the 
 moving spirit in both such corporations whom it also intends 
 to make a party, individually, to its contemplated action, in 
 order to find out the facts as to the transfer by the predecessor 
 to its successor corporation of all its property.* 
 
 § 469. Id.: Creditors. — In an action brought to procure a 
 judgment sequestrating the property of a corporation and 
 providing for distribiTtion thereof, the court may in its dis- 
 cretion 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 thereto- 
 fore commenced, and such an injunction has the same effect 
 and 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.* In an action brought to 
 procure a judgment sequestrating the property of a corpora- 
 tion and providing for distribution thereof, the court may at 
 any stage of the action, before or after final judgment, make 
 an order requiring all the creditors of the corporation to 
 exhibit and prove their claims, and thereby make themselves 
 parties to the action, in such manner and in such a reason- 
 able time, not less than six months from the first publication 
 of notice of the order, as the court directs ; and that the cred- 
 itors 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 that, notwithstanding such order, 
 any such creditor who may exhibit and prove his claim in the 
 manner directed by the order, with proof by affidavit or other- 
 wise that he has had no notice or knowledge thereof in time 
 to comply therewith is entitled at any time before an order 
 is made directing a final distribution of the assets of such 
 corporation to have his claim received, and has the same 
 rights and benefits thereon, so far as the assets of such cor- 
 poration then remaining undistributed may render possible, 
 as if his claim had been duly exhibited and proved within the 
 
 * Matter of Sayre, 70 A. D. 329, "Gen. Corp. L. § 302 (L. 1909, 
 75 N. Y. Supp. 286 (1902). c. 28). 
 
§ 470 CORPORATE EXISTENCE AND CHANGE 569 
 
 time limited by such order." Notice of the order must be given 
 by publication in such newspapers and for such length of time 
 as the court directs.' A claim against a company which is 
 surety on a contractor's bond who defaults in his contract 
 before an action for dissolution of the company and an order 
 for sequestration of its property is a fixed liability and shares 
 with other fixed claims in its assets.* 
 
 § 470. Id.: Practice, Judgment and Subsequent Proceedings. 
 — "When the action is brought by a creditor and the stock- 
 holders, directors, trustees or other officers, or any of them 
 are made liable by law, in any event or contingency, for the 
 pajonent of the creditor's debt, they may be made parties 
 defendant by the original or a supplemental complaint and 
 their liability declared and enforced by the judgment in the 
 action, and if they are not made parties defendant, the plain- 
 tiff may maintain a separate action against them to procure 
 a judgment declaring, apportioning and enforcing their lia- 
 bility; and the court must when it is necessary cause an 
 account to be taken of the property and debts of the corpora- 
 tion and thereupon the defendants' liability must be appor- 
 tioned 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 ascer- 
 tain and determine the amount of each defendant's liability 
 and enforce the same accordingly.' The final judgment in the 
 action, whether brought against a corporation separately or 
 in conjunction with its stockholders, directors, trustees or 
 other officers, must provide for a just and fair distribution of 
 its property and 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 corpora- 
 tion." When the stockholders are parties to the action, if 
 the corporate property is not sufficient to discharge its debts 
 the interlocutory or final judgment, as the case requires, must 
 adjudge that each stockholder pay into court the amount due 
 and remaining unpaid gn the shares of stock held by him or 
 so much thereof as is necessary to satisfy the corporate debts, 
 and if it appears that the corporate property and the sums 
 collected or collectible from the stockholders upon their stock 
 
 «Gen. Corp. L. § 303 (L. 1909, »Gen. Corp. L. §§ 109, 110, 111 
 c. 28). (L. 1909, c. 28). 
 
 'Gen. Corp. L. § 303 (L. 1909, ^"Gen. Corp. L. § 112 (L. 1909, 
 c. 28). e. 28). 
 
 * People V. Metropolitan Surety 
 Co., 171 A. D. 15, 156 N. Y. Supp. 
 1027 (1916). 
 
570 BUSINESS CORPORATIONS IN NEW YORK § 471 
 
 subscriptions are or will be insufficient to pay the corporate 
 debts, the court must ascertain the several sums for which the 
 directors, trustees or other officers, or the stockholders, being 
 parties to the action, are liable, and must adjudge that the 
 same be paid into court to be applied in such proportions and 
 in such order as justice requires to the payment of the corpo- 
 rate debts." A final judgment in an action to sequestrate the 
 property of a corporation must be entered in the office of the 
 clerk of the county in which the principal business office or 
 the principal place of business of the corporation is located.^^ 
 § 471. Dissolution and Forfeiture, In General. — "At com- 
 mon law, a corporation aggregate might be dissolved within 
 the time limited by the charter: First, by act of parliament; 
 second, by the loss of all its members, or of an integral part, 
 by death or otherwise ; third, by surrender of its franchises ; 
 and, fourth, by forfeiture of its charter through negligence or 
 abuse of the privileges conferred by it." " The power of the 
 court to dissolve a corporation depends entirely upon statute, 
 and unless the complaint shows the jurisdictional facts it can- 
 not act and any decree it makes is void." " ... the 
 method of effecting corporate dissolution, when prescribed by 
 statute as in this state, is exclusive, and must be substantially 
 followed . . . The statute now regulating the subject con- 
 sists of sections 2419 to 2432 of the Code of Civil Procedure 
 , . . in the opinion of the legislature dissension as to the 
 management, especially when it might result in a deadlock, 
 so that business could not be done efficiently, was sufficient to 
 authorize action by the courts. . . . when the interests of 
 the stockholders of a corporation are so discordant as to pre- 
 vent efficient management and a large majority of both 
 trustees and members wish to wind up its affairs, a dissolu- 
 tion thereof will be beneficial to the interests of the stock- 
 holders, because the object of its corporate existence cannot 
 be attained." " The statutory provisions, on dissolution of a 
 corporation, have for their object, as they say, to secure " a 
 just and fair distribution of the property of the corporation, 
 and of the proceeds thereof, among its fair and honest cred- 
 itors;" and mean " not a distribution among those whose 
 diligence has given direction to the conduct of the proceeding, 
 
 "Gen. C!orp. L. § 114 (L. 1909, Hun, 167, 35 N; Y. Supp. 610 
 
 c. 28). (1895); aff'd 153 N. Y. 672, 48 
 
 "Gen. Corp. L. § 115 (L. 1916, N. E. 1106; C. C. P. §§ 1785, 1786, 
 
 e. 163). - ■ see now Gen. Corp. L. § 101 et seq. 
 
 "Bradt v. Benedict, 17 N. Y. 93 "Hitch v. Hawley, 132 N. Y. 212, 
 
 (1858). 30 N. E. 401 (1892). 
 
 "Osbom V. Montelac Park, 89 
 
§ 471-a COEPORATE EXISTENCE AND CHANGE 571 
 
 but among all who are within the descriptive terms of the 
 statute."" " ... it was not intended by the legislature 
 that the voluntary proceedings for the dissolution of the [a] 
 corporation should preclude the People, by the Attorney-Gren- 
 eral, from commencing an action to procure a dissolution of a 
 corporation for any of the grounds stated " in the statute.'^' 
 No action towards the compulsory dissolution of a corpora- 
 tion can be taken if it has been duly dissolved voluntarily.''^ 
 A court of equity, at the instance of a creditor of a dissolved 
 corporation, will enjoin many actions at law begun to hold its 
 various stockholders liable for its debts pursuant to the stat- 
 ute, and will in the equitable suit adjudge the rights of all 
 creditors and the liabilities of all stockholders." Stockholders 
 and directors unable to secure the consent of a two-thirds 
 majority of the stockholders to the corporation's dissolution 
 cannot accomplish their purpose by reducing the capital and 
 turning over the business and good will without compensation 
 to a new corporation, as this in effect terminates the corpo- 
 rate existence as against dissenting stockholders.^" No pro- 
 ceeding taken under the statute permitting a stock corporation 
 to reorganize so that it may have all the rights and be subject 
 to all the liabilities of a corporation organized to have stock, 
 other than preferred, without nominal or. par value, is deemed 
 to work a dissolution or to create a new corporation or to 
 interrupt in any way the continuity of existence of the corpo- 
 ration affected.^"* 
 
 § 471-a. Id.: Forfeiture For Maintaining Nuisance. — ^Any 
 corporation organized under the laws of New York State 
 which so conducts its business, without the State, by the emis- 
 sion or discharge of dust, smoke, gas, steam or offensive, 
 
 ^° People V. American Loan & ^® Bagley & Sewall Co. v. Ehr- 
 
 Trust Co., 177 N. Y. 231, 69 N. E.. licher, 8 A. D. 581, 40 N. Y. Supp. 
 
 420 (1904) ; C. C. P. § 1793, see now 922(1896). Fifteen creditors had 
 
 G«n. Corp. L. § 112. brought separate actions at law 
 
 " People V. Seneca Lake Grape & under the statute against stock- 
 Wine Co., 52 Hun, 174, 5 N. Y. holders; others were likely to be 
 Supp. 136 (1889); C. C. P. § 1785, brought; many transfers of stock 
 see now Gen. Corp. L. § 101. Be- were made duriiig the period when 
 fore the attorney-general started his the debts were incurred, 
 action to dissolve for non-user the ™ Godley v. Crandall & Godley 
 corporation had petitioned for vol- Co., 212 N. Y. 121, L.R.A.1915D, 
 Tintary dissolution. 632, 105 N. -E. 818 (1914). 
 
 ^* Knickerbocker v. Groton Bridge ^'"' St, Corp. L. § 24-d (L. 1917, 
 
 & Mfg. Co., Ill A, D. 145, 97 c. 484). 
 
 N. Y. Stip'p. 595 (1906) ; St, Corp. As to power of majority of stocky 
 
 L. § 57 (L. 1900, c. 760), see now holders to dissolve corporation, see 
 
 Gen. Corp. L. § 221; C. C. P. § 1785, note in 2 L.R.A.(N.S.) 493. 
 subd. 3, see now Gen. Corp. L. § 101. 
 
572 BUSINESS CORPORATIONS IN NEW YORK § 471-a 
 
 noisome or noxious odors or fumes, so as unreasonably to 
 injure or endanger the health or safety in this State of any 
 considerable number of the people of t^iis State, is deemed 
 guilty of a nuisance and its charter is deemed forfeited in the 
 manner prescribed , in the statute and cannot be revived 
 except as prescribed in the statute.^ Complaints may be made 
 to the State Commissioner of Health by any person, associa- 
 tion or corporation aggrieved, by petition or complaint in 
 writing setting forth any act or thing done or omitted to be 
 done, claimed to constitute a nuisance within the provisions of 
 the statute.^ Upon the presentation of such a complaint, the 
 State Commissioner of Health must cause a copy thereof to 
 be served upon the corporation complained of, in the manner 
 provided by law for the service of a summons, accompanied 
 by a notice directed to such corporation requiring that the 
 matters complained of be abated, or that the charges be 
 answered in writing within a time to be specified by such com- 
 missioner.' If the charges contained in such complaint be not 
 thus satisfied and it appears to such commissioner that there 
 are reasonable grounds therefor, he must cause such charges 
 to be investigated in such manner and by such means as he 
 deems proper; and fix a time for a hearing upon such com- 
 plaint, and cause notice thereof to be forwarded to the 
 complainant and the corporation complained of.* If such 
 commissioner, or his successor, after such notice to such cor- 
 poration and an opportunity for a hearing being given it, 
 finds it is so conducting its business without the State as 
 unreasonably to injure or endanger the health or safety in 
 this State of any considerable number of people of this State, 
 he must file such findings in duplicate in the offices of the Sec- 
 retary of State and the Attorney-General.^ A certificate of 
 the Secretary of State giving notice of the filing of such find- 
 ings must be served upon the corporation and thereupon its 
 charter is suspended for the period of thirty days.* Any 
 person who exercises or attempts to exercise any powers 
 under the charter of any corporation which has been so sus- 
 pended, during the period of such suspension, is deemed 
 guilty of a misdemeanor.' If at the expiration of such period 
 
 ^Gen. Corp. L. § 200 (L. 1917, =Gen. Corp. L. § 200 (L. 1917, 
 
 e. 292). e. 292). 
 
 ==6611. Corp. L. § 200 (L. 1917, «Gen. Corp. L. § 200 (L. 1917, 
 
 e. 292). ■ e. 292). 
 
 'Gen. Corp. L. § 200 (L. 1917, ^Gen. Corp. L. § 200 (L. 1917, 
 
 c. 292). e. 292). 
 
 *Gen. Corp. L. § 200 (L. 1917, 
 c. 292). 
 
§ 471-a COEPOEATE EXISTENCE AND CHANaE 573 
 
 the State Commissioner of Health, upon further proof and 
 opportunity to such offending corporation to be heard, finds 
 and determines that such corporation continues to conduct its 
 business so as to constitute such nuisance, he must cause a 
 notice of such determination to be served upon the corpora- 
 tion and published once a week for two successive weeks in 
 the official State paper; and on the tenth day after such 
 service and publication the charter of such corporation is 
 deemed forfeited.' Any person who exercises or attempts to 
 exercise any powers under the charter of any corporation 
 which has been so forfeited is guilty of a misdemeanor." If a 
 charter be so forfeited the Attorney-General must forthwith 
 apply to the Supreme Court for the appointment of a receiver 
 of its property, who has all the powers and duties, so far as 
 practicable, prescribed by articles ten-a and eleven of the 
 General Corporation Law." When any corporation has 
 ceased to perform the acts or to maintain the nuisance by 
 reason of which its charter has been forfeited and satis- 
 factorily guarantees that it will not perform such acts or 
 maintain such nuisance in the future, its charter may be 
 revived in the manner prescribed by the statute with the same 
 force and effect as if such charter had not been forfeited." 
 If such corporation files a petition in writing with the State 
 Commissioner of Health setting forth that the nuisance in 
 fact no longer exists, and it appears that there are reasonable 
 grounds therefor, such commissioner must cause an investiga- 
 tion to be made in such manner and by such means as he deems 
 proper; and if after such investigation he finds and certifies 
 that such corporation has ceased to conduct its business so as 
 to constitute such nuisance and files such findings in duplicate 
 in the offices of the Secretary of State and Attorney-General, 
 such corporation's charter must be deemed to be revived with 
 full force and effect." A supplemental certificate of the Sec- 
 retary of State must be served and published in like manner ; 
 and upon such service and publication such revival becomes 
 effective.^'' Such revival does not, however, prevent a sub- 
 sequent forfeiture or revocation of the charter of the same 
 corporation for the same or a similar offense." This statute 
 
 *Gen. Corp. L. § 200 (L. 1917, i^ Gen. Corp. L. § 201 (L. 1917, 
 
 e. 292). e. 292). 
 
 "Gen. Corp. L. § 200 (L. 1917, "Gen. Corp. L. § 201 (L. 1917, 
 
 e. 292). c. 292). 
 
 "Gen. Corp. L. § 200 (L. 1917, "Gen. Corp. L. § 201 (L. 1917, 
 
 c. 292). c. 292). 
 
 "Gen. Corp. L. § 201 (L. 1917, 
 c. 292). 
 
574 BUSINESS CORPORATIONS IN NEW YORK §§ 472, 473 
 
 is not to be deemed to apply to a corporation organized and 
 existing under the laws of the State of New York and subject 
 to the jurisdiction of the Public Service Conunission under the 
 Public Service Commissions Law, or principally engaged in 
 furnishing power to such public service corporation/^ 
 
 § 472. Id.: Voluntary Dissolution, Before Payment of Capi- 
 tal Stock. — Surrender of all a domestic corporation's rights 
 and franchises before payment of any part of the capital and 
 before beginning business may be made by the incorporators 
 named in any certificate of incorporation filed for the purpose 
 of creating such corporation by their signing, verifying and 
 filing in the office of the Secretary of State and clerk of the 
 county where the certificate of incorporation is filed a cer- 
 tificate setting forth (a) the names of the incorporators, (b) 
 that no part of the capital has been paid, (c) that there are 
 no liabilities, (d) that such business has not been begun, and 
 (e) a surrender of all rights and franchises.^ Proof of the 
 facts set forth in such certificate must be made, to the satis- 
 faction of the Secretary of State and thereupon the corpora- 
 tion must be dissolved and its corporate existence and power 
 cease.^ 
 
 § 473. Id,: By Unanimous Consent. — ^Any stock corporation 
 may be dissolved before the expiration of the time limited in 
 its certificate of incorporation or in its charter by having (1) 
 a meeting of its board of directors, (2) a meeting of stock- 
 holders, (3) a written consent by stockholders, (4) a filing 
 of such consent with the Secretary of State, (5) an issue by 
 the latter of a certificate of such dissolution, (6) a filing of 
 such certificate with the county clerk, (7) a publication of such 
 certificate, and (8) a winding up of the corporaljon by its 
 directors.' The meeting of the board of directors to dissolve 
 the corporation must (1) be called for that purpose, (2) be 
 called upon at least three days' notice to each director, (3) 
 result in a vote by a majority of the whole board' adopting a 
 resolution that it is in their opinion advisable to dissolve such 
 
 '^ Gen. Corp. L. § 201 (L. 1917, that one or more of said incorpo- 
 
 e. 292). rators is deceased." 
 
 ^Gen. Corp. L. § 220 (L. 1909, ^ Gen. Corp. L. § 220 (L. 1909, 
 
 c. 28). "In case any incorporator c. 28). 
 
 of such a corporation shall be de- On right of minority stockholders 
 
 ceased, then the aforesaid certificate to restrain voluntary dissolution of 
 
 may be made by the surviving incor- corporation by the directors or ma- 
 
 porators providing two years shall jority stockholders, see note in 23 
 
 have elapsed since the date of its L.R.A.(N.S.) 1177. 
 incorporation, but in such case the ^ Gen. Corp. L. § 221 (L. 1909, 
 
 certificate shall set forth the fact c. 28). 
 
§ 473 CORPORATE EXISTENCE AND CHANGE 575 
 
 corporation forthwith, and (4) result in a call for a meeting 
 of the stockholders for the purpose of voting upon a proposi- 
 tion that such corporation be forthwith dissolved/ The meet- 
 ing of stockholders to dissolve the corporation must (1) be 
 held not less than thirty nor more than sixty days after the 
 adoption of the directors' resolution, (2) be after publication 
 of the notice of the time and place of such meeting so called by 
 the directors in one or more newspapers published and cir- 
 culated in the county wherein such corporation has its prin- 
 cipal office at least once a week for three weeks successively^ 
 next preceding the time appointed for holding such meeting ; 
 (3) be after personal service on each stockholder, or mailing 
 to each stockholder at his last-known postoffice address, on or 
 before the day of the first publication of such notice, of a 
 copy of such notice; (4) be held in the city, town or village in 
 which the last preceding annual meeting of the corporation 
 was held/ The stockholders' meeting may on the day so 
 appointed be adjourned from time to time by the consent of a 
 majority in interest of the stockholders present; and notice 
 of such adjournment must be published in the newspapers in 
 which the notice of the meeting is published.* If at any such 
 stockholders ' meeting the holders of two-thirds in amount of 
 the stock of the corporation then outstanding in person or by 
 attorney consent that such dissolution take place and 
 signify such consent in writing, then such corporation must 
 file such consent, attested by its secretary or treasurer, 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 such corporation and 
 the names and residences of its officers duly verified by the 
 secretary or treasurer or president of such corporation, in the 
 office of the Secretary of State/ The Secretary of State must 
 then issue to such corporation, in duplicate, a certificate of the 
 filing of such papers and that it appears therefrom that such 
 corporation has complied with the statute in order to be dis- 
 solved, and one of such duplicate certificates must be filed by 
 such corporation in the office of the clerk of the county in 
 which it has its principal office/ Thereupon such corporation 
 
 *Gen. Corp. L. § 221 (L. 1909', 'Gen. Corp. L. § 221 (L. 1909, 
 
 0. 28). c. 28). 
 
 = Gen. Corp. L. § 221 (L. 1909, 'Gen. Corp. L. § 221 (L. 1909, 
 
 c. 28). e. 28). 
 
 «Gen. Corp. L. § 221 (L. 1909, 
 c. 28). 
 
576 BUSINESS CORPORATIONS IN NEW YORK § 473 
 
 is dissolved and must cease to carry on business except for 
 the purpose of adjusting and winding up its business." The 
 board of directors must 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 principal office of such corporation is located, and at the 
 expiration of such publication the corporation by its board of 
 directors must proceed to adjust and wind up its business and 
 affairs with power to carry out its contracts and sell its assets 
 at public or private sale, and to apply the same in discharge 
 of debts and obligations of such corporation, and, after pay- 
 ing and adequately providing for the payment of such debts 
 and obligations, to distribute the balance of assets among the 
 stockholders according to their respective rights and inter- 
 ests." The corporation nevertheless continues in existence 
 for the purpose of paying, satisfying and discharging any 
 .existing debts or obligations, collecting and distributing its 
 assets and doing all other acts required in order to adjust 
 and wind up its business and affairs, and may sue and be sued 
 for the purpose of enforcing such debts or obligations, until 
 its business and affairs are fully adjusted and wound up." 
 After paying or adequately providing for the debts and obli- 
 gations 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 cor- 
 poration organized under the laws of New York or any other 
 State and engaged in a business of the same general char- 
 acter, and take in payment therefor the stock or bonds or 
 both of such corporation and distribute them among the stock- 
 holders in lieu of money in proportion to their interesit 
 therein ; but no such sale is valid as against any stockholder 
 who within sixty days after the mailing of notice to him of 
 such sale applies to the Supreme Court in the manner pro- 
 vided by the seventeenth section of the Stock Corporation 
 Law for an appraisal of the value 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 pay to 
 such objecting stockholder or deposit for his account in the 
 manner directed by the court the aniount of such appraisal; 
 and upon such payment or deposit the interest of such 
 objecting stockholder vests in the person or persons making 
 
 °Gf«n. Corp. L. § 221 (L. 1909, "Gen. Corp. L. § 221 (L. 1909, 
 c. 28). c. 28). 
 
 "Gen. Corp. K § 221 (L. 1909, 
 c. 28). 
 
§ 474 CORPORATE EXISTENCE AND CHANGE 577 
 
 such payment or deposit.^^ Stockholders of a corporation 
 dissolved by agreement may hold those persons appointed by 
 the agreement trustees to dissolve it for moneys declared by 
 them as a dividend from assets over the corporation 's indebt- 
 edness but never paid, even though the trustees be not acting 
 strictly under the statute making provision for voluntary cor- 
 porate dissolution." 
 
 § 474. Id.: By Court Proceedings, Petition and Grounds. — 
 A petition for a final order dissolving a corporation may be 
 presented, (1) to the Supreme Court, (2) by a majority of 
 the directors, trustees, or other officers having the manage- 
 ment of the concerns of a domestic corporation, (3) for these 
 grounds: (a) if they discover that the stock, effects and other 
 property thereof are not sufficient to pay all just demands for 
 which it is liable or to afford a reasonable security to those 
 who may deal with it, or (b) if for any reason they deem 
 it beneficial to the interests of the stockholders that the cor- 
 poration should be dissolved; and such a petition must be 
 presented by them (c) whenever directed so to do by a 
 majority in interest of its stockholders; and such a petition 
 may be presented by any one or more of the directors, trustees 
 or stocldiolders (d) if the corporation (whether created under 
 domestic general statute or special act or charter) has an 
 even number of trustees or directors who are equally divided 
 respecting the management of its affairs, or (e) if the stock 
 of such corporation is equally divided into not more than two 
 independent ownerships or interests, or (f ) 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 represent- 
 ing the management of its affairs, or (g) 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 petition must (1) show 
 that is it made by a person or persons and upon a ground or 
 grounds prescribed by the statute, (2) state the reasons which 
 induce the petitioner or petitioners to desire the dissolution 
 of the corporation, (3) be accompanied by (a) a schedule 
 
 "Gen. Corp. L. § 221 (L. l&QQ, Corp. L. § 57 (L. 1900, c. 760), see 
 
 c. 28). now Gen. Corp. L. § 221. 
 
 '^Janeway v. Bum, 91 A. D. 165, "Gen. Corp. L. §§ 170, 171, 172 
 
 86 N. Y. Supp. 628 (1904); aff'd (L. 1909, c. 28). 
 180 N. Y. 560, 73 N. E. 1125 j St. 
 B. C. N. Y.— 37 
 
578 BUSINESS CORPORATIONS IN NEW YORK § 475 
 
 and (b) affidavit.'^ A petition for dissolution of a corpora- 
 tion signed by a majority of a reduced number of directors 
 but not by a majority before the reduction is invalid if the 
 corporate minutes of the stockholders' meeting reducing the 
 number have not been filed with the Secretary of State and 
 the County Clerk before the petition is signed." That directors 
 signing a petition for voluntary dissolution of their corpora- 
 tion were not such de jure because not stockholders does not 
 disqualify them from signing if the situation was known to 
 all the stockholders at the time of their election." There is 
 no general power in a court of equity for sustaining an action 
 by a portion of a corporation's stockholders to dissolve it.^* 
 *'. . . the owners of fifty per cent of the stock have the 
 right to present a petition to the court for a dissolution under 
 section one hundred and seventy-two . . . without regard 
 to any action of a majority of the directors under section one 
 hundred and seventy, and . . . similarly a majority of 
 the directors may file a petition for dissolution irrespective 
 of any of the provisions of section one hundred and seventy- 
 two."" In proceedings for the voluntary dissolution of a 
 corporation it is insufficient for the petition to state that the 
 petitioners, owning half the stock, are convinced that, if the- 
 methods and plans advocated by those owning the other half 
 are carried out, the result will be the financial ruin of the 
 corporation; but these must be stated and the reason why it 
 would be beneficial to the stockholders that the corporation 
 be dissolved must also be shown.^° 
 
 § 475. Id.: Schedule and Affidavit. — The schedule annexed 
 to the petition must contain, as far as the petitioner knows or 
 the petitioners know, or have the means of knowing them, the 
 following matters: (1) A full and true account of all the 
 creditors of the corporation; (2) a full and true account of 
 all unsatisfied engagements entered into by and subsisting^ 
 
 ^^Gen. Corp. L. §§ 174, 175 (L. " Matter of M'cLoughHn, 176 A. D. 
 
 1909, c. 28). 653, 163 N. Y. Supp. 547 (1917); 
 
 "Matter of DolgevilleEl. L. &P. Gen. Corp. L. §§ 170 ef seg. ". . . 
 
 Co., 160 N. Y. 500, 55 N. E. 287 we must construe section 174 as if 
 
 (1899); C. C. P. §§ 2419, 2422, s«e it read . . .: 'The petition must 
 
 now Gen. Corp. L. § 170 et seq.; show that the case is one of those 
 
 Stock Corp. L. § 21, now § 26. specified in' sections one hundred and 
 
 " Matter of Manoca Temple Assn., seventy or one hundred and seventy- 
 
 128 A. D. 796, 113 N. Y. Supp. 172 two . . .'" 
 
 (1908). ^Matter of Pyrolusite Manganese 
 
 "Denike v. New York and Rosen- Co., 29 Hun, 429 (1883) ; C. C. P. 
 
 dale Lime and Cement Co., 80 N. Y. § 2419, see now G«n. Corp. L. § 170. 
 599 (1880). 
 
§476 CORPORATE EXISTENCE AND CHANGE 579 
 
 against the corporation; (3) a statement of (a) the name and 
 (b) the place of residence of each creditor and 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; (4) a statement (a) of the sum owing 
 to each creditor or each person with whom the corporation 
 is engaged and (b) the nature of each debt, demand or other 
 engagement; (5) a statement of the true cause and considera- 
 tion of each indebtedness to each creditor; (6) a full, just 
 and true inventory of all the property of the corporation and 
 of all books, vouchers and securities relating thereto; (7) 
 a statement of each incumbrance upon the property of the 
 corporation by judgment, mortgage, pledge or otherwise; 
 (8) a full, just and true account of the capital stock of the 
 corporation specifying (a) the name of each stockholder; 
 (b) his residence, (if it is known and if not known stating 
 that fact); (c) the number of shares belonging to him; (d) 
 the amount paid in upon his shares, and (e) the amount still 
 due thereupon.^ Annexed to the petition and schedule must 
 be an affidavit (1) made by each of the petitioners (2) to the 
 effect that the matters of fact stated in the petition and 
 schedule are just and true so far as the affiant knows or has 
 the means of knowing the same.^ The court, at any stage of 
 the proceedings before final order, may, on the application of 
 the petitioners or of a majority of them or of the temporary 
 receiver, grant an order amending the schedules annexed to 
 the original petition by the insertion of additional items, or 
 by making the statements or inventory fuller and in greater 
 detail than as originally filed, with the like effect as though 
 such petition and schedules has been originally presented and 
 filed as amended.^ 
 
 § 476. Id.: Practice: Notice to Attorney-General; Order to 
 Show Cause; Receivers, Injunction, Referee, Report, 
 Decision, Final Order.— In every proceeding for the dissolu- 
 tion of a corporation or a distribution of its assets, a copy of 
 all motions and all motion papers and of any other application 
 to the court, together with a copy of the order or judgment 
 to be proposed thereon to the court, must 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 otherwise would be ex 
 
 'Gen. Corp. L. § 174 (L. 1909, 'Gen. Corp. L. § 189 (L. 1909. 
 c. 28). e. 28). 
 
 ^Gen. Corp. L. § 175 (L. 1909, 
 c. 28). 
 
580 BUSINESS CORPORATIONS IN NEW YORK § 476 
 
 parte or upon notice, and no order or judgment granted can 
 vary in any material respect from the relief specified in such 
 copy, order or judgment unless the Attorney-General appears 
 on the return day and has been heard in relation thereto ; and 
 any order or judgment granted in any such action or pro- 
 ceeding is void without such service of such papers upon the 
 Attorney-General, and no receiver of any such corporation 
 may pay to any person any money directed to be paid by any 
 order or judgment made in any such proceeding until the 
 expiration of eight- days after a certified copy of such order 
 or judgment has been served as already stated upon the 
 Attorney-General.* It is jurisdictional in a proceeding for 
 the voluntary dissolution of a corporation that notice of the 
 presentation of the petition and schedules of the application 
 for the order to show cause why dissolution should not be had 
 and of the motion papers and proposed order be served on 
 the Attorney-General.^ In proceedings for voluntary disso- 
 lution of a corporation, notice must be served on the Attorney- 
 General." The omission to serve upon the Attorney-General 
 the motion papers on which an order, in a proceeding for 
 dissolution of a corporation, restraining actions against it 
 is made, is a fatal defect.' ". . . . there is no reason for 
 denying the Attorney-General the power to accept short 
 notice of proceedings referred to in the statute " governing 
 the dissolution of a corporation.' While the Attorney-General 
 may confer jurisdiction on the court in^n application for dis- 
 solution of a corporation by waiving service before the motion 
 is" brought on of all motion papers, application, proposed 
 order or judgment required by statute to be served on Mm, 
 yet he cannot admit due and timely service thereof after the 
 entry of the order to show cause and after the motion is made.' 
 
 *G€n. Corp. L. § 312 (L. 1909, the Laws of 1896, it seems to be 
 
 c. 28). necessary that notice of an applica- 
 
 ° Knickerbocker Trust Co. v. tion for the dissolution of a corpora- 
 
 Tanytown, White Plains & Mama- tion should be given to the Attomey- 
 
 roneck Ry. Co., 133 A. D. 285, 117 General whether such corporation is 
 
 N. Y. Supp. 871 (1909). solvent or insolvent." Matter of 
 
 ° People V. Seneca Lake Grape & Broadway Insurance Co., 23 A. D. 
 
 Wine Co., 52 Hun, 174, 5 N. Y. 282, 48 N. Y. Supp. 299 (1897). 
 
 Supp. 136 (1889); L. 1883, c. 378, » Matter of Peekamose Fishing 
 
 § 8, see now Gen. Corp. L. § 312. Club, 151 N. Y. 511, 45 N. E. 1037 
 
 ' Dohn V. Buffalo Amusement Co., (1897) ; C. C. P. § 2420, see now 
 
 66 A. D. 446, 73 N. Y. Supp. 95 Gen. Corp. L. § 171 et seq. 
 
 (1901) ; L. 1883, c. 378, § 8, see now 'Matter of Strong Co., No. 1, 128 
 
 Gen. Corp. L. § 312. "Under the A. D. 208, 112 N. Y. Supp. 557 
 
 amendment of chapter 378 of the (1908) ; L. 1883, c. 378, § 8, see now 
 
 Laws of 1883, being chapter 282 of Gen. Corp. L. § 312 et seq. 
 
§ 476 COEPORATE EXISTENCE AND CHANGE 581 
 
 On an order to show cause why an order should not he made 
 vacating an order dissolving a corporation, stockholders 
 and creditors need not he served or heard if the Attorney- 
 General, the corporate receiver and the only stockholder who 
 appeared in the dissolution proceeding are before the court." 
 The papers must be presented at a special term of the 
 Supreme Cotirt held within the judicial district embracing 
 the county wherein the principal office of the corporation is 
 located and the court may in its discretion entertain or dis- 
 miss the application, and if it entertains it, or the cause for 
 the dissolution is either that the corporation's stock, effects 
 and other property are insufficient to pay all just demands for 
 which it is liable or to afford a reasonable security to those 
 who may deal with it, or that the directors deem it beneficial 
 to the interests of the stockholders that it should be dissolved, 
 the court must make an order requiring all persons interested 
 in the corporation to show -cause before it or a referee desig- 
 nated 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." A copy of the order 
 must be published as prescribed thereiii 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 and published in the city or county wherein the 
 order is entered ; and 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, and such 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 
 enclosed in a post-paid wrapper, addressed to the person to 
 be served at his residence as stated in the schedule.^^ The 
 order must be entered and the papers filed within ten days 
 after the order is made with the Clerk of the County where 
 the principal office of the corporation is located." An order 
 to show cause returnable in more than eight days based on 
 
 "Matter of Automatic Chain Co., ^^Gen. Corp. L. §§ 179, 180 (L. 
 
 134 A..D. 863, 119 N. Y. Supp. 379 1909, c. 28). 
 
 (1909) ; aff'd 198 N. Y. 618, 92 N. E. " Gen. Corp. L. § 182 (L. 1909, 
 
 1078. • c. 28). 
 
 "Gen. Corp. L. §§ 176, 178 (L. 
 1909, e. 208 and 240, respectively). 
 
582 BUSINESS CORPORATIONS IN NEW YORK § 476 
 
 a petition for it and for voluntary dissolution of a corporation 
 instead of an affidavit is sufficient." An order published and 
 served pursuant to statute in a proceeding for voluntary 
 dissolution of a corporation which simply requires those 
 interested to show cause " why the prayer of the petitioners 
 should not be granted " is legally insufficient; because no 
 copy of the petition is served in such a proceeding and those 
 interested would, therefore, not get the information it is 
 intended they should get/^ 
 
 The statute also permits and provides for the appointment 
 of temporary receivers and permanent receivers; but these 
 points are hereinafter discussed in the chapter of this work 
 on ' ' Eeceivers. " ^^ If a temporary receiver be appointed, 
 the court may in its discretion, on notice to the Attorney- 
 General or on his motion on notice to the corporation, with or 
 without security, at any stage of the proceeding before the 
 final order, grant an injunction restraining the creditors of 
 the corporation from beginning any action against the cor- 
 poration for the recovery of a sum of money or from taking 
 any further proceedings in such an action theretofore com- 
 menced, and such injunction has the same effect and is subject 
 to the same provisions of law as if each creditor upon whom 
 it is served was named therein." If a referee was not desig- 
 nated in the order to show cause the court may in its discretion 
 appoint a referee when or after the order is returnable." The 
 court or the referee must hear the allegations and proofs of 
 the parties at the time and place specified in the order or at 
 the time and place to which the hearing is adjourned; must 
 determine the facts; must in writing make its decision or 
 report, as the case may be, which must contain a statement 
 of the effects, credits and other property, and of the debts 
 and other engagements of the corporation, and of all other 
 matters pertaining to its affairs ; and must file such decision 
 or report with all convenient speed." The court or the referee 
 is entitled to use upon the hearing the original petition and 
 the schedules annexed thereto, and the clerk must transmit 
 them accordingly upon the written order of the judge or of 
 
 " Matter of Greneva Basket Co., L. § 191 et seq., as to permanent re- 
 
 71 Misc. 156, 127 N. Y. Supp. 943 ceivers; § 514 et seq., infra, as to 
 
 (1911); C. C. P. § 3343, subd. 11; "Receivers." 
 G. R. P. 37. " Gen. Corp. L. § 184 (L. 1909, 
 
 "Matter of Pyrolusite Man- c. 28). 
 ganese Co., 29 Hun, 429 (1883), ^«Gen. Corp. L. § 185 (L. 1909, 
 
 tit. 2, c. 17, C. C. P. c. 28). 
 
 " G«n. Corp. L. § 182 et seq., as '» Gen. Corp. L. §§ 186, 187 (L. 
 
 to temporary receivers; Gen. Corp. 1909, c. 28). 
 
§ 477 CORPORATE EXISTENCE AND CHANGE 583 
 
 the referee, and in tliat case they must be returned with the 
 decision or report.^" When the hearing is before a referee, 
 a motion 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 New York State where such 
 notice may be served; and 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; but when 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.^ A reference cannot be made of course upon 
 the consent of the parties in an action against a corporation 
 to obtain a dissolution thereof, unless it is brought by the 
 Attorney-General; and if the parties consent to a reference 
 the court may in its discretion grant or refuse a reference, 
 and if a reference is granted the court must designate the 
 referee and if the referee refuses to serve or a new trial of the 
 action is granted the court must upon the application of either 
 party appoint another referee.^ 
 
 § 477. Id.: In General. — The interests of the minority as 
 well as of the majority stockholders are entitled to be con- 
 sidered on the question of whether it is beneficial to the 
 interests of the stockholders that the corporation should be 
 dissolved in a voluntary proceeding therefor, as such benefit 
 must be shown to permit dissolution.' A petition by the 
 majority of the directors of a corporation for its dissolution 
 will be denied if certain creditors appear and oppose it and 
 it is plain that the corporation has at least an apparent cause 
 of action against some of its officers and directors for mal- 
 administration of its affairs.* Proceedings looking to the 
 dissolution of a corporation and instituted by three of its 
 seven directors will be discountenanced by the court when 
 it appears that when begun a stockholders' meeting had been 
 
 ^° Gen. Corp. L. § 188 (L. 1909, be considered in determining npon 
 
 c. 28).. the dissolution when they showed a 
 
 ^ Gen. Corp. L. § 190 (L. 1909, prima fade cause o£ action to avoid 
 
 c. 28). an alleged rescission of an all^edly 
 
 ^ C. C. P. § 1012. valuable contract by the corporation 
 
 ' Matter of Rateau Sales Co., 201 not mentioned in the dissolution pro- 
 
 N. Y. 420, 94 N. E. 869 (1911); ceedings. 
 
 Gen. Corp. L. § 170. The complaint * Matter of Great Northern Trad- 
 
 and demurrer in an equitable action ing Co., 168 A. D. 536, 153 N. Y. 
 
 by the minority begun after the peti- Supp. 213 (1915) . 
 tion for voluntary dissolution should 
 
584 BUSINESS CORPORATIONS IN NEW YORK § 477 
 
 called to effectuate such changes in the corporation's workings 
 as would obviate the dissolution/ ". . . the application 
 for a final order in a proceeding [for voluntary dissolution 
 of a corporation] . . . is to be made by the petitioner. 
 . . . But where in a proceeding to dissolve a corporation the 
 petitioner, after a referee has been appointed, neglects or 
 refuses to proceed, . . . it is competent for the court on 
 special application of any person interested, to direct the peti- 
 tioner to move, so that the interests of all may be protected. 
 So, also . , . if aU the parties appear before the court for 
 the purpose of procuring a final order, the court would be 
 authorized to dispose of the matter, although no formal 
 notice had been given by the petitioner."* On. presentation 
 to it of a petition by aU the directors of a corporation for its 
 voluntary dissolution the court may appoint a referee to hear 
 and report on the conflicting claims of stockholders which the 
 petition recites have arisen on a controversy between them, 
 as an incident to the court's statutory power to provide by 
 final order for the distribution of the corporate assets.'' The 
 Supreme Court cannot in a proceeding for the voluntary 
 dissolution of a corporation by order restrain the prosecution 
 by a trustee of its mortgage of an action to foreclose or grant 
 an extra allowance to the petitioners in such proceeding.* In 
 a proceeding for voluntary corporate dissolution on petition 
 of the majority of the corporation's directors the court can- 
 not make any binding adjudication as to the existence or 
 extent of a liability of corporate officers and directors for 
 maladministration alleged by objecting creditors to exist." 
 A final order dissolving a corporation in voluntary proceed- 
 ings for its dissolution is void if the referee appointed to take 
 proof does not in his report give, in the words of the statute, 
 " a statement of the effects, credits and other property, and 
 of the debts and other engagements of the corporation and 
 of other matters pertaining to its affairs. " " In a proceeding 
 
 = Matter of Colton, 26 Misc. 571, Plains & Mamaroneck Ry. Co., 133 
 
 57 N. Y. Supp. 556 (1899). A. D. 297, 117 N. Y. Supp. 695 
 
 "Matter of Peekamose Fishing (1909) ; C. C. P. §§ 2423, 3333, 3334, 
 Club, 151 N. Y. 511, 45 N. E. 1037 see now Gen. Corp. L. § 170 et seq. 
 (1897); C. C. P. § 2420, see now 'Matter of Great Northern Trad- 
 Gen. Corp. L. § 171 et seq. ing Co., 168 A. D. 536, 153 N. Y. 
 
 'Matter of Seneca Oil Co., 153 Supp. 213 (1915). 
 
 A. D. 594, 138 N. Y. Supp. 78 "Matter of E. M. Boynton Saw 
 
 (1912) ; aff'd, no opinion, 208 N. Y. & File Co., 34 Hun, 369 (1884) ; 
 
 545, 101 N. E. 1121; Gen. Corp. L C. C. P. § 2426; see now Gen. Corp. 
 
 § 191. L. §§ 1S5-187. 
 
 * Matter of Tarrytown, White 
 
§§478,479 CORPORATE EXISTENCE . AND CHANGE 585 
 
 voluntarily to dissolve a corporation a report by the referee 
 which contains no statement of the corporation's debts but 
 simply states generally that the schedules annexed to the 
 petition were correct is not a compliance with the state." A 
 sale, assignment, mortgage, conveyance or other transfer of 
 any property of a corporation made after the filing of a peti- 
 tion for its voluntary dissolution 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 proceed- 
 ing and as against the creditors of the corporation.^^ 
 
 § 478. Id.: Compulsory Dissolution, Governing Statutes. — 
 An action to procure a judgment dissolving a domestic cor- 
 poration and forfeiting its corporate rights, privileges and 
 franchises ijaaj be maintained by the Attorney-General in the 
 name and in behalf of the People, and, on leave given by 
 court, by a creditor or stockholder whose verified written 
 statement of facts showing grounds for such action, submitted 
 to the Attorney-General, has not resulted in his commencing 
 such an action for sixty days after such submission: (1) when 
 the corporation has remained insolvent for at least one year ; 
 (2) when the corporation has neglected or refused for at 
 least one year to pay and discharge its notes or other evi- 
 dences of debt; and (3) when the corporation has suspended 
 its ordinary and lawful business for at least one year.*^ 
 
 § 479. Id.: In General. — " The provisions of the Code of 
 Civil Procedure, permitting the sale of lands in partition free 
 of all liens, are not applicable to the dissolution of corpora- 
 tions on the ground of insolvency." " A sufficient answer to 
 a suit to dissolve a corporation being brought by a person 
 in order, to leave his company of the same name the only one 
 in existence is that the suit is instituted by the Attorney- 
 General in the name of the People under a statute authorizing 
 him to do so." 
 
 ^^ Matter of Pyrolusite Manganese or unable to pay its debts, or has 
 
 Co., 29 Hun, 429 (1883) ; C. C. P. violated any provision of the act, by 
 
 § 2426; see now Gen. Corp. L. or under which it was incorporated, 
 
 §§ 185-187. or of any other act binding upon 
 
 "Gen. Corp. L. § 193 (L. 1909, it." 
 
 e. 28). "Matter of Coleman, 174 N. Y. 
 
 ^^Gen. Corp. L. §§ IQl, 102 (L. 373, 66 N. E. 983 (1903). 
 
 1909, e. 28). " 4. If it has banking i= People v. Troy Chemical Co., 
 
 powers, or powers to make loans on 118 A. D. 437, 103 N. Y. Supp. 22 
 
 pledges or deposits, or to make in- (1907); C. C. P. § 1786; now Gen. 
 
 suranees, where it becomes insolvent Corp. L. § 102. 
 
586 BUSINESS CORPORATIONS IN NEW YORK § 480 
 
 § 480. Id.: Grounds. — ^An action to procure a judgment dis- 
 solving a domestic corporation and forfeiting its corporate 
 rights, privileges and franchises may be maintained (1) when 
 it has remained insolvent for at least one year; (2) when it 
 has neglected or refused for at least one year to pay and dis- 
 charge its notes or other evidences of debt; (3) when it has 
 suspended its ordinary and lawful business for at least one 
 year." " It is a general principle that a cause of forfeiture 
 can not be taken advantage of, or enforced against a corpora- 
 tion collaterally, or incidentally, or in any other mode than by 
 a direct proceeding for that purpose against the corporation 
 so that it may have an opportunity to answer. ' ' " The statute 
 providing that whenever a corporation for one year has 
 remained insolvent or has refused to pay its evidences of debt 
 or has suspended its ordinary business it shall be deemed to 
 have surrendered its franchise is not a substitute for the com- 
 mon law rule that a virtual surrender of its franchise may be 
 inferred from its condition and its manner of conducting its 
 affairs, but is merely cumulative thereto, adding a rule by 
 which circumstances are made equivalent to a surrender, 
 which before had no such effect.^' ' ' A surrender of corporate 
 franchises cannot be inferred even from insolvency and sus- 
 pension of business for a less period thaii that designated by 
 statute to consummate it, unless the circumstances are such 
 as to make it appear that the corporation has not power to 
 continue or resume its business. " " A statute that a corpora- 
 tion shall be dissolved which for one year has suspended its 
 ordinary business " proceeds upon the idea that it has once 
 been in the exercise of its ordinary (authorized) business; 
 for it can scarcely be said to have suspended such business 
 unless it has at some time exercised it. " ^'' The statute per- 
 mitting the Attorney-General to bring an action against a 
 corporation when it has failed to exercise its powers and 
 vacate its charter is available only when it has violated the 
 statute permitting an action to dissolve it for suspension of 
 its ordinary and lawful business for at least one year; " it is 
 to that section the Attorney-General must look for a declara- 
 tion as to what constitutes a forfeiture of a franchise by a 
 
 "Gen. Corp. L., § 101 (L. 1909, "People v. Oriental Bank, 124 
 
 c. 28). A. D. 741, 109 N. Y. Supp. 509 
 
 "Towar v. Hale, 46 Barb. 361 (1908). 
 
 (1866). 20 rpjj^ People v. Troy House Com- 
 
 "Bradt v. Benedict, 17 N. Y. 93 pany, 44 Bari). 625 (1865) ; 1 N. Y. 
 
 (1858) ; 2 R. S. 463, § 38. See now Stats, at Large, 560. 
 Gen. Corp. L. § 100 et seq. 
 
§ 481 CORPORATE EXISTENCE AND CHANGE 587 
 
 failure to exercise its powers." ^ A stockholder seeking com- 
 pulsorily to dissolve his corporation hecause the Attorney- 
 Oeneral has refused to do so and because a prior voluntary 
 dissolution of it was fraudulent and should be vacated cannot 
 base his demand for vacation of the voluntary dissolution on 
 failure of the directors to account or on an allegation that no 
 notice was given of the voluntary dissolution: he must allege 
 failure of the directors to publish and serve or mail the notice 
 required by law.^ An admission in an answer by a cprpora- 
 tion to a complaint by the People to dissolve it that its busi- 
 ness has not been conducted since the time of the ^ling of a 
 petition for its bankruptcy, over a year past, is ground for 
 its dissolution.' That a corporation has not discharged its 
 notes and has allowed them to remain outstanding and unpaid 
 for more than one year is ground for its dissolution at the 
 suit of the People, and " the fact that it has received a dis- 
 charge in bankruptcy cannot avail to save its corpor.ate 
 life. " * A stockholder wil not succeed in his action to dissolve 
 his corporation on the ground that it had suspended its ordi- 
 nary and lawful business for at least one year if what it did 
 was simply to settle with another competing corporation their 
 dispute as to which was entitled to the patent under which 
 they were both operating by taking a certain part of the stock 
 of a new corporation formed to operate under such patent.*" 
 § 481. Id.: Who May Initiate. — Such an action for dissolu- 
 tion of a corporation may be maintained either by the 
 Attorney-General in the name and in behalf of the People, or 
 by a creditor or stockholder who (a) has submitted to the 
 Attorney-General a written statement of facts verified by 
 oath showing grounds for such an action, if (b) the Attorney- 
 General omits for sixty days after this submission to com- 
 mence such an action, who (c) has applied to the proper court 
 for leave to commence such an action, and who (d) has 
 obtained such leave accordingly.* "When the Attorney- 
 
 ^ People V. Atlantic Avenue R. R. A. D. 437, 108 N. Y. Supp. 22 
 
 Co., 57 Hun, 378, 10 N. Y. Supp. (1907) ; C. C. P. § 1786; now Gen. 
 
 907 (1890) ; affi'd 125 N. Y. 513, 26 Corp. L. § 102. 
 
 N. E. 622; G. C. P. §§ 1785, 1798; "People v. Troy Chemical Co., 118 
 
 see now Gen. Corp. L. §§ 131 and A. D. 437, 103 N. Y. Supp. 22 
 
 101. (1907); C. C. P. § 1785, subd. 2; 
 
 ° Knickerbocker v. Groton Bridge now Gen. Corp. L. § 101. 
 
 & M'fg. Co., Ill A. D. 145, 97 N. Y. =Kelsey v. Pfandler Process Co., 
 
 Supp. 595 (1906) ; St. Corp. L. § 57 45 Hun, 10 (1887). 
 
 (L. 1900, c. 760); C. C. P. § 1785; «Gen. Corp. L., § 102 (L. 1912, 
 
 now Gen. Corp. L. § 101. c. 204). 
 
 ' People V. Troy Chemical Co., 118 
 
588 BUSINESS CORPORATIONS IN NEW YORK § 481 
 
 General has good reason to believe that an action can be 
 maintained in behalf of the People of the State to dissolve 
 the corporation and to forfeit its franchises on the ground 
 that for a year it has remained insolvent or neglected to pay 
 its evidences of debt or suspended its business, 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 interest requires that an action should be brought ; and 
 if the case be one in which the action can be brought only by 
 the Attorney-General in behalf of the People, if a creditor, 
 stockholder, director or trustee of the corporation applies to 
 him for that purpose and furnishes the security required by 
 law, he must bring the action, or apply for leave to bring it, 
 if he has good reason to believe that it can be maintained, and 
 when such an application is made section nineteen hundred 
 and eighty-six of the Code of Civil Procedure applies thereto 
 and to the action brought in pursuance thereof/ " A cor- 
 poration may be dissolved by forfeiture through abuse or 
 neglect of its franchises ; but such forfeiture, unless there be 
 special provisions by statute, can only be enforced by the 
 sovereign in some proceeding instituted in its behalf. " * If a 
 complaint by a stockholder allege that the ordinary and law- 
 ful business of his corporation has been suspended for at 
 least a year, the submission of a written verified statement of 
 the facts to the Attorney-General, the latter 's failure to 
 institute an action within sixty days, and leave of court to 
 commence the action, the stockholder is entitled to maintain 
 an action to dissolve the corporation, unless other facts 
 alleged are a bar to the action.® One who is stockholder and 
 director of a corporation may maintain an action for its dis- 
 solution if it has been insolvent for more than a year before 
 the suit was begun; and may have a receiver pendente lite 
 
 ' Gen. Corp. L. § 304 (L. 1909, Hun, 387 (1879) ; under L. 1870, 
 
 c. 28). c. 151, § 2, in which it was held 
 
 * Denike v. New York and Rosen- that an action to have a corporation 
 
 dale Lime and Cement Co., 80 N. Y. dissolved, under a statute permitting 
 
 599 (188Q). such a course when it has remained 
 
 'Knickerbocker v. Groton Bridge insolvent a year, refused to pay its 
 
 & Mfg. Co., Ill A. D. 145, 97 N. Y. evidences of debt, or suspended 
 
 Supp. 595 (1906) ; C. C. P. § 1785, business for a year, may be brought 
 
 subd. 3; now Gen. Corp. L., § 101. by the Attorney-General only, and 
 
 See, however, Wibnersdoerffer v. not even by a stockholder. 
 Lake Mahopac Improvement Co., 18 
 
482-484 CORPORATE EXISTENCE AND CHANGE 589 
 
 )pointed to preserve the corporation's property." A cred- 
 ar at large cannot sue to wind up his corporate debtor." 
 § 482. Id. : Where to be Initiated.— An action or proceeding 
 rought by the Attorney-Greneral on behalf of the People of 
 le State against any corporation for the purpose of procur- 
 ig its dissolution may be brought in any county of the State 
 I be designated by the Attorney-Greneral." 
 § 483. Id.: Trial and Testimony.— In an action brought to 
 focure a judgment dissolving a corporation and forfeiting 
 s franchises because of its year-long insolvency, year-long 
 ifusal or neglect to discharge its evidences of debt, or year- 
 ng suspension of business, a stockholder, officer, alienee or 
 ^ent of the corporation is not excused from answering a 
 lestion relating to the management of the corporation or 
 le transfer or disposition of its property on the ground that 
 IS answer may expose the corporation to a forfeiture of any 
 ? its corporate rights or will tend to convict him of a criin- 
 lal offense, or to subject him to a penalty or forfeiture ; but 
 is testimony cannot be used as evidence against him in a 
 ■iminal action or special proceeding.^^ 
 § 484. Id.: Practice, Process, Notice, Injunction, Receivers; 
 ontribution by Stockholders, Directors and Officers.— If 
 lere be no person in existence upon whom service of the 
 immons can be made under the provisions of section four 
 iindred and thirty-one of the Code of Civil Procedure, ser- 
 Lce of the summons in such an action may be made in such 
 tanner as the court upon application by petition may direct." 
 
 I every action for the dissolution of a corporation or a dis- 
 •ibution of its assets, a copy of all motions and all motion 
 apers and of any other application to the court, together 
 ith a copy of the order or judgment to be proposed thereon 
 ) the court, must in all cases be served on the Attorney- 
 eneral in the same manner as provided by law for the ser- 
 ice of papers on attorneys who have appeared in actions, 
 hether the applications otherwise would be ex parte or upon 
 otice, and no order or judgment granted can vary in any 
 laterial respect from the relief specified in such copy, order 
 
 "Medbury v. Rochester Frear "Gen. Corp. L. § 315 (L. 1909, 
 
 X)ne Co., 19 Hun, 498 (1880); 2 c. 28). 
 
 . S. 463, § 38. 13 Gen. Corp. L. § 301 (L. 1909, 
 
 II Cole V. Knickerbocker Life Ins. c. 28). 
 
 o., 23 Hun, 255 (1880) ; dism'd 91 " Gen. Corp. L. 8 102 (L. 1912, 
 
 . Y. 256; 2 R. S. 463, § 35. The e. 204). 
 ■editor should reduce his claim to 
 idgment. 
 
590 BUSINESS CORPORATIONS IN NEW YORK § 484 
 
 or judgment unless the Attorney-Greneral appears on the 
 return day and has been heard in relation thereto, and any 
 order or judgment granted in any such action or proceeding 
 is void without such service of such papers upon the Attorney- 
 General, and no receiver of any such corporation must pay 
 to any person any money directed to be paid by any order or 
 judgment made in any such action until the expiration of 
 eight days after a certified copy of such order or judgment 
 has been served as already stated upon the Attorney- 
 GeneraL" In an action brought to procure a judgment dis- 
 solving a corporation and forfeiting its franchises because 
 for one year it has been insolvent or refused or neglected to 
 discharge its evidences of debt, or has suspended its business, 
 the court may in its discretion on the application of either 
 party at any stage in the action, before or after final judg- 
 ment, and with or without security, grant an injunction order 
 restraining the creditors of the corporation from bringing 
 actions against the defendants or any of them for the recovery 
 of a sum of money or from taking any further proceedings in 
 such actions theretofore commenced; and such an injunction 
 has the same effect and 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." 
 In an action for such dissolution the court may, upon proof 
 of the facts authorizing the action to be maintained, grant an 
 injunction order restraining the corporation, its trustees, 
 directors, managers and other officers during the pendency of 
 the action except by express permission of the court, (a) from 
 collecting or receiving any debt or demand, and (b) from 
 paying out or in any way transferring or delivering to any 
 person any money, property or effects of the corporation, and 
 (c) from exercising any of its corporate rights, privileges or 
 franchises." Except that it can be granted only by the court, 
 the granting, vacating or modifying of an injunction order so 
 granted is governed by the provisions of title second - of 
 chapter seventh of the Code of Civil Procedure.^^ The subject 
 of receivers on dissolution is considered in the subsequent 
 chapter on " Receivers.!' ^° When the action is brought by a 
 creditor of a corporation and the stockholders, directors, 
 
 '=G«n. Corp. L. § 312 (L. 1909, "Gen. Corp. L. § 103 (L. 1909, 
 
 c. 28). c. 28). 
 
 ^"Gen. Corp. L. § 302 (L. 1909, "See § 513 et seq., infra. 
 
 c. 28). 
 
 "Gen. Corp. L. § 103 (L. 1909, 
 c. 28). 
 
§ 485 COEPORATE EXISTENCE AND CHANGE 591 
 
 trustees or other officers, or any of them, are made by law 
 liable, in any event or contingency, for the payment of the 
 creditor's debt, the persons so made liable may be made 
 parties defendant by the original or by a supplemental com- 
 plaint and their liability may be declared and enforced by the 
 judgment in the action; and if they are not made parties 
 defendant, the plaintiff may maintain a separate action 
 against them to procure a judgment declaring, apportioning 
 and enforcing their liability; and in either case the court, 
 when it is necessary, must cause an account to be taken of the 
 property and of the debts of the corporation, and thereupon 
 the defendants' liability must be apportioned accordingly; 
 but if it affirmatively appears that the corporation is insol- 
 vent and has no property to satisfy its creditors the court 
 may without taking such an account ascertain and determine 
 the amount of each defendant's liability and enforce the 
 same accordingly.^" 
 
 § 485. Id.: Creditors. — In an action brought to procure a 
 judgment dissolving a corporation and forfeiting its fran- 
 chises because for one year it has been insolvent, or refused 
 or neglected to discharge its evidences of debt, or has sus- 
 pended its business, the court may at any stage of the action, 
 before or after final judgment, make an order requiring all 
 the creditors of the corporation to exhibit and prove their 
 claims, and thereby make themselves parties to the action, in 
 such 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 that, notwithstanding such order any such creditor 
 who may exhibit and prove his claim in the manner directed 
 by the order, with proof by affidavit or otherwise that he has 
 had no notice or knowledge thereof in time to comply there- 
 with, is entitled at any time before an order is made directing 
 a final distribution of the assets of such corporation to have 
 his claim received, and has the same rights and benefits 
 thereon, so far as the assets of such corporation then remain- 
 ing undistributed may render possible, as if his claim had 
 been exhibited and proved within the time limited by such 
 order.^ Notice of the order must be given by publication in 
 such newspapers and for such length of time as the court 
 
 2° Gen. Corp. L. §§ 109, 110, 111 ^Gen. Corp. L. § 303 (L. 1909, 
 (L. 1909, e. 28). c. 28). 
 
592 BUSINESS CORPORATIONS IN NEW YORK § 486 
 
 directs.^ " In an action brought by the People to dissolve an 
 insolvent corporation and distribute its assets among its cred- 
 itors, the distribution is to take place first among the credit- 
 ors whose claims represent a fixed liability at the time of 
 the commencement of the action and the order of sequestra- 
 tion. A contingent claim, where the liability is not fixed and 
 certain at that time, but depends upon the happening there- 
 after of an uncertain event, can only share in the surplus 
 remaining after the fixed liabilities and the expenses of 
 administration have been paid."^ A creditor of a corpora- 
 tion being dissolved by action cannot prove against it both 
 its obligations and coupon notes held as collateral security 
 for such obligations, unless, possibly, such notes carry some 
 lien on the corporation's property.* In decreeing ratable 
 division of a fund on dissolution of a corporation among all 
 unpreferred creditors before the court, those whose claims 
 have been admitted in the dissolution proceeding but who are 
 not represented by their own attorneys, are included on the 
 theory that the receiver represents them.*" " When a corpo- 
 ration has been legally organized its existence may continue 
 after an event which would be a sufficient cause for its dissolu- 
 tion by the court ; and when dissolved for violating the laws 
 under which it exists, the rights of the creditors, who have 
 become such since the time when it had, by some act of com- 
 mission or omission, forfeited its right to exist, cannot be 
 ignored, and the assets, which have been seized by the court, 
 must be distributed among the creditors (in the absence of 
 statutory directions) according to the principle of equity."* 
 § 486. Id.: Judgment; Distribution, and Subsequent Practice. 
 — A final judgment in the action against the corporation 
 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; and the interlocutory 
 or final judgment, as the case requires, must, if the stock- 
 
 ^Gon. Corp. L. § 303 (L. 1909, *" People v. American Loan & 
 
 c. 28). Trust Co., 177 N. Y. 467, 69JN'-. ,*■. 
 
 'People V. Metropolitan Surety 1105 (1904); C. C. P. § IJ^-feow 
 
 Co., 171 A. D. 15, 156 N. Y. Supp. Gen. Corp. L. § 112. #•■ • 
 
 1027 (1916). 'Welch v. Importers' & Tr^ 
 
 * People V. Remington & Sons, 54 Nat. Bk., 122 N. Y. 177, 25 
 
 Hun, 480, 8 N. Y. Supp. 31 (1889) ; 269 (1890). 
 aff'd 121 N. Y. 675, 24 N. E. 1095. 
 
§ 486 CORPOEATE EXISTENCE AND CHANGE 593 
 
 holders are parties to the action and the property of the cor- 
 poration is not sufficient to discharge its debts, adjudge that 
 each stockholder pay into court the amount due and remain- 
 ing unpaid on the shares of the stock held by him, or so much 
 thereof as is necessary to satisfy the debts of the corpora- 
 tion; and the court must, if the property of the corporation 
 and the sums collected or collectible from the stockholders 
 upon their unpaid stock subscriptions are or will be insuffi- 
 cient to pay the corporate debts, ascertain the several sums 
 for which the directors, trustees, or other officers, or the 
 stockholders, being parties to the action, are liable, and 
 adjudge that the same be paid into court to be applied in such 
 proportions and in such order as justice requires to the pay- 
 ment of the debts of the corporation.^ The final judgment in 
 an action to dissolve a corporation must be entered in the 
 office of the clerk of the county in which the principal business 
 office or the principal place of business .of the corporation is 
 located, and if it is adjudged that such corporation be dis- 
 solved, a certified copy of such judgment must be filed in the 
 office of the Secretary of State/ A judgment entered on 
 a referee's report in an uncontested proceeding by the 
 Attorney-General to dissolve a corporation that certain 
 stockholders pay a stated amount as the value of assets of the 
 corporation in their hands, though not entered upon proper 
 legal proceedings will nevertheless bind the stockholders if 
 they made no objection to the course followed and had full 
 opportunity to, and did present their side of the claim against 
 them.* WhUe a court may, on dissolution of a corporation, 
 decree distribution of its funds among those entitled thereto, 
 it may not take away from a trustee funds placed with it for 
 a specific purpose by the dissolved corporation and itself dis- 
 tribute them, but can only require its receiver who has 
 accepted such funds to pay them back to the trustee.' Under 
 a statute providing that on dissolution of a corporation the 
 residue of its assets left after paying the expenses of the 
 receivership and its debts and liabilities shall be distributed 
 among the stockholders in proportion to their several 
 interests therein, " if the distribution can be properly made 
 without a sale, then it should not be made; but when a sale 
 
 °Gen.:C£>rp. L. |§ 112, 113, 114 « Matter of Home Provident 
 
 (L. 1909, c. 28). Safety Eund Assn., 129 N, Y. 288, 
 
 •^q-m.'Gorp. L., § 115 (L. 1916, 29 N. E. 323 (1891). 
 c. 163). 
 
 * People V. Hydrostatic Paper Co., 
 88 N. Y. 623 (i882). 
 B. C.N.Y.— 38 
 
594 BUSINESS CORPORATIONS IN NEW YORK § 487 
 
 may become necessary to give each one of the stockholders 
 his full interest in the assets, then, clearly, it should be 
 ordered by the court. ' ' " 
 
 § 487. Id.: Eflfect of Dissolution, In General.— The only 
 effect of a resolution by a corporation's board of directors 
 that it " be and the same is hereby dissolved, to take effect 
 upon the sale and transfer of its property, the settling of its 
 business and the division of its capital stock " is " to deprive 
 the corporation of the power of engaging in new business, 
 and to leave it clothed with full power, so far as necessary to 
 close up all its affairs, pay off its debts and distribute its 
 property, and it . . . continued to have authority to fill 
 any vacancy occasioned by death, resignation or other- 
 wise."" The Supreme Court has the same power over its 
 order dissolving a corporation as it has over any other order 
 made by it and may, therefore, resuscitate a corporation it 
 has by order dissolved." The court has power to set aside 
 its final order of dissolution of a corporation made on appli- 
 cation of a majority of its board of directors on the request 
 of a stockholder ; and it will exercise this power if the merits 
 of the request appeal to it and the applicant give a sufficient 
 and approved bond to pay creditors the amounts to wliich 
 they may be entitled." Once a petition for voluntary dissolu- 
 tion of a corporation is made the court acquires jurisdiction 
 and may appoint a receiver, restrain proceedings against the 
 corporation, etc." The common law rule that real estate held 
 by a corporation at the time of dissolution reverts to the 
 grantor does not prevail in this State in respect to stock cor- 
 porations, as under the statute, " upon the dissolution of a 
 corporation, the directors or managers at that time become 
 trustees of its property (unless some other custodian is 
 appointed), for the purpose of paying the debts of the corpo- 
 ration and dividing its property among its stockholders."" 
 
 "Matter- of Woven Tape Skirt (1909); aff'd 198 N. Y. 618, 92 
 
 Co., 8 Hun, 508 (1876) ; L. 1876, N. E. 1078. 
 
 c. 442. The stockholders had inter- " Matter of Automatic Chain Co., 
 
 ests in a patent and a sale of two- 64 Misc. 280, 118 N. Y. Supp. 542 
 
 sixths of it, together with the agree- (1909) ; aff'd 134 A. D. 863, 119 
 
 ment for its use, would bring, it was N. Y. Supp. 379. 
 
 shown, a larger proportionate price "Matter of Christian Jensen Co., 
 
 than a sale of one-sixth with an un- 128 N. Y. 550, 28 N. E. 665 (1891) ; 
 
 divided one-half of the agreement. C. C. P. § 2423. 
 
 " Ervin v. Oregon Steam Naviga- ^' Heath v. Barmore, 50 N. Y. 302 
 
 tion Co., 22 Hun, 598 (1880). (1872); 1 R. L. 248; 1 R. S. 600, 
 
 " Matter of Automatic Chain Co., §8 9, 10. 
 134 A. D. 863, 119 N. Y. Supp. 379 
 
§ 488 COBPOBATE EXISTENCE AND CHANaE 595 
 
 After judgment has been entered dissolving a corporation 
 and appointing a receiver, stockholders should be permitted 
 to examine and take abstracts from its books to get informa- 
 tion as to its condition; but they are not entitled to a court 
 order requiring notice to them of any application to the court 
 or action by the court or receiver." Though the persons 
 appealing from an order dissolving a corporation did not 
 themselves object to the proceeding on the ground that the 
 order therein for publication of notice was improper under 
 the statute they may nevertheless raise the point on appeal, 
 if they are not the only ones on whom the order published had 
 to be served." 
 
 § 488. Id.: On Actions. — ^A cause of action for damages for 
 negligent injury by a stock corporation should after its volun- 
 tary dissolution be brought against it and not its directors.^^ 
 An action for damages for death from negligence of a corpo- 
 ration survives its dissolution and may be contained against 
 its receiver, who may even appeal from the judgment 
 therein.^® The dissolution of a corporation puts an end to an 
 action against it; and a receiver for it, in authority when 
 judgment is rendered against the corporation, bust who has not 
 been made party to the action, cannot be affected by it unless 
 by direction of the court he has interfered and made himself 
 responsible for its final result, and a mere direction to argue 
 the case on appeal does not make him responsible.^" The 
 principle that creditors may proceed against a corporation by 
 its corporate name until it is declared dissolved by judicial 
 decree is applicable to a dissolution in consequence of insol- 
 vency or non-user or mis-user of the corporate franchises, or 
 some other cause of forfeiture, and not to a dissolution by 
 expiration of the charter, in which event the corporation is 
 de facto dead and no judgment can be rendered against it.'^ 
 " To effect a dissolution of a corporation there must be the 
 judgment of a court of competent jurisdiction declaring it 
 dissolved; and until such judgment creditors may proceed by 
 
 ^° People V. Cataract Bank, 5 Misc. ^' People v. Troy Steel & Iron Co., 
 
 14, 25 N. Y. Supp. 129 (1893). 82 Hun, 308, 31 N. Y. Supp. 337 
 
 "Matter of Pyroliisite Manganese (1894) ; C. C. P. §§ 1784, 1785 (now 
 
 Co., 29 Hun, 429 (1883) ; C. C. P. Gen. Corp. L. §§ lOO, 101) 755, 756, 
 
 tit. 2, c. 17. 1902. 
 
 ^^ Cunningham v. Gdauber, 61 ^"People v. Knickerbocker Life 
 
 Misc. 443 (1908) ; St. Corp. L. § 57. Ins. Co., 106 N. Y. 619, 13 N. E. 
 
 Section 30 of the General Corpora- 447 (1887). 
 
 tion Law does not apply to a stock ^ Sturges v. Vanderbilt, 73 N. Y. 
 
 corporation. 384 (1878). 
 
596 BUSINESS CORPORATIONS IN NEW TORK § 489 
 
 suit against the corporation, unless restrained by injunction 
 {citations). A corporation may by virtue of proceedings 
 against it, or by reason of its pecuniary condition, cease to 
 exist for all practical purposes, all the purposes for which it 
 was created or for which a corporation may exist, but it can- 
 not be held to be actually dissolved till so adjudged and deter- 
 mined, either by judicial sentence or the sovereign power. ' ' ' 
 On dissolution of a corporation, action for an admitted debt 
 of the corporation should be against the directors as trustees, 
 but for a contested claim which can be established and 
 liquidated only by a judgment the action should be against the 
 corporation.^ 
 
 § 489. Id.: On Creditors. — Creditors of a dissolved corpora- 
 tion have a lien on its assets for the payment of their debts, 
 whether they are in the hands of one who came by them 
 fairly or by fraud or force, unless such one has acquired a 
 higher or better equity thereto than the creditors.* ' ' Under 
 the statutes of this State, on the dissolution of a corporation, 
 its assets become a trust fund for the payment of its debts, 
 and these include debts to mature as well as accrued indebted- 
 ness, and all engagements entered into by the corporation, 
 which have not been fully satisfied or canceled. " ° In order 
 to maintain the lien of a creditor of a corporation upon its 
 assets after its dissolution by judgment enjoining further 
 proceedings against it it must be shown that the lien was 
 valid and existed before entry of the judgment.' 
 
 ^ Kincaid v. Dwindle, 59 N. Y. tion of charter, see note in 32 L.R.A. 
 
 548 (1875) ; Gen. Mfg. Act, L. 1848, (N.S.) 446. 
 
 c. 40, §§ 18, 24. On effect of proceedings for dis- 
 
 ^ Cunningham v. Glauber, 133 solution of corporation upon its 
 
 A. D. 10, 117 N. Y. Supp. 806 rights of action, see note in 15 
 
 (1909) ; old Gen. Corp. L. §§ 19, 20 L.R.A. 627. 
 
 (L. 1892, e. 687, § 30). The action On dissolution of corporation as 
 
 was to recover damages for negli- excusing creditor from exercising 
 
 gence. remedies against corporation, as con- 
 On effect of insolvency or appoint- dition of enforcing stockholder's lia- 
 
 ment of receiver to work dissolution bility on unpaid subscription, see 
 
 which will affect right of corporation note in 24 L.R.A. (N.S.) 628. 
 
 to sue, see note in 50 L.R.A.(N.S.) * Tinkham v. Borst, 31 Barb. 407 
 
 383. (1860). 
 
 On effect on pending actions of ^ People v. National Trust Co., 82 
 
 expiration of statutory period per- N. Y. 283 (1880) ; R. S. art. 3, 
 
 mitting litigation after dissolution, tit. 4, c. 8, pt. 3. 
 
 see note in 32 L.R.A. (N.S.) 452. « People v. Mutual Benefit Life 
 
 Abatement of action by or against Assn., 86 Hun, 219, 33 N. Y. Supp. 
 
 corporation, in the absence of a sav- 191 (1895). 
 
 ing statute, by dissolution or expira- 
 
§ 490 CORPORATE EXISTENCE AND CHANGE 597 
 
 § 490. Id.: On Judgments. — ^A judgment against a corpora- 
 tion which was a lien on its realty when suit to dissolve the 
 corporation was begun, but was later reduced by the Appel- 
 late Division, is a lien which holds good for the reduced 
 amount even though such realty be sold by the receiver 
 appointed in the dissolution proceedings under a final decree 
 ordering the sale subject only to certain liens mentioned of 
 which this judgment was not one.'' A judgment obtained in a 
 foreign state against a corporation after a temporary receiver 
 had been appointed in this State for it in proceedings for its 
 dissolution is good and entitles the judgment creditor to 
 share in its property sequestrated in 'this State on introduc- 
 tion in evidence of an exemplified copy of the judgment and 
 records of the foreign court showing the appearance of the 
 corporation by attorney, unless the order appointing the tem- 
 porary receiver restrained creditors from proceeding by 
 action against the corporation and the creditor in question 
 was served with such order.^ A decree of corporate dissolu- 
 tion does not contemplate that the sale of the corporate realty 
 shall be free and clear of all judgment liens unless specially 
 reserved in the decree ; and until any particular judgment is 
 satisfied from the moneys in the hands of the receiver, it is 
 the right of the owner of the judgment to proceed to execution 
 and sell subject to the order of the court.' " . . . there 
 can be no valid judgment against a dissolved corporation, 
 unless one founded on a pending suit which the order of dis- 
 solution itself preserves from abatement, or in some manner 
 saved. . . . That the foreign corporation, dissolved and 
 dead in the domicile of its origin, should be deemed alive in 
 the foreign state so far as to save the remedies of its own 
 citizens against property within its own jurisdiction, is 
 entirely possible and not at all unreasonable. But to . . . 
 insist that by force of the foreign judgment and through the 
 comity of the states the corporation, in its own jurisdiction 
 is . . . dead as to our own citizens, but alive as to 
 foreign creditors — is to . . . make a complete dissolu- 
 tion . . , impossible. . . . The foreign creditor may 
 pursue the corporate assets in his own state but when he 
 would reach the fund held here for distribution after the 
 corporate death he must, in some manner, make the receiver 
 
 'Matter of Coleman, 174 N. T. Supp. 117 (1896); affi'd 151 N. Y. 
 
 373, 66 N. E. 983 (1903). 640, 45 N. E. 1133. 
 
 * People V. Commercial Alliance ° Matter of Coleman, 174 N. . Y. 
 
 Life Ins. Co., 5 A. D. 273, 39 N. Y. 373, 66 N. E. 983 (1903). 
 
598 BUSINESS CORPORATIONS IN NEW YORK § 491 
 
 a party, so as to bind Mm by the judgment."" A judgment 
 cannot validly be rendered against a corporation which has 
 been dissolved by court judgment; but the receiver, if any, 
 appointed of its property, should be brought in." A judg- 
 ment entered in a foreign state against a domestic corporation 
 after it has been dissolved, though in an action commenced 
 before the dissolution in which it appeared, is ineffective." 
 § 491. Id.: On Contracts. — " There is nothing in the statute 
 [providing for the voluntary dissolution of a corporation] 
 . . . authorizing the court to restrain the creditors of the 
 corporation from disposing of its bonds held as collateral to 
 loans under lawful contracts empowering them to sell. ' ' " 
 When an agreement between competing ship lines provides ■ 
 for their combination into a corporation and division of its 
 stock, and one interest, given control of the corporation's 
 management, guarantees payment of stated dividends to the 
 other for a certain term prior to the expiration of which the 
 corporation is dissolved at the suit of the State on the instiga- 
 tion of the guaranteed interest, the obligation of the contract 
 of guarantee terminates prima facie with the dissolution of 
 the corporation." A corporation guaranteeing to pay to 
 holders of certificates of another corporation, so long as the 
 latter 's certificates should be outstanding, but not longer than 
 the then unexpired term of the period for which the latter 
 was incorporated, a stated dividend, is not liable on the guar- 
 anty, per se, after such other corporation's legal dissolution." 
 
 ^° Rogers v. Adriatic Fire Insur- against a non-existing eorporation 
 
 ance Co., 148 N. Y. 34, 42 N. E. 515 . . . shall be conclusive evidence 
 
 (1895). as against persons not parties to the 
 
 "MeCuUough v. Norwood, 58 record in other States, and shall af- 
 
 N. Y. 562 (1874) ; L. 1832, c. 296, feet property which has ceased to be 
 
 Code, § 121. the property of the judgment 
 
 ^^ People V. Mercantile Credit debtor." 
 Guarantee Co., 65 A. D. 3Q6, 72 "Matter of Binghamton Electric 
 
 N. Y. Supp. 858 (1901). "It was Co., 143 N. Y. 261, 38 N. E. 297 
 
 entirely competent for the State of (1894). 
 
 Illinois to direct that a judgment be "Lorillard v. Clyde, 142 N. Y. 
 
 entered in form against a dissolved 456, 24 L.R.A. 113, 37 N. E. 489 
 
 corporation, although its courts had (1894). 
 
 lost jurisdiction over it by its disso- ^^ Mason v. Standard Distilling & 
 lution and to direct that such a judg- Distributing Co., 85 A. D. 520, 83 
 ment should affect property which N. Y. Supp. 343 (1903). 
 had belonged to the corporation lo- On right to recover for services 
 cated within the State . . . ; and expenses under a running con- 
 but it is entirely incompetent for tract with a corporation ended by its 
 the State of Illinois to say that a dissolution, see note in 69 L.R.A. 
 judgment that its courts shall enter 124. 
 
§§ 492, 493 CORPORATE EXISTENCE AND CHANGE. 599 
 
 § 492. Id.: On Liabilities of Directors, Officers and Stock- 
 holders. — The liability of directors and officers of a corpora- 
 tion on its dissolution has already been discussed." The last 
 sentence of section five of the Business Corporations Law, 
 that ' ' the dissolution of any such corporation for any cause 
 shall not take away or impair any remedy against it, its stock- 
 holders or officers, for any liabilities incurred previous to 
 Its dissolution," inartificial as may be its insertion in a clause 
 providing for dissolution on failure of payment of a corpo- 
 ration's capital stock, cannot be qualified by what precedes; 
 and it reaches beyond the contingency of the particular dis- 
 solution previously referred to and applies to any, that is to 
 say every, case of corporate dissolution." "When there is no 
 action by a corporation with a view to the discontinuance of 
 its business or the abandonment of its franchise and no 
 acquiescence in such a course by its * trustees or stock- 
 holders, the mere fact of an application by the attorney-gen- 
 eral at the instance of two and in spite of the opposition of 
 half of the trustees for its dissolution upon grounds undis- 
 closed does not relieve them from the duty of making and 
 filing the statutory annual report so as to relieve them from 
 individual liability under the then statute.^* 
 
 § 493. Id.: Voluntary Sale of Property and Franchise, In 
 General. — The legislation permitting voluntary sale of a cor- 
 ■ poration's franchise and property was designed to meet two 
 evils: " (1) The injustice to the bulk of the stockholders from 
 want of power in a corporation to sell its business or an 
 essential part thereof to another corporation organized for 
 the purpose, frequently from its own membership, on terms 
 deemed advantageous by the holders of a large majority of 
 the stock, (2) the injustice to minority stockholders of requir- 
 ing them to abandon, change or limit their business if the 
 majority should have the power to direct such a sale. An inci- 
 dental evil was the power of a dissenting stockholder to com- 
 pel the majority to buy him out on his own terms in order to 
 secure unanimous consent j\rith no one left to question the 
 
 "As to Directors, see § 293, supra; v. Lamon, 130 N. Y. 366, 29 N. E. 
 
 as to Officers, see § 340, supra. 321 (1891) ; Gen. Mfg. Act, § 12 
 
 "Marstaller v. Mills, 143 N. Y. (L. 1848, c. 40). 
 39-8, 38 N. E. 370 (1894). The trus- As to effect of dissolution of cor- 
 
 tees on dissolution were held proper poration on liability of directors 
 
 defendants in a suit based on the under statutes purporting to make 
 
 corporation's negligence resulting in them liable for contracting debts In 
 
 plaintiff's personal injury. excess of a fixed limit, see note 
 
 "First Nat. Bank of Jersey City L.R.A.1915D, 1052. 
 
600 BUSINESS CORPORATIONS IN NEW YORK § 493 
 
 transaction." " The language of the statutory provision con- 
 cerning voluntary sale by a corporation of its franchise and 
 property " was not addressed to ordinary sales by a corpo- 
 ration, nor even to those extraordinary in size but still in the 
 regular line of business; " but a sale of a whole independent 
 and important branch of its business because of necessity by 
 reason of lack of capital to carry it on, including good wUl, 
 so as to preclude the corporation from ever again engaging 
 in that line of business, which was authorized by its charter, 
 is a sale or abandonment of its charter to that extent and 
 therefore within the ban of the statute.^" A manufacturing 
 corporation has " the right, with the consent of its stock- 
 holders, to sell its plant and retire from business."^ A stock- 
 holder voting by proxy with the other stockholders of a 
 corporation owing no debts to sell all its property to one of 
 their number and dissolve, since which time it has done no 
 business, cannot claim that this is not equivalent to a sur- 
 render of its franchises, if all the conditions of the offer of 
 purchase have been fulfilled save those which he himself has 
 not fulfilled.^ "... a domestic corporation, whose prin- 
 cipal tangible property is located within a State adjoining the 
 State of New York and the principal business of which is 
 carried on in such adjoining State, may, with the consent of 
 the holders of ninety-five per cent, of its capital stock, sell and 
 convey its property situated without the State of New York, 
 not including its franchises, to a corporation organized under 
 the laws of such adjoining State, vesting the rights and prop- 
 erty 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."' 
 
 ^'Matter of Timmis, 200 N. Y. poration is non-paying and its busi- 
 
 177, 93 N. E. 522 (lOlO) ; St. Corp. ness is being conducted at a loss. 
 
 L., § 16. People v. Ballard, 136 N. Y. 639, 32 
 
 ^° Matter of Timmis, 200 N. Y. N. E. 611 (1892) ; C. C. P. §§ 1781, 
 
 177, 93 N. E. 522 (1910) ; St. Corp. 1782; now Gen. Corp. L. §§ 90, 91. 
 
 L. § 16. « . . . the trustees of a See also 134 N. Y. 269, 17 L.R.A. 
 
 mining company incorporated under 737, 32 N. E. 54. 
 
 the act of 18^ cannot, even with ^ Holmes & Griggs Mfg. Co. v. 
 
 the consent of a majority of its Holmes & WesseU Metal Co., 127 
 
 etockholders, transfer all of its prop- N. Y. 252, 27 N. E. 831 (1891). 
 
 erty and assets to another corpora- ^ Webster v. Turner, 12 Hun, 264 
 
 tion avowedly incorporated for the (1877). 
 
 purpose of acquiring the same and ' Barney v. Whalen, 56 Misc. 278, 
 
 carrying on its business, and receive 106 N. Y. Supp. 434 (1907) ; St. 
 
 in payment therefor the stock of the Corp. L. § 33 (L. 1890, c. 564) ; now 
 
 latter corporation;" but it may be § 16. 
 that the rule is different if the eor- 
 
§ 494 CORPORATE EXISTENCE AND CHANGE 601 
 
 § 494. Id.: To What Corporation, and of What.— A domestic 
 stock corporation is permitted by statute to sell its property, 
 rights, privileges and franchises to another domestic corpo- 
 ration, or its property outside New York State, not including 
 its franchises, to a corporation organized under the laws of 
 an adjoining state in which the selling corporation carries on 
 its principal business and in which its principle tangible prop- 
 erty is located.* If the sale is to a domestic corporation the 
 latter must be engaged in a business of the same general 
 ' character as the selling corporation, or engaged in a business 
 which might be included in the certificate of incorporation of 
 a corporation organizing under any general law of New York 
 State for a business of the same general character as the sell- 
 ing corporation; and if to a foreign corporation the latter 
 must be organized under the laws of an adjoining state to the 
 selling corporation in which the seller carries on its principal 
 business and in which the seller's principal tangible property 
 is located.^ If the sale is to a domestic corporation it may be 
 of any interest in or part of the property, rights, privileges 
 and franchises of the selling corporaton." On dissolution of a 
 stock corporation before the time limited in its certificate of 
 incorporation by voluntary action of its directors and stock- 
 holderSj the former, after paying or adequately providing for 
 the debts and obligations of the corporation, 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 or both of 
 such corporation, and distribute them among the stockholders 
 in lieu of money in proportion to their interest therein, but no 
 such sale is valid as against any stockholder who within sixty 
 days after the mailing of notice to him of such sale applies to 
 the Supreme Court in the manner provided by the seventeenth 
 section of the Stock Corporation Law for an appraisal of the 
 value 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 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 vests in 
 the person or persons making such payment or deposit.' 
 
 *St. Corp. L. § 16 (L. 1909, e. 61). ^Gen. Corp. L. § 221 (L. 1909, 
 * St. Corp. L. § 16 (L. 1909,e. 61). c. 28). 
 SSt. Corp. L. § 16 (L. 1909. e. 61). 
 
602 BUSINESS CORPORATIONS IN NEW YORK §§ 495, 496 
 
 § 495. Id.: stockholders' Consent.— If the sale is of both 
 property and rights, privileges and franchises to a domestic 
 corporation, it must be with the consent of two-thirds of the 
 selling corporation's stock; and if of only property situate 
 outside New York, to a foreign corporation, it must be with 
 the consent of the holders of ninety-five per centum of the 
 selling corporation's capital stock.* Before a sale or convey- 
 ance can be made either to a domestic or foreign corporation 
 the consent of the two-thirds of stock or ninety-five per centum 
 of the holders of the stock, respectively, must be obtained at 
 a meeting of the stockholders called upon like notice as that 
 required for an annual meeting." 
 
 § 496. Id.: Stockholders' Dissent and Procedure Thereon.— 
 A stockholder may within sixty days after the meeting held 
 to authorize sale to a domestic or foreign corporation apply 
 to the Supreme Court for the appointment of three persons 
 to appraise the value of his stock if (1) he did not vote in 
 favor of the proposed sale at such meeting, or (2) within 
 twenty days after such meeting objected to such sale and 
 demanded payment for his stock." The statutory provision 
 that a stockholder objecting to sale of his corporation's fran- 
 chise and property to another corporation by consent of two- 
 thirds of its stockholders may apply to the court " within 
 sixty days " after the stockholders' meeting for the appoint- 
 ment of appraisers of his stock means that the notice of 
 application must be served within sixty days — not that the 
 court hearing must be had within the sixty days." The appli- 
 cation may be made at any special term held in the district in 
 which the principal place of business of the corporation is 
 situated and upon eight days ' notice to the corporation.^^ The 
 court must appoint three appraisers as asked and designate 
 the time and place of their proceedings as is deemed proper 
 and also direct the manner in which payment for such stock 
 is to be made to the applying stockholders." The court may 
 fill any vacancy in the board of appraisers occurring by 
 refusal or neglect to serve or otherwise." The appraisers 
 must meet at the time and place designated and they or any 
 
 «St. Corp. L. § 16 (L.1909,c.61). "Matter of Ennis v. Federal 
 
 'St. Corp. L. § 16 (L. 1909, c. 61). Brewing Co., 123 A. D. 691, 108 
 
 On power of ofiBcers or majority N. Y. Supp. 230 (1908) ; afif'd 192 
 
 stockholders against consent of mi- N. Y. 570, 85 N. E. 1109 ; St. Corp. 
 
 nority to sell property of corpora^ L. § 33; now § 17. 
 
 tion essential to its corporate exist- "St. Corp. L. § 17 (L. 1909, c. 61). 
 
 enee as a giving concern, see note in " St. Corp. L. § 17 (L. 1909, c. 61). 
 
 35 L.R.A.(N.S.) 396. " St. Corp. L. § 17 (L. 1909, c. 61). 
 
 10 
 
 St. Corp. L. § 17 (L. 1909, e. 61). 
 
§§ 4-97-499 CORPORATE EXISTENCE AND CHANGE 603 
 
 two of them after being duly sworn honestly and faithfully 
 to discharge their duties must 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; and the charges and expenses of the appraisers 
 must be paid by the corporation." 
 
 § 497. Id.: Effect of Sale Pursuant to Statute.— The sale 
 and conveyance, in the case of a sale to a domestic corpora- 
 tion, vest the rights, property and franchises thereby trans- 
 ferred, and in the case of a sale to a foreign corporation, vests 
 the property sold, in the transferee-corporation for the term 
 of its corporate existence, subject t6 the provisions and 
 restrictions applicable to the corporation conveying." When 
 the corporation has paid the amount of such appraisal, as 
 directed by the court, such stockholders 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 corporation." The duty of a corporation having a dis- 
 senting stockholder to pay the value of his holdings within 
 thirty days of its appraisal involves the performance of a 
 condition subsequent to the sale of its assets, and the sale 
 itself is effectual, so far as the buyer is concerned, until 
 invalidated by failure to pay." 
 
 § 498. Id.: Merger and Consolidation, Distinction. — " The 
 legislature has provided two ways of uniting two or more 
 corporations by transfer of their property to a single corpo- 
 ration: " (1) consolidation (Bus. Corps. L., § 7); and (2) 
 merger (Stock Corp. L., § 15) ; " and it made a corporation 
 accepting the assets of other corporations under the statute 
 authorizing the consolidation of corporations liable for the 
 indebtedness of the corporations so consolidated. It declined 
 to do so in the case of corporations transferring assets under 
 the merger statute. The rights of creditors were not over- 
 looked, as the legislature expressly provided that the rights 
 of such creditors should be preserved and that the merger 
 should be without prejudice as to them. ' ' " 
 
 § 499. Id.: Merger.— Either (a) any domestic corporation 
 or (b) any foreign stock corporation authorized to do busi- 
 ness in New York State, which lawfully owns all the stock of 
 
 ^^St. Corp. L. §17(L.1909,c.61). N. Y. Supp. 1105: Gen. Corp. L. 
 
 i« St. Corp. L. § 16 (L. 1909, e. 61). § 221. 
 
 " St. Corp. L. § 17 (L. 1909, c. 61) . " Irvine v. New York Edison Co., 
 
 ^* Homer & Co. v. Lawrence, 86 207 N. Y. 425, 101 N. E. 358 (1913) : 
 
 Misc. 95, 149 N. Y. Supp. 82 St. Corp. L. § 15: Bus. Corp. L. 8 7. 
 (1914); aff'd 166 A. D. 920, 150 
 
604 BUSINESS CORPORATIONS IN NEW YORK § 499 
 
 any other stock corporation organized for or engaged in 
 business similar or incidental to that of the possessor corpo- 
 ration, may merge such other corporation.'" The possessor 
 corporation accomplishes the merger by filing in the ofiSce of 
 the Secretary of State a certificate — which must be under its 
 common seal — (1) of its ownership of all the other corpo- 
 ration's stock, and (2) of the resolution of its (the possessor- 
 corporation's) board of directors to merge such other corpo- 
 ration.^ Thereupon the possessor-corporation acquires, 
 becomes and is possessed of all the estate, property, rights, 
 privileges and franchises of such other corporation, and they 
 vest in and are held and enjoyed by it as fully and entirely, 
 and without change or dimunition, as they were before held 
 and enjoyed by such other corporation; and the latter ife 
 managed and controlled by the board of directors of such 
 possessor-corporation and in its name, but without prejudice 
 to any liabilities of such other corporation or the rights of 
 any creditors thereof.^ The Secretary of State collects a fee 
 of twenty-five dollars for filing a certificate of merger pur- 
 suant to section fifteen of the Stock Corporation Law.' A 
 creditor of a corporation merged into another, rather than 
 consolidated, must hold not the possessor-corporation, but the 
 merged corporation for the debt, as the statute retains the 
 merged corporation 's existence for the one purpose of carry- 
 ing out in good faith the reservation in the statute of the 
 rights of creditors thereof. If the merged corporation's prop- 
 erty is not of such nature that it can be reached .directly by 
 execution or otherwise, it constitutes a trust fund for benefit 
 of such creditors and can be reached as such precisely as if a 
 merger had not taken place.* One suing a corporation which 
 becomes merged in another is entitled to have the latter sub- 
 stituted for the former." A plaintiff, by accepting an answer 
 from a successor corporation to the one originally sued into 
 which the latter has been merged since the suit was begun, 
 waives any objection to its having been made by a party not 
 named in the summons, and cannot move at the trial to have 
 the case stricken from the calendar." Solely by virtue of the 
 
 '°St. Corp. L. §15(L.1909,c.61). = Burrow v. Merceau, 132 A. D. 
 
 ^St. Corp. L. § 15 (L. 1909, c. 61). 797, 117 N. Y. Supp. 537 (1909); 
 
 ^St. Corp. L. § 15 (L.1909,c. 61).' C. C. P. § 756. 
 
 ^Executive L. § 26 (L. 1917, 'Klein v. East River Electric 
 
 c. 69). Light Co., 37 Misc. 490, 75 N. Y. 
 
 * Irvine v. N«w York Edison Co., Supp. 1000 (1902); former Bus. 
 
 207 N. Y. 425, 101 N. E. 358 (1913) ; Corp. L. § 12. 
 St. Corp. L. § 15: Bus. Corp. L. 
 §7. 
 
§ 500 CORPORATE EXISTENCE AND CHANGE 605 
 
 statute permitting merger of corporations, the merged corpo 
 ration — without any assignment thereof — becomes possessed 
 of all rights under a guaranty made to the merging one by an 
 individual/ 
 
 § 500. Id.: Consolidation, In General. — Consolidation pur- 
 suant to statute is permitted to corporations ; but not transfer 
 by one of all its assets to another, insofar as creditors are con- 
 cerned, even though the transferee-corporation assume the 
 other's debts, because a creditor cannot be forced to change 
 his debtor against his will.^ Corporations cannot consolidate 
 without legislative authority.' The courts cannot legalize a 
 consolidation of corporations for which there is no legislative 
 sanction." There can be no corporate consolidation except 
 as provided by the legislature; and any agreement to con- 
 solidate in any other way is void and ineffective to transfer 
 any of the property of the constituent corporations to the 
 consolidated company." When a revision of existing laws 
 provides that its repeal clauses shall not affect or impair any 
 act done and right accrued before a certain date, it does not 
 invalidate proceedings for a consolidation of corporations in 
 which the directors' meeting was held and the stockholders' 
 meeting was called before the repeal of the laws empowering 
 such consolidation, even though the stockholders' meeting 
 was not held till after the repeal." "... in this State 
 there can be no partnerships of separate and independent 
 corporations, whether directly, or indirectly, through the 
 medium of a trust; no substantial consolidations which avoid 
 and disregard the statutory permissions and restraints, but 
 . . . manufacturing corporations must be and remain 
 several as they were created, or one under the statute. ' ' " 
 
 '' McElwain Co. v. Premiere, 180 Verein, 32 Misc. 269, 66 N. Y. Supp. 
 
 A. D. 288, 167 N. T. Supp. 815; 356 (1900). 
 
 St.. Corp. L. § 15. "Cameron v. New York & Mt. 
 
 On rights of life tenant or re- Vernon Water Co., 133 N. Y. 336, 
 
 mainderman in distribution by cor- 31 N. E. 104 (1892) ; Gen. Corp. L. 
 
 poration.in process of consolidation (L. 1890, c. 563), repealing L. 1867, 
 
 or merger with other corporation, see . c. 960, as amended L. 1877, c. 374, 
 
 note in 12 L.R.A.(N.S.) 806. with saving clause embodied in § 24. 
 
 * Cole V. Millerton Iron Co., 133 " People v. North River Sugar 
 
 N. Y. 164, 30 N. E. 847 (1892). Refining Co., 121 N. Y.' 582, 9 L.R.A. 
 
 ' Chevra Bnai Israel v. Chevra 33, 24 N. E. 834 (1890) ; C. C. P. 
 
 Bikur Cholim, 24 Misc. 189, 52 N. Y. § 1798; now Gen. Corp. L. § 131. 
 
 Supp. 712 (1898). For a note on the question of 
 
 **Selkir v. Klein, 50 Misc. 194, right of corporation to consolidate, 
 
 lOO N. Y. Supp. 449 (1906). see 52 L.R.A. 369. 
 
 "Congregation Anshe Yosher v. As to what unsecured claims are 
 
 First United Royatiner Sokolower covered by the express assumption 
 
606 BUSINESS CORPORATIONS IN NEW YORK §§ 501-503 
 
 § 501. Id.: What Corporations May Consolidate. — Any two 
 or more corporations organized under the law of New York 
 State for the purpose of carrying on any kind of business of 
 the same or of a similar nature, which a corporation organized 
 imder the Business Corporations Law might carry on, may 
 consolidate such two or more corporations into a single cor- 
 poration." 
 
 § 502. Id.: The Agreement of Consolidation. — The consoli- 
 dation is accomplished by the respective corporations enter- 
 ing into and making an agreement for the consolidation of 
 such corporations (1) signed by a majority of the respective 
 boards of directors and (2) under their respective corporate 
 seals, (3) prescribing (a) the terms and conditions of the 
 consolidation, (b) the mode of carrying it into effect, (c) the 
 name of the new corporation, (d) the number of directors 
 who are to manage its affairs (not less than three), (e) the 
 names and postoffice addresses of the directors for the first 
 year, (f) the term of its existence (not exceeding fifty years), 
 (g) the name of the town or towns, county or counties, in 
 which its operations are to be carried on, (h) the name of the 
 town or city and county in New York State in which its prin- 
 cipal place of business is to be situated, (i) the amount of its 
 capital stock (which must not be larger in amount than the 
 fair aggregate value of the property, franchises and rights of 
 such corporations), (j) the number of shares into which such 
 capital stock is to he divided, (k) the manner of distributing 
 such capital stock among the holders thereof, (1) if such cor- 
 porations or any or either of them have been organized for 
 the purpose of carrying on any part of its business in any 
 place outside of New York State, such fact, and (m) such 
 other particulars as they may deem necessary." 
 
 § 503. Id.: Stockholders' Consent. — The consolidation 
 agreement must be submitted to the stockholders of each con- 
 solidating corporation at a meeting thereof to be called (1) 
 upon notice of (a) at least two weeks, specifying (b) the time, 
 (c) place and (d) object thereof, and (e) addressed to each 
 
 by one corporation of the indebted- On lien of holders of bonds of one 
 
 ness of another, upon consolidation, of two or more consolidating cor- 
 
 merger, or absorption, see note in 26 porations on property of corporation 
 
 L.R.A.(N.S.) 1101. -which issued the bonds where the 
 
 "Bus. Corp. L. § 7 (L. 1909, new corporation had agreed to pro- 
 
 c. 12). tect them, see note in 47 L.R.A. 
 
 ^^Bus. Corp. L. § 7 (L. 1909, (N.S.) 190. 
 c. 12). 
 
§ 504 CORPORATE EXISTENCE AND CHANGE ©07 
 
 (f) at his last known postoffice address, and (2) deposited in 
 the postoffice, postage prepaid, and (3) published for at least 
 two successive weeks in one of the newspapers in each of the 
 counties of New York State in which either or any of such 
 corporations has its place of business." If the consolidation 
 agreement is approved at each of the stockholders ' meetings 
 of the several consolidating companies, separately, by the 
 vote by ballot of the stockholders owning at least two-thirds 
 of the stock it is the agreement of such corporations." A vote 
 by stockholders for consolidation of two corporations does not 
 effect a consolidation; but the laws regulating such action 
 must first be complied with." 
 
 § 504. Id.: Stockholders' Dissent or Failure to Surrender 
 Stock, and Procedure Thereon. — ^Any stockholder may apply 
 to the Supreme Court at any special term thereof held in the 
 district in which any county is situated in which the new cor- 
 poration may have its place of business for the appointment 
 of three persons to appraise the value of his stock if (1) he 
 did not vote in favor of such agreement to consolidate; (2) 
 he objected either at such meeting or within twenty days 
 thereafter to such consolidation and demanded payment for 
 his stock; (3) the consolidation has taken effect after such 
 objection and demand ; (4) he applies within sixty days after 
 such meeting; and (5) he gives at least eight days' notice to 
 the new corporation.^' The court must appoint three such 
 appraisers ; designate the time and place of their first meet- 
 ing; give such directions in regard to their proceedings as are 
 deemed proper ; and 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 
 must 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, must 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; and the charges and expenses of the appraisers 
 must be paid by the new corporation.^ "When the new corpo- 
 
 "Bus. Corp, L. § 8 (L. 1909, ^og^g q l. 8 8 (L. 1909, 
 
 c. 12). c. 12). 
 
 "Bus. Corp. L. § 8 (L. 1909, ^Bus. Corp. L. § 8 (L. 1909, 
 
 c. 12). e. 12). 
 
 "Halliday v. Nicholas, 13 Misc. ^Bus. Corp. L. § 8 (L. 1909, 
 
 111, 34 N. Y. Supp. 104 (1895). e. 12). 
 
 "Bus. Corp. L. § 8 (L. 1909, 
 e. 12). 
 
608 BUSINESS CORPORATIONS IN NEW YORK § 504 
 
 ration has paid the amount of such appraisal, as directed by 
 the court, such stockholder ceases 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 corpora- 
 tion.^ In determining the value of the good will of a corpo- 
 ration in order to fix the value of the holdings of a dissenting 
 stockholder on consolidation of the corporation with another 
 the average net profits for a number of years may be multi- 
 plied by three, after deducting from the average net profits 
 interest on the capital invested in the business.* In ascertain- 
 ing the value of taxicabs of a corporation which has been 
 consolidated with another in order to fix the value of the stock- 
 holdings of a dissenting stockholder, it is proper to ascertain 
 their value when the company began business and to deduct 
 from such value at the rate of twenty per cent per annum for 
 depreciation and obsolescence.^ When any consolidation has 
 been or is effected pursuant to the laws of New York State 
 and the holders of ninety per centum of the capital stock of 
 each of such corporations has voted in favor of such agree- 
 ment to consolidate, if any stockholder not voting in favor of 
 such consolidation fail to exchange his stock for stock of such 
 new corporation within sixty days after the statute regulat- 
 ing consolidation became effective or within sixty days after 
 he has become entitled by such statute to make such exchange, 
 as the case may be, such new corporaton may apply to the 
 court for the appointment of three persons to appraise the 
 value of such stock at the time of the expiration of such sixty 
 days: (1) At any time thereafter, (2) upon notice of eight 
 days to such stockholder, either (a) given personally within 
 the state if possible; and (b) if not possible then in such 
 manner as the court may direct,* Upon the completion of the 
 appraisal, in the manner provided for when the stockholder 
 instead of the corporation applies therefor, and the payment 
 by such new corporation of the amount of such appraisal, as 
 directed by the court, such stockholder ceases to have any 
 interest in such stock and in the corporate property of such 
 corporation, and such stock miay be held or disposed of by- 
 such new corporation.' 
 
 'Bus. Corp. L. § 8 (L. 1909, 156 N. Y. Supp. 579; aflf'd 219 
 c- 12). N. Y. 634, 114 N. S. 1083 (1915); 
 
 * Matter of Seaich, 170 A. D. 686, Bus. Corp. L. § 8. 
 
 156 N. Y. Supp. 579; aff'd 219 »Bus. Corp. L. § 8 (L. 1909, 
 
 N. Y. 634, 114 N. E. 1083 (1915); e. 12). 
 
 Bus. Corp. L. § 8. ' Bus. Corp. L. § 8 (L. 1909, 
 
 * Matter of Seaich, 170 A. D. 686, c. 12). 
 
§§ 505, 506 CORPORATE EXISTENCE AND CHANGE 609 
 
 § 505. Id.: Filing and Evidentiary Value of Consolidation 
 Agreement and Proceedings. — A sworn copy of the proceed- 
 ings of the stockholders' meetings of several corporations 
 which consolidate, made by their respective secretaries, and 
 attached to the consolidation agreement, is presumptive evi- 
 dence of the holding and action of such meetings.^ The agree- 
 ment and a verified copy of the proceedings of each meeting 
 of the stockholders of the various consolidating companies 
 must be made in duplicate, one of which must 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 New York State.* 
 Upon filing of the consolidation agreement and verified copy 
 of proceedings of stockholders' meetings in the office both of 
 the Secretary of State and county clerk the consolidating 
 corporations are merged or consolidated into the new corpo- 
 ration specified in the agreement, to be known by the corpo- 
 rate name therein nientioned; and the provisions of such 
 agreement must be carried into effect as therein provided.^" 
 The Secretary of State collects a fee of twenty-five dollars for 
 filing an agreement for the consolidation of two or more 
 corporations other than railroad corporations.^.^ The Secre- 
 tary of State collects a fee of twenty-five dollars for a cer- 
 tificate under subdivision three of section nine of the G-eneral 
 Corporation Law, viz.: a certificate stating the name, etc., 
 of corporations consolidating and inerging into a new 
 corporation.^^ 
 
 § 506. Id.: Effect of Consolidation. — The new corporation 
 enjoys, in addition to the general powers of corporations, the 
 rights, franchises and privileges possessed by each of the 
 corporations so consolidated, subject to the restrictions, lia- 
 bilities, duties and provisions contained in the Business Cor- 
 porations Law so far as they may be applicable to the 
 purposes for which it has been organized and expressed in 
 the agreement for consolidation; and may prosecute and 
 carry on any kind of business which each of the consolidating 
 corporations was authorized by law to conduct." Upon the 
 consummation of such act of consolidation all the rights, 
 privileges, franchises and interests of each of the corporate 
 
 « Bus. Corp. L. § 8 (L. ' 1909, " Executive L. § 26 (L. 1917, 
 
 c. 12). c. 69). 
 
 »Bus. Corp. L. § 8 (L. 1909, "^^ Executive L. § 26 (L. 1917, 
 
 c. 12). c. 69). 
 
 "Bus. Corp. L. § 8 (L. 1909, "Bus. Corp. L. § 9 (L. 1909, 
 
 c. 12). e. 12). 
 B. C. N. Y.— 39 
 
610 BUSINESS CORPORATIONS IN NEW YORK § 506 
 
 parties to it, and all the real, personal and mixed property, 
 and all the debts due on whatever account to either or any of 
 them, as well as all stock subscriptions and other things in 
 action belonging to either or any of them, are taken and 
 deemed to be transferred to and vested in such new corpora- 
 tion' without further act or deed ; and all claims, demands, 
 property and every other interest is as effectually the prop- 
 erty of the new corporation as they were of the former cor- 
 porations which were parties to such agreement and act ; and 
 the title to all real estate, taken by deed or otherwise, under 
 the laws of New York State, vested in either or any of the 
 corporate parties to the consolidation agreement and act, is 
 not deemed to revert or to be in any way impaired by reason 
 of the law pertaining to corporate consolidation or any thing 
 done by virtue thereof, but is vested in the new corporation 
 by virtue of such act of consolidation." The rights of cred- 
 itors of any corporation which is consolidated into a new one 
 are not in any manner impaired, nor is 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, released or impaired by any such con- 
 solidation; but such new corporation succeeds to and is 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 corporation had itself incurred the obligation or 
 liability to pay such debt or damages; and the stockholders 
 of the respective corporations consolidated continue subject 
 to all the liabilities, claims and demands existing against them 
 as such at or before the consolidation ; and no action or pro- 
 ceeding then pending before any court or tribunal in which 
 any corporation that is so consolidated is a party, or in which 
 any such stockholder is a party, abates or is discontinued by 
 reason of such consolidation, but it may be prosecuted to final 
 judgment 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 proceeding may be pending.^° " In 
 the consolidation of corporations, pursuant to the provisions 
 
 '^*Bus. Corp. L. § 10 (L. 1909, the new corporation thereby created 
 c. 12) : " and • all the rights, privi- as they were vested in the corpora- 
 leges, franchises and property of tions, parties to such consolidations." 
 the corporations, parties to any con- ^^ Bus. Corp. L. § 11 (L. 1909, 
 solidation heretofore made under c. 12). 
 this chapter, shall vest as fully in 
 
§ 506 CORPORATE EXISTENCE AND CHANGE 611 
 
 of the statute, the new corporation starts upon its existence 
 freighted with the liabilities of the old companies and subject 
 to the terms and conditions of the consolidation agreement, 
 so far as they are not in conflict with the law. While it is not 
 competent to do anything which would impair the rights of 
 outside creditors, there is no reason why the parties to the 
 consolidation agreement may not bind themselves to some- 
 thing deemed for the benefit of the new corporation, and that 
 is what seems to have been done in the present case. The 
 manifest intention of the stockholders of the old companies, 
 who united in making and signing the consolidation agreei- 
 ment, seems to have been to represent that their corporate 
 properties and franchises vested in the new company freed 
 from any burden of indebtedness. As to creditors not assent- 
 ing to any such arrangement, this was quite unavailing; but 
 as to themselves, it should, and would, operate to bar their 
 claims, while the other creditors were seeking payment from 
 the assets of the corporation since become insolvent."^* 
 " ... statutes for the consolidation of domestic corpo- 
 rations are to be treated as acts of incorporation, and . . . 
 on consolidation being effected under their provisions, the 
 constituent companies, unless such an intention is excluded by 
 the language of the statute, are deemed to be dissolved, and 
 their powers and faculties to the extent authorized become 
 vested in the consolidated company as a new corporation 
 created by the act of consolidation. "" A statute authorizing 
 the consolidation of corporations which provides that all lia- 
 bilities incurred by either corporation, except mortgages, 
 shall attach to the new corporation does not relieve the new 
 company from the obligation of one of the old companies on 
 bonds secured by mortgages on its property." While a new 
 corporation formed by consolidation of old corporations is 
 not, in the absence of fraud, liable upon the contracts of the 
 old corporation, yet it is liable, if it is organized out of the 
 officers, directors and stockholders of the old and appro- 
 priates all of the assets of the latter in consideration solely of 
 the issue of its stock to the holders of stock in the old corpo- 
 ration, for any debt owing by the old companies at the time of 
 the consolidation, as there is no consideration moving to the 
 old companies as legal entities from which its creditors may 
 
 "Matter of Utiea Nat. Brewing "Polhemus v. Fitcbburg R. R. 
 
 Co., 154 N. Y. 268, 48 N. E. 521 Co., 123 N. Y. 502, 26 N. E. 31 
 (1897) ; L. 1892, c. 691, § 8 et seq. (1890) ; L. 1869, c. 917, § 5. 
 
 ^'People V. New York, Chica^-o & 
 St. Louis R. R. Co., 129 N. v 1-4 
 15 L. R. A. 82, 29 N. E. 9'" 
 
612 BUSINESS CORPORATIONS IN NEW YORK § 507 
 
 be satisfied." A person who has subscribed for corporate 
 stock and has thus become bound to receive it in many 
 respects sustains the relation of stockholder both to the cor- 
 poration and its creditors ; but the fact that he subscribed to 
 shares of a corporation later consolidated with another does 
 not, six years after his subscription, even when accompanied 
 by proof that he paid ten per cent of his subscription, entitle 
 him to the issue of full-paid certificates of stock of the 
 consolidating company.^" Ari action against a corporation 
 consolidated prior to the commencement of the action must 
 be against the consolidated company/, On consolidation into 
 one corporation of several, one of which is liable to holders 
 of its preferred stock for dividends passed, the consolidated 
 company alone may be prosecuted on such liability.^ On con- 
 solidation of a defendant corporation pending suit against it 
 the method provided by law for prosecuting or defending the 
 action should be followed.^ 
 
 § 507. Id.: Reorganization, In General. — The subject of 
 reorganization of corporations has already been considered in 
 the chapter dealing with corporate bonds and mortgages, 
 upon foreclosure of which reorganization may by statute be 
 accomplished by the formation at the purchaser's instigation 
 of a new corporation.* A corporation formed by about the 
 same persons to whom certain property was transferred, and 
 which takes such property, is charged with any conditions 
 agreed to concerning it.° An action -for breach of a syndicate 
 
 i» Wilson V. Aeolian Co., 64 A. D. L.R.A.(N.S.) 1119; 32 L.R.A.(N.S.) 
 
 337, 73 N. Y. Supp. 150 (1901); 616; 47 L.R.A.(N.S.) 1058. 
 
 aff'd 170 N. Y. 618, 63 N. E. 1123. * See § 262, supra. 
 
 '" Babcoek v. Schuylkill & Lehigh ° Thorn v. Volunteer St. Gregory 
 
 Valley R. R. Co., 133 N. Y. 420, 31 Hospital, 59 Misc. 442, 110 N. Y. 
 
 N. E. 30 (1892). Supp. 931 (1908). Gary v. Scho- 
 
 ^ Copp V. Colorado Coal & Iron harie Valley Machine Co., 2 Hun, 
 
 Co., 29 Misc. 109, 60 N. Y. Supp. 110 (1874). There is no opinion, 
 
 293 (1899). but only this head-note: "A corpo- 
 
 " Boardman v. Lake Shore & ration was organized under the laws 
 
 Michigan Southern Ry. Co., 84 N. Y. of the State (chap. 40, of 1848, and 
 
 157 (1881). amendments) and its corporate busi- 
 
 ' Klein v. East River Electric ness was conducted for two years, 
 
 Light Co., 37 Misc. 490, 75 N. Y. when the company voluntarily ceased 
 
 Supp. 1000 (1902) ; old Bus. Corp. to do business, and a new ons was 
 
 L. § 12. organized with larger capital and 
 
 The effect of consolidation, merger additional members but for the same 
 
 or absorption of corporation, on its purpose and under the same name, 
 
 unsecured liabilities, in absence of The first company turned over its 
 
 statutory or contract, provisions property to the new organization, 
 
 thereto, is discussed in notes 11 Held, that a stockholder in the first 
 
§ 507a CORPORATE EXISTENCE AND CHANGE 613 
 
 agreement between individuals contemplating the formation 
 of a new corporation to take over the business of an old one 
 in which they were interested and for the surrender and 
 return of certain securities alleged to have been illegally 
 issued to some of such individuals must be brought by the com- 
 plaining individual as such and not as a stockholder." In a 
 stockholder's action against members of a corporate reorgan- 
 ization committee a demurrer by a corporate defendant that 
 no cause of action is alleged against it will be held bad if it 
 appears that it is the depositary of and received securities 
 under the agreement of reorganization, though superseded 
 later, and delivered all securities to its successor, if it be 
 alleged on information and belief that it assisted individual 
 members of the reorganization committee in misappropriat- 
 ing and wasting the corporate property/ 
 
 § 507-a. Id.: Under Business Corporations Law. — Any 
 stock corporation (excepting a moneyed, transportation, 
 banking or insurance corporation) may reincorporate under 
 the Business Corporations Law in the following manner: (1) 
 The directors must call a meeting of stockholders by (a) pub- 
 lishing a notice stating the time, place and object of the meet- 
 ing, signed by at least a majority of them, in a newspaper of 
 the county in which the corporation's principal business office 
 is situated, once a week for at least three weeks, and by (b) 
 serving upon each stockholder, at least three weeks before the 
 meeting, a copy of such notice, either personally, or by 
 depositing it in the post-office, postage prepaid, addressed to 
 him at his last known post-office address; (2) the stockholders 
 must (a) meet at the time and place specified in the notice and 
 (b) organize by choosing one of the directors chairman and a 
 suitable secretary, and (c) take a vote of those present in 
 person or by proxy upon the proposition to reincorporate 
 under the Business Corporations Law, and, if votes repre- 
 senting a majority of all the stock of the corporation are cast 
 in favor of the proposition, (3) the officers of the meeting must 
 (a) execute and (b) acknowledge a certificate of the proceed- 
 ings, containing also the statements required by statute in a 
 
 corporation could maintain an action case differing from a simple part- 
 
 against it on an indebtedness due nershhip." 
 
 from the. company to him; that the « Flanagan v. Lyon, 54 Misc. 372, 
 
 corporate business was not termi- 105 N. Y. Supp. 1049 (1907). 
 
 nated by its ceasing to do business. 'Mawhimmer v. Bliss, 124 A. D. 
 
 The fact that the plaintiff was a 609, 109 N. Y. Supp. 332 (1908); 
 
 stockholder did not deprive him of affi'd 194 N. Y. 590, 88 N. E. 1125. 
 the right to bring an 'action, the 
 
614 BUSINESS CORPORATIONS IN NEW YORK I 507b 
 
 certificate of incorporation, and (4) this certificate must be 
 filed in the oflSces where certificates of incorporation under 
 the Business Corporations Law are required to be filed ; and 
 from the time of such filing such corporation is deemed to be 
 a corporation organized under the Business Corporations 
 Law, and, if originally organized or incorporated under a 
 general law of New York State, it has and exercises all such 
 rights and franchises as it had and exercised under the laws 
 pursuant to which it was originally incorporated, and such 
 reorganization does not in any way affect, change or diminish 
 the existing liabilities of the corporation/" 
 
 § 507-b. Id.: To Provide for Stock Without Nominal or Par 
 Value. — ^Any stock corporation other than a moneyed corpo- 
 ration or a corporation under the jurisdiction of any public 
 service commission may be reorganized so that it, as well as 
 its officers, directors and stockholders, may acquire and enjoy 
 all the rights, privileges, powers and exemptions, and become 
 subject to all of the liabilities and obligations imposed on cor- 
 porations organized with shares of capital stock without par 
 value, by filing and recording a certificate in form prescribed 
 by statute, and by obtaining the approval of the State Comp- 
 troller if the amount of capital named in such certificate is 
 less than the par value of its previously outstanding stock; 
 but no corporation so reorganized can incur any debts sub- 
 sequent to the filing of such certificate until it has assets of an 
 actual value at least equal to the amount of the capital stated 
 in such certificate as that with which it will carry on business, 
 and the liability of the corporation, as well as its officers, 
 directors and stockholders, for corporate debts contracted or 
 obligations incurred prior to the filing of such certificate is 
 unaffected by such filing, and for the purpose of enforcing and 
 recovering upon such claims creditors have the same right of 
 recourse against the corporation, or its officers, directors and 
 stockholders individually, that they would have had if the 
 corporation had not been reorganized, and all of the rights 
 and benefits conferred by the statutes imposing liability upon 
 stockholders to corporate creditors for the amount unpaid 
 on their stockholdings, to corporate laborers, servants or 
 employees other than contractors for services performed by 
 them for the corporation, subject, however to the conditions, 
 limitations and restrictions imposed by such statutes, such as 
 relate to persons holding stock as collateral or as trustee, or 
 to the necessity of the creditor obtaining a judgment against 
 
 '"Bus. Corp. L. § 4 (L. 1909, c. 12), 
 
§§ 508, 509 CORPORATE EXISTENCE AND CHANGE 615 
 
 the corporation before seeking to hold the stockholders.'"' 
 This matter has already been treated and reference is made 
 to such treatment/" 
 
 § 508. Id.: Reorganization Agreement, Construction Of. — 
 A reorganization agreement prepared by a committee and 
 wholly in its language, in the preparation of which bond- 
 holders of the corporation, to be affected by it, had no part, 
 though compelled to accept it as it stood or not at all, should 
 be construed most favorably to the bondholders.* The fact 
 that a reorganization agreement provides that the reorgan- 
 ization committee h&s the right to construe it and that its 
 construction is final does not empower it to make a new con- 
 tract or subvert the agreement by construing a vital provision 
 into or out of it: "no one can be made, by contract, the final 
 judge of his own acts, for the law writes ' good faith ' into 
 such agreements. . . . the power to construe and the 
 engagement that the construction shall be final mean that it 
 shall be final if the members of the committee act in good 
 faith, but not otherwise.'" When persons have the option 
 to present their stock in an old company for exchange for 
 bonds of a new corporation, and no limitation is put by the 
 agreement of time for the exercise of the option, it must be 
 acted upon or abandoned within a reasonable time." 
 
 § 509. Id.: Modification or Rescission of. — ^In order to create 
 an effective rescission of a corporate reorganization agree- 
 ment there must be a lawful right to rescind, due notice of an 
 intention to rescind and the restoration of benefits received 
 by the party attempting to rescind, so that the other party 
 may be placed in statu quo; even if the most complete right 
 of rescission exists it cannot be exercised without a return or 
 offer to return such benefits." No ratification of a modifica- 
 tion of a corporate reorganization agreement can be found 
 when ' ' there was no consideration, intent, misleading conduct, 
 change of position or mutual understanding from which a 
 waiver or estoppel could properly be inferred. " ^^ A corpora- 
 ation cannot escape its liability to an attorney to deliver him 
 
 '" St. Corp. L. §§ 24, 24-a, 24-b ' i" Catlin v. Green, 120 N. Y. 441, 
 
 24-e (L. 1917, e. 484). ^4 N. E. 941 (1890). Stock held 
 
 ''" See § 96-a, supra. nine years till worthless and com- 
 
 ' Industrial & General Trust, Ltd. pany insolvent and its property in 
 
 V. Tod, 180 N. Y. 215, 73 N. E. 7 receiver's hands. 
 
 (1904). i^ Cox V. Stokes, 156 N. Y. 491, 51 
 
 'Industrial & General Trust, Ud. N. E. 316 (1898). 
 
 y. Tod, 180 N. Y. 215, 73 N. E. 7 " Cox v. Stokes, 156 N. Y. 491, 
 
 (1904). 51 N. E. 316 (1898), 
 
616 BUSINESS CORPORATIONS IN NEW YORK § 510 
 
 certain securities on its complete reorganization in considera- 
 tion of his services upon the gt-ound that the reorganization 
 was not attained according to the precise scheme marked out 
 originally if the reorganizaton was in fact effected and the 
 attorney performed his part of the agreement.^' 
 
 § 510. Id.: Rights, Powers and Liabilities of Parties: of 
 Bondholders. — ^When the relations between a bondholder and 
 a reorganization committee of a corporation rest in contract 
 and are defined by the reorganization agreement, his action 
 against it for failure to proceed properly lies in contract and 
 not in tort." Although a reorganization agreement of a 
 corporation contains no express provision for the preparation 
 and adoption of a plan for reorganization at any particular 
 time, nor for the performance of the duties imposed upon 
 the reorganization committee in any categorical order, yet 
 if the very purpose of the agreement and the sequence of its 
 arrangement compel the implication that there was to be no 
 binding agreement until the depositing bondholders had been 
 given the opportunity to decide whether they would abide by 
 the plan adopted by the members of the committee and others 
 or withdraw therefrom, and this decision could not be made 
 until the plan had been prepared, adopted and promulgated, 
 the agreement will be held not binding until such plan has been 
 made, adopted and notice of it given, unless waived." 
 Although there be no express provision in an agreement for 
 the reorganization of a corporation that the reorganization 
 committee prepare a plan and submit it to the bondholders 
 before the corporate property is feold under foreclosure, yet 
 if the construction of the agreement be such that the bond- 
 holders cannot withdraw their bonds from participation in 
 the reorganization until after a plan of reorganization had 
 been prepared and notice of it given or breach of duty by the 
 committee, an implied covenant exists that such a plan be 
 submitted before the corporate property was sold.^* When 
 the plan sent bondholders of a corporation by a reorganiza- 
 tion committee provides that, prior to the conveyance of any 
 of the corporation's property purchased by the conunittee 
 
 "Babbitt V. Gibbs, 150 N. Y. 281, "Industrial & General Trust v. 
 
 44 N. E. 952 (1896). Tod, 170 N. Y. 233, 63 N. E. 285 
 
 ""Industrial & General Trust V. (1902). 
 
 Tod, 170 N. Y. 233, 63 N. E. 285 " Industrial & General Trust, Ltd. 
 
 (1902). The action was for conver- v. Tod, 180 N. Y. 215, 73 N. E. 7 
 
 sion in the use of the corporation's (1904). 
 bonds to buy in on foreclosure pur- 
 suant to the reorganization agree- 
 ment. 
 
§ 511 CORPORATE EXISTENCE AND CHANGE 617 
 
 to a new, contemplated company, the committee should sub- 
 mit to those it represented, i. e., the bondholders, " a detailed 
 plan of reorganization," to be binding on all bondholders 
 unless a majority dissent within a stated time, the word 
 " detail" means minor particulars necessary to complete a 
 reorganization, but consistent with the original plan, and law- 
 ful and honest, so that nothing in matters of substance may 
 be done under the detailed plan that could not have been done 
 under the original agreement; and the provision binding all 
 bondholders unless dissent were registered by a majority 
 does not embrace anything except details of the plan included 
 in the original agreement." 
 
 § 511. Id.: Of Reorganization Committee. — As to matters spe- 
 cifically provided for in a corporate reorganization agreement 
 the reorganization committee are bound to compliance and 
 cannot change without the consent of those for whom they 
 act.^* A provision in a corporate reorganization agreement 
 that the members of the reorganization committee shall not 
 be liable for anything except their own willful misconduct 
 does not shield them if they fail in the perfomance of a con- 
 dition precedent upon which the vesting of their powers was 
 dependent." No general powers are to be implied in behalf 
 of members of a committee to reorganize a corporation, and 
 express powers are not to be extended by construction.^" An 
 agreement between a committee undertaking to reorganize 
 a corporation and those it represents should be strictly con- 
 strued as against the committee and in favor of the cestuis 
 que trust; and " such a construction necessarily denies to 
 the committee the power, under guise of a detail of the 
 original agreement, to incorporate into it a provision author- 
 izing the committee to permit other parties than the holders of 
 bonds to share in the property which had been brought in 
 for the benefit of the bondholders alone. " ^ A letter signed 
 in the name of an individual, with the sole word "chairman " 
 added, to another, agreeing to give the latter certain securities 
 
 "United Water Works Co. v. providing that such stocks and se- 
 
 Omaha Water Co., 164 N. Y. 41, 58 curities should be left out of the 
 
 N. E. 58 (1900). new mortgages. 
 
 ^^ Cox V. Stokes, 156 N. Y. 491, 51 " Industrial & General Trust v. 
 
 N. E. 316 (1898). The agreement Tod, 170 N. Y. 233, 63 N. E. 285 
 
 specified that the new mortgages " (1906). 
 
 should cover all property, including ^"Industrial & General Trust v. 
 
 certain stocks and securities, and the Tod, 170 N. Y. 233, 63 N..E. 285 
 
 committee modified the agreement by (1902). 
 
 increasing the first mortgage bonds ^United Water Works Co. v. 
 
 going to the man advancing the Omaha Water Co., 164 N. Y. 41, 58 
 
 money for the reorganization and N. E. 58. 
 
€18 BUSINESS CORPORATIONS IN NEW YORK § 511 
 
 in full payment for withdrawing specified suits and for help 
 rendered or to be rendered in reorganizing a corporation, 
 subject to ratification of the reorganization committee, is the 
 personal agreement of the signer.^ A creditor of a corpora- 
 tion ma;y properly secure an accounting in equity from per- 
 sons who acted as a creditors' committee to reorganize the 
 corporation and transfer its business and assets to a new 
 company, of amounts paid by him to such persons at their 
 request for the purpose of the reorganization; and it is 
 proper for the complaint to make them the sole defendants — 
 though both individually and as a committee — without join- 
 ing either of the corporations.' It seems that allegations of 
 fraud and mismanagement on the part of a corporate reor- 
 ganization committee, with averments of possession by it of 
 the property of the corporation as a reorganization commit- 
 tee for over a year, warrant the committee's being called to 
 account.* In the absence of fraud, acts of a reorganiza- 
 tion committee performed under an agreement which bond- 
 holders have approved will not be nullified at the instance 
 of a minority of them because the plan followed was unwise 
 and of poor business judgment.' A fiduciary relation exists 
 between depositors of claims of various kinds against a 
 corporation and members of a committee vested with its 
 control for purposes of reorganization -with which such claims 
 are deposited, and the members of the committee must 
 act in the utmost good faith.* Members of a reorganiza- 
 tion committee cannot be compelled to distribute stock 
 they hold as such, before the expiration of the time set in 
 the reorganization agreement during which they may hold 
 it in their discretion, unless an abuse of such discretion is 
 shown.' In order to avoid a contract by a committee, made 
 pursuant to a corporate reorganization agreement and within 
 the scope of such agreement, on the ground of fraud, the con- 
 tractors seeking to avoid must show a fraud on the part of 
 the conunittee or the contractors as distinguished from 
 conduct by the committee which might amount as between 
 
 ^ Gerding v. Funk, 48 A. D. 603, Omaha Water Co., 21 Misc. 594, 48 
 
 64 Ns Y. Supp. 423 (1900); aflf'd N. Y. Supp. 817 (1897); afE'd 29 
 
 169 N. Y. 572, 61 N. E. 1129. A. D. 630, 52 N. Y. Supp. 1151. 
 
 ^ Biddle Purchasing Co. V. Snyder, °Mawhinney v. Bliss, 117 A. D. 
 
 109 A. D. 679, 96 N. Y. Supp. 356 255, 102 N. Y. Supp. 279 (1907) ; 
 
 (1905). aff'd 189 N. Y. 501, 81 N. E. 1169. 
 
 *Mawhinney v. Bliss, 117 A. D. 'Haines v. Kinderhook & Hudson 
 
 255, 102 N. Y. Supp. 279 (1907) ; Ry., 33 A. D. 154, 53 N. Y. Supp. 
 
 afPd 189 N. Y. 501, 81 N. E. 1169. 368 (1898). 
 
 •United Water Works Co. v. 
 
§ 512 CORPORATE EXISTENCE AND CHANGE 619 
 
 them and the bondholders to a violation of their trust duties.' 
 When under a raUroad reorganization agreement on fore- 
 closure the committee is to issue to the bondholders the stock 
 of a new company formed to operate the road what is meant 
 is the old road or the property bought on foreclosure by the 
 committee, and whether the new road is capitalized at a large 
 or small amount is immaterial so long as each bondholder 
 receives his pro rata share of its stock ; so that if the amount 
 of stock provided by the charter of new road to be issued to 
 bondholders of the old was the result of an honest construction 
 by the committee of its powers under the reorganization 
 agreement and under the laws of the state where the corpora- 
 tion was to be created, it would be unjust to hold the com- 
 mittee liable upon some narrow or technical construction of 
 the agreement or the meaning of the law that it was obliged 
 to act under.* 
 
 § 512. Id.: Of Old and New Corporation.— The fact that any 
 relief which the courts may grant to remedy a wrong spring- 
 ing from violation of a corporate reorganization agreement 
 will prove of slight value is no reason for not doing what can 
 be done." A corporation issuing bonds, under the terms of a 
 reorganization agreement, to be delivered to creditors to the 
 amount of their claims, has such an interest in an action by a 
 creditor against the reorganization committee to compel 
 delivery of such bonds as to be entitled to be made a party in 
 order to contest the validity of the full amount of the cred- 
 itor's claim." When a new company is formed to effect the 
 reorganization of an insolvent old one and agrees to assume 
 all the debts, obligations and liabilities of the latter in addition 
 to its bonds, it will be held, in view of the evident object of 
 the reorganization, that the new company assumes the old 
 company's bond as stated in the reorganization agreement, 
 i. e. by issuing new bonds and stock in their place ; and not that 
 it agrees to pay off the bondholders of the old company.^^ 
 Proof that the stockholders of an old corporation organized 
 another corporation in another state, turned over the assets 
 of the old company to the new one, managed the new one in 
 
 * Brooks V. Dick, 135 N. Y. 652, ing by the prime reorganizer was 
 
 32 N. E. 230 (1892). ordered. 
 
 'White V. Wood, 129 N. Y. 527, "Washington Savings Bank v. 
 
 29 N. E. 835 (1892). Fletcher, 55 A. D. 580, 67 N. Y. 
 
 ^»Cox V. Stokes, 156 N. Y. 491, Supp. 366 (1900). 
 
 51 N. E. 316 (1898). Specific per- "Eernschild v. Yuengling Brew- 
 
 formanee of the rights of bondhold- ing Co., 154 N. Y. 667, 49 N. E. 
 
 ers being impossible, an account- 151 (1898). 
 
620 BUSINESS CORPORATIONS IN NEW YORK § 512 
 
 the name of and by the same persons who managed the old, 
 carried on the same business in the same place, without any 
 intent to hinder, delay or defraud the creditors of the old 
 company, will not warrant an inference that the new company 
 adopted a contract with the old company which did not call 
 for the rendition of any services for the old company and by 
 Adrtue of which no services were performed for the new com- 
 pany and no benefits received by it." A corporation formed 
 to succeed another which has been dissolved for the purpose 
 is liable for an indebtedness of the old assumed for it by its 
 president though the assumption was ultra vires, if it has 
 received and retained the benefits of the contract of which 
 such assumption was a part." In seeking to hold a new cor- 
 poration for a judgment debt against an old, it must be alleged 
 that the new knew of the claim, that there was fraud in the 
 joint reorganization of the new and the dissolution of the old, 
 and that there are facts (which must be given) making the new 
 responsible for the claim against the old; it is not sufficient 
 simply to allege a transfer of all assets of the old to the new 
 corporation after the cause of action on the claim accrued, 
 a sufficiency of assets of the old to pay the claim, the dissolu- 
 tion of the old, the incorporation of the new and issue of its 
 stock to holders of stock in the old, and knowledge by the old's 
 officers of the claim." A new corporation taking over property 
 once held by a receiver of another corporation under a cove- 
 nant to assume all liabilities incurred by the receiver and to 
 take care of all sums which the receiver ought to pay, is liable 
 for a judgment against such receiver for damages arising 
 from his corporation's negligence recovered while he acted 
 as receiver but finally affirmed on appeal after the transfer of 
 all the original corporation's property to the new corpora- 
 tion." It seems that the general rule is that the liability 
 of a new corporation for the debts of an old one does not 
 result from operation of law, but must follow from the con- 
 tract relationship based upon the assumption of the debts of 
 the old corporation by the new." 
 
 "Goldmark v. Magnolia Metal & Russell Co., 170 A. D. 747, 156 
 
 Co., 44 A. D. 35, 60 N. Y. Supp. N. Y. Supp. 662 (1915). 
 
 425 (1899) ; aff'd 170 N. Y. 579, 63 " Schmid v. New York, Lake Erie 
 
 N. E. 1117. & Western R. R. Co., 32 Hun, 335 
 
 "Curtis V. NataUe Anthracite (1884); aff'd 98 N. Y. 634. 
 
 Coal Co., 89 A. D. 61, 85 N. Y. "Goldraark v. Magnolia Metal 
 
 Supp. 413 (1903) ; aff'd 181 N. Y. Co., 28 A. D. 264, 51 N. Y. Supp. 
 
 543, 73 N. E. 1126. 68 (1898). 
 
 15 
 
 City of New York v. Eppinger 
 
CHAPTER X. 
 
 RECEIVERS. 
 XV. Receivers. 
 
 A. Definitions and Kinds, § 513. 
 
 B. Appointment. 
 
 1. In General, § 514. 
 
 2. When Appointed. 
 
 a. In General and in Supp. Pro., § 515. 
 
 b. On Vacation or Annulment, § 516. 
 
 c. On Sequestration and Dissolution, § 517. 
 
 d. On Foreclosure, § 518. 
 
 3. Where and By What Court Appointed, § 519. 
 
 4. Notice of Application and Appointment, § 520. 
 
 5. Effect of Appointment, § 521. 
 
 C. Qualification, § 522. 
 
 D. Powers, Duties and Liabilities. 
 
 1. Under Statute. 
 
 a. In General, § 523. 
 
 b. When Appointed on Application of Attorney-Gen- 
 
 eral, § 524. 
 
 c. On Sequestration and Dissolution, § 525. 
 
 2. In General, § 526. 
 
 3. Subject to Court Control, § 527. 
 
 4. When Only One and When More, § 528. 
 
 5. As to Moneys, Drafts and Books, § 529. 
 
 6. As to Contracts and Agreements, § 530. 
 
 7. As to Leases, § 531. 
 
 8. As to Counsel, § 532. 
 
 9. As to Recovery of Stock Subscriptions, § 533.- 
 
 10. As to Recovery of Assets and Penalties, § 534. 
 
 11. As to Appraisal of Property, § 535. 
 
 12. As to Holding Real Property in Trust, § 536. 
 
 13. As to Selling and Conveying Property, § 537. 
 
 14. As to Debts and Credits, § 538. 
 
 15. As to Receivers' Certificates, § 539. 
 
 E. Reports, § 540. 
 
 F. Accountings, § 541. 
 
 G. Compensation and Expenses. 
 
 1. In General, § 542. 
 
 2. Expenses, § 543. 
 
 3. Compensation. 
 
 a. Under Statute. 
 
 aa. Commissions on Voluntary Dissolution, § 544. 
 
 bb. Commissions In Other Cases, § 545. 
 
 cc. Additional Allowance, § 546. 
 
 dd. When More Than One Receiver, § 547. 
 
 b. In General, § 548. 
 
 c. On What Allowed, § 549. 
 
 621 
 
622 BUSINESS CORPORATIONS IN NEW YORK §§ 513, 514 
 
 XV. Receivers — Continued: 
 
 H. Payments and Distribution. 
 
 1. Governing Statutes, § 550. 
 
 2. In General, § 551. 
 
 3. Preferred Claims. 
 
 a. Governing Statutes, § 552. 
 
 b. In General, § 553. 
 
 e. Who Are Laborers and Employees, § 554. 
 I. Tenure of Office. 
 
 1. In General, § 555. 
 
 2. Renouncing Trust, § 556. 
 
 3. Removal, § 557. 
 
 4. Filling Vacancy, § 558. 
 
 5. Survivor and Successor, § 559. 
 J. Court Proceedings. 
 
 1. In General, § 560. 
 
 2. %, § 561. 
 
 3. Against, § 562. 
 
 a. Itc General, § 563. 
 
 b. Service of Process On, § 564. 
 
 § 513. Receivers: Definitions and Kinds. — A receiver ap- 
 pointed before final judgment by the court in an action to 
 dissolve or sequestrate the property of a corporation is a 
 temporary receiver until final judgment is entered.^ A per- 
 manent receiver in an action to dissolve a corporation or to 
 sequestrate its property is one appointed by or pursuant to 
 a final judgment in the action, or a temporary receiver who 
 is continued by the final judgment.^ 
 
 § 514. Id.: Appointment, in General. — A reference cannot be 
 made of course upon the consent of the parties in an action 
 against a corporation to obtain the appointment of a receiver 
 of its property, unless it is brought of the Attorney-6enera,l ; 
 and if the parties consent to a reference the court may in 
 its discretion grant or refuse a reference, and if a reference 
 is granted the court must designate the referee and if the 
 referee refuses to serve or a new trial of the action is granted 
 the court must upon the application of either party appoint 
 another referee.^ A receiver of a corporation can be 
 appointed only as an incident to some other relief sought and 
 not when such appointment is the whole purpose of the suit.* 
 " The theory of the law providing for a temporary receiver 
 is, that until the final judgment is entered in the action declar- 
 ing the corporation to be insolvent and that its affairs are to 
 
 ' C. C. P. § 1012. 
 * People V. Hasbrouek, 57 Misc. 
 130, 107 N. Y. Supp. 257 (1907). 
 
 
 ^Gen. 
 
 Corp. 
 
 L. 
 
 § 
 
 104 
 
 (L. 
 
 1909, 
 
 c. 
 
 28). 
 
 
 
 
 
 
 
 
 2 Gen. 
 
 Corp. 
 
 L. 
 
 § 
 
 106 
 
 (L. 
 
 1909, 
 
 c. 
 
 240). 
 
 
 
 
 
 
 
§ 514 RECEIVERS 623 
 
 be wound up and its assets distributed, the temporary receiver 
 may have to be discharged, and that he should only interfere 
 with the assets pending the litigation just so far as is neces- 
 sary to preserve them," and that he should not be allowed to 
 sell or dispose of them except from necessity, and then upon 
 application to the court. ' ' ' An order appointing a temporary 
 receiver of an insolvent corporation may be made before an 
 order to show cause in proceedings for its voluntary dissolu- 
 tion why it should not be dissolved; and the receiver may 
 likewise be authorized to issue temporary certificates." No 
 receiver may be appointed pending and as a proceeding in an 
 action save " on the application of a party who establishes 
 an apparent right to or interest in the property where it is in 
 the possession of an adverse party and there is danger that 
 it will be removed beyond the jurisdiction of the court, or 
 lost, materially injured, or destroyed."^ It seems that the 
 Supreme Court has no jurisdiction to appoint a receiver of 
 a corporation simply upon a bill filed by a creditor-at-large.^ 
 ' ' The court has no power to appoint a receiver of a corpora- 
 tion upon the filing of a bill by a creditor-at-large, nor until 
 he has a judgment and an execution returned unsatisfied;" 
 but the corporation may waive the fact that the plaintiff has 
 not exhausted his remedy at law.® An order entered on a 
 petition for voluntary dissolution of a corporation is not a 
 nullity because in some respects irregular, imperfect and 
 informal ; but is effectual to appoint the receiver and may be 
 perfected nunc pro tunc.^" An order appointing a receiver 
 of a corporation's assets in proceedings for its voluntary dis- 
 solution which in its title shows the character of the pro- 
 ceeding and requires cause to be shown why the prayer of 
 the petition should not be granted complies with the statute 
 that such an order shall require all persons interested to show 
 cause " why the corporation should not be dissolved." " To 
 
 'People V. Saint Nicholas Bank, ' Moe v. McNally Co., 138 A. D. 
 
 76 Hvm, 522, 28 N. Y. Supp. 114 480, 123 N. Y. Supp. 71 (1910). 
 
 (1894) ; C. C. P. §§ 1785-1789; now " Matter of Christian Jensen Co., 
 
 Gen. Corp. L. § 101 et seq. 128 N. Y. 550, 28 N. B. 665 (1891). 
 
 * Knickerbocker Trust Co. v. Tar- The defect claimed was that the 
 
 rytown, White Plains &. Mamaro- order appointing the receiver "did 
 
 neck Ry. Co., 133 A. D. 285, 117 not require its publication and 
 
 N. Y. Supp. 871 (1909). specify the newspapers, under C. C. 
 
 ^Hastings v. Tousey, 121 A. D. P. § 2424. 
 
 815, 106 N. Y. Supp. 639 (1907); "Matter of Christian Jensen Co., 
 
 quotation from C. C. P. § 713. 128 N. Y. 550, 28 N. E. 665 (1891) ; 
 
 » Lehigh Coal & Navigation Co. C. C. P. § 2423; now Gen. Corp. L. 
 
 V. Central R. R. of N. J., 43 Hun, § 176 et seq. 
 546 (1887). 
 
624 BUSINESS CORPORATIONS IN NEW YORK § 515 
 
 sustain a denied allegation that one was duly appointed 
 receiver of a corporation it is necessary to prove the com- 
 mencement of an action and that the court obtained jurisdic- 
 tion over the corporation as provided by statute.^^ 
 
 § 515. Id.: When Appointed, in General; and on Supp. Pro. 
 — A receiver of the property of a corporation can be appointed 
 only by the court, and only (1) in an action brought against 
 one or more trustees, directors, managers or other officers of 
 a corporation to procure a judgment compelling them to 
 account for their official conduct; or to pay over what they 
 have acquired to themselves or transferred to others or lost 
 or wasted through neglect of their duties ; or to suspend from 
 office for abuse of trust; or to remove from office and direct 
 a new election; or to set aside or restrain an alienation of 
 property by them; (2) in an action to procure a judgment 
 sequestrating the corporate property and distributing it; 
 (3) in an action to procure a judgment dissolving a corpora- 
 tion and forfeiting its franchises for a year-long period in 
 which it has been insolvent, or in which it has' neglected to 
 discharge its evidences of debt, or in which it has suspended 
 its business; or (4) in an action by the Attorney-Greneral to 
 procure a judgment vacating or annulling the act of incor- 
 poration or the act renewing or continuing its existence for 
 fraudulent concealment or suggestion of a material fact, or for 
 offense against such an act, or for violation of a law, whereby 
 it has forfeited its charter or become liable to dissolution by 
 abuse of its powers, or has forfeited its franchises by failure 
 to exercise its powers, or has done or omitted any act amount- 
 ing to a surrender of its franchises, or has exercised a fran- 
 chise not conferred upon it by law; (5) in an action brought 
 for the foreclosure of a mortgage upon the property, of which 
 the receiver is appointed, when the mortgage debt or the 
 interest upon it 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 when 
 either the income of the property is specially mortgaged or 
 the property itself is probably insufficient to pay the mort- 
 gaged debt; (6) in an action brought by the Attorney-Genesal 
 or by a stockholder to preserve the assets of a corporation 
 
 ^^ Spring V. The Bowery National appointing a receiver, otherwise 
 Bank, 63 Hun, 505, 18 N. Y. Supp. made, shall be void." 
 574 (1892) ; L. 1883, c. 378, § 1, As to the power to appoint re- 
 provided that the Supreme Court ceivers of corporations where there 
 could appoint receivers of domestic is no other relief asked, see note in 
 corporations and that "any order 20 L.R.A. 210. 
 
§ 515 EECEIVERS 62o 
 
 having no officer empowered to hold them, or (7) in a special 
 proceeding for the voluntary dissolution of a corporation." 
 A stockholder cannot have a receiver appointed of all his 
 corporation's property, paper and rights of action." A 
 receiver of the assets of a corporation will be appointed to 
 preserve them at the instance of a stockholder if it is wholly 
 insolvent, it has defaulted in one and will shortly in another 
 lawsuit, its directors refuse to bring such proceedings that the 
 rights of creditors and stockholders may be equally pro- 
 tected, there is danger that executions will wipe out all its 
 assets, and there is no judgment creditor to make application 
 for the preservation of the assets until they can be distrib- 
 uted." In a representative action by a stockholder to compel 
 the officers of the corporation to make restitution to it, a 
 receiver pendente lite of all its property in the State with wide 
 statutory powers will not be appointefl because of mere mis- 
 conduct by the officers and directors unless necessary to 
 preserve the property or rights of creditors or stockholders, 
 or if the allegations are loose and general of fraud and malad- 
 ministration, made on information and belief and unsup- 
 ported by anything that can reasonably be called legal proof, 
 especially when the answering affidavits deny the allegations 
 of the moving papers.^® A receiver will not be appointed in 
 an action by a stockholder as such to run his corporation 
 solely on allegations that its secretary and treasurer has 
 taken and hidden its books and papers and is notifying 
 employees their services are no longer needed, etc." A 
 receiver will not be appointed to run the business of a corpora- 
 tion in lieu of its president owning half its stock, when it is 
 not shown to be insolvent, no rights of creditors are involved 
 and there is no suggestion that the individual directors and 
 officers charged with misfeasance are not solvent.^* ' ' Some- 
 thing beyond the mere unsupported statements of the plaintiff 
 
 "Gen. Corp. L. § 306 (L. 1909, Gen. Corp. L. § 306; suM. 3; 
 
 c. 28). This statute applies not §§ 1785, 1786; now Gen. Corp. L. 
 
 only to a domestic corporation but § 101 et seq. 
 
 to a foreign corporation which does ^' Fenn v. Ostrander, Incorpo- 
 
 business in New York or has within rated, 132 A. D. 311, 116 N. Y. 
 
 New York an agency, business, fls- Supp. 1083 (1909). 
 
 cal or for the transfer of its stock; ^^ Fallon v. United States Diree- 
 
 see Gen. Corp. L. § 308. tory Co., 86 A. D. 29, 83 N. Y. 
 
 "Belmont v. Erie Ey. Co., 52 Supp. 359 (1903). 
 
 Barb. 637 (1869). is Hastings v. Tousey, 121 A. D. 
 
 i=* Porter v. Industrial Informa- 815, 106 N. Y. Supp. 639 (1907); 
 
 tion Co., 5 Misc. 262, 25 N. Y. Supp. C. C. P. § 713. 
 328 (1893); C. C. P. § 1810; now 
 B. C.N.Y.— 40 
 
626 BUSINESS CORPORATIONS IN NEW YORK § 516 
 
 [stockholder, that corporate assets have been fraudulently 
 diverted and should be restored to the corporation,] made on 
 information and belief in the general allegations of a com- 
 plaint should appear to warrant the appointment [of a 
 receiver] where the allegations are explicitly denied."" It 
 is no reason for appointing a new receiver of one corporation 
 for which a receiver already exists that it was organized 
 simply to have transferred to it the property of a second cor- 
 poration, against which an individual applying for the new 
 receiver has a judgment, so as to prevent such property of 
 the second corporation from being subject to seizure to pay 
 its debts ; until it has been proven that property of the second 
 corporation applicable to the debt came into the hands of 
 the receiver of the first and that if it has, it is impossible to 
 separate it from other property.^" A temporary receiver of 
 a corporation will be appointed only in a clear case of 
 necessity therefor to protect the interests of the applicant 
 from imminent and serious injury.^ 
 
 A receiver of the property of a domestic corporation can- 
 not be appointed in proceedings supplementary to execution, 
 because the policy of this State favors a pro rata distribution 
 of the assets of an insolvent domestic corporation and not a 
 receivership for the benefit of a specific creditor.'' 
 
 If the charter of a domestic corporation is forfeited on pro- 
 ceedings taken by the State Commissioner of Health, on the 
 ground that it conducts its business without New York State 
 so as to make it a nuisance to a considerable number of people 
 within New York State, the Attorney-General must forthwith 
 apply to the Supreme Court for the appointment of a receiver 
 of its property, who has all the powers and duties, so far as 
 practicable, prescribed by articles ten-a and eleven of the 
 General Corporation Law.^ 
 
 § 516. Id.: On Vacation or Annulment. — ^A fiual judgment 
 in an action by the Attorney-General against a corporation 
 brought under the statute to vacate or annul its act of incor- 
 poration or any act renewing the corporation or continuing 
 its corporate existence must provide for the appointment of 
 a receiver.* 
 
 " Weber v. Wallerstein, No. 2, ^ Matter of Boueker Co. v. Calla- 
 
 111 A. D. 700, 97 N. Y. Supp. 852 ban Co., 218 N. Y. 321, 113 N. E. 
 
 (1906). 257 (1916); C. C. P. §§ 2463, as 
 
 ™ Schulze V. Sizer, 14 A. D. 274, amended L. 1908, e. 278. 
 
 43 N. Y. Supp. 463 (1897). ^Gen. Corp. L. § 200 (L. 1917, 
 
 ^ Thalmann v. Hoffman House, 27 c. 292). 
 
 Mise. 140, 58 N. Y. Supp. 227 * Gen.' Corp. L. § 134 (L. 1909. 
 
 (1899). c. 28). 
 
§ 517 EECEIVERS 627 
 
 § 517. Id.: On Sequestration and Dissolution. — In an action 
 for sequestration of a corporation 's property or for its dis- 
 solution the court may at any stage appoint one or niore 
 receivers of its property .° ' ' It has long been the settled law 
 of this state that the jurisdiction of Chancery does not extend 
 to the sequestration of the property Of a corporation by means 
 of a receiver (citations). It follows that the authority of 
 the court in this proceeding must be found in the statute and 
 not in its general equitable powers."* When a judgment 
 creditor's execution against a corporation has been returned 
 unsatisfied and he then,by later action for sequestration of its 
 property has receivers appointed, if the court opens up the 
 original judgment and allows the defendant to appear and 
 serve an ansiwer, it must also at its request, vacate the appoint- 
 ment of the temporary receivers, because sequestration can 
 only be had on final judgment, and such no longer existed 
 after the court allowed the defendant to appear and answer.'' 
 In an action for sequestration of a corporation's property and 
 appointment of a receiver the corporation will not be per- 
 mitted to delay matters by interposing an answer alleging it 
 has no knowledge or information sufficient to form a belief as 
 to the entry of a judgment and the issue thereon of execution 
 returned unsatisfied alleged in the complaint or alleging the 
 commencement of dissolution proceedings not concluded; as 
 such an answer will be stricken out on motion as frivolous.* 
 In an action for sequestration and distribution of the property 
 of a domestic corporation and the appointment of a receiver, 
 not brought by the Attorney-General, an order of reference 
 and the report of the referee must be set aside on motion of 
 the corporation's attorney, even though not made till after 
 notice of motion for judgment on the report has been served." 
 An order appointing a temporary receiver in an action for 
 sequestration of the property of a domestic corporation should 
 not be made on a complaint alone, unsupported by any affi- 
 davit or other evidence." A receiver of a domestic corpora- 
 tion will not be appointed in an action to sequestrate its 
 
 *Gen. Corp. L. § 104 (L. 1909, C. C. P. § 1784; now Gen. Corp. L. 
 
 c. 28). "A receiver, so appointed, § 100. 
 
 before final judgment is a tempo- * Morgan & Co. v. Quo Vadis 
 
 rary receiver, until final judgment Amusement Co., 45 Misc. 130, 91 
 
 is entered." N. Y. Supp. 882 (1904). 
 
 ° Matter of Binghampton Electric * Fallon v. Egberts Woolen Mill 
 
 Co., 143 N. Y. 261, 38 N. E. 297 Co., 24 Misc. 304, 53 N. Y. Supp. 
 
 (1894). 672 (1898); aff'd 46 A. D. 630, 61 
 
 'Efldboum v. Utica, Ithaca & El- N. Y. Supp. 1136; C. C. P. § 1012. 
 
 mira By. Co., 28 Hun, 369 (1882) ; i" Eederman v. Standard Chum 
 
628 BUSINESS CORPORATIONS IN NEW YORK §§ 518, 519 
 
 property solely on a complaint verified unqualifiedly that 
 execution on a money judgment against it has been returned 
 unsatisfied and on a motion made before the time to answer 
 has expired ; the facts necessitating a receiver to effectuate the 
 judgment must be shown." No warrant exists for appointing 
 a temporary receiver of a corporation and enjoining its 
 creditors from suing, upon a proceeding by its directors for 
 its voluntary dissolution, if the schedule of its assets and 
 liabilities annexed to the petition shoM's a surplus of tlie 
 former over the latter ; and affidavits of its assets and liabil- 
 ities made over four months after the receiver's appointment 
 cannot be received to support such appointment and injunc- 
 tion.^^ A temporary receiver of a corporation cannot be 
 appointed in proceedings for its voluntary dissolution, as a 
 receiver can, under the statute, only be appointed upon grant- 
 ing the final order dissolving the corporation." An appoint- 
 ment of a receiver in proceedings for voluntary dissolution 
 of a corporation must be made at the very time provided by 
 the statute, viz., on the coming in of the report of the referee 
 appointed to hear any cause why the dissolution should not 
 take place; and until due appointment at such time the cor- 
 porate creditors may pursue their legal remedies, e. g., by 
 attachment, against the corporation." 
 
 § 518. Id.: On Foreclosure. — ^A receiver of mortgaged prop- 
 erty of a corporation may be appointed on sufficient facts 
 alleged in a verified complaint, even on information and belief 
 as to some of its averments particularly in defendant's knowl- 
 edge, when not denied by answer of affidavit." 
 
 § 519 Id.: Where and by What Court Appointed and Con- 
 trolled. — An action or proceeding brought by the Attorney- 
 General on behalf of the People of the State against any 
 corporation for the purpose of procuring the appointment 
 
 Mfg. Co., 128 A. D. 493, 112 N. Y. Seamless Paper Vessel Co., 7 Hun, 
 
 Supp. 834 (1908). 557 (1876), c. 8, part 3, — R. S. — . 
 
 ^^ Kieley v. Barron & Cooke H, The title of the receiver to the cor- 
 & P. Co., 87 A. D. 317, 84 N. Y. porate property does not attach 
 Supp. 306 (1903) ; C. C. P. § 1784; from the date of the order direct- 
 now Gen. Corp. L. § 100. ing the appointment of a receiver, 
 
 ^^ Matter of Hitchcock Mfg. Co., and a creditor's attachment after 
 
 1 A. D. 164, 37 N. Y. Supp. 834 that order but before an order ap- 
 
 (1896) ; C. C. P. §§ 2421, 2427; now pointing a receiver is therefore 
 
 Gen. Corp. L. §§ 174, 188. good. 
 
 ^^ Matter of E. M. Boynton Saw ^^ Holland Co. v. Consolidated 
 
 & File Co., 34 Hun, 369 (1884) ; Gas & Electric Co., 85 Hun, 454, 32 
 
 C. C. P. § 2429; now Gen. Corp. L. N. Y. Supp. 830 (1895); C. C. P. 
 
 §§ 191, 192, 194. § 713. 
 
 " Chamberlaine v. Rochester 
 
§ 519 RECEIVERS 629 
 
 of a receiver may be brought in any county of the State to be 
 designated by the Attorney-General/" Applications made by 
 the Attorney-General for the appointment of a receiver of 
 a corporation must be made in the judicial district in which 
 the action in which the appointment is sought is triable." A 
 receiver appointed of a corporation in an action to foreclose 
 a mortgage need not be appointed in the judicial district in 
 which its principal business office is located, as would be 
 necessary were the receiver one to wind up the corporation 
 and distribute its assets.^' A State court has power to appoint 
 receivers of a corporation in an action by the Attorney-Gen- 
 eral for its dissolution although the Federal court has already 
 appointed receivers of all the property and franchises of the 
 same corporation in a bill filed by general creditors/" The 
 State courts of New York will not appoint a receiver of the 
 property of a corporation for which a receiver has already 
 been appointed by the Federal courts, at the instance of 
 holders of certificates of the Federal receiver issued by order 
 of the Federal courts ; but will leave the certificate holders to 
 be cared for on the accounting in the Federal courts by the 
 receiver appointed therein.^" A court which has appointed 
 a receiver of the property of iin insolvent corporation ' ' may, 
 in aid of that appointment, forbid any after interference by 
 way of levy or seizure with the property in his possession," 
 e. g., by one who was an attachment creditor before the 
 appointment of the receiver ; and such an order by the court 
 is not an injunction in the sense that the statutory rules 
 governing the grant of injunctions are applicable to it/ The 
 Supreme Court will entertain an equitable suit to vacate an 
 order of a court obtained by a corporate receiver for a fraudu- 
 lent purpose, e. g. a sale of a judgment, and the sale made 
 pursuant thereto, even though a motion could have been made 
 for the same purpose before the court in the action in which 
 the receiver was appointed/ The Supreme Court of this 
 State having jurisdiction in personam over a receiver 
 
 "Gen. Corp. L. § 315 (L. 1909, =° Passage v. Dansville & Mt. 
 
 c. 28). Morris R. R. Co., 41 A. D. 182, 58 
 
 "Gen. Corp. L. § 108 (L. 1909, N. Y. Supp. 770 (1899). 
 
 0. 28). '^ Woerishofler v. North- River 
 
 '* United States Trust Co. v. New Construction Co., 99 N. Y. 398, 2 
 
 York, "West Shore & Buffalo Ry. N. E. 47 (1885); C. C. P. § 603 
 
 Co., 35 Hun, 341 (1885); L. 1883, et seq. 
 
 c. 378. ^Hackley v. Draper, 60 N, Y. 
 
 "People V. New York City Rail- 88 (1875), 
 way Co., 57 Mise. 114,' 107 N. Y. 
 Supp. 247 (1907). 
 
630 BUSINESS CORPOEATIONS IN NEW YORK § 520 
 
 appointed in an action to dissolve a corporation may enjoin 
 him from further prosecuting an action he has begun- in 
 another state over matters which can be as well disposed of in 
 an action pending before it as in the action in the foreign 
 state.^ By the proper presentation of a petition to a state 
 court praying for the dissolution of a corporation and the 
 appointment of a receiver upon due notice of the application 
 to the Attorney-General, the court acquired jurisdiction of 
 the subject-matter of the proceeding and took the property of 
 the corporation into the custody of the law, although the 
 receiver had not actually and physically seized and taken it 
 into his manual possession : the state court acquires the 
 exclusive jurisdiction and right to take such possession and 
 make a final decree.* 
 
 § 520. Id.: Notice of Application and Appointment. — When 
 a receiver of the property of a corporation is appointed in an 
 action otherwise than by or pursuant to a final judgment 
 notice of the application for his appointment must be given 
 to the proper officer of the corporation.' Permanent receivers 
 appointed by or pursuant to a final judgment in an action or 
 by or pursuant to a final order in a case in which the corpora- 
 tion is insolvent or in which a dissolution of the corporation 
 will be beneficial to the interests of the stockholders and not 
 injurious to the public interests must immediately upon their 
 appointment give notice thereof, which must be published 
 for three weeks in a newspaper printed in the county in which 
 the principal place of conducting the business of such corpora- 
 tion was situated.* In such notice of their appointment the 
 receivers must require: (1) AU persons indebted to the cor- 
 poration to render an account of and to pay to such receivers, 
 by a day and at a place specified in the notice, all debts and 
 
 ' Guaranty Trust Co. v. Edison stance of stockholders, to appoint a 
 
 United Phonograph Co., 128 A. D. receiver because of mismanagement 
 
 591, 112 N. Y. Supp. 929 (1908). or fraud of its officers, see note in 
 
 * Matter of Schuyler's Steam 39 L.R.A.(N.S.) 1032, L.R.A.1915A 
 
 Tow Boat Co., 136 N. Y. 169, 20 606. 
 
 L.R.A. 391, 32 N. E. 623 (1892). ^Gen. Coir. L. § 306 (L. 1909, 
 
 A creditor had libelled the corpora- c. 28). This statute applies not 
 
 tion's boats in the U. S. court only to a domestic corporation but 
 
 after he knew a receiver had to a foreign corporation which does 
 
 been applied for in the State court business within New York or has 
 
 but before the appointment had within New York an agency, busi- 
 
 been made. ' His remedy was held ness, fiscal or for the transfer of 
 
 to be against the receiver solely. its stock. 
 
 On inherent jurisdiction in equity, " Gen. Corp. L. § 250 (L. 1909, 
 
 independently of statute at the in- c. 28). 
 
§ 520 RECEIVERS 631 
 
 sums of money owing by them respectively; (2) all persons 
 having in their possession any property or effects of the cor- 
 poration to deliver the same to snch receivers by the day so 
 appointed; (3) all the creditors of the corporation to deliver 
 their respective accounts and demands to the receivers or one 
 of them by a day to be specified in the notice which must be 
 not less than forty days from the publication of such notice ; 
 and (4) all persons holding any open or subsisting contract of 
 the corporation to present the same in writing and in detail 
 to such receivers at the time and place specified in such 
 notice.' Notice must be given the Attorney-General of an 
 application for the appointment of a receiver of a corpora- 
 tion in a judgment creditor's proceeding to sequestrate its 
 property but not in a proceeding for the appointment of a 
 receiver on foreclosure of a mortgage given by the corpora- 
 , tion.* An application by a judgment creditor of a corporation 
 having no lien on its property to vacate the appointment of 
 a receiver of such property on the ground that no notice of 
 the application for the receiver's appointment was given him, 
 his attorney or the Attorney-General will be denied if such 
 notice and a copy of the judgment were subsequent to the 
 appointment served on the Attorney-General and an order 
 was thereupon made by the court providing nunc pro tunc 
 for his appointment on the notice so served." The receivers 
 must, immediately upon their appointment, give notice thereof 
 which must be published for three weeks in a newspaper 
 printed in the county where the principal place of conducting 
 the business of such corporation has been situated; and 
 therein must require: (1) All persons indebted to siich cor- 
 poration (a) to render an account of all debts and sums 
 owing by them respectively to such receivers, (b) to do this 
 by a day and at a place specified in the notice, and (c) to pay 
 the same ; (2) all persons having in their possession any prop- 
 erty or effects of such corporation to deliver the same to the 
 receivers by the day so appointed; (3) all creditors of such 
 corporation to deliver their respective accounts and demands 
 to the receivers or one of them by a day to be specified in 
 such notice which must not be less than forty days from its 
 first publication; (4) all persons holding any open or sub- 
 sisting contract of such corporation to present the same in 
 
 'Gen. Corp. L. § 250 (L. 1909, "Morrison v. Menhaden Co., 37 
 
 c. 28). Hun, 522 (1885); L. 1883, c. 378. 
 
 ^Whitney v. New York & At- 
 lantic R. R. Co., 32 Hun, 164 
 (1884) ; L. 1883, c. 378, § 8. 
 
632 BUSINESS CORPORATIONS IN NEW YORK § 521 
 
 writing and in detail to such receivers at the time and place 
 in sucji notice specified." 
 
 § 521. Id.: Effect of Appointment. — The appointment of a 
 common-law receiver, not of a corporation but of its property, 
 does not take title to the property from the corporation or 
 the right to recover any indebtedness due it ; so that the right 
 to maintain proceedings supplementary to execution and .to 
 examine a third party still remains in the judgment creditor 
 of the corporation." ' " It is obvious that every lien upon the 
 property of a corporation resting upon valid agreement or 
 process before the appointment of a receiver, the lienor being 
 lawfully in possession, must be preserved with the right of 
 enforcement, unless courts and legislatures are to override 
 the vested rights of creditors. ' ' " An agreement under 
 which one owning the majority stock in a corporation sold so 
 much thereof to the minority stockholders as to make them 
 majority stockholders, upon condition that he be paid a stated 
 salary for 'a certain number of years, as vice-president or 
 consulting engineer of the corporation, binds the individuals 
 signing it to an employment of such one for the stated time 
 and salary, and is not terminated on the appointment of a 
 receiver for the corporation in an action by them against it 
 alleging its insolvency .^^ The appointment of a receiver for 
 a corporation and an injunction against it from exercising its 
 franchises do not relieve its stockholders from their liability 
 to suit for its judgment debts on which execution has been 
 returned unsatisfied." A Federal Court which has appointed 
 receivers of the property of a State corporation on motion of 
 a general creditor should direct them to turn over such prop- 
 erty to the receivers of the same corporation later appointed 
 by the State Court in dissolution proceedings instigated by 
 the Attorney-General." One injured through alleged fraudu- 
 lent diversion of assets of a corporation by others while 
 acting as its ofiBcers is not precluded from himself suing 
 them by the appointment of a receiver, unless he be a per- 
 manent receiver." A judgment creditor of a corporation 
 
 "Gen. Corp. L. § 250 (L. 1909, "Kincaid v. Dwinelle, 59 N. Y. 
 
 c. 28). 548 (1875) ; Gen. Mfg. Act, L. 1848, 
 
 " Matter of Howell v. German c. 40, §§ 18, 24. 
 
 Theatre, 64 Misc. 110, 117 N. Y. "People v. New York City Rail- 
 
 Supp. 1124 (1909) ; C. C. P. § 2441. way Co., 57 Misc. 114, 107 N. Y. 
 
 "Matter of Binghamton Electric Supp. 247 (1907). 
 
 Co., 143 N. Y. 261, 38 N. E. 297 "Dibblee v. Metcalf, 13 Misc. 
 
 (1894). 136, 34 N. Y. Supp. 122 (1895). 
 
 ^' Kinsman v. Fisk, 37 A. D. 443, 
 56 N. Y. Supp. 33 (1899). 
 
§ 521 RECEIVERS 633 
 
 upon whose judgment the sheriff has levied under execution 
 and taken the corporation's property into his possession is 
 entitled to have his lien on such property satisfied though a 
 receiver for the corporation in proceedings for its voluntary 
 dissolution was appointed thereafter ; but in order to protect 
 other creditors the receiver instead of the sheriff may be 
 directed to sell the corporate property in the latter's hands as 
 well as its other property, with a proviso that the receiver 
 apply the proceeds upon the executions in order of priority." 
 An agreement by a corporation to pay rent for the full term 
 of a lease of premises occupied by it does not cease to be a 
 subsisting obligation by reason of its insolvency and the 
 appointment of a receiver for it, and the lessor may either 
 not re-enter and allow the premises to remain vacant and 
 recover all the rent for the unexpired term as it accrues, or 
 avail himself of the right given him under the lease to 
 rent the premises to someone else and hold the receiver for 
 the difference between the rentals." A proceeding for the 
 appointment of a receiver of a corporation under a statute 
 permitting such appointment on the petition of one who has 
 obtained a judgmfflit against it on which an execution has not 
 been satisfied " is a proceeding against the corporation, arid 
 if the appointment of a receiver under it is binding upon the 
 corporation, no one else can question it ; " e. g., because of a 
 misnomer of the corporation." A corporation is not divested 
 of title to its property by the appointment of a temporary 
 receiver pendente lite.^" " The appointment of a temporary 
 receiver pendente lite does not dissolve a corporation, nor 
 restrain the exercise of its corporate powers . . . his 
 powers were limited to the [federal] district in which the 
 decree was made, unless some additional power was subse- 
 quently conferred. The corporation still had the right to 
 exercise its corporate powers, except as to the matters and 
 claims specially confided to the receiver by that court. The 
 title to the property was not changed by his appointment. 
 The receiver acquired no title, but only the right of possession 
 as the officer of the court. The title remained in the corpora- 
 tion in which it was vested when the appointment was 
 
 "Matter of Muehlfeld & Haynes "Whittlesey v. Erantz, 74 N. Y. 
 
 Piano Co., 12 A. D. 492, 42 N. T. 456 (1878) ; 2 R. S. 463, § 36. 
 
 Supp. 802 (1896) ; C. C. P. § 1405. ^ Mutual Brewing Co. v. New 
 
 " People V. St. Nicholas Bank, 3 York & College Point Terry Co., 16 
 
 A. D. 544, 38 N. Y. Supp. 379 A. D. 149, 45 N. Y. Supp. 101 
 
 (1896); aff'd 151 N. Y. 592, 45 (1897). 
 N. E. 1129. 
 
634 BUSINESS CORPORATIONS IN NEW YORK § 521 
 
 made."^ A corporation is not disabled from moving to 
 vacate an attachment against it because of the appointment 
 by court order of a temporary receiver of its property in 
 proceedings for its voluntary dissolution.^ The pendency of 
 an action by the People to dissolve a corporation, in which a 
 temporary receiver has been appointed, does not prohibit the 
 commencement of an action to foreclose a mortgage given by 
 the corporation.' 
 
 A receiver appointed in a proceeding for the voluntary 
 dissolution of a corporation takes title to it's property on the 
 mere making of the order appointing him, even though he does 
 not take possession; so that an attachment thereof by cred- 
 itors cannot be made against such property after such order 
 without leave of court in spite of the fact that the dissolving 
 company had no true title thereto as against such creditors.* 
 A final judgment dissolving a corporation at the instance of 
 the Attorney-General, adjudging it insolvent and its capital 
 stock impaired, relates back to the date when the temporary 
 receiver was appointed and took possession of its assets." 
 The title of receivers of a corporation does not relate back to 
 the time at which the order appointing them was signed by 
 a judge as a court order, as distinguished from the time it was 
 entered, so as to defeat intervening rights of a creditor of the 
 corporation actually acquired before the perfection of the 
 order by entry." 
 
 ^ Sigua Iron Co. v. Brown, 171 note coming due to the bank that 
 
 N. Y. 488, 64 N. E. 194 (1902). day. At twenty-flve minutes past 
 
 The right to recover calls unpaid on ten the order was filed with the 
 
 stock was held to remain in the cor- clerk of . the court. The order, 
 
 poration. being a court order, was held not 
 
 ^ Waverly Co. v. Worthington effective to prevent such applica- 
 
 Co., 41 Misc. 447, 24 N. Y. Supp. tion by the bank of the balance to 
 
 331 (1893). the note until entered, which oc- 
 
 ' Herring v. N. Y. Lake Erie & curred only when filed. 
 
 Western R. R. Co., 105 N. Y. 340, On effect of appointment of re- 
 
 12 N. E. 763 (1887). ceiver for corporation on right to 
 
 * Dickey v. Bates, 13 Misc. 489, deal with corporation directly, see 
 
 35 N. Y. Supp. 525 (1895). note in 34 L.R.A.(N.S.) 1200. 
 
 'People V. Merchants' Trust Co., Effect of appointment of receiver 
 
 187 N. Y. 293, 79 N. E. 1004 (1907). for insured on fire insurance, is dis- 
 
 " Wilcox V. National Shoe & cussed in a note in 19 L.R.A.(N.S.) 
 
 Leather Bank, 67 A. D. 466, 73 643. 
 
 N. Y. Supp. 900 (1902). One night Effect of appointment of receiver 
 
 the order was sig^ned by a judge at on right of set-off, see note in 17 
 
 his home, " Enter, Wm. N. Cohen, L.R.A. 458. 
 
 J. S. C." At ten the next mom- Effect of appointment of receiver 
 
 ing the defendant bank applied a for corporation as affecting its 
 
 balance on deposit with it to the right to sue, see note in 50 L.R.A. 
 
 corporation's credit to the latter's (N.S.) 384. 
 
§ 522 RECEIVERS 635 
 
 § 522. Id.: Qualification. — All receivers appointed in seques- 
 tration or dissolution proceedings must take and subscribe 
 an oath before proceeding to the discharge of any of their 
 duties, which must be that they will well and truly execute the 
 trust by their appointment reposed in them, according to the 
 best of their skill and understanding, and which must be filed 
 with the officer or court that appointed them.'' Befcre enter- 
 ing upon the duties of their appointment such receivers must 
 give such security to the People of the State, and in such 
 penalty, as the court directs, conditioned for the fa ' thful dis- 
 charge of the duties of their appointment and for the due 
 accounting for all moneys received by them.* A receiver 
 appointed in an action or special proceeding must before 
 entering upon his duties execute and file with the proi)ep 
 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 New 
 York State to transact business is equivalent to the execution 
 of such bond by two sureties ; but if special provision is made 
 by law for the security to be given by a receiver in any par- 
 ticular case or for increasing such security, such special pro- 
 vision prevails over the general requirement just stated.® 
 The court, or the judge making the order if it was made out 
 of court, 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 
 condition that he will faithfully discharge his duties as 
 receiver ; but if special provision is made by law for the secur- 
 ity to be given by a receiver or for increasing it or for remov- 
 ing him, in any particular case, such special provision pre- 
 vails over the general rule just stated.^" A temporary 
 receiver appointed of the property of a corporation on dis- 
 solution or on sequestration of its property must qualify as 
 prescribed by law for the qualification of a permanent 
 receiver." A permanent receiver appointed by or pursuant 
 
 On effect of appointment of re-. 'Gen. Corp. L. § 234 (L. 1909, 
 
 ceiver or assignee for creditors of c. 28). 
 
 a corporation on compensation of ' Gen. Corp. L. § 235 (L. 1909, 
 
 officers, agents, or employees for c. 240). 
 
 unexpired term of employment, see ^^ Gen. Corp. L. § 236 (L. 1909, 
 
 note in 51 L.R.A. 146. c. 240). 
 
 ^Gen. Corp. L. § 238 (L. 1909, "Gen. Corp. L. § 104 (L. 1909, 
 
 c. 28). c. 28). 
 
636 BUSINESS CORPORATIONS IN NEW YORK § 522 
 
 to a final judgment in an action or by or pursuant to a final 
 order in a case in which the corporation is insolvent or in 
 which a dissolution of the corporation will be beneficial to the 
 interests of the stockholders and not injurious to the public 
 interests is vested with all the property, real or personal, 
 vested or contingent, of the corporation, from the time of 
 having filed the security required by law." While a receiver 
 appointed of a corporation's property in proceedings for 
 its voluntary dissolution cannot interfere with such prop- 
 erty until he files his bond, yet after he files his bond his 
 title relates back to the date of his appointment." " When 
 a receiver has duly qualified his appointment takes effect to 
 relate back to the date at which the appointment was made, 
 and not to the date at which the petition was filed. ' ' " The 
 general rule, that, unless the court or a party in interest 
 having power waives the bond required of a receiver, by 
 court order, before he intermeddles with the property, the 
 receiver must give security before he undertakes to execute 
 the trust is avoided by evidence justifying an inference that 
 the bond had been given ; such evidence, for instance, as that 
 a State court permitted a receiver required by the appointing, 
 Federal Court to give bond, to sue, and that the receiver 
 resigned after some time had lapsed since his appointment." 
 One appointed temporary receiver of a corporation who as 
 such has duly executed his bond may sue to recover the 
 assets of the corporation even though he fails when by judg- 
 ment of the court he is continued as permanent receiver to 
 give a new bond.^° An action cannot be brought legally on 
 the bond of a receiver, against his surety, if no notice was 
 given the latter of the settlement of the former's accounts: 
 certainly if no showing is made of conversion by the receiver 
 to his own use of any part of the estate." The sureties on the 
 bond of a receiver appointed for a corporation in proceedings 
 for its voluntary dissolution by a court which would have had 
 power to appoint him but which exercised its right at a time 
 not sanctioned by law cannot absolve themselves from their 
 
 ^2 Gen. Corp. L. § 232 (L. 1909, "Jones v. Blun, 145 N. Y. 333, 
 
 c. 28). 39 N. E. 954 (1895); C. C. P. 
 
 "Matter of Christian Jensen Co., §§ 1788, 2429; 2 E. 8. 468, § 66. 
 
 128 N. Y. 550, 28 N. E. 665 (1891). " Stratton v. City Trust, Safe 
 
 " Matter of Muehlf eld & Haynes Deposit & Surety Co., 86 A. D. 551, 
 
 Piano Co., 12 A. D. 492, 42 N. Y. 83 N. Y. Supp. 780 (1903) ; C. C. P. 
 
 Supp. 802 (1896). § 715. 
 
 "Hegewisch v. Silver, 140 N. Y. 
 414, 35 N. E. 658 (1893). 
 
§§ 523-^25 EECEIVERS 637 
 
 liability by insisting that he was not receiver if he acted as 
 such, though the proceedings for the corporation's voluntary 
 dissolution were later quashed.^^ A receiver of a corporation 
 appointed on the application of the Attorney-General in pro- 
 ceedings to dissolve it should not be ordered to file security 
 for costs in an action brought by the corporation before his 
 appointment which he continues, in the absence of proof not 
 only that it was insolvent when it began the action but that 
 it was brought mala fide^^ 
 
 § 523. Id.: Powers, Duties and Liabilities; Under Statute, 
 In General. — The powers of receivers must be sought in the 
 statutes, and will be found in the following sections. 
 
 § 524. Id.: When Appointed on Application of Attorney- 
 General. — In all cases in which receivers are appointed for 
 any domestic corporation on application by the Attorney- 
 General, all property, real and personal, and all securities of 
 any kind and nature belonging to such corporation, no matter 
 where located or by whom held, must be transferred to, 
 vested in and held by such receivers, if and when directed by 
 order of the Supreme Court on due notice of application for 
 the order given to the Attorney-General and the custodian of 
 the funds, securities or property.^" 
 
 § 525. Id.: On Sequestration and Dissolution. — Permanent 
 receivers appointed in actions to sequestrate the property of 
 a corporation and distribute its property among creditors or 
 in proceedings to dissolve it are trustees of the property for 
 the benefit of the creditors and stockholders of the corpora- 
 tion.^ A permanent receiver appointed in an action to dis- 
 solve a corporation or to sequestrate its property has all the 
 powers and authority conferred, and is subject to all the 
 duties and liabilities imposed, upon a receiver by the statute 
 prescribing the duties, powers and liabilities of receivers of 
 corporations.^ Such receivers are vested with all the prop- 
 erty, real or personal, vested or contingent, of the corpora- 
 tion from the time of their having filed the security required 
 
 ^^ Thompson v. Denner, 16 A. D. validity of attachment see note in 
 
 160, 44 N. Y. Supp. 723 (1897). 35 L.R.A. 765. 
 
 "Hale V. Mason, 86 Hun, 499, 33 ^^ Gen. Corp. L. § 233 (L. 1909, 
 
 N. Y. Supp. 789 (1895). A delay c. 28). 
 
 of 16 months after the receiver's ^Gen. Corp. L. § 230 (L. 1909, 
 
 appointment in the mating of a c. 28). 
 
 motion to require him to give se- ^ Gen. Corp. L. § 106 (L. 1909, 
 
 curity is also ground for its denial. e. 240). The statute referred to is 
 
 On right of receiver to question Gen. Corp. L. §§ 230-278. 
 
638 ' BUSINESS CORPORATIONS IN NEW YORK § 525 
 
 by law.' A permanent receiver appointed for an electric 
 lighting company in an action for sequestration of its prop- 
 erty is liable for a claim by one personally injured in his 
 employ as receiver and must pay it as in the same class as 
 operating expenses before mortgage debts or other debts 
 existing when the action in which he was appointed was 
 brought.* A receiver appointed in proceedings for the dis- 
 solution of an insolvent corporation and the distribution of 
 its assets among its creditors ' * although he may be appointed 
 in a suit brought by a single creditor or stockholder, takes the 
 whole estate of the insolvent corporation for the benefit of all 
 its creditors, and, before distribution is made, opportunity is 
 to be given to creditors, not parties to the action in the first 
 instance, to come in and make themselves parties to it, by the 
 exhibition of their claims, and it is only when they make them- 
 selves parties that they can have the benefit of the decree. . . . 
 It is essential to the complete and proper administration of 
 the system established by the statute, that all questions 
 respecting the claims of creditors upon the fund in the hands 
 of the receiver; and its distribution, and the accounting by 
 the receiver should be determined upon an application to the 
 court in the action in which the receiver is appointed. Each 
 creditor has the • right to be heard in respect to his own 
 demand, and to contest the demands of others. " ^ A receiver 
 appointed of a corporation in proceedings to dissolve it is not 
 required to pay a creditor the sum received by the corpora- 
 tion on disposing of goods delivered to it by such creditor 
 under an agreement that it was to pay out of the proceeds of 
 such goods but with the option to it to buy such goods itself, 
 if it was liable under such agreement to pay for such goods 
 whether it sold such goods or bought them itself and if it 
 mixed the proceeds in with all its other moneys." A receiver 
 of a corporation appointed in proceedings for its dissolution 
 may not enforce any action against its directors which is 
 vested by law in its creditors or stockholders as such, but only 
 a cause of action that had vested in the corporation.^ 
 
 A temporary receiver of the property of a corporation 
 appointed in an action to dissolve it or to sequestrate its 
 
 'Gen. Corp. L. § 232 (&. 1913, « Baker v. Turner, 19 A. D. 223, 
 
 c. 766). 46 N. Y. Supp. 25 (1897). 
 
 * Robinson v. New York & Staten 'Higgins v. TefEt, 4 A. D. 62, 38 
 
 Island Electric Cc^ 99 A. D. 509, N. Y. Supp. 716 (1896). 
 91 N. Y. Supp. 153 (1904). 
 
 ^Rinn v. Astor Fire Ins. Co., 59 
 N. Y. 143 (1874) ; 2 R. S. 462 et seq. 
 
§ 526 RECEIVERS 639 
 
 property has power, without order of the court, (a) to col- 
 lect and receive the debts, demands and other property of 
 the corporation, (b) to preserve the property and the pro- . 
 ceeds of the debts and demands collected, (c) to sell or other- 
 wise dispose of the property as directed by the court, (d) to 
 collect, receive and preserve the proceeds thereof, (e) to 
 maintain any action or special proceeding for any of such 
 purposes, and (f) such as is incidental to the exercise of the 
 powers just enumerated-, and, if granted by the order or 
 interlocutory judgment appointing him or by an order subse- 
 quently made in the action, or by the final judgment, such 
 powers, authority, duties and liabilities of a permanent 
 receiver as the court thinks proper, except that he cannot 
 make any distribution among the creditors or stockholders 
 before final judgment unless he is specially directed so to do 
 by the court.* " It is the evident policy of the statute to vest 
 in the temporary receiver many of the important powers that 
 are exercised by a permanent receiver, and this for the very 
 obvious reason that before final judgment, in an action to 
 procure the dissolution of a corporation, it is of vital import- 
 ance that the title of the corporate property should be vested 
 in an officer of the court who has full authority to reduce it 
 to possession wherever found and to maintain any action or 
 special proceeding necessary in the premises. ' ' ° 
 
 § 526. Id. : In General. — A permanent receiver appointed by 
 or pursuant to a final judgment in an action or by or pursuant 
 to a final order in a case in which the corporation is insolvent 
 or in which a dissolution of the corporation will be beneficial 
 to the interests of the stockholders and not injurious to the 
 public interests is a trustee of the property for the benefit of 
 the creditors of the corporation and of its stockholders.^" A 
 permanent receiver appointed by or pursuant to a final judg- 
 ment in an action or by or pursuant to a final order in a case 
 in which the corporation is insolvent or in which a dissolution 
 of the corporation will be beneficial to the interests of the 
 stockholders and not injurious to the public interests must as 
 speedily as possible convert the property, real and personal, 
 of the corporation, into money.^^ " What are the duties and 
 powers of a receiver appointed in an equity action pendente 
 
 *Gen. Corp. L. §§ 104, 105 (L. "Gen. Corp. L. § 231 (L. 1909 
 
 1909, c. 28). • c. 28). 
 
 ^ Nealis v. American Tube & Iron " Gen. Corp. L. § 245 (L. 1909, 
 
 Co., 150 N. Y. 42, 44 N. E. 944 c. 28). 
 (1896) ; C. C. P. § 1788, now Gen. 
 Corp. L. § 104. 
 
640 BUSINESS CORPORATIONS IN NEW YORK § 526 
 
 lite, are not defined by the statute or code, and are usually 
 defined in the appointing order. As an ofificer of the court he 
 is subject to its directions. Section 1788 of the Code of Civil 
 Procedure [now section 104 of the General Corporation Law], 
 defining the powers and duties of a temporary receiver 
 appointed in a sequestration action does not necessarily 
 apply to receivers appointed in other actions. " ^^ A receiver 
 of a corporation cannot repudiate a legal transaction of the 
 company." " . . . a receiver is a trustee for the benefit of 
 the creditors of the corporation as well as its stockholders, 
 and . . . he is to redeem mortgages and pledges and satisfy 
 any judgment which may be an incumbrance upon the prop- 
 erty so sold by him, or to sell such property subject to mort- 
 gages, contracts, pledges or judgments."" " The general 
 rule is well estaljlished that a receiver takes the title of the 
 corporation or individual whose receiver he is, and that any 
 defense which "would have been good against the former, may 
 be asserted against the latter. But there is a recognized 
 exception, which permits a receiver, of an insolvent individual 
 or corporation, in the interest of creditors, to disaffirm deal- 
 ings of the debtor in fraud of their rights. " " " . . . the 
 situation of a receiver of an insolvent corporation is quite 
 different from that of an assignee for the benefit of creditors, 
 limited in his authority and power by the terms of the deed 
 of assignment. The receiver is subject to the direction of the 
 court that appointed him and to the provisions of the statutes 
 regulating the distribution of the assets of an insolvent cor- 
 poration . . . greater latitude of judgment and action is 
 contemplated by the provisions of the statutes on the part of a 
 receiver and in the supervisory powers of the court. " " A 
 receiver appointed of a railroad corporation pendente lite 
 may be held for the value of coal supplied him as such upon 
 allegations in the complaint that he operated the road, bought 
 the coal for that purpose, and the road could not be operated 
 without such coal, without the necessity of an allegation that 
 the court directed such operation, because his duty without 
 
 "Cobb V. Sweet, 46 A. D. 375, "Matter of Coleman, 174 N. Y. 
 
 61 N. Y. Supp. 545 (1899). 373, 66 N. E. 983 (1903). 
 
 "Hyde v. Lynde, 4 N. Y. 387 "Pittsburg Carbon Co. v. Me- 
 
 (1850). " If the settlement, though Millin, 119 N. Y. 46, 7 L.R.A. 46. 
 
 a lawful act in itself, had been 23 N. E. 530 (1890). 
 made for an illegal purpose ... " People v. St? Nicholas Bank, 151 
 
 the persons defrauded would un- N. Y. 592, 45 N. E. 1129 (1897). 
 doubtedly have a remedy." 
 
§ 527 RECEIVERS 641 
 
 a court order would be to operate the road.^' In order that 
 one holding a prior judgment may secure the sale of property 
 of the debtor held by the sheriff under a subsequent judgment 
 by a corporate receiver, notice must be given the Attorney- 
 General in the action in which the receiver was appointed and 
 the petition must be made in the district in which the action 
 is pending/' 
 
 A receiver of a corporation appointed on foreclosure of a 
 mortgage of all its property has placed in his possession all 
 the corporate property and is authorized to operate the busi- 
 ness of the company,: protect his title, defend all suits against 
 the mortgager-corporation, etc.; but he does not represent 
 the corporation or supersede it in the exercise of his powers 
 otherwise, as the corporation still exists and acts for itself 
 except as to the mortgaged property; so that the receiver is 
 not a proper party, to an action against the corporation to 
 recover for a trespass committed by it before the receiver's 
 appointment." A court of equity has jurisdiction, when it 
 has possession through its receiver in a foreclosure action of 
 the property of a railroad company, to authorize the creation 
 of debts for rolling stock and other purposes, if in its opinion 
 it is necessary so to do to secure the "continued and successful 
 operation of the road ; and to charge the debts so created a,s a 
 first lien on the mortgaged property.^" 
 
 § 527. Id.: Subject to Court Control. — The receivers ap- 
 pointed in proceedings for sequestration, dissolution, annul- 
 ment, foreclosure and preservation of assets are subject to 
 the control of the court and may be compelled to account at 
 any time.^ A temporary receiver appointed in an action to 
 dissolve a corporation or sequestrate its property is subject 
 to the control of the court.^ When an action to dissolve a 
 corporation by the People and another action to foreclose a 
 mortgage given by it are pending at the same time, the court 
 may supersede the receiver in the first action and transfer his 
 duties to the receiver in the second.^ 
 
 " Cobb V. Sweet, 46 A. D. 375, 61 ^ Gen. Corp. L, , § 276 (L. 1909, 
 N. T. Supp. 545 (1899). c. 28). 
 
 ^^Gillig V. Treadwell Company, ^ Gen. Corp. L. § 105 (L, 1909, 
 
 151 N. y. 552, 45 N. E. 1035 e. 28). 
 (1897); L. 1883, e. 378, § 8. ^Herring v. N. Y., Lake Erie & 
 
 "Decker v. Gardner, 124 N. Y. Western R. R. Co., 105 N. Y. 340, 
 334, 11 L.R.A. 480, 26 N. E. 814 12 N. E. 763 (1887). 
 (1891). 
 
 ^° Vilas V. Page, 106 N. Y. 439, 13 
 N. E. 743 (1887). 
 
 B.CN.Y.— 41 
 
642 BUSINESS CORPORATIONS IN NEW YORK §§ 528, 529 
 
 § 528. Id.: When Only One and When More.— When one 
 
 receiver only is appointed in proceedings for sequestration 
 or dissolution all provisions in reference to several receivers 
 apply to him.* When there are more receivers than one 
 appointed, the debts and property of the corporation may be 
 collected and received by any one of them.' When there are 
 more than two receivers appointed, every power and author- 
 ity conferred on the receivers may be exercised by any two of 
 them." 
 
 § 529. Id.: As to Moneys, Drafts and Books.— All orders 
 appointing receivers of corporations must designate therein 
 one or more places of deposit wherein all funds of the corpo- 
 ration not needed for immediate disbursement shall be 
 deposited; and no deposits or investments of such trust funds 
 must be made elsewhere except upon the order of the court 
 upon due notice given to the Attorney-General.^ A receiver 
 of a corporation should keep funds in his hands as such 
 separate from his individual moneys, whether banked or not ; 
 and if he does not, and the court can see any benefit to him 
 personally by the commingling of the funds and moneys, he is 
 chargeable with interest, either simple or compound, as the 
 facts developed may require.* A stockholder of a corporation 
 in a receiver's hands has the right to show from the receiver's 
 books what amount of the corporate funds the latter has 
 deposited to his private credit, and what amounts he has with- 
 drawn therefrom for his individual use.° A receiver of a 
 corporation buying goods for which the seller drew a draft 
 upon him, addressed to him as receiver, and accepted in his 
 name as receiver, is not personally liable thereon if the order 
 appointing him authorized him to carry on the corporation's 
 business so far as necessary to enable him to collect accounts 
 due it and he purchased the goods in question pursuant to 
 such authority to the seller's knowledge.'" A receiver 
 appointed for a corporation by an order directing delivery to 
 him of its books cannot hold such corporation in contempt for 
 not turning over such books if they are in the possession of a 
 new corporation as transferee of a mortgagee of the old 
 
 'Gen. Corp. L. § 235 (L. 1909, « Matter of Commonwealth Fire 
 
 c. 28). Ins. Co., 32 Hun, 78 (1884). 
 
 = Gen. Corp. L. § 236 (L. 1909, ° Matter of Commonwealth Fire 
 
 c. 28). ■ Ins. Co., 32 Hun, 78 (1884). 
 
 « Gen. Corp. L. § 236 (L. 1909, '" Olpherts v. Smith, 54 A. D. 514, 
 
 c. 28). 66 N. Y. Supp. 976 (1900); aff'd 
 
 ' Gen. Corp. L. § 313 (L. 1909, 173 N. Y. 593, 65 N. E. 1120. 
 c. 28). 
 
§ 530 RECEIVERS 643 
 
 corporation 's property who had obtained them on foreclosure 
 of the mortgage, even though the officers of the old and new 
 companies are the same and it is claimed the new corporation 
 is a sham." A receiver appointed for a corporation in pro- 
 ceedings for its voluntary dissolution cannot, by order to 
 show cause why a general assignee of the corporation who 
 had obtained possession of all its property before the 
 receiver's appointment should not deliver the corporate 
 books to him, determine the right of property in the corpo- 
 rate books, especially if the assignee was not a party to the 
 proceedings for the receiver's appointment.^^ 
 
 § 530. Id.: As to Contracts and Agreements. — If there are 
 any open and subsisting engagements or contracts of the 
 corporation which are in the nature of insurances or contin- 
 gent engagements of any kind, the receivers may with the 
 consent of the party holding such engagement cancel and dis- 
 charge the same by refunding to such party the premium or 
 consideration paid thereon by the corporation or so much 
 thereof as is in the same proportion to the time remaining 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 is deemed canceled 
 and discharged as against such receivers." A corporation is 
 not, as a matter of law, excused from performing its con- 
 tracts by the appointment of receivers in proceedings for its 
 voluntary dissolution, or relieved from liability of damages 
 for the breach." " It is the settled law in this State that a 
 receiver who enters into a contract as such, by the direction 
 or authority of. a court having jurisdiction to confer such 
 authority or make such direction, is not personally liable 
 upon the contracts so entered into. . . . It is equally well 
 settled that if a receiver, although authorized by the court to 
 contract as such, assumes to contract in his individual capac- 
 ity, although for the benefit of his trust, or if he assumes to 
 contract as receiver without authority so to do, he will be 
 held personally liable. . . . Such want of authority may 
 arise because of the omission from the order or decree of the 
 court of language suitable to confer the same, or because the 
 
 "Olmsted v. Rochester & Pitts- "Gen. Corp. L. § 256 (L. 1909, 
 
 burgh R. R. Co., 46 Hun, 552 c. 28). 
 
 (1887). . "Stannard v. Raid & Co., 114 
 
 ^2 Matter of Muehlfeld, 16 A. D. A. D. 135, 99 N. Y. Supp. 567 
 
 401, 45 K Y. Supp. 16 (1897). (1906). 
 
644 BUSINESS CORPORATIONS IN NEW YORK §§ 531, 532 
 
 court was without jurisdiction to confer such authority."" 
 It seems that corporate receivers who have repudiated a con- 
 tract to which their corporation is a party cannot restrain 
 other parties to it from enforcing a forfeiture clause therein 
 against the insolvent corporation." A temporary receiver 
 not empowered by court order to continue the corporation's 
 business, dispose of its property or employ a truckman, can- 
 not be held liable as receiver on an agreement to pay a weekly 
 salary to an individual as a truclonan." One appointed tem- 
 porary receiver of a corporation in proceedings for its 
 voluntary dissolution under an order empowering him to 
 complete its unperformed outstanding contracts is liable as 
 receiver only, and not individually, to' one supplying goods 
 to him as receiver for completion of such a contract, as the 
 statutory power of a temporary receiver to preserve ' ' prop- 
 erty " of the corporation, includes as " property " " con- 
 tracts for work entered into by the corporation, in which 
 moneys are invested for material and out of the performance 
 of which reimbursement of those moneys is to be made, or out 
 of which profits are to be derived. ' ' ^* 
 
 § 531. id.: As to Leases. — A receiver of a lessee-corpora- 
 tion on its dissolution cannot be charged as assignee of the 
 lease if he waives the term, but if the landlord does not choose 
 to re-enter the estate may be liable for the rent." 
 
 § 532. Id.: As to Counsel. — ^If the receiver of a corporation 
 for sequestration, dissolution, annulment, foreclosure or pre- 
 servation of assets employs counsel the following rules apply: 
 (1) He must within three months after he has qualified as 
 receiver enter into a written contract fixing the compensation 
 of such counsel at not exceeding a certain amount or a certain 
 percentage of the sums received and disbursed by him; (2) 
 such contract must be approved by the Supreme Court on at 
 
 ^° Sager Manufacturing Co. v. (now Gen. Corp. L. § 176 et seq.), 
 
 Smith, 45 A. D. 358, 60 N. Y. Supp. 1788 (now Gen. Corp. L. § 104 
 
 849 (1899) ; afl'd 167 N. Y. 600, 60 et seq.). 
 
 N. E. 1120. On power of railway receiver to 
 
 '"West V. Guaranty Trust Co., contract for transportation beyond 
 
 162 A. D. 301, 147 N. Y. Supp. 421 on line 31 L.R.A.(N.S.) 33. 
 
 (1914). On right of receiver of insurance 
 
 '^ Merger v. Lexow, 1 A. D. 116, company to funds deposited with 
 
 37 N. Y. Supp. 67 (1896). The state official to secure performance 
 
 truckman might hold the person ap- of contract, see note in 46 L.R.A. 
 
 pointed receiver individually liable. (N.S.) 187. 
 
 '* Nason Manufacturing Co. v. '° People v. National Trust Co., 
 
 Garden, 52 A. D. 363, 65 N. Y. 82 N. Y. 283 (1880). 
 Supp. 147 (1900) ; C. C. P. §§ 2423 
 
§ 532 RECEIVERS 645 
 
 least eight days' notice to the Attorney-Greneral ; (3) a pay- 
 ment by such receiver to his counsel on account of services 
 can only be made pursuant to an order of the court on notice 
 to the Attorney-General and subject to review on the final 
 accounting ; (4) a contract with counsel cannot 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.^" If receivers cannot agree on coun- 
 sel the court will remove them and appoint others who can.^ 
 The employment by a receiver of an insolvent bank appointed 
 on the application of the Attorney-General of one who 
 resigned as deiputy in the latter 's office to accept the retainer 
 will not be countenanced by the court.^ The court has the 
 right to examine into the reasons of a contemplated change 
 of attorneys by a receiver of an insolvent corporation, to see 
 how the change wiU effect the interests of creditors; but 
 unless the court is satisfied the interests of the trust would 
 be prejudiced by the change, it should grant the receiver's 
 motion for substitution.^ ". . . a court of primary juris- 
 diction in the exercise of its discretion may authorize the 
 receiver of an insolvent corporation, appointed in an action 
 brought for its dissolution, which was defended in good faith 
 by the corporation, though unsuccessfully, to pay as a pre- 
 ferred claim out of the funds in his hands, a reasonable sum 
 for the compensation of counsel employed by the corporation 
 in defending the action; " but if the corporation acted 
 fraudulently in asking ■ the counsel to defend the action 
 because it knew of the insolvency, though he did not, the claim 
 
 ^° Gen. Corp. L. § 242 (L. 1909, expenses incurred, and shall have 
 
 e. 28) : " In case of the inter- been approved by that court, by 
 
 vention of any policyholder or an order of the court duly entered, 
 
 depositor, by permission of the and any such order shall be the 
 
 court, such policyholder or depositor subject of review by the Appellate 
 
 shall defray the legal expenses Division and the Court of Appeals 
 
 thereof, and no allowance shall be on an appeal taken therefrom by 
 
 made for costs or fees to any at- any party aggrieved thereby." 
 
 tomey of such policyholder or de- ^People v. Brooklyn Bank, 125 
 
 positor. It shall be unlawful for A. D. 354, 109 N. Y. Supp. 534 
 
 receivers of an insurance, banking (1908) ; L. 1906, e. 349, § 2a. 
 
 or railroad corporation, or trust ^People v. Brooklyn Bank, 125 
 
 company, to pay to any attorney or A. D. 354, 109 N. Y. Supp. 534 
 
 counsel any costs, fees or allow- (1908); L. 1906, c. 349, § 2a. 
 
 ances until the amount thereof shall ^ People v. Bank of Staten Island, 
 
 have been stated to the special term 112 A. D. 791, 99 N. Y. Supp. 486 
 
 as provided in section two hundred (1906). 
 and forty-nine of this chapter, as 
 
646 BUSINESS CORPORATIONS IN NEW YORK §§ 533, 534 
 
 of counsel is infected with the fraud of the corporation, from 
 which the compensation is due, and payment thereof from the 
 receiver's fund will be refused.* The court will not approve 
 now as of a date three and one-half years back a contract 
 between receivers of a corporation and their counsel.^ 
 
 § 533. Id.: Recovery of Stock Subscriptions. — The receiver 
 appointed for sequestration, dissolution, annulment, fore- 
 closure or preservation of assets must inunediately proceed 
 to recover any sum remaining due upon any share of stock 
 subscribed in such corporation unless the person so indebted 
 is wholly insolvent, and for that purpose may commence and 
 prosecute any action or proceeding for the recovery of such 
 sum without the consent of any creditors of such corporation." 
 
 § 534. Id.: Recovery of Assets and Penalties. — Actions by 
 and against receivers are treated generally in the five hundred 
 and sixtieth, sixty-first and sixty-second sections of this book. 
 In all cases in which receivers are appointed for any domestic 
 corporation on application of the Attorney-General, all prop- 
 erty, real and personal, and all securities of any kind and 
 nature belonging to such corporation, no matter where located 
 or by whom held, must be transferred to, vested in and held 
 by such receivers, if and when directed by order of the 
 Supreme Court on due notice of application for the order 
 given to the Attorney-Greneral and the custodian of the funds, 
 securities or property.' 
 
 Eeceivers for sequestration and dissolution have power: 
 (1) to sue in their own names or otherwise and recover all the 
 property, debts and things in action belonging or due or to 
 become due to such corporation, whether accruing or matur- 
 ing before or after the dissolution thereof, and whether vested 
 or contingent at the time of such dissolution, in the same man- 
 ner and with the like effect as such corporation might or 
 
 * People V. Commercial Alliance able against the corporation, see 
 
 Life Insurance Co., 148 N. Y. 563, note in 18 L.R.A.(N.S.) 347. 
 
 43 N. E. 988 (1896). On right of receiver of corpora- 
 
 ^ In re People's Trust Co. of tion, to recover statutory added lia- 
 
 N. Y., — Misc. — (1918); N. Y. bility of corporate shareholder, see 
 
 L. J. Feb. 15, Sp. T. Kings Co.; note in 31 L.R.A.(N.S.) 365. 
 
 Gen. Corp. L. § 242. Suit in equity by receiver, as- 
 
 ° Gen. Corp. L. § 244 (L. 1909, signee, or trustee to enforce liabil- 
 
 c. 28). ity on unpaid subscriptions to 
 
 For a discussion of the question stock, see note in 46 L.R.A.(N.S.) 
 
 of right, in action by corporate re- 452. 
 
 ceiver to recover unpaid balance of ' Gen. Corp. L. § 233 (L. 1909, 
 
 stock subscriptions, to interpose a c. 28). 
 defense that would have been avail- 
 
§ 534 RECEIVERS 647 
 
 could have done if no receivers had been appointed.* In such 
 an action by such receivers no set-off can be allowed for any 
 debt unless it was owing to such creditor by such corporation 
 before the appointment of the receiver of such corporation or 
 unless it had been duly contracted by such receiver subsequent 
 to his appointment; notwithstanding the notice to creditors 
 the receivers may sue for and recover any property or effects 
 of the corporation and any debts due to it, at any time, before 
 the day appointed for the delivery or payment thereof.® Such 
 receivers have power (2) to take into their hands aU the prop- 
 erty of such corporation, whether attached, or delivered to 
 them, or afterwards discovered; and all books, vouchers and 
 securities relating to the same.^° Such receivers have power 
 (3) in the case of a non-resident, absconding or concealed 
 debtor, to demand .and receive of every sheriff who has 
 attached any of the property of such debtor, or who has in his 
 hands any moneys arising from the sale of such property, all 
 such property and moneys, on paying him his reasonable costs 
 and charges for attaching and keeping the same, to be allowed 
 by the court having jurisdiction." 
 
 A receiver in an action to. sequestrate and distribute the 
 property of a judgment-debtor corporation, or to dissolve it 
 and forfeit its corporate rights, privileges and franchises, or 
 in a proceeding to dissolve it, or in an action by the Attorney- 
 General to vacate or annul the corporation or its charter or 
 any act renewing the corporation or continuing its corporate 
 existence, or in an action to preserve the corporation 's assets, 
 appointed and qualified either before, upon, or after final 
 judgment in the action or special proceeding in which such 
 appointment was made, is entitled to a court order to help 
 him to recover assets of the corporation." The receiver must 
 show (1) by his own verified petition, affidavit or other compe- 
 tent proof (2) to the Supreme Court at a special term thereof 
 held within the judicial district wherein such appointment 
 was made that he has good reason to believe (a) 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 
 
 » Gen. Corp. L. § 239, subd. 1 (L. " Gen. Corp. L. § 239 (L. 1913, 
 
 1913, c. 766). c. 766). 
 
 ' G«n. Corp. L. § 239, subd. 1 (L. " Gen. Corp. L. § 240 (L. 1909, 
 
 1913, e. 766). e. 28). 
 
 " Gen. Corp. L. § 239, subd. 2 (L. 
 1913, c. 766). 
 
648 BUSINESS CORPORATIONS IN NEW YORK § 534 
 
 whicli of right ought to be surrendered to the receiver thereof ; 
 or (b) that any person can testify concerning the embezzle- 
 ment, conceahnent, withholding, possession, control or wrong- 
 ful disposition of any such property." Whenever such a 
 condition is shown the court must 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 wrong- 
 ful disposition of such property." At the time of making such 
 order or at any time thereafter the court may in its discretion 
 enjoin and restrain 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 can 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 cannot be used against 
 him in any criminal action or proceeding." Any person so 
 ordered to appear and be examined shall (1) be entitled to 
 the same fees and mileage (to be paid at the time of serving 
 the order) as are allowed by law to witnesses subpoenaed to 
 attend and testify in an action in the Supreme Court; (2) 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; (3) be sworn by the court or referee 
 to teU the truth; (4) be entitled to be represented on such 
 examination by counsel; (5) be liable to cross-examination; 
 and (6) be permitted to 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, have power to adjourn 
 such examination from time to time, and may rule upon any 
 question or objection arising in the course of such examina- 
 
 "Gen. Corp. L. § 240 (L. 1909, "Gen. Corp. L. § 240 (L. 1909, 
 
 c. 28). c. 28). 
 
 "Gen. Corp. L. § 240 (L. 1909, "Gen. Corp. L. § 240 (L. 1909. 
 
 e. 28). c. 28). 
 
 "Gen. Corp. L. § 240 (L. 1909, 
 c. 28). 
 
§ 535 RECEIVERS 649. 
 
 tion 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 is concluded, the testimony must be signed and sworn 
 to by the person so examined, and 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." If from such testi- 
 mony it appear to the satisfaction of the court that any per- 
 son so examined is wrongfully concealing or withholding, or 
 has in his possession or under his control, any property which 
 of right belongs to such receiver, the court may make an order 
 commanding the person so examined forthwith to deliver the 
 same to such receiver, who must 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 may require.^" 
 
 All penalties which are recovered by any receivers pursuant 
 to the eleventh article of the General Corporation La,w are 
 deemed part of the property of the corporation and must be 
 distributed as such among its creditors/ 
 
 A receiver permanently appointed for a corporation after 
 judgment for its dissolution is not entitled to property gen- 
 erally assigned by it to an assignee while insolvent, without 
 preferences and before the receiver was appointed.^ 
 
 § 535. Id.: Appraisal of Property. — Whenever it becomes 
 necessary by reason of the provisions of any law of New York 
 State to appraise in whole or in part the property of any 
 corporation in the hands of a receiver or otherwise, the per- 
 sons whose duty it is to make such appraisal must value the 
 real estate at its full and true value, taking into consideration 
 actual sales of neighboring real estate similarly situated dur- 
 ing the year immediately preceding the date of such appraisal, 
 if any; and must value all such property, stocks, bonds or 
 securities as are customarily bought or sold in the open 
 markets in the City of New York or elsewhere for the day on 
 which such appraisal or report may be required by ascertain- 
 
 "Gen. Corp. L. § 240 (L. 1909 'Gen. Corp. L. § 260 (L. 1909, 
 c. 28). c. 28). 
 
 "Gen. Corp. L. 8 240 (L. 1909, 'People v. United States Law 
 „ no-. f V \ , gj^jjjj ^ Stationery Co., 24 Misc. 
 
 ^\f'- ^ ^ 535, 53 N. Y. Supp. 852 (1898); 
 
 '"Gen. Corp. L. § 240 (L. 1909, c. C. P. § 1788; R S. part 3, c. 8, 
 c. 28). tit. 4, §§ 67, 68. 
 
650 BUSINESS CORPORATIONS IN NEW YORK §§ 536, 537 
 
 ing the range of the market and the average of prices as thus 
 found, running through a reasonable period of time.' 
 
 § 536. Id.: Holding Real Property in Trust.— A receiver 
 appointed by or pursuant to an order or a judgment in an 
 action in (a) the Supreme Court or (b) a County Court, or 
 (c) in a special proceeding for the voluntary dissolution of a 
 corporation may take and hold real property upon such 
 trusts and for such purposes as the court directs, subject to 
 the direction of the court from time to time respecting the 
 disposition thereof.* 
 
 § 537. Id.: As to Selling and Converting Property. — The 
 receivers appointed for sequestration, dissolution, annulment, 
 foreclosure or preservation of assets must convert the prop- 
 erty of the corporation, real and personal, into money as 
 speedily as possible.* Receivers on sequestration or dissolu- 
 tion have power to sell at public auction from time to time 
 all the property, real and personal, vested in them which 
 comes into their hands, after giving at least fourteen days' 
 public notice of the time and place of sale, and after also pub- 
 lishing the same for two w^eeks in a newspaper, if any, printed 
 in the county where the sale is to be made ; and to allow such 
 credit on the sale of real property by them as they deem 
 reasonable for not more than three-fourths of the purchase 
 money, which credit must be secured by a bond of the pur- 
 chaser and a mortgage on the property sold ; and on such sales 
 to execute the necessary conveyances and bills of sale; and 
 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, con- 
 tracts, pledges or judgments." A receiver duly appointed in 
 New York State by and pursuant to (1) a judgment in an 
 action or (2) an order in a special proceeding may be author- 
 ized by the court by which such judgment was rendered or 
 order made to sell or convey the property, whether real or 
 personal, of the corporation of which he is the receiver at 
 private sale and upon such terms and conditions as the court 
 may direct (a) upon application to such court and (b) upon 
 notice to such parties as maj'^ be entitled to notice of applica- 
 tions made in such action or special proceeding.^ An order 
 allowing sale by a receiver to a corporation of assets for 
 
 ^Gen. Corp. L. § 310 (L. 1909, «Gen. Corp. L. § 239, subds. 4. 
 
 ''■?^^' ^ T » o.o ,T ,nnn 5, 6 and 7 (L. 1913, c. 766). 
 
 *Gen. Corp. L. § 243 (L. 1909, %„ „^ -r I .... L -,„^« 
 ,. 28). F s V , 7Qgj, Qqj^p l § 246 (L. 1900. 
 
 '^Ge'n. Corp. L. § 245 (L. 1909. o. 28). 
 c. 28). 
 
§ 538 RECEIVERS 651 
 
 various considerations, one of which was the release from 
 personal liability of the individuals who formed and backed 
 such corporation and became its directors so that it might 
 make &e purchase, will not be modified so as to prevent such 
 release.^ While a receiver who takes property belonging to 
 a third person in the belief that it belongs to a trust is never- 
 theless liable for conversion, Avithout permission from the 
 court to sue him, yet, if upon his accounting as temporary 
 receiver such third party makes himself a party and demands 
 such property and the court orders such property to be 
 retained by the permanent receiver, the latter is protected 
 from attack without the court's permission.' The court will 
 not, in a proceeding for voluntary dissolution of a corpora- 
 tion, give temporary receivers appointed by it leave to sell 
 all the corporate property upon facts shown only in affidavits, 
 but will wait till the hearing provided by statute has been had 
 before the court or referee.^" Receivers appointed of a cor- 
 poration in proceedings for its voluntary dissolution may give 
 good title to its property by sale under order of the court of 
 which notice was given the creditors and stockholders but not 
 the Attorhey-Greneral if the latter was notified on the con- 
 firmation of the sale and did not object, even though the cred- 
 itors and stockholders received no notice of the confirmation." 
 Assuming that a trust of corporations would not be entitled 
 to the proceeds of a contract by one of its constituents because 
 the trust is illegal and void, yet the trust's receiver is entitled 
 to such proceeds ; because, whether the proceeds belong to the 
 trust or the constituent, he " unites in himself the right of 
 the trust combination, and also the right of creditors. " ^^ 
 
 § 538. Id.: As to Debts and Credits. — Payment of claims of 
 creditors of a corporation and distribution of its assets by 
 receivers are considered in the five hundred and fiftieth sec- 
 tion and following sections of this work. The notice which 
 receivers are required by statute to publish of their appoint- 
 ment must require: (1) All persons indebted to the corpora- 
 tion, by a day and at a place specified in the notice, to render 
 
 " Craig V. James, 89 A. D. 541, 85 " Johnson v. Rayner, 25 A. D. 
 
 N. Y. Supp. 583 (1904) ; afE'd 181 598, 49 N. Y. Supp. 959 (1898) ; 
 
 N. Y. 538, 73 N. E. 1121. • C. C. P. § 2429, see now Gen. Corp. 
 
 ° Fallon V. Egberts Woolen Mills L. § 191 et seq. 
 Co., 56 A. D. 585, 67 N. Y. Supp. ^^ Pittsburg Carbon Co. v. MeMil- 
 
 347 (MOO). len, 119 N. f . 46, 7 L.R.A. 46, 23 
 
 ^"Matter of Malcolm Brewing Co., N. E. 530 (1890). 
 78 A. D. 592, 79 N. Y. Supp. 1057 
 (1903); C. C. P. § 2423, no-w see 
 Gen. Corp. L. § 176 et seq. 
 
652 BUSINESS CORPORATION'S IN NEW YORK § 538 
 
 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 such 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 specified in such notice which must be 
 not less than forty days from the first publication of such 
 notice; and (4) all persons holding any open or subsisting 
 contract of the corporation to present the same in writing and 
 in detail to such receivers at the time and place specified in 
 such notice." Every person having possession of any prop- 
 erty belonging to a corporation as to which a receiver is had 
 on sequestration, dissolution, annulment, foreclosure, or 
 preservation of assets, and every person indebted to it must, 
 ; after the first publication of the notice of the appointment of 
 , receivers, account and answer for the amount of such debt 
 and for the value of such property to such receivers." Every 
 person indebted to the corporation or having the possession 
 or custody of any property or thing in action belonging to it 
 who conceals the same and does not deliver either a just and 
 true account of such indebtedness or such property or thing 
 in action to the receivers or one of them by the day for that 
 purpose appointed in the notice of their appointment forfeits 
 double the amount of such debt or double the value of such 
 property so concealed — and such penalties may be recovered 
 by the receivers." 
 
 Receivers for sequestration or dissolution have power (5) 
 to settle all matters and accounts between such corporation 
 and its debtors or creditors, and to examine any person touch- 
 ing such matters and accounts on oath, to be administered by 
 either of them." Such receivers have power (6) to compound, 
 under the order of the court appointing them, with any per- 
 son indebted to such corporation, and thereupon to discharge 
 all demands against such person.^^ Receivers for sequestra- 
 tion, dissolution, annulment, foreclosure or preservation of 
 assets may settle controversies arising between them and any 
 other person in regard to any demands against the corpora- 
 tion or debts due to it in two ways: (1) They may be referred 
 
 "Gen. Corp. L, § 250 (L. 1909, "Gen. Corp. L. § 239, subd. 8 
 
 c. 28). (L. 1913, c. 766). 
 
 "Gen. Corp. L. § 251 (L. 1909, "Gen. Corp. L. § 239 (L. 1913. 
 
 e. 28). c. 766). 
 
 "Gen. Corp. L. g 252 (L. 1909, 
 c. 28). 
 
§ 538 RECEIVERS 653 
 
 to one or more indifferent persons who may be agreed npon by 
 the receivers and the party with whom such controversy may 
 exist by a writing to that effect signed by them; or (2) the 
 receivers or the other party, if such referee or referees be not 
 selected by agreement and no action at law is pending arising 
 out of such debts or deriiands, may (1) giye a notice of their 
 intention to apply to any judge of the Supreme Court at 
 chambers (residing in the same district with such receivers) 
 for the appointtnent of one or more referees, specifying (a) 
 the time and (b) place when such application will be made; 
 and (2) serve such notice at least ten days before the time so 
 therein specified/* If referees are sought by appointment of 
 court, the judge before whom the application is made (1) 
 must on the day so specified receive due proof of the service 
 of such notice and (2) may then 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.^* Commission or commissions io "take testi- 
 mony may be issued by the referee or referees appointed to 
 hear such controversy when any witness to it resides out of 
 the county where such receivers resided at the time of their 
 appointment, and in like manner as justices of the peace are 
 now authorized to issue the same ; and the testimony so taken 
 must be returned to such referee or referees in the same man- 
 ner and be read before them on a hearing in like manner as 
 testimony taken on commission before justices of the peace.''" 
 The written agreement of the parties as to who shall be 
 referee or referees must be filed by the receivers in the ofiice 
 of a clerk of the Supreme Court and an order must thereupon 
 be entered by such clerk in vacation or in term appointing the' 
 persons so selected to determine the controversy/ The officer 
 before whom the referees are selected must certify such selec- 
 tion in writing and such certificate must be filed by the 
 receivers in the office of a clerk of the Supreme Court, who 
 must then enter an order in vacation or in term appointing 
 the persons so selected to determine the controversy/ Such 
 referees have the same powers and are subject to the like 
 duties and obligations as referees appointed by the Supreme 
 Court in personal actions pending therein, and 'receive the 
 
 ^^ Gen. Corp. L. § 241 (L. 1909, ^ Gen. Corp. L. ■ § 241 (L. 1909, 
 c. 28). ' ■ e. 28). 
 
 " Gen. Corp. L. ■-§ 241 (L. 1909, ^ Gen. Corp. L. § 241 (L. 1909, 
 c. 28). c. 28). 
 
 2° Gen. 'Corp. L. § 241 (L. 1909, 
 c. 28). 
 
654 BUSINESS CORPORATIONS IN NEW YORK § 538 
 
 same compensation.' The report of the referees must be filed 
 in the same office in Avhich the order for their appointment 
 was entered, and is conchisive on the rights of the parties if 
 not set aside by the court.* 
 
 The receivers may cancel and discharge any open and sub- 
 sisting engagements or contracts of such corporation which 
 are in the nature of insurances or contingent engagements of 
 any kind, with the consent of the party holding such engage- 
 ment, by refunding to such party the premium or considera- 
 tion paid thereon by such corporation or so much thereof as 
 is in the same proportion to the time remaining 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 must be deemed canceled and 
 discharged as against such receivers.^ The receivers must 
 retain out of the moneys in their hands a sufficient amount to 
 pay the sums which they are authorized to pay for the pur- 
 pose of canceling and discharging any open or subsisting 
 engagements.* 
 
 The receivers may retain from moneys in their hands the 
 proportion which would belong to any demand, if established, 
 on which any suit is pending against the corporation or them- 
 selves, together with the necessary costs and proceedings, to 
 be applied according to the event of such suit, or to be dis- 
 tributed in a second or other dividend.^ Every person to 
 whom a corporation is indebted on a valuable consideration 
 for any sum of money not due at the time of such distribution 
 but payable afterwards must receive his proportion with other 
 creditors after deducting a rebate of legal interest upon the 
 sum distributed for the time unexpired of such credit.' 
 
 The receivers may set off credits or debts when mutual 
 credit has been given by any corporation and any other person 
 or mutual debts have subsisted between such corporation and 
 any other person, and may pay the proportion or receive the 
 balance due; but no set off can be allowed of any claim or 
 debt which would not have been entitled to a dividend as pro- 
 vided by statute; and no set off must be allowed by such 
 receivers of any claim or debt which has been purchased by or 
 
 ^Gen. Corp. L.. § 241 (L. 1909, «Gen. Corp. L. § 257 (L. 1909, 
 
 e. 28). c. 28). 
 
 *Gen. Corp. L. § 241 (L. 1909, 'Gen. Corp. L. § 257 (L. 1909, 
 
 c. 28). e. 28). 
 
 = Gen. Corp. L. § 256 (L. 1909, «Gen. Corp. L. § 258 (L. 1909, 
 
 c. 28). c. 28). 
 
§ 539 RECEIVERS 655 
 
 transferred to the person claiming its allowance which could 
 not have been set off by him in a suit brought by such 
 receivers.' 
 
 The receivers must call a general meeting of the creditors 
 of such corporation (1) within four months from the time of 
 their appointment, (2) by a notice specifying (a) the place 
 and (b) the time of such meeting (not more than three months 
 nor less than two months after the first publication of such 
 notice), (3) by publishing such notice at least once in each 
 week for three weeks until the time of such meeting in. a news- 
 paper printed in the county where the principal place of con- 
 ducting the business of such corporation has been situated." 
 At such creditors ' meeting, or other adjourned meeting, there- 
 after, all accounts and demands for and against such corpo- 
 ration and all its open and subsisting contracts must be ascer- 
 tained and adjusted as far as may be, and the amount of 
 moneys in the hands of the receivers declared." 
 
 " The statute authorizing proceedings for the voluntary 
 dissolution of corporations prescribes a method for ascertain- 
 ing the claims of creditors and for a reference in case claims 
 are disputed. But this method is not . . . exclusive. The 
 court may, nevertheless, when in its judgment it is proper so 
 to do, authorize an action to be brought against the receiver 
 who disputes the validity of a claim, so that the matter may be 
 more deliberately examined and determined than in the sum- 
 mary method authorized by the statute. But whether the 
 validity of a claim is ascertained by a summary reference or 
 by action, the purpose of each proceeding is the same, to 
 procure an adjudication for the guidance of the receiver in 
 administering the estate of the corporation."" The Attor- 
 ney-General must be given notice of an application for an 
 order of reference of a claim presented to and rejected by a 
 receiver of a corporation appointed in an .action for its dis- 
 solution.^' 
 
 § 539. Id.: Receivers' Certificates. — " The right of a court 
 having possession of an insolvent corporation's property to 
 issue certificates and ^o declare the liens thereof precedent to 
 the existing liens has been asserted after considerable conflict 
 
 ' Gen. Corp. L. § 259 (L. 1909, N. Y. 499, 47 N. E. 903 (1897) ; 2 
 
 c. 28). R. S. § 467 et seq. 
 
 " Gen. Corp. L. §§ 250, 253 " Matter of Eustace v. New York 
 
 (L. 1909, e. 28). Building-Loan Co., 98 A. D. 97, 90 
 
 "Gen. Corp. L. § 254 (L. 1909, N. Y. Supp. 784 (1904); L. 1883, 
 
 c. 28). e. 378, § 8. 
 
 ^^Ludington v. Thompson, 153 
 
656 BUSINESS CORPORATIONS IN NEW YORK § 539 
 
 in the courts, and is now maintained in the Federal courts 
 (citations), and has been recognized by the Court of Appeals 
 in this State (citation)."^* The power of a court of equity 
 to authorize a receiver of a corporation to raise money by 
 issuing certificates which shaU be a lien on its property can- 
 riot be questioned; but the power will be exercised only to 
 protect the corporate property, and each case will be decided 
 on its own peculiar facts/' On final adjustment of demands 
 by a Contractor for work done for another, outstanding cer- 
 tificates issued by the receivers for the contractor and their 
 unpaid notes should be treated with equal favor, after what 
 may be reasonably allowed as receivers' charges and for legal 
 outlays." Unsecured claims against a corporation, however 
 meritorious in character, cannot be paid out of the proceeds 
 of sale of a mortgage receiver's certificates in the absence of 
 the consent of the bondholders, even though for nearly a year 
 prior to the date of the mortgage receivership the corporation 
 had been in the hands of a temporary receiver appointed in 
 proceedings for the corporation's dissolution." Certificates 
 issued by a receiver of a railroad, appointed in a sequestra- 
 tion action, pending an action instituted by a trustee under a 
 mortgage to foreclose, but before a receiver had been 
 appointed therein, under a court order on notice to but against 
 the objection (to the court's jurisdiction) of the trustee, to 
 pay overdue interest on the mortgage bonds and the trustee's 
 fees and expenses, and so prevent foreclosure of the prin- 
 cipal by the trustee with loss to stockholders and creditors, 
 even though sold and paid for by innocent parties before 
 reversal of such order on appeal, are not a prior lien on the 
 corporate property though so declared by the court's order; 
 because the court, granting it to have the powers of a court of 
 equity, cannot issue certificates paramount to the liens of 
 strangers to the suit unless necessary for the care, mainte- 
 nance and preservation of the property or fund, in this case 
 the corporate railroad, and certainly not solely for the pur- 
 pose of appropriating to pay bondholders part of their own 
 property against their protest." 
 
 ^* Passage v. Dansville & Mt. ^^Knickerbocker Trust Co. v. 
 
 Morris R. R. Cb., 41 A. D. 182, 58 Tarrytown, White Plains & Mama- 
 
 N. Y. Supp. 770 (1899). roneck Ry. Co., 133 A. D. 285, 117 
 
 "Rochester Trust & Safe Deposit N. Y. Supp. 871 (1909). 
 
 Co. V. Rochester & Irondequoit R. R. ^' Knickerbocker Trust Co. v. 
 
 Co., 29 Misc. 222, 60 N. Y. Supp. Oneonta, C. & R. S. Ry. Co., 201 
 
 409 (1899). N. Y. 379, 94 N. E. 871 (1911). 
 
 "Horton v. McNally Co., 168 
 A. D. 248, 153 N. Y. Supp. 429 
 (1915). 
 
§§ 540, 541 RECEIVERS 657 • 
 
 § 540. Id.: Reports. — All receivers of insolvent corpora- 
 tions who are required by law to make and file reports of their 
 proceedings must at the time of making and filing such 
 reports serve a copy thereof upon the Attorney-General of 
 New York State; and in case they neglect to make and file 
 such report or neglect for the same length of time to serve a 
 copy thereof on the Attorney-General, the latter 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." 
 
 § 541. Id.: Accountings. — A permanent receiver for se- 
 questration or dissolution must (1) keep an account of all 
 moneys received by him and (2) on the first days of January, 
 April, July and October in each and every year make and file 
 (a) a written statement (b) verified. by his oath that such 
 statement is correct and true, (c) showing the amount of 
 money received by him, his agents or attorneys, the amount 
 he has a right to retain and the items for which he claims the 
 same, and the distributive share due each person interested 
 therein.^" The statutory, quarterly account and statement, 
 and all the books and papers of the corporation in the hands 
 of a permanent receiver must be open at all reasonable times 
 to the inspection of all persons having an interest therein.^ 
 Eeceivers for sequestration, dissolution, annulment, fore- 
 closure or preservation of assets must keep a regular account 
 of all moneys received by them as receivers ; to which every 
 creditor or other person interested therein is at liberty at all 
 reasonable times to have recourse.'' The receiver must apply 
 either for a final settlement of his accounts and an order for 
 distribution or for an extension of time within one year from 
 qualifying; and if he seeks extension it must be (1) by appli- 
 cation to the court (2) upon notice to the Attorney-General 
 (3) on reasons, duly set forth, showing why he is unable to 
 close his accounts ; and the order may be; granted in the dis- 
 cretion 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 
 should not be had at any time after the expiration of one year 
 after the receiver qualifies.* It is the duty of the Attorney- 
 
 "Gen. Corp. L. § 248 (L. 1909, ^Gen. Corp. L. § 247 (L. 1909, 
 c. 28). c. 28). 
 
 2° Gen. Corp. L. § 107 (L. 1909, ^ Gen. Corp. L. § 268 (L. 1909, 
 e. 28). e. 28). 
 
 ^Gen. Corp. L. § 107 (L. 1909, *Gen. Corp. L. § 268 (L. 1909, 
 e. 28). c. 28). 
 
 B.C.N.Y.— 42 
 
668 BUSINESS CORPORATIONS IN NEW YORK § 541 
 
 General to apply for an order that the receiver show cause 
 why an accounting and distribution should not be had after 
 the expiration of eighteen months from the time the receiver 
 enters upon his duties if the receiver has not applied for a 
 final settlement of his accounts; and notice of such applica- 
 tion must be given the receiver. 
 
 The Attorney-General may, at any time he deems that the 
 interests of the stockholders, creditors, 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, to 
 compel him to account, or for such other additional order or 
 orders as to him may seem proper to facilitate the closing 
 up of the affairs of such receivership.^ Any appeal from any 
 order made upon any motion under such statute must be 
 made to the Appellate Division of the department in which 
 such motion is made." In case of such application by a party 
 other than the receiver the court must 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 provided by statute unless by special order of the 
 court.* The receivers, previous to rendering their account, 
 must insert a notice of their intention to present it in a news- 
 paper of the county in which notices of dividends are by 
 statute required to be inserted, once in each week for three 
 weeks, specifying the time and place at which such account 
 will be rendered." The receivers must give notice to the 
 sureties on their official bonds of their intention to render 
 their account, not less than eight days before the day set 
 for the hearing of such accounting." A receiver who has 
 executed and filed a bond must before presenting his accounts 
 as receiver 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 such account- 
 ing, and the same notice must be given when the accounting 
 is ordered on the petition of a person or persons other than 
 the receiver; and in no case can the receiver's accounts be 
 passed, settled or allowed unless such notice has first been 
 
 ^Gen. Corp. L. § 311 (L. 1909, »Gen. Corp. L. § 268 (L. 1909, 
 
 c. 28). c. 28). 
 
 «Gen. Corp. L. § 311 (L. 1909, "Gen. Corp. L. § 269 (L. 1909, 
 
 c. 28). ■ e. 240). 
 
 'Gen. Corp. L. § 268 (L. 1909, i° Gen. Corp. L. § 269 (L. 1909, 
 
 c. 28). c. 240), and § 227. 
 
§ 541 RECEIVERS 659 
 
 given to the surety or sureties on the receiver's official bond." 
 Upon the coming in of the receivers' report the court must 
 hear the allegations of all concerned therein and allow or dis- 
 allow the account; and decree it to be final and conclusive 
 upon all the creditors of the corporation, upon all persons 
 who have claims against it, upon any open or subsisting 
 engagement, and upon all the stockholders of the corpora- 
 tion.^^ The referee to whom the account is referred must 
 hear and examine the proofs, vouchers and documents offered 
 for or against the account and report thereon fully to the 
 court." The receivers must 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 have been retained by them 
 for any of the purposes specified in the statute and must also 
 pay into court all unclaimed dividends." The discretion of a 
 court summarily to grant a petition to compel a receiver to 
 pay over money may properly be exercised when the facts 
 are simple or only legal questions are involved while con- 
 flicting claims of third parties are not in issue; but when the 
 contest involves an issue of fraud ordinarily triable by jury, 
 the better practice is for the court to decline jurisdiction.^^ 
 An accounting in a proceeding for voluntary dissolution of a 
 corporation by one appointed temporary receiver, of which 
 the Attorney-General alone receives notice, is not binding 
 upon the creditors of the corporation, who are notified of the 
 accounting of the permanent receiver, if the permanent and 
 temporary receiver be the same person." Decrees settling 
 accounts of receivers of a corporation in other jurisdictions, 
 if valid, protect them in this jurisdiction and halt any investi- 
 gation in transactions validated thereby." ' ' It accords with 
 the long-established practice of the court to subject the 
 accounts of receivers to the scrutiny of a referee before pass- 
 ing upon them, when . . . large sums have to be accounted 
 for."^' When objections have been filed by a judgment 
 
 " Gen. Corp. L. § 227 (L. 1909, " Matter of Simonds Mfg. Co., 39 
 
 c. 240). A. D. 576, 57 N. Y. Supp. 776 
 
 "Gen. Corp. L. § 270 (L. 1909, (1899). 
 
 e. 28). "People v. Republic Savings & 
 
 "Gen. Corp. L. § 271 (L. 1909, Loan Assn., 119 A. D. 502, 104 
 
 e. 28). N. Y. Supp. 1136 (1907). 
 
 "Gen. Corp. L. § 272 (L. 1909, "People v. Oriental Bank, 129 
 
 c. 28). A. D. 865, 114 N. Y. Supp. 440 
 
 "Alden & Co. v. New York Com- (1909). 
 
 mercial Co., 157 A. D. 872, 142 
 N. Y. Supp. 772 (1913). 
 
660 BUSINESS CORPORATIONS IN NEW YORK §§ 542, 543 
 
 creditor to the account of a receiver on dissolution of a cor- 
 poration a referee may be appointed to take and state the 
 account.^* 
 
 § 542. Id.: Compensation and Expenses, in General. — The 
 receivers for sequestration, dissolution, annulment, fore- 
 closure or preservation of assets may first deduct all the 
 necessary disbursements made by them in the discharge of 
 their duty, together with such commissions as may be allowed 
 by law, out of the moneys in their hands.^" On an application 
 by a corporation to be allowed to resume business in which 
 all parties are before the court it is proper for the court, 
 without any independent proceeding, to fix the compensation 
 of the temporary receivers who have been in charge of the 
 corporation and whose accounts are before the court, as well 
 as of their counsel; and if the amounts allowed below and 
 not objected to by anyone are excessive, the appellate court 
 should reduce them.^ 
 
 § 543. Id.: Expenses. — " The jurisdiction of the court to 
 appoint receivers of property has for its primary object the 
 care and custody of the property which is the subject of the 
 receivership, pending the determination of the questions 
 involved in the litigation, and to enable the court, by placing 
 the property under the control of its officer, to preserve it to 
 answer the final decree which may be made in the action. 
 But the receiver cannot of his own motion contract debts 
 chargeable upon the fund in litigation. The court must 
 authorize expenditures on account of the property before they 
 can be charged thereon; and while it may, and does in its 
 discretion, allow expenses incurred by a receiver strictly for 
 preservation to be charged upon the fund, although incurred 
 without the prior sanction of the court, it is, nevertheless, the 
 order of the court and not the act of the receiver which 
 creates the charge and upon which its validity depends.'"' 
 
 " Matter of Home Book Co., 60 jeetion by amicus curiae, see note in 
 
 Misc. 560, 112 N. Y. Supp. 1012 18 L.R.A.(N.S.) 284. 
 
 (1908); L. 1880, c. 245, 1 L. 1880, ,^°Gen. Corp. L. § 255 (L. 1909, 
 
 p. 368, which make applicable to a c.' 28) < 
 
 receiver appointed under C. C. P. ^ People v. Knickerbocker Trust 
 
 § 2429 and except from repeal Co., 127 A. D. 215, 111 N. Y. Supp. 
 
 §§ 66 to 89 of tit. 4, pt. 3 R. S. 2 (1908) ; app. dism'd 193 N. Y. 
 
 On right of receiver to appeal 649, 86 N. E. 1129. 
 
 from decree settling his accounts On right of surviving partner 
 
 see note in L.R.A.1915D, 808. acting as receiver to compensation. 
 
 On right of court to surchai^e see note in 17 L.R.A.(N.S.) 408. 
 
 account of receiver, in absence of ^ Vilas v. Page, 106 N. Y. 439, 13 
 
 objection to accoUnt, or upon an ob- N. E. 743 (1887). 
 
§ 544 RECEIVERS CBl 
 
 Expenses of dissolution proceedings by a corporation, con- 
 sisting of 'printing, advertising, attorneys' fees, referee's and 
 stenographers' fees and disbursements, are properly payable 
 out of the funds in the hands of the receiver before all other 
 liens.' A receiver may incur expenses for the preservation of 
 the property of the corporation for which he is appointed, 
 but whether he should absolutely be held individually liable 
 for such expenses as he contracts without court authority on 
 his individual liability should be determined as a question of 
 fact on the circimistances of each case, is a moot point.* A 
 receiver of a corporation defending an action instituted 
 against it before his appointment will be required to pay, 
 from the funds in his hands as such, the costs of the action, 
 if his answer was a general denial of allegations of the com- 
 plaint proven on the trial from entries in the corporate books 
 produced by him on subpoena, and copies of which were 
 annexed to the complaint.' If a receiver appointed in pro- 
 ceedings for the voluntary dissolution of a corporation com- 
 pletes without any objection a contract by it which it had 
 assigned to another concern, he can charge the expense to 
 such assignee.* 
 
 The court will not allow counsel fees incurred in attempting 
 to repel an appointment of a receiver for the corporation- 
 client if the client knew it was insolvent and acted in bad 
 faith, however good may have been the faith and however 
 ignorant the mind of the counsel.' An order for payment of 
 fees to counsel of a corporate receiver, made upon the latter 's 
 petition is valid; but such an order on the petition of the 
 counsel himself, he himself appearing also as attorney for 
 the receiver, may be assailed collaterally by anyone affected 
 by it, especially if the counsel is the receiver's law partner.* 
 
 § 544. Id.: Compensation, Under Statute; Commissions on 
 Voluntary Dissolution. — A receiver appointed by the Supreme 
 Court in a proceeding for voluntary dissolution of a corpora- 
 tion is entitled in addition to his necessary expenses to com- 
 missions upon the sums received and disbursed by him as 
 
 ^Matter of New Platz & Walkill » Matter of Chasmar & Co., 22 
 
 Valley R. R. Co., 27 Misc. 451, 59 Misc. 680, 50 N. Y. Supp. 1065 
 
 N. Y. Supp. 247 (1899); aff'd 42 (1898). 
 
 A. D. 622, 59 N. Y. Supp. 1111. ' People v. Cominercial Alliance 
 
 * Rogers v. Wendell, 54 Hun, 540, Insurance Co., 91 Hun, 389, 36 
 
 7 N. Y. Supp. 781 (1889). Two N. Y. Supp. 248 (1895); aff'd 148 
 
 only of three judges sitting and N. Y. 563, 43 N. E. 988. 
 
 each rendering an opinion. * Matter of Commonwealth Fire 
 
 ''Locke V. Covert, 42 Hun, 484 Ins. Co., 32 Hun, 78 (1884). 
 (1886). 
 
662 BUSINESS CORPORATIONS IN NEW YORK § 545 
 
 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 aiid one-half per centum; and on 
 the remainder, not exceeding one per centum ; but in case the 
 commissions of a receiver so appointed do not amount to one 
 hundred dollars the court or judge may in his or its discre- 
 tion allow such receiver such a sum not exceeding one hundred 
 dollars for his conmiissions as shall be commensurate with 
 the services rendered by such receiver." The commissions 
 of a temporary receiver appointed for a corporation on pro- 
 ceedings for its voluntary dissolution are governed by the 
 thirty-three hundred and twentieth section of the Code of 
 Civil Procedure, and may not exceed, for receiving property, 
 two and one-half per cent of its value, though the value of 
 propet-ty (not only cash) may be considered in arriving at 
 the amount of the commissions." 
 
 § 545. Id.: Commissions in Other Cases. — A receiver of a 
 corporation, except a receiver appointed in proceedings for 
 its voluntary dissolution, is entitled in addition to his neces- 
 sary expenses to such commissions not exceeding two and one- 
 half per centum upon the sums received and disbursed by him 
 as the court by which or the judge by whom he is appointed 
 allows; but except upon a final accounting such a receiver 
 must not receive on account of his services for any one year 
 a greater amount than twelve thousand dollars, nor for any 
 period less than a year more than at that rate." A receiver, 
 except as otherwise specially prescribed by statute, is entitled 
 in addition to his necessary expenses to such commissions 
 not exceeding five 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 if in any case the commissions of 
 a temporary or permanent receiver so computed do not 
 amount to one hundred dollars such court or judge may in its 
 or his discretion allow such receiver such a sum not exceeding 
 one hundred dollars for his commissions as is commensurate 
 with the services rendered by such receiver ; and any receiver 
 appointed under section one hundred and eleven of the Keal 
 Property Law or under section twenty of the Personal Prop- 
 erty Law required by law to give a bond as such may include 
 
 »Gen. Corp. L. § 277 (L. 1909, "Gen. Corp. L. § 278 (L. 1909, 
 
 c. 28). c. 28). 
 
 1° Matter of Smith Co., 31 A. D. 
 39, 52 N. Y. Supp. 877 (1898); 
 C. C. P. § 3320. 
 
§§ 546-548 RECEIVERS 663 
 
 as a part of his necessary expenses such a sum not exceeding 
 one per centum per annum upon the amount of such bond paid 
 his surety thereon as such court or judge allows.^^ 
 
 § 546. Id.: Additional Allowance. — ^Upon final accounting 
 the court may make an additional allowance to such receiver 
 not exceeding two and one-half per centum upon the sums 
 received and disbursed by him, if the court is satisfied that he 
 has performed services that fairly entitle him to such addi- 
 tional allowance." 
 
 § 547. Id.: When More Than One Receiver. — ^When more than 
 one receiver is appointed, the compensation provided by 
 statute must be divided between the receivers." 
 
 § 548. Id.: In General. — ^A continuing corporate receiver is 
 entitled to commissions as to the fund which had been col- 
 lected or received by the late receiver, his predecessor, for 
 paying it out only, and not for receiving it.^* A referee in a 
 proceeding to fix the compensation of a removed receiver of 
 a corporation cannot have an order that the new receiver pay » 
 the compensation.^" The statutory provision entitling a 
 receiver to such commissions not exceeding five per cent as 
 the court by which he is appointed allbws does not prohibit 
 the General Term from reviewing the discretion of the Special 
 Term in regard to the amount allowed." ' ' Receivers are sup- 
 posed to earn the compensation provided for them by law, 
 and their commissions are for services rendered, and it is not 
 to be presumed, in the absence of a clear intention expressed 
 in the statute, that the legislature meant [by enacting a new 
 law affecting receivers' compensation] to interfere with com- 
 pensation that had already been earned." " It cannot be said 
 as matter of law that receivers are entitled to no compensa- 
 tion because the order appointing them has been vacated." 
 A receiver appointed because of disagreements as to the man- 
 agement of a corporation's affairs cannot receive commis- 
 sions allowed by a statute for moneys received and paid out 
 
 "C. C. P. § 3320. . (1887); dism'd 109 N. Y. 663, 17 
 
 "Gen. Corp. L. § 278 (L. 1909, N. E. 868. 
 
 c, 28) . ^* People ex rel. Newcomb v. 
 
 "Gen. Corp. L. § 278 (L. 1909, McCall, 94 N. Y. 587 (1884), hold- 
 
 c. 28). ing that L. 1883, c. 378, § 2, did not 
 
 ^° Attorney-General v. Continental affect the compensation of a re- 
 insurance Co., 32 Hun, 223 (1884). ceiver whose compensation at the 
 
 "Attorney-General v. Continental time of appointment was governed 
 
 Life Insurance Co., 27 Hun, 524; by L. 1869, e. 902. 
 
 dism'd 93 N. Y. 45. "People v. Oriental Bank, 129 
 
 ^^ Hanover Insurance Co. v. Ger- A. D. 865, 114 N. Y. Supp. 440 
 
 mania Insurance Co., 46 Hun, 308 (1909). 
 
664 BUSINESS CORPORATIONS IN NEW YORK §§ 549, 550 
 
 when he carried on the business through the instrumentality 
 of two persons owning all the stock, without himself receiving 
 or disbursing the money or doing more than supervising 
 somewhat the corporate affairs.^" 
 
 § 549. Id.: On What Allowed. — The commissions allowed a 
 corporate receiver must be confined to the sums received and 
 paid out.^ A receiver upon the settlement of his accounts or 
 the litigation is entitled to his commissions upon the valiie of 
 the entire property that came into his hands and was dis- 
 tributed by him by order of court whether to creditors or by 
 settlement and whether consisting of cash, securities, notes, 
 bonds, mortgages, evidences of indebtedness, but probably 
 not realty.'^ A resigning receiver of an insurance association 
 is not entitled to commissions on reassessments made by him 
 upon members or the percentage of such reassessments 
 deemed by him to be collectible, but only upon funds actually 
 received by him.^ 
 
 § 550. Id.: Payments and Distribution, Governing Statutes. — 
 A permanent receiver must pay the distributive share shown 
 by his statutory, quarterly statement to be due each person 
 interested therein to the person or persons entitled thereto, 
 on demand, at any time after such statement.* A final judg- 
 ment in an action brought to dissolve a corporation or to 
 
 ^"In the Matter of the Woven ing $12,000 foj." any one year or a 
 
 Tape Skirt Co., 85 N. Y. 506 (1881) ; proportionate sum for a less period, 
 
 L. 1876, c. 442. The compensation provided that if there be more than 
 
 of a receiver of a corporation as one receiver the compensation • pre- 
 
 well as of an individual, appointed scribed must be divided between 
 
 in a foreclosure action, is governed them; and, secondly, an additional 
 
 by the Code of Civil Procedure. allowance upon final accounting not 
 
 U. S. Trust Co. V. N. Y., West Shore exceeding two and a half upon the 
 
 & Buffalo Ry. Co., 101 N. Y. 478, sums received and disbursed by him 
 
 5 N. E. 316 (1886) ; C. C. P. § 3320. if the court is satisfied that he has 
 The provisions of chapter three hun- performed services fairly entitling 
 dred seventy-eight of the Laws of him to such additional allowance, 
 eighteen hundred eighty-three, and People v. Brooklyn Bank, 64 Misc. 
 particularly of section two thereof 538, 118 N. Y. Supp. 722 (1909) ; 
 regulating the compensation of eor- L. 1906, c. 349, § 2. 
 
 porate receivers, relate exclusively ^Moe v. McNally Co., 138 A. D. 
 
 to receivers of corporations, ap- 480, 123 N. Y. Supp. 71 (1910) ; 
 
 pointed in proceedings in insolvency. C. C. P. § 3320. 
 
 U. S. Trust Co. V. N. Y. West Shore ^ People v. Brooklyn Bank, 64 
 
 6 Buffalo Ry. Co., 101 N. Y. 478, Misc. 538, 118 N. Y. Supp. 722 
 5 N. E. 316 (1886) ; L. 1883, c. 378, (1909) ; L. 1906, c. 349, § 2. 
 
 § 2. Two different percentages may ^ People v. Mutual Benefit Asso- 
 
 be allowed a receiver as commis- ciates, 39 Hun, 49 (1886). 
 
 sions: first, not over two and a half *Gen. Corp. L. § 107 (L. 1909, 
 
 on sums received and disbursed by c. 28). 
 him as the court allows, not exceed- 
 
§ 550 RECEIVERS 6«5 
 
 sequestrate its property, either against the corporation 
 separately or in conjunction with its stockholders, directors, 
 trustees of other oflBcers, 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 iai case of the 
 voluntary dissolution of a corporation.^ In case of the neglect 
 or refusal of a permanent receiver for sequestration or disso- 
 lution to comply with the statutory requirements that he pay 
 
 '■ to the person entitled thereto a distributive share shown in his 
 statutory, quarterly statement, and that he keep open for 
 inspection such statement and the corporate books and papers 
 in his hands, or with any duty imposed upon him, the Supreme 
 Court, at either an appellate division or special term, must 
 on the application of the party aggrieved, unless such neglect 
 or refusal is satisfactorily explained to the court, forthwith 
 remove such receiver and appoint some suitable person as 
 receiver in his place. Such receiver is also liable to pay the 
 party interest at the rate of ten per centum per annum on 
 all moneys due to such party and retained by him more than 
 one day after demand of such party's distributive share as 
 shown by the receiver 's statutory, quarterly statement.* 
 
 The receivers for sequestration, dissolution, annulment, 
 foreclosure or preservation of assets must distribute the resi- 
 
 ~ due of the moneys in their hands among all those who have 
 exhibited their claims as creditors and whose debts have been 
 ascertained, as follows: (1) All debts due by the 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, adminis- 
 trator or trustee — and if there be not sufficient to pay all 
 debts of the character above specified, then a distribution 
 must 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 are respectively liens; (4) all other creditors of 
 such corporation, in proportion to their respective demands 
 without giving any preference to debts due on specialties.'' 
 Every creditor who has neglected to exhibit his demand 
 before the first dividend and who delivers his account to the 
 receivers before the second dividend must receive the sum he 
 
 = Gen. Corp. L. § 112 (L. 1909, ^Gen. Corp. L. § 261 (L. 1909, 
 e. 28). c. 28). 
 
 «Gen. Corp. L. § 107 (L. 1909, 
 c. 28). 
 
666 BUSINESS CORPORATIONS IN NEW YORK § 550 
 
 would liave been entitled to on the first dividend before any 
 distribution is made to the other creditors.' The receivers 
 must make a second dividend (1) of all moneys in their hands. 
 (2) among the creditors entitled thereto (3) within one year 
 after the first dividend (4) if the whole of the property of 
 such corporAtion is not distributed on the first dividend.' 
 Notice (1) of a second dividend and (2) that if will be a final 
 dividend, must be (3) inserted (a) once a week (b) for three 
 weeks in a newspaper printed in the county where the princi- 
 pal place of business of the corporation was situated." Such 
 second dividend must be made in all respects in the same man- 
 ner provided by statute in relation to the first dividend, and 
 no other must be made thereafter among the creditors of such 
 corporation, except (1) to the creditors having suits against 
 (a) the corporation or (b) the receivers pending at the time 
 of such second dividend, and (2) of the moneys which may 
 be retained to pay such creditors, as provided by statute." 
 
 The receivers must distribute any surplus remaining in 
 their hands after the second dividend is made among the 
 stockholders of such corporation in proportion to the respec- 
 tive amounts paid in by them severally on their shares of 
 stock.'^ When any suit pending at the time of the second 
 dividend is terminated the receivers must apply the moneys 
 retained in their hands for that purpose to the payment of 
 the amount recovered and their necessary charges and 
 expenses; and if nothing has been recovered they must dis- 
 tribute such moneys after deducting their expenses and costs 
 among the creditors and stockholders of the corporation in 
 the same manner as directed by statute in respect to a second 
 dividend." The receivers must consider as relinquished and 
 distribute on any subsequent dividend among the other cred- 
 itors any dividend which has been declared and remains 
 unclaimed by the person entitled thereto for one year after it 
 was declared." The receivers are not answerable to any cred- 
 itor of the corporation or to any person having claims against 
 the corporation by virtue of any open or subsisting engage- 
 ment after such second dividend has been made imless the 
 
 ^ Gen. Corp. L. § 262 (L. 1909, " Gen. Corp. L. § 264 (L. 1909, 
 
 c. 28). c. 28). 
 
 ^Gen. Corp. L. § 263 (L 1909, "Gen. Corp. L. § 265 (L. 1909, 
 
 c. 28). c. 28). 
 
 '"Gen. Corp. L. § 263 (L. 1909, "Gen. Corp. L. § 266 (L. 1909, 
 
 c. 28). c. 28). • 
 
 "Gen. Corp. L. § 263 (L. 1909, 
 c. 28). 
 
§, 551 RECEIVERS 667 
 
 demands of such creditor have been exhibited and the engage- 
 ments upon which such claims are founded have been pre- 
 sented to such receivers in detail and in writing before or at 
 the time specified by them in their notice of a second 
 dividend/^ 
 
 § 551. Id.: In General. — A reference cannot be granted of 
 course upon the consent of the parties in an action against 
 a corporation to obtain the distribution of its property unless 
 it is brought by the Attorney-General ; and if the parties con- 
 sent to a reference the court may in its discretion grant or 
 refuse a reference, and if a reference is granted the court 
 must designate the referee and if the referee refuses to serve 
 or a new trial of the action is granted the court must upon the 
 application of either party appoint another referee." "A 
 corporation is created by the edict of the legislature and dies 
 at its command. Knowledge is imputed to all who deal with 
 it that when it suspends business the law takes charge of its 
 affairs, liquidates its debts, converts its assets and distributes 
 the proceeds among its creditors. Those who contract with it 
 do so ' with the knowledge of the statutory conditions, and 
 these must be deemed to have permeated the agreement and 
 constituted elements of the obligation ' (citations). The 
 process of administration provided by law is through a 
 receiver, as the executive arm of the court. He is appointed 
 for the benefit of all the creditors, both preferred and unpre- 
 ferred, and holds the assets under the direction of the court, 
 in trust primarily for them and finally for the corporation or 
 its stocldiolders. Thereupon by operation of law the cred- 
 itors become the equitable owners of the assets and the admin- 
 istration of affairs is for their benefit as such. The claims of 
 creditors against the defunct coi^poration differ from their 
 claims against its assets in sequestration, for they are not 
 proved against the insolvent and dissolved nonentity, but 
 against the fund in the receiver's hands. In the distribution 
 of that fund the general rule applicable to insolvent estates, 
 that equality is equity, should prevail so far as the statute, 
 when reasonably construed, will permit."" The general 
 assets of a corporation are to be administered at the home of 
 the corporation in case of its insolvency for the benefit of all 
 creditors wherever residing and the courts of one state have 
 no right to favor domestic creditors on distribution; and 
 
 ^'Gen. Corp. L. § 267 (L. 1909, "People v. American Loan & 
 
 c. 28). Trust Co., 172 N. Y. 371, 65 N. E. 
 
 "C. C. P. § 1012. 200 (1902). 
 
668 BUSINESS CORPORATIONS IN NEW YORK § 551 
 
 when the ancillary receiver in a state foreign to the corpora- 
 tion's home state is about to transmit the fund under his 
 control to the home state, the court may impose such condi- 
 tions as are just and reasonable to protect domestic creditors 
 e. g., by requiring the assignee in the home state to give 
 security before receiving the fimd collected in the foreign 
 jurisdiction.'* A receiver pendente lite of all a corporation's 
 property in a proceeding foreclosing a corporate mortgagor 
 who has also been appointed receiver in proceedings supple- 
 mentary to an execution on a judgment had by a creditor can- 
 not be compelled to apply to payment of such judgment a 
 sum equal to the amount thereof until it has been determined 
 otherwise than in the supplementary proceedings that there 
 is a surplus applicable to the discharge of such judgment over 
 the amount properly applicable to the claims in the fore- 
 closure action." A creditor of an insolvent corporation is 
 entitled, on administration and settlement of its estate by a 
 receiver in a court of equity, to prove and receive a dividend 
 upon the full amount of the debt due from the insolvent 
 estate, without being compelled to deduct from the amount of 
 the proved debt the value of any collateral securities or of 
 any proceeds thereof.^" " Before a claim for 250 days' 
 service, rendered between JTovember 5, 1902, and September 
 12, 1903, at $100 a day can be allowed against an insolvent 
 corporation, evidence highly satisfactory and most convincing 
 must be presented that the services were, in fact, actually 
 rendered.'" " The claims of creditors [of an insolvent cor- 
 poration] are presentable when the receiver is appointed, and 
 that date fixes their status and amount, regardless of when 
 they are in fact presented. " ^ "In People v. Metropolitan 
 Surety Co. (205 N. Y. 135, 98 N. E. 412) it was held that 
 claims against the funds in the hands of the receiver [of a 
 dissolved corporation] must be valued and determined and 
 their status fiked as of the date of the commencement of the 
 action for dissolution and that contingent claims cannot share 
 in the distribution. ' ' ' Claims under undertakings of an 
 insurance company which has been dissolved for insolvency 
 
 ^* People V. Granite State Provi- ^ People v. New York Building- 
 dent Assn., 161 N. Y. 492, 55 N. E. Loan Banking Co., 112 A. D. 166, 
 1053 (1900). 98 N. Y. Supp. 290 (1906). • 
 
 ^° Kenney v. South Shore Natural ^ People v. American Loan & 
 
 Gas & F. Co., 201 N. Y. 89, 94 N. E. Trust Co., 172 N. Y. 371, 65 N. E. 
 
 606 (1911); C. C. P. § 2447. 200 (1902). 
 
 ^° People V. Remington, 121 N. Y. ^ People v. Metropolitan Surety 
 
 328, 8 L.R.A. 458, 24 N. E. 793 Co., 158 A. D. 651, 144 N. Y. Supp. 
 
 (1890). 235 (1913). 
 
§ 552 RECEIVERS 669 
 
 and placed in the hands of a receiver in an action instituted 
 by the Attorney-General must be valued and determined and 
 their status fixed as of the date of the commencement of the 
 action for dissolution.* 
 
 In the settlement of the affairs of insolvent corporations 
 " while interest is allowed as against the corporation itself, 
 or its stockholders, if the assets are sufficient for the purpose, 
 as between preferred and unpreferred creditors no interest 
 is allowed after the law takes charge through the appointment 
 of a receiver. " ° " , . . in an action brought by the 
 Attorney-G-eneral to wind up the affairs of an insolvent bank, 
 . . . interest at the contract rate should be allowed and 
 credited upon the accounts of its creditors to the date that the 
 receiver took possession of its assets; that thereafter interest 
 is not allowable as between the creditors themselves, but is 
 allowable against the corporation; and if the assets are 
 sufficient after payment of the principal of the indebtedness, 
 as established at the time the receiver took possession, the 
 interest should be paid at the legal rate before the distribution 
 of the surplus to the stockholders." * 
 
 § 552. Id.: Preferred Claims, Governing Statutes.— The 
 receivers for sequestration, dissolution, annulment, fore- 
 closure, or preservation of assets must distribute the residue 
 of the moneys in their hands among all those who have 
 exhibited their claims as creditors and whose debts have been 
 ascertained, as follows: (1) All debts due by the 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, adminis- 
 trator or trustee : — and if there be not sufficient to pay all 
 debts of the character above specified, then a distribution must 
 be made among them, in proportion to their amounts respec- 
 tively; (3) judgments actually obtained against such cor- 
 poration, to the extent of the value of the real estate on which 
 they are respectively liens; (4) all other creditors of such 
 corporation, in proportion to their respective demands, with- 
 out giving any preference to debts due on specialties.'' Upon 
 the appointment of a receiver of a corporation organized 
 
 * People V. Metropolitan Surety * People v. Merchants' Trust Co., 
 
 Co., 205 N. Y. 135, 98 N. E. 412 187 N. Y. 293, 79 N. E. 1004 (1907). 
 
 (1912). ''Gen. Corp. L. § 261 (L. 1909, 
 
 ^People V. American, Loan & c. 28). 
 Trust Co., 172 N. Y. 371, 65 N. B. 
 200 (1902); G-en. Bank. L. § 130; 
 L. 1872, c. 868; L. 1884, c. 260, § 3. 
 
670 BUSINESS CORPORATIONS IN NEW YORK § 553 
 
 under the laws of and doing business in New York State (other 
 than a moneyed corporation), the wages of the employees of 
 such corporation are preferred to every other debt or claim." 
 The term " employee, " when used in the Labor law preferring 
 the claims of the employees of corporations when receivers 
 are appointed for the latter, means a mechanic, workingman, 
 or laborer who works for another for hire.® No corporation 
 which has 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 must 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 con- 
 sideration than the full value of the property paid in cash; 
 and no conveyance, assignment 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 insol- 
 vency is imminent with the intent of giving a preference to 
 any particular creditor over other creditors of the corpora- 
 tion is valid, except that laborers' wages for services are 
 preferred claims and are entitled to payment before any other 
 creditors out of the corporation assets in excess of valid 
 prior liens or encumbrances ; and every person receiving by 
 means of any such prohibited act or deed any property of the 
 corporation is bound to account therefor to its creditors or 
 stockholders or other trustees ; and no stockholder can make 
 any assignment or transfer of his stock to any person in con- 
 templation of its insolvency; and every transfer or assign- 
 ment or other act done in violation of the foregoing prohibi- 
 tions is void; and every director or officer of a corporation 
 who violates or is concerned in violating any of such prohibi- 
 tions is personally liable to the creditors and stockholders of 
 their corporation to the full extent* of any loss such creditors 
 or stockholders may respectively sustain by such violation.^" 
 § 553. Id.: In General. — ^A preference given by statute on the 
 appointment of a receiver of a corporation to payment of 
 the wages of its employees, operatives and laborers is not 
 assignable before the appointment of the receiver is made.'^ 
 
 ' Labor L. § 9 (L. 1909, c. 36). by insolvent corporation, see note in 
 
 "Labor L. § 2 (L. 1909, c. 36). 22 L.R.A. 802. 
 
 "St. Corp. L. § 66 (L. 1909, "People v. Remington, 45 Hun, 
 
 c. 61). 329; aflE'd 109 N. Y. 631, 16 N. E. 
 
 Generally on the question of 680; L. 1885, c. 376. 
 preferences among creditors given 
 
§ 553 RECEIVERS 671 
 
 When a corporation gave for sums due its laborers orders 
 on itself payable to tbe order of merchants which were 
 delivered by the laborers to the payees for goods purchased, 
 this amounted to a payment of the laborers' wages, so that 
 on appointment of a receiver for the corporation there is 
 no preference of such wages to be taken advantage of by 
 anyone." 
 
 The distribution of the assets of an insolvent corporation 
 involves the payment of taxes before creditors." When a 
 receiver appointed in proceedings for the voluntary dissolu- 
 tion of a corporation is directed by the court to take posses- 
 sion of two classes of its property, first, that on. which the 
 sheriff had levied under attachment by some of its creditors, 
 and, second, that on which no attachment or levy had been 
 made, on sale of both classes by the receiver, he must pay 
 from the proceeds, first the administration expenses and his 
 fees, second the claims of the attaching creditors, third, taxes 
 due municipal and state authorities, and fourth, the general 
 creditors." Claimants against a corporation, who had 
 recovered judgment against it after the appointment of a 
 receiver for it in an action by a stockholder because of its 
 insolvency, but where action was begun before the stock- 
 holder's proceeding was instituted, cannot have a preference 
 on the grounds that at the time of their recovery the company 
 owned realty on which their judgment was a lien and that the 
 appointment of the receiver was void, if the company was 
 represented on the appointment, as, in whatever action he was 
 designated, the receiver was the court in holding the property, 
 and it will be considered held for the benefit of all creditors.''' 
 ' ' An officer of a corporation, with knowledge of its insolvency, 
 cannot by a bookkeeping entry appropriate property of the 
 corporation to pay a debt due to him."^" A lawyer whose 
 claim against a temporary receiver of a corporation for 
 services rendered him is by agreement between them and its 
 directors made a lien upon its then assets which were about 
 to be turned over to it and the receiver discharged, may 
 recover on the basis of an equitable lien, in preference to 
 
 ^^ People v.. Remington, 45 Hun, ^' Attorney-General v. Continental 
 
 329; aff'd 109 N. Y. 631, 16 N. E. Life Insurance Co., 28 Hun, 360 
 
 680; L.. 1885, c. 376. (1882) ; afl'd 93 N. Y. 630. 
 
 ^^ In re Receivership of Colum- ^° Rock Island Butter Co. v. Pree- 
 
 bian Ins. Co., 42 N. Y. (3 Keyes) man, 83 Misc. 7, 144 N. Y. Supp. 
 
 123 (1866). 317 (1913); St. Corp. L. § 66. 
 
 "Matter of Atlas Iron Construc- 
 tion Co., 19 A. D. 415, 46 N. Y. 
 Supp. 467 (1897). 
 
67a BUSINESS CORPORATIONS IN NEW YORK § 554 
 
 creditors when the corporation later goes permanently into 
 another receiver's hands." One holding notes of a corpora- 
 tion's receiver issued by the latter without authority of court 
 has no valid claim to share with the holders of notes issued 
 by the receiver by authority of the court/* A subtenant of 
 an insolvent corporate lessee for which a receiver has been 
 appointed cannot set off against a claim by the receiver for 
 rent which accrued during a period of tenancy mainly at the 
 receiver 's hands a debt of the insolvent corporation." A fund, 
 collected by an ancillary receiver appointed in this State for 
 an insolvent foreign corporation, from a special deposit in 
 this State's Banking Department made as a statutory condi- 
 tion of the corporation's right to transact business in New 
 York, the statute providing for the distribution of the deposit 
 among New York creditors on the appointment of a receiver 
 in this State, is not a part of the corporation's general assets 
 distributable to all creditors but a specific deposit reserved to 
 New York creditors.^" 
 
 § 554. Id.: Who Are Laborers, and Employees. — ^Upon the 
 appointment of a receiver of a corporation (other than a 
 moneyed corporation) organized under the laws of and doing 
 business in New York State, the wages of its employees — 
 defined by statute to be mechanics, workingmen or laborers 
 who work for another for hire — are preferred to every other 
 debt or claim.^ When a corporation refuses to pay its notes 
 or other obligations when due or is insolvent or its insolvency 
 is imminent, however invalid other preferences may be, yet 
 laborers' wages for services are preferred claims and are 
 entitled to payment before any other creditors out of the 
 corporation assets in excess of valid prior liens or incum- 
 brances.^ Wages earned by laborers prior to the passage of 
 an act preferring them in payment on the appointment of a 
 receiver for their corporate employer are not entitled to a 
 preference.' The important word in the statute preferring to 
 other claims against a corporation for which a receiver has been 
 appointed the wages of the employees, operatives and laborers 
 thereof is the word " \^ages," which " is applied in common 
 
 " Whitehead v. O'Sullivan, 12 dent Assn., 161 N. Y. 492, 55 N. E. 
 
 Misc. 577, 33 N. Y. Supp. 1098 1053 (1900). 
 
 (1895). ^ Labor L. §§ 9 and 2 (L. 1909, 
 
 "Wesson v. Chapman, 77 Hun, c. 36). 
 
 I'' 4, 28 N. Y. Supp. 431 (1894). = St. Corp. L. § 66 (L. 1909, 
 
 "Matter of ArkeU Publishing c. 61). 
 
 Co., 29 Misc. 145, 60 N. Y. Supp. 'People v. Remington, 45 Hun, 
 
 832 (1899). 329; aff'd 109 N. Y. 631, 16 N. E. 
 
 20 
 
 People V. Granite State Provi- 680; L. 1885, c. 376. 
 
§ 554 RECEIVERS 673 
 
 parlance specifically to the payment made for manual labor, 
 or other labor of menial or mechanical kind, as distinguished 
 from salary and from fee, which denotes compensation paid 
 to professional men," and the word " employees " must be 
 limited by the more specific words " operatives " and 
 " laborers," so that there shall be no preference given to 
 the clerical force engaged in transacting the corporation's 
 business, or to the superintendent, foremen or officers of the 
 corporation who are compensated by a fixed yearly salary. ', ' * 
 " The case of bookkeepers or persons employed to make sales 
 of merchandise, or of property manufactured by the corpora- 
 tion, are . . . ' employees, ' within the meaning of the act and 
 their compensation earned is ' wages,' whether such persons 
 are employed by the day, or month, or year, and whether the 
 compensation is denominated ' salary ' or ' wages ' in the 
 contract or employment."® " The term * employee ' is the 
 correlative of ' employer ' and neither term has either tech- 
 nically or in general use a restricted meaning by which any 
 particular employment or service is indicated. The terms 
 are as applicable to attorney and client, physician and patient, 
 as to master and servant, a farmer and day laborer or a 
 master mechanic and his workman. To employ is to engage 
 or use another as an agent or substitute in transacting busi- 
 ness, or the performance of some service 5 it may be skilled 
 labor or the service of the scientist or professional man as 
 well as servile or unskilled manual labor."* The word 
 " employee " is of " more comprehensive signification than 
 laborers and operatives;" and if not used in a statute to be 
 strictly construed should be given a liberal interpretation.'^ 
 A bookkeeper is an " employee " to be paid his wages as a 
 preferred claim by a receiver of an insolvent corporation.' 
 
 * Matter of Stryker, 158 N. Y. ployees " of a corporation ' ' for 
 
 526, 53 N. E. 525 (1899) ; L. 1885, labor and services actually done in 
 
 e. 376. connection with that company's 
 
 'Palmer v. V^n Santvoord, 153 railways." 
 
 N. Y. 612, 38 L.R.A. 402, 47 N. E. ' Gumey v. Atlantic & Great 
 
 915 (1897); L. 1885, c. 376. The Western Ry. Co., 58 N. Y. 358 
 
 employment was to set up, take (1874). See note supra. - 
 
 down and repair machines ; to sell * People v. Beveridge Brewing Co., 
 
 them; and to obey orders. 91 Hun, 313, 36 N. Y. Supp. 525 
 
 "Gumey v. Atlantic & Great (1895); L. 1885, c. 376: "Where, 
 
 Western Ry. Co., 58 N. Y. 358 a receiver of a corporation . . .; 
 
 (1874) . The question arose on the shall be appointed, the wages of the 
 
 claim of an attorney to be paid by employees, operatives and laborers 
 
 a receiver directed to pay debts thereof shall be preferred to every 
 
 " owin^ to the laborers and em- other debt or claim against such 
 B.C.N.Y.— 43 
 
674 BUSINESS CORPORATIONS IN NEW YORK § 554 
 
 A bookkeeper is not a mechanic, workingman or laborer so 
 as to be entitled to a preference in payment of wages on the 
 appointment of a receiver for a corporation by which he is 
 employed.' A clerk, a draftsman, a superintendent and a 
 foreman receiving monthly payment for services, though 
 doing manual labor incidentally, if not hired for that are not 
 within the statute preferring the wages of employees, opera- 
 tors and laborers of a corporation of which a receiver has 
 been appointed over others of its creditors." One employed 
 by a corporation to assist the general manager in keeping its 
 books and to clean its office and showroom and assist in 
 putting together, taking apart and shipping wire wicket-fence 
 and weaving machines at forty dollars a month payable in 
 four instalments is entitled to preference in payment by the 
 receiver appointed of the corporation, under a statute pre- 
 ferring the wages of employees, operatives and laborers.^^ 
 One employed at a weekly wage of forty dollars as manager 
 of a corporation, with absolute control over its affairs, doing 
 nothing save to exercise general supervision, and having 
 under him a foreman in the manufacturing department who 
 receives orders from him only, is not an " employee " whose 
 claim for earnings is to be preferred, under the statute, by 
 a receiver appointed for the corporation." An assistant, at 
 a salary of $700 a month, $100 in cash and $600 in securities, 
 to a superintendent in two foreign countries of a domestic 
 corporation, is not a servant or laborer though he occasionally 
 performs manual labor." A superintendent or an attorney is 
 not an employee, operative or laborer of a corporation 
 entitled to preference in payment on appointment of a 
 receiver for it." Sums due attorneys of a corporation for 
 
 corporation, and shall be paid by what sort of service it comprehends, 
 
 the receiver from the moneys of it may be said generally that the 
 
 such corporation which shall first term ' employees ' includes persons 
 
 come to his hands." employed by a corporation in com- 
 
 " Cochran v. A. S. Baker Co., 30 paratively subordinate positions 
 
 Misc. 48, 61 N. Y. Supp. 724 who cannot correctly be described 
 
 (1900) ; L. 1897, c. 415, §§ 8, 2. either as operatives or laborers; 
 
 ^^ Matter of Stryker, 73 Hun, 327, such for example as bookkeepers, 
 
 26 N. Y. Supp. 209; aff'd 158 N. Y. clerks, salesmen and agents en- 
 
 , 526, 53 N. E. 525; L. 1885, c. 376. gaged at a regular compensation in 
 
 ^^ Brown v. A. B. C. Fence Co., soliciting orders for goods." 
 
 52 Hun, 151, 5 N. Y. Supp. 95 ^^ Dean v. DeWolf, 16 Hun, 186 
 
 (1889) ; L. 1885, c. 376. (1878) ; afi'd 82 N. Y. 626; L. 1848, 
 
 ^^ Matter of American Lace c. 40, § 18. 
 
 Works, 30 A. D. 321, 51 N. Y. Supp. " People v. Remington, 45 Hun, 
 
 818 (1898) ; L. 1885, c. 376. " While 329; afE'd 109 N. Y. 631, 16 N. E. 
 
 it is extremely difficult to lay down 680; L. 1885, c. 376. 
 any exact rule stating precisely 
 
§ 554 ' RECEIVERS 675 
 
 professional services rendered upon occasional retainers are 
 not " wages," which are preferred in payment when a 
 receiver is appointed for it.^'^ An independent contractor for 
 a corporation is not its employee, operative or laborer so as 
 to have his compensation preferred as a wage on its insol- 
 vency.^" A person to whom a corporation furnishes stock 
 from which, rooms in which and power and machinery with 
 which to manufacture parts of machines and implements, and 
 to whom it pays a fixed price for the articles manufactured, 
 and who employes, discharges and pays his own employees, 
 is not an employee, operative or laborer entitled to prefer- 
 ence in payment of the amount due him, as wages, when a 
 receiver for the corporation is appointed." One employed to 
 sell goods abroad for a corporation at an annual salary, plus 
 a commission and traveling expenses is not entitled to prefer- 
 ence in payment on the appointment of a receiver for his cor- 
 poration on the ground that he is an employee, laborer or 
 operative." A traveling salesman is an " employee " of a 
 corporation whose agreed compensation is to be preferred on 
 its insolvency under a statute preferring ' ' the wages of 
 . . . employees, operatives and laborers thereof ." ^^ One 
 who receives a stated weekly salary, plus a percentage of 
 all sales made by him, from a corporate employer which com- 
 mands his entire time and controls him at all times, is an 
 
 ^^ People V. Remington, 45 Hun, tion of such assignment, shall be 
 
 329; aff'd 109 N. Y. 631, 16 N. E. preferred . . . " (L. 1897, c. 624, 
 
 680; L. 1885, c. 376. § 29). 
 
 ^* Matter of Charron v. Hale, 25 ^* People v. Remington, 45 Hun, 
 
 Misc. 34, 54 N. Y. Supp. 411 (1898) ; 329; afE'd 109 N. Y. 631, 16 N. E. 
 
 L. 1885, c. 376, § 1. 680; L 1885, c. 376. 
 
 '^People V. Remington, 45 Hun, ^° Matter of Fitzgerald, 21 Misc. 
 329; afE'd 109 N. Y. 631, 16 N; E. 226, 45 N. Y. Supp. 630 (1896); 
 680; L. 1885, e. 376. Hopkins v. L. 1885, c. 376. " ' Employee ' is 
 Cromwell, 89 A. D. 481, 85 N. Y. defined by Webster as follows: 
 Supp. 839 (1903), on opinion below: 'One who is employed.' Worcester 
 One contracting with farmers in a defines the same word, ' One who 
 corporation's name for pickles, is employed; an official; a clerk; 
 which he himself sorted, weighed, a servant.' In the Standard Dic- 
 brined, barrelled and shipped to his tionary . . . the word is defined: 
 corporation, all for pay, is entitled 'A person who is employed; one 
 to preference under the statute who works for wages or a sal- 
 providing that " in all distribution ary; one who is engaged in the 
 of assets, under all assignments service of, or is employed by an- 
 made in pursuance of this act, the other.' . . . this act . . . 
 wages or salaries actually owing to must be held to have intended to 
 the employees of the assignor . . . embrace all classes of employees 
 at the time of the execution of the who are conceded to have rendered 
 assignment for services rendered services to the corporation prior to 
 
676 BUSINESS CORPORATIONS IN NEW YORK § 555 
 
 " employee " receiving " wages," which he is entitled to 
 have paid by a receiver of his employer in preference to other 
 of its debts."" 
 
 § 555. Id.: Tenure of Office, In General. — The appointment 
 of a receiver for a corporation will not be vacated because of 
 error in the spelling of its name in legal papers used in pro- 
 ceedings looking to such appointment if the corporation 
 served with process was the one intended, knew this and 
 took steps for its protection for five years ; and the court will 
 direct the necessary change in the spelling of the name in all 
 the papers of the legal proceedings.' A creditor who has 
 obtained an interlocutory judgment on his claim against the 
 receiver of his insolvent corporate debtor and an order of 
 reference to determine the amount of funds held by the 
 receiver from which payment of his claim might be made is 
 not affected by the discharge of the receiver without notice 
 to him pending appeals from such judgment resulting first in 
 a reversal and then in an affirmance thereof.^ A creditor of 
 an insolvent corporation for which a receiver has been 
 appointed cannot litigate his claim with the receiver after 
 the latter 's discharge by the court, even though the discharge 
 took place after the initiation of the creditor's proceedings to 
 collect his claim, and without notice to him: " After such 
 discharge the sole right of the creditor was to apply to the 
 court to vacate its order so that its rights as a creditor might 
 be protected. " ^ A receivership in an action by a stockholder 
 against a corporation and some of its directors for an 
 accounting for their mismanagement and waste of its assets 
 cannot be continued after such directors have been supplanted 
 by others at the corporation's own initiative, even though it 
 is desired that the receivership continue so as to give the cor- 
 poration time to raise money to pay its debts.* 
 
 2° Matter of Luxton & Black Co., ^ Woodruff v. Jewett, 115 N. Y.. 
 
 35 A. D. 243, 54 N. Y. Supp. 778 267, 22 N. E. 156 (1889). He is a 
 
 (1898) ; L. 1885, e. 376. judgment creditor not represented 
 
 As to who are laborers, employes, by proxy by the Attorney-General 
 
 or servants; within the meaning of as was the unsecured creditor in 
 
 the statute giving them preferences, N. Y. & W. U. T. Co. v. Jewett, 115 
 
 see notes in 18 L.R.A. 305 and 30 N. Y. 166. 
 
 L.R.A.(N.S.) 85. =New York & Western Union 
 
 ^ Fisher v. Independent Brothers Telegraph Co. v. Jewett, 115 N. Y. 
 
 of Nieshweiser, 84 Misc. 382, 147 166, 21 N. E. 1036 (1889). 
 
 N. Y. Supp. 390 (1904). Municipal * Duncan v. Treadwell Co., 82 
 
 Court proceedings, and City Court Hun, 376, 31 N. Y. Supp. 340 
 
 " Nieshwis " instead of " Niesh- (1894). 
 weiser." Mun. Ct. Act, § 177. 
 
§ ,556 RECEIVERS 677 
 
 § 556. Id.: Renouncing Trust. — ^Any receiver wlio is 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 ; and such application must be accom- 
 panied by an account of the receiver's transactions, verified 
 by his affidavit.' The account of the receiver's transactions 
 must (1) be full, true and just; (2) of all his transactions; 
 (3)' particularly state (a) the property, moneys and effects 
 received by him, (b) all payments made, whether to creditors 
 or otherwise, (c) the remaining effects and property of the 
 corporation in respect of which he was appointed receiver, 
 within his knowledge, and (d) the situation of the same. The 
 affidavit of the receiver annexed to his account must (1) be 
 to the effect that such account is in all respects just and true, 
 according to the best of his knowledge and belief; (2) be 
 subscribed; (3) be sworn to before the court to whom the 
 application is made; and (4) be certified by the clerk of the 
 court.^ The court .must 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 must be published 
 once in each week for six weeks successively in such news- 
 papers as the court shall direct.' The court must grant an 
 order allowing the receiver to renounce his appointment if it 
 shall appear (1) that the proceedings of such receiver in rela- 
 tion to his trust have been fair and honest, and particularly in 
 the collection of the property and debts vested in him;- (2) 
 that the court is satisfied for any reason it is inexpedient for 
 such receiver to continue in the execution of the duties of his 
 appointment; (3) that the court is satisfied such duties can 
 be executed by another receiver without injury to the prop- 
 erty of the corporation or to the creditors; and (4) that no 
 good cause appears to the contrary.* Upon such order being 
 granted the receiver must be discharged from the trust 
 reposed in him and his power and authority must thereupon 
 cease; but he must, notwithstanding, remain subject to the 
 
 = Gen. Corp. L. § 275 . (L. 1909, ^Gen. Corp. L. § 275 (L. 1909, 
 e. 25). ' c. 28). 
 
 'Gen. Corp. L. § 275 (L 1909, ^Gen. Corp. L. § 275 (L. 1909, 
 e. 28). e. 28). 
 
 'Gen. Corp. L. § 275 (L. 1909, 
 c. 28). 
 
678 BUSINESS CORPORATIONS IN NEW YORK § 557 
 
 granting of such order, in the management of his trust." 
 The expense of all proceedings in effecting such renunciation 
 must be paid by the receiver making the application." 
 
 § 557. Id.: Removal. — The receivers for sequestration, disso- 
 lution, annulment, foreclosure or preservation of assets may 
 be removed by the court." A court appointing receivers may 
 remove one of them summarily, though such a practice is not 
 to be commended." Removal of a permanent receiver for 
 sequestration or dissolution for failure to pay on demand a 
 distributive share shown by his statutory, quarterly state- 
 ment to be due or for neglect or refusal to allow inspection of 
 such statement or the corporate books and papers in his hands 
 does not vitiate or annul any legal proceedings had by such 
 receiver, but such proceedings must be continued by his 
 successor as if no removal had been had." The Attorney- 
 General may, at any time he deems that the interests of the 
 stockholders, creditors, policy-holders, depositors or other 
 beneficiaries interested in the proper and speedy distribution 
 of the assets of any insolvent corporation, will be subserved 
 thereby, make a motion in the Supreme Court at a special 
 term thereof, in any judicial district, for an order removing 
 the receiver of any insolvent corporation and appointing a 
 receiver thereof in his stead; or such other and additional 
 order or orders as to him may seem proper to facilitate the 
 closing up of the affairs of such receivership.^^ Any appeal 
 from any order made upon any motion under such statute 
 must be made to the Appellate Division of the dejjartment in 
 which such motion is made." An application by the Attorney- 
 General to remove a receiver of a corporation and appoint 
 another will not be granted if the corporation be not insolvent 
 and required by law to file reports of his proceedings, or if 
 notice of the application be given not only to. the removed 
 receiver but to all parties who appeared in the action in which 
 he was appointed." The court will not at the motion of the 
 Attorney-General oust from the position of receiver of a 
 
 "Gen. Corp. L. § 275 (L. 1909, i= Gen. Corp. L. § 311 (L. 1909, 
 
 c. 28). ■ c. 28). 
 
 "Gen. Corp. L. § 275 (L. 1909, "Gen. Corp. L. § 311 (L. 1909, 
 
 c 28). ■ c. 28). 
 
 " Gen. Corp. L. § 273 (L. 1909, " Attrill v. Roekaway Beach Im- 
 
 c. 28). provement Co., 25 Hun, 509 (1881) ; 
 
 "Horton v. McNally Co., 155 L. 1880, c. 537, as amend 'd L. 1881, 
 
 A. D. 322, 140 N. Y. Supp. 357 c. 639. 
 (1913) ; Gen. Corp. L. § 273. 
 
 "G«n. Corp. L. § 107 (L. 1909, 
 c. 28). 
 
§§ 558, 559 RECEIVERS 679 
 
 corporation one whom it has appointed with the approval of 
 about everyone interested in the corporation save a bare 
 majority of its bondholders when it appears that the receiver 
 has increased receipts since appointment and has sued such 
 bare majority to invalidate their holdings on the ground that 
 they belong to the company.^' A receiver appointed of a cor- 
 poration on application of its judgment creditor whose execia- 
 tion is unsatisfied will not be removed because the answer 
 to the application charged the judgment was coUusively 
 recovered for goods sold the president of the corporation and 
 not the corporation itself, if the corporation refused the 
 court's offer to apply to have the judgment set aside and 
 leave granted it to defend/" One appointed receiver of a 
 corporation should not be removed simply because he had 
 been one of its directors and its treasurer; and only on a 
 direct application on which he has reasonable oppprtunity to 
 present his side of the case.^° 
 
 § 558. Id.: Filling Vacancy.— Any vacancy created by 
 removal, death or otherwise may. be supplied by the court.^ 
 
 § 559. Id.; Survivor and Successor. — The survivor or sur- 
 vivors of any receivers for sequestration or dissolution have 
 all the powers and rights given to receivers, and all property 
 in the hands of any receiver at the time of his death, removal 
 or incapacity, must 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.^ On an order being made, in an accounting 
 before a referee by a predecessor receiver of a corporation 
 for the benefit of a successor receiver, for production by the 
 predecessor of the corporate books which had come to his 
 hands as receiver, it is not necessary that notice of the 
 intended application for the order 'be given the Attorney- 
 General, but it is sufficient if notice of the motion with a copy 
 of the proposed order is served on him;' and it is proper to 
 permit the corporate creditors to be present at the account- 
 ing.^ A successor receiver's executors may be brought into 
 an accounting pending on his and his co-receiver's petition 
 
 ^^Townsend v. Oneonta, Coopers- 86 A. D. 604, 83 N. Y. Supp. 1034 
 
 town and Richfield Springs Ry. Co., (1903). 
 
 41 Misc. 298, 84 N. Y. Supp. 119 ^Gen. Corp. L. § 274 (L. 1909, 
 
 (1903). c. 28). 
 
 "Loder v. New York, Utiea & 'Gen. Corp. L. § 237 (L. 1909, 
 
 Ogdensburgli R. R. Co., 4 Hun, 22 c. 28). 
 
 (1875). ^ Greason v. Goodwillie-Wyman 
 
 '"Townsend v. Oneonta, Coopers- Co., 38 Hun, 138 (1885). 
 town & Richfield Springs Ry. Co., 
 
680 BUSINESS CORPORATIONS IN NEW YORK § 560 
 
 by order reviving and continuing the accounting against 
 them; and no new petition is necessary.* 
 
 § 560. Id.: Court Proceedings, In General. — An action for 
 the determination of a claim to real property may be main- 
 tained as prescribed by statute by or against the receiver or 
 other successor to any corporation.' All actions or other 
 legal proceedings, and appeals therefrom or therein, brought 
 by or against a receiver of any insolvent corporation referred 
 to in the statute 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.® A receiver of a corpora- 
 tion who has been directed by the court to make a final 
 accounting as such receiver by a certain date should be 
 granted a preference in the trial of an action being brought 
 by him if its final disposition before such accounting is neces- 
 sary, even though if the plaintiff were a private individual 
 the preference would be denied him because of laches in fail- 
 ing promptly to commence the action and notice the case for 
 trial.' A receiver of a corporation appointed by the court in 
 proceedings to dissolve it " represents the corporation, its 
 creditors, and its stockholders (citation), and, hence, the 
 receiver's appearance in all matters relating to the liquida- 
 tion of the corporate affairs must be deemed an appearance 
 for all concerned, except when there is a conflict between the 
 receiver and those interested, in which event, of course, they 
 appear for themselves. " * At common law, a judgment 
 obtained against a corporation a:fter its dissolution, though 
 begun before such dissolution, is not binding on a receiver 
 appointed after the action was begun." A receiver of a cor- 
 poration appointed by order which vested in him the corpo- 
 rate assets may move to vacate a judgment entered against it 
 in an action begun by sfervice of process on one who was not 
 its officer when served." A receiver who is also party as 
 trustee to the same proceeding in which he acts as receiver 
 cannot appeal as receiver from an order made while he was 
 
 * Matter of Columbian Insurance * People v. American Loan & 
 
 Co., 30 Hun, 342 (1883) ; aff 'd 94 Trust Co., 177 N. Y. 467, 69 N. E. 
 
 N. Y. 636; C. C. P. §§ 414, 452. 1105 (1904) ; C. C. P. § 1793, now 
 
 = C. C. P. § 1650. Gen. Corp. L. § 112. 
 
 ^Gen. Corp. L. § 316 (L. 1909, ^Matter of Norwood, 32 Hun, 
 
 c. 28). The statute referred to is 196 (1884). 
 
 the General Corporation Law in its ^° Yorkville Bank v. Zeltner 
 
 entirety. Brewing Co., 80 A. D. 578, 80 N. Y. 
 
 'Sehlesinger v. Gilhooly, 111 Supp. 839 (1903); app. dism'd 178 
 
 A.. D. 158, 97 N. Y. Supp. 606 N. Y. 572, 70 N. E. 1111. 
 (1906) ; C. C. P. § 791, subd. 5. 
 
.5 560 KECEIVERS 681 
 
 before the court as trustee, on which he was heard and with 
 which he was content." " As a general rule a receiver may 
 not appeal from an order which discharges him and settles 
 the rights of the parties to the fund in his hands. " ^^ A war- 
 rant of attachment obtained by a creditor of a corporation 
 will be vacated at the instance of a receiver thereafter 
 appointed for it, if, upon discovery of its insolvent condition, 
 the corporation called a meeting of creditors at which the 
 attaching creditor was present, and consented to the appoint- 
 ment of the receiver only after its request for an extension of 
 time had been disapproved by the creditors and they had 
 asked for a receiver." A receiver appointed for an insolvent 
 corporation cannot move to dissolve an attachment against 
 it without first applying to the court to be made a party to 
 the suit and asking an order that it be continued in his name." 
 Under a statute giving a receiver of an insolvent corporation 
 power, for the benefit of creditors, to resist all acts done in 
 fraud of creditors, he may sue to recover a distribution of 
 capital made by it while insolvent among its stockholders and 
 called a dividend, without averring any intent in the directors 
 in making distribution to defraud the creditors.^^ No appeal to 
 the Court of Appeals can be had from an order of the Appel- 
 late Division affirming an order of the Special Term directing 
 a receiver appointed for an insolvent corporation in an action 
 by the Attorney-General to dissolve it to pay a creditor's 
 claim." A temporary receiver appointed in an action by the 
 People to dissolve a corporation is not a necessary party to 
 an action to foreclose a mortgage given by it." Temporary 
 receivers of a corporation appointed in an application for its 
 voluntary dissolution are proper, if not necessary parties to> 
 a representative action later brought by one of the corpora- 
 tion's creditors against the corporation and its directors to 
 hold the latter to a statutory liability for consenting to an 
 
 '^Witherbee v. Witherbee, 55 ^= Osgood v. Laytin, 42 N. Y. (3 
 
 A. D. 151, 66 N. Y. Supp. 1039 Keyes) 521 (1867) ; L. 1858, p. 506, 
 
 (1900). § 1. 
 
 ^^ Witherbee v. Witherbee, 55 ^° People v. American Loan & 
 
 A. D. 151, 66 K Y. Supp. 1039 Trust Co., 150 N. Y. 117, 44 N. E. 
 
 (1900). 949 (1896); N. Y. Const, art. VI, 
 
 "Thompson v. Queen City Cycle § 9; C. C. P. § 190. 
 
 Co., 169 A. D. 522, 44 N. Y. Supp. " Herring v. N. Y., Lake Erie & 
 
 1049 (1897) ; C. C. P. § 636, subd. 2. Western E. R. Co., 105 N. Y. 340, 
 
 "Tracy v. First Nat. B'k of 12 N. E. 763 (1887). Nor the Peo- 
 
 Selma, 37 N. Y. 523 (1868) ; Code, pie either. 
 §§ 121, 122. 
 
682 BUSINESS CORPORATIONS IN NEW YORK § 561 
 
 indebtedness by it, not secured by mortgage, in excess of its 
 capital stock.^' 
 
 § 561. Id.: By. — Aside from statutory authority, " receivers, 
 by virtue of their general powers, have authority to sue for 
 all moneys due to the company, and for all property improp- 
 erly disposed of in violation of the rights of either creditors 
 or stockholders, for the purpose of paying the debts and 
 dividing the surplus, if any, among the stockholders. " " A 
 receiver appointed of a corporation in an action for its dis- 
 solution may, pursuant to statutory authority, continue an 
 action begun, before the action for dissolution, in favor of 
 the corporation.™ A receiver appointed of a corporation in a 
 proceeding to sequestrate its property to satisfy a creditor 
 is not entitled as of right to be substituted as plaintiff in an 
 action by it, but only in the court's discretion.^ On appoint- 
 ment of an ancillary receiver in this State of a corporation 
 which had instituted actions to recover unpaid calls on its 
 outstanding stock and verification by him as such of the 
 amended complaints the actions may be continued in the name 
 of the corporation." A receiver appointed for the winding 
 up of a dissolved corporation is a trustee of an express trust 
 in so far that the statute of limitations does not run in favor 
 of a trustee against claims not barred at the time of his 
 appointment so long as the trust is open and continuing and 
 has not been repudiated or denied.' A receiver of a corpora- 
 tion dissolved because it had become a party to an illegal com- 
 bination caimot sue to recover anything arising from the 
 illegal agreement by which the combination was effectuated.* 
 A receiver of a corporation cannot enforce an agreement 
 made by its president with one of its creditors not to receive 
 salary due him during the period of its liquidation." A 
 receiver appointed in this State for a corporation cannot 
 enjoin the corporation's mortgagee from foreclosing, in a 
 
 '* Whitney v. Wilcox, 58 A. D. Snow, Church & Co., 20 Misc. 319, 
 
 57, 68 N. Y. Supp. 667 (1901) ; old 45 N. Y. Supp. 849 (1897) ; C. C. P. 
 
 St. Corp. L. § 24 (L. 1892, c. 688). § 756. 
 
 " Osgood V. Laytin, 48 Barh. 463 ^ Sigua Iron Co. v. Brown, 171 
 
 (1867); aff'd 3 Keyes, 521. N. Y. 488, 64 N. E. 194 (1902); 
 
 ^° Piatt V. Ashman, 32 Hun, 230 C. C. P. §§ 755, 756. 
 
 (1884). The statute was 2 R. S. ^ Ludington v. Thompson, 153 
 
 (6th ed.) 392, § 11: "The disso- N. Y. 499, 47 N. E. 903 (1897). 
 
 lution of a corporation . . . shall *Gray v. Oxnard Brothers' Co., 
 
 not abate any suit or proceedings in 59 Hun, 387, 13 N. Y. Supp. 86 
 
 favor of such corporations . . .; (1891). 
 
 but all such . . . may be con- ^ Snow v. Russell Coe Fertilizer 
 
 tinued by the receiver . . ." Co., 58 Hun, 134, 11 N. Y. Supp. 
 
 ^Shaped Seamless Stocking Co. v. 492 (1890). 
 
§ 561 RECEIVERS 683 
 
 foreign State, the mortgaged property, in an action to which 
 he is a party and which seeks solely to settle whether the 
 mortgage or certificates issued by the receiver is entitled to 
 priority in payment." A receiver appointed in a proceeding 
 which seeks the appropriation of a debtor-corporation's 
 property for the payment of all of its creditors may institute 
 an action for the recovery of property of the corporation 
 affected by a chattel mortgage which is void for lack of refil- 
 ing under the statute/ A receiver appointed of a corporation 
 in an action for the sequestration of its property may sue in 
 equity to determine what bonds issued by it are secured by a 
 certain mortgage by it of property unsold.^ A permanent 
 receiver appointed in proceedings to sequestrate a corpora- 
 tion's property as distinguished from a receiver in supple- 
 mentary proceedings, may bring an action at law for conver- 
 sion, as well as a suit in equity for an accounting, against one 
 who had obtained property of the corporation by bill of sale 
 while it was insolvent.' A temporary receiver may maintain 
 an action to recover from a defendant an amount secured 
 through a fraudulent preference by the insolvent corporation, 
 and need not join the insolvent corporation as a party 
 defendant." A receiver of a corporation need not, as a con- 
 dition precedent to an action for recovery of property 
 delivered by it with intent to prefer while its insolvency was 
 imminent, have published the statutory notice requiring all 
 persons having property of the corporation in their posses- 
 sion to deliver it to him." A receiver of a corporation not 
 insolvent when certain payments from its funds were made 
 ultra vires for the individual benefit of its shareholders can- 
 not follow the payments as a trust fund if all the stockholders 
 assented to them." A receiver of a corporation may properly 
 bring, in his name as the representative of the corporation 
 and its creditors, an action to set aside and vacate a judgment 
 against the company upon the ground that it was without con- 
 sideration and obtained by collusion with the officers of the 
 
 " Walton V. The Grand Belt Cop- 944 (1896) ; C. C. P. § 1788, now 
 
 per Co., 56 Hun, 211, 9 N. Y. Supp. Gen. Corp. L. § 104. 
 375 (1890). "Stiefel v. New York Novelty 
 
 Tanners' Loan & Trust Co. v. Co., 25 Misc. 221, 55 N. Y. Supp. 
 
 Baker, 20 Misc. 387, 46 N. Y. Supp. 90 (1898) ; old St. Corp. L. § 48 
 
 266 (1897). (L. 1892, c. 688) ; 2 R. S. 469, §§ 70, 
 
 * Hubbell V. Syracuse Iron Works, 72. But see Matter of Stonebridge, 
 
 42 Hun, 182 (1886). 57 Hun, 441, 10 N. Y. Supp. 727. 
 
 "McQueen v. New, 45 A. D. 579, ^^ Little v. Garabrant, 90 Hun, 
 
 61 N. Y. Supp. 464 (1899). 404, 35 N. Y. Supp. 689 (1895); 
 
 " Nealis v. American Tube & aff'd 153 N. Y. 661, 48 N. E. 1105. 
 Iron Co., 150 N. Y. 42, 44 N. E. 
 
684 BUSINESS CORPORATIONS IN NEW YORK § 563 
 
 company in fraud of the rights of creditors." A receiver, as 
 representative of a corporation, may sue the directors of the 
 corporation in the form of an action at law for damages 
 resulting from their misconduct or in an equitable action to 
 compel an accounting as to the property wasted and lost." 
 Notice of a warrant issued at the instance of a receiver of a 
 corporation for the examination of one supposed to have 
 possession of property of the corporation must be given the 
 Attorney-General." Stockholders have no absolute right to 
 be made parties to an action brought by a receiver of a cor- 
 poration to recover assets belonging to it or which vest in a 
 receiver upon his appointment." A claim of one sued by a 
 receiver of a corporation against such corporation will not 
 be allowed as an offset or counterclaim in the suit unless it 
 accrued prior to the corporation's insolvency and the appoint- 
 ment of the receiver." In an action by corporate receivers 
 seeking to recover for acts which were frauds upon the corpo- 
 rate creditors claims by the defendants growing out of trans- 
 actions entirely independent of such acts and between dif- 
 ferent parties (e. g. the stockholders and defendants) cannot 
 be set off.'" 
 
 § 562. Id.: Against. — The courts cannot against the will of 
 the plaintiff strike from the record of and exclude from an 
 action the name of one who is a necessary defendant, such as 
 a receiver provisionally discharged who has by court order 
 turned over to a co-defendant of which it was receiver all such 
 co-defendant's property." The commencement of an action 
 against a receiver without leave does not present a jurisdic- 
 tional question, as the court acquires jurisdiction of the 
 receiver by 'service of the summons, and the remedy is either 
 a stay of proceedings on the part of the plaintiff or to punish 
 him for contempt, or both, because he did not get leave of 
 court to sue the receiver.^" A receiver appointed of a corpo- 
 
 " Whittlesey v. Delaney, 73 N. Y. ^^ Osgood v. Ogden, 43 N. Y. (4 
 
 571 (1878). Keyes), 70 (1868). 
 
 " Mason v. Henry, 152 N. Y. 529, " Barwin Realty Co. v. Batterman 
 
 46 N. E. 837 (1897). Co., 169 A. D. 415, 155 N. Y. Supp. 
 
 '= Matter of Stonebridge, 57 Hun, 178 (1915) ; C. C. P. §§ 756, 1502. 
 
 441, 10 N. Y. Supp. 727 (1890) ; 4 The complaint demanded possession 
 
 R. S. (8th ed.) 2524-2534, 2682, of realty of which all defendants 
 
 § 72; L. 1883, c. 378; 2 R. S. 469, were occupants. 
 
 § 70. 20 Hirschfleld v. Kalischer, 81 
 
 "Kimball v. Ives, 30 Hun, 568 Hun, 606, 30 N. Y. Supp. 1027 
 
 (1883); C. C. P. § 452. (1894). 
 
 "Hall V. Holland House Co., 9 
 Misc. 245, 30 N. Y. Supp. 263 
 (1894). 
 
§ 562 RECEIVERb 685 
 
 ration pending an action against it who has advertised for 
 claims pursuant to statute, served the plaintiff and his attor- 
 ney with notice to present their claim and distributed the 
 corporate assets, reserving only enough for expenses, cannot 
 be substituted thereafter as party defendant in such action.^ 
 An action by a judgment creditor of one corporation to have 
 a transfer of its property to a second corporation avoided as 
 having been made to create a preference while insolvent, and 
 to have an accounting, in which a receiver of the first corpora- 
 tion appointed after the action was begun was brought in as 
 defendant, who by answer admitted the allegations and joined 
 in the prayer of the complaint, cannot be discontinued as of 
 right thereafter by the second corporation on tender of pay- 
 ment into court of the amount of plaintiff's claim.^ An 
 injunction by the courts of this State on appointing a receiver 
 for a corporation against any one in New York prosecuting 
 suits, etc., against it does not prevent a foreign corporation 
 from instituting proceedings against the insolvent corpora- 
 tion and enforcing them on any of its property . outside this 
 State.^ A plaintiff suing the receivers of one corporation 
 may bring in as co-defendant with them by supplemental sum- 
 mons and complaint another corporation which has bought 
 the property of the first in the receivers ' hands out of which 
 any judgment the plaintiff might have obtained against them 
 would have been made good, particularly if, on such purchase, 
 it assumed certain liabilities of the first company and its 
 receivers.*^ One selling property to a receiver, appointed 
 pendente lite, of a corporation, which is necessary to the con- 
 duct of its business, may sue him therefor without suing the 
 company or any other party.^ A discharged receiver in 
 voluntary dissolution proceedings of a corporation is not a 
 necessary party to an action by creditors to hold individually 
 for their debts a corporate officer who bought in the corpo- 
 rate property on its sale by the receiver after preventing cred- 
 itors from combining or bidding by certain representations.® 
 
 ^Owen V. Kellogg, 56 Hun, 455, (1904); aff'd 183 N. T. 546, 76 
 
 10 N. Y. Supp. 75 (1890) ; C. C. P. N. E. 1111. 
 
 § 756. * Winters v. King, 51 A. D. 80, 
 
 ^Raymond v. Security Trust & 64 N. Y. Supp. 496 (1900). 
 
 Life Ins. Co., 101 A. D. 546, 91 = Cobb v. Sweet, 46 A. D. 375, 61 
 
 N. Y. Supp. 1041 (1905). N. Y. Supp. 545 (1899). 
 
 ^ Union National Bank v. Leary, ^ Lilienthal v. Betz. 185 N. Y. 153, 
 
 95 A. D. 381, 88 N. Y. Supp. 652 77 N, E. 1002 (1906). 
 
CHAPTER XL 
 
 TAXATION. 
 XVI. Taxation. 
 
 A. General Statement of Taxes to Which Corporations are Sub- 
 
 ject, § 563. 
 
 B. Taxation In General, § 564. , 
 
 C. Organization Tax. 
 
 1. What Corporations Must Pay, § 565. 
 
 2. Amount and Computation of Tax. 
 
 a. In General, § 566. . 
 
 b. On Increase, Decrease, Consolidation or Change from 
 
 Par to Non-Par, § 567. 
 
 c. When Due and Payable, § 568. 
 
 d. Effect of Failure to Pay, § 569. 
 
 D. State-Income and Franchise Taxes. 
 
 1. What Corporations Pay Which Taxes, § 570. 
 
 2. State-Income Tax. 
 
 a. In General, § 571. 
 
 b. What Corporations Subject to. 
 
 aa. In General, § 572. 
 
 bb. What Are Manufacturing Corporations, § 573. 
 
 cc. What Are Mercantile Corporations, § 574. 
 
 c. How to- Ascertain Net Income to be Taxed, § 575. 
 
 d. Amount of Tax, § 576. 
 
 e. Beports. 
 
 aa. Who To Make, When and To Whom, § 577. 
 bb. Contents and Form, § 578. 
 ce. Effect of Failure to Make or Fraudulent State- 
 ment In, § 579. 
 
 f. Notice of Tax, § 580. 
 
 g. Review and Revision of Tax. 
 
 aa. By Tax Commission. 
 
 aaa. On Application Within Year, § 581. 
 bbb. When Tax Based on Estimate by Com- 
 mission, § 582. 
 cce. When United States Changes Its Tax, 
 § 583. 
 bb. By Certiorari, § 584. 
 h. When and To Whom Tax Payable, § 585. 
 i. Penalty and Lien on Non-Payment, § 586. 
 j. Audit, Apportionment, Collection and Deposit of Tax 
 and Powers of Commission, § 587. 
 
 E. State Franchise Tax. 
 
 1. In General, § 588. 
 
 2. What Corporations Subject To. 
 
 a. In General, § 589. 
 
 b. Capital Stock Employed in State, § 590. 
 
 0, Exercising Franchises or Doing Business in State, 
 §591. 
 
 3. How to Ascertain Tax. 
 
 a. Governing Statutes, § 592. 
 
 b. What and Where are Capital Stock, Earnings, Assets, 
 
 and Dividends, § 593. 
 686 
 
TAXATION 687 
 
 XVI. Taxation — Contintied: 
 
 E. blate Franchise Tax — Continued: 
 
 4. Bate of Tax. 
 
 a. When Dividends are 6% or More, § 594. 
 
 b. When No Dividends or Less Than 6%, § 595. 
 
 c. When More Than One Kind of Capital Stock and 
 
 Dividends Are Declared, § 596. 
 
 d. When Stock Has No Par Value, § 597. 
 
 e. In All Other Cases, § 598. 
 
 5. Review, § 599. 
 
 F. Local Real Estate and Personal Property (Including Corporate 
 
 Capital) Taxes. 
 
 1. Real Property Tax. 
 
 a. In General, § 600. 
 
 b. What Corporations Subject To, § 601. 
 
 c. What is Taxable as Real Property and How Valited, 
 
 § 602. 
 
 d. Place of Taxation of Real Property, § 603. ■ 
 
 2. Personal Property Tax Including Tax on Capital. 
 
 a. What Corporations Subject To, § 604. 
 
 b. What Is Taxable. 
 
 aa. Governing Statutes, § 605. 
 
 bb. Personal Property, In General, § 606. 
 
 ec. Corporate Capital. 
 
 aaa. In General, § 607. 
 bbb. Not Share Stock, § 608. 
 ccc. At Actual Value. 
 
 aaaa. In General, § 609. 
 bbbb. Not Market Value of Shares, 
 § 610. 
 ddd. Exceptions and Exemptions, § 611. 
 eee. Surplus Profits or Reserve Funds, § 612. 
 fff. Real Estate, § 613. 
 ggg. Stock In Other Corporations, § 614. 
 dd. Debts and Liabilities, § 615. 
 ee. Franchises, § 616. 
 ff. Patents, § 617. 
 gg. Good Will, § 618. 
 hh. Dividends, § 619. 
 
 e. Place of Taxation of Personal Property Including 
 
 Corporate Capital, § 620. 
 
 3. Procedure of Assessing Real and Personal Property 
 
 {Including Capital Stock) Taxes. 
 
 a. Ascertainment of Property Exempt, § 621. 
 
 b. Ascertainment of Property and Corporations Taxable, 
 
 § 622. 
 
 c. Assessment on the Rolls, § 623. 
 
 d. Statements and Reports By Corporations. 
 
 aa. Governing Statutes, § 624. 
 
 bb. How For Binding on Taxing Authorities, § 625. 
 
 e. Review by and Complaint to Assessors. 
 
 aa. Examination of Assessments and Complaints, 
 
 § 626. 
 bb. Hearing, § 627. 
 cc. Equalization and Cancellation of Assessment 
 
 and Levy and Cancellation of Tax, § 628. 
 f. Miscellaneous Statutory Provisions. S fi29- 
 
688 BUSINESS CORPORATIONS IN NEW YORK 
 
 XVI. Taxation — Continued: 
 
 G. Local Special Franchise Tax. 
 
 1. In General, § 630. 
 
 2. What is Taicable as Special Franchise, § 631. 
 
 3. Place of Taxation of Special Franchise, § 632. 
 
 4. Reports by Corporations. 
 
 a. On Acquisition of Special Franchise, § 633. 
 
 b. Subsequent and Annual Reports, § 634. 
 
 c. Form and Verification, § 635. 
 
 d. Penalty for Failure to Make or for Disclosing, § 636. 
 
 5. Valuation and Equalization of Special Franchise. 
 
 a. Preliminarily By Tax Commission, § 637. 
 
 b. Notice of Hearing of Complaints, § 638. 
 
 c. Hearing, § 639. 
 
 d. Final Valuation By Tax Commission on Basis of Net 
 
 Earnings or Otherwise, § 640. 
 e. Filing, Entry, Notice of, Basis of All Taxation 
 on Franchise, Information As To, § 641. 
 
 6. How Far Taxation on Special Franchise Relieves from 
 
 Other Taxes, § 642. 
 
 7. Review By Certiorari, § 643. 
 H. Review By Certiorari. 
 
 1. Procedure in General Both in Real and Personal Prop- 
 
 erty {Including Capital Stock) and Special Franchise, 
 Certiorari, and in Income Tax and Franchise Tax Cer- 
 tiorari, § 644. 
 
 2. Certiorari to Review Real and Personal Property {Includ- 
 
 ing Capital Stock) and Special Franchise Taxes. 
 
 a. Petition. 
 
 aa. Who May Make, § 645. 
 bb. Where and When Made, § 646. 
 cc. Form, Contents and Grounds, § 647. 
 
 b. The Writ of Certiorari. 
 
 aa. When Allowed and Effect, § 648. 
 bb. Against Whom Issued, § 649. 
 cc. Form and Contents, § 650. 
 dd. Service of, § 651. 
 
 c. The Return to the Writ. 
 
 aa. When and Where Returnable, § 652. 
 bb. Form and Contents of Return, § 653. 
 cc. Filing of, § 654. 
 
 d. Hearing, Reference, Striking Out or Correcting 
 
 Assessment or Re-assessment. 
 aa. In General, § 655. 
 bb. In Special Franchise Certioraris, § 656. 
 
 e. Costs, § 657. 
 
 f. Appeals, § 658. 
 
 g. Refund; Apportionment of Mixed Assessments; Col- 
 
 lection After Removal From County; Collection By 
 Supp. Pro.; Contempt, Fines, Imprisonment; Dis- 
 missal of Proceedings; Cancellation For Lack of 
 Jurisdiction or of Personalty; Failure of Collector 
 to Pay Over; Sequestration of Corporation Not 
 Paying; Recovery of Surplus from Sale, § 659, 
 
563 TAXATION 689 
 
 TI. Taxation — Continmd: 
 
 H. Review by Certiorari — Continved: 
 
 3. Certiorari to Review State Income and Franchise Taxes. 
 
 a. In General, § 660. 
 
 b. Petition or Affidavit. 
 
 aa. Who May Make, § 661. 
 bb. Where and When Made, § 662. 
 ce. Form, Contents and Grounds, § 663. 
 
 c. Notice, § 664. 
 
 d. Deposit of Tax and Filing of Undertaking, § 665. 
 
 e. The Writ of Certiorari. 
 
 aa. When Allowed and Effect, § 666. 
 bb. Against Whom Directed, § 667. 
 cc. Form and Contents, § 668. 
 dd. Service of, § 669. 
 
 f. The Return to the -Writ. 
 
 aa. When and Where Returnable, § 670. 
 bb. Form and Contents, § 671. 
 cc. Filing of, § 672. 
 
 g. Hearing, § 673. 
 
 h. Final Order, § 674. 
 
 i. Costs, § 675. 
 
 j. Appeals, § 676. 
 
 k. Defective or Omitted Returns; When One Certio- 
 raried Out of Office Dead, etc.; Bringing In Inter- 
 ested Parties; Substitution of Mandamus for Cer- 
 tiorari, § 677. 
 I. Stock Transfer Tax. 
 
 1. In General, § 678. 
 
 2. On What Imposed, § 679. 
 
 3. Amount and Computation of Tax, § 680. 
 
 4. Stamps and Payment, § 681. 
 
 5. Bill, Memorandum or Agreement of Sale, § 682. 
 
 6. Penalties for Not Paying Tax, Not Cancelling or Not 
 
 Affixing or Illegally Using Stamps, § 683. 
 
 § 563 Taxation: General Statement of Taxes to Which 
 Corporations are Subject. — The general rule is that all real 
 )roperty within New York State, and all personal property 
 ituated or owned within New York State, is taxable unless 
 ixempt from taxation by law ; ^ and the statute giving the 
 )roperty which is exempt from taxation is quoted herein- 
 ifter,^ while the exemptions from the several kinds of taxes, 
 inch as the personal and real property taxes, are discussed in 
 lonnection with the treatment of these several taxes. The 
 luty of tax assessment boards to report exempt property is 
 )rescribed by statute, hereinafter quoted.^ Every domestic 
 itock corporation must pay an organization tax to the State 
 »n its incorporation or on changing its capital or character of 
 
 ^Tax L. § 3 (L. 1909, c. 62). ^Tax L. § 15 (L. 1916, c. 323). 
 
 ^ See text of Tax Law, infra. 
 B. C. N. Y.— 44 
 
690 BUSINESS CORPORATION'S IN NEW YORK § 563 
 
 its stock or consolidating.* Every domestic stock corporation 
 must pay a real property tax on its real property.' Every 
 domestic stock mercantile or manufacturing corporation must 
 pay an income tax to the State for the privilege of exercising 
 its corporate franchise,* while every other domestic stock cor- 
 poration, instead of such income tax, must pay the State a per- 
 sonal property,' or a capital stock tax * and a franchise tax.' 
 In addition, the corporation may have to pay United States 
 income or other taxes. Both the State and the United States 
 impose a tax on transfers of its shares of stock. The State 
 also imposes a mortgage tax. All these taxes are perennial 
 except the organization, stock transfer and mortgage taxes. 
 Manufacturing and mercantile domestic corporations pay an 
 income . tax for the privilege of exercising their corporate 
 franchises in New York, and by so doing are relieved (1) from 
 being assessed on any personal property, (2) from being 
 assessed or taxed upon their capital stock, and (3) from pay- 
 ing the franchise tax, or making a capital stock or franchise 
 tax report.^" Corporations wholly engaged in the purchase, 
 sale and holding of real estate for themselves ; holding corpo- 
 rations whose principal income is derived from holding the 
 stocks and bonds of other corporations ; corporations formed 
 for steam surface railroad, canal, steamboat, ferry, express, 
 navigation, pipe-line, transfer, baggage-express, telegraph, 
 telephone, palace car or sleeping car purposes ; corporations 
 owning or operating elevated railroads or surface railroads 
 not operated by steam; corporations formed for supplying 
 water or gas or for electric or steam heating, lighting or 
 power purposes; insurance corporations; trust companies; 
 savings banks ; and banks, title guaranty, insurance or surety 
 companies, are, generally speaking, exempt from the State 
 income tax." Other domestic corporations than manufactur- 
 ing or mercantile ones, instead" of an income tax, pay a fran- 
 chise tax ; " and a personal property " or capital-stock tax.*^ 
 ' ' The system of taxation in this State is so complicated as to 
 
 *Tax L. § 180 (L. 1917, c. 493); "Tax L. § 210 (L. 1918, c. 417), 
 
 St. Corp. L. § 21 (L. 1917, c. 501); § 184 (L. 1914, c. 334), § 185 (L. 
 
 and § 24-e (L. 1917, c. 484). 1917, c. 710), § 186 (L. 1909, c. 62), 
 
 'Tax L. § 11 (L. 1909, c. 62). § 187 (L. 1909, c. 62); § 188 (L. 
 
 'Tax L. § 209 (L; 1918, c. 276), 1909, c. 62)), and § 189 (L. 1909, 
 
 § 219-j (L. 1918, c. 271). c. 62). 
 
 ' Tax L. § 11 (L. 1909, c. 62). " Tax L. § 182 (L. 1916, c. 333). 
 
 «Tax L. § 12 (L. 1909, c. 62). "Tax L. § 11 (L. 1909, c. 62). 
 
 'Tax L. § 182 (L. 1916, c. 323). "Tax L. § 12 (L. 1909, c. 62). 
 
 ^"Tax L. § 209 (L. 1918, c. 276), 
 § 219-j (L. 1918, c. 271). 
 
§ 564 TAXATION 691 
 
 involve mistakes on the part of those who are called upon to 
 enforce the law. ' In some instances the tax is laid upon prop- 
 erty and in others upon rights and privileges connected with 
 property. . . . There is, first, an organization tax, pay- 
 able to the .State, which is imposed but once and is 
 exacted for the privilege of becoming a corporation (statute). 
 Next, there is a tax upon the real estate owned by the 
 corporation in this State, which is assessed the same as if 
 it were owned by an individual (statute). The personal 
 property of the corporation is not directly' taxed, but its 
 capital stock and surplus, after deducting the assessed value 
 of its real estate and making some other deductions, is 
 assessed at its actual value (statute). Finally, there is a 
 franchise tax on corporations which is payable annually to 
 the State, ' computed upon the basis of the amount of its 
 capital stock employed within this State ' (statute). This 
 is not a tax upon property, although it is measured by the 
 value of property, but upon the right of a corporation to 
 exist and exercise the powers granted by its charter. These 
 forms of taxation do not all rest upon the same principle. 
 The organization tax is in the nature of a license fee for the 
 right to become a corporation. The tax upon real estate is a 
 direct tax upon real property, and the tax upon capital stock 
 is an indirect tax upon personal property, while the franchise 
 tax is not laid upon property at all, but is imposed upon the 
 corporation for the privilege of carrying on business in this 
 State and exercising the corporate franchises granted by the 
 State."" " If we examine the scheme of the Tax Law we 
 shall discover that it recognizes two characters of franchises 
 which are to be taxed upon different theories: There is the 
 franchise to be a corporation . . . and then there is the 
 franchise to do the business . . . ."" 
 
 § 564. Taxation, In General. — "A curative statute " (con- 
 cerning a tax law) " acts directly upon the defective assess- 
 ment and legalizes it without further procedure by the taxing 
 officers. This may legally be done as to such features 
 of the procedure as might have been omitted in the original 
 statute without affecting its validity. When, however, 
 the new act requires something more to be done by the tax- 
 ing officers and legalizes the assessment, provided those acts 
 
 " People ex rel. U. S. A. P. P. Co. A. D. 344, 160 N. Y. Supp. 752 
 
 V. Knight, 174 N. Y. 475, 63 L.E.A. (1916) ; afE'd 219 N. Y. 637, 114 
 
 87, 67 N. E. 65 (1903). N. E. 1080; Tax L. §§ 180, 182 
 
 "People ex rel. tlidgewood Land (L. 1909, e. 62). 
 & Improvement Co. v. Saxe, 174 
 
692 BUSINESS CORPORATIONS IN NEW YORK § 565 
 
 are done, it provides for a reassessment, or the comple- 
 tion of the old assessment. Such legislation is valid, pro- 
 vided the original taxing act was valid and the omission 
 sought to be remedied is not jurisdictional, but an irregu- 
 larity,"^* A statute imposing taxes on corporations which 
 states that they " shall be applicable to the payment of the 
 ordinary and current expenses of the State " is not uncon- 
 stitutional on the ground that it does not state the object to 
 which the tax is to be applied.^^ Assessors of a municipality 
 should not be admitted by the court into a proceeding to liti- 
 gate a corporation 's ' claim on certiorari of inequality of its 
 assessment by the State Board of Tax Commissioners after 
 payment has been made by the corporation on the court's 
 determination upon such writ after notice to the munici- 
 pality's corporation counsel.^" " ... while a state tax 
 which in substance and effect is a direct tax on interstate com- 
 merce, constitutes a state regulation of commerce and is the 
 usurpation of a power exclusively vested in Congress and, 
 therefore, void, yet . . . the commerce provision of the 
 Federal Constitution does not deprive the states of the power 
 to levy a property tax upon property employed in interstate 
 commerce, having a situs within the jurisdiction, provided no 
 adverse discrimination is made in the imposition of the tax 
 between such property and other property of a similar 
 character."^"* 
 
 § 565. Id.: Organization Tax, What Corporations Must 
 Pay. — Every stock corporation incorporated under the laws 
 of New York State may pay the State Treasurer the organ- 
 ization tax.^ On reorganization by purchasers of franchises 
 of a corporation on foreclosure thereof into a new corporate 
 body, pursuant to statutory permission, the tax required to 
 be paid on incorporation must be paid, whether the State 
 directly grants some franchise to the corporation other than 
 
 "People ex rel. American Ex- R. Co. v. Wemple, 138 N. Y. 1 
 
 change National Bank v. Purdy, (1893); L. 1880, c. 542; L. 1881, 
 
 196 N. Y. 270, 89 N. E. 838 (1909); c. 361; L. 1882, c. 151; L. 1885, 
 
 L. 1909, e. 74, § 1. c. 501; L. 1890, c. 522, § 3. See 
 
 " Pieople V. National Fire Ins. no* Tax L. § 182. 
 
 Co. of Hartford, 27 Hun, 188 ^ Tax L. § 180 (L. 1917, c. 493). 
 
 (1882) ; L. 1880, c. 542, see now Special provisions govern state and 
 
 Tax L, § 182; N. Y. Const, art. 3. national banks, building, mutual 
 
 § 20. loan, accumulative fund and co- 
 
 ^ People ex rel. Rochester Gas operative associations, and rail- 
 Co. V. Priest, 101 A. D. 334, 91 N. Y. roads. See text of Tax L. § 180, 
 Supp. 772 (1905). infra. 
 
 20a 
 
 People ex rel. Pennsylvania R. 
 
66, 567 TAXATION" 693 
 
 franchise to be a corporation, or not, and in spite of the 
 tutory grant to the new corporation of all the rights, fran- 
 ses, etc., of the corporation the property of which is sold.' 
 3 reincorporation under the Business Corporations Law of 
 existing corporation organized under the Manufacturing 
 ; of eighteen hundred and forty-eight is not the creation 
 a new corporation which must pay an organization tax, 
 
 a continuation of an existing one.' 
 
 566. Id.: Amount and Computation of Tax, In General. — 
 3 amount and computation of the organization tax is gotten 
 iifferently,. according as the stock of the corporation has or 
 1 not par value, except that every domestic stock corpora- 
 
 1, whether its stock have or have not par value, and at 
 vever low a figure it be capitalized, must pay a minimum 
 :anization tax of ten dollars.* If the corporation's stock 
 re par value the tax is one-twentieth of one per centum 
 )n the amount of capital stock which the corporation is 
 horised to have.' If the corporation issue shares of its 
 ck without designated monetary value, the organization tax 
 it the rate of five cents on each such share which the corpo- 
 ion is authorised to issue." 
 
 567. Id.: On Increase, Decrease, Consolidation or Change 
 m Par to Non-Par. — ^A like organization tax — whether the 
 poration's stock have or have not par value — must be 
 d on any increase of its capital stock subsequent to the 
 ount for which it was originally incorporated.' lii case of 
 iecrease of capital stock, upon which the. tax required by 
 ^ has been paid, and a subsequent increase thereof, a tax 
 ;o be paid only on so much of such increase as exceeds the 
 ount of capital stock upon which a tax has before been 
 d.^ In case of the consolidation of existing corporations 
 a corporation, such new corporation is required to pay 
 
 organization tax provided by statute only upon the 
 
 People ex rel. Sehurz v. Cook, of the Legislature conferring new 
 
 N. Y. 443, 18 N. E. 113 (1888) ; powers and imposing new obliga- 
 
 .874, c. 430, as amend 'd L. 1876, tions upon it." 
 
 46; L. 1886, e. 143, see now St. * Tax L. § ISO (L. 1917, e. 493). 
 
 p. L. § 9. =Tax I. § 180 (L. 1917, c. 493). 
 
 Matter of Kansas City Smelt- « St. Corp. L. § 21 • (L. 1917, 
 
 Co., 13 A. D. 50, 43 N. Y. Supp. c. 501). 
 
 (1897) ; Bus. Corp. L. § 4 (L. ' Tax L. § 180, and St. Corp. L. 
 
 2, e. 691) : " The situation may § 21 (L. 1917, chs. 493, 501, re- 
 ieemed to be the same in effect speotively). 
 
 if the original charter '. . . » Tax L. § 180 (L. 1917, c. 493). 
 
 been amended by a special act 
 
694 BUSINESS CORPORATIONS IN NEW YORK §§ 568, 569 
 
 amount of its capital stock in excess of the aggregate amount 
 of capital stock of such corporations." A tax imposed on the 
 privilege of consolidation of corporations is not a property 
 tax and may, therefore, be imposed as a condition upon 
 corporations availing themselves of the privileges of con- 
 solidation.^" ■ A. consolidated corporation formed from the 
 consolidation of two existing corporations is liable to pay the 
 organization tax imposed by statute.^^ Every corporation 
 which has been organized under any general law and is 
 reorganized so that it may acquire the rights and liabilities of 
 corporations organized with stock having no nominal or par 
 value must pay to the State Treasurer for the privilege of 
 such reorganization a tax of the same amount, and computed 
 in like manner as upon the organization of a new corporation 
 authorized to issue shares of the same number and kinds as 
 the reorganized corporation, less one-half of the aggregate 
 amount of all sums previously paid for the privilege of 
 organizing or of increasing the capital stock; provided such 
 tax shall in no case be less than twenty-five dollars."" 
 
 § 568. Id.: When Due and Payable. — The organization tax 
 is due and payable upon the incorporation of the corporation 
 or upon the increase of its capital stock," or upon its reorgan- 
 ization,"" as the case may be. 
 
 § 569. Id.: Effect of Failure to Pay.— The effect of failure 
 to pay the organization tax is (1) that neither the Secretary 
 of State nor the county clerk will file any certificate of incor- 
 poration or article of association, or give any certificate to 
 any such corporation or association (except in the case of a 
 railroad corporation) until he is furnished with a receipt for 
 such tax from the State Treasurer, and (2) that no stock 
 corporation has or can exercise any corporate franchise or 
 powers, or carry on business in this State until such tax has 
 been paid." 
 
 'Tax L. § ISO (L. 1917, c. 493). On liability for incorporation tax 
 
 " People V. New York, Chicago & upon extension, reorganization, con- 
 st. Louis R. R. Co., 129 N. Y. 474, solidation or merger of existing cor- 
 15 L.R.A. 82, 29 N. E. 959 (1892) ; poration, see note in 47 L.R.A.(N.S.) 
 L. 1886, c. 143, § 1, see now Tax L. 1066. 
 § 180. " Tax L. § 180 (L. 1917, c. 493). 
 
 " People -ea; re?. New York Phono- ""St. Corp. L. §"24-e (L. 1917, 
 
 graph Co. v. Rice, 57 Hun, 486, 11 c. 484). 
 
 N. Y. Supp. 249 (1890) ; aff'd 128 " Tax L. § 180 (L. 1917, c. 493) ; 
 
 N. Y. 591, 28 N. E. 251; L. 1887, St. Corp. L. § 24-e (L. 1917, c. 484). 
 c. 284, § 1, see now Tax L. § 180. 
 
 ""St. Corp. L. § 24-e (L. 1917, 
 c. 484). 
 
§§ 570-572 
 
 TAXATION 
 
 695 
 
 § 570. Id.: State Income and Franchise Taxes, What Corpo- 
 rations Pay Which Taxes. — Mercantile and manufacturing 
 corporations pay the State income tax and do not pay the 
 State franchise tax or the State personal property or capital 
 stock tax." 
 
 § 571. Id.: State Income Tax, In General. — Every domestic 
 
 manufacturing or mercantile corporation must annually pay 
 
 "an annual franchise tax to be computed upon the basis of its 
 
 net income for the privilege of exercising its franchises in 
 
 this State in a corporate or organized capacity.^^ 
 
 § 572. Id.: What Corporations Subject To, In General. — 
 Every domestic manufacturing and every domestic mercantile 
 corporation must pay the franchise tax based on its net 
 income." The tax is an annual franchise tax to be' computed 
 by the State Tax Commission upon the basis of the corpora- 
 tion's net income for its fiscal or the calendar year next pre- 
 ceding, and this income is presumably the same as the income 
 upon which such corporation is required to pay a tax to the 
 United States ; and is imposed upon the corporation for the 
 
 " See § 563, supra. The statute 
 also makes specific provision to cover 
 cases in which personal property or 
 capital stock taxes have been as- 
 sessed against the corporation for 
 the year ending December 31, '1917. 
 See Tax L. §§ 219-j and 219-1 (L. 
 1918, c. 271), infra. 
 
 Generally on the question of taxa- 
 tion of corporate franchise, see note 
 in 57 L.R.A. 34; 58 L.E.A. 564; 10 
 L.R.A.(N.S.) 693. 
 
 As to what property is part of 
 franchise for purpose of taxation, 
 see note in 17 L.R.A. 42. 
 
 "Tax L. § 209 (L. 1918, c. 276). 
 
 "Tax L. I 209 (L. 1918, c. 276). 
 " Corporations wholly engaged in 
 the purchase, sale and holding of 
 real estate for themselves, holding 
 corporations whose principal income 
 is derived from holding the stocks 
 and bonds of other corporations and 
 liable to a tax under sections one 
 hundred and eighty-four to one 
 hundred and eighty-nine, inclusive, 
 of this chapter [viz. " every cor- 
 poration . . . formed for steam 
 surface railroad, canal, steamboat, 
 ferry, except a ferry company 
 operating between any of the bor- 
 oughs of the city of New York 
 
 under a lease granted by the city, 
 express, navigation, pipe line, trans- 
 fer, baggage express, tel^raph, tele- 
 phone, palace ear or sleeping car 
 purposes, and every other trans- 
 portation corporation not liable' to 
 taxation under section one hundred 
 and eighty-five or one hundred and 
 eighty-six of this chapter . . ." 
 (Tax L. § 184, L. 1914, c. 334) and 
 '■ every corporation . . . owning 
 or operating any elevated railroad 
 or surface railroad not operated by 
 steam" (Tax L. § 185, L. 1917, 
 c. 710), and "every corporation 
 . . . formed for supplying 
 water or gas, or for electric or 
 steam heating, lighting or power 
 purposes . . . (Tax L. § 186, 
 L. 1909, c. 62), and insurance com- 
 panies (Tax L. § 187, L. 1906 c. 62), 
 and trust companies and- savings 
 banks (Tax L. § 188, L. 1909, c. 62), 
 and banks, title guaranty, insurance 
 or surety companies (Tax L. § 189, 
 L.- 1909, c. 62) banks, savings 
 banks, institutions for savings, title 
 guaranty, insurance or surety corpo- 
 rations] shall be exempt from the 
 payment of the taxes prescribed by 
 this article." Tax L. § 210 (L. 1918, 
 C.417). 
 
BUSINESS CORPORATIONS IN NEW YORK 
 
 § 572 
 
 privilege of exercising its franchises in New York State in 
 a corporate or organized capacity." The decisions cited in 
 the note are not under the particular statute before the reader 
 for consideration, and should be used with this in mind/* 
 
 (L. 1880, c. 542, as amend 'd L. 
 1889, c. 193). " The statute of 
 1889, in exempting from taxation - 
 manufacturing corporations ' wholly 
 engaged in carrying on manufac- 
 ture ' within this state, had in view 
 corporations whose corporate powers 
 were confined to the exclusive busi- 
 ness of manufacturing, and the lim- 
 iting words were intended to distin- 
 guish between such corporations and 
 corporations which embraced a 
 wider scope of power, but which in- 
 cluded the power to engage in the 
 business of manufacture. 
 The statute was not aimed at and 
 did not contemplate the exercise by 
 a corporation of powers ultra vires. 
 If a manufacturing corporation is 
 engsiged in business outside of its 
 corporate jwwers, in connection 
 with its manufacturing business, it 
 does not cease to be ' wholly en- 
 gaged ' in the business of manufac- 
 ture; that is to say, its only legal 
 and authorized business was that of 
 manufacture. It subjected itself to 
 taxation upon that portion of its 
 capital so used, but nevertheless it 
 remained a corporation which, so 
 far as it exercised its legal powers, 
 was ' wholly engaged ' in manufac- 
 ture, and, therefore, entitled to ex- 
 emption as to its manufacturing 
 business." People ex rel. Tiffany & 
 Co. V. Campbell, 144 N. Y. 166, 38 
 N. E. 990 (1894); Corp. Tax Act, 
 § 3 (L. 1880, e. 542, as amend'd by 
 L. 1889, c. 193). 
 
 On right to be a corporation as a 
 franchise within constitutional or 
 statutory provisions subjecting fran- 
 chises to t-axation as property see 
 note in 28 L.R.A.(N.S.) 255. 
 
 On the question as to whether 
 structure or improvement in street 
 or highway used in connection with 
 special franchise is taxable element, 
 see note in L.R.A.1916B, 1228. 
 As to location of street railway 
 
 "Tas L. § 209 (L. 1918, c. 276). 
 ■'^In determining whether a cor- 
 poration is exempt as a manufac- 
 turing corporation from a capital 
 stock tax it is immaterial under 
 what particular statute it came into 
 existence. People ex rel. Edison 
 Electric Illuminating Co. of N. Y. 
 v. Wemple, 129 N. Y. 664, 29 N. E. 
 812 (1892) ; L. 1848, c. 37 ; L. 1879, 
 c. 512. The policy of the legisla- 
 ture in exempting from the annual 
 franchise tax so much of a corpo- 
 ration's capital as is employed in 
 manufacturing in this State is to 
 encourage the business of manu- 
 facturing within the State, and in 
 determining whether a given case 
 is within the exemption the courts 
 should consider and give weight to 
 this legislative policy. People ex rel. 
 E. S. Dairy Co. v. Sohmer, 218 
 N. Y. 199, L.R.A.1917A, 48, 112 
 N. E. 765 (1916) ; Tax L. § 183. A 
 corporation engaged in other busi- 
 ness than manufacturing, e. g., in 
 selling goods from broken, imported 
 packages, is not exempt as to its 
 business of manufacturing. People 
 ex rel. Matheson & Co. v. Roberts, 
 158 N. Y. 162, 52 N. E. 1102 (1899). 
 A foreign corporation chartered to 
 manufacture, buy, sell, lease, or 
 otherwise procure, own and dispose 
 of eleotric and electric telegraph 
 and telephone instruments and ap- 
 paratus of all kinds; to acquire by 
 purchase patent and other rights 
 and franchises; to acquire and dis- 
 pose of capital stock of other cor- 
 porations, may not only manufac- 
 ture and sell its own goods but buy 
 and sell others', and is not, there- 
 fore, wholly engaged in carrying en 
 manufacture within this State so 
 as to escape taxation on the amount 
 of capital stock it employs here. 
 People ex rel. Western Electric Co. 
 V. Campbell, 145 N. Y. 587, 40 N. E. 
 239 (1895); Corp. Tax Act, § 3 
 
§ 573 TAXATION 697 
 
 § 573. Id.: What Are Manufacturing Corporations.— The 
 
 term " manufacturing corporation," as used in the statute, 
 is not defined thereby." The decisions now given were ren- 
 dered under other statutes than the one prescribing the 
 income-franchise tax, and should be considered with this in 
 irdnd. They are given to aid the reader in deciding what are 
 to be considered manufacturing corporations under the State 
 Income Tax Law by referring him to the decisions of the 
 courts as to what were to be considered manufacturing cor- 
 porations under former statutes /affecting that class of 
 companies. A corporation must be held a manufacturing 
 corporation within the meaning of a statute excepting such 
 from taxation on their capital stock if it is such within the 
 meaning of the words " manufacturing corporation " in its 
 usual and ordinary sense, whatever the law may be under 
 which the corporation is organized and by whatever general 
 name, so long as its chief and principal business is the manu- 
 facture and sale of artificial products.™ ' ' According to Web- 
 ster a manufacturer is one who works raw materials into 
 wares suitable for use. The constructing, using and provid- 
 ing of one or more docks . . . is no more a manufacturing 
 within the meaning of that word than would be the building of 
 warehouses and elevators for the carrying on of the business 
 of warehousemen or the erection of buildings or residences." ^ 
 " Mr. Webster defines manufacture to be ' anything made 
 from raw materials by the hand, by machinery, or by art, 
 as cloths, iron utensils, shoes, machinery, saddlery, etc' 
 The process of manufacture is supposed to produce -some 
 
 franchise for purposes of taxation, bonds, notes, credits or evidences of 
 
 see note in 5 L.R.A.(N.S.) 174. an interest in property and evidences 
 
 On the question of corporate of debt. The 1918 amendment of 
 
 taxation as affected by contract Tax Law, § 208, omitted such third 
 
 clause in Federal Constitution, in and fourth subdivisions, 
 
 general, see comprehensive note in ^"Nassau Gras-Light Co. v. City 
 
 60 L.R.A. 33. of Brooklyn, 89 N. Y. 409 (1882) ; 
 
 "Tax L. § 209 (L. 1918, c. 276). L. 1880, c. "542, § 3. 
 
 The 1917 Law (Tax L. § 208, subds. ^People v. N. Y. Floating Dry- 
 
 2, 3, L. 1917, c. 726), did define a Dock Co., 92 N. Y. 487 (1883); L. 
 
 manufacturing corporation as one 1880, c. 542, § 3. " Defendant was 
 
 principally engaged in the business incorporated under chapter 170 of 
 
 of manufacturing tangible personal the Laws of 1843 ' for the purpose 
 
 property for itself and for others, of constructing, using and providing 
 
 and it also defined " tangible per- one or more dry-docks, or wet-docks, 
 
 sonal property " as corporeal per- or other conveniences and structures 
 
 sonal property, such as machinery, for building, raising, repairing and 
 
 tools, implements, goods, wares and coppering vessels and steamers of 
 
 merchandise, not including money, every description.' " 
 deposits in bank, shares of stock, 
 
698 BUSINESS CORPORATIONS IN NEW YORK § 573 
 
 new article by the application of skill and labor to the 
 raw material. " ^ A company holding the stock of a manu- 
 facturing company cannot itself claim to be engaged in 
 manufacturing so as to escape a franchise tax.' A domestic 
 manufacturing corporation which has its manufacturing 
 plant and its employees in the business of manufacturing its 
 goods in a foreign state where they work and are paid, but 
 which carries on in this State its sales, its bank account, 
 general office and general control and management of its busi- 
 ness, is not exempt from the franchise tax, because it is not 
 engaged in carrying on manufacture within this State.* 
 " ... making the paving compound is the production of 
 a new and distinct substance which constitutes manufacturing 
 . . . but . . . the preparation of a street for the lay- 
 ing of the pavement and placing of the pavement thereupon is 
 not in any sense a process of manufacturing within the mean- 
 ing of the " law exempting from payment of a corporate fran- 
 chise tax a corporation's capital employed in manufacturing 
 in this State.' Crushing stone is not manufacturing so as to 
 relieve a domestic corporation doing it from franchise taxa- 
 tion to the extent of its capital employed in this State in 
 crushing and selling the stone." A corporation making 
 asphaltum by compounding different raw materials, none 
 of which alone is of any value for the purpose for which 
 the compound is used, with the aid of applied labor, skill, 
 machinery and mechanical devices, is a manufacturing 
 corporation so far as the franchise tax is concerned.' A cor- 
 poration formed to manufacture lead boilers to be placed 
 inside steel digesters as lining thereto is a manufacturing 
 corporation insofar as taxation goes.* Illuminating gas is 
 so much an artificial product that a company making it 
 is a manufacturing company, within the exception of a statute 
 
 ^ People ex rel. Union Pacific Tea 537 (1904) ; Tax L. § 183 (L. 1897, 
 
 Co. V. Roberts, 145 N. Y. 375, 40 c. 785). 
 
 N. E. 7 (1895). 8 People ex rel. Tompkins Cove 
 
 ^People ex rel. American Bank Stone Co. v. Saxe, 176 A. D. 1, 162 
 
 Note Co. V. Sohmer, 157 A. D. 1, N. Y. Supp. 408 (1916) ; afE'd 221 
 
 141 N. Y. Supp. 635 (1913); aflE'd N. Y. 601, 117 N. E. 1081; Tax L. 
 
 210 N. Y. 621, 104 N. E. 1137; Tax §§ 182, 183 (L. 1909, e. 62). 
 
 L. § 183. ' People ex rel. Paving Co. v. 
 
 ^People ex rel. Blackinton Co. v. Morgan, 61 A. D. 373, 70 N. Y. 
 
 Roberts, 4 A. D. 388, 38 N. Y. Supp. Supp. 516 (1901) ; Tax L. § 183 
 
 872 (1896) ; afE'd 151 N. Y. 651, 46 (L. 1897, e. 985). 
 
 N. E. 1150; L. 1880, c. 542, as « People ex rel. Digester Co. v. 
 
 amend 'd.L. 1890, c. 522, § 3. Knight, 67 • A. D. 365, 73 N. Y. 
 
 = People ex rel. Paving Co. v. Supp. 743 (1901); Tax L. § 183 
 
 Knight, 99 A. D. 62, 90 N. Y. Supp. (L. 1896, c. 908). 
 
§ 573 TAXATION 699 
 
 subjecting corporations to a tax on their capital stock." 
 An electric light and power company will be held exempt 
 from payment of a capital stock tax as a manufacturing 
 corporation until the legislature specifically enacts that it is 
 not exempt.^" A corporation having for its business the 
 collection, storage, preservation, preparation for sale, trans- 
 portation and sale of na,tural ice is not a manufacturing cor- 
 poration so as to be exempt from taxation." A corpora- 
 tion having its factory and doing its work only in New York, 
 which consists in putting partially finished gold pens into 
 holders which it shapes to fit such pens, is a manufacturing 
 corporation, insofar as the determination of the tax on its 
 capital stock goes." The process of refining bullion in an 
 assay office in this State for a foreign corporation paying 
 therefor does not constitute the corporation a manufacturing 
 corporation in determining the tax it must pay.". When * ' tea 
 is taken in the original state, and various kinds are mixed 
 together, producing a compound which is called combination 
 tea," and " coffee is purchased in the raw bean, roasted, 
 ground, and in some instances different kinds of coffee are 
 mixed together, forming, as in the case of the tea, a combina- 
 tion article," the corporation doing these things is not 
 engaged in manufacturing within the meaning of the statute 
 imposing a tax on its capital stock." A corporation the prin- 
 cipal business of which is " the purchasing of sheep and 
 lambs, slaughtering them, pulling the wool from the hides or 
 pelts, selling it, selling the hides, taking from the animals the 
 
 ° Nassau Gas-Light Co. v. City of manufactured and- frigoric effects 
 
 Brooklyn, 89 N. Y. 409 (1882); L. produced by artificial means. Cor- 
 
 1880, c. 542, § 3. The court discuss porations exist for that purpose and 
 
 the process of furnishing the gas come literally within our manufac- 
 
 till the final step by which it is turing laws. ' ' 
 
 ' ' measured . out to the consumer ^^ People ex rel. Waterman Co. v. 
 
 through a meter which is the result Morgan, 48 A. D. 395, 63 N. Y. 
 
 of considerable inventive skill, but Supp. 76 (1900). 
 
 whose accuracy is not always cheer- ^^ People v. Horn' Silver Mining 
 
 fully admitted." Co., 105 N. Y. 76, 11 N. E. 155 
 
 "People ex rel. Brush Electric (1887) ; L. 1880, c. 542, as amend 'd 
 
 Mfg. Co. v. Wemple, 129 N. Y. 543, L. 1881, c. 361, and L. 1882, c. 151. 
 
 14 L.R.A. 708, 29 N. E. 808 (1892) ; Farmer paying to have grain 
 
 L 1880, c. 542, as am«nd'd L. 1881, ground, or wool woven; or railroad 
 
 c. 361, and L. 1889, c. 353. manufacturing its. rolling stock 
 
 ^^ People V. Knickerbocker Ice " cannot be properly classified as a 
 
 Co., 99 N. Y. 181, 1 N. E. 669 (1885) ; manufacturing company. " 
 
 Gen. Mfg. Act. L. 1848, c. 40, as ex- ^* People ex rel. Union Pacific Tea 
 
 tended L. 1855, c. 301; L. 1880, Co. v. Romerts, 145 N. Y. 375, 40 
 
 c. 542, § 3, as amend 'd L. 1881, N. E. 7 (1895). 
 c. 361. ' ' No doubt ice may be 
 
700 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 573 
 
 offal, including the blood and lys, converting it into fertilizer, 
 and then reducing the carcasses to a temperature which would 
 retard decomposition, and shipping them to the place of 
 delivery in refrigerator cars " is not " carrying on manu- 
 facture ' ' within the statutes exempting such a company from 
 taxes." Assuming, but not deciding, that the printing of a 
 newspaper is manufacturing, yet a corporation not owning or 
 operating any plant for the printing of its paper, but having 
 the type set and the paper printed by third persons at a price 
 agreed upon, and doing no part of the work itself farther 
 than to have a foreman overlook and watch the work as it 
 progresses in the hands of the contractor, is not a manu- 
 facturer so as to be assessed for its franchise tax as a manu- 
 facturing corporation." The pasteurization of milk by a 
 domestic corporation is not manufacture so as to entitle it to 
 exemption from the annual franchise tax to the extent of its 
 capital actually employed in this State for pasteurization 
 purposes." Other decisions under statutes imposing fran- 
 chise taxes on manufacturing corporations but which do not 
 deal with the question of what companies are to be classed 
 as manufacturing ones are collected in the note." 
 
 ^° People ex rel. New England 
 Dressed Meat & W. Co., 155 N. Y. 
 408, 4l L.R.A. 228, 50 N. E. 53 
 (1898) ; L. 1880, c. 542, as amend 'd 
 L. 1896, e. 908, art.' 9. 
 
 ^'People ex rel. Jewelers' Pub. 
 Co. V. Roberts, 155 N. Y. 1, 49 
 N. E. 248 (1898). 
 
 ^^ People ex rel. E. S. Dairy Co. 
 V. Sohmer, 218 N. Y. 199, L.R.A. 
 1917A, 48, 112 N. E. 755 (1916); 
 Tax L. § 183. 
 
 ^ A law imposing a tax on a 
 manufacturing corporation upon the 
 basis of its capital employed in the 
 State is constitutional. Matter of 
 the Tax against Tiffany & Co., 80 
 Hun, 486, 30 N. Y. Supp. 494 
 (1894); L. 1889, c. 353. A manu- 
 facturing corporation doing an ultra 
 vires business, however small, out- 
 side of manufacturing, is subject to 
 the franchise tax. People ex rel. 
 Stokes Co. V. Roberts, 90 Hun, 533, 
 36 N. Y. Supp. 73 (1895) ; L. 1880, 
 c. 542. The tax on a manufactur- 
 ing corporation should be imposed 
 on its whole capital employed in 
 
 this State if it has not been wholly 
 engaged in carrying on manufactur- 
 ing business within the State. Mat- 
 ter of the Tax against Tiffany & 
 Co., 80 Hun, 486, 30 N. Y. Supp. 
 494 (1894) ; L. 1889, c. 353. A cor- 
 poration carrying on business in 
 this State which is not wholly that 
 of manufacturing is liable to tax. 
 People ex rel. Western Electric Co. 
 V. Campbell, 80 Hun, 466, 30 N. Y. 
 Supp. 472 (1894); aff'd 145 N. Y. 
 587, 40 N. E. 239; L. 1889, chs. 353, 
 463. " . . . it is not sufficient to 
 exempt a corporation from taxation 
 that it is a manufacturing corpora- 
 tion, but it must also carry on 
 manufacture within this State." 
 People V. Horn Silver Mining Co., 
 105 N. Y. 76, 11 N. E. 155 (1887) ; 
 L. 1880, c. 542, as amend 'd L. 1881, 
 c. 361, and L. 1882, c. 151. Land on 
 which no shops of a manufacturing 
 corporation are located and none of 
 its work is done cannot be deemed 
 part of its "capital actually em- 
 ployed ... in manufacturing " 
 so as to be exempted in determin- 
 
§§ 574, 575 TAXATION 701 
 
 § 574. Id.: What Are Mercantile Corporations. — The term 
 ** mercantile corporation," as used in the statute imposing a 
 tax on the income of a mercantile corporation, is not defined 
 by the statute." 
 
 § 575. Id.: How to Ascertain Net Income to Be Taxed.— 
 Whether the tax is on the corporation's entire net income or 
 only upon a proportion thereof depends upon whether or not 
 the entire business of the corporation be transacted within 
 New York State: if it is, the tax is based upon the entire net 
 income of such corporation as returned to the United States 
 treasury department for such fiscal or calendar year ; if it is 
 not, the tax is based upon a proportion only of the net 
 income.^" To determine such proportion add together (1) the 
 average monthly actual value where located of the real prop- 
 erty and the tangible personal property, such as machinery 
 tools, implements, goods, wares and merchandise (not money, 
 deposits in bank, shares of stock, bonds, notes, credits or evi- 
 dences of an interest in property and evidences of debt) 
 within New York State; (2) the average monthly value of 
 bills and accounts receivable for (a) personal property sold 
 by the corporation from merchandise manufactured by it 
 within New York State, (b) personal property sold by the 
 corporation from merchandise owned by it and located within 
 New York State at the time of the acceptance of the order, 
 but not manufactured by it within New York State, and (c) 
 services performed within the State, excluding biUs and 
 
 ing the corporation's franchise tax; Extension of exemption to addi- 
 
 though it must be considered, for tion to, or enlai^ement of, manu- 
 
 sueh purpose, as capital of the cor- facturing plant, see note in L.R.A. 
 
 poration, in spite of the fact that 1916D, 112. 
 
 it employs its whole capital stock "Tax L. § 209 (L. 1918, e. 276). 
 
 in its business and has a large sur- The 1917 Law (Tax L. § 208, subds. 
 
 plus in which it would seem thai 2, 3, L. 1917, c. 726), did define a 
 
 such land, not beiiig used in its mercantile corporation as one prin- 
 
 business, should logically be in- cipally engaged in the business of 
 
 eluded. People ex rel. Steinway & buying or selling tangible personal 
 
 Sons V. Kelsey, 108 A. D. 138, 96 property for itself or for others, and 
 
 N. Y. Snpp. 42 (1905) ; Tax L. it also defined " tangible personal 
 
 §182 (L. 1901, e. 558). property" as corporeal personal 
 
 Electric company as manufactur- property, such as machinery, tools, 
 
 ing company for purposes of taxa- implements, goods, wares and mer- 
 
 tion, see notes in 64 L.R.A. 59; 38 chandise not including money, de- 
 
 L.R.A.(N.S.) 907. posits in bank, shares of stock, 
 
 Authorities discussing the ques- bonds, notes, credits or evidences of 
 
 tion as to what are manufacturing an interest in property and evi- 
 
 eorporations for the purposes of denws of debt, 
 
 taxation are collated in note in 64 ^'Tax L. § 214 (L. 1918, e. 417). 
 L.R.A. 33. 
 
702 BUSINESS CORPORATIONS IN NEW YORK § 575 
 
 accounts receivable arising from sales made from a stock of 
 merchandise or other property located at a place of business 
 maintained by the reporting corporation without this State ; 
 and (3) the proportion of the average value of the stock of 
 another corporation owned by the corporation in question 
 which the value of the physical property of such other cor- 
 poration in New York State which represents such stock bears 
 to the value of its physical property outside New York State 
 which represents such stock (but not exceeding ten per centum 
 of the real and tangible personal property segregated to New 
 York State under the statute).^ Then add together (1) the 
 average actual monthly value where located of all the real 
 property and personal property of the corporation, such as 
 machinery, tools, implements, goods, wares and merchandise 
 (not money, deposits in bank, shares of stock, bonds, notes, 
 credits or evidences of an interest in property and evidences 
 of debt), wherever located ; (2) the average total value of bills 
 and accounts receivable for (a) personal property sold by the 
 corporation from merchandise manufactured by it within and 
 without New York State, (b) personal property sold by the 
 corporation from merchandise owned by it at the time of 
 acceptance of the order but not manufactured by it, and (c) 
 services performed both within and without New York State, 
 based on orders received at offices maintained by the corpo- 
 ration, excluding bills and accounts receivable on orders filled 
 from a stock of merchandise or other property maintained by 
 the corporation; and (3) the average total value of the stocks 
 of other corporations owned by the corporation ' in question, 
 (but not exceeding ten per centum of the aggregate real and 
 tangible personal property set up in the report).^ The pro- 
 portion of the net income of the corporation upon which the 
 tax is based is then such portion of its entire net income as 
 the aggregate of the first three items bears to the aggregate 
 of the last three.' The net income is the net income of the 
 corporation for the year beginning November first to be com- 
 puted by the State Tax Commission upon the basis of its net 
 income for its fiscal or calendar year next preceding, which is 
 presumably the same income as that upon which it is required 
 to pay a tax to the United States ; except that a corporation 
 which reports to the United States Treasury Department on 
 the basis of its fiscal year may report to the New York State 
 Tax Commission upon the same basis.* 
 
 'Tax L. § 214 (L. 1918, c. 417). * Tax L. § 209 (L. 1918, c. 2"«), 
 
 ^ Tax L. § 214 (L. 1918, c. 417). and § 212 (L. 1917, c. 726). 
 ' Tax L. § 214 (L. 1918, c. 417). 
 
§§ 576-578 TAXATION 703 
 
 § 576. Id.: Amount of Tax.— The State franchise tax on 
 income is at the rate of three per centum of the net income of 
 the corporation, or the portion thereof taxable within New 
 York State, determined as provided by statute.* The mini- 
 mum tax and the tax when the stock has no par value are 
 given in the note."^* 
 
 § 577. Id.: Reports, Who to Make, When and to Whom.— 
 Every corporation subject to the State income tax (as well 
 as foreign corporations having officers, agents or representa- 
 tives within New York State) must annually on or before July 
 first, or within thirty days after the making of its report on 
 net income to the United States Treasury Department for 
 any fiscal or palendar year, transmit to the Tax Commis- 
 sion a report of its income.^ If any corporation takes 
 over by merger or consolidation the assets or franchise of 
 another corporation doing business in New York State dur- 
 ing the year ending with the thirty-first day of October, such 
 corporation must make a consolidated report for all the cor- 
 porations so merged or consolidated, as though the merged 
 or consolidated corporation had existed and done business 
 as an entity throughout the year for which the report is made, 
 and must be taxed for the year to ensue upon the basis of 
 such report and as provided by statute."* The Tax Commis- 
 sion may for good cause shown extend the time within which 
 any corporation is required to report by statute.' 
 
 § 578. Id.: Contents and Form. — The report must be in the 
 form prescribed by the Tax Commission.* Blank forms of 
 report must be furnished by the Tax Commission, on applica- 
 tion, but failure to secure such a blank does not release any 
 corporation from the obligation of making a report under the 
 statute." The statements to be contained in a corporation's 
 State income tax report depend upon whether or not it incor- 
 porates therein a consent to be taxed upon its entire net 
 income. If it does so consent, the report must specify: (1) 
 
 ^ Tax L. § 215 (L. 1917, e. 726). value of the issued capital stock ; and 
 
 =^Tax L. § 214 (L. 1918, c. 417). i£ the corporation has stock without 
 
 The minimum tax is $10 and not less par value, the base of the tax is on 
 
 than one mill on each dollar of the such a portion of its paid in capital 
 
 apportionment of the face value of as its real a;nd tangible personal 
 
 its issued capital stock apportioned property in New York State bears 
 
 to New York State, determined by to its entire real and tangible per- 
 
 diyiding the amount of the real and sonal property. 
 
 tangible personal property in New ' * Tax L. § 211 (L. 1918, c. 417). 
 
 York State by the entire amount of ^ Tax L. § 214-a (L. 1918, c. 292). 
 
 the real and tangible personal prop- 'Tax L. § 217 (L. 1917, e. 726). 
 
 erty as shown in the report, and ^ Tax L. § 211 (L. 1918, c. 417). 
 
 multiplying the quotient by the face 'Tax L. § 213 (L.. 1917, c. 726). 
 
704 BUSINESS CORPORATIONS IN NEW YORK § 578 
 
 Its consent to be taxed upon its entire net income; (2) the 
 (a) name of the corporation, (b) location of its principal place 
 of business; (c) state under the laws of which organized; 
 (d) date of organization and (e) kind of business transacted; 
 (3) the amount of its net income, either (a) for the preceding 
 calendar year or (b) for its preceding fiscal year if it reports 
 to the United States treasury department on the basis of its 
 fiscal year, but in either case the amount must be the same as 
 was shown in its last return of annual net income made by it 
 to the United States treasury department; (4) (a) the aver- 
 age monthly value for the fiscal or calendar year of its real 
 property and tangible personal property in each city, village 
 or portion of a town outside of a villg,ge within New York 
 State, and (b) the average monthly value of all its real prop- 
 erty and tangible personal property wherever located, or, if 
 it has no such real or tangible personal property, the city, 
 village or portion of a town outside of a village in New York 
 State in which is located the office in which its principal 
 financial concerns within New York State are transacted ; and 
 (5) such other facts as the Tax Commission may require for 
 the purpose of making the computation required by the 
 statute.'* If it does not so consent, the report, in lieu of 
 specifying its consent to be taxed upon its entire net income, 
 must, in addition to the other items required of a corporation 
 so consenting, specify: (6) the (A) average monthly value 
 for the fiscal or calendar year of bills and accounts receivable 
 for (a) personal property sold by the corporation from mer- 
 chandise manufactured by it within New York State, (b) per- 
 sonal property sold by the corporation from merchandise 
 owned by it and located within New York State at the time 
 of the acceptance of the order, but not manufactured by it 
 within New York State, and (c) services performed, based on 
 all orders received at offices maintained by the corporation 
 within New York State, excluding bills and accounts receiv- 
 able arising from sd,les made from a stock of merchandise or 
 other property located at a place of business maintained by 
 the reporting corporation within New York State, and (B) 
 average monthly total value for the fiscal or calendar year of 
 bills and amounts receivable for (a) personal property sold 
 by the corporation from merchandise manufactured by it 
 within and without New York State, (b) personal property 
 sold by the corporation from merchandise owned by it at the 
 time of the acceptance of the order but not manufactured by 
 it, and (c) services performed, based on orders received at 
 
 °»Tax L. § 211 (L. 1918, c. 417). 
 
§§ 579, 580 TAXATION 705 
 
 offices maintained by the corporation, excluding bills and 
 accounts receivable on orders filled from a stock of mer- 
 chandise or other property maintained by the reporting cor- 
 poration; (7) the (a) average total value for the fiscal or 
 calendar year of the stock of other corporations owned by the 
 corporation and (b) the proportion of the average value of 
 the stock of such other corporations within the State of New 
 York, in the proportion which the value of the physical prop- 
 erty of such other corporations in New York State which 
 represents such stock bears to such property out of New York 
 State; (8) the city, village or portion of a town outside of a 
 village in New York State in which is located the office in 
 which its principal financial concerns within New York State 
 are transacted, if it has no real or tangible personal property 
 within New York State.^° The Tax Commission may require 
 a further or supplemental report to contain further informa- 
 tion and data necessary for the computation of the tax." 
 Every report must have annexed to it the affidavit of the 
 president, vice-president, secretary or treasurer of the cor- 
 poration to the effect that the statements contained therein 
 are true." The form of report on merger is stated in the last 
 section."* 
 
 § 579. Id.: Effect of Failure to Make or Fraudulent State- 
 ment in. — ^Any corporation which fails to make any report 
 required by the statute is liable to a penalty of not more than 
 five thousand dollars to be paid to the State and to be col- 
 lected in a civil action at the instance of the Tax Commission ; 
 and any officer of any such corporation who makes a fraudu- 
 lent return or statement with intent to defeat or evade the 
 payment of the taxes prescribed by the statute is liable to a 
 penalty of not more than one thousand dollars, to be col- 
 lected in like manner." If any report is not made as 
 required by statute the Tax Commission is authorized to 
 make an estimate of the net income of the corporation and 
 of the amount of tax due by law from any information in its 
 possession, and to order and state an account according to 
 such estimate for the taxes, penalties and interest due New 
 York State from the corporation." 
 
 § 580. Id.: Notice of Tax.-^Notice of tax assessment must be 
 sent by mail to the postoffice address given in the corpora- 
 
 " Tax L. § 211 (L. 1918, c. 417). "All moneys recovered as penalties, 
 
 "Tax L. § 213 (L. 1917, c. 726). for a failure to report or for 
 
 ^^Tax L. § 213 (L. 1917, e. 726). making fraudulent reports, shall be 
 
 "* Tax L. § 214a (L. 1918, c. 292.) paid to the state comptroller." 
 
 ^^Tax L. § 216 (L. 1917, c. 726) : "Tax L. § 217 (L. 1917, c. 726). 
 B.C.N.Y.— 45 
 
706 BUSINESS CORPORATIONS IN NEW YORK §§ 581-583 
 
 tion's report, and the record that such notice has been sent 
 is presumptive evidence of the giving of the notice and must 
 be preserved by the Tax Commission; and if the tax imposed 
 is based upon an estimate by the Tax Commisson made in 
 default of a report by the corporation, notice thereof and of a 
 time and place at which opportunity will be given to be heard 
 in respect thereof must be mailed to the postoffice address of 
 the corporation.^^ 
 
 § 581. Id.: Review and Revision of, by Tax Commission, on 
 Application Within Year. — The Tax Commission must grant 
 a hearing on any application for revision filed with it by a 
 corporation against which an account is audited and stated 
 within one year from the time of such audit and statement; 
 and must resettle the tax according to law and the facts and 
 adjust the account for taxes accordingly and send notice of 
 its determination thereon to th'e corporation and State Comp- 
 troller forthwith, if it is made to appear upon any such 
 hearing by evidence submitted to the Tax Commission or 
 otherwise (a) that any such account included taxes or other 
 charges which could not have been lawfully demanded or (b) 
 that payment has been illegally made or exacted of any such 
 account." 
 
 § 582. Id.: When Tax Based on Estimate by Commission. — 
 If tjie State Income Tax imposed upon any corporation is 
 based upon an estimate of its income made by the Tax Com- 
 mission under the statute permitting it to do so if the cor- 
 poration does not make the report required of it by law, the 
 Commission must notify the corporation of a time and place 
 at which opportunity will be given it to be heard in respect 
 thereof, by notice mailed to the postoffice address of the 
 corporation." 
 
 § 583. Id.: When U.S. Changes Its Tax.— If the Commis- 
 sioner of Internal Revenue, or other officer of the United 
 States, or other competent authority, changes or corrects the 
 amount of the annual net income of any corporation, taxable 
 under the State Income Tax Law, as returned to the United 
 States Treasury Department, the corporation must within 
 ten days after receipt of notice of such change or correction 
 make return under oath or affirmation to the Tax Commission 
 of such changed or corrected net income and must either 
 concede the accuracy of such determination or state wherein 
 it is erroneous. The Tax Commission must ascertain, from 
 such return and any other information in its possession, the 
 net income of such corporation for the fiscal or calendar year 
 
 "Tax L. §§ 219-b and 217 (L. "Tax L. § 218 (L. 1917, c. 726). 
 1917, e. 726). "Tax L. § 217 (L. 1917, c. 726). 
 
§ 584 TAXATION 707 
 
 for which such change or correction has been made by such 
 Commission of Internal Eevenue or other officer or authority; 
 and all the authority conferred on it by the provisions of 
 section one hundred and ninety-five of the Tax Law is 
 granted to it in respect of the ascertainment of such net 
 income. The Tax Commission must thereupon reaudit and 
 restate the account of such corporation for taxes based upon 
 the net income for such fiscal or calendar year, such reaudit 
 to be according to the net income so ascertained by the Tax 
 Commission. The proceedings and determination of the Tax 
 Commission in the making of such reassessment may be 
 revised and readjusted and reviewed in the manner provided 
 by sections two hundred and eighteen and two hundred and 
 nineteen of the Tax Law, as in the case of an original assess- 
 ment of the tax. If from such reassessment it appears that 
 such corporation has paid an excess State Income Tax for 
 the year for which such reassessment is made, the Tax Com- 
 mission must return a statement of the amount of such excess 
 to the Comptroller, who must credit such corporation with 
 such amount. If from such reassessment it appears that an 
 additional tax is due from such corporation for such year, it 
 must within thirty days after notice has been given by the 
 Commission pay such additional tax.^^ 
 
 § 584. Id.: By Certiorari. — The determination of the Tax 
 Commission upon any application made to it by any corpora- 
 tion for revision and resettlement of any account, as prescribed 
 in the State Income Tax Law, may be reviewed in the manner 
 prescribed by and subject to the statute regulating certiorari ; 
 but no certiorari to review any audit and statement of an 
 account or any determination by the Commission can be 
 granted unless notice of the application therefor is made 
 within thirty days after the service of the notice of such 
 determination. Eight days ' notice must be given to the Com- 
 mission of the application for such writ ; and the full amount 
 of the taxes, percentage, interest and other charges audited 
 and stated in such account must be deposited with the State 
 Comptroller before making the application and an under- 
 taking filed with the Commission, in such amount and with 
 such sureties as a Justice of the Supreme Court approves, to 
 
 ^* Tax L. § 219-d (L. 1918, c. 276). shall thereupon be entitled to credit 
 " Such credit may be assigned by upon the books of the comptroller 
 the corporation in whose favor it for the amount thereof on the cur- 
 is allowed to a corporation liable rent account for taxes of such as- 
 to pay taxes under this article, and signee in the same way and with 
 the assignee of the whole or any the same effect as though the 
 part of such credit on filing with credit had originally been allowed 
 the commission such assignment in favor of such assignee." 
 
708 BUSINESS CORPOEATIONS IN NEW YORK §§ 585-587 
 
 the effect that if such writ is dismissed or the determination 
 of the Commission affirmed, the applicant for the writ will 
 pay aU costs and charges which may accrue against it in the 
 prosecution of the writ, including costs of all appeals." 
 
 § 585. Id.: When and to Whom Payable.— The State Income 
 Tax must be paid to the State Comptroller on or before the 
 first day of January of each year or within thirty days after 
 notice of the tax has been given by mail to the corporation by 
 the Tax Commission as provided by statute if such notice is 
 given subsequent to the first day of December of the year for 
 which such tax is imposed f and if it appears that, by reason 
 of a change or correction made by the United States Treasury 
 Department in the amount of the corporation's annual net 
 income, and the State Tax Commissions' reassessment, that 
 an additional tax is due by the corporation, the latter must 
 pay such additional tax within thirty days after notice has 
 been given it by the State authorities.^"'^ 
 
 § 586. Id.: Penalty and Lien of Tax from Non-payment. — 
 If the State Income Tax is not paid on or before January first, 
 or, in the case of additional taxes, within thirty days after 
 the notice for them has been given and such notice of addi- 
 tional tax is given subsequent to the first day of December of 
 the year for which such additional tax is imposed, the cor- 
 poration liable to pay the tax must pay to the State Comp- 
 troller, in addition to the amount of such tax, as additional 
 tax, ten per centum of such amount, plus one per centum for 
 each month the tax, or additional tax, remains unpaid; and 
 each such tax, or additional tax, is a lien upon and binding 
 upon the real and personal property of the corporation liable 
 to pay it from the time when it is payable until it is paid in 
 fuU.^ 
 
 § 587. Id.: Auditing, Apportionment, Collection and Deposit 
 of Tax and Powers of Commission. — The statute imposing the 
 income tax provides for the powers of the Tax Commission,^ 
 for the auditing and apportionment of the tax in New York 
 State,^ for warrants and action for its recovery," for the 
 
 "Tax L. § 219 (L. 1918, c. 417). ^ Tax L. § 217 (L. 1917, o. 726) : 
 
 See Tax L. §§ 199, 200. "All the authority and iwwers con- 
 
 '"' Tax L. § 219-c (L. 1918, c. 271). f erred on the tax commission by the 
 
 ^» Tax L. § 219-d (L. 1918, e. 276). provisions of section one hundred 
 
 ^ Tax L. § 219-c (L. 1918, c. 271) : and ninety-five of the tax law shall 
 
 " No such penalty or charge shall he have full force and effect in respect 
 
 added to the amount of such tax or of corporations which may be liable 
 
 additional tax imposed for the year hereunder." 
 
 beginning November first, nineteen ^ Tax L. 219-a (L. 1917, c. 726). 
 
 hundred and seventeen, if such tax *Tax L. §§ 219-e, 219-f (L. 1917, 
 
 or additional tax is paid within thirty c. 726). 
 
 days after the passage of this act." 
 
§ 588 TAXATION 709 
 
 deposit and disposition of the revenues thereof,' for secrecy 
 of State officials having to do with the tax," for preservation 
 of tax reports for three years,^ and for the statute of limita- 
 tions in income tax proceedings.* 
 
 § 588. Id.: Frachise Tax In General.—" The general fran- 
 chise of a corporation is its right to live and ^o business by the 
 exercise_ of the corporate powers granted by the State."" 
 I' The right to hold stock in other corporations and to have 
 its officers eligible to the board of directors of such other cor- 
 porations is clearly a franchise . . ."" The statute impos- 
 ing a franchise tax " does not impose a property tax, but 
 merely exacts a payment for the privilege of exercising cor- 
 porate powers within the State. . . . The legislature is 
 not bound to impose the same conditions upon all corporations 
 for the privilege of doing business in New York. It may 
 grant or withhold the privilege in the case of each corporation 
 as it sees fit." " "A franchise stock corporation owns three 
 things: 1. Its capital, existing in money or property. 2. 
 Its surplus, if any. 3. Its franchise. The franchise is the 
 thing taxed, and the tax is ' computed upon the basis of the 
 amount of its' capital stock employed within the state.' 
 The share stock, or in other words, the paper certificates 
 held and owned by individuals, are not employed within this 
 State. It is the capital represented by such certificates that 
 is so employed. The total share stock of a domestic corpora- 
 tion may be held by non-residents, and yet all of its capital 
 may be employed within the State. ... In construing 
 this section [182] of the Corporation Tax Law, the authorized 
 issue of the share stock of a corporation needs to be con- 
 sidered only as fixing the limit beyond which a corporate 
 franchise cannot be taxed in a case where all the corporate 
 capital- is employed within this State."" The tax upon the 
 capital stock of a corporation " is not imposed upon property, 
 but in the case of a domestic corporation on its franchises, 
 and of a foreign corporation on its business."" " The tax 
 
 = Tax L. § 219-g (L. 1917, e. 726), Co. v. Glynn, 194 N. Y. 387, 87 
 
 and § 219wh (L. 1918, e. 417). N. E. 434 (1909); Tax L. § 182, 
 
 "Tax L. § 219-i (L. 1917, c. 726). dictum. 
 
 7 Id ^^ People ex rel. Commercial Cable 
 
 'Tax L. § 219-k (L. 1917, c. 726). Co. v. Moi^an, 178 N. Y. 433, 67 
 
 » People ex rel. H. R. & P. R. R. L.R.A. 960, 70 N. E. 967 (1904); 
 
 Co. V. Tax Commissioners, 215 N. Y. Tax L. § 182. 
 
 507, L.R.A.1916B, 1222, 109 N. E. "People ex rel. Singer Mfg. Co. 
 
 569 (1915). V. Wemple, 150 N. Y. 46, 44 N. E. 
 
 " Venner v. New York Central & 787 (1896) ; Corp. Tax Act, L. 1880, 
 
 H. R. R. E. Co., 160 A. D. 127, 145 c. 542, as amend 'd L. 1885, e. 501. 
 
 N. Y. Supp. 725 (1914) ; afPd 217 See now Tax L. § 182; People ex rel. 
 
 N. Y 615 and 617, 111 N. E. 487; St. Badisehe Eabrik v. Roberts, 152 
 
 Corp. L. § 52. N. Y. 59 (1897) ; L. 1880, c. 542, 
 
710 BUSINESS CORPORATIONS IN NEW YORK § 588 
 
 [on capital] when imposed on a domestic corporation is a tax 
 on its corporate franchises ; when imposed on a foreign cor- 
 poration is a tax on its business, a distinction based on the 
 fact that corporate franchises are only taxable within the 
 jurisdiction which creates them, and where alone they can 
 be said to have a situs." ^* The statute imposing a franchise 
 tax on corporations is constitutional/^ A law imposing a 
 franchise tax upon corporations sufficiently states its object, 
 under the Constitutional mandate that the object shall dis- 
 tinctly be stated in a statute 's title, if it says that it is " appli- 
 cable to the payment of the ordinary and current expenses of 
 the State."" A statute imposing a franchise tax is not 
 obnoxious to any provision of the Federal Constitution, if 
 confined to capital employed in this State by an entity existing 
 under its laws." An annual franchise tax based on dividends 
 declared is not on property and cannot be held violative of 
 any provision of the Constitution of the United States if there 
 is no discrimination made between one corporation and 
 another.^* The statute providing for the imposition of a 
 franchise tax upon corporations ' ' repeals by implication any 
 other act not dealing exclusively with taxation in conflict with 
 it, insofar as taxation is concerned. ' ' " When two meanings 
 are inferrable from a statute imposing a franchise tax, the 
 taxpayer is entitled to the more favorable reading.^" The 
 franchise tax " acts are prospective in operation and the tax 
 thereby imposed is payable annually, not for the past, but for 
 the future enjoyment of the franchise. The framers of the 
 act had to solve the problem of ascertaining the value of 
 such enjoyment, and for that purpose alone was reference 
 made to dividends. . . . The amount of dividends made 
 or declared during the year are thus made simply the measure 
 
 " People ex rel. Pennsylvania R. ^* People ex rel. Matheson & Co. 
 
 R. Co. V. Wemple, 138 N. Y. 1, 19 v. Roberts, 158 N. Y. 162, 52 N. E. 
 
 L.R.A. 694, 33 N. E. 720 (1893) ; 1102 (1899) ; L. 1880, c. 542; People 
 
 L. 1880, c 542; L 1881, e. 361; L. ex rel. A. S. Fountain Co. v. Rob- 
 
 1882,0.151; L. 1885, c.501; L. 1890, erts, 158 N. Y. 168, 52 N. E. 1104 
 
 c. 522, § 3. See now Tax L. § 182. (1899) ; L 1880, c. 542, amend 'd by 
 
 " People V. Gold Stock Telegraph L. 1890, c. 522, see now Tax L. 
 
 Co., 8 N. Y. 67 (1885) ; L. 1881, § 182. 
 
 e. 361, see now Tax L. § 182. " People v. Gold & Stock Tele- 
 
 " People V. Home Insurance Co., graph Co., 98 N. Y. 67 (1885); L. 
 
 92 N. Y. 328 (1883) ; L. 1880, c. 542, 1881, c. 361; L. 1853, c. 471, see 
 
 § 9, see now Tax L. § 182; N. Y. now Tax L. § 182. 
 
 Const, art. 3, § 20. ^"People ex rel. American Bank 
 
 "People ex rel. Piatt v. "Wemple, Note Co. v. Sohmer, 157 A. D. 1, 
 
 117 N. Y. 136, 6 L.R.A. 303, 22 141 N. Y. Supp. 635 (1913); aflf'd 
 
 N. E. 1046 (1889) ; L. 1880, c. 542, 210 N. Y. 621, 104 N. E. 1137; Tax 
 
 as amend 'd L. 1881, c. 361, § 3, and L. § 182. 
 L. 1885, c. 501, see now Tax L. 
 « 182. 
 
§ 588 TAXATION 711 
 
 of the annual value of the franchise upon which the tax is to 
 be annually paid." ^ All the data used in fixing a franchise 
 tax must be of past transactions as the tax is not on property 
 or on business to be done but upon business done.^ The fran- 
 chise tax of a corporation organized for less than a year when 
 the tax becomes due should be determined at such a part o'f 
 the full year's tax as the time since it-s organization bears to 
 one year/ "An annual tax is a tax reckoned by the year 
 the same as annual rent or annual interest. An ' annual ' 
 tax imposed ' annually,' means a tax that is imposed once 
 a year, computed by the year. ' ' * If .an act ' ' imposes annuallj'- 
 an annual tax for doing business, tjut does not say whether, 
 if business is done for only part of a year, the tax shall be 
 fixed in accordance with the time business is done, or for the 
 entire year, including that part when not only no business 
 was done, but there was no right to do any, ' ' the tax ' ' should 
 be based upon the period that the privilege was extended and 
 enjoyed."^ A corporate transferee of a corporation which 
 has been credited by the Comptroller on resettlement of its 
 franchise tax payments for past years with a certain amount 
 cannot offset the amount transferred to it by the corporation 
 against a franchise tax due by it.° In collecting a franchise 
 tax from a corporation " when the property of a corporation 
 is already sequestrated and a receiver appointed, and where, 
 in addition thereto, foreclosure proceedings are pending 
 against it to foreclose mortgages to an amount in excess of 
 all its property, and a receiver has also been appointed under 
 such proceedings, and where the corporation is largely and 
 hopelessly insolvent and all its property in the hands of the 
 receiver appointed by the court, and where the money to pay 
 
 ^ People V. Albany Insurance Co., ^ People ex rel. Paving Co. v. 
 
 92 N. Y. 458 (1883) ; L. 1880, c. 542, Knight, 99 A. D. 62, 90 N. Y. Supp. 
 
 as amend 'd L. 1881, c. 361, see now 537 (1904). 
 
 Tax L. § 182. * People ex rel. Mutual Trust Co. 
 
 ^People ex rel. Brooklyn Rapid v. Miller, 177 N. Y. 51, 69 N. E. 
 Transit Co. v. Moi^an, 57 A. D. 124 (1903) ; Tax L. § 187-a. 
 335, 68 N. Y. Supp. 21 (1901) ; mod. = People ex rel. Mutual Trust Co. 
 168 N. Y. 672, 61 N. E. 1132, 9 v.; v. Miller, 177 N. Y. 51, 69 N. E. 124 
 Tax L. § 182 (L. 1896, c. 908). "It (1903); Tax L. § 187-a: A corn- 
 is not for the privilege to do busi- pany which had carried on business 
 ness that the tax is imposed. The for but six days before the fiscal 
 organization tax .takes care of that, year expired is taxable for a pro- 
 but it is the business actually done, portionate part only of the year and 
 and after it is done, and can be as- not for the whole year, 
 certained and measured, that this ° People ex rel. Western Union 
 tax lights upon; it is not for the Telegraph Co. v. Roberts, 30 A. D. 
 privilege of doing business in the 78, 51 N. Y. Supp. 747 (1898) ; aff'd 
 future. That also is provided for 156 N. Y. 693, 51 N. E. 1093; L. 
 by the organization tax. It is for 1889, c. 463, see now Tax L. § 182. 
 
712 BUSINESS CORPORATIONS IN NEW YORK § 589 
 
 the taxes has arisen from the gross earnings, and an amount 
 sufficient to pay them is in the hands of the receiver, . . . 
 the proceedings to obtain payment of those taxes thus in the 
 receiver's hands are not confined to those provided for by the 
 act . . ., but ... a direct application for an order on 
 the receiver for their payment may be made to the court by 
 petition . . ., having made the corporation and the 
 receiver a party thereto. ' ' ' 
 
 § 589. Id. : What Corporations Subject to, In General. — Cor- 
 porations, other than manufacturing and mercantile corpora- 
 tions, doing business in New York State, must pay annually 
 a tax computed upon the basis of the amount of their capital 
 stock employed during the preceding year in New York State 
 and commonly called the " Franchise Tax," except (1) certain 
 financial, insurance, surety, trust and title companies, (2) 
 laundering companies at least forty percentum of the capital 
 stock of which is invested in property in New York State and 
 used by it in its laundering, (3) mining companies wholly 
 engaged in mining ores within New York State and at least 
 forty percentum of the capital stock of which is invested in 
 property in New York State and used by it in its mining busi- 
 ness in New York State, (4) certain transmission and trans- 
 portation corporations.* The decisions concerning manu- 
 facturing corporations and payment by them of the State 
 Franchise Tax — to which they were subject — are found in 
 
 ' Central Trust Co. v. New York income tax on manufacturing and 
 
 City and Northern R. R. Co., 110 mercantile corporations says that 
 
 N. Y. 250, 1 L.R.A. 260, 18 N. E. they are not "required to pay the 
 
 92 (1888) ; L. 1881, e. 361, see now franchise tax imposed by section one 
 
 Tax L. § 182. " If there are any hundred and eighty-two" of the Tax 
 
 disputed questions of fact to be Law. It also says (Tax L. § 210, 
 
 determined, the court may direct an L. 1918, c. 417) that " corporations 
 
 action to be brought, or may deter- wholly engaged in the purchase, sale 
 
 mine it in some other and more and holding of real estate for them- 
 
 summary way." selves, holding corporations whose 
 
 Generally on the question of taxa- principal income is derived from 
 
 ation of corporate franchise, see holding the stocks and bonds of other 
 
 comprehensive note ^n 57 L.R.A. 33. corporations, and corporations liable 
 
 'Tax L. § 182, and § 210 (L. to a tax under sections 184 to 189 
 
 1918, e. 417). As to the certain fi- inclusive" of the Tax Law, "banks, 
 
 nancial, insurance, surety, trust and savings banks, institutions for sav- 
 
 title corporations, see Tax L. § 183 ings, title guaranty, insurance or 
 
 (L. 1909, c. 62). As to laundering surety corporations" are exempt 
 
 companies see the same. As to min- from the State income tax. There- 
 
 ing companies, see the same. As to fore, the broad statement in the text 
 
 the certain transmission and trans- that " corporations, other than manu- 
 
 portation companies, see Tax L. facturing and mercantile corpora- 
 
 § 184 (L. 1914, c. 334), and § 185 tions, . . . must pay ... a 
 
 et seq. The statute (L. 1918, c. 271, tax . . ." etc. 
 Tax L. § 219-j) imposing a State 
 
§ 589 TAXATION 713 
 
 that section of this work which relates to the State Income 
 Tax; forthe reason that such decisions relate principally to 
 the question of what are and what are not manufacturing cor- 
 porations, and are therefore more valuable in the text relating 
 to the State Income Tax which is now imposed upon manu- 
 facturing corporations.® " The word * incorporated ' . . . 
 [in the statute subjecting ^ every corporation, joint-stock com- 
 pany or association whatever . . . incorporated or organ- 
 ized under any law of this State ' to a franchise tax] is not 
 to be taken in a technical or restricted meaning and confined 
 to an association brought into being according to the formula 
 of a statute, but as including any combination of individuals 
 upon terms which embody or adopt as rules or regulations of 
 business the enabling provisions of the statutes."" A cor- 
 poration in a receiver's hands and operated by him " is 
 operated under and by virtue of the franchise which has been 
 conferred upon the corporation by the State, and . . . 
 when he receives the gross earings arising from its operation 
 and has in his hands money enough to pay these taxes, the State 
 has a paramount right to collect them before the moneys applic- 
 able to such payment shall be paid away by the receiver."" 
 ' ' There would seem to be no question that domestic corpora- 
 tions, engaged in both state and interstate commerce, may law- 
 fully be subjected by the state to a franchise, tax, measured by 
 its whole capital or business, or in any other way in the discre- 
 tion of the legislature, without taking notice of the part of its 
 business arising from interstate commerce, provided no 
 hostile discrimination is made against such part. Nor would 
 there seem to be any valid reason why a foreign corporation, 
 engaged in the business both of state and interstate trans- 
 portation in this state, should not be subject to taxation in 
 common with domestic corporations. " " " . . . the State 
 legislature has no power to impose a tax upon the bonds or 
 
 ° See §§ 572 and 573, supra. prosecution of suits in the name of 
 
 ^° People ex rel. Piatt v. Wem- one person, 
 pie, 117 N. Y. 136, 6 L.R.A. 303, 22 " Central Trust Co. v. New York 
 
 N. E; 1046 (1889) ; L. 1880, e. 542, City and Northern R. E. Co., 110 
 
 as amend 'd L. 1881, c. 361, § 3, N. Y. 250, 1 L.E.A. 260, 18 N. E. 
 
 and L. 1885, e. 501. See now Tax 92 (1888) ; L. 1881, e. 361. See 
 
 L. § 182. The United States Ex- now Tax L § 182. 
 press Company was held subject to ^^ People ex rel. Pennsylvania R. 
 
 the franchise tax because it enjoyed R. Co. v. Wemple, 138 N. Y. 1, 19 
 
 by the statutes of the State per- L.R.A. 694, 33 N. E. 720 (1893) 
 
 manent investment of capital, the L. 1880, c. 542; L. 1881, c. 361 
 
 right of succession, the transfer of L. 1882, c. 151; L. 1885, c. 501 
 
 property by an assignment of the L. 1890, c. 522, § 3. See now Tax L. 
 
 certificate of ownership, and the .§ 182. 
 
714 BUSINESS CORPORATIONS IN NEW YORK § 589 
 
 securities . . . issued as a means of borrowing money 
 upon the credit of the United States, whether such bonds and 
 securities are held by individuals or corporations. . . . 
 such exemption cannot be evaded by any mere change of form 
 or name in the law by which the tax is imposed. If, in fact, 
 the tax is laid upon such bonds or securities, then, by whatever 
 form of words the imposition is laid, it is illegal. . . . 
 The powers and privileges which constitute the franchises of 
 a corporation, are in a just sense property, and quite distinct 
 and separate from the property which by the use of such 
 franchises the corporation may acquire;" and may be sub- 
 jected to taxation, even though the corporation has invested in 
 United States bonds or securities.^^ " . . . while a tax can 
 not be assessed upon property that is exempt by act of Con- 
 gress, it may be imposed upon the franchise of a corporation 
 to which such exempt property belongs and may be measured 
 by the value thereof. The principle applies with the same 
 force to patent rights as to United States bonds, both of 
 which are exempt from taxation."" The Comptroller may 
 impose a tax on the capital stock of a domestic corporation 
 though it be engaged in both state and interstate commerce." 
 Neither upon the theory that a corporation which has so 
 liquidated that it has paid back one-twentieth of its capital 
 stock to its stockholders in cash and is continuing to distrib- 
 ute the rest of its property representing the rest of its capi- 
 tal as it reduces it to cash is distributing dividends, nor upon 
 the theory that by holding a purchase-money mortgage and 
 
 ^^ Monroe Savings Bank v. City taxed alike upon their franchise or 
 
 of Rochester, 37 N. Y. 365 (1867). business transacted within the state, 
 
 "People ex rel. U. S. A. P. P. and if they are engaged in state as 
 
 Co. V. Knight, 174 N. Y. 475, 63 well as interstate business, they are 
 
 L.R.A. 87, 67 N. E. 65 (1903). taxable upon both." People ex rel. 
 
 ^^ People ex rel. Postal Telegraph A. S. Fountain Co. v. Roberts, 158 
 Cable Co. v. Campbell, 70 Hun, 507, N. Y. 168, 52 N. E. 1104 (1899) ; 
 24 N. Y. Supp. 208 (1893) ; L. 1889, L. 1880, c. 542, as amend'd L. 
 c. 463, § 20. See now Tax L. § 182 1890, c. 522. See now Tax L. § 182. 
 et seq. " . . . the imposition of A corporation engaged in business 
 a tax upon the [corporations'] cap- other than manufacturing, even 
 ital employed in manufacturing, though such other business be inter- 
 when it was also engaged in selling state commerce, is liable to state 
 goods manufactured outside, was taxation if there be no hostile dis- 
 not in conflict with the Federal crimination against it in the tax 
 Constitution which prohibits the assessment. People ex rel. A. S. 
 laying of any imposts or duties on Fountain Co. v. Roberts, 158 N. Y. 
 imports or exports, and confers 168, 52 N. E. 1104 (1899) ; L. 1880, 
 upon Congress the power to regu- c. 542, amend'd by L. 1890, c. 522. 
 late commerce. By this statute do- See now Tax L. § 182. 
 mestie and foreign corporations are 
 
§ 590 TAXATION" 715 
 
 distributing its principal and interest as collected it is employ- 
 ing its capital in this State, can it be subjected to a franchise 
 tax." A railroad agreeing to pay a municipality an annual 
 sum in addition to all franchise and other taxes must do so, 
 whatever the law may provide in general terms for deduction 
 of sums in the nature of a tax from a corporation's franchise 
 tax." 
 
 § 590. Id.: Capital Stock Employed in State.— The cases dis- 
 cussed in the next succeeding section should also be con- 
 sidered in determining whether or not a corporation's 
 capital stock is employed in the State. " The franchise tax 
 is imposed upon that part of the capital stock of the cor- 
 poration which is employed within the State. It is the 
 stock and not the dividend which is taxable. Where a cor- 
 poration pays no dividend the stock is appraised and the' tax 
 is computed upon the appraised value. Where a dividend 
 is paid it is an indication of the value of the stock, and the 
 tax upon the stock is determined by the amount of such divi- 
 dend."^® " It is apparent, of course, that this section [182, 
 Corporation Tax Law] applies to two classes of corporations. 
 In the first class are those that declare and pay dividends of 
 six percentum or more upon the capital stock; and in the 
 second class are those that declare and pay dividends of less 
 than six percentum upon their capital stock! The tax upon 
 corporations in the first class is ' to be computed upon the 
 basis of the amount of its capital stock employed within this 
 State,' while the tax. upon corporations in the second class is. 
 ' upon such portion of the capital stock at par as the amount 
 of capital employed within this State bears to the entire capi- 
 tal of the corporation. ' It will be observed that in either case 
 the tax can only be based upon the capital stock employed in 
 this State although the methods for ascertaining the amount 
 
 ^* People ex rel. Ridgewood Land taxable in respect of its equipment, 
 
 & Improvem.ent Co. v. Saxe, 174 maintenance and operation of the 
 
 A. D. 344, 160 N. Y. Supp. 752 subway road under §§ 182 and 184 
 
 (1916) ; afl'd 219 N. Y. 637, 114 of the Tax Law. People ex rel. In- 
 
 N. E. 1080; Tax L. § 182 (L. 1909, terborough Rapid Transit Co. v. 
 
 c. 62). Williams, 200 N. Y. 93, 93 N. E. 
 
 " City of Ithaca v. Ithaca St. R. 505 (1910) ; Tax L. §§ 182, 184, 186. 
 
 Co., No. 3, 145 A. D. 675, 130 N. Y. As to what organizations are sub- 
 
 Supp. 359 (1911) ; aff 'd 204 N. Y. ject to franchise tax, see note in 57 
 
 626; Tax L. § 48. While a subway L.R.A. 73. 
 
 corporation may not be assessable ^* People ex rel. Pullman Co. v. 
 
 for a franchise tax under § 185 of G-lynn, 130 A. D. 332, 114 N. Y. 
 
 the Tax Law because it operates Supp. 460 (1909); aff'd 198 N. Y. 
 
 some elevated road, yet it may be 605, 92 N. E. 1097; Tax L. § 182. 
 
716 BUSINESS CORPORATIONS IN NEW YORK § 590 
 
 thereof are different. " " It seems ' ' that the chartered privi- 
 leges of a corporation as defined in its certificate of incorpora- 
 tion, which is invariably framed in the language of the cor- 
 porators, should be the index to its relations to the State, 
 rather than the possibly sporadic and shifting exercise of any 
 one or more of a large number of the powers delegated to 
 it;" so that a corporation empowered to acquire and sell 
 realty, ' ' and to carry on any other business which may seem 
 to the board . . . capable of being conveniently con- 
 ducted in connection with the purposes above set forth," or 
 calculated directly or indirectly to increase the profits of said 
 corporation, etc., cannot claim exemption from license and 
 franchise taxation on the ground that it is organized for the 
 sole purpose of holding and owning lands, the capital to pur- 
 chase which was not " employed within this State" but simply 
 invested.^" The capital stock of a corporation is employed in 
 this State within the meaning of the franchise tax law when it 
 is being used for the purpose specified in its certificate of 
 incorporation, viz., buying realty from individuals which it 
 paid for with its stock, leasing such realty and using the net 
 rentals for dividends.^ From the moment a corporation 
 (whether it be organized to buy, sell, lease, rent and own 
 realty and build thereon, or otherwise) begins to use its money 
 to purchase property, e. g., real estate for the purposes of 
 its incorporation, it employs capital in this State within the 
 purview of the Tax Law, whether it has or has not earned 
 dividends or derived any benefit or advantage from its 
 capital.^ " ... a corporation whose only business is 
 owning and managing an apartment house is employing its 
 capital stock within the State and is taxable under section 
 182 of the Tax Law."' The capital of a corporation is 
 invested rather than " employed within the State," within the 
 meaning of the franchise tax law, and is not therefore subject 
 to such tax, when it consists solely of realty owned by a 
 
 « 
 
 ^° People ex rel. Coimnercial Cable ^ People ex rel. Vandervoort R. 
 
 Co. V. Morgan, 178 N. Y. 433, 67 Co. v. Glynn, 194 N. Y. 387, 87 
 
 L.R.A. 960, 70 N. E. 967 (1904) ; N. E. 434 (1909) ; Tax L. § 182. 
 
 Tax L. § 182. "People ex rel. Fifth Ave. Bldg. 
 
 2° People ex rel. Wall & H. St. Co. v. Williams, 198 N. Y. 238, 91 
 
 R. Co. V. Miller, 181 N. Y. 328, 73 N. E. 638 (1910) ; Tax L. § 182 
 
 N. E. 1102 (1905) ; Tax L. §§ 181, et seq. 
 
 182. But see concurring opinion of 'People ex rel. Hubert Apartment 
 
 Vann, J., justifying the tax not on Assn. v. Kelsey, 110 A. D. 617, 96 
 
 the corporation's charter but unex- N. Y. Supp. 745 (1906); aff'd 184 
 
 ercised powers but on those actu- N. Y. 573, 77 N. E. 1194; Tax L. 
 
 ally used. See Tax L. § 210 (L. § 182. 
 1918, 0. 417). 
 
§ 590 TAXATION 717 
 
 decedent and put into the shape of the corporation's stock 
 after his death only for the purpose of saving it from sale or 
 foreclosure, and when no improvements have been made to 
 it.* In determining what capital stock of a corporation is 
 " employed within this State " so as to subject it to tax, an 
 investment by it in real estate not used by it in the usual 
 course of its business, or in non-taxable municipal bonds, can- 
 not be included.* Under a statute imposing an annual tax 
 upon corporations computed on the basis of the amount of 
 capital stock employed in the State (but not, as it then stood, 
 on capital stock employed in business), capital stock of a 
 company represented by realty and structures thereon belong- 
 ing to it, is taxable if it was formed to hold realty.* Land on 
 which in some place dwelling-houses are built and earning 
 an annual rent and the balance of which is held for sale when 
 a satisfactory buyer can be had is employed in this State 
 by its corporate, manufacturing owner, so as to be con- 
 sidered for the purpose of the franchise tax as capital actually 
 employed in New York.^ Stock of one corporation acquired 
 by another along with the former's entire assets, property 
 and privileges except its corporate franchise and some non- 
 assignable contracts, for which the holding company issued 
 bonds in payment and as security for which bonds it deposited 
 the stock of the selling company, is nevertheless to be regarded 
 as capital of the holding corporation employed in this State 
 and subject to the franchise tax ; because the selling company 
 is still a corporation the stockholders of which can do the 
 business authorized in its charter.* When a corporation in 
 compensation for its grants of patent rights to local corpora- 
 tions receives stocks of the latter, this is an employment of 
 its capital in the purchase of such stocks, and when such local 
 corporations are situated outside of this State, then, to the 
 extent that it held their certificateis of stock, its property is 
 outside the State and its capital cannot be said to be employed 
 here ; so that a tax on an estimate of its capital stock which 
 
 * People ex rel. Tort George ^People ex rel. Steinway & Sons 
 
 Realty Co. v. Miller, 179 N. Y. 49, v. Kelsey, 108 A. D. 138, 96 N. Y. 
 
 71 N. E. 463 (1904) ; Tax L. § 182. Supp. 42 (1905) ; Tax L. § 182 (L. 
 
 ^People ex rel. Union Ferry Co. 1901, c. 558). 
 
 V. Roberts, 66 A. D. 157, 72 N. Y. ^ People ex rel. Commercial Cable 
 
 Supp. 950 (1901); Tax L. §§ 182, Co. v. Morgan, 178 N. Y. 433, 67 
 
 190 (L. 1896, c. 908). L.R.A. 960, 70 N. E. 967 (1904); 
 
 " People ex rel. Waclark R. Co. v. Tax L. § 182. 
 Williams, 198 N. Y. 54, 28 L.R.A. 
 (N.S.) 371,- 91 N. E. 266 (1910) ; 
 Tax L. § 182, 
 
718 BUSINESS CORPORATIONS IN NEW YORK § 591 
 
 takes into consideration its property in shares of corporations 
 outside the State is erroneous.' An amount carried on a cor- 
 poration's books as " Bills receivable, " made up of its expend- 
 itures on railroad lines leased by it, for which no direct 
 return is expected and for which the corporation holds no 
 obligation for reimbursement, constitutes no part of its prop- 
 erty within the State for the purpose of the franchise tax/" 
 The determination of whether or not a corporation 's average 
 bank balance for a year ending October thirty-first is capital 
 employed in the State for franchise tax purposes depends on 
 the facts." Bonds, for example of railroads, a newspaper 
 company and the United States, held by a corporation within 
 this State, are to be treated as capital employed within this 
 State and therefore as a part of the basis upon which the 
 corporation's franchise tax is to be computed, if purchased 
 with its capital as distinguished from its surplus, but not if 
 bought with surplus; and the fact that the corporation has 
 more assets than share stock raises no presumption that capi- 
 tal would be invested in properties relating to its business, 
 while surplus would be invested in safe interest-bearing 
 securities.^^ The rolling stock of a domestic corporation used 
 upon its lines in this State, though transferred to other 
 roads and run outside the State to facilitate transportation 
 of goods and persons, if always returned to this State after 
 such temporary use without it, is to be considered as capital 
 employed in this State in assessing the corporation's franchise 
 tax.^' 
 
 § 591. Id.: Exercising Franchises or Doin^ Business in State. 
 — The cases discussed in the last preceding section should 
 also be considered in determining whether or not a corpora- 
 tion is exercising franchises or doing business in the State. 
 
 "People ex rel. Edison Electric ^^ People ex rel. New York Cen- 
 
 Light Co. V. Temple, 148 N. Y. 690, tral, etc., R. R. Co. v. Knight, 173 
 
 43 N. E. 176 (1896) ; L. 1880, c. 542, N. Y. 255, 65 N. E. 1102 (1903), 
 
 as amend 'd L. 1882, c. 151, and L. opinion by Haight, J., concurred in 
 
 1885, c. 501. See now Tax L. § 182. by majority of court. An office and 
 
 ^^ People ex rel. New York Cen- office furniture had by a corporation 
 
 tral, etc., R. R. Co. v. Knight, 173 as incidents to its manufacturing 
 
 N. Y. 255, 65 N. E. 1102 (1903). business do not make their value 
 
 "People ex rel. Brooklyn Rapid capital stock separate from that em- 
 Transit Co. V. Miller, 85 A. D. 178, ployed in its manufacturing busi- 
 83 N. Y. Supp. 96 (1903) ; afC'd 181 ness, so as to make it taxable. Peo- 
 N. Y. 582, 74 N. E. 1123. pie ex rel. Standard Wood Co. v. 
 
 "People ea; reL Commercial Cable Roberts, 20 A. D. 514, 47 N. Y. 
 
 Co. V. Morgan, 178 N. Y. 433, 67 Supp. 122 (1897); L. 1880, c. 542, 
 
 L.R.A. 960, 70 N. E. 967 (1904) ; as amended. See now Tax L. § 182. 
 Tax L. § 182. 
 
§ 591 TAXATION 719 
 
 " To render a corporation liable to the imposition of a fran- 
 chise tax under that section [the one hundred and eighty- 
 second] itmust be doing business or exercising its corporate 
 franchise in this State and must have capital stock employed 
 within the State during the year for which ' the tax is 
 assessed." " That a corporation does an ultra vires business 
 is no ground for relieving it from payment of a franchise 
 tax.^^ Onlj a corporation (whether domestic or foreign) 
 which is doing business in this State need pay the annual 
 statutory, franchise tax; a corporation, the sole activity of 
 which is to maintain its corporate existence is not doing busi- 
 ness in this State." A corporation doing a trust company's 
 business is not relieved from payment of a franchise tax on 
 the ground that it is not exercising its franchise simply 
 because the State Superintendent of Banks notifies it that he 
 would take legal action if it continued to receive deposits in 
 its then condition." A corporation is liable to a franchise tax 
 as doing business in this Stafe if it takes care of its plant, 
 keeps its organization, principal office, secretary and superin- 
 tendent; rents houses on property owned by it; borrows 
 money; pays rent; and makes its annual State franchise tax 
 report, though it do none of the business for which it was 
 mainly formed.^* " . . . corporations organized for the 
 purpose of buying, selling, leasing, renting and owning real 
 estate, and of erecting buildings or other structures thereon 
 
 "People ex rel. Vandervoort R. 558, 29 N. E. 812 (1892); L. 1880, 
 
 Co. V. Glynn, 194 N. Y. 387, 87 c. 542, as amended L. 1881, c. 361; 
 
 N. E. 434 (1909); Tax L. § 182. L. 1882, c. 151; L. 1885, c. 359 and 
 
 The proper construction of the act c. 501. See now Tax L. § 182. 
 
 imposing a tax on the capital stock '^^ People ex rel. Coney Island 
 
 of every corporation which is incor- Jockey Club v. Sohmer, 156 A. D. 
 
 porated in this State or under the 842, 140 N. Y. Supp. 507 (1913); 
 
 laws of any other state or country aff'd 210 N. Y. 549, 104 N. E. 1137; 
 
 and is doing business in this State Tax L. § 182. 
 
 is that the words " and doing busi- ^° People ex rel. Lehigh & N. Y. 
 
 ness in this State " refer only to R. R. Co. v. Sohmer, 217 N. Y. 443, 
 
 foreign corporation; so that domestic 112 N. E. 181; Tax L. § 182 (as it 
 
 corporatione are liable to the tax stood in 1913 after 1906 amend- 
 
 whether they do business in the ment). 
 
 State or not, and a just measure of ^' People v. Holland Trust Co., 
 
 liability is arrived at, in those cases 139 A. D. 353, 123 N. Y. Supp. 935 
 
 in which the capital stock is partially (1910). 
 
 employed in this State, by fixing the ^^ People ex rel. Coney Island 
 
 basis for the tax by the amount Jockey Club v. Sohmer, 155 A. D. 
 
 which is employed here. People 842, 140 N. Y. Supp. 507 (1913); 
 
 ex rel. American Contracting & a£f*d 210 N. Y. 549, 104 N. E. 1137; 
 
 Dredging Co. v. Wemple, 129 N. Y. Tax L. § 182. 
 
720 BUSINESS CORPORATIONS IN NEW YORK § 592 
 
 are taxable under the Tax Law."" A corporation is doing 
 business within the State within the meaning of tiie franchise 
 tax law when its own petition to review a tax imposed states 
 that it began business here on a specified date, and its own 
 report to the comptroller declares its principal place of busi- 
 ness is at a stated place in the State, and its certificate of 
 incorporation declares its purpose to be to acquire a certain 
 tract of realty in the State."" A corporation holding realty, 
 which its charter gave it no power to do and which it bought 
 as an investment, is doing business so as to be subject to a 
 franchise tax.^ A corporation formed to hold real property 
 which was in litigation and in which several persons were 
 interested so as to expedite service of papers in the litigation 
 is engaged in business so "as to be subject to a franchise tax.^ 
 A domestic corporation empowered by its charter to buy, hold 
 and lease real estate is not liable to a franchise tax if all it 
 does is to hold a piece of realty consisting of unimproved 
 swamp land from which it yearly collects forty-five dollars 
 for the grass crop, and on which it pays taxes." A corpora- 
 tion which may under its charter powers do a general business 
 in the purchase, sale and exchange of real property, including 
 the erection and management of buildings and the purchase 
 and sale of mortgages, and also stocks and bonds, is subject 
 to pay a franchise tax though it in fact is on holding and 
 leasing real estate.* 
 
 § 592. Id.: How to Ascertain Tax, Governing Statutes. — 
 The franchise tax is based on the amount of the corporation 's 
 capital stock, and upon each dollar of such amount, which 
 was employed during the preceding year within New York 
 State; and that amount is determined for corporations 
 the stock of which has a par value a.s follows: First: Find 
 the gross assets employed by the corporation in any busi- 
 ness within New York State and the gross assets employed 
 
 '« People ex rel. Fifth Ave. Bldg. Supp. 611 (1914) ; aff'd 213 N. Y. 
 
 Co. V. Williams, 198 N. Y. 238, 91 702, 108 N. E. 1105; Tax L. § 182. 
 
 N. E. 638 (1910); Tax L. § 182 'People ex rel. Hydraulic Co. v. 
 
 et seq. Roberts, 30 A. D. 180, 57 N. Y. 
 
 "■" People ex rel. Vandervoort R. Supp. 771 (1898) ; afPd 157 N. Y. 
 
 Co. V. Glynn, 194 N. Y. 387, 87 676, 51 N. E. 1093; L. 1880, c. 542, 
 
 N. E. 434 (1909) ; Tax L. § 182. § 3. See now Tax L. § 182. 
 
 ^ People ex rel. Coney Island * People ex rel. Fourteenth St. 
 
 Jockey Club v. Sohmer, 155 A. D. Realty Co. v. Kelsey, 110 A. D. 797, 
 
 842, 140 N. Y. Supp. 507 (1913); 97 N. Y. Supp. 197 (1906); aff'd 
 
 aff'd 210 N. Y. 549, 104 N. E. 1137; 184 N. Y. 572, 77 N. E. 1194. 
 
 Tax L. § 182. On state taxation of property, 
 
 ^ People ex rel. Tetragon Co. v. franchises or processes of national 
 
 Sohmer, 162 A. D. 433, 147 N. Y. bank, see note in 45 L.R.A. 739. 
 
§ 593 TAXATION 721 
 
 by it in business anywhere and ascertain what proportion 
 the former are to the latter; Second: Take the corporation's 
 issued capital stock; and that proportion thereof which 
 the gross assets employed in New York has been found to 
 bear to the gross assets employed anywhere is the measure 
 of the amount of the capital stock employed in New York 
 State which is the basis of the franchise tax/ For corpo- 
 rations the stock of which has no par value the way to find 
 the basis of the franchise tax is: First, to ascertain its gross 
 assets employed in any business within New York State; 
 Second, to ascertain its entire gross assets employed in busi- 
 ness anywhere; Third, to ascertain the proportion between 
 the first and second items ; and. Fourth, to take that propor- 
 tion, whatever it is, of the net assets of the corporation — 
 which proportion is the basis of the tax.® 
 
 § 593. Id.: What and Where Are Capital Stock, Assets, 
 Earnings and Dividends. — ". . , so long as a corporation 
 continues business under its charter the privilege of so doing 
 is of some pecuniary value to it, and . . . there is no valid 
 reason why the value of the capital stock may not be used 
 as an element for determining the amount of tax levied upon 
 franchise, and why it will not in each year approximate its 
 variable taxable value quite as accurately as any other 
 method."^ In valuing the stock of a corporation for taxa- 
 tion purposes the Comptroller must determine its present as 
 distinguished from its prospective value.' " While the 
 statute makes the basis of taxation the amount of the capital 
 stock employed, the words ' capital stock ' and ' capital ' are 
 practically the equivalent of each other when considered as a 
 basis for a franchise tax {citation). By the value of capital 
 stock is meant the valine of its net assets." ° " It must be 
 deemed settled that the words ' capital stock ' as used in 
 . . . [the sections of the Tax Law imposing a franchise 
 tax on manufacturing corporations] refer to the property of 
 
 ^Tax L. § 182 (L. 1916, c. 323). dividends on the stock or interest on 
 
 °St. Corp. L. § 21 (L. 1917, income bonds of $4,500,000 which 
 
 c. 501). were a lien prior to the stock. Ten 
 
 'People V. Home Insurance Co.. dollars a share was held a proper 
 
 92 N. Y. 328 (1883) ; L. 1880, c. 542, value for each share of the one hun- 
 
 as amended L. 1881, c. 361. See dred dollar par value stock, 
 
 now Tax L. § 182. 'People ex rel. Coney Island 
 
 ^People ex rel. Staten Island R. Jockey Club v. Sohmer, 155 A. D. 
 
 T. R. R. Co. V. Roberts, 4 A. D. 842, 140 N. Y. Supp. 507 (1913); 
 
 334, 38 N. Y. Supp. 724 (1896) ; L. aff'd 210 N. Y. 549, 104 N. E. 1187; 
 
 1880, c. 542. See now Tax L. § 182. Tax L. § 182. 
 The income was insufficient to pay 
 B.C.N.Y.— 46 
 
722 BUSINESS CORPORATIONS IN NEW YORK § 593 
 
 a corporation contributed by the stockholders, or otherwise 
 obtained by it, and not the shares of stock (citations). It is 
 the actual and not the par value of the capital stock of a cor- 
 poration employed within this State which is the basis for 
 computing the franchise tax." '° " The theory of the statute 
 [Tax Law], as disclosed by its successive amendments, seems 
 to indicate that when the capital stock is the basis upon which 
 the tax is to be assessed, there shall be an appraisal or valua- 
 tion of the capital stock at its actual value. " " In computing 
 the franchise tax on a corporation's capital stock, the basis 
 to be used is the actual and not the par value of the stock." 
 To ascertain the franchise tax due from a domestic corpo- 
 ration, " from the value of all its assets, deduct its liabilities, 
 and add to the remainder the value of its good will, unless 
 . . . it has already ben included in the value of its assets, 
 and such proportion of that sum as is employed in this State 
 is the sum on which the tax is to be levied."" The statute 
 assessing for franchise taxation the capital stock of a corpo- 
 ration " contemplates that the whole capital stock of a cor- 
 poration may not be employed within this State and . . . 
 seeks to impose a franchise tax proportionate to or measured 
 by only that part of the capital which is so employed. The 
 direction that the tax shall be ' upon such portion of the 
 capital stock at par as the amount of capital employed within 
 this State bears to the entire capital of the corporation ' was 
 not intended to establish or fix the rate at which such capital 
 stock was to be assessed, but a rule for the computation of the 
 amount of capital stock on which assessment was to be made. 
 
 . . . But having determined that $ of capital stock 
 
 is to be deemed as employed within this State, then that 
 capital stock is, under section 190, to be taken at ' its actual 
 cash value ' for the purpose of computing the franchise 
 tax."" A corporation the articles of association of which 
 
 ^'' People ex rel. Standard Oil Co. without evidence that its par was its 
 
 V. Saxe, 179 A. D. 721, 166 N. Y. actual value, and by deducting there- 
 
 Supp. 887 (1917) ; Tax L. §§ 182, from each year the indebtedness in- 
 
 183 (L. 1909, c. 62). curred; but must take the value of 
 
 ^^ People ex rel. New York Mail the property and deduct therefrom 
 
 & N. T. Co. V. Gaus, 198 N. Y. 250, the indebtedness. People ex rel. Lo- 
 
 91 N. E. 634 (1910) ; Tax L. § 182. rena Co. v. Morgan, 55 A. D. 265 
 
 12 People ex rel. New York Cen- (1900). 
 
 tral, etc., R. R. Co. v. Knight, 173 "People ex rel. Rees' Sons v. 
 
 N. Y. 256, 65 N. E. 1102 (1903) ; Miller, 90 A. D. 591, 86 N. Y. Supp. 
 
 Tal L. §§ 182, 190. The Comptroller 193 (1904) ; Tax L. §§ 182, 190 (L. 
 
 cannot fix the value of a corpora- 1901, c. 558). 
 
 tion's capital stock by assuming ^* People ex rel. N. Y. & E. R. F. 
 
§ 593 TAXATION 723 
 
 declare that the money represented by its certificates of stock 
 constitutes a part of its capital stock is estopped from assert- 
 ing to the contrary in a proceeding to determine their liability 
 to the franchise tax when the construction of the certificates 
 is clearly debatable." 
 
 In determining the franchise tax the Comptroller should 
 levy on the average capital employed during the year and that 
 average may be accurately found by multiplying the amount 
 of capital employed during any period of days by the number 
 of days, adding together the products so obtained and divid- 
 ing by the number of days in the year/° As a corporate fran- 
 chise tax is an annual one, the capital stock appraised should 
 be apportioned throughout the entire year ; so that if the com- 
 pany have for seven months, say, but five hundred dollars 
 derived from the sale of . . . shares needed to effect its 
 incorporation, and employed no capital and did no business 
 for such period ; but during the other five months had large 
 assets employed, five-twelfths only of such assets should be 
 assumed as carried by the company through the entire year.^' 
 The law requiring payment of an annual franchise 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 "does not mean that all such 
 capital stock must be employed during the entire year but 
 that capital stock employed during the preceding year is tax- 
 able: the statute does not necessarily contemplate computing 
 the tax upon the amount of the capital stock outstanding on 
 October 31st/* "When a trust company increases its capital 
 stock in the course of the tax year, it is proper to assess the 
 tax on the basis of the whole outstanding stock at the end of 
 the tax year, even though the increased stock was outstand- 
 ing during only a part of the year and it might therefore well 
 be argued that the assessment should be made on the average 
 amount of stock during the year." 
 
 Co. V. Roberts, 168 N. Y. 14, ©0 193 (1904) ; Tax L. §§ 182, 190 (L. 
 
 N. E. 1043 (1901); Tax L. §§ 182, 1901, c. 558). 
 
 190. ^'People ex rel. Mercantile Safe 
 
 "People ex rel. Cohn & Co. v. Deposit Co. v. Sohmer, 158 A. D. 
 
 Miller, 180 N. Y. 16, 72 N. E. 525 110, 143 N. Y. Supp. 313 (1913) ; 
 
 (1904). aff'd 217 N. Y. 605, 111 N. E. 1097; 
 
 "People ex rel. Brooklyn R. T. Tax L. § 182. 
 
 Co. V. Morgan, 57 A. D. 335, 68 ^'People ex rel. New York Cen- 
 
 N. Y Supp. 21 (1901) ; mod. 168 tral & Hudson River R. R. Co. v. 
 
 N. Y. 672, 61 N. E. 1132 q. v.; Tm Gaus, 200 N. Y. 328, 93 N. E. 988 
 
 L. § 182 (L. 1896, c. 908). (1911); Tax L. §§ 182, 187a. But 
 
 ^^ People ex rel. Rees' Sons v. the amendment to § 182, Tax L., 
 
 Miller, 90 A. D. 591, 86 N. Y. Supp. after the decision in People ex rel. 
 
724 BUSINESS CORPORATIONS IN NEW YORK § 593 
 
 " ... the surplus of the corporation has been defined 
 to be ' the accumulations of the company of moneys or prop- 
 erty in excess of the par value of the stock issued by it.' " ^" 
 Because the surplus of a corporation constitutes no part of 
 its capital stock in determining the tax thereon, it does not 
 follow that the surplus escapes taxation, as the surplus exer- 
 cises a controlling influence in fixing the amount of the tax by 
 swelling the dividends declared or increasing the valuation of 
 the capital stock.^ " ... while it may be conceded that 
 the words ' par value ' ordinarily are to be given the same 
 meaning as face value when applied to bonds and stocks hav- 
 ing a face value, yet when used as applying to the surplus 
 and undivided earnings and not limited to bonds and stocks, 
 the meaning may be very different, ' ' e. g., in determining the 
 surplus and undivided earnings of a savings bank, on which 
 a franchise tax is imposed, its interest-paying stocks and 
 bonds must not be estimated above their par value or above 
 their market value if below par.^ An amount accumulated by 
 a domestic corporation, by passing dividends in order to pay 
 for stock and bonds of another company nearly the entire 
 business of which consisted in transporting the purchasing 
 corporation's goods to its mines and the products from the 
 mines, is surplus, even though placed in such railway securi- 
 ties as an independent investment ; and it cannot be regarded 
 as part of the corporation's capital stock employed in this 
 State for taxation purposes.' 
 
 In determining the franchise tax due from a corporation 
 ** capital of a corporation which must first be invested before 
 it begins to earn anything cannot be said to, be a part of the 
 earnings of such corporation merely because it is turned into 
 cash and thus in one sense becomes a receipt of the corpora- 
 tion. " * " The profits and earnings of a corporation are not 
 
 Mutual Trust Co. v. Miller, 177 ^People ex rel. Bank for Savings 
 
 N. Y. 51, 69 N. E. 124, while it did v. Miller, 177 N. Y. 461, 69 N. E. 
 
 not affect companies taxed under 1103 (1904) ; Tax L. § 187b ; Bank- 
 
 § 187a, Tax L., did affect other oor- ing L. §§ 123, 124. 
 
 porations. ° People ex rel. U. V. Copper Co. 
 
 2° People ex rel. McClure PubUca- v. Roberts, 156 N. Y. 585, 51 N. E. 
 
 tions, Inc. v. Purdy, 161 A. D. 541, 293 (1898) ; L. 1880, c. 542. See 
 
 146 N. Y. Supp. 646 (1914) ; aff'd now Tax L. § 182. 
 
 213 N. Y. 658, 107 N. E. 1084; * People ex rel. Brooklyn Union 
 
 Franchise tax. Gas Co. v. Morgan, 114 A. D. 266, 
 
 ^People ex rel. Singer Mfg. Co. 99 N. Y. Supp. 711 (1906); aff'd 
 
 V. Wemple, 150 N. Y. 46, 44 N. E. 195 N. Y. 616, 89 N. E. 1108. The 
 
 787 (1896) ; Corp. Tax Act, L. 1880, company bought coal and oil to 
 
 c. 542, as amended L. 1885, c. 501. make gas. For the year part of its 
 
 See now Tax L. § 182. capital was invested in coal and oil 
 
§ 593 TAXATION 725 
 
 capital, though they may be converted into capital. If no such 
 conversion has taken place, they furnish no basis for taxa- 
 tion . . . , except incidentally as the dividends may be 
 increased, upon which the tax in many cases is computed."' 
 In determining the franchise tax upon a light and power com- 
 pany an amount paid by it from its gross receipts to another 
 corporation for electricity purchased is properly taken into 
 consideration as part of its " gross earnings."* Good will 
 is an asset to be considered in fixing the amount of capital 
 employed by a corporation for franchise taxation purposes, 
 and the Comptroller may value it at the same amount at 
 which stock was issued therefor when it was acquired by the 
 corporation.'' The Comptroller, in determining the tax on a 
 domestic corporation's capital stock, may consider the 
 amount of its monthly bank balances, the gross amount paid 
 for salaries, wages, labor, etc., and the total amount paid for 
 rent.* Eeal estate and United States bonds which are part of 
 a corporation's capital and are in another State on deposit 
 for the benefit of its policyholders are not to be con- 
 sidered as part of its capital used or employed within this 
 State for tax assessment purposes." " . . . the State 
 authorities, in taxing corporations under the statutes . . . 
 [imposing franchise taxes] are [not] obliged to deduct the 
 amount of stock which such corporations hold in bonds of the 
 United States from the total amount of their capital stock 
 and compute the tax only upon the dividends derived from the 
 remainder of such capital;" because the tax is a franchise 
 and not .a property tax." The Comptroller need not, in esti- 
 
 which was converted into gas and ^People ex rel, Koechl & Co. v. 
 
 came back to the company as cash, Morgan, 96 A. D. 110, 88 N. Y. 
 
 being part of the selling price of Supp. 1066 (1904) ; aff'd 183 N. Y. 
 
 gas. 574, 76 N. E. 1106; Tax L. § 182 
 
 'People ex rel. Chicago Junction (L. 1896, c. 908). 
 
 Rys., etc., v. Roberts, 154 N. Y. 1, 47 * People ex rel. Postal Telegraph 
 
 N. B. 974 (1897) ; L. 1880, c. 542, Ca;ble Co. v. Campbell, 70 Htin,. 507, 
 
 and amendments. See now Tax L. 24 N. Y. Supp. 208 (1895) ; L. 1889, 
 
 § 182. c. 463, § 20. See now Tax L. § 182 
 
 ® People ex rel. Genesee Light & et seq. 
 
 Power Co. v. Sohmer, 162 A. D. 207, ° People ex rel. American Surety 
 
 147 N. Y. Supp. 726 (1914) ; aflE'd Co. of N. Y. v. Campbell, 74 Hun, 
 
 212 N. Y. 598, 106 N. E. 1040; Tax 101, 26 N. Y. Supp. 462 (1893); 
 
 L. § 186, clause added in 1907. " The aff'd 143 N. Y. 625, 37 N. E. 827. 
 
 term ' gross earnings ' . . . means '° People v. Home Insurance Co., 
 
 all receipts from the employment of 92 N. Y. 328 (1883) ; L. 1880, c. 542, 
 
 capital, without any deduction," does as amended L. 1881, e. 361. See now 
 
 away with decision in People ex rel. Tax L. § 182. 
 Brooklyn Union Gas Co. v. Morgan, 
 114 A. D. 266, 99 N. Y. Supp. 711. . 
 
726 BUSINESS CORPORATIONS IN NEW YORK § 593 
 
 mating the amount of a domestic corporation's capital stock 
 employed within this State, deduct therefrom its real estate 
 subject to local taxation." An item of less than one per cent 
 for uncollectible accounts is properly deducted in determin- 
 ing a franchise tax." 
 
 Patent rights may not be assessed by the State under its 
 taxing power." Patents held by a domestic corporation for 
 the purpose of disposing of them eventually to domestic and 
 foreign corporations are employed at its home office and are 
 to be included in its capital to be estimated for taxation." 
 Stock in domestic corporations received by a domestic corpo- 
 ration as consideration for patents held by it and transferred 
 to them is capital of such corporation employed in this State 
 for the purpose of ascertaining its taxable capital stock." 
 Stock in foreign corporations received by a domestic corpora- 
 tion as consideration for patents held by it and transferred to 
 them is not capital of the domestic corporation taxable as 
 part of its capital stock." Bonds of foreign corporations held 
 by a domestic corporation as consideration for patent rights 
 granted by it to them are part of its capital stock employed in 
 this State subject to taxation." There is no better method of 
 ascertaining the value of the rights of a corporation under 
 
 ^^ People ex rel. Postal Telegraph 543, 20 L.R.A. 453, 34 N. E. 370 
 
 Cable Co. V. Campbell, 70 Hun, 507, (1893); Corp. Tax Act, L. 1880, 
 
 24 N. Y. Supp. 208 (1893) ; L. 1889, c. 542, as amended L. 1881, c. 361, 
 
 c. 463, § 20. See now Tax L. § 182 and L. 1885, c. 501. See now Tax 
 
 et seq. ' L. § 182. 
 
 " People ex rel. Queens County "^People ex rel. Edisoin Electric 
 
 Water Co. v. Woodbury, 67 Misc. Light Co. v. Campbell, 138 N. Y. 
 
 490, 123 N. Y. Supp. 599 (1910-) ; 543, 20 L.R.A. 453, 34 N. E. 370 
 
 aflE'd 143 A. D. 618, 128 N. Y. Supp. (1893) ; Corp. Tax Act, L. 1880, 
 
 522. c. 542, as amended L. 1881, c. 361, 
 
 " People ex rel. Edison El. II. Co. and L. 1885, c. 501. See now Tax L. 
 
 V. Assessors, 156 N. Y. 417, 42 § 182. 
 
 L.R.A. 290, 51 N. E. 269 (1898). "People ex rel. Edison Electric 
 
 The . Court refused to answer the Light Co. v. Campbell, 138 N. Y. 
 
 question: •"Assuming that patent 543, 20 L.R.A. 453, 34 N. E. 370 
 
 rights are not taxable by the states (1893) ; Corp. Tax Act, L. 1880, 
 
 and that the capital stock of an c. 542, as amended L. 1881, c. 361, 
 
 electric company is used to pay for and L. 1885, c. 501. See now Tax 
 
 the use of methods and appliances L. § 182. 
 
 of a parent company, protected by " People ex rel. Edison Electric 
 
 patents, can it be said that this Light Co. v. Campbell, 138 N. Y. 
 
 stock is invested in patent rights 543, 20 L.R.A. 453, 34 N. E. 370 
 
 within the general principles that (1893) ; Corp. Tax Act, L. 1880, 
 
 patents are not taxable?" c. 542, as amended L. 1881, c. 361, 
 
 " People ex rel. Edison Electric and L. 1885, c. 501. See now Tax L. 
 
 Light Co. V. Campbell, 138 N. Y. § 182. 
 
§ 593 TAXATION 727 
 
 patents for the purposes of license and franchise tax than to 
 assume that they are worth what was paid for them,^' 
 
 The courts are not interested in the form of a transaction 
 in determining if it results in a dividend so as to subject the 
 corporation profiting by it to a franchise tax, but if it results 
 in the receipt or earning by the corporation of money other- 
 wise than by contribution from stockholders the substance of 
 its division among them is a dividend and will be so con- 
 sidered.^° A sum returned by directors of a corporation to its 
 stockholders as part of their cash contribution to its surplus, 
 made prior to its merger with another corporation, and for 
 which no additional stock was issued, cannot be regarded as 
 paid from surplus profits so as to be considered a dividend in 
 computing the corporation's franchise tax.^° A corporation 
 the stock of which was issued for real estate, which it held and 
 leased till it was taken in condemnation proceedings, after 
 which it did nothing save what was incidental to its corporate 
 organization and the condemnation proceedings; and which 
 has never declared a dividend, cannot be held to have done 
 business after the award in the condemnation proceedings was 
 made, and the surplus above the par value of its capital stock 
 resulting on payment of such award cannot be considered in 
 the nature of a dividend made and declared, for taxation pur- 
 poses.^ In determining a corporation's franchise tax, an 
 amount paid in on cancellation of a lease under which it was 
 lessee over the value at which it had carried it, which is 
 divided among its stockholders, represents not capital but the 
 product of capital, being derived from an increase in value of 
 the company's assets, and is therefore a dividend from sur- 
 plus profits/ The State Comptroller is justified in assessing 
 a corporation at the sum paid by it for a building in which its 
 
 ^^ People ex rel. Vending Oo. v. ^"People ex rel. North American 
 
 Kelsey, 101 A. D. 325, 91 N. T. Trust Co. v. Knight, 96 A. D. 120, 
 
 Supp. 955 (1905) ; afE'd 181 N. Y. 89 N. Y. Supp. 72 (1904) ; Tax L. 
 
 512, 73 N. E. 1130; Tax L. § 181 § 182 (L. 1896, e. 908). 
 
 (L. 1901, c. 558). ^People ex rel. Jerome Park Co. 
 
 '» People ex rel. Queens County v. Roberts, 41 A. D. 21, 58 N. Y. 
 
 Water Co. v. Travis, 171 A. D. 521, Supp. 254 (1899) ; afPd 169 N. Y. 
 
 157 N. Y. Supp. 943 (1916); St. 582. 
 
 Corp. L. §§ 28, 55. The Q. C. W. ^People ex rel. Mercantile Safe 
 
 Co. bought land it did not need; its Deposit Co. v. Sohmer, 158 A. D. 
 
 stockholders formed and controlled 110, 143 N. Y. Supp. (1913) ; affi'd 
 
 the N. Co. and the N. Co. took over 217 N. Y. 605, 111 N. E. 1097; Tax 
 
 the land for all its stock -which was L. § 182. 
 entirely distributed among the stock- 
 holders of Q. C. W. Co. This was 
 held a dividend. 
 
728 BUSINESS CORPORATIONS IN NEW YORK § 593 
 
 stockholders had leases of apartments from the corporation 
 even though the stock has no cash value because stocldiolders' 
 profits are in the form of the leases.' A sum taken in a cer- 
 tain year from a corporation's surplus fund and divided 
 among stockholders, which was all acquired before the pass- 
 age of an act taxing corporate franchises, is not a dividend 
 within the meaning of such act and cannot be considered a 
 dividend upon which to base the computation of the franchise 
 tax due from the corporation.* In determining the franchise 
 tax upon a corporation owning and managing an apartment 
 house the value of the property and stock may be assessed 
 with reference to its present rental value, if the stockholders 
 receive by means of leases to them the benefits which ordi- 
 narily accrue to a stockholder under the name of dividends." 
 Anticipated dividends, i. e., dividends not declared, on stock 
 of other corporations held by a corporation should not be con- 
 sidered in determining the capital stock of the holding corpo- 
 ration for the purpose of imposing a franchise tax upon it.° 
 A stock dividend distributed as a lump in one year instead of 
 yearly is properly the basis for computing the franchise tax 
 for that year.'' " Whether a distribution of stock pro rata 
 among the stockholders of a corporation is a dividend repre- 
 senting profits or an adjustment of capital account depends 
 upon the circumstances of each case, and if such distribution 
 represents surplus earnings it may fairly be treated as a 
 dividend and as the income from the original stock. " ° A 
 stock dividend stands upon the same basis as a dividend in 
 cash in determining the annual franchise tax due from a 
 domestic corporation." 
 
 For purposes of taxation, the capital of a corporation 
 invested in the stock, of another corporation is deemed to be 
 assets located where the physical property represented by 
 
 'People ex rel. Gramercy Co. v. etc., R. R. Co. v. Knight, 173 N. Y. 
 
 Roberts, 91 Hun, 146, 36 N. Y. 255, 65 N. E. 1102 (1903). 
 
 Supp. 277 (1895) ; afE'd 158 N. Y. ' People ex rel. Pullman Co. v. 
 
 709, 53 N. E. 1130; L. 1880, c. 542. Glynn, 130 A. D: 332, 114 N. Y. 
 
 See now Tax L. § 182. , Supp. 460 (1909) ; aiPd 198 N. Y. 
 
 * People V. Albany Insurance Co., 605, 92 N. E. 1097; Tax L. § 182. 
 
 92 N. Y. 458 (1883) ; L. 1880, c. 542, » People ex rel. Pullman Co. v. 
 
 as amended L. 1881, c. 361. See Glynn, 130 A. D. 332, 114 N. Y. 
 
 now Tax L. § 182. Supp. 460 (19<») ; aff'd 198 N. Y. 
 
 = People ex rel. Hubert Apartment 606, 92 N. E. 1097; Tax L. § 182. 
 
 Assn. V. Kelsey, 110 A. D. 617, 96 ' People ex rel. E. S. Dairy Co. v. 
 
 N. Y. Supp. 745 (1916) ; aff'd 184 Sohmer, 218 N. Y. 199, L.R.A.1917A, 
 
 N. Y. 573, 77 N. E. 1194; Tax L. 48, 112 N. E. 756 (1916); Tax L. 
 
 § 182. § 183. 
 
 ' People ex rel. New York Central, 
 
§ 594 TAXATION 729 
 
 such stock is located." The statute imposing the franchise 
 tax upon corporations " declares the basis upon which the 
 assessment is to be made, and makes no distinction as to the 
 locality where the money was earned which was divided ' ' in 
 dividends, i. e., whether the dividends were earned in its busi- 
 ness transacted outside the State of New York or not." Coal 
 and supplies outside the State owned by a railroad company 
 should be excluded from consideration in determining its 
 capital stock subject to franchise tax." The earnings of a 
 corporation ' ' derived from the transportation of property in 
 transit from one state to another, that is to say, in conveying 
 it by means of elevators and raijroad trucks from the boats on 
 the lake to the railroad cars on the land, are ' earnings of an 
 interstate character,' " under the franchise tax law, even 
 though all the corporation's operations are conducted within 
 this State ; and such earnings are therefore exempt from any 
 State franchise tax.^' In determining the franchise tax due 
 from a domestic corporation bills receivable for merchandise 
 sold out of the State and which never came within the State 
 are not to be considered capital employed within New York, 
 even though entered in the books of the company at its office 
 in New York." In assessing the franchise tax upon a domes- 
 tic corporation which has assets both in and out of the State, 
 and liabilities, too, the law requires " a reduction from the 
 value of the assets in this State only of such proportionate 
 amount of the liabilities of the corporation as is represented 
 by the ratio of the capital stock employed within this State 
 to the entire capital of the corporation. ' ' ^^ 
 
 § 594. Id.: Rate of Tax, When Dividends Are Six Per Cent 
 or More. — 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 is at the rate of one-quarter of one mill for 
 each one per centum of dividends made or declared upon the 
 
 ^^ Tax L. § 182 (L. 1916, c. 323). minal R. E. Co. v. Miller, 178 N. Y. 
 
 " People ex rel. New England ' 194, 70 N. E. 472 (1904) ; Tax L. 
 
 Dressed Meat & W. Co. v. Roberts, § — . 
 
 155 N. Y. 408, 41 L.R.A. 228, 50 "People ex rel. Rees' Sons v. 
 
 N. E. 53 (1898). The fact that the Miller, 90 A. D. 591, 86 N. Y. Supp. 
 
 business conducted in New York was 193 (1904) ; Tax L. §§. 182, 190 (L. 
 
 without profit was held immaterial. 1901, c. 558). 
 
 ^^ People ex rel. New York Cen- ^° People ex rel. Hyde & Sons v. 
 
 tral, etc., R. R. Co. v. Knight, 173 Miller, 90 A. D. 599, 85 N. Y. Supp. 
 
 N. Y. 255, 65 N. E. 1102 (1903). 522 (1904) ; aff'd 179 N. Y. 564, 71 
 
 ^^ People ex rel. Connecting Ter- N. E. 1136. 
 
730 BUSINESS CORPORATIONS IN NEW YORK § 595 
 
 par value of the capital stock during such year." " It will be 
 observed that when the [franchise] tax is based upon divi- 
 dends, it is upon the capital stock at par value, but, when no 
 dividends have been declared, it must be assessed upon the 
 appraised capital. . . . The distinction made between 
 share stock and capital stock in other cases in the construction 
 of other statutes is in this statute fully recognized. Capital 
 stock on its par value is known in other cases as share stock, 
 while appraised capital is known as capital stock. ' ' " The 
 rule enunciated by the Legislature for determining the rate of 
 tax on a corporation 's capital stock, according as its dividends 
 are less or more than six per. cent, is legal and proper, even 
 though it result in taxing a corporation declaring a dividend 
 of less than six per cent but the stock of which is worth more 
 than par at a greater rate than if a corporation had declared 
 a dividend of more than six per cent.^' Under the statutory 
 provision that the rate of the annual corporate franchise tax 
 is one-fourth of a mill for each one per cent of dividends on the 
 par value of stock employed during the year if .a dividend in 
 excess of six per cent has been declared, and three-quarters 
 of a mill on the amount of capital employed in the State if 
 dividends of less than six per cent or no dividend have been 
 declared, when the stock is doubled in the middle of the year 
 by declaration of a dividend of one hundred per cent in stock 
 but no dividend is declared on such stock dividend during the 
 remainder of the year, the corporation is assessable upon half 
 of its corporate stock at its par value at the rate of one- 
 quarter of a mill for each one per cent of dividend and upon 
 che other half at the rate of three-quarters of one mill." 
 
 § 595. Id.: When No Dividends or Less Than Six Per Cent. 
 — If the dividends upon the capital stock amount to less than 
 six per centum upon the par value of the capital stock, the tax 
 is at the rate of three-fourths of one mill on each dollar of the 
 amount of capital stock employed in New York State pro- 
 vided (1) the assets do not exceed the liabilities, exclusive of 
 capital stock, or (2) the average price at which such stock 
 sold during the preceding year did not equal or exceed its 
 par value, or (3) no dividend was declared; but the tax is at 
 
 "Tax L. § 182 (L. 1916, c. 323). 666, 24 N. E. 1093; L. 1881, c. 361. 
 
 " People ex rel. Jewelers' Pub. See now Tax L. § 182. 
 Co. V. Roberts, 155 N. Y. 1, 49 "People ex rel. E. D. Dairy Co. 
 
 N. E. 248 (1898). v. Sohmer, 218 N. Y. 199, L.R.A. 
 
 ^* People V. Delaware & Hudson 1917 A, 48, 112 N. E. 755 (1916); 
 
 Canal Co., 54 Hun, 598, 7 N. Y. Tax L. § 183. 
 Supp. 890 (1889) ; aff'd 121 N. Y. 
 
§ 595 TAXATION 731 
 
 the rate of one and one-half mills on each dollar of the valua- 
 tion of the capital stock employed in this State if (1) the 
 assets exceed the liabilities, exclusive of capital stock, .by an 
 amount equal to or greater than the par value of the capital 
 stock, or (2) the average price at which such stock sold dur- 
 ing the preceding year is equal to or greater than the par 
 value.^° But in the latter case the valuation of the capital 
 stock employed in this State must not be less than (1) the par 
 value of such stock, (2) the difference between the assets and 
 liabilities, exclusive of capital stock, (3) the average price at 
 which such stock sold during the preceding year.^ Non-divi- 
 dend paying corporations, or corporations, the assets of which 
 do not exceed their liabilities, exclusive of capital stock, or 
 the stock of which has been sold during the year at an average 
 price which does not equal or exceed its par value, are not 
 therefore to be taxed upon the basis of the par value of their 
 capital stock ; but are to be taxed upon the basis of the actual 
 value of their capital stocks.^ If there have been sales of a 
 corporation's stock during the year and the Comptroller's 
 fixing of its value is the average price thereof the corporation 
 cannot complain of a franchise tax based on such valuation/ 
 When a corporation has declared no dividends and there have 
 been no sales of its stock, the method to be adopted in deter- 
 mining the value of its capital stock for the purpose of fixing 
 its franchise tax is to compute the actual 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.* In assessing for 
 taxation the capital stock of a corporation which has declared 
 no dividends the Comptroller may base his figures on the 
 market value of the stock, even though this place its value 
 above par and tax the surplus of the corporation as part of its 
 capital stock.' In determining the franchise tax of a corpo- 
 ration not declaring dividends, its surplus may be considered 
 
 ^ Id • Tax L. S 182 (L. 1916, * People ex rel. Wiebusch & H. 
 
 c 323) Co. V. Roberts, 154 N. Y. 101, 47 
 
 ^Tax L. § 182 (L. 1916, e. 323). N. E. 980 (1897); L. 1880, c. 542, 
 
 2 People ex rel. Fifth Ave. B'ld'g as amend'd (before 1896). See now 
 
 Co. V. Williams, 198 N. Y. 238, 91 Tax L. § 542. 
 
 N. E. 638 (1910); Tax L. §§ 182, = People ex rel. Colonial Trust 
 
 190; People ex rel. New York Mail Co. v. Morgan, 47 A. D. 126, 62 
 
 & N. T. Co. V. Gaus, 198 N. Y. 250, N. Y. Supp. 191 (1900) ; afi'd 162 
 
 91 N. E. 634 (1910); Tax L. § 182. N. Y. 654, 57 N. E. 1116; Tax L. 
 
 => People ex rel. Brooklyn Ele- § 190 (L. 1896, e. 908), § 182. 
 vated R. R. Co. v. Roberts, 90 Hun, 
 537, 36 N. Y. Supp. 34 (1895); L. 
 1880, e. 542. See now Tax L. § 182. 
 
732 BUSINESS CORPORATIONS IN NEW YORK § 596 
 
 in estimating the value of its capital stock.' In determining 
 if the average sale of corporate stock during a year is less 
 than par, for the purpose of determinin'g the franchise tax 
 due from the corporation, " the average price is to be deter- 
 mined by the different sales irrespective of the amount sold 
 upon the respective sales. ' ' ' The estimate and appraisal by 
 the officers of a corporation declaring no dividend of its 
 capital stock for franchise tax purposes may be disregarded 
 by the Comptroller, who may estimate the value of the capital 
 stock himself at a sum not less than the average market price.* 
 The sales price of stock is the minimum but not the maximum 
 limit of its valuation if it pays no dividends, for franchise tax 
 purposes, and the actual value must be the basis of assess- 
 ment ; and if the corporation gives its actual value, that value 
 must be adopted by the taxing authorities, however discrepant 
 it may be with its sales value.* 
 
 § 596. Id.: When More Than One Kind of Capital Stock and 
 Dividends Are Declared. — If the corporation (a) has more 
 than one kind of capital stock, and (b) dividends have been 
 declared upon at least one of such kinds of stock, amounting 
 to six per centum or more upon the par value thereof, the tax 
 is based both on such dividend of six per centum or more and 
 upon the capital stock on which no dividend, or one less than 
 six per centum, was declared; and at the rate of one-quarter 
 of a mUl for each one per centum of dividends made or 
 declared upon the capital stock upon the par value of which 
 dividends were made or declared of six or more per centum, 
 and at the same rate or as has hereinbefore been set forth as 
 the rate for the taxation of tjapital stock upon which no divi- 
 dend was made or declared or upon which the dividend or divi- 
 dends made or declared did not amount to six per centum on 
 the par value, upon the capital stock upon which either no divi- 
 dend was made or declared or the dividends made or declared 
 did not amount to six per centum upon the par value." ' ' The 
 
 * People ex rel. Metropolitan Se- erage price for the two days would 
 
 eurities Co. v. Kelsey, 101 A. D. be forty-nine." 
 
 248, 91 N. Y. Supp. 711 (1905); 'People ex rel. Metropolitan Se- 
 
 Tax L. § 182 (L. 1901, e. 558). eurities Co. v. Kelsey, 101 A. D. 
 
 'People ex rel. American Bank 248, 91 N. Y. Supp. 711 (1905); 
 
 Note Co. V. Sohmer, 157 A. D. 1, Tax L. § 182 (L. 1901, e. 558). 
 
 141 N. Y. Supp. 635 (1913); aff'd 'People ex rel. City Investing 
 
 210 N. Y. 621, 104 N. E. 1137; Tax Co. v. Saxe, 177 A. D. 16, 163 N. Y. 
 
 L. § 182. "For instance, if one Supp. 942 (1917); aff'd 221 N. Y. 
 
 hundred shares be sold at forty- 585, 117 N. E. 1080; Tax L. §§ 182, 
 
 eight upon one day and ten shares 193. 
 
 at fifty upon the next day the av- "Tax L. § 182 (L. 1916. c. 323i. 
 
§§ 597, 599 TAXATION 733 
 
 law substantially directs that if a corporation has more than 
 one kind of stock and on the different kinds of stock the divi- 
 dends vary, the tax should be computed for each kind of stock 
 separately. This provision evidently contemplates the ordi- 
 nary case of preferred and common stock. It has no applica- 
 tion to a condition such as is presented " by a corporation 
 increasing its capital stock during the course of the tax year, 
 and paying six per cent dividends on all stock outstanding at 
 the time of the dividends, but declaring the dividends quar- 
 terly so that those paid on the new stock necessarily aggre- 
 gated less than six per cent, if all this stock is still of one kind, 
 i. e., common." 
 
 § 597. Id.: When Stock Has No Par Value.— The rate of tax 
 upon a corporation the capital stock of which has no par value 
 i^ determined by the same process as is prescribed for a cor- 
 poration the capital stock of which has a par value^ with this 
 preliminary step to be borne in mind: that the rate of divi- 
 dends must be computed by dividing the total amount of 
 dividends which has been paid during the year by the amount 
 of the net assets of the corporation upon the first day of such 
 year." 
 
 § 598. Id.: In All Other Cases. — ^AU other corporations 
 must be taxed in an amount not less than would be produced 
 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 New York State as provided by the statutes here- 
 inbefore discussed, or one and one-half mills upon each dollar 
 of such capital stock at the average price at which such stock 
 sold during such year." 
 
 § 599. Id.: Review. — Review by certiorari of a franchise 
 tax is discussed in the six hundred and sixtieth and succeeding 
 sections of this work. A corporation assessed for franchise 
 tax has the right to make application to the Comptroller for 
 resettlement and readjustment of the account on which he 
 assessed the tax upon the same evidence, papers, proofs and 
 proceedings as were had upon the original statement of the 
 • account when the corporate officers were examined ; and unless 
 further evidence is actually offered on such proceeding it is 
 his duty to resettle and readjust the account if it is clearly 
 made to appear that it is erroneous or illegal, and if it is not 
 so clearly made to appear, then an order should be entered 
 
 "People ex rel. New York Cen- ^= St. Corp. L. § 21 (L. 1917, 
 
 tral & Hudson River R. R. Co., 200 c. 501). 
 
 N. Y. 328, 93 N. E. 988 (1911); "Tax L. § 182 (L. 1916, c. 323). 
 Tax L. § 182. 
 
734 BUSINESS CORPORATIONS IN NEW YORK § 600 
 
 denying the application for such resettlement and readjust- 
 ment and thus enable the corporation feeling itself aggrieved 
 to bring the matter up before the court for review ; and if he 
 do not, peremptory mandamus will issue that he forthwith 
 send written notice to the relator of his determination." 
 Corporations are not limited as to the time within which they 
 may apply to the State Comptroller for the revision of any 
 tax levied upon them under the law providing for the taxation 
 of certain corporations ; but all the Comptroller can do if he 
 finds they have paid too much is to credit their account with 
 the excess so that it may be applied on their future taxes: 
 he cannot refund the excess, as only the Legislature can do 
 this/^ On revision and readjustment of a corporation's 
 account for taxes the State Comptroller cannot increase the 
 assessment theretofore made." The State Comptroller is nt)t 
 required to resettle and revise a tax assessed by him upon the 
 report of a corporation voluntarily made and filed by it in 
 his office and the tax upon which has been voluntarily and 
 without objection paid into the State treasury, although made 
 under a mistake of law and the courts later held the tax was 
 illegal as the corporation was exempt." 
 
 § 600. Id.: Local Real Estate and Personal Property (In- 
 cluding Corporate Capital) Taxes; Real Property Tax, In 
 General. — The Legislature cannot pass a private or local bill 
 
 ^* People ex rel. Studebaker Co. and so certiorari does not lie from 
 
 V. Knight, 66 A. D. 150, 72 N. Y. his order declining to revise his 
 
 Supp. 929 (1901) ; Tax L. § 195 former revision. People ex rel. 
 
 (L. 1896, c. 908). American Surety Co. v. Campbell, 
 
 "People ex rel. Edison Electric 64 Hun, 417, 19 N. Y. Supp. 652 
 Illuminating Co. of N. Y. v. Wem- (1892); L. .1889, c. 463, § 20; L. 
 pie, 133 N. Y. 617, 30 N. E. 1002 1885, c. 501, § 17. See now Tax 
 (1892); L. 1889, c. 463. See now L. § 182 et seq. Once a corpora- 
 Tax L. § 182 et seq. tion, by its proper officer, has made 
 
 '" People V. Miller, 84 A. D. 166, and filed its report with the State 
 
 82 N. Y. Supp. 607 (1903) ; Tax L. Comptroller, paid the capital stock 
 
 § 195 (L. 1896, c. 908). tax found by him due therefrom, 
 
 " People ex rel. Edison Electric taken a receipt therefor, and 
 Co. V. Wemple, 69 Hun, 367, 23 sought no appeal or review there- , 
 N. Y. Supp. 661 (1893) ; Corp. Tax from within the time limited by 
 Act (L. 1889, c. 463), § 19. See statute, it cannot overhaul its re- 
 new Tax L. § 182 et seq. The port, on the ground even of pure 
 Comptroller may not repeatedly re- mistake of law, and recover an al- 
 vise and readjust the tax imposed leged excessive payment from the 
 on a corporation's capital stock, State board of audit. Cerbat Min- 
 for, when any tax has been once ing Co. v. State, 29 Hun, 81 
 revised or readjusted and the (1883); L. 1880, c. 542, § 1. See 
 Comptroller has rendered his deci- now Tax L. § 182. 
 sion thereon, he cannot do so again; 
 
§§ 601, 602 TAXATION 735 
 
 granting to any corporation an exemption from taxation on 
 real or personal property; but must pass general laws pro- 
 viding for such a matter.'^ In all cases the assessment of 
 taxes on corporate realty is deemed as against the real prop- 
 erty itself and the property is to be held and liable to sale for 
 any tax levied upon it/" 
 
 § 601. Id.: What Corporations Subject To. — The general 
 rule is that a corporate owner of real estate must pay the tax 
 thereon, and the policy of the law is to confine exceptions 
 within the narrow limits of charitable corporations or corpo- 
 rations other than the business corporations which are dis- 
 cussed in this work. 
 
 § 602. Id.: What Is Taxable Real Property and How Valued. 
 — The terms " land," " real estate," and " real property " 
 as used in the Tax Law include (1) the land itself above and 
 under water; (2) all buildings and other articles and struc- 
 tures, substructures and superstructures erected upon, under 
 or above, or affixed to the same; (3) all wharves and piers, 
 including the value of the right to collect wharfage, cranage 
 or dockage thereon; (4) all bridges, all telegraph lines, wires, 
 poles and appurtenances ; (5) all supports and inclosures for 
 electrical conductors and other appurtenances upon, above 
 and under ground; (6) all surface, underground or elevated 
 railroads, including the valine of all franchises, rights or per- 
 mission to construct, maintain or operate the same in, under, 
 above,, on or through, streets, highways or public places ; (7) 
 all railroad structures, substructures and superstructures, 
 tracks and the iron thereon; (8) branches, switches and other 
 fixtures permitted or authorized to be made, laid or placed in, 
 upon, above or under any public or private road, street or 
 ground; (9) all mains, pipes and tanks laid or placed in, upon, 
 above or under any public ox private street or place for con- 
 ducting steam, heat, water, oil, electricity or any property, 
 substance 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, main- 
 tain or operate, in, under, above, upon, or through, any 
 streets, highways or public places, any mains, pipes, tanks, 
 
 "N. Y. Const, of 1894, art. 3, within State, see note in 28 L.R.A. 
 
 § 18. (N.S.) 371. 
 
 ^"Tax L. § 9 (L. 1911, c. 315). On taxation o£ capital stock of 
 
 As to when capital of corpora- corporation in the United States, 
 
 tion invested in real estate deemed see comprehensive note in 58 L.R.A. 
 
 " employed " within statute taxing 513. 
 
 amount of capital stock employed 
 
736 BUSINESS CORPORATIONS IN NEW YORK § 602 
 
 conduits or wires, with their appurtenances, for conducting 
 water, steam, heat, light, power, gas, oU or other substance, 
 or electricity for telegraphic, telephonic or other purposes; 
 (10) all trees and underwood growing upon land; and (11) 
 all mines, minerals, quarries and fossils in and under land 
 except mines belonging to the State.°° A franchise, right, 
 authority or permission just mentioned is for the purpose of 
 taxation known as a " special franchise," and is deemed to 
 include the value of the tangible property of a corporation 
 situated in, upon, under or above any street, highway, public 
 place or public waters in connection with the special franchise, 
 and the tangible property so included is taxed as a part of 
 the special franchise; but the term " special franchise " is 
 not deemed to include the crossing of a street, highway or 
 public place outside the limits of a city or incorporated vil- 
 lage where such crossing is less than two hundred and fifty 
 feet in length, unless such crossing be the continuation of an 
 occupancy of another street, highway or public place (save as 
 respects an elevated railroad).^ All lands which have been 
 sold by the State, although not conveyed, are assessable in 
 the same manner as if the purchaser were the actual owner, 
 and improvements not acquired by the State but situate on 
 land purchased by the State are assessable to the owner 
 thereof ; and when land is leased by the State, such leasehold 
 interest except in cases where by the terms of the lease the 
 State is to pay the taxes imposed upon the property leased, 
 must be assessed to the lessee or occupant in the tax district 
 where the land is situated.^ A tunnel constructed under a 
 river under a grant by the State of a right of way necessary 
 therefor is not exempt from inclusion in the special franchise 
 tax of the grantee as real estate subject to local taxation." 
 Machinery delivered to a corporation and attached to realty 
 is assessable as real estate irrespective of the question* in 
 whom the strict legal title lay.* For the purpose of assess- 
 ment for taxation against a corporation owning it, machinery- 
 essential to the conduct of its business and annexed to its 
 realty permanently, is to be taxed as realty.' Machinery used 
 
 2° Tax L. § 2, subd. 6 (L. 1916, Tax L. § 2, subd. 3 (L. 1896, c. 908, 
 
 c. 323). as amend'd L. 1899, c. 712). 
 
 ^ Tax L. § 2, subds. 6, 7 (L. 1916, * People ex reV. New York Edi- 
 
 c. 323). son Co. v. Wells, No. 3, 135 A. D. 
 
 = Tax L. § 5 (L. 1916, c. 323). 644, 119 N. Y. Supp. 1057 (1909); 
 
 'People ex rel. Bryan v. State, afE'd 198 N. Y. 607, 92 N. E. 1097; 
 
 Tax Commrs., 61 Misc. 508, 124 Tax L. § 2, subd. 3 (L. 1899, c. 
 
 N. Y. Supp. 711 (1910) ; aflf'd 142 712) ; Greater N. Y. Charter, § 894. 
 
 A. D. 796. 127 N. Y. Supp. 858; ^People ex rel. National Starch 
 
§§ 603, 604 TAXATION 737 
 
 in connection with mains or wires for generating and sending 
 forth electricity on the lines or gas through the mains of a 
 corporation is taxable as real estate under the statute." The 
 foundations, columns and superstructure of a corporation's 
 elevated railroad are taxable a§ real estate/ Tax commis- 
 sioners may not treat subways of a corporation as equally 
 valuable as real estate unrestricted in its use, but must con- 
 sider its restriction to a specific use, the financial condition of 
 the company and the control which the municipality has over 
 it.* While sometimes property affixed to the freehold should 
 be assessed for real estate tax purposes at its replacement 
 value, yet ordinarily it should be assessed as nearly as, pos- 
 sible at its actual value.® " The general rule for the assess- 
 ment of the real estate of a railroad corporation within the 
 boundaries of a town where the railroad itself . . . trav- 
 erses several towns, is that the reasonable cost of reproducing 
 the railroad structures, added to the value of the roadbed as 
 land, is presumptively the value of the railroad considered ais 
 real property for the purposes of assessment for taxation."" 
 
 § 603. Id.: Place of Taxation. — The real estate of all incor- 
 porated companies liable to taxation must be assessed in the 
 tax* district in which it lies, in the same manner as the real 
 estate of individuals." 
 
 § 604. Id.: Personal Property Tax, Including Tax on Capital; 
 What Corporations Subject To. — ^What corporations are sub- 
 ject to a tax on their personal property has already been 
 discussed." ". . . the capital stock of an incorporated 
 company, which is legally a resident of this State, may be 
 taxed here, notwithstanding that the property which that 
 
 Co. V. Waldron, 26 A. D. 527, 50 vated E. R. Commr's of Taxes, 82 
 
 N. Y. Supp. 523 (1898); R. S. 9tli N. Y. 459 (1880). 
 
 ed. p. 1676, §§ 2, 3, 6. * People ex rel. .Consolidated Tele- 
 
 ^ Herkimer County Light & Power graph, etc., Co. v. Barker, 7 A. D. 
 
 Co. V. Johnson, 37 A. D. 257, 55 27, 39 N. Y. Supp. 776 (1896) ; afi'd 
 
 N. Y. Supp. 924 (1899) ; Tax L. 151 N. Y. 639, 45 N. E. .1133. 
 
 § 2, subd. 3: "all mains, pipes, * People ex rel. New York Edison, 
 
 and tanks laid or placed in, upon, Co. v. Wells, No. 6, 135 A. D. 647, 
 
 above, or under any public or pri- 119 N. Y. Supp. 1060. 
 
 vate street or place for conducting "People ex rel. New York Cen- 
 
 . . . electricity or any prop- tral & Hudson River R. R. Co. v. 
 
 erty . . . capable of transpor- Hanking, 152 A. D. 488, 137 N. Y. 
 
 tation or conveyance therein or that Supp. 365 (1912). 
 
 is protected thereby " is real es- "Tax L. § 11 (L. 1909, c. 62). 
 
 tate. , " See § 563, supra. 
 
 ^People ex rel. New York Ele- 
 B. C.N.Y.— 47 
 
738 BUSINESS CORPORATIONS IN NEW YORK § 605 
 
 stock represents is situated in a foreign state."" A cor- 
 poration seeking to escape taxation in this State on its 
 personalty on the ground that it is situated and taxed in 
 another state is bound to make its foreign situs clear to the 
 tax commissioners and " a mere statement that all of it^ 
 assets were in another state was not sufficient to relieve it 
 from taxation."" A domestic corporation which moves its 
 office for transacting business to another state and does all its 
 business there, save that it has a bank account in New York, 
 is taxable only on the amount of such account in determining 
 the tax due on its capital stock." A joint-stock company is 
 not taxable upon its capital." A company is not excused from 
 paying a municipal personal tax for the statutory reason that 
 it is " unable for want of property to pay the tax in whole or 
 in part " if it is a going concern, though insolvent in the sense 
 that its liabilities exceed by a very substantial sum the value 
 of its assets, provided it have property of a value greater 
 than the amount of the tax." In order to enable a corporation 
 to claim a statutory exemption from taxation of " the personal 
 estate of every incorporated company not made Uable to 
 taxation on its capital " the corporation must have a capital 
 not liable to taxation as such, as the words " incorporated 
 company " were intended to designate only such business and 
 stock corporations as are exempted under special circum- 
 stances from taxation on their capital, and do not embrace 
 corporations not having a capital." 
 
 § 605. Id.: What is Taxable, Governing Statutes.— All per- 
 sonal property situated or owned within New York State is 
 taxable unless exempt from taxation by law." The terms 
 ' ' personal estate ' ' and ' ' personal property ' ' as used in the 
 Tax Law include (1) chattels; (2) moneys; (3) things in 
 
 ^'People ex rel. Zulie Steam '"People ex rel. Winchester v. 
 
 Navigation Co. v. Commissioners of Coleman, 133 N. Y. 279, 16 L.R.A. 
 
 Taxes, 51 Hun, 312, 3 N. Y. Supp. 183, 31 N. E. 96 (1892) ; 1 R. S. 
 
 885 (1889). 414, § 1. 
 
 "People ex rel. Orinoka Mills v. "City of New York v. Chase, 
 
 Barker, 84 A. D. 469, 83 N. Y. Talbot & Co., 206 N. Y. 1, 99 N. E. 
 
 Supp. 33 (1903) ; Tax L. §§ 3, 11, 143 (1912) ; Tax L. § 301. 
 
 12, L. 1896, c. 908). "People ex rel. Savings Bank of 
 
 '^People ex rel. Davis-Colby Co. New London v. Coleman, 135 N. Y. 
 
 V. Campbell, 66 Hun, 146, 21 N. Y. 231, 31 N. E. 1022 (1892) ; 1 R. S. 
 
 Supp. 7 (1892) " . . . in deter- 388, § 4, subd. 71. 
 
 mining the amount of capital stock "Tax L. § 3 (L. 1909, c. 62). 
 employed in this State, the same 
 principle applies to a domestic as 
 to a foreign corporation." 
 
§ 605 TAXATION 739 
 
 action; (4) debts due from solvent debtors, whether (a) on 
 account, (b) contract, (c) note, (d) bond or (e) mortgage; 
 (5) debts and obligations for the payment of money due or 
 owing to persons residing within New York State, however 
 secured or wherever such securities are held; (6) debts due 
 by inhabitants of New York State to persons not residing 
 within the United States for the purchase of any real estate ; 
 (7) public stocks; (8) stocks in moneyed corporations; and 
 (9) such portion of the capital of incorporated companies, 
 liable to taxation on their capital, as is not invested in real 
 estate/" The following property is exempt from taxation as 
 against a domestic private business stock corporation: (1) 
 All property exempt by law from execution;^ (2) bonds of 
 New York State or any civil division thereof; ^ (3) all vessels 
 registered at any port in New York State and owned by any 
 corporation incorporated under the laws of the State of New- 
 York, engaged in ocean commerce between any port in the 
 United States and any foreign port; ' (4) a bond, mortgage, 
 note, contract, account or other demand sent to or deposited 
 in New York State for collection and belonging to any person 
 not a resident of New York State;* (5) the products of 
 another state consigned to his agent in this State for sale on 
 commission for the benefit of the owner, who is a non-resi- 
 dent;* (6) moneys under the control or in the possession of 
 his agent in New York State transmitted by a non-resident 
 for the purpose of investment or otherwise; * (7) the stock in 
 another incorporated company liable to taxation on its capital 
 which may be held or owned by the corporation in question.^ 
 All personal property subject to taxation must be assessed at 
 the full value thereof, provided, however, that the owner of 
 personal property must be allowed a deduction from the full 
 value of all his taxable personal property to the extent of the 
 just debts owing by him ; but no such deduction can be allowed 
 (1) by reason of the indebtedness of the owner contracted 
 or incurred in the purchase of nontaxable property or secur- 
 ities owned by him or held for his benefit, (2) nor for or on 
 account of any indirect liability as surety, guarantor, indorser 
 or otherwise, (3) nor for or on account of any debt or liability 
 
 ^ Tax L. § 2, subd. 8 (L. 1916, ^ Tax L. § 4, subd. 12 (L. 1909, 
 c. 323). c. 62). 
 
 ^Tax L. § 4, subd. 5 (L. 1914, *Tax L. § 4, subd; 13 (L. 1909, 
 c. 278). c. 62). 
 
 2 Tax L. § 4, subd. 6 (L. 1917, °Tax L. § 4, subd. 16 (L. 1909, 
 c. 97). e. 62). 
 
740 BUSINESS CORPORATIONS IN NEW YORK § 606 
 
 contracted or incurred for the purpose of evading taxation." 
 Every company must pay a tax on its capital stock and its 
 surplus profits or reserve funds. The assessment of such 
 capital stock for taxation must be at its actual value, except 
 for the deduction of (1) such part of such capital stock as (a) 
 has been excepted in the assessment-roll or (b) is exempt by 
 law, (2) ten per cent of its capital constituting surplus profits 
 or reserve funds, (3) its real estate at its assessed value, and 
 (4) all shares of stock in other corporations actually owned 
 by the company in question which are taxable upon their capi- 
 tal stock under the laws of New York.' 
 
 § 606. Id.: Personal Property, In General. — The general 
 aspect of the personal property tax payable by corporations 
 has been previously considered.* ". . . where personal 
 property has an actual situs in another State, and thus 
 becomes in- that other State subject to taxation, it is not tax- 
 able in this State, although its owner is an actual resident 
 here."" A domestic corporation is taxable in New York on 
 cash in bank payable on its cheques, and on bills and accounts 
 receivable for property sold to persons outside New York and 
 payable at its office in New York, save a certain portion pay- 
 able in another State and to be deposited there to its credit."* 
 Payments made by an elevated railroad company to owners 
 of adjacent property in acquiring easements with a perpetual 
 right to operate the company's railroad in front of such 
 abutting property, i. e., fee damages, represent property that 
 may be assessed against the company for municipal taxation." 
 When the original packages in which goods were imported by 
 a domestic corporation have been broken, and the goods taken 
 therefrom and placed in store upon sale, thereby becoming 
 mixed with other property, they become subject to the taxing 
 power of the State." 
 
 "Tax L. § 6 (L. 1914, c. 277). Co. v. Barker, 165 N. Y. 305, 59 
 
 'Tax L. § 12 (L. 1909, c. 62). N. E. 151 (1901). 
 
 * See § 563, sufra. " People ex rel. Matheson & Co, 
 
 ' People ex rel. Orinoka Mills v. v. Roberts, 158 N. Y. 162, 52 N. E. 
 
 Barker, 84 A. D. 469, 83 N. Y. 1102 (1899); U. S. Const, art. 1, 
 
 Supp. 33 (1903) ; Tax L. §§ 3, 11, §§ 8, 10. In determining the tax on 
 
 12 (L. 1896, c. 908). a corporation's capital stock the 
 
 ^"People ex rel. United States commissioners should hold non-as- 
 
 Verde Copper Co. v. Peitner, 54 sessable investments in shares of 
 
 A. D. 217, 66 N. Y. Supp. 769 other corporations (L. 1857, c. 456, 
 
 (1900); afPd 165 N. Y. 645, 59 §3); investments in United States 
 
 N. E. 1129; Tax L. § 2, subd. 4, securities (U. S. R. S. § 3701); 
 
 and § 3 (L. 1896, c. 908). goods imported and held in un- 
 
 '^ People ex rel. Manhattan Ry. broken packages; property outside 
 
§ 607 TAXATION 741 
 
 § 607. Id.: Corporate Capital, in General.— The statute 
 includes in its definition of personal property and personal 
 estate "such portion of the capital of incorporated com- 
 panies, liable to taxation on their capital, as shall not be 
 invested in real estate." " It further provides that the capi- 
 tal stock of every company liable to taxation, except such part 
 of it as has been excepted in the assessment-roll or is 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 
 New York, must be assessed at its actual value." " The 
 law is equally well settled as to what is the subject of 
 assessment, and in what way the value of a corporation's 
 capital is to be ascertained for the purposes of taxation: (1) 
 The capital stock of every company liable to taxation shall 
 be assessed at its actual value. (2) It is not the value of the 
 capital stock, but the value of the capital that is to be ascer- 
 tained. (3) To ascertain the capital subject to taxation 
 requires the valuation of the whole property owned by the 
 corporation, whether real or personal or both, and from the 
 aggregate is to be deducted the assessed value of the real 
 estate, and the balance is the capital subject to assessment, 
 after deducting debts and any exemptions allowed by law. 
 (4) The franchises of the corporation are not part of its 
 taxable capital."" " The general scheme of the statute for 
 the assessment of the property of corporations other than 
 real estate for the purposes of taxation, is to assess their 
 capital at its actual value, and their surplus funds, deducting 
 therefrom the value of their real estate, and of shares of other 
 corporations held by them, liable to taxation. ' ' ^° The meaning 
 of the phrase capital stock of a corporation, as used- in a 
 statute taxing it is " the company's capital existing in money 
 or property, or both. "" " . . , by the phrase ' capital 
 
 the State ; and surplus on capital ^' People ex rel. Consolidated 
 
 stock (L. 1857, c. 456, § 3); while Telegraph, etc., Co. v. Barker, 7 
 
 the assessed valuation of real es- A. D. 27, 39 N. Y. Supp. 776 
 
 tate should be deducted from gross (1896) ; aff 'd 151 N. Y. 639, 45 
 
 assets. (L. 1857, e. 456, § 3). Peo- N. E'. 1133. 
 
 pie ex rel. Sloane v. Barker, 76 ^'People .ex rel. Bay State Shoe 
 
 Hun, 454, 27 N. Y. Supp. 1082 & Leather Co. v. McLean, 80 N. Y. 
 
 (1894). 254 (188Q); 1 R. S. 414, L. 1853, 
 
 '*Tax L. § 2, subd. 8 (L. 1916, c. 654; id. 1857, e. 456. See now 
 
 e. 323). Tax L. § 12. 
 
 "Tax L. § 12 (L. 1909, c. 62). ''^ People ex rel. Rochester R. Co. 
 
742 BUSINESS CORPORATIONS IN NEW YORK § 607 
 
 stock ' the statute [imposing a tax thereon] means not the 
 share stock, but the capital owned by the corporation; the 
 fund required to be paid in and kept intact as the basis of the 
 business enterprise, and the chief factor in its safety. ' ' " The 
 statutory provisions making " personal property " of a cor- 
 poration subject to taxation to include " such portions of the 
 capital of incorporated companies liable to taxation on their 
 capital " has reference to the actual value of the tangible 
 property of incorporated companies and not to the value of 
 its share stock, which would include its franchise and good 
 will, which is taxable under another statute." The mean- 
 ing of the statute that " the capital stock of every com- 
 pany liable to taxation . . . together with its surplus 
 profits or reserved funds exceeding ten per cent of its Capital 
 after deducting the assessed value of its real estate . . . 
 shall be assessed," etc., is: " The capital stock of every 
 company shall be assessed at its actual value, ' after deducting 
 the assessed value of its real estate,' thus transposing the 
 latter clause so as to give it its true effect, or that clause 
 may be put in parenthesis and have the same effect. ' ' ^° Under 
 a statute imposing a tax upon the capital stock of corpora- 
 tions ' ' the capital stock of a corporation, less the part thereof 
 owned by the State, or by literary or charitable institutions, 
 or exempted from taxation by the Revised Statutes, is to be 
 assessed at its actual value, whether more or less than its 
 nominal amount, deducting, however, from such actual value, 
 the assessed value of its real estate and shares owned by it 
 in other taxable corporations, and also from its surplus or 
 reserve, if any, an amount not exceeding ten per cent of its 
 capital. ' ' ^ Assessors cannot deduct from the capital stock of 
 corporations anything not authorized by statute.^ The law 
 does not prescribe how the value of the capital stock of a 
 corporation is to be ascertained and it is left to the judgment 
 of the assessing officers.^ ' ' It would seem to be easy to pro- 
 
 V. Pond, 37 A. D. 330, 57 N. Y. L. 1853, c. 654. See now Tax L. 
 
 Supp. 490 (1899) ; Tax L. § 12 (L. § 12. 
 
 1896, c. 908). 1 People ex rel. Panama R. R. Co. 
 
 "People ex rel. Union Trust Co. v. Comrs. of Taxes, 104 N. Y. 240, 
 
 V. Coleman, 126 N. Y. 433, 12 L.R.A. 10 N. E. 437 (1887) ; L. 1857, c. 456. 
 
 762, 27 N. E. 818 (1891) ; L. -1857, See now Tax L. § 12. 
 
 c. 456, § 3. See now Tax L. § 12. ^People ex rel. National Surety 
 
 " People ex rel Cornell S. Co. v. Co. v. Eeitner, 166 N. Y. 129, 59 
 
 Dederick, 161 N. Y. 195, 55 N. E. N. E. 731 (1901). 
 
 927 (1900) ; Tax L. § 2, subd. 4. ' United States Trust Co. of 
 
 ™ People ex rel. Twenty-third St. N. Y. v. The Mayor, etc., of New 
 
 R. R. Co. V. Comm'rs of Taxes, 95 York, 144 N. Y. 488, 39 N. E. 383 
 
 X. Y. 554 (1884); L. 1857, c. 456; (1895); L. 1880, c. 269. 
 
§ 607 TAXATION 743 
 
 vide a formula for arriving at the actual value of corpora- 
 tion stock, viz., to ascertain the value of all the corporate 
 real and personal property, and from the aggregate deduct 
 the value of the real estate and the corporate indebtedness, ' ' * 
 " The law does not prescribe how the actual value of the 
 capital stock of a corporation is to be ascertained [in assess- 
 ing it for taxation]. That is left to the judgment of the 
 assessors, and in appraising the actual value they have a 
 right to resort to all the tests and measures of value which 
 men ordinarily adopt for business purposes in estimating and 
 measuring values of property. They may take into account 
 the business of the corporation, its property, the value of its 
 actual assets, the amount and nature of its present and con- 
 tingent liabilities, the amount of its dividends and the market 
 value of its shares of stock in the hands of individuals. They 
 may resort to any or all of these as to them seems best, and 
 they are not confined to one of them. They may take that 
 test which they think will be most likely to give them the 
 actual value of the stock, and they may disregard the 
 others." ^ " One mode of arriving at the actual value of the 
 capital stock of a corporation [for the purpose of assessing 
 the tax thereon] is to take what is sometimes called the book 
 value, which is reached by estimating all the assets as they 
 appear upon the corporate books, arid deducting all the liabil- 
 ities and other matters required to be deducted by law, and 
 taking the balance as the measure of value for assessment. 
 This seems to be a proper method for arriving at the value of 
 the capital stock in the case of a corporation which is about to 
 discontinue business, wind up its affairs and distribute its 
 assets among its shareholders. But it cannot always, or 
 usually, be a fair or correct method of assessment in the case 
 of a going corporation whose assets are to remain at the risk 
 of its business. In the case of an insurance company, the 
 actual value of its capital stock must usually be less than the 
 book value, and the same must frequently be true of other 
 corporations which are engaged in business attended with 
 many hazards and fluctuations. In the case of a corporation 
 the value of whose capital stock is largely made up of its 
 franchise, good will and business advantages, the book value 
 of its capital stock will be less than the actual value. " ° In 
 
 * People ex rel. New York & ^People ex rel. Knickerbocker 
 
 Queens Gas Co. v. Feitner, 58 Fire Ins. Co. v. Coleman, 107 N. Y. 
 
 A. D. 555, 69 N. Y. Supp. 27 541, 14 N. E. 431 (1887) ; L. 1857, 
 
 (1901) ; Tax L. § 12 (L. 1896, c. 456, § 3. See now Tax L. § 12. 
 
 .c 908). * People ex rel. Knickerbocker 
 
744 BUSINESS CORPORATIONS IN NEW YORK § 608 
 
 assessing the tax upon a corporation's capital stock " the 
 earnings of a corporation may be considered by the assessors, 
 and where they are such as to enable the company to pay its 
 running expenses, necessary repairs, interest upon its indebt- 
 edness and declare a dividend of six per cent and still have 
 a surplus, it may be assumed that its capital stock remains 
 unimpaired and that there are assets over and above sufficient 
 to pay its outstanding indebtedness (citation). 'This method, 
 however, may include the value of the franchises, which should 
 be deducted in order to determine the amount of property 
 liable for assessment."' In determining the value of leases 
 in which a corporation is lessee in a proceeding to assess for 
 taxation its capital stock and surplus profits, the commis- 
 sioners cannot estimate the value of the real and personal 
 property leased and include that value in the amount of the 
 corporation's property, but must find the actual value of the 
 lease.* In assessing a corporation-lessee for its capital and 
 surplus the value of the lease, deducting therefrom the value 
 of the right to use the franchises of the leased corporations, 
 should be ascertained and added to the value of the corpora- 
 tion's real estate and personal property, and from this total 
 the deductions made which are allowed by the statute.' 
 
 § 608. Id.: Not Share Stock.—" The capital stock of a com- 
 pany is one thing; that of the shareholders is another and 
 different thing. That of the company is simply its capital, 
 existing in money or property, or both ; while that of the share- 
 holders is representative, not merely of that existing and 
 tangible property, but also of surplus, of dividend earning 
 power, of franchise and the good will of an established and 
 prosperous business. The capital stock of the company is 
 owned and held by the company in its corporate character; 
 the capital stock of the shareholders they own and hold in 
 different proportions as individuals. The one belongs to the 
 corporation; the other to the corporators. The franchise of 
 the company, which may be deemed its business opportunity 
 and capacity, is the property of the corporation, but con- 
 stitutes no.part or element of its capital stock ; while the same 
 franchise does enter into and form part, and a very 
 
 Tire Ins. Co. v. Coleman, 107 N. Y. son Co. v. Feitner, 61 A. D. 129, 70 
 
 541, 14 N. E. 431 (1887) ; L. 1857, N. Y. Supp. 500 (1901) ; aflE'd 171 
 
 c. 456, § 3. See now Tax L. § 12. N. Y. 641, 63 N. E. 786; Tax L. 
 
 'People ex rel. Manhattan Ry. § 12 (L. 1896, e. 908). 
 
 Co. V. Barker, 146 N. Y. 304, 40 "The People ex rel. The Dela- 
 
 N. E. 996 (1895) ; L. 1857, c." 456, ware & Hudson Co. v. Feitner, 171 
 
 § 3. See now Tax L. § 12. N. Y. 641, 63 N. E. 786 (1902). 
 
 * People ex rel. Delaware & Hud- 
 
§ 608 TAXATION 745 
 
 essential part of the shareholder's capital stock. While the 
 nominal or par value of the capital stock and of the share 
 stock are the same, the actual value is often widely different. 
 The capital stock of the company may' be wholly in cash or 
 in property, or both, which may be counted and valued. It 
 may have in addition a surplus, consisting of some accumu- 
 lated and reserved funds, or of undivided profits, or both, but 
 that surplus is no part of the company's capital stock, and, 
 therefore, is not itself capital stock. The capital cannot be 
 divided and distributed; the surplus may be. But that surplus 
 does enter into and form part of the share stock, for that 
 represents and absorbs into its own value surplus as well as 
 capital, and the franchise in addition. So that the property 
 of every company may consist of three separate and distinct 
 things, which are its capital stock, its surplus, its franchise ; 
 but these three things, several in the ownership of the com- 
 pany, are united in the ownership of the shareholders."" 
 The " capital stock " of a corporation which is subjected by 
 statute to taxation means "actual tangible property of the 
 company, and not its share stock, which is to be assessed at 
 its actual value."" " Capital stock, as that term is used in 
 the Tax Law . . ., does not mean share stock ; it is limited 
 to the actual money or property paid in and possessed by the 
 corporation as such. " " " First, the subject of valuation and 
 assessment is never the share stock, but always the company's 
 capital and surplus. Second, such capital and surplus must 
 be assessed at its own value, and when that is correctly known 
 and ascertained, no other value can be substituted for it. 
 Third, where its amount and value are undisclosed and 
 unknown the assessors may consider the market value of the 
 share stock and the general condition of the company as 
 indicative of surplus or deficiency and of the probable amount 
 of either. Fourth, they may further resort to such means 
 of information when the amount of capital and surplus is dis- 
 closed, but the assessors have sufficient reason to disbelieve 
 the statement and such reason is founded upon facts estab- 
 lished by competent proof. ' ' '" The manner of ascertaining 
 
 ^"People ex rel. Union Trust Co. N. Y. Supp. 304 (1904); Tax L. 
 
 V. Coleman, 126 N. Y. 433, 12 § 12 (L. 1896, c. 908, § 12). It is 
 
 L.R.A. 762, 27 N. E. 818 (1891) ; eironeous to take the capital stock 
 
 L. 1857, c. 456, § 3. See now Tax at par, add the premium at which 
 
 L. § 12. share stock is selling on the market 
 
 ^^ People ex rel. Cornell S. Co. v. and the par value of bonds, though 
 
 Dederick, 161 N. Y. 195, 55 N. E. making various deductions from the 
 
 927 (1900) ; Tax L. § 12. total. 
 
 ^^ People ex rel. Twenty-Third St. ^'People ex rel. Union Trust Co. 
 
 R. Co. V. Feitner, 92 A. D. 518, 87' v. Coleman, 126 N. Y. 433, 12 L.R.A. 
 
746 BUSINESS CORPORATIONS IN NEW YORK §^ 609, 610 
 
 the value of the capital stock of a corporation for taxation 
 purposes is not to take the value of its share stock but its 
 capital and surplus at their actual value.^* 
 
 § 609. Id.: At Actual Value, In General.—" The term ' actual 
 value ' [in a statute requiring assessment of corporate capital 
 stock at its actual value], is evidently used in distinction to 
 the nominal value or amount. The direction to assess it at 
 the actual value, therefore, required that it should be esti- 
 mated above or below the par amount, according to the fact, 
 and as the particular case might require. . . . There is 
 doubtless, an incongruity in including the accumulated profits 
 above ten per cent in the assessment, where the capital is 
 assessed at its market value. It does not seem to have 
 occurred to the law-makers that the existence of a surplus 
 enters into the market value of the stock, and that this surplus 
 is never the subject of an ownership or disposition distinct 
 from the stock, and that their whole object was accomplished 
 when they directed the stock to be assessed at its actual value. 
 . . . in a case where a surplus exists, which must be 
 included in the amount of the assessment, justice will be 
 attained by deducting its amount from the sum at which the 
 stock would be estimated if the surplus was considered as 
 embraced in the valuation. " ^^ " It is the actual value of its 
 capital stock and not the market value of its share stock that 
 is to be assessed ; in other words, it is its actual tangible per- 
 sonal property and not its franchises. Other statutes provide 
 for the taxing of its real estate and franchises. . . . The 
 value of property is determined by what it can be bought and 
 sold for, and there can be no doubt but that these various 
 expressions used in the statutes all are intended to mean the 
 actiml value of the property. ' ' " 
 
 § 610. Id.: Not Market Value of Shares of Stock.— In assess- 
 ing a corporation's capital stock for taxation it is not illegal 
 
 762, 27 N. E. 818 (1891); L. 1857, "People ex rel. Manhattan Ry. 
 
 c. 456, § 3. See now Tax L. § 12. Co. v. Barker, 146 N. Y. 304, 40 
 
 "United States Trust Co. v. N. E. 996 (1895); L. 1857, c. 456, 
 
 Mayor, 77 Hun, 182, 28 N. Y. Supp. § 3, imposing tax on corporation's 
 
 344 (1894) ; aff 'd 144 N. Y. 488, 39 capital stock. See now Tax L. § 12. 
 
 N. E. 383; L. 1857, c. 456, § 3. See Assessment of corporation at full 
 
 now Tax L. § 12. value when valuations generally are 
 
 ^' Oswego Starch Factory v. Dol- less, see note in 60 L.R.A. 368. 
 
 loway, 21 N. Y. 449 (1860) ; Gen. On valuation of corporate fran- 
 
 Mfg. Act, L. 1848, c. 40, as amend 'd ehise for purpose of taxation, see 
 
 L. 1853, e. 654, and L. 1857, c. 456, note in 57 L.R.A. 98. 
 § 3. See now Tax L. § 12. 
 
§ 611 TAXATION 747 
 
 to assess it at more than its market value."- " So the market 
 value of the shares of capital stock [the value of which is to be 
 assessed for taxation thereof] may sometimes be above and 
 sometimes below the actual value. . . . But the market 
 value of any stock which is listed at the stock exchange in 
 New York, and largely dealt in from day to day for a series 
 of months will usually furnish the best measure of value for 
 all purposes. . . . But there is no law which compels 
 assessors to resort to market value to find the actual value 
 of capital stock. " " " The value of the share stock, however, 
 is not conclusive evidence of the value of the capital stock and 
 surplus of a corporation. The selling price of the share stock 
 is some and in many cases, where better evidence is not obtain- 
 able, may be satisfactory evidence of the value of the assets 
 of a corporation, but it Jaas never been held to be conclusive. 
 . . ."^* The capital and surplus of a corporation must be 
 assessed at their own value in determining the tax on its 
 capital stock; and the market value of the shares of capital 
 stock is only to be considered by the assessors when either the 
 value of the capital and surplus is not disclosed and cannot 
 be ascertained, or', being disclosed, the assessors have reasons 
 based upon facts established by competent proof to disbelieve 
 the statement.^" The proper basis for determining the amount 
 of the capital of a corporation liable to taxation is not the 
 market value of the shares in the hands of individual holders, 
 but the corporate assets constituting the capital.^ 
 
 § 611. Id.: Exceptions and Exemptions — ^The property 
 exempt from the personal property tax has already been 
 listed.^ The words in the statute imposing a tax upon cor- 
 
 . " Knickerbocker Fire Ins. Co. v. =" United States Trust Co. of 
 
 Coleman, 44 Hun, 410 (1887). N. Y. v. The Mayor, etc., of New 
 
 "People ex rel. Knickerbocker York, 144 N. Y. 488, 39 N. E. 383 
 
 Fire Ins. Co. v. Coleman, 107 N. Y. (1895) ; L. 1880, c. 269. 
 
 541, 14 N. E. 431 (1887); L. 1857, ^People ex rel. Bleecker St. R. 
 
 c. 456, 3. See now Tax L. § 12. Co. v. Barker, 85 Hun, 210, 32 N. Y. 
 
 "People ex rel. Eden Musee Co. Supp. 990 (1895). 
 V. Feitner, 60 A. D. 282, 70 N. Y. ^ See § 606, supra; People ex rel. 
 Supp. 120 (1901) ; Tax L. § 12. In Panama R. R. Co. v. Comrs. of 
 assessing the capital stock of a Taxes, 104 N. Y. 240, 10 N. E. 437 
 corporation which owned a building (1887) ; L. 1857, c. 456, § 3. See 
 on leased land and some personal now Tax L. § 12. The exception in 
 property, it is proper for the com- the statute imposing a tax upon 
 missioners to estimate the building corporate capital stock of such part 
 at its actual value and to add the thereof " as shall have been ex- 
 personal property and from this empted by law," refers to the gen- 
 total to deduct the assessed value eral exemption in § 4, tit. 1, o. 13, 
 of the building. R. S. 
 
748 BUSINESS CORPORATIONS IN NEW YORK §§ 612, 613 
 
 porate capital stock, ' ' except such part of as shall have been 
 excepted in the assessment-roU " probably refer to stock of 
 the corporation taxed, belonging to the State, or incorporated 
 literary or charitable institutions.^ 
 
 § 612. Id.: Surplus Profits or Reserve Funds.—". . . in 
 the assessment of corporations they are entitled to no general 
 deduction of ten per cent of their capital stock, but that 
 percentage is only to be deducted from the surplus profits or 
 reserve fund when such surplus is returned for taxation." ■* 
 
 § 613. Id.: Real Estate.— " The theory of the statute [taxing 
 the capital stock of corporations] is that r«al estate for the 
 purpose of taxation shall be assessed at its full value. . . . 
 the commissioners could legally disregard the assessed value 
 of the capital. . . . " ° The rule for ascertaining the tax- 
 able value of corporate capital stock is to add together the 
 actual value of the corporation's real estate and personal 
 property and deduct therefrom its indebtedness and the 
 assessed value of its real estate.* " The statutory scheme 
 prescribed by the legislature as construed by the courts 
 directs that on one side of the account be placed the total 
 property of the corporation; on the other side, among other 
 things, the value of its real estate;" and this does not mean 
 that if the realty is mortgaged the corporation shall return 
 as its property only the value of the equity of redemption, 
 while deducting from the total value of its property the whole 
 assessed value of its realty as if unencumbered, but that if it 
 return only the equity it deduct only the assessed value of 
 the equity.' " . . . in determining the value of the capital 
 stock of a domestic corporation for the purposes of taxation, 
 it is lawful to include the actual value of its real estate and 
 to deduct merely the assessed value thereof."* ". . . for. 
 the purpose of ascertaining the value of the capital of a cor- 
 
 ^ People ex rel. Panama R. R. Co. v. Peitner, 39 Misc. 467, 80 N. Y. 
 
 V. Comrs. of Taxes, 104 N. Y. 240, Supp. 152 (1902). 
 10 N. E. 437 (1887) ; L. 1857, c. 456, ' People ex rel. Weber Piano Go. 
 
 t; 3. See now Tax L. § 12. The v. Wells, 180 N. Y. 62, 72 N. E. 
 
 quoted wol-ds are taken from § 10, 626 (1904) ; Tax L. § 12. " It may 
 
 tit. 4, c. 13, R. S. be that the proper way in which the 
 
 * People ex rel. Citizens' lUu- relator should have been assessed 
 
 minating Co. v. NefiE, 26 A. D. 542, was to treat it as holding the entire 
 
 50 N. Y. Supp. 680 (1898) ; Tax L. ownership of the realty and to de- 
 
 §§ 12, 31 (L. 1896, c. 908). duct from its assets the whole as- 
 
 '^ People ex rel. Equitable ' Gas sessed value." 
 Light Co. V. Parker, 144 N. Y. 94, » People ex rel. Bankers' Safe 
 
 39 N. E. 13 (1894); L. 1857, c. 456. Deposit Co. v. O'Donnel, 54 Misc. 
 
 See now Tax L. § 12. 5, 105 N. Y. Supp. 457 (1907). 
 
 "People ex rel. Cord Meyer Co. Safe-deposit vaults were the realty. 
 
§ 613 . TAXATION 749 
 
 poration it is competent for the commissioners to take the 
 quantity or actual value of the real estate, together with 
 the other property of the corporation, and after the value 
 thereof is found, they are not required to deduct therefrom the 
 actual value of the real estate which has been included in 
 estimating the value of the capital, the exemption of the real 
 estate being only to the extent that it has beeft assessed."* 
 Commissioners assessing for taxation the capital stock of a 
 corporation need not consider its real estate as worth only the 
 amount for which it is assessed for taxation, but may estimate 
 its actual value though in excess of its assessed value/" Com- 
 missioners of taxes cannot fix the value of the same real 
 estate of a corporation at a different price to ascertain the 
 amount for which the corporation is liable upon its capital 
 stock and surplus froin the price at which such realty was 
 assessed for the purpose of taxation as real estate." Commis- 
 sioners, assessing for taxation the capital stock of a domestic 
 corporation which they find has no other property going to 
 make up its capital and surplus than what is invested in cer- 
 tain land and buildings, cannot place thereon for the purposes 
 of taxation a larger figure than they are prepared to allow 
 when they are required to deduct the value of the real estate 
 for the purpose of seeing what portion of the capital and 
 surplus is liable to taxation." " It will not always be easy 
 to determine the assessed value of the real estate to be 
 deducted from the actual value of the capital stock. There 
 can be no difficulty when the real estate is situated in the same 
 ward or town where the capital stock is assessable, or even 
 when it is situated in the same city or county. . . . But 
 if the real estate should be in another State or country, or if, 
 for any other reason, its assessed value cannot be obtained, 
 then as the best and nearest substitute for it, the price paid, as 
 the presumed value in the absence of proof or of any other 
 standard, may be taken as the assessable value." " In deter- 
 mining the tax on the capital stock of a corporation which has 
 
 ^People ex rel. Equitable Gas- 97 N. Y. Supp. 47 (1906); Tax L. 
 
 Light Co. V. Barker, 66 Hun, 21, § 21 (L. 1899, c. 712), and Tax L. 
 
 20 N. Y. Supp. 797 (1892); afiE'd § 12 (L. 1899, c. 712). 
 
 137 N. Y. 544, 33 N. E. 336. • " People ex rel. New York Real 
 
 " People ex rel. Clearing House Estate Assn. v. Barker, 29 A. D. 
 
 V. Barker, 31 A. D..315, 51 N. Y. 325, 51 N. Y. Supp. 567 (1898). 
 
 Supp. 1102 (1898) ; aff'd 158 N. Y. "People ex rel. Twenty- Third 
 
 709, 53 N. E. 1130; aff'd 171 U. S. St. E. R. Co. v. Conunr's of Taxes, 
 
 276, and 179 U. S. 287; L. 1857, 95 N. Y. 554 (1884) ; L. 1857, c. 456; 
 
 0. 456. See now Tax L. § 12. L. 1853, c. 654. See now Tax L. 
 
 ^'^ People ex rel. Merchants' Real § 12. 
 Estate Co. v. Wells, 110 A. D. 194, 
 
750 BUSINESS CORPORATIONS IN NEW YORK § 613 
 
 been entirely expended in real estate the assessors may 
 properly estimate the stock at par and deduct only the 
 assessed value of the realty (which is but one-half of its cost)." 
 A corporation assessed upon its capital stock cannot deduct 
 the value of vaults, admittedly an interest in real property, at 
 their assessed value if in assessing the premises in which they 
 are build for the real estate tax the assessors made the assess- 
 ment on such premises in ignorance of the existence of the 
 vaults and without, therefore, considering their value." An 
 interest acquired by a corporation in purchasing various 
 vaults is an interest in real property and must be treated as 
 such in determining its liability to tax upon its capital stock.^* 
 In determining the tax on the capital stock of a corporation 
 owning real estate in a foreign State, the assessed value of 
 such realty should be deducted as being its actual value in the 
 absence of evidence of actual value deemed by the assessors 
 more conclusive than the assessment thereof." When a cor- 
 poration liable to tax upon its capital stock has real estate 
 outside the State, it is the actual value thereof which is to be 
 deducted from its property liable to tax; and the price paid 
 for the real estate, in the absence of other and better evidence, 
 may be taken as representing such value." Real property in 
 other states as well as tangible property without the State 
 should be deducted from the amount of the assets constituting 
 the capital or surplus of a corporation in which they are 
 included, in fixing the amount at which it should be assessed 
 for purposes of taxation.^" 
 
 ^* People ex rel. Butchers' Hide reasonable assumption that real 
 
 & Melting Co. v. Asten, 100 N. Y. property is worth a capital sum 
 
 597, 3 N. E. 788 (1885); L. 1857, equal to that represented by the 
 
 e. 456, § 3. See now Tax L. § 12. capitalization of its ordinary net 
 
 ^^ People ex rel. Knickerbocker rental. So, also, the property of a 
 
 Safe Deposit Co. v. Wells, 181 railroad corporation may be worth 
 
 N. Y. 245, 73 N. E. 961 (1905); a sum capitalized on the basis of 
 
 Tax L. § 12. its average income and earning ca- 
 
 ^° People ex rel. Knickerbocker pacity;" but a railroad's franchise 
 
 Safe Deposit Co. v. Wells, 181 to run over the road constituting 
 
 N. Y. 245, 73 N. E. 961 (1905) ; its real property cannot be eonsid- 
 
 Tax L. § 12. ered part of the actual value of 
 
 '' People ex rel. Fairchild Chem- the land, 
 
 ieal Co. v. Coleman, 115 N. Y. 178, " People ex rel. Delaware & Hud- 
 
 21 N. E. 1056 (1889); L. 1857, son Canal Co. v. Barker, 23 Misc. 
 
 c. 456, § 3. See now Tax L. § 12. 188, 51 N. Y. Supp. 1105 (1897) ; 
 
 "People ex rel. Panama R. R. L. 1857, e. 456. See now Tax L. 
 
 Co. V. Comrs. of Taxes, 104 N. Y. § 12. 
 
 240, 10 N. E. 437 (1887) ; L. 1857, On constitu-tionality of statute 
 
 c. 456. " In many cases it is a which allows a deduction of only 
 
§§ 614, 615 TAXATION 751 
 
 § 614. Id.: Stock In Other Corporations — The statute 
 requires taxation of the capital stock of a corporation after 
 deduction, among other things, of " all shares of stock in 
 other corporations actually owned by such company which are 
 taxable upon their capital stock under the ' laws of New 
 York."==" 
 
 § 615. Id.: Debts and Liabilities. — ^Although nothing is said 
 in the statute imposing a tax upon a corporation's " capital 
 stock " about the deduction of debts, yet nothing is said 
 against doing so ; and debts may be deducted because the value 
 of the capital stock of necessity must largely depend upon the 
 amount of the company's indebtedness.^ A corporation is 
 " entitled to have its indebtedness deducted from the value 
 of its corporate assets which constituted its capital stock, or 
 capital, as distinguished from its actual share stock ' ' in deter- 
 mining the tax upon its capital stock.^ In determining the 
 tax payable by a corporation on its capital stock, " while 
 . . . [the] indebtedness [of the company] is a proper sub- 
 ject for consideration in estimating the value of the stock 
 there is no authority for its deduction from the value of the 
 stock after an estimate of the same has been made. " ^ " Debts 
 are deductible in ascertaining the assessable value of the capi- 
 tal of a corporation ; ' ' but if its capital is unimpaired the com- 
 missioners are not bound to deduct debts, because they are 
 presumably offset by assets above the capital which otherwise 
 would be liable to taxation.* Assessors are not precluded from 
 assessing for taxation the capital stock of a corporation 
 according to their best judgment and information or bound 
 to find it not subject to' any tax because of an affidavit that its 
 debts exceeded the value of all its personalty.^ When the 
 evidence before the commissioners of taxes and assessments 
 of New York City is full and uncontradicted as to all neces- 
 sary facts about its assets and liabilities, they cannot, because 
 its capital is unimpaired, assume it to be possessed of undis- 
 
 the assessed value of the real es- ^People ex rel. Butchers' Hide & 
 
 tate in assessing the corporate Melting Co. v. Asten, 100 N. Y. ' 
 
 stock of a corporation, see note in 597, 3 N. E. 788 (1885) ; L. 1857, 
 
 30 L.R.A.(N.S.) 704. c. 456, § 3. See now Tax L. § 12. 
 
 ^"Tax L. § 12 (L. 1909, c. 62). - * People ex rel. Equitable Gas 
 
 ^People ex rel. Cornell S. Co. v. Light Co. v. Parker, 144 N. Y. 94, 
 
 Dederick, 161 N. Y. 195, 55 N. E. 39 N. E. 13 (1894) ; L. 1857, c. 456. 
 
 927 (1900) ; Tax L. § 12. See now Tax L. § 12. 
 
 ^ People ex rel. Second Ave. R. R. ° People ex rel. Utiea & Black 
 
 Co. V. Barker, 141 N. Y. 196, 36 River R. R. Co. v. Shields, 6 Hun, 
 
 N. E. 184 (1894); L. 1857, e. 456, 556 (1876). 
 § 3. See now Tax L. § 12. 
 
752 BUSINESS CORPORATIONS IN NEW YORK § 615 
 
 closed assets sufficient to pay the disclosed indebtedness, and 
 therefore refuse to deduct any of such indebtedness." ' ' When 
 the assessors, in making an assessment of personal property, 
 ascertain the amount of the owner's liabilities and make all 
 the deductions on account thereof to which he is entitled, and 
 •assess him for the balance thus obtained, he cannot then again 
 claim against the assessment thus made another deduction of 
 his liabilities and thus entirely wipe out the assessment. 
 Assessors may assess an owner for the whole amount of his 
 personal property and then allow him deductions on account 
 of his liabilities when he appears and claims it, or they may 
 allow him the deductions when they make the assessment, and 
 then he has no grievances to complain of.'" In assessing the 
 tax upon a corporation's capital stock no presumption can be 
 indulged that its indebtedness represents property to tho 
 amount of such indebtedness in addition to that represented 
 by its capital stock.* The capital stock of a corporation can- 
 not be assessed as of any value for purposes of taxation when 
 its entire assets are insufficient to pay bonds for which it is 
 liable." In determining the value of the capital stock and 
 surplus of a domestic corporation for assessment purposes 
 the commissioners may not consider as part thereof bonds of 
 another corporation payment of the principal and interest of 
 which has been guaranteed by the assessed corporation." A 
 guarantee and bonding company cannot deduct from the 
 assessed value of its capital stock an amount called "unearned 
 premiums held as reinsurance reserve, as required by law, 
 being amount necessary to reinsure outstanding risks " when 
 the only ground for the deduction is that before the next year 
 should roll around it might be required to pay a considerable 
 sum on account of contracts then outstanding for which it 
 had received premiums.^^ A corporation assessed for taxa- 
 tion on its personal property which has given its notes for 
 stock in another corporation and has been taxed oij the money 
 which is evidenced by such notes is entitled to deduct from 
 
 * People ex rel. Seidenberg Co. v, Yonkers Ry. Co. v. Commsrs. of 
 
 Feitner, 41 A. D. 571, 58 N. T. Taxes, 31 Hun, 32 (1883) ; L. 1857, 
 
 Supp. 713 (1899). c. 456. See now Tax L. § 12. 
 j ' People ex rel. Savings Bank of ^° People ex rel. Delaware & Hud- 
 
 ■ New London v. Coleman, 135 N. Y. son Co. v. Feitner, 61 A. D. 129, 70 
 
 231, 31 N. E. 1022 (1892). N. Y. Supp. 500 (1901); affi'd 171 
 
 ■ 'People ex rel. Manhattan Ry. N. Y. 641, 63 N. E. 786; Tax L. 
 
 Co. V. Barker, 146 N. Y. 304, 40 §§ 6, 12 (L. 1896, c. 908). 
 N. E. 996 (1895); L. 1857, c. 456, "People ex rel. National Surety 
 
 S 3. See now Tax L. § 12. Co. v. Feitner, 166 N. Y. 129, 59 
 
 ^People ex rel. West Side & N. E. 731 (1901). 
 
§§ 616, 617 TAXATION 753 
 
 its personalty taxed the debt evidenced by sucb notes/^ Sub- 
 scriptions prepaid for periodicals to be published by a sol- 
 vent corporation are not debts to be deducted in determin- 
 ing the capital stock tax to be paid by it, except to the extent 
 of the cost of furnishing the periodicals to the subscribers 
 who have paid in advance for the unexpired terms of their 
 subscriptions.^^ An amount received by a corporation for 
 patterns from merchants to whom it sold them under agree- 
 ment to repurchase them at a percentage of the price paid 
 therefore by the merchants if not sold is not a debt to be 
 deducted in ascertaining the capital stock tax to be paid by 
 the corporation." 
 
 § 616. Id.: Franchises.— The value of the franchise of a 
 corporation may not be assessed as being part of its person- 
 alty in taxing the latter locally." Franchises cannot be 
 valued or included in an assessment against a corporation's 
 capital and surplus as they are taxed under another statute." 
 In assessing the tax npon a corporation's capital stock the 
 value of the franchises possessed by it cannot properly be 
 included." 
 
 § 617. Id.: Patents.^In determining the assets of a corpora- 
 tion for local taxation of its personal property an amount 
 invested in United States patent rights should be deducted; 
 interest accrued on its outstanding mortgage -debts should be 
 allowed as a debt; and an estimated amount for accrued 
 annual taxes and depreciation in value of assets should not be 
 allowed.'* 
 
 "JPeople ex rel. Keppler v. Bar- ^^ People ex rel. Coney Island 
 
 ker, 22 A. D. 120, 47 N. Y. Supp. E. R. Co. v. Neff, 15 A. D. 585, 44 
 
 958 (1897); afPd 156 N. Y. 661. N. Y. Supp. 810 (1897). 
 
 "People ex rel. Butterick Pub- ^''People ex rel. Manhattan R. 
 
 lishing Co. v. Purdy, 153 A. D. 665, Co. v. Barker, 152 N. Y. 417, 46 
 
 138 N. Y. Supp. 707 (1912) ; mod. N. E. 875 (1897) ; L. 1857, c. 456. 
 
 207 N. Y. 771, 101 N. E. 1116; on See now Tax L. § 12. 
 
 dissenting opinion of Scott, J., be- "People ex rel. Manhattan Ry. 
 
 low; Tax L. § 12. Co. v. Barker, 146 N. Y. 304, 40 
 
 " People ex rel. Butterick Pub- N. E. 996 (1895) ; L. 1857, e. 456, 
 
 lishing Co. v. -Purdy, 153 A. D. 665, § 3. See now Tax L. § 12; People 
 
 138 N. Y. Supp. 725 (1912) ; mod. ex rel. Brooklyn R. R. Co. v. Neff, 
 
 207 N. Y. 771, 101 N. E. 1116; Tax 19 A. D. 590 (1897) ; aff'd 154 N. Y. 
 
 L. § 12. 763, L. 1881, c. 361. See now Tax 
 
 Deduction of corporaite indebted- L. § 182. 
 
 ne^ as element in fixing value of '* People ex rel. New York & New 
 
 capital stock for taxation see note Jersey Telephone Co. v. Neff, 15 
 
 in 58 L.R.A. 577. A. D. 8, 44 N. Y. Supp. 46 (1897) ; 
 
 Deduction in valuation of capital aff'd 156 N. Y. 701, 51 N. E. 1093. 
 stock of corporation, see note in 58 
 L.R.A. 594. 
 
 B. C.N.Y.— 48 
 
754 BUSINESS CORPOEATIONS IN NEW YORK §§ 618, 619 
 
 § 618. Id.: Good-Will.—" Good-will, like a franchise, is & 
 privilege which the courts will protect as a right of value. As 
 such it is property, though intangible. Under the Franchise 
 Tax Law of corporations it is taxable with the franchises as 
 forming a part of the value of the share stock (citations). 
 But good-will, as such, is not taxable for general town, county 
 or municipal purposes. It is not real estate, nor is it personal 
 property as defined by the provisions of the Tax Law . . . 
 It consequently follows that good-will is not taxable property 
 for town, county and municipal purposes, and that debts or 
 liabilities contracted in the purchase of such property should 
 not be deducted from the value of the taxable personal prop- 
 erty."" "The good-will of a corporation, though of an 
 intangible nature, is taxable with the franchise, as forming a 
 part of the value of the share stock. " ^° In determining 
 whether or not the Capital stock of a corporation is fully paid 
 it is proper to permit a witness thoroughly conversant with 
 the business, the good-will of which formed part of the con- 
 sideration for the issue of the corporation's stock, and with 
 its management, to give his opinion of the value of the good- 
 will.^ ". . . the value of good-will may be fairly arrived 
 at by multiplying the average net profits by a number of 
 years, such number being suitable and proper, having refer- 
 ence to the nature and character of the pa:rticular business 
 under consideration, and the determination of such proper 
 number of years should be submitted to and determined by 
 the jury as a question of fact, dependent upon the evidence 
 before them in each action. ' ' ^ 
 
 § 619. Id.: Dividends. — A corporate dividend declared 
 before but payable after the date on which the corporation's 
 taxable status is by statute to be determined is not taxable as 
 part of its capital stock.^ It is proper to include among the 
 assets of a corporation to be taxed dividends declared but left 
 with the company and invested in its business.* 
 
 "People ex rel. Cornell S. Co. v. A. D. 84, 100 N. Y. Supp. 659 
 
 Dederick, 161 N. Y. 195, 55 N. E. (1906); aff'd 196 N. Y. 510, 89 
 
 927 (1900) ; Tax L. § 6. N. E. 1114. 
 
 '° People ex rel. New York & ' People ex rel. United States 
 
 Queens Gas Co. v. Feitner, 58 A. D. Trust Co. v. Barker, 86 Hun, 131, 
 
 555, 69 N. Y. Supp. 27 (1901) ; Tax 33 N. Y. Supp. 388 (1895) ; L. 1857, 
 
 L. § 12 (L. 1896, c. 908). c. 456, § 3. See now Tax L. § 12. 
 
 ^ White, Corbin & Co. v. Jones, * People ex rel. Hawley Box Co. 
 
 79 A. D. 373, 79 N. Y. Supp. 583 v. Barker, 23 A. D. 532, 48 N. Y. 
 
 (1903). Supp. 557 (1897). There were only 
 
 ^ Von Au V. Magenheimer, 115 four stockholders and with their 
 
§ 620 TAXATION 755 
 
 § 620. Id.: Place of Taxation.— All the personal estate of 
 every incorporated company liable to taxation on its capital 
 must 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.° 
 " The State of New York does not seek to impose a double 
 taxation upon the same property, nor will it deprive one 
 county of the State of the revenue to be afforded by taxation 
 of the assessable property within that county because another 
 county, which is a more important financial center, may have 
 at an earlier date in the year made an assessment upon per- 
 sonal property rightfully assessable in the former county."* 
 ' ' The general statute prescribing where corporations are to 
 be taxed was framed to meet two classes of cases : first, those 
 which had a principal office, fixed by their certificate, in 
 accordance with the mandate of their charter, or the general 
 law under which they were organized; and, second, those 
 which had no such principal office fixed by their certifi- 
 cate of incorporation, because their charter did not require it. 
 The former was to be taxed in the locality of their principal 
 office. The latter in the ' place for transacting the financial 
 concerns of the company. ' " ' The principal office of a cor- 
 poration for taxation purposes is where its by-laws put its 
 principal place of business, if the special act incorporating 
 it empowers it to fix its residence by its by-laws.® A statement 
 in a certificate of incorporation of the city in which the cor- 
 poration's operations are to be carried on is conclusive upon 
 it for purposes of personal property taxation.' Under 
 statutes providing respectively that corporations be assessed 
 in the town or ward where is their principal office, and that 
 
 consent tlie dividends declared poration; pursuant to the law of 
 
 never were called for. L. 1855, incorporation, locates only the 
 
 c. 37. " principal oflBce for managing the 
 
 ^ Tax L. § 11 (L. 1909, e. 62). affairs of such company" is imma- 
 
 ° People ex rel. General Electric terial. 
 
 Co. V. Barker, 91 Hun, 590, 36 ^ People ex rel. General Electric 
 
 N. Y. Supp. 842 (1895); afl'd 149 Co. v. Barker, 91 Hun, 590, 36 
 
 N. Y. 589, 44 N. E. 1127. N. Y. Supp. 842 (1895) ; aff'd 149 
 
 ^ Union Steamboat Co. v. City of N. Y. 589, 44 N. E. 1127; R. S. 
 
 Buffalo, 82 N; Y. 351 (1880); 1 pt. 1, c. 13, tit. 2, art. 1, § 6; 1 
 
 R. S. 289, § 6. That the statute R. S. 389; Gen. Corp. Act (L. 
 
 says corporations " shall be as- 1892, c. 687), § 3. 
 
 sessed in the town or ward where ' Chesebrough Mfg. Co. v. Cole- 
 
 the principal office . . . shall man, 44 Hun, 545 (1887) ; incor- 
 
 be " while the certificate of incor- porated under L. 1848, c. 40. 
 
756 BUSINESS CORPORATIONS IN NEW YORK § 620 
 
 certificates of incorporation state the name of the town and 
 county in which corporations' operations are to be carried 
 on, corporations must he assessed in the last mentioned place, 
 irrespective of the relative proportion of the pecuniary busi- 
 ness which is managed at various localities." " In the case 
 of a corporation which has a principal office or place for 
 transacting its financial concerns, it is plain that the place 
 where the office is located is the place of assessment of its 
 personal estate, irrespective of its actual sif MS. " " ". . . . 
 in case a statute under which a corporation is organized 
 requires that its principal place of business or its principal 
 office shall be designated in its certificate of organization, the 
 statement in the certificate in respect thereto is, as against 
 the corporation, conclusive evidence of its residence, unless 
 its residence has been changed pursuant to some statute," 
 and a qualification in such certificate as to such residence is 
 surplusage." The statement, pursuant to statute, by a cor- 
 poration in its certificate of incorporation, of its principal 
 place of business, is conclusive against it for taxation pur- 
 poses unless its residence has heen changed pursuant to some 
 statute.^' " When a statute under which a corporation is 
 organized requires that it be stated in the articles of incor- 
 poration in what place the principal office for the manage- 
 ment of its affairs is to be situated, and the location of its 
 principal office is stated in the articles, the statement is con- 
 clusive for the purposes of taxation . . . ; " but " when 
 a statute under which a domestic corporation is organized 
 does not fix its residence, or require that its place of business 
 or of its principal office shall be stated in its articles of asso- 
 ciation, its residence or domicile is deemed to be where its 
 principal place of business is situated (citations) ; and when 
 
 " Oswego starch Factory v. Dol- N. Y. Supp. 269 (1895) ; aff'd 147 
 
 loway, 21 N. Y. 449 (1860) ; 1 R. S. N. Y. 715, 42 N. E. 725; Gen. Corp. 
 
 389, § 6, and Gen. Mfg. Act, L. L. § 3 (L. 1892, e. 687, § 3). 
 
 1848, c. 40 ; Western Transporta- " . . . should it appear that the 
 
 tion Co. V. Scheu, 19 N. Y. 408 location of its principal office was 
 
 (1859); 1 R. S. 389, § 6, and L. willfully misstated in the certifl- 
 
 1854, c. 232. cate, or in ease the corporation 
 
 ^^ People ex rel. Bay State Shoe should change its principal place 
 
 & Leather Co. v. McLean, 80 N. Y. of business, without effecting a 
 
 254 (1880) ; 1 R. S. 414, § 6. legal change of residence, for the 
 
 ^^ People ex rel. Edison Electric purpose of evading taxation, it 
 
 Co. V. Barker, 91 Hun, 594, 36 might present a case under section 
 
 N. Y. Supp. 844 (1895); L. 1848, 1798 of the Code of Civil Proee- 
 
 c. 40 and L. 1892, e. 691, § 2. dure for the attention of the At- 
 
 ^' People ex rel. Knickerbocker tomey-General. ' ' 
 Press V. Barker, 87 Hun, 341, 34 
 
§§ 621, 622 TAXATION 757 
 
 the residence of such a corporation is not fixed pursuant to 
 statute it may change its principal office or place of business 
 from where it was first established to any place within the 
 State wherein it is actually engaged in carrying on its busi-. 
 ness pursuant to authority conferred by its charter . . ." " 
 
 § 621. Id.: Procedure of Assessing Real and Personal Prop- 
 erty (Including Capital Stock) Taxes; Ascertainment of Prop- 
 erty Exempt. — By September first each year the boards of 
 assessors of the several towns and the boards or officials 
 charged with assessing property for taxation of the several 
 cities must furnish the clerks of the boards of supervisors of 
 their respective counties (or the city clerk of the city in the 
 case of New York City) a full and complete list and state- 
 ment of all property situated in their respective districts 
 which is exempt or partially exempt from taxation under the 
 laws of New York; and such clei;ks of the boards of super- 
 visors (or city clerk in the case of New York City) must by 
 October first transmit such completed lists or statements to 
 the tax commission of the State, which, in turn must tabulate 
 the statements and publish such tabulation in its annual 
 report to the Legislature.^^ 
 
 § 622. Id.: Ascertainment of Property and Corporations 
 Taxable. — ^Between January first and July first the assessors 
 in each tax district must ascertain by diligent inquiry all 
 the property and the names of all the persons taxable therein.^* 
 Between June first and fifteenth the county clerks in every 
 county, except those counties which contain a city of the 
 second class or which are wholly situate within the corporate 
 limits of a city, must give to each town clerk in his county a 
 statement of the name and names and addresses of the 
 directorate of every stock corporation, certificate of incor- 
 poration of which has been filed with him in the past year, 
 which has its principal business office or chief place of busi- 
 ness — according to its certificate of incorporation — in such 
 town clerk's town, village or hamlet; and each such town 
 clerk must then mail a notice that he has filed such statement 
 in his office to each of the assessors of his town." 
 
 " Austen v. Hudson Eiver Tele- sessors in taxing capital stock of 
 
 phone Co., 73 Hun, 96, 25 N. Y. corporation, see note in 58 L.R.A. 
 
 Supp. 916 .(1893) ; L. 1848, c. 265, 612. 
 
 1 R. S. 389, § 6. For a discussion of different 
 
 ^^ Tax L. § 15 (L. 1916, c. 323). methods and procedure in taxation 
 
 "Tax L. § 20 (L. 1916, c. 323). of corporations, see note in 60 
 
 "Tax L. '§ 29 (L. 1909, c. 62). L.E.A. 372. 
 
 On practice and procedure of as- 
 
758 BUSINESS CORPORATIONS IN NEW YORK § 623 
 
 § 623. Id.: Assessment on the Rolls.— The State Tax Com- 
 mission must adopt regulations and rules for the preparation 
 and use of assessment-rolls and advise with and instruct 
 boards of assessors and other officers as to their duties in 
 respect thereto; and the assessors must prepare the assess- 
 ment-rolls in form prescribed and approved by the Tax Com- 
 mission.'^* Assessment-rolls must be sufficiently classified and 
 arranged with respect to number of parts, and columns in 
 each part, as to identify (1) each separately assessed parcel 
 or portion of real estate, with the approximate quantity of 
 the square feet, square rods or acres contained therein, or a 
 statement of the linear dimensions thereof; (2) each special 
 franchise; (3) the name of each corporation taxable on per- 
 sonal property; (4) the name of each corporation taxable on 
 capital stock; and assessments of real property — other than 
 special franchises — must be carried in a separate part of 
 the roll from the assessments of personal property. In addi- 
 tion, the form of assessment-roll must indicate in appropriate 
 columns the district in which is situated (1) each parcel or 
 portion of real property, (2) each special franchise, (3) each 
 corporation subject to taxation for personal property, and 
 provide for the entry of assessments of real property, per- 
 sonal property and special franchises." More particularly, 
 the assessors must assess corporations liable to taxation in 
 their respective districts upon their assessment-rolls in five 
 columns: (1) In the first column (a) the name of each corpo- 
 ration; under the name (b) the amount of its capital stock 
 paid in and secured to be paid in, (c) the amount paid by it 
 for real property then owned by it wherever situated, (d) the 
 amount of all surplus profits or reserve funds exceeding ten 
 per centum of its capital after deducting therefrom the 
 amount of such 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 estate (except special franchises) owned by such cor- 
 poration and situated within their tax district; (3) In the 
 third column, the actual value of such real property (except 
 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 then belonging to it, wherever such real estate may 
 
 "Tax L. § 21, subds. 1 and 7 "Tax L. § 21 (L. 1916, c. 323). 
 (L. 1916, c. 323). 
 
§ 623 TAXATION 759 
 
 be situated, and the amount of stock if any belonging to the 
 People of the State and • to incorporated literary and 
 charitable institutions _; and (5) In the fifth column, the value 
 of any special franchise owned by it as fixed by the State 
 Board of Tax Commissioners.^" The assessors of any tax 
 district must either on their own motion or upon the applica- 
 tion of any taxpayer therein enter in the assessment-roll of 
 the current year any property shown to have been omitted 
 from the assessment-roll of the preceding year, at the valua- 
 tion of that year, or, if not then valued, at such valuation as 
 the assessors may determine for the preceding year; but 
 assessments of special franchises that were omitted must be 
 entered at the valuation fixed and equalized by the tax com- 
 mission.^ On failure, through mistaken belief in its exemp- 
 tion, to assess a corporation's property for taxation one year, 
 it may be assessed next year for the omitted year if notice is 
 given of such assessment.^ The assessment-roll directed by 
 law to be made up by assessors of corporate capital stock 
 may bfe made up substantially as follows : "In the first 
 column insert the name of the corporation ; in the second the 
 quantity of real estate, in the town or ward; in the third 
 column the assessed value of the real estate, and in the fourth 
 column the value of'the capital stock after making the exemp- 
 tions and deductions required . . . " ^ " There is nothing 
 in any of these provisions of the statute which requires that 
 the roll, as originally completed for review, shall be made 
 out in a single volume or upon sheets of paper attached 
 together, or which forbids that it should be made out in parts 
 or upon detached sheets, which when brought together con- 
 stitute the roll, completed.for purposes of review; least of all 
 is there anything to forbid the re-engrossment of the roll 
 after the corrections of the review-day. " * 
 
 2° Tax L. § 32 (L. 1909, e. 62). objeotion is based are, that the roll 
 
 ^ Tax L. § 34 (L. 1916, c. 323). was first made in three parts; that 
 
 ^ People ex rel. Brooklyn City it was so on review day, when it 
 
 R. E. Co. V. Board of Assessors of was inspected by the relator, which 
 
 Brooklyn, 92 N. Y. 430 (1883); was duly heard to complain that 
 
 L. 1865, c. 452; L. 1880, c. 542. the valuation of its property was 
 
 'People ex rel. Twenty-third St. excessive, and a very substantial 
 
 R. R. Co. V. Comm'rs of Taxes, 95 reduction was made in such valua- 
 
 N. Y. 554 (1884); L. 1857, c. 456; tion; and that afterwards the three 
 
 L. 1853, e. 654. parts of the roll were engrossed 
 
 * People ex rel. Delaware, Lacka- into a single roll, which was duly 
 
 wanna & Western R. R. Co. v. verified, as the completed roll, by 
 
 Clapp, ,64 Hun, 547, 19 N. Y. Supp. the assessors and delivered to the 
 
 531 (1892) ; 1 R. S. 390, § 8 e* seq. supervisor of the town." 
 
 ' * Briefly, the facts on which the 
 
760 BUSINESS CORPORATIONS IN NEW YORK § 624 
 
 § 624. Id. : Statements and Reports By Corporations, Govern- 
 ing Statutes. — On or before June first every moneyed or stock 
 corporation deriving an income or profit from its capital or 
 otherwise must make a written statement, through its presi- 
 dent or other proper officer, in the form, prescribed by the 
 State Tax Commission, and deliver it to one of the assessors 
 of the tax district in which the company is liable to be taxed ; 
 and such statement must be verified by an officer of the cor- 
 poration making the report to the effect that it is in all 
 respects just and true.' The statement must specify: (1) 
 The real property, if any, owned by such company and (a) 
 the tax district in which such realty is situated and (unless a 
 railroad corporation) (b) the sums actually paid therefor; 
 
 (2) the capital stock actually paid in and secured to be paid 
 in, excepting therefrom (a) the sums paid for real property 
 and (b) 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 com- 
 pany is situated, or, in case it has no principal office, the tax 
 district in which its operations are carried on." If such 
 statement is not made within twenty days after the first day 
 of June or is insufficient, evasive or defective, the assessors 
 may compel the corporation by maiidamus to make a proper 
 statement.' A statute requiring every corporation within 
 twenty days from the first day of January to make a report, 
 which must be published and filed, requires that it must be 
 made within twenty days following (and not preceding) the 
 first of January, although it may be filed and published within 
 a reasonable time thereafter.' In case of neglect to furnish 
 such statements within thirty days after the time above pro- 
 vided the company so neglecting forfeits to the People of New 
 York State for each statement so omitted to be furnished the 
 sum of two hundred and fifty dollars, and it is the duty of the 
 Attorney-General to prosecute for such penalty upon informa- 
 tion which must be furnished him by the Tax Commission; 
 but the Tax Commission may in its discretion discontinue 
 such suit upon such statement being furnished and the costs 
 of the suit being paid, if it is satisfied that such omission was 
 not wilful.' 
 
 ''Tax L. 8 27 (L. 1916, c. 323). O'Keefe, 44 Hun, 64 (1887); aff'd 
 
 "Tax L. I 27 (L. 1916, c. 323). 120 N. Y. 603, 24 N. E. 993; L. 
 
 ' Tax L. § 27 (L. 1916, e. 323). 1848, c. 40, § 12. 
 
 ^Cincinnatti Cooperage Co. v. "'Tax L. § 28 (L. 1916, e. 323). 
 
§ 625 TAXATION 7G1 
 
 § 625. Id.: How Far Binding On Taxing Authorities. — 
 
 '' The reports of corporations should receive a reasonable 
 interpretation and excessive nicety or exactness should not be 
 exercised in bringing them to the test of the statutes."^" 
 " In defining the powers and duties of the department of 
 taxes the Court of Appeals has established certain principles : 
 (1) The action of the commissioners must be based upon facts 
 and evidence before them, and must not be capricious, 
 arbitrary or fanciful. (2) The commissioners must return 
 the information and evidence upon which they acted. (3) 
 Where nothing is returned beyond the statements filed by the 
 relator, these statements must be regarded as the basis of 
 their action and as containing the only facts upon which the 
 assessment was made. (4) Statements which are not denied, 
 or as to which the return is silent, must be regarded as 
 true. ' ' " The commissioners of taxes have the right to rely 
 on a statement of assets of a corporation made by it.^^ The 
 inquiry in taxing a corporation's capital and surplus is their 
 actual value; and if the information asked is given the com- 
 missioners in reasonably plain and full form, is uncontra- 
 dicted, not objected to as insufficient, and not subject to 
 reasonable doubt, they cannot question it or assess in dis- 
 belief of it.^' It is the value of a corporation's capital stock, 
 and not its share stock, which assessors are to ascertain; aud 
 if the commissioners do not require an examination of the 
 corporate officers and books they are bound by the statement 
 of the value of the gross assets given them." A sworn state- 
 ment by a corporation to tax commissioners must be accepted 
 as the basis for their assessment unless it be otherwise con- 
 tradicted; and such contradiction does not follow from an 
 assessment by them based on the market value of the stock or 
 the dividends declared thereon." The commissioners cannot 
 
 ^'' Whitney Arms Co. v. Baxlow, "People ex rel. Brooklya Union 
 
 63 N. Y. 62 (1875) ; Gen. Mfg. Act, Gas Co. v. Feitner, 82 A. D. 368, 81 
 
 L. 1848, e. 40, § 12, as amend 'd L. N. Y. Supp. 898; Tax L. § 12. 
 
 1853, c. 333. Commissioners cannot infer that, 
 
 " People ex rel. Consolidated because $15,000,000 of bonds had 
 
 Telegraph, etc., Co. v. Barker, 7 been issued (no part of which had 
 
 A. D. 27, 39 N. Y. Supp. 776 been used to buy non-taxable prop- 
 
 (1896); aff'd 151 N. Y. 639, 45 erty), they had been applied to 
 
 N. E. 1133. property of the corporation in ad- 
 
 ^^ People ex rel. German Looking dition to the paid-up capital. 
 
 Glass Plate Co. v. Barker, 75 Hun ^^ People ex rel. Mutual Gas Light 
 
 6, 26 N. Y. Supp. 971 (1894). Co. v. Wells, 42 Misc. 606, 87 N. Y. 
 
 "People ex rel. Edison Electric Supp. 595 (1904). 
 Illuminating Co. of N. Y. v. Barker, 
 139 N. Y. 55, 34 N. E. 722 (1893). 
 
762 BUSINESS CORPORATIONS IN NEW YORK § 626 
 
 disregard a statement made for them under oath by a corpo- 
 ration's officer for taxation purposes, if they make no further 
 inquiry; and the relator may cancel the tax they impose if 
 they adopt a method of assessment erroneous on the state- 
 ment's face." When there is nothing before commissioners 
 of assessment, on an application and hearing for correction 
 of their assessment of a corporation, to contradict its state- 
 ment and testimony, they are bound to consider them true; 
 and if they reject them and their act is challenged by cer- 
 tiorari they must not only in the return set forth their con- 
 clusion but the evidence as well so that the court may review 
 it." Commissioners of taxes " are not bound by statements 
 [by a corporation seeking correction of its tax assessment] 
 which are contradicted and which they disbelieve where good 
 reasons exist for such disbelief (citation), but where a state- 
 ment is made, the truth of which is not disputed, a mere sur- 
 mise that it may not be true does not justify assessing officers 
 in rejecting such statement or acting otherwise than in accord- 
 ance therewith. ' ' " 
 
 § 626. Id.: Examination of Assessments and Complaints. — 
 The assessors must complete the assessment-roll by August 
 first and give notice they will review their assessments on the 
 third Tuesday of August next following, up to which time it 
 may be examined, and at which time they must hear and 
 determine all complaints in relation to such assessments 
 brought before them — for which purpose they may adjourn 
 from time to time." The complainant must file with them a 
 statement under oath specifying the respect in which the 
 assessment complained of is incorrect; and such statement 
 must be made either by the party assessed, or where property 
 is assessed, by some person authorized to make such state- 
 ment, and who has knowledge of the facts stated therein.'"' 
 " A taxing act, which requires a valuation of property as 
 part of the procedure, is unconstitutional unless it provides a 
 grievance day, or an adequate opportunity to be heard and 
 any tax levied under such a statute is void. If, however, a 
 grievance day is provided but notice thereof is not given, 
 
 " People ex rel. Twenty-third St. " share stock " the \nalnie of the f ran- 
 
 R. Co. V. Feitner, 92 A. D. 618, 87 ohise cannot be considered. 
 
 N. Y. Supp. 304 (1904). "People ex rel. Bhumgara Co. v. 
 
 " People ex rel. Consolidated Gas Wells, 93 A. D. 212, 87 N. Y. Supp. 
 
 Co. V. Teitner, 78 A. D. 313, 79 543 (1904) ; afE'd 179 N. Y. 529, 71 
 
 N. Y. Supp. 975 (1903) ; Tax L. N. E. 1136. 
 
 § 12 (L. 1896, c. 908). Before has- ^»Tax L. §§ 36 and 37 (L. 1916, 
 
 ing assessment on earnings, they c. 323). 
 
 must be established. In valuing ^° Tax L. § 371 (L. 1916, c. 323). 
 
§ 626 TAXATION • 763 
 
 while tlie statute is valid, the tax is voidable. The assessors 
 have jurisdiction, but the failure to give notice is an irregu- 
 larity (citation), and the assessment, if attacked in due form 
 and in due time, will be set aside . . . " ^ "In case a cor- 
 poration feels itself aggrieved on account of an assessment 
 made upon its property, and desires to file a statement on 
 ' grievance day,' pursuant to statute, with the board of assess- 
 ors making the same, for the purpose of having such assess- 
 ment reduced, or to enable it to review the same, the tax agent 
 of such corporation will be presuined to have sufficient knowl- 
 edge of the facts relating to the assessment of its property to 
 make him competent, within the meaning of the statute, to 
 verify such statement, and the sources of such knowledge need 
 not be stated. " ^ A statement by a corporation filed with 
 assessors to obtain a revision need not be verified by an officer 
 or agent of the corporation having personal knowledge of the 
 facts, but may be verified on information received from others, 
 provided the sources of the information be stated.^ A corpora- 
 tion assessed for real estate tax cannot apply to the tax board 
 for reduction of the assessment through a corporation doing 
 that kind of business which it never appointed its agent and 
 which had no prior relation to or knowledge of the property.* 
 ". . . in the city and county of New York the right to 
 review an assessment for purposes of taxation is confined to 
 the grounds of illegality and overvaluation. . , . there 
 is no requirement of law that any particular phrase or set 
 form of words should be used by a taxpayer in objecting to 
 an excessive assessment. If it is made distinctly to appear 
 that overvaluation is the ground of his objection, it is imma- 
 terial in what language that objection is expressed. "° 
 ". . . where a person assessed complains because his 
 
 . ^ People ex rel. Bridgeport Sav- sources of information as statements 
 
 ings Bank' v. Feitner, l&l N. Y. 88, furnished and letters written by the 
 
 83 N. E. 592 (1908) ; U. S. R. S. corporation's tax agent. 
 
 § 5219; Tax L. §§ 23, 24, 36; Greater * People ex rel. Trojan Realty 
 
 N. Y. Charter, §§ 892, 895, 898, 899, Corporation v. Purdy, 174 A. D. 702, 
 
 907, 914, 915, 916. 162 N. Y. Snpp. 56 (1916) ; Tax L. 
 
 2 People ex rel. Erie R. R. Co. v. § 37 (L. 1909, c. 62). 
 
 Webster, 49 A. D. 556, 63 N. Y. 'People ex rel. B'roadmiy Im- 
 
 Supp. 574 (1900) ; Tax L. § 36 (L. provement Co. v. Barker, 14 A. D. 
 
 1896, c. 908). 412, 43 N. Y. Supp. 1015 (1897). 
 
 ^ People ex rel. West Shore R. R. " Th« notification is that the prop- 
 Co. V. Johnson, 29 • A. D. 75, 51 erty was assessed at $210,000 more 
 N. Y. Supp. 388 (1898) ; Tax L. than is in accordance with the mar- 
 § 36 (L. 1896, c. 908). The attor- ketable value thereof." Held, suffi- 
 ney verified the statement on in- oieiit. 
 formation and belief and gave the 
 
764 BUSINESS CORPORATIONS IN NEW YORK § 627 
 
 property is assessed proportionately higher than other par-* 
 ticular pieces of property upon the same roll, he should 
 specify such pieces of property and state their value; but 
 where the allegation is that the property of the person com- 
 plaining is assessed proportionately higher than any of the 
 other property in the town . . ., the valuation of all the 
 different properties in the town need not be stated, or the par- 
 ticular instances of value given."" A corporation taxed for 
 its personal property is not barred from insisting upon a 
 reduction because in its first statement for a reduction it did 
 not include the later reduction sought as a debt, provided the 
 commissioners accepted the later statement and it was sub- 
 mitted to them before the expiration of the time limited for 
 the making of complaints.' 
 
 § 627. Id.: Hearing. — The assessors may administer oaths, 
 take testimony and hear proof in regard to any such com- 
 plaint and the assessment to which it relates, and, if not satis- 
 fled that such assessment is erroneous, may require the party 
 assessed or his agent or representative, or any other person, 
 to appear before them and be examined concerning such com- 
 plaint and to produce any papers relating to such assessment 
 with respect to his property or his residence for the purpose 
 of taxation; and, after such examination, must fix tlie value 
 of the property of the complainant and for that purpose may 
 increase or diminish the assessment thereof ; and if any per- 
 son wUftdly neglects or refuses to attend and be so examined, 
 or to answer any material question put to him, such person is 
 not entitled to any reduction of his assessment; and minutes 
 of the examination of every person examined by the assessors 
 upon the hearing of any such complaint must be taken and 
 filed in the office of the town or city clerk.* " It is a familiar 
 principle that a party may waive an objection founded upon 
 want of jurisdiction of the person . . . The proceedings 
 
 ° People ex rel. Erie R. R. Co. v. valuation, pliaced on said property is 
 
 Webster, 49 A. D. 556, 63 N. Y. unequal and not in proportion to 
 
 Supp. 574 (1900) ; Tax L. § 36 the valuations placed upon the other 
 
 (L. 1896, c. 908). The statement, property set forth in said roll, but 
 
 held sufficient, alleged : " That the is in excess thereof, and is assessed 
 
 assessment ... is illegal, in- at a higher proportionate valuation 
 
 correct and erroneous, for the rea- than other properties on the same 
 
 son that the valuation placed on roll." 
 
 said proi>erty is excessive and ^ People ex rel. Keppler v. Barker, 
 
 greater than the full value of said 22 A. D. 120, 47 N. Y. Supp. 958 
 
 property. 4. That the assessment (1897); aff'd 155 N. Y. 661, 49 
 
 is illegal, incorrect and N. E. 1102. 
 erroneous, for the reason that the * Tax L. § 37 (L. 1916, c. 323). 
 
§ ess TAXATION 765 
 
 for the assessment of property are of a judicial character, 
 and the assessors in making an assessment act judicially, and 
 the law provides for the appearance before them of parties 
 deeming themselves aggrieved by their proposed action, and 
 the submission of proofs to support the complaint made, and 
 a final determination by the assessors thereon ; and the rule 
 referred to is applicable to such a proceeding, and precludes 
 a party, who appears before them and asks to have his assess- 
 ment reduced and obtains a reduction and makes no other 
 objection, from subsequently claiming that they had no juris- 
 diction to tax him at all." ' Assessors act in a judicial capac- 
 ity, must be governed by the evidence before them, and when 
 they have no ground in such evidence to dispute it are bound to 
 act in accordance with it." The Commissioners of Taxes and 
 Assessments of New York City cannot tax a corporation on 
 the basis of a statement of one of its officers at the end of an 
 examination before them that he considered its stock worth 
 par and that its capital was unimpaired, if uncontradicted 
 testimony of the witnesses at the examination gives the actual 
 amount of the company's property and liabilities; but they 
 must base their assessment on such actual amount." 
 
 § 628. Id.: Equalization and Cancellation of Assessment and 
 Levy and Collection of Tax. — The text of the statute govern- 
 ing the equalization of assessment and the levy and collection 
 of taxes is given hereinafter." ". . . the determination of 
 an assessing or taxing officer that an assessment made for one 
 
 'Matter of McLean, 138 N. Y. collectible for want of personal 
 
 158, 20 L.R.A. 389, 33 N. E. 821 property out of which to collect the 
 
 (1893). A domestic corporation did same, the . . . corporation against 
 
 most of its business in Suffolk •^hom or against whose proi>erty the 
 
 county but had an office in New said tax was levied may then apply 
 
 York city where it was assessed and to the Supreme Court or County 
 
 took the proceedings mentioned in Court in the county in which is 
 
 the text. located the tax district where said 
 
 ^° People ex rel. Grlen Telephone tax was kvied, for an order can- 
 Co. V. Hall, 130 A. D. 360, 114 celling the said tax, and upon notice 
 N. Y. Supp. 511 (1909). to the president of the village, 
 
 ^'^ People ex rel. Brokaw Bros. v. county treasurer, supervisor of the 
 
 Feitner, 44 A. D. 278, 60 N. Y. town or, in the case of a city, upon 
 
 Supp. 687 (1899). notice to its attorney or to the cor- 
 
 ^^ Tax L. §§ 50-95 ; Tax L. § 302 poration counsel, and upon satisf ac- 
 
 (as amend'd L. 1918, c. 530), enacts tory proof by affidavit, the court 
 
 that " if a personal tax, levied against shall malie an order directing the 
 
 a . . . corporation, on the prop- cancellation of said tax from the as- 
 
 erty of a . . . corporation, is sessment-roU by the county treas- 
 
 void for want of jurisdiction of such urer, comptroller, or other officer in 
 
 . corporation and has been whose custody and control the said 
 
 returned by the proper collector un- roll may be." 
 
766 BUSINESS CORPORATIONS IN NEW YORK § 629 
 
 particular year should be canceled for the reason that the 
 property was not subject to assessment, is [not] conclusive 
 upon succeeding officers against assessments for subsequent 
 years upon the same property or franchise."" A statute 
 permitting application by a corporation for ' ' correction ' ' of 
 the local assessment against its personal property does not 
 permit an increase thereof by the assessors on its application 
 for correction." In determining the question of inequality of 
 assessment under the Tax Law, as distinguished from the 
 charter of New York City, comparison must be made with 
 property in the borough or county, as distinguished from 
 property in the same ward or section or other part of the 
 city ; and with personal as well as with real property." Sub- 
 stantial performance only of the provisions of the tax laws is 
 to be required; and, therefore, when a warrant is made to a 
 tax collector to collect a tax which requires him to collect six 
 instead of five per cent additional, it will not be defective, 
 especially if the corporation taxed objected not on that 
 ground but only on the ground that the tax was excessive, and 
 this after its time to raise this objection had passed.^" An 
 application to have an action by the city to collect a personal 
 tax from a company dismissed on the statutory ground that 
 the assessment under which the tax was levied was erroneous 
 because the company's just indebtedness was greater than 
 the value of its personal property is improper, as review of 
 the acts of the tax commissioners can be had, in the absence 
 of fraud, only as provided by statute, viz. application to them 
 during the grievance days from January to April for correc- 
 tion of the erroneous assessment, and failing in that, review 
 of their action by writ of certiorari; and the reasons which, 
 under the statute, make it appear to the court just that the 
 tax imposed within the jurisdiction of the taxing officers 
 should not be paid must be reasons other than those which 
 may be considered in certiorari." ^ 
 
 § 629. Id.: Miscellaneous Statutory Provisions. — ^Provision 
 for the oath by the assessors to their roll ; its filing by Septem- 
 
 ^^ People ex rel. New England Gas & Electric Co. v. Woodbury, 67 
 
 Dressed Meat & W. Co., 155 N. Y. Misc. 481, 123 N. Y. Supp. 592 
 
 408, 41 L.R.A. 228, 50 N. E. 53 (1910). 
 
 (1898). "Matter of Adler & Co., 174 
 
 "People ex rel. New York & New N. Y. 287, 66 N. E. 929 (1903) ; 
 
 Jersey Telephone Co. v. Nefl, 15 Tax L. § 259. 
 
 A. D. 8, 44 N. Y. Supp. 46 (1897) ; " City of New York v. Chase, 
 
 affd 156 N. Y. 701, 51 N. E. 1093; Talbot & Co., 206 N. Y. 1, 99 N. E. 
 
 L. 1888, c. 583, tit. 10, § 8. 143 (1912) ; Tax L. §. 301. 
 
 ^'People ex rel. Queens Borough 
 
§ 630 TAXATION 767 
 
 ber first, subject to inspection for fifteen days; the giving of 
 notice of completion, filing and openness to inspection of the 
 roll; delivery and filing of the roll with the proper authori- 
 ties; apportionment of the valuation of railroad, telegraph, 
 telephone, pipeline, water or gas companies and of special 
 franchises among school and special districts ; and neglect or 
 omission of duty by assessors, is contained in the statute 
 hereinafter quoted." An application by a county treasurer 
 for institution of proceedings to collect a tax against a corpo- 
 ration cannot be made to or allowed by a special county judge, 
 or anyone save the court.^" 
 
 § 630. Id.: Special Franchise Tax, In General. — In the 
 assessment-roll prepared by the assessors each special fran- 
 chise must be distinguished, with the amount of tax assessed 
 against it, and its value as fixed by the State Board of Tax 
 Commissioners.^" " The charter of a corporation is the law 
 which gives it existence as such. That is its general fran- 
 chise, which can be repealed at the will of the Legislature. 
 A special franchise is the right, granted by the public, to use 
 public property for a public use, but with private profit, such 
 as the right to build and operate a railroad in the streets of a 
 city. Such a franchise, when acted upon, becomes property 
 and cEinnot be repealed, unless power to do so is reserved in 
 the grant, although it may be condemned upon making com- 
 pensation. ' ' ^ The special franchise tax act is constitutional.* 
 The act conferring on the State Tax Commissioners the 
 power to assess, for the purpose of taxation, the value of 
 " Special Franchises " is constitutional.^ " The object of an 
 assessment is not necessarily to produce a tax upon the intan- 
 gible rights but is to determine what the special franchise is 
 
 ^^Tax L. §§ 39 (L. 1918, e. 279), ^ Lord v. Equitable Life Assur- 
 
 40, 41 (L. 1916, c. 323). ance Soc, 194 N. Y. 212, 22 L.R.A. 
 
 1" Matter of Wright, Peters & (N.S.) 420, 87 N. E. 443 (1909). 
 Co., 73 A. D. 75, 76 N. Y. Supp. ^People ex rel. Metropolitan St. 
 
 775 (1902) : Tax L. § 250 (L. 1896, Ry. Co. v. Tax Commrs., 174 N. Y. 
 
 c. 908). 417, 63 L.R.A. 884, 67 N. E. 69 
 
 For atuthorities' on the question of (1903). It violates neither the home 
 
 constitutional equality in the United rule nor the contract clauses of the 
 
 States in relation to taxation of Constitution, being § 2 of art. 10 
 
 corporate property, see oomprehen- of the . State and § lO of art. 1 of 
 
 sive note in 60 L.R.A. 321. • the Federal Constitutions. 
 
 On power to compel production ^ Buffalo Gas Co. v. Volz; 31 Misc. 
 
 of corporate book to aid in assess- 160, 64 N. Y. Supp. 534 (1900) ; 
 
 ing holder of stock or his estate, see L. 1899, e. 712; N. Y. Const, art. 10, 
 
 note in 8 L.R.A.(N..S.) 788. § 2. 
 
 '"'Tax L. § 21 (L. 1916, c. 323), 
 and § 32 (L. 1909, c. 62). 
 
768 BUSINESS CORPORATIONS IN NEW YORK § 631 
 
 worth, and, if the basis of computation is right, it is quite 
 immaterial for the purpose of fairness whether a tax on the 
 intangible part of the franchise results or not. ' ' * 
 
 § 631. Id.: What Is Taxable as Special Franchise. — What is 
 known, for the purpose of taxation, as a special franchise 
 includes the value of: (1) The right to collect wharfage, 
 cranage or dockage on wharves and piers; (2)- the franchise, 
 right or permission to construct, maintain or operate surface, 
 under-ground or elevated railroads, in, under, above, on or 
 through streets, highways or public places; (3) the franchise, 
 right, authority or permission to construct, maintain or 
 operate, in, under, above, upon or through any streets, high- 
 ways or public places, any 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; and (4) the 
 tangible property of a corporation situated in, upon, under 
 or above any street, highway, public place or public waters 
 in connection with the special franchise, and the tangible 
 property as included must be taxed as a part of the special 
 f ranchise.' The term ' ' Special Franchise ' ' is not — except 
 as to elevated railroads — deemed to include the crossing of 
 a street, highway or public place outside the limits of a city 
 or incorporated village where such crossing is less than two 
 hundred and fifty feet in length, unless such crossing be the 
 continuation of an occupancy of another street, highway or 
 public place.* A grant from owners of the soil to a corpora- 
 tion through which the latter 's property runs is not a 
 " Special Franchise " taxable by the State.' An exclusive 
 right in the nature of an easement vested in a railroad " to 
 use and occupy the thirty-foot strip [on a street] forever for 
 the purpose of railroad tracks and turnouts and running 
 locomotives and cars thereon without interruption or molesta- 
 tion " is not such a right as to be subject to a franchise tax.' 
 
 * People ex rel. Brooklyn Heights ' People ex rel. Retsof Mining Co. 
 
 R. R. Co. V. Tax Commissioners, 146 v. Priest, 75 A. D. 131, 77 N. Y. 
 
 A. D. 372, 131 N. Y. Supp. 49 Supp. 382 (1902); aff'd 175 N. Y. 
 
 (1911); afE'd 204 N. Y. 648, 97 511, 67 N. E. 1088; Tax L. § 2, 
 
 N. E. 1113. subd. 3 (L. 1899, c. 712). 
 
 For authorities on the question of ? People ex rel. Long Island R. R. 
 
 taxability of local franchises, see Co. v. Tax Commissioners, 148 A. D. 
 
 note in 57 L.R.A. 40. 751, 133 N. Y. Supp. 348 (1912) ; 
 
 ^Tax L. § 2, subd. 6 (L. 1916, aff'd 207 N. Y. 683, 101 N. E. 1117; 
 
 c. 323). Tax L. § 2, subd. 3, as amend'd L. 
 
 «Tax L. § 2, subd. 7 (L. 1916, 1899, c. 712. 
 c. 323). 
 
§ 631 TAXATION 769 
 
 "A special franchise involves a grant from competent public 
 authority, and there can be no franchise if an act is done 
 within the boundaries of a street ' by virtue of the ownership 
 of the soil or of some interest therein; ' " so that an assess- 
 ment for taxation on property occupied in the latter way is 
 unjustified.® "A street crossing franchise consists of the 
 right to lay tracks across a street and use them, when but for 
 a grant of the right to do so from competent public authority 
 it would be a trespass." " "A special franchise granted to a 
 railroad corporation is a right granted to it to maintain its 
 road where, without such authority to do so, it would be 
 unlawful." " " When a right of way over a public street is 
 granted to such [a] corporation, with leave to construct and 
 operate a street railroad thereon, the privilege is known as a 
 special franchise, or the right to do something in the public 
 highway, which, except for the grant, would be a trespass. ' ' '^ 
 While an avenue at the time of incorporation of a railroad 
 company may not actually be in public use as a street, yet if 
 legislation by the legislature and resolutions by the city be 
 passed on the assumption of and with reference to rights, o;f 
 the city in streets then laid out as public highways on maps 
 of which the avenue in question is part, and were treated by 
 several private owners as public highways, and the public 
 authorities' consent was always necessary to occupation of 
 such avenue by the railroad company, then the right to travel 
 upon it is a special franchise, taxable as such." " . . . the 
 statutes authorizing the taxation of special franchises apply 
 to steam surface railroads."" The test of whether or not 
 certain property shall be considered in determining the 
 special franchise tax of a street railroad corporation is: Does 
 it belong to the structure of the railroad and is it necessary 
 for its operation? If yea, the value of the property may be 
 
 ' People ex rel. New York Central " People ex rel. H. R. & P. E. R. 
 
 & Hudson River R. R. Co. v. Wood- Co. v. Tax Commissioners, 215 N. Y. 
 
 bury, 167 A. D. 428, 153 N. Y. 507, L.R.A.1916B, 1222, 109 N. E. 
 
 Supp. 537 (1915) ; afE'd without 569 (1915) ; Tax L. § 2, subd. 3. 
 
 opinion 218 N. Y. 635, 112 N. E. "People ex rel. New York Cen- 
 
 1070. tral & Hudson River R. R. Co. v. 
 
 ^"People ex rel. New York Cen- Priest, 206 N. Y. 274, 99 N. E. 
 
 tral R. R. Co. v. Woodbury, 203 547 (1912). 
 
 N. Y. 167, 96 N. E. 431 (1911); "People ex rel. New York Cen- 
 
 Tax L. §§ 1, 2, subd. 3. tral & Hudson River R. R. Co. v. 
 
 "People ex rel. New York Cen- Priest, 206 N. Y. 274, 99 N. E. 547 
 
 tral & Hudson River R. R, Co. v. (1912) ; People ex rel. New York 
 
 Priest, 206 N. Y. 274, 99 N. B. 547 Central & H. R. R. R. Co. v. Wood- 
 
 (1912). bury, 203 N. Y. 167, 96 N. E. 431. 
 B.C.N.Y.— 49 
 
770 BUSINESS CORPORATIONS IN NEW YORK § 631 
 
 considered ; if nay, it may not." A State grant to a corpora- 
 tion to use the public streets is taxable as a special franchise 
 though the United States later give it license to use such 
 streets without State interference." The crossing of a rail- 
 road over canal lands, which are to be deemed " public 
 places " under the statute, is a special franchise and taxable 
 as such." " The object of the Special Franchise Tax Act is 
 to tax railroad corporations for privileges granted them in 
 the streets which they occupy on their lines of railway, and if, 
 after they have their rights of way secured over private land, 
 a public highway is laid across the tracks, while there is a 
 crossing, it is not a crossing made by the railroad or through 
 public favor so far as the railroad is concerned ; ' ' and it is 
 not a special franchise taxable within the meaning of the 
 statute." Crossings made by constructing steam surface rail- 
 roads across streets already in existence are included in the 
 statute imposing the franchise tax, i. e., the statute authoriz- 
 ing*the taxation of special franchises applies to steam surface 
 railroads, as their crossings are land according to its pro- 
 visions." A railroad corporation proceeding to act as if it 
 acquiesced in the contention of municipal authorities that land 
 within the lines of some streets over which it ran its tracks 
 had been dedicated to public use is estopped from claiming 
 that such streets are not public in a proceeding to enforce 
 against it a franchise tax unless it admits it is a trespasser 
 thereon, because its operation over such streets must then be 
 by permission or franchise which is therefore taxable.^" A 
 corporation contracting with, a municipality to construct, 
 maintain and operate a railroad and paying a municipality 
 a fixed sum for the use of the property over which the railway 
 runs and holding the balance of the fares for performing the 
 public service is not subject to a special franchise tax for its 
 
 ^' The two eases of People ex rel. ^' People ex rel. New York Cen- 
 
 Buffalo & L. E. Traction Co. v. Tax tral R. R. Co. v. Woodbury, 203 
 
 Commisaoners, in 209 N. Y. 496, N. Y. 167, 96 N. E. 431 (1911); 
 
 502, 103 N. E. 776, 778, respectively. Tax L. §§ 1, 2, subd. 3. 
 
 "People ex rel. Postal Tel^raph- ^'People ex rel. New York Cen- 
 
 Cable Co. v. State Board of Tax tral R. R. Co. v. Woodbury, 203 
 
 Commissionere, — Misc. — (1918), N. Y. 167, 96 N. E. 431 (1911): 
 
 N. Y. L. J. Feb. 25; App. Div. Tax L. §§ 1, 2, subd. 3. 
 
 1st Dept. ^ People ex rel. East River T. R. 
 
 ^'People ex rel. New York Cen- R. v. Board of Tax Commissioners, 
 
 tral & Hudson River R. R. Co. v. 160 A. D. 771, 146 N. Y. Supp. 112 
 
 Woodbury, 167 A. D. 535, 153 N. Y. (1914) ; Tax L, § 2, subd. 3. 
 Supp. 541 (1915); afiE'd without 
 opinion 216 N. Y. 661, 110 N. E. 
 1047; Tax L. § 2, subd. 3. 
 
§ 631 TAXATION 771 
 
 rights under the contract.^ A grant by the city to a railroad 
 company pursuant to statute of the right to use for the term 
 of its corporate existence certain subsurface property, not in 
 fee but with reservation to the city of the right to use any 
 part of the soil under the company's tracks and structures, 
 etc., is a special franchise, properly included in an -assessment 
 therefor.^ A right granted by the State to a corporation to 
 construct its railroad over water-courses and build bridges 
 for the purpose is a special franchise ; and bridges and trestles 
 so erected are assessable as and for special franchises, even 
 though the corporation own the fee on each side of the water- 
 courses on which the bridges' abutments rest/ A bridge over 
 a river built on abutments built on lands owned in fee by a 
 railroad company, not immediately connected with any 
 special franchise, while tangible property, is not within the 
 statutory words " tangible property . . . situated in, 
 upon, under or above any street, highway, public place or 
 public waters in connection with the special franchise ; ' '' and 
 its value should not be considered in determining the amount 
 of the assessment.* The right of a corporation to run its cars 
 over a bridge under a contract with a municipal corporation 
 does not give it a franchise to operate its cars within the 
 meaning of the phrase " special franchise " so as to be 
 taxable as such.' In determining a franchise tax assessment 
 a viaduct constructed by the corporation by agreement with a 
 town, its highway commissioner, part of the expense of which 
 the town pays, and over which the corporation's track ran, is 
 properly treated as tangible property of the corporation in 
 the streets, but not the pavement between the rails and for 
 two feet outside.* The fact that a bridge not properly the 
 subject of a franchise tax is included with other intangible and 
 tangible property does not vitiate the whole assessment when 
 
 ^People ex rel. Interborcragh tral E. R. Co. v. Woodbury, 206 
 
 Rapid Transit Co. v. Tax Oommis- N. Y. 304, 99 N. E. 545 (1912). 
 
 sioners, 126 A. D. 610, 110 N. Y. = Matter of New York Railways 
 
 Supp. 577 (1908) ; aff'd 195 N. Y. Co., 172 A. D. 128, 158 N. Y. Supp. 
 
 618. 237 (1916); Tax L. §.2, sTibd. 3; 
 
 ^People ex rel. New York Cen- Greater New York Charter, §§ 73, 
 
 tral, «tc., R. R. Co. v. Woodbury, 74 (L. 1901, c. 466, as amend'd L. 
 
 206 N. Y. 304, 99 N. E. 545 (1912). 1905, ee. 629, 630). 
 
 = People ex rel. H. R. & P. C. R. ^People ex rel. Buffalo & Lake 
 
 R. Co. V. Tax Commissioners, 215 Erie Traction Company v. Tax 
 
 N. Y. 507, L.R.A.1916B, 1222, 109 Conunissioners, 156 A. D. 466, 142 
 
 N. E. .569 (1915); Tax L. § 2, N. Y. Supp. 116 (1913); aff'd 209 
 
 i9ubd. 3. N. Y. 502, 103 N. E. 778; Railroad 
 
 * People ex rel. New York C«n- L. § 98. 
 
772 BUSINESS CORPORATIONS IK NEW YORK § 631 
 
 it is a small and definite part of the property assessed/ 
 Tangible property of a corporation under public waters used 
 in connection with its special franchise is assessable and 
 taxable by the State Board of Tax Commissioners as tangible 
 property.* A viaduct (and its approaches) built by a street 
 railroad company under a contract with a municipality by 
 which each was to expend money and the company to keep it 
 in repair for the term of its franchise, although the contract 
 declares it is to be a public highway, is properly treated by the 
 State Board of Tax Commissioners as tangible property of 
 the railroad in assessing its special franchise tax, because it 
 is essential to the operation of the railroad.' In assessing the 
 value of a street railroad's special franchise for the purpose 
 of tax, the pavement which it is by law obliged to construct 
 and maintain between and near its tracks is not to be treated 
 by the State Board of Tax Commissioners as constituting any 
 part of the railroad's tangible property; although the price 
 which the railroad company is willing to pay to lay down and 
 maintain the statutory pavement, being some evidence of the 
 value of the intangible right to operate the railroad in the 
 street, may properly be considered in ascertaining the value 
 of its special franchise." Under a statute providing that a 
 special franchise shall not include the crossing of a street, 
 highway or public place where such crossing is not at the 
 intersection of another street or highway unless at other than 
 right angles for two hundred and fifty feet or more, the cross- 
 ing of two highways or of a highway and a public place is not 
 a special franchise ; and an authorized crossing by a railroad- 
 lessee of a canal, and a contiguous crossing of a public high- 
 way lying next to the canal, at an oblique angle, on a 
 continuous bridge, not at the intersection of another street or 
 highway, 242 and 62 feet over the canal and highway respec- 
 tively, are not a special franchise for the purpose of assess- 
 ment and taxation as such." 
 
 ' People ex rel. New York Cen- Traction Co. v. Tax Commissioners, 
 
 tral R. R. Co. v. Woodbury, 206 209 N. Y. 4%, 103 N. E. 776 (1913) ; 
 
 N. Y. 304, 99 N. E. 545 (1912). Tax L. § 2; R. R. L. § 178. 
 
 * People ex rel. Edison Co. v. Com- ^^ People ex rel. New York Cen- 
 
 missioners of Taxes, 58 Misc. 249, tral & Hudson River R. R. CO. v. 
 
 110 N. Y. Supp. 833 (1908) ; Tax Woodbury, 208 N. Y. 421, 102 N. E. 
 
 L. § 47, subd. 3. 565, 566 (1913) ; Tax L. § 2, subd. 4 
 
 ^People ex rel. Buffalo & L. E. (in 1907), and subd. 6. 
 Traction Co. v. Tax Commissioners, Tax on franchise of interstate 
 
 209 N. Y. 502, 103 N. E. 778 (1913). telegraph and telephone companies, 
 
 " People ex rel. Buffalo & L. E. see note in 24 L.R.A. 162. 
 
§§ 63^-636 TAXATION 773 
 
 § 632. Id.: Place of Taxation. — Assessors must assess cor- 
 porations liable to taxation on their special franchises in their 
 respective tax districts." 
 
 § 633. Id.: Reports By Corporations, On Acquisition of 
 Special Franchise. — Every corporation subject to taxation on 
 a special franchise must within thirty days after such special 
 franchise is acquired make a written report to the Tax Com- 
 mission containing (1) a full description of every special fran- 
 chise possessed or enjoyed by it, (2) a copy of (a) the special 
 law, grants ordinance or contract under which it is held, or 
 (b) if possessed or enjoyed under a general law, a reference 
 to such law, (3) a statement of any condition, obligation or 
 burden (a) imposed upon such special franchise or (b) under 
 which it is enjoyed, together with (4) any other information 
 relating to the value of such special franchise required by the 
 Tax Commission." 
 
 § 634. Id.: Subsequent and Annual Reports. — ^The Tax Com- 
 mission may require an annual report and from time to time 
 a further or supplemental report from any such corporation 
 containing information and data upon such matters as it may 
 specify." 
 
 § 635. Id.: Form and Verification.— The Tax Commission 
 may prepare blanks to be used in making the reports; and 
 every report required by law must have annexed to it the 
 affidavit of the president, vice-president, secretary or treas- 
 urer of the corporation to the effect that the statements con- 
 tained therein are true.^^ 
 
 § 636. Id.: Penalty for Failure to Make or for Disclosing. — 
 Every corporation failing to make the report or failing to 
 make any special report required by the Tax Commission 
 within a reasonable time specified by it forfeits 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 ; and is not entitled to review the assess- 
 ment by certiorari as provided by the statute; and acknowl- 
 edgment of receipt of blank reports which contain the penalty 
 provisions of the statute is deemed sufficient notice of such 
 penalties." The courts will not enjoin the State Board of Tax 
 Commissioners from disclosing franchise tax reports made to 
 it, but, as the law says nothing either about such reports being 
 kept private or about their being made public, will leave it 
 
 ^^Tax L. § 32 (L. 1909, e. 62). "Tax L. § 44 (L. 1916, c. 334). 
 
 "Tax L. § 44 (L. 1916, e. 334). i«Tax L. § 44 (L. 1916, c. 334). 
 
 "Tax L. § 44 (L. 1916, c. 334). 
 
7.74 BUSINESS CORPORATIONS IN NEW YORK § 637 
 
 to the Commissioners' wise discretion either to withhold or to 
 permit their inspection, depending upon whether they can be 
 convinced the inspection or disclosure is for legitimate or 
 illegitimate purposes." 
 
 § 637. Id.: Valuation and Equalization of Special Franchise, 
 Preliminarily by Tax Commission. — The Tax Commission 
 must annually fix and determine the fuU and actual valuation 
 of each special franchise subject to assessment in each city, 
 town or village; must inquire into and ascertain as near as 
 may be the percentage of the full and actual value at which 
 other real property in the city, town or village for which such 
 full valuation has been made is being assessed; and by the 
 rate of equalization so established must fix and determine the 
 equalized valuation of each special franchise subject to assess- 
 ment." The tangible property of a corporation brought into 
 the system of special franchise taxation as an incidental part 
 thereof, though previously assessed by local authority is " an 
 inseparable part of the special franchises mentioned in the 
 statute, constituting with them a new entity, which as 
 a going concern can neither be assessed nor sold to advan- 
 tage, except as one thing, single and entire. " " " The 
 scheme of the statute for the taxation of special franchises 
 (incorporated in the Tax Law) is that they are assessed 
 at their value without any diminution for any local public 
 charges thereon, and that such charges are to be deducted 
 from the tax when levied." "" The State Board of Tax Com- 
 missioners properly fixes and determines in one amount the 
 value of the special franchise of a corporation distributing 
 gas and wires to occupy streets and public places in a city 
 even though its continuous and unbroken lines of pipes and 
 wires extend through and into several wards of the city.* 
 Although the statute may not make a village one of the ter- 
 ritorial units for a special franchise assessment by the State 
 authorities, yet each franchise in a village must be separately 
 assessed by the State board; and the village assessors are 
 without power to fix values in villages — their duty is merely 
 clerical; and the assessment, i. e., the ascertained value of a 
 
 ^'American District Telegraph ^"People ex rel. Nassau Electric 
 
 Co. V. Woodburj', 127 A. D. 455, 112 Railroad Co. v. Grout, 119 A. D. 
 
 N. Y. Supp. 166 (1908) ; Tax L. 130, 103 N. Y. Supp. 975 (1907) ; 
 
 § 43. aff'd 189 N. Y. 510, 81 N. E. 1173; 
 
 "Tax L. § 45 (L. 1916, c. 334). Tax L. § 46. 
 
 "People ex rel. Metropolitan St. ^People ex rel. Troy Gas Co. v. 
 
 Ry. Co. V. Tax Commrs., 174 N. Y. Hall, 203 N. Y. 312, 96 N. E. 933 
 
 417, 63 L.R.A. 884, 67 N. E. 69 (1911) ; Tax L. §§ 40, 43. 
 (1903). 
 
§§ 638-640 TAXATION 775 
 
 special franchise, wholly within a village, can be made only 
 by the State board.^ The State board should fix the value of 
 each special franchise instead of placing it on a whole town 
 in bulk so that the local assessors may know the amount to be 
 apportioned each village for taxation purposes, as they are 
 without power themselves to make the apportionment.^ 
 
 § 638. Id.: Notice of Hearing of Complaints.-^On determin- 
 ing the full and actual valuation of a special franchise and 
 the rate of equalization thereof, the Tax Commission must 
 immediately give notice in writing to the corporation affected 
 and to each city, town or village in which such special fran- 
 chise is subject to assessment, stating in substance that such 
 determinations have been made, and the total full and actual 
 valuation, and the rate of equalization thereof, in each city, 
 town and village; and that the Commission will meet at its 
 oflSce in the City of Albany on a day specified in such notice 
 to hear and determine any complaint concerning such full 
 valuation and the rate of equalization.* In a town the state- 
 ment must specify the total amount of the assessment of such 
 special franchise and the amount thereof in any village or vil- 
 lages therein.^ Such notice must be served at least ten days 
 before the day fixed for the hearing by mailing a copy thereof 
 to the corporation at its principal office or place of business.® 
 
 § 639. Id.: Hearing. — ^^The Tax Commission must meet at 
 the time and place specified in its notice and hear and deter- 
 mine all complaints in relation to their assessments broughf 
 before them, and for that purpose may adjourn from time to 
 time.' The procedure as regards the assessed corporation's 
 statement containing its complaint; the administering of 
 oaths ; the taking of testimony and proof, etc., are the same in 
 general as the procedure before the assessors when they 
 review real and personal property tax assessments ; and refer- 
 ence is made to the treatment heretofore 'given of such 
 procedure.* 
 
 § 640. Id.: Final Valuation by Tax Commission on Basis of 
 Net Earnings or Otherwise. — After hearing complaints as to 
 such valuation and rate of equalization of the special fran- 
 chise the Tax Conmtiission must fix and determine the final 
 full value of each special franchise and ascertain the final rate 
 
 2 People ex rel. N. Y. C. & H. R. ' Tax L. § 45a (L. 1916, c. 334). 
 
 R. R. Co. V. Keno, 61 Misc. 345, «Tax L. § 45a (L. 1916, c. 334). 
 
 114 N. Y. Supp. 1094 (1908). ^Tax L. § 45a (L. 1916, c. 334) 
 
 = People ex rel. N. Y. C. & H. R. and § 37 (L. 1916, c. 323). 
 
 R. R. Co. V. Keno, 61 Misc. 345, 114 » See § 626, et seq., supra; Tax L. 
 
 N. Y. Supp. 1094 (1908). § 45-a (L. 1916, e. 334); § 37 (L. 
 
 *Tax L. § 45a (L. 1916, c. 334).- 1916, c. 323). 
 
776 BUSINESS CORPORATIONS IN NEW YORK § 640 
 
 of equalization and equalize the final full value of each special 
 franchise to such an amount as in its judgment will place the 
 special franchise on the same basis as the assessment of other 
 real property in the city, town or village in which the special 
 franchise is located.' In ascertaining the basis of assessment 
 of other real property or determining the final full and actual 
 valuation of a special franchise, the Tax Commission may in 
 its discretion take testimony and hear proof under oath or 
 otherwise, and may avail itself of all information on the sub- 
 ject appearing of record in its office, and all information which 
 it may acquire in the discharge of its duties, and may employ 
 its experts, agents or other persons in procuring any informa- 
 tion it may require for such purpose." The usual rules as to 
 value should apply in the valuation of the tangible property 
 included in a special franchise, and it should accordingly be 
 valued at the cost of reproduction less depreciation." In 
 valuing tangible property of a company to determine the 
 special franchise tax, its land should be taken at its then 
 present value and not at its original cost value.^" In deter- 
 mining the taxable value of a street railway's franchise it is 
 proper to include as part of th^ value of its structure in the 
 streets a certain sum for the value of the paving within the 
 railroad area, if a statute imposes a duty on the corporation 
 to keep such area in repair.^^ A tunnel under public waters 
 constructed pursuant to a grant to a corporation to build it is 
 properly taken into consideration in assessing the special 
 franchise tax due from the corporation." "Any comparison 
 of track or passenger mileage necessarily spreads the earn- 
 ings over the mileage, without taking into account the value 
 of a franchise at a particular place to increase the earnings 
 of the system of road with which it is connected. A particular 
 franchise is frequently of important value in connection with 
 a railroad system as a means of obtaining and retaining busi- 
 ness. Where a special franchise relates simply to a point or 
 portion of a railroad system its value to the system must be 
 
 'Tax L. § 45b (L. 1916^ e. 334). "People ex rel. Metropolitan 
 
 "Tax L. § 45b (L. 1916, c. 334). Street Railway Co. v. State Tax 
 
 " People ex rel. New York Cen- Commissioners, 159 A. D. 136, 144 
 
 tral & Hudson River R. R. Co. v. N. Y. Snpp. 74 (1913); aff'd-212 
 
 Woodbury, 167 A. D. 428, 153 N. Y. N. Y. 606, 607, 106 N. E. 1040; R. 
 
 Supp. 537 (1915) ; afl'd -without R. L. § 178. 
 
 opinion, 218 N. Y. 635, 112 N. E. "People ex rel. Bryan v. State 
 
 1070. Board of Tax Commissioners, 142 
 
 ^^ People ex rel. Jamaica W. S. A. D. 796, 127 N. Y. Supp. 858 
 
 Co. V. Tax CommissioneiB, 196 (1911) ; Tax L. § 2, subd. 3. 
 
 N. Y. 39, 89 N. E. 581 (1909). 
 
§ 640 TAXATION 777 
 
 considered in connection with all the surroundings and facts 
 which aid in the determination of such value. ' ' " All of the 
 special privileges enjoyed by a corporation within a tax dis- 
 trict, i. e., a town, and constituting parts of a single system, 
 must be regarded as a " special franchise " upon which a 
 valuation must be fixed by the State Board of Tax Commis- 
 sioners ; and where parts of such special franchise are in two 
 or more villages, all within the same town, the assessors of 
 such villages must ascertain and determine what is a fair and 
 just portion of such total valuation, to be placed upon the vil- 
 lage tax roll/" In determining the value, for franchise taxa- 
 tion, of the right of a railroad to cross a highway,. there may 
 be taken into consideration the population of the municipality 
 where the crossing is located, the character of the crossing 
 itself (whether at grade, overhead or underground), the rela- 
 tive importance of the street with reference to its use by the 
 public at the place of crossing, the amount of traffic over it by 
 the railroad and the resulting interference with its use by the 
 public, the character of the trackage (whether by through 
 train service or for switching purposes), the land values of 
 the locality in which the crossing is, the general financial 
 condition of the railroad bearing on its being a paying road, 
 and general information of the members of the assessing 
 board as to prices paid to municipalities for the privilege of 
 generally similar occupancies." "... a public service 
 corporation, with reference to its property which will become 
 worthless by use and must be replaced, is entitled to set aside 
 each year from its earnings a reasonable sum to provide for 
 its replacement. This is outside of the ordinary annual 
 expenses for maintenance, renewals and repairs. ' ' " 
 
 ' ' The manner of computing the value of a special franchise 
 is dependent upon the facts and circumstances in each case. 
 Where the net earnings of a special franchise can be com- 
 puted with reasonable certainty ... an assessment 
 
 ^^ People ex rel. New York Cen- " People ex rel. New York & 
 
 tral & Hudson Biver R. R. Co. y. Bockaway Beach Ry. C!o. v. Tax 
 
 Priest, 206 N. Y. 274, 99 N. E. 547 Conunissioners, 157 A. D. 496, 140 
 
 (1912). N. Y. Supp. 601 (1913); aiiE'd 209 
 
 "People ex rel. New York Cen- N. Y. 599, 103 N. E. 1130. 
 
 tral & Hudson River R. B. Co. v. "People ex rel. Third Ave. R. R. 
 
 Gflurley, 64 Misc. 605, 118 N. Y. Co. v. Tax Commissioners, 136 A. D. 
 
 Supp. (1909); Tax L. §§ 43, 45. 155, 120 N. Y. Supp. 528 (1909); 
 
 The elaim was made that "each high- afif'd 198 N. Y. 608, 92 N. E. 1098. 
 way crossing or other special privi- 
 lege should have a separate valua- 
 tion fixed upon it by the Tax Board. 
 
778 BUSINESS CORPORATIONS IN NEW YORK § 640 
 
 thereof based upon a computation therefrom is approved by 
 the courts. No hard and fast rule by which the board of tax 
 commissioners must be controlled in valuing a special fran- 
 chise for the purpose of taxation has been adopted by the 
 legislature or laid down by the courts. " " " . . . it is 
 beyond the province of the courts to lay down an exclusive 
 rule of franchise valuation applicable to all cases. . . . 
 When a particular assessment comes up for review . . . 
 the duty of the appellate courts is discharged when they 
 inquire whether the rule whereby the value of this special 
 franchise was ascertained was reasonably adapted to that end, 
 and if so, whether it was consistently and correctly applied to 
 the facts. ' ' ^° Although a certain rule for valuing franchises 
 for taxation is binding on a trial court when the case is before 
 it yet if evidence sufficient and pertinent to entitle the relator 
 to the rule declared by the courts by the time he appeals was 
 introduced, he is entitled to have the later rule applied.^ In 
 determining the taxable value of special franchises the net 
 earnings rule should be adopted in preference to expert 
 opinion, when possible.^ The net earnings rule is not neces- 
 sarily conclusive in determining the value of a special fran- 
 chise.' " The application of the net earnings rule is a method 
 to that end [of ascertaining the full and actual value of special 
 franchises for taxation purposes] ... It rests upon the 
 fact that the net income from the use of the franchise to the 
 owner and operator of it is a tesit and arbiter of its actual 
 value . . . Manifestly, the, term ' net earnings ', as used 
 in the rule, means what is left of the gross earnings produced 
 by the property after the legitimate costs, expenses and deduc- 
 tions connected with and arising from its use are paid."* 
 " The net earnings rule ... is based upon the practical 
 and commonly recognized principle that the earning capacity 
 or power of an industrial property indicates its value. The 
 
 ^'"People ex rel. New York Cen- Street Railway Co. v. State Tax 
 
 tral & Hudson River R. R. R. Co. Commissioners, 159 A. D. 136, 144 
 
 V. Priest, 206 N. Y. 274, 99 N. E. N. Y. Supp. 74 (1913); aff'd 212 
 
 547 (1912). N. Y. 606, 607, 106 N. E. 1040. 
 
 ^ People ex rel. Jamaica W. S. ' People ex rel. Queens County 
 
 Co. V. Tax Commissioners, 196 N. Y. Water Co. v. Woodbury, 67 Misc. 
 
 39, 89 N. E. 581 (1909). 490, 123 N. Y. Supp. 599 (1910); 
 
 ^ People ex rel. Metropolitan aff'd 143 A. D. 618, 128 N. Y. Supp. 
 
 Street Railway Co. v. State Tax 522. 
 
 Commissioners, 15& A. D. 136, 144 * People ex rel. Third Ave. R. R. 
 
 N. Y. Supp. 74 (1913) ; aff'd 212 Co. v. Tax Commissioners, 212 N. Y. 
 
 N. Y. 606, 607, 106 N. E. 1040. 472, 106 N. E. 325 (1914). 
 
 People ex rel. Metropolitan 
 
§ 640 TAXATION 779 
 
 STim of the earnings or income indicates, however, the value of 
 the property only which produces it. In the application of the 
 net earnings rule, the value of the tangible property used in 
 producing those earnings upon which a fair and reasonable 
 return is allowed should be the full and actual value of all the 
 property essential to the operation of the enterprise or plant. 
 But what that property is and its' value are questions of 
 fact. " ° " While no statute prescribes it, yet in ordinary cases 
 the net earnings rule is the proper method by which to com- 
 pute the value of a special franchise in order to determine the 
 tax assessable upon it by the State Board of Tax Commis- 
 sioners. This rule consists in ascertaining the sum of the 
 gross earnings or income, and deducting from it the sum of 
 operating expenses and other expenses necessarily paid, such 
 as taxes and rentals, leaving a figure representing the sum of 
 the final net income from both tangible and intangible prop- 
 erty. If from this final sum is deducted an amount equal to 
 six per cent of the value of the tangible property as the rea- 
 sonable earnings or income therefrom and from the remainder 
 is deducted a sum designated " depreciation allowance," 
 what is left is deemed to represent the net earnings attribut- 
 able to the intangible parts of the special franchises and is 
 capitalized at six per cent to produce the sum of their assess- 
 able value for the purpose of taxation. Adding the value of 
 the company's tangible property, there is produced the 
 taxable value of the special franchise. " " " The net earnings 
 rule contemplates a valuation upon the basis of the net earn- 
 ings of the corporation which are attributable to its enjoy- 
 ment of the special franchise. The method is thus applied: 
 
 (1) Ascertain the gross earnings. 
 
 (2) Deduct the operating expenses. 
 
 (3) Deduct a fair and reasonable return on that portion of 
 the capital of the corporation which is invested in tangible 
 property. 
 
 The resulting balance gives the earnings attributable to the 
 special franchise. If this balance be capitalized at a fair rate 
 we have the value of the special franchise. " ^ " The net earn- 
 ings rule is a method of determining the value of a special 
 franchise by ascertaining its earning capacity. It is 
 
 ' People ex rel. Third Ave. R. R. ^ People ex rel. Jianiiaica W. S. Co. 
 
 Co. V. Tax Commissioners, 212 N. Y. v. Tax Commissioners, 196 N. Y. 39, 
 472, 106 N. E. 325 (1914). 89 N. E. 581 (1909). 
 
 'People ex rel. Third Ave. R. R. 
 Co. V. Tax Commissioners, 212 N. Y. 
 472, 106 N. E. 325 (1914). 
 
780 BUSINESS CORPORATIONS IN NEW YORK § 640 
 
 assumed to be worth that stun wliich, placed at interest at a 
 determined rate, usually six or seven per cent, will produce 
 the amount which the franchise earns. If the gross earnings 
 of the company, the operating expenses, other proper charges 
 against earnings, and the value of the tangible property be 
 given, the value of the special franchise is the result of a 
 purely mathematical computation. ' ' ^ Taking the value of a 
 company's tangible property, computing interest thereon at 
 6%, deducting the resulting amount from the total net earn- 
 ings, makes a balance, after allowing for return on the invest- 
 ment in tangible property, which results from the ownership 
 and use of the special franchise owned by the company and is 
 the amount of net earnings attributable to enjoyment of the 
 special franchise and taxable as part thereof." In ascertain- 
 ing the taxable value of franchises of several street railways 
 comprising a general street railway system it is proper to 
 adopt the net earnings rule and in applying it to treat the 
 system as a whole and ascertain its value, including the tan- 
 gible property in the streets and the intangible right to 
 operate, and then to divide the aggregate amount among the 
 various companies in proportion to the tangible property in 
 the streets owned by each." ' ' In cases where the net earnings 
 rule is an appropriate method for valuing a special franchise 
 the first step is to ascertain the gross earnings of the corpora- 
 tion and the second step is to deduct the operating expenses. 
 Among the operating expenses are to be included alLthe taxes 
 which have accrued against and have been paid by the cor- 
 poration during the period in which the net earnings are 
 taken as the basis of the valuation. These taxes include any 
 special franchise tax which has been assessed against the 
 corporation for that or in that period and which the corpora- 
 tion has actually paid. A special franchise tax, however, 
 which has not actually been paid is not to be deemed a part of 
 the operating expenses and cannot properly be included in the 
 deduction made on account of such expense."" The net 
 earnings rule should be adopted in determining the value of 
 a railroad company's special franchise for taxation purposes, 
 
 * People ex rel. Queens County Street Railway Co. v. State Tax 
 
 Water Co. v. Woodbury, 67 Misc. Commissioners, 159 A. D. 136, 144 
 
 490, 123 N. Y. Supp. 599 (1910); N. Y. Supp. 74 (1913); afE'd 212 
 
 aff'd 143 A. D. 618, 128 N. Y. Supp. N. Y. 606, 607, 106 N. E. 1040. 
 
 522. " People ex rel. Jamaica Water 
 
 ° People ex rel. Jamaica W. S. Supply Co. v. State Board of Tax 
 
 Co. V. Tax Conmiissioners, 196 N. Y. Commissioners, 197 N. Y. 33, 90 
 
 39, 89 N. E. 581 (1909). N. E. 112 (1909). 
 
 10 
 
 People ex rel. Metropolitan 
 
§ 640 TAXATION 781 
 
 i. e., the gross earnings should be ascertained, the operating 
 expenses should be deducted, with the annual taxes paid, and 
 from the remainder should be taken a fair and reasonable 
 return on that portion of the capital invested in tangible prop- 
 erty, the result becoming the net earnings attributable to the 
 special franchise, which, when capitalized at one per cent 
 higher than the rate (6%) of income allowed, becomes the 
 value of the intangible property of the special franchise." 
 " The rate of return upon the value of a corporation's tangible 
 property must be allowed in determining its special franchise 
 tax ; and the rate upon the value of the property used consti- 
 tuting a fair return is inherently a question of fact to be 
 decided upon the circumstances, conditions, facts and opinions 
 disclosed by the evidence. The nature of the business, 
 whether it be established or experimental, the risks natural 
 or proven attending it, are some of the many varying circum- 
 stances which may enter into the determination of a rate of 
 return which must as a rule be left to the good judgment of 
 the tribunals which review the facts as proven. " ^^ In getting 
 at the value of a special franchise of a public service corpora- 
 tion by using the net earnings rule it is proper to give the cor- 
 poration a return of six per cent on its property in the absence 
 of satisfactory evidence to the contrary, as the question is 
 what return should be allowed on the investment represented 
 by the company's property, tangible and intangible." " In 
 ascertaining a franchise tax, necessitating the preliminary 
 determination of the value of the company's tangible prop- 
 erty (upon which a return of 6% should be allowed) the value 
 of its interest in subservice or subway conduits through which 
 its power and light cables pass should be included, even 
 though owned by another corporation, if the corporation in 
 question had invested therein and such investment was essen- 
 tial to the operation of its road. In its tangible property 
 
 ^^ People ex rel. Manhattan Ry. all the eircumstanees surrounding 
 
 Co. V. Woodbury, 203 N. Y. 231, 96 the business', we are then to deduct 
 
 N. E. 420 (1911). from the net earnings an amount 
 
 ^^ People ex rel. Third Ave. R. R. which the tangible property earns, 
 
 Co. V. Tax Commissioners, 212 N. Y. based upon a per cent which is 
 
 472, 106 N.' E. 325 (1914). deemed a fair return upon an in- 
 
 " People ex rel. Third Ave. R. R. vestment in such a street railway 
 
 Co. V. Tax Commissioners, 136 A. D. enterprise, and then are to capitaJ- 
 
 155, 120 N. Y. Supp. 528 (1909) ; ize the remaining net earnings at 
 
 aff'd 198 N. Y. 608, 92 N. E. 1098. the same rate in order to determine 
 
 " We are, therefore, to allow a fair the actual value of the remainder of 
 
 return upon the value of the entire the property, that is, the intangible 
 
 property, considering the risks and part of. the special franchise." 
 
782 BUSINESS CORPORATIONS IN NEW YORK § 640 
 
 should also be included cash on hand and the cost of ease- 
 ments. " ^^ In determining the special franchise tax of a cor- 
 poration it is proper to allow for annual depreciation, which 
 should be computed by dividing the values of the various 
 kinds of tangible property by the number of years of their 
 respective estimated lives, or periods of time through which 
 the various kinds of tangilale property will respectively, with 
 ordinary and adequate annual renewals and repairs, continue 
 efficient in and commercially adaptable to their respective 
 processes and functions." " So long as depreciation of prop- 
 erty is a proper factor to take into account in determining 
 the net earnings, . . . the rate should ... be applied 
 as well to functional as to physical depreciation. ' ' " The pro- 
 vision for the ultimate replacement of property deteriorating 
 so that ordinary repairs do not make it good should be allowed 
 out of the gross earnings to ascertain the true earning capac- 
 ity in determining the franchise tax.^* In applying the net 
 earnings rule to the determination of the value of a special 
 franchise it is proper to consider the reconstruction cost of 
 practically indestructible property as its value." When the 
 net earnings rule is adopted to determine the taxable value 
 of a corporate special franchise, taxes should be deducted 
 from the gross earnings in order to determine the net earnings 
 of the taxpayer.^" In determining the value of a special fran- 
 chise pursuant to the net earnings rule it is not improper to 
 deduct the franchise tax from earnings in getting at the net 
 earnings.^ Payments by a company operating a railroad 
 for claims against it for injuries and damages not made on 
 account of its employing defective machinery or incompetent 
 servants or of other wrongful or negligent acts, are properly 
 deducting from earnings in the determination of the value of 
 the corporation's special franchise by applying the net earn- 
 
 ^'^ People ex rel. Manhattan Ry. ^'People ex rel. Third Ave. R. R. 
 
 Co. V. Woodbury, 203 N. Y. 231, 96 Co. v. Tax Commissioners, 136 A. D. 
 
 N. E. 420 (1911). 155, 120 N. Y. Supp. 528 (1909); 
 
 " People ex rel. Third Ave. R. R. aff'd 198 N. Y. 608, 92 N. E. 1098. 
 
 Co. V. Tax Commissioners, 212 N. Y. ^ People ex rel. Jamaica W. S. 
 
 472, 106 N. E. 325 (1914). Co. v. Tax Commissioners, 196 N. Y. 
 
 "People ex rel. Queens County 39, 89 N. E. 581 (1909). 
 
 Water Co. v. Woodbury, 67 Misc. "^ People ex rel. Third Ave. R. R. 
 
 490, 123 N. Y. Supp. 599 (1910) ; Co. v. Tax Commissioners, 136 A. D. 
 
 aff'd 143 A. D. 618, 128 N. Y. Supp. 155, 120 N. Y. Supp. 528 (1909) ; 
 
 522. aff'd 198 N. Y. 608, 92 N. E. 1098. 
 
 ^' People ex rel. Jamaica W. S. 
 Co. V. Tax Commissioners, 196 N. Y. 
 39, 89 N. E. 581 (1909). 
 
§§ 641, 642 TAXATION 783 
 
 ings rule.^ Payments by a corporation for percentages of 
 gross earnings and for car license fees should be included in 
 operating expenses in deternaining the corporation's special 
 franchise tax because the percentages and license fees are 
 costs or charges connected with the use of the property.' 
 Eental received by a corporation from certain of its cars 
 rented to subsidiaries should be excluded from the income or 
 earnings of the corporation under the net earnings rule, in 
 determining the value of its special franchise for taxation.* 
 
 § 641. Id.: Filing; Entry, Notice of; Basis of all Taxation on 
 Franchise; Information as To. — The statute requires the Tax 
 Commission to file with the proper clerk or department of 
 each political subdivision a statement of its valuation of the 
 special franchises assessed therein; and the clerk or departr 
 ment to deliver a copy to the taxing authorities; and the 
 latter to enter such valuations in their assessment-rolls.^ The 
 time for filing a certificate (by assessors, of a corporation's 
 franchise tax) provided by statute is directory and may be 
 filed mmc pro tunc.^ The statute further requires the Tax 
 Commission to give the corporation notice of its valuation of 
 its franchise.^ The final equalized valuation of every special 
 franchise as fixed and determined by the Tax Commission is 
 the assessed valuation on which all taxes, based on such special 
 franchise for state, county, city, town, village, school, highway 
 or other district purposes are levied for the ensuing year.* 
 The taxing authorities in any city, town, village or district 
 must on demand furnish to the Tax Commission any informa- 
 tion required by it to value special franchises.' 
 
 § 642. Id.: How Far Taxation On Special Franchise Relieves 
 From Other Taxes. — ^If the corporation assessed in any locality 
 for a special franchise has paid such locality a tax on a per- 
 centage of gross earnings or other income, or a license fee, 
 or on account of such special franchise, such payment is to be 
 deducted from the special franchise assessment." The 
 imposition of the special franchise tax on a corporation does 
 not relieve it from payment of any organization, franchise or 
 
 2 People ex rel. Third Ave. B. E. = Tax L. § 45c (L. 1916, c. 334). 
 
 Co. V. Tax Commissioners, 136 A. D. * People ex rel. Troy Gas Co. v. 
 
 155, 120 N. Y. Supp. 528 (1909) ; Hall, 143 A. D. 756, 128 N. Y. Supp. 
 
 aff'd 198 N. Y. 608, 92 N. E. 1098. 361; aflf'd 203 N. Y. 312, 96 N. E. 
 
 ^ People ex rel. Third Ave. E. E. 933 (1911) ; Tax L. §§ 40, 43. 
 
 Co. V. Tax Commissioners, 212 N. Y. ' Tax L. § 45d (L. 1916, c. 334). 
 
 472, 106 N. E. 325 (1914). ^Tax L. § 45e (L. 1916, c. 334). 
 
 * People ex rel. Third Ave. E. E. » Tax L. § 45f (L. 1916, c. 334). 
 
 Co. V. Tax Commissioners, 2l2 N. Y. " Tax L. § 48 (L. 1916, «. 581). 
 472, 106 N. E. 325 (1914). 
 
784 BUSINESS CORPORATIONS IN NEW YORK § 642 
 
 other tax; but tangible property situated in, upon, under or 
 above any street, highway, public place or public waters, sub- 
 ject to tax as special franchise as described in the statute 
 cannot be taxed except upon an assessment as a special fran- 
 chise made by the Tax Commission." By the forty-eighth 
 section of the Tax Law " it was intended that corporations 
 which were by some other statute required to pay taxes in the 
 nature of a special franchise tax for the same period of time 
 provided by the special franchise act should be given credit 
 therefor upon the tax so imposed by that act and thus prevent 
 a duplication of special franchise taxes. . . . Franchise 
 taxes relating to or affecting- entirely different periods of time 
 do not overlap and cannot constitute a duplication."" A 
 corporation organized for private gain cannot because it con- 
 tracts for a compensation to furnish water to a village escape 
 taxation as employing its property as a means of village gov- 
 ernment.^* In ascertaining the tax value of franchises, pay- 
 ments made thereunder to a municipality of percentages of 
 gross earnings, rents for use of streets and fees for car 
 licenses should be viewed as in the nature of taxes and allowed 
 as deductions." Payments made by a street railroad corpora- 
 tion to a municipality under an ordinance for the right to 
 build and operate tracks on its streets should be credited 
 against a tax levied upon the corporation's special franchise; 
 and the fact that in the ordinance are listed crossings not used 
 by the corporation and therefore not subjected to the fran- 
 chise tax does not deprive the company of the right to have 
 deducted from its franchise tax on the other crossings the 
 amount paid under the ordinance for the whole crossings 
 therein listed.^'' A railway corporation is not entitled to com- 
 pel a municipal corporation to credit against its special fran- 
 chise taxes bridge tolls paid by it to the municipality under a 
 contract for the operation of its cars over a municipal bridge ; 
 " nor does the fact that the city has credited what it has 
 received from other corporations for the right to operate cars 
 over the bridge against their special franchise taxes estop the 
 
 "Tax L. § 49 (L. 1916, c. 334). Street Railway Go. v. State Tax 
 
 ^-New York Rail-ways Co. v. City Commissioners, 150 A. D. 136, 144 
 
 of New York, 218 N. Y. 483, 113 N. Y. Supp. 74 (1913) ; aff'd 212 
 
 N. E. 501 (1916) ; Tax L. § 48 (L. N. Y. 606, 607, 106 N. E. 1040. 
 
 1909, c. 60). ^^ People ex rel. New York, West- 
 
 ^^ People ex rel. Mills Water- Chester & Boston Ry. Co. v. Hyde, 
 
 Works Co. V. Forrest, 97 N. Y. 97 143 A. D. 321, 128 N. Y. Supp. 115 
 
 (1884); L. 1873, c. 737; L. 1876, (1911); aff'd 204 N. Y. 666, 97 
 
 c. 415; L. 1877, c. 171. N. E. 1114; Tax L. § 48. 
 
 ^* People ex rel. Metropolitan 
 
§§ 643, 644 TAXATION 785 
 
 city from denying the right of, . . . [a particular corpora- 
 tion] to have what it paid credited towards its special fran- 
 chise taxes."" In determining the tax on a franchise to a 
 corporation to cross highways, assessments on crossings the 
 locus in quo of which was occupied by the railroad prior to 
 occupation thereof by the highways, are illegal." A statute 
 providing that when a corporation assessed by a municipality 
 for a franchise tax has paid the latter any snm based on a per- 
 centage of gross earnings, any other income, -any license fee 
 or any sum of money, such sum shall be deducted from the 
 tax assessed, has in view " a deduction in four cases: (1) 
 Where the corporation has paid any snm based on a percent- 
 age of gross earnings; (2) or any other income; (3) or any 
 license fee ; (4) or any sum of money on account of snch special 
 franchise, which' payment was in thcnature of a tax," and 
 '* applies only to payments made in cash;" so that a railroad 
 company compelled to furnish a city space in its subways free 
 cannot deduct the rental value of the space from its franchise 
 assessment.^' Under the statute requiring that all amounts 
 paid by a corporation to a municipality (under any agreement 
 or statute) based on a percentage of. gross earnings, other 
 income, license fee or on account of any special franchise, 
 shall be deducted from the corporation's franchise tax assess- 
 ment, not only sums paid as taxes may be deducted but a pay- 
 ment of toll by a railway to a city for crossing a bridge may 
 be deducted.^" 
 
 § 643. Id.: Review By Certiorari. — ^Review by certiorari of 
 special franchise taxation is considered in the sections of this 
 work beginning with the next one. 
 
 § 644. Id.: Review By Certiorari; Procedure in General both 
 in Real and Personal Property (Including Capital Stock) and 
 Special Franchise Certiorari, and In Inconae Tax and Fran- 
 chise Tax Certiorari. — The right to review taxation is limited 
 by the statutes.^" The Tax Law specifically prescribes the 
 
 "Matter of New York Railways N. E. 1125; Tax L. § 46 (L. 1899, 
 
 Co., 172 A. D. 128, 158 N. Y. Supp. e. 712). 
 
 237 (1916); Tax L. § 48. "People ex rel. Nassau Electric 
 
 ^^ People ex rel. New York & Railroad Co. v. Grout, 119 A. D. 
 
 Rockaway Beach Ry. Co. v. Tax 130, 103 N. Y. Supp. 975 (1907) ; 
 
 Commissioners, 157 A. D. 496, 140 aff'd 189 N. Y. 510, 81 N. E. 1173; 
 
 N. Y. Supp. 691 (1913) ; aff'd 209 Tax L. § 46. 
 
 N. Y. 599. '" Matter of Lehigh Valley R. R. 
 
 '« Matter of Consolidated Tele- Co. v. Sohmer, 174 A. D. 732, 161 
 
 graph & Electrical Subway Co., 119 N. Y. Supp. 567 (191«) ; aff'd 220 
 
 A. D. 835, 104 N. Y. Supp. 922 N. Y. 689, 115 N. E. 1057; Tax L. 
 
 (1907); aff'd 189 N. Y. 549, 82 §§182,200. 
 B. C. N. Y.— 50 
 
786 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 644 
 
 procedure which any person aggrieved by assessment of prop- 
 erty on any assessment-roll must follow to have the assess- 
 ment reviewed; and the Charter of New York City supple- 
 ments this regulation of the Tax Law ; so that these statutes 
 govern certiorari proceedings to review assessments of taxa- 
 tion against a corporation's real and personal property 
 (including capital stock) and special franchise.^ But the Tax 
 Law does not specifically provide the procedure for reviewing 
 by certiorari corporate state-income and franchise taxes, 
 referring to the Code of Civil Procedure for that procedure.^ 
 " The common-law writ [of certiorari] brings up the record 
 for inquiry into jurisdiction and regularity, and in criminal 
 or quasi-criminal cases, the evidence also, ' to see whether, 
 as a matter of law, there was any proof which could warrant 
 a conviction of the relartor' {citations). The general statutory 
 writ brings up both record and proceedings for examination, 
 not only as to jurisdiction and method of procedure, but also 
 to see whether there was a violation of any rule of law, or any 
 competent proof of all the essential facts, or a preponderance 
 of proof against the existence of any of those facts {citations). 
 The special statutory writ now before us [L. 1880, C. 269] 
 differs from its predecessors in one remarkable respect, in 
 
 ^Tax L. § 290; N. Y. Charter, 
 § 906; Tax L. § 46 says "an assess- 
 ment of a special franchise by the 
 state board of tax commissioners 
 may be reviewed in the manner pre- 
 scribed by article thirteen of this 
 chapter," which is the articl'e begin- 
 ning with section 290. 
 
 ^ As to State income tax certio- 
 rari, see Tax L. § 219 (L. 1917, 
 c. 726), §§ 199, 20O (L. 1909, c. 61). 
 As to State franchise tax certiorari, 
 see Tax L. §§ 199, 200 (L. 1909, 
 c. 61). The provisions of the Code 
 of Civil Procedure regulating cer- 
 tiorari are found in § 2120 et seq. 
 " The Code does not provide a new 
 remedy of certiorari, but regulates 
 the writ and the practice therein in 
 eases where it is expressly authorized 
 by statute, or where the right to it 
 existed at common law and has not 
 been taken away by statute. The 
 provisions of the Code apply to 
 eveiy statutory or common-law writ 
 except in cases where the statute has 
 made provisions superseding them. 
 
 The Tax Law, sections 290-296, both 
 inclusive, as amended, permits a re- 
 view of assessments by certiorari, 
 and gives certain rules governing 
 such procedure. And so far as it 
 regulates the practice and the use of 
 the writ in tax cases, the provisions 
 are exclusive and override the Code 
 provisions (citations). Where the 
 statute is silent, the provisions of the 
 Code are effective. . . . The pro- 
 vision of the Tax Law as to how the 
 writ is to be directed, relates only to 
 the issuing, of the writ and the 
 making of the return, but is silent 
 upon the question as to whether the 
 court in its discretion may allow an 
 interested party to intervene and 
 take a part in the proceedings. It 
 follows that the court, in its discre- 
 tion, has the power in a tax case, as 
 in other cases of certiorari, to bring 
 in a new party." People ex rel. New 
 York Central R. R. Co. v. Block, 178 
 A. D. 251 (1917); Tax L. § 290 
 et seq.; C. C. P. § 2137. 
 
§ 644 TAXATION . 787 
 
 that it permits a redetermination of all questions of fact upon 
 evidence, taken in part at least, by the Special Term, or under 
 its direction. ' ' ^ The special statutory writ of certiorari 
 ' ' embraces all that is contained in the common law and Code 
 writs of certiorari . . . and in addition thereto author- 
 izes a rehearing of the question at issue and the introduction 
 of additional proofs bearing thereon;" it is still a writ of 
 review.* Certiorari is the proper remedy if assessors err in 
 judgment; but if they are without jurisdiction certiorari (if 
 it be a mode of redress) is not the only remedy, and an action 
 may be maintained to recover the amount of the assessment.^ 
 "When a corporation of which assessors had jurisdiction did 
 not avail itself of its right by certiorari to review an assess- 
 ment made by them against it, it cannot later sue to rgcover 
 back the taxes it paid on an erroneous basis for their imposi- 
 tion adopted by the assessors, as such taxes are not illegal but 
 merely erroneous.® Certiorari lies to review a void assess- 
 ment' ". . . the act of 1880 (Chap. 269), which provided 
 for the allowance of writs of certiorari, furnished an adequate 
 remedy for the dissatisfied taxpayer and confined him to its 
 adoption, in all cases where the illegality of the proceedings 
 of the taxing officers consisted, not in a lack of jurisdiction 
 on their part to act, but in the commission of errors which 
 vitiated the assessment and laid it open to cancellation or 
 reversal."* A writ returnable at Special Term under the 
 Tax Law is a statutory one ; while a writ to the court for hear- 
 ing at the Appellate Division under the Code of Civil Pro- 
 cedure is a common-law one.' ". . . a party assessed in 
 the city of New York may resort, as a matter of right, to 
 either the statutory writ or to the common-law writ as regu- 
 lated by sections twenty-one hundred and twenty to twenty- 
 one hundred and forty-four. " " A writ of certiorari provided 
 for by a statute " for the review and correction of illegal, 
 
 ^People ex rel. Manhattan R. Co. Co. v. Feitner, 30 Misc. 641, 64 
 
 V. Barker, 152 N. Y. 417, 46 N. E. N. Y. Supp. 321 (1900). 
 
 875 (1897). 8 United States Trust Co. o£ N. Y. 
 
 * People ex rel. Twenty-third St. v. The Mayor, etc., of New York, 
 
 R. Co. V. Feitner, 92 A. D. 518, 87 144 N. Y. 488, 39 N. E. 383 (1895) ; 
 
 N. Y. Supp. 304 (1004). L. 1880, c. 269. 
 
 ° Union Steamboat Co. v. City of 'People ex rel. American Thread 
 
 Buffalo, 82 N. Y. 351 (1880). Co. v. Feitner, 30 Misc. ©41, 64 
 
 'United States Trust Co. v. N. Y. Supp. 321 (190O). 
 
 Mayor, 77 Hun, 182, 28 N. Y. Supp. ^° People ex rel. American Thread 
 
 342 (1894); afE'd 144 N. Y. 488, Oo. v. t'eitner, 30 Misc. 641, 64 
 
 39 N. E. 383; L. 1857, c. 456, § 3. N. Y. Supp. 321 (1900). 
 
 People ex rel. Amerioan Thread 
 
788 BUSINESS CORPORATIONS IN NEW YORK § 645 
 
 erroneous or unequal assessments " may be granted ex parte, 
 if it do not stay the action of the assessors; need not make 
 the supervisor a party ; need not be served ten days before the 
 return day ; and permits the court itself to correct the wrong 
 done, if any.^^ The statutory remedy by certiorari from a 
 tax assessment does not avaU a corporation which complains, 
 not that the assessment against it is illegal, but that the assess- 
 ment of its stockholders whom it represents is unequal, as 
 compared with that levied against real estate owners; and 
 equity will not aid because the grievance assigned does not 
 relate to any question of fraud or illegal discrimination or 
 classification." The statutory prohibition against certiorari 
 when the determination disputed is reviewable by appeal to a 
 court or some other body or officer does not apply to a case 
 in which the officers of a corporation take the stand that it is 
 not liable to a capital stock tax because exempted as a manu- 
 facturing company, and refuse, therefore, to make a report; 
 but rather to a case in which the report is made by the cor- 
 porate officers and the comptroller is dissatisfied with the 
 report, proceeds to make a valuation of his own, and settles 
 an account thereon against the company from \?hich it 
 appeals to the proper board." 
 
 § 645. Id.: Certiorari to Review Real and Personal Property 
 (Including Capital Stock) and Special Franchise Taxes, 
 Petition, Who May Make. — Any person assessed upon any 
 assessment-roll, claiming to be aggrieved by any assessment 
 for property therein, may present a petition; and two or more 
 persons assessed upon the same roll who are affected in the 
 same manner by the alleged illegality, error or inequality, 
 may unite in the same petition." The petition in a certiorari 
 proceeding to review a New YoA City tax must be that of the 
 party aggrieved." If a corporation assessed for real estate 
 taxes and claiming reduction or exemption wilfully refuses 
 to appear when summoned by the tax board to testify it can- 
 
 ^^ People ex rel. Ulster & Delaware stock were assessed and taxed at 
 
 R. R. Co. V. Smith, 24 Hun, 66 their full value. 
 
 (1881); dism'd 85 N. Y. 628; L. 1=* People ex rel. Brush Electric 
 
 1880, c. 369; C. C. P. §§ 2128, 2355, Mfg. Co. v. Wemple, 129 N. Y. 543, 
 
 2132, 2138. 14 L.R.A. 708, 29 N. E. 808 (1892) ; 
 
 ^^ Mercantile Nat. Bank v. Mayor, L. 1880, c. 542, as amend'd L. 1881, 
 
 etc., of N. Y., 172 N. Y. 35, 64 N. E. c. 361. 
 
 756 (1906). The complaint was that "Tax L. § 290 (L. 1916, c. 323, 
 
 realty was assessed and taxed at not § 76). 
 
 more than 60 per cent, of its actual ^' Greater N. Y. Charter, § 906 
 
 value while the plaintiff's shares of (L. 1911, c. 455). 
 
§ 646 TAXATION 789 
 
 not obtain review by certiorari." Certiorari proceedings to 
 review real estate taxation will apparently not be entertained 
 though instituted on refusal of the tax board to reduce its 
 assessment on request by a corporation engaged in the busi- 
 ness of reducing tax assessments to so reduce; because such 
 request is not made by one entitled by statute to make it.^^ 
 
 § 646. Id.: Where and When Made. — The petition must be 
 presented to the Supreme Court.^* The petition must be pre- 
 sented to a Justice of the Supreme Court or at a Special Term 
 of the Supreme Court in the judicial district in which the 
 assessment complained of was made." A certiorari to review 
 or correct on the merits any final determination of the Board 
 of Taxes and Assessments of New York City must be allowed 
 by the Supreme Court or any Justice thereof.^" The petition 
 must be presented within fifteen days after the completion and 
 filing of the assessment-roU and the first posting or publica- 
 tion of the notice thereof as required by the Tax Law.^ If 
 no notice of completion and filing of an assessment-roll is 
 given, though required by statute, the period of liinitation 
 prescribed by it for making application for a writ of certiorari 
 to review the tax assessment does not bind, although if there 
 has been long delay in applying for the writ it may be that 
 the court could dismiss it on account of laches." A writ of 
 certiorari to review an assessment against a corporation in 
 the City of New York need be applied for only within four 
 months and not within fifteen days.^ The Supreme Court will 
 not entertain applications to correct assessments unless appli- 
 cation has first been made to the commissioners, assuming 
 that they have jurisdiction to assess ; but if they had not, and 
 their assessment is void, application may be made directly to 
 
 ^"People ex rel. Trojan Realty ''Tax L. § 291 (L. 1906, c. 61). 
 
 Corporation v. Purdy, 174 A. D. ^"Greater N. Y. Charter, § 906 
 
 702, 162 N. Y. Supp. 56 (1916); (L. 1911, c. 455). 
 
 Tax L. § 37 (L. 1909, c. 62). 'Tax L. § 291 (L. 1906, c. 61). 
 
 " People ex rel Moersheimer v. " People ex rel. American Ex- 
 
 Purdy, 174 A. D. 094, 162 N. Y. change National Bank v. Purdy, 196 
 
 Supp. 70, rev'd 221 N. Y. 481, 483, N. Y. 270, 89 N. E. 838 (1909) ; 
 
 116 N. E. 390 (1916) ^ Tax L. § 37 Tax L. § 251, now § 291. 
 
 (L. 1909, c. 62); Greater N. Y. * People ex rel. Langdon v. Feit- 
 
 Charter, §§ 895, 898, 906 (L. 1913, ner, 30 Misc. 646, 64 N. Y. Supp. 
 
 e. 324) ; Bus. Corp. L. § 2a (L. 1909, 269 (1900) ; C. C. P. § 2125; Gen. 
 
 c. 484) ; Penal L. § 280 (L. 199, Tax L. § 251 (L. 1896, c. 908) ; see 
 
 e. 317). now Tax L. § 290 et seq.; Greater 
 
 '« Tax L. § 290 (L. 1916, «. 323, N. Y. Charter, §§ 892-895, 907, 909. 
 § 76). 
 
790 BUSINESS CORPORATIONS IN NEW YORK § 647 
 
 the Supreme Court by certiorari.* The statutory remedy of 
 certiorari to review and correct an illegal, excessive or 
 unequal assessment is not available to a corporation which has 
 omitted to file a report of its capital stock and has neglected, 
 after it has been assessed, to apply within the statutory limi- 
 tation of time to the tax commissioners for a correction of the 
 assessment/ 
 
 § 647. Id. : Form, Contents and Grounds. — The petition must 
 (1) be duly verified; and set forth (2) that the assessment is 
 illegal, specifying (a) the grounds of the alleged illegality, 
 or (b) if erroneous by reason of overvaluation, stating the 
 extent of such overvaluation, or (c) if unequal in that the 
 assessment has been made at a higher proportionate valua- 
 tion than the assessment of other property on the same roll 
 by the same officers, specifying the instances in which such 
 inequality exists, and the extent thereof; (3) that the peti- 
 tioner is or will be injured thereby; and (4) that the appli- 
 cation has been made in due time to the proper officers to 
 correct such assessment." In certiorari proceedings for 
 assessment by New York City, the petition must (1) be 
 verified, (2) specify the grounds therefor, viz., (a) that the 
 assessment is illegal, giving the particulars of the alleged 
 illegality, or (b) that it is erroneous by reason of overvalua- 
 tion, or (c) in the case of real estate that it is erroneous by 
 reason of inequality in that the assessment has been made at 
 a higher proportionate valuation than the assessment of other 
 real estate of like character in the same ward or section or 
 other real estate on the tax rolls of the city for the same 
 year, specifying the instances in which such inequality exist?, 
 and the extent thereof, (3) state that the petitioner is or will 
 be injured thereby.' ' ' Section two hundred and ninety et seg 
 of the Tax Law ... as well as section nine hundred and 
 six of the Greater New York Charter . . . provide that 
 any person claiming to be aggrieved by any assessment may 
 seek relief through a writ of certiorari upon either one of 
 three grounds : First for illegality, in which case the grounds 
 of the alleged illegality must be stated ; second, for overvalua- 
 tion, in which case the extent of the overvaluation must be 
 
 * People ex rel. New York Edison 99 N. Y. 254, 1 N. E. 773 (1885) ; 
 
 Co. V. Feitner, 39 Misc. 474, 80 L. 1859, c. 302, § 8; L. 1880, c. 269. 
 
 N. Y. Supp. 138 (1902); Gen. Tax « Tax L. § 290 (L. 1916, c. 323, 
 
 L. § 250, see now Tax L. § 290 et § 76). 
 
 seq.; N. Y. City Charter, § 895. 'Greater N. Y. Charter, § 906 
 
 ° People ex rel. Mutual Union (L. 1911, c. 455). 
 Telegraph Co. v. Commrs. of Taxes, 
 
§ 647 TAXATION 791 
 
 stated; third, for inequality, in which case facts showing the 
 inequality must be stated. The judgment to be awarded if 
 the petitioner establishes his claim, is in case the assessment 
 is found to be ' illegal, ' that it shall be stricken from the roll, 
 in which case the property would remain unassessed for any 
 sum and in case it is ' erroneous ' for overvaluation or inequal- 
 ity that a reassessment be made or the roll be corrected, in 
 which case the property will remain assessed at the proper 
 valuation. " * A case of " an assessment of a parcel of real 
 estate which the tax commissioners had jurisdiction to assess, 
 but as to which they unlawfully included an element of value, 
 to wit, an uncompleted building which while it constituted 
 a part of the real estate, was expressly exempted from taxa- 
 tion," is a case not of an " illegal " assessment but of one 
 erroneous for overvaluation, which cannot be attacked for 
 "illegality" or on a petition alleging only "illegality."' 
 Certiorari to review a franchise tax assessment on the claim 
 of lack of jurisdiction to make it, as distinguished from a 
 claim of overvaluation, lies though the relator filed no written, 
 verified objection.^" ". . . a corporation taxed upon its 
 special franchise is entitled to assail the assessment on the 
 ground of inequality. ' ' ^^ The inequality of taxation which is 
 the subject of review in certiorari proceedings " has refer- 
 ence to a case where the assessors have departed from the 
 general rule, or ratio, of assessment in a particular case, to 
 the taxpayer's injury, and where there have resulted unequal 
 valuations of the same class of property, so that the com- 
 plainant 's property has been valued higher in proportion than 
 other similar property on the same assessment roll."" The 
 absence in a petition for a writ of certiorari to review a 
 franchise tax assessment of statements of the extent of the 
 overvaluation must be taken advantage of by motion to quash 
 the writ; and if return be made thereto as though the petition 
 sufficed and the questions involved be submitted to the court 
 
 * People ex rel. Soeurbee, Inc. v. ^"People ex rel. N. Y. C. & H. R. 
 
 Purdy, 179 A. D. 748, 167 N. Y. B. R. Co. v. Keno, 61 Misc. 345, 114 
 
 Supp. 91 (1917); Tax L. § 290 et N. Y. Supp. 1094 (1908); Tax L. 
 
 seq. (L. 1916, c. 323) ; Greater N. Y. § 36, now § 37. 
 
 Charter, § 906 (L. 1911, c. 455); "People ex rel. Jamaica W. S. 
 
 Tax L. § 293 (L. 1916, c. 323). Co. v. Tax Commissioners, 196 N. Y. 
 
 'People ex rel. Soeurbee, Inc. v. 39, 89 N. E. 581 (1909). 
 
 Purdy, 179 A. D. 748, 167 N. Y. " Mercantile Nat. Bank v. Mayor, 
 
 Supp. 91 (1917) ; Tax L. § 290 et etc., of N. Y., 172 N. Y. 35, 64 
 
 seq. (L. 1916, c. 323) ; Greater N. Y. N. E. 756 (1902) ; L. 1880, e. 269. 
 Charter, § 906 (L. 1911, e. 455). 
 
792 BUSINESS CORPORATIONS IN NEW YORK § 647 
 
 upon the merits, the defect is waived.^' The statutory state- 
 ment in a petition for a writ to review an assessment, that 
 ' ' application has been made in due time to the proper officers 
 to correct such assessment, ' ' should be inserted in the petition 
 only in cases where the assessment is sought to be reviewed on 
 some other ground than that it is " illegal," as that word is 
 used in the statute, and a writ granted on a petition omitting 
 such statement will not be quashed." AU that is necessary to 
 permit an application by a corporation for a writ of certiorari 
 to review an assessment of its real property in New York City 
 for a given year is that there be a completed assessment book 
 or roll; that the commissioners of taxes should have acted 
 definitely in fixing the amount of the assessment upon its 
 property, and should have taken final action which could not 
 be revised or altered and which constituted an adjudication 
 that could be reviewed." A petition by a corporation to 
 review an assessment on its real estate is sufficient to warrant 
 the grant of a writ of certiorari if it allege that other assess- 
 ments on the roll were made at a lower proportionate valua- 
 tion than the assessment of the relator's property, and that 
 its assessment is not only largely in excess of the real value 
 of the property, but is not in proportion to the basis of the 
 valuation adopted in making other assessments." The court 
 may, on a motion to strike from a petition for certiorari to 
 review an assessment an allegation that other real and per- 
 sonal property was assessed at a less proportionate value 
 than that of the petitioner, on the ground that it failed to 
 specify the instances and extent of the inequality, permit an 
 amendment to the petition and subsequent proceedings to 
 cover the defect." A ground, alleged for reduction by 
 certiorari of a capital stock assessment, that the commis- 
 sioners have illegally included in their valuation of the corpo- 
 ration's personalty the then market-value of the capital stock, 
 to wit, one hundred and twelve per cent upon the whole of it, 
 fairly apprises them of the objection that the method on 
 
 ^=' People ex rel. New York & Supp. 1020 (1897), 155 N. Y. 308, 
 
 Rockaway Beach Ry. Co., v. Tax 49 N. E. 775. 
 
 Commissioners, 157 A. D. 496, 140 ^"People ex rel. Bronx Gas Co. v. 
 
 N. Y. Supp. 691 (1913) ; aff'd 209 Eeitner, 43 A. D. 198, 59 N. Y. 
 
 N. Y. 599, 103 N. E. 1130; Tax L. Supp. 327 (1899); Greater N. Y. 
 
 § 290. City Charter, § 906 (L. 1897, c. 378). 
 
 ^* People ex rel. American Thread ^^ People ex rel. Brooklyn Ele- 
 
 Co. V. Feitner, 30 Misc. 641, 64 vated E. R. Co. v. Assessors, 10 
 
 N. Y. Supp. 321 (1900). A. D. 393, 41 N. Y. Supp. 769 
 
 "People ex rel. Bronx Gas Co. v. (1896) ; L. 1896, c. 908, §§ 250, 251; 
 
 Barker, 22 A. D. 161, 47 N. Y. C. C. P. § 723. 
 
§§ 648-652 TAXATION 793 
 
 which the assessment proceeded was illegal, and is not 
 simply an objection of overvaluation to the extent of twelve 
 per oent.^* 
 
 § 648. Id.: The Writ of Certiorari, When Allowed, and 
 Effect. — Upon the presentation of the petition the justice or 
 court may allow a writ of cettiorari." The allowance of the 
 writ does not stay the proceedings of the assessors or other 
 persons to whom it is directed or to whom the assessment is 
 delivered, to be acted upon according to law.^" The writ of 
 certiorari to review an assessment of a special franchise can- 
 not be used by the court or judge issuing it to bring before the 
 court a municipal corporation as a party defendant.^ 
 
 § 649. Id.: Against Whom Issued. — The writ of certiorari 
 is allowed against or to the officers making the assessment, to 
 review such assessment.^ A certiorari to review or correct 
 on the merits any final determination of the Board of Taxes 
 and Assessments in New York City must be directed to the 
 Commissioner of Taxes and Assessments.' 
 
 § 650. Id.: Form and Contents. — ^The writ of certiorari must 
 (a) be to the officers making the assessment, (b) be to review 
 the assessment, (c) prescribe the time within which a return 
 thereto must be made.* 
 
 § 651. Id.: Service of. — ^In the six hundred and sixty-ninth 
 section of this work will be found a discussion of service of a 
 writ of certiorari. 
 
 § 652. Id.: The Return to the Writ, When and Where 
 Returnable. — The time within which the return to the writ of 
 certiorari must be made is that prescribed in the writ, but 
 it must not be less than ten days and may be extended by the 
 court or a justice thereof. The return of the writ must be 
 made to a Special Term of the Supreme Court of the judicial 
 district in which the assessment complained of was rnade.^ 
 In all proceedings, brought under the two hundred and fifty- 
 first [now two hundred and ninety-first] section of the Tax 
 Law, in which it is sought to review the final determination 
 of the board of taxes and assessments, as a board, the writ of 
 certiorari must be returnable in the first judicial district." 
 
 '* People ex rel. Eqtiitable Gas- § 251, art. 11, see now § 291; Tax 
 
 Light Co. V. Barker, 66 Hun, 21, L. § 45 (L. 1900, c. 254). 
 
 20 N. Y. Supp. 797 (1892); aff'd ^Tax L. § 2&1 (L. 1906, e. 61). 
 
 137 N. Y. 544, 33 N. E. 336. ? Greater N. Y. Charter, S 906 (L. 
 
 "Tax L. § 291 (L. 1906, c. 61). 1911, c. 455). 
 
 2° Tax L. § 291 (L. 1909, c. 61). ^Tax L. § 291 (L. 1906, c. 61). 
 
 ^People ex rel. Rochester Tele- = Tax L. § 291 (L. 1906, c. 61). 
 
 phone Co. v. Priest, 95 A. D. 44, ° People ex rel. Long Island R. R. 
 
 88 N. Y. Supp. 11 (1904); Tax L. Co. v. Peitner, 53 A. D. 181, 65 
 
794 BUSINESS CORPORATIONS IN NEW YORK § 653 
 
 § 653. Id.: Form and Contents of Return. — The officers 
 .making a return to the writ need not return the original 
 assessment-roll or other original papers acted upon by them, 
 but it is sufficient to return certified or sworn copies of such 
 roll or papers, or of such portions thereof as may be called 
 for by such writ; and the return- must concisely set forth such 
 other facts as may be pertinent and material to show the 
 value of the property assessed on the roll and the grounds 
 for the valuation made by the assessing officers.' The return 
 must be verified.* The officers making a return under the 
 certiorari provided in the Tax Law, as distinguished from the 
 certiorari at cOmmon-law or under the Code of Civil Pro- 
 cedure, cannot file an " answer ' ' admitting the making of the 
 assessment-roll and alleging the property was assessed at its 
 true market value, but must make ' ' certified or sworn copies 
 of such roll or papers, or of such portions thereof as may be 
 called for by such writ," without reference to fees or com- 
 pensation.' The statutory provision that a return by com- 
 missioners assessing a corporate franchise tax must set forth 
 the grounds for the valuation made by the assessing officers 
 requires " that the assessing officers should tell the court 
 how they got at the valuation; in other words, that they 
 should disclose the modus operandi leading to the result 
 which they reached."" The statutory mandate that the 
 return of the officials taxing a corporate special franchise 
 " must concisely set forth such other facts as may be per- 
 tinent and matet-ial to show the value of the property assessed 
 on the rolls and the grounds for the valuation made by the 
 assessing officers ' ' requires that the return tell the court how 
 such officers got at the valuation, i. e., not merely a statement 
 from which the grounds may be guessed at ; and an order for 
 a further return to a writ of certiorari to review such an 
 assessment will be granted if such grounds are not set forth." 
 A return by the State Board of Tax Commissioners on a 
 special franchise should contain not merely the conclusion of 
 the Board as to the franchise's value but the evidence on 
 
 N. Y. Supp. 935 (1900); Tax L. '"People ex rel. Jamaica W. S. 
 
 § 251 (L. 1896, c. 908, now § 291) ; Co. v. Tax Commissioners, 196 N. Y. 
 
 Greater N. Y. Charter, §§ 906, 908. 39, 89 N. E. 581 (1909). 
 
 ^Tax L. § 292 (L. 1906, c. 61). "People ex rel. Buffalo Gas Co. 
 
 'Tax L. § 292 (L. 1906, c. 61). v. Tax Commissioners, 199 N. Y. 
 
 »Peopl« ex rel. Long Island R. R. 162, 92 N. E. 215 (1910) ; Tax L. 
 
 Co. V. Wolf, 152 A. D. 173, 136 § 292. S«e also People ex rel. The 
 
 N. Y. Supp. 465 (1912) ; Tax L. Lehigh Valley R. Co. v. Woodbury, 
 
 §§ 290-292. 199 N. Y. 167, 92 N. E. 217 (1910). 
 
§§ 654, 655 TAXATION 795 
 
 which the conclusion is based and the grounds for the valua- 
 tion made." A requirement in a writ of certiorari to 
 assessors of the special franchise of a corporation that they 
 return " the manner of making the same [the assessment], 
 the method pursued by you in making and fixing a valuation 
 . . ., with the basis adopted by you for such valuation 
 thereof," will be stricken out as surplusage, because the 
 statute requires of them to return the facts " pertinent and 
 material to show the value of the property " and " the 
 grounds for the valuation ' ' and no writ can require of them 
 to do either more or less." If a return by commissioners of 
 taxes and assessments in New York City to a writ of certiorari 
 sued out by a corporation to review their assessment of its 
 capital and surplus traverses an averment in its petition that 
 it was denied opportunity to inspect the tax books and instead 
 alleges that full notice, after the assessment, was given that 
 the books were open for inspection, the return is conclusive ; 
 and if, in fact, the averments of the return are untrue in this 
 respect, the relator's remedy is by action for a false return." 
 
 § 654. Id.: Filir^ of. — The return must be filed in the office 
 where the writ is returnable, according to the command 
 thereof."* 
 
 § 655. Id.: Hearing, Reference, Striking Out or Correcting 
 Assessment, or Re-assessment, In General. — Upon the return 
 to the writ the court may (1) order the assessment stricken 
 from the roll, if it appears that it is illegal; or (2) order (a) 
 a reassessment of the property of the petitioner, or (b) the 
 correction of the assessment upon the roll in whole or in part 
 in such manner as shall be in accordance with law or as shall 
 make it conform to the valuations and assessments of other 
 property upon the same roll and secure equality of assess- 
 ment, if it appears that the assessment is erroneous or 
 unequal; or (3) take evidence, if, upon the hearing it appears 
 
 ^^ People ex rel. New York, On- does not aver that the relator ever 
 
 tario and Western Ry. Co. v. Tax appeared before the board of tax 
 
 Commissioners, 132 A. D. 604, 117 commissioners and offered to be 
 
 N. Y. Supp. 81 (1909) ; Tax L. sworn, or to present testimony show- 
 
 § 45 (L. 1900, c. 254), now § 46. ing that the statement as filed by 
 
 ^ People ex rel. Buffalo Gas Co. them was erroneous in any respect 
 
 V. Commissioners, 55 A. D. 186, 67 or that the tax which was levied 
 
 N. Y. Supp. 51 (1900) ; Tax L. was excessive. . . . the person 
 
 § 252 (L. 1896, c. 908), now § 292. or corporation must present himself, 
 
 "People ex rel. Rochester Lamp its agents or officers ..." A 
 
 Co. V. Feitner, 65 A. D. 224, 72 letter applying for revision is in- 
 
 N. Y-. Supp. 641; Greater N. Y. City sufficient. 
 
 Charter, § 898 (1901). « The petition "" C. C. P. § 2134. 
 
796 BUSINESS CORPORATIONS IN NEW YORK § 655 
 
 to the court that testimony is necessary for the proper dis- 
 position of the matter, or (4) appoint a referee to take such 
 evidence as it may direct and report it to the court with his 
 findings of fact and conclusions of law, if upon the hearing it 
 appears to the court that testimony is necessary for the 
 proper disposition of the matter.^° If a reference is ordered, 
 the evidence taken by the referee together with his report and 
 findings of fact and conclusions of law constitute a part of the 
 proceedings upon which the determination of the court must 
 be made." Upon a hearing on the return of a writ, the parties 
 to the proceeding may mutually agree upon the number of 
 pieces of property to be valued and the number of witnesses 
 to be sworn on the subject of the value of such properties ; but 
 in case the parties fail to so agree, then upon application of 
 either party the court must determine the number of witnesses 
 to be sworn and the number of pieces of property to be valued, 
 and must limit the same to such number as the court deems 
 reasonable." ' ' Ordinarily, the writ of certiorari whereby the 
 court reviews the judicial or quasi-judicial determination of 
 a board or body of officers brings up for consideration only 
 the evidence on which such board or body of officers acted and 
 the court is called upon to decide whether any error of law 
 or fact was committed in dealing with such evidence. When 
 the action of assessing officers, however, is questioned by a 
 writ of certiorari under the Tax Law, the court is authorized 
 by the statute to take further and additional proof as to the 
 true" value of the assessed property, and upon such proof, in 
 addition to the evidence before the assessing officers, it must 
 endeavor to reach a correct conclusion as to what is a proper 
 valuation. A certiorari proceeding under the Tax Law, there- 
 fore, is very much like a revaluation of the property which is 
 the subject of assessment. ' ' '* The remedy given by the nine 
 hundred and sixth section of the Charter of Greater New 
 York to review a determination of the Tax Board by 
 certiorari is to bring about a new hearing by the court in 
 which it may review the whole subject and is not bound by 
 the strict rules of the common law, in the admission of evi- 
 dence or otherwise." "... a hearing on the return^ to 
 
 " Tax L. § 293 (L. 1916, c. 323, Co. v. Tax Commissioners, 196 N. Y. 
 
 § 77). 39, 89 N. E. 581 (1909). 
 
 "Tax L. § 293 (L. 1916, c. 323, "People ex rel. Brooklyn Devel- 
 
 § 77). opjnent Co. v. Purdy, 96 Misc. 10, 
 
 " Tax L. § 293 (L. 1916, c. 323, 159 N. Y. Supp. 778 (1916) ; aflPd, 
 
 § 77). without opinion, 177 A. D. 936, 164 
 
 "People ex rel. Jamaica W. S. N. Y. Supp. 1107 (App. Div. 2d 
 
§ 655 TAXATION 797 
 
 the certiorari [to correct a tax assessment] is in substance a 
 new trial ; . . . new evidence may be taken which, by the 
 command of the statute, the court is bound to consider in 
 making its determination. " ™ A corporation cannot have 
 evidence taken in certiorari proceedings to cancel or reduce 
 an assessment of its capital stock unless its application for 
 reduction tenders a question of fact and contains a statement 
 of facts which if true would require a cancellation or reduc- 
 tion.^ An assessment Qf a corporation for taxation will be 
 stricken from the rolls on certiorari only if illegal: if simply 
 erroneous because a wrong basis of assessment was adopted 
 a reassessment will be ordered.^ It is incumbent on the 
 relator appealing in certiorari from a tax assessment to 
 affirmatively show that the assessment imposed was exces- 
 sive.^ Facts deemed sufficient to present a prima facie case of 
 erronepus assessment of a corporation's real estate by reason 
 of overvaluation and inequality are given in the note ease.* 
 The entire proof must be considered to determine if a per- 
 sonal property assessment against a domestic corporation is 
 proper ; and if it show that its debts exceed its taxable assets 
 an assessment must be vacated.^ The General Tax Law must 
 be read in connection with the Greater New York Charter 
 and controls in the absence of conflicting charter provisions ; 
 so that only the total assessment against both improved and 
 unimproved land can be reviewed by the court, and not the 
 value of the land exclusive of the buildings thereon.^ Special 
 
 Dept.); Greater N.Y. Charter, § 906. Co. v. Teitner, 78 A. D. 313, 79 
 
 "... the burden of proof is N. Y. Supp. 975 (1903); Tax L. 
 
 upon the party assailing the assess- § 12 (L. 1896, e. 908). 
 
 ment to establish affirmatively its al- ^ People ex rel. Niagara Falls, etc., 
 
 leged inequality or exeessiveness. Co. v. Tax Commissioners, 202 N. Y. 
 
 ... In the absence of proof to 426, 95 N. E. 754 (1911). 
 
 the contrary, the assessors are pre- * People ex rel. Broadway Realty 
 
 sumed to have properly performed Co. v. Feitner, 61 A. D. 156, 70 
 
 their duties . . ." N. Y. Supp. 452 (1901) ; aff'd 168 
 
 ^People ex rel. Bibb Mfg. Co. v. N. Y. 661, 61 N. E. 1132. 
 
 Wells, 84 A. D. 330, 82 N. Y. Supp. = People ex rel. Sicilian Asphalt 
 
 564 (1903). Co. V. Feitner, 30 Misc. 665, 64 
 
 ^People ex rel. Cord Meyer Co. v. N. Y. Supp. 298 (1900). 
 
 Feitner, 39 Misc. 467, 80 N. Y. ° People ex rel. Morse Dry Dock 
 
 Supp. 152 (1902) ; Tax L. § 253 & Repair Co. v. Purdy, 100 M'ise. 
 
 (L. 1896, c. 908), now § 293. The 580, 167 N: Y. Supp. 69 (1917) ; 
 
 application for reduction said the Tax L. § 21-a. A writ of certiorari to 
 
 corporation's realty was not all in review an assessment of real property 
 
 New York City and it had many and a building thereon on the ground 
 
 parcels therein assessed at over that the building was not assess- 
 
 $400,000. able because in New York City and 
 
 ^ People ex rel. Consolidated G-as in the course of construction will not 
 
798 BUSINESS CORPORATIONS IN NEW YORK § 656 
 
 Term has discretion to permit an amendment to a writ of 
 certiorari made returnable through error at the county clerk's 
 office instead of Special Term, even though the objection is 
 taken on special appearance.' The municipal representatives 
 of a city of the second class may be allowed by the court to 
 appear in proceedings to reduce the assessments of property 
 of corporations in such city in order to equalize it with that 
 of the realty in the city even though notice of such proceed- 
 ings had been given by the Attorney-General to the corpora- 
 tion counsel of the city and he had done nothing.* The statute 
 providing for the taking of testimony by the court or a referee 
 on a hearing on a writ of certiorari to review an assessment 
 for taxation on a corporation's real estate, while permissive 
 in form, is nevertheless, mandatory ; and the court cannot dis- 
 miss the proceeding if the relator request that testimony be 
 taken and its papers are sufficient, as the only option the court 
 has is to determine whether it will take the testimony or 
 appoint a referee to do so.° The fact that on a special stat- 
 utory certiorari proceeding the court decides in the first 
 instance that testimony is necessary to be given to make a 
 proper disposition of the proceeding does not conclude it on 
 a motion to confirm the report of the referee it appointed to 
 take the testimony from determining that upon the face of the 
 return it appears that the tax is illegal and void," 
 
 § 656. Id.: In Special Franchise Certioraris. — When the 
 writ is obtained to review a special franchise assessment made 
 pursuant to the provisions of the second article of the Tax 
 Law, the court, upon the filing of the return to the writ may 
 (1) take such evidence as it may deem necessary, or (2) 
 appoint a referee to take evidence and to hear, try and deter- 
 mine all questions raised by the petition and the return 
 thereto, and to make his findings and determinations therein, 
 or (3) on motion of either party direct the place of trial 
 
 be quashed because the relator * People ex rel. Rochester R. R. 
 
 charged illegality when relator should Co. v. Priest, 41 Misc. 545, 85 N. Y. 
 
 have charged overvaluation if the Supp. 235 (IQ'OS). 
 
 sufficiency of the petition was not ® People ex rel. Bronx Gas Co. v. 
 
 challenged and no motion to quash Feitner, 43 A. D. 198, 50 N. Y. 
 
 the writ was made on that ground. Supp. 327 (1899); Tax L. § 253 
 
 People ea: reJ. Gleason V. Purdy, 223 (L. 1896, c. 908), now § 293; 
 
 N. Y. 88 (1918); Greater N. Y. Greater N. Y. City Charter, § 906 
 
 Charter, § 889-a. (L. 1897, c. 378). 
 
 ' People ej rel. New York Central ^° People ex rel. Twenty-third St. 
 
 & Hudson River R. R. Co. v. Cook, R. Co. v. Feitner, 92 A. D. 518, 87 
 
 62 Hun, 303, 17 N. Y. Supp. 546 N. Y. Supp. 304 (1904). 
 (1891); L. 1880, c. 269, § 2. 
 
§ 656 TAXATION 799 
 
 changed to the county in which the special franchise under 
 review is situated." On due entry of an order granting a 
 motion to change the place of trial, the place of trial is deemed 
 changed to the county designated, and the papers and pro- 
 ceedings must be certified to that county in the manner pro- 
 vided by law in the case of a change in the place of trial of an 
 action, and all subsequent proceedings must be had in the 
 county so designated, as if the special proceedings had been 
 originally instituted in that county j and the court, upon the 
 application of the Attorney-General upon cause shown, may 
 vacate any reference made in any proceeding instituted prior 
 to April twenty-sixth, nineteen hundred sixteen to review a 
 special franchise assessment, made pursuant to the provisions 
 of the second article of the Tax Law." The Governor upon 
 application of the Attorney-General upon cause shown may 
 appoint extraordinary terms of the Supreme Court to be held 
 in any judicial district and to try such special franchise cases 
 and designate a justice to preside thereat ; and such extraor- 
 dinary term has jurisdiction over all special franchise cases 
 arising in any tax district within the judicial district for 
 which, the term is appointed, without regard to the county in 
 which the term is being held, and either party to a proceeding 
 to review a special franchise assessment may at any time 
 bring the proceeding on for a hearing or trial before such 
 extraordinary term by serving upon the other party sixteen 
 days' notice thereof by mail or fourteen days' notice person- 
 ally.^^ A new assessment or a correction of an assessment" 
 made by order of the court has the same force and effect as 
 if it had been so made by the proper officers within the time 
 prescribed by law for making such assessment." " ... 
 for purposes of review upon certiorari the valuation of a 
 special franchise shall be treated as though it had been fixed 
 by the same officers as those who made the other assessments 
 upon the roll." " The presumption is that an assessment for 
 franchise taxation made by assessors is correct and it will 
 not be overthrown without evidence that their conclusion is 
 wrong.^^ A relator certioraring the tax board for assessing 
 
 " Tax L. § 293-a (L. IQ'l©, e. 323). Co. v. Tax Commissioners, 196 N. Y. 
 
 " Tax L. § 293-a (L. 1916, c. 323, 39, 89 N. E. 581 (1909) ; Tax L. 
 
 § 78). §§ 42, now § 43, and 250, now § 290. 
 
 "Tax L. § 293-a (L. 1916, c. 323, "People ex rel. New York & 
 
 § 78). Rockaway Beaeh Ry. Co. v. Tax 
 
 " Tax L, § 293-a (L. 1916, c. 323, Commissioners, 157 A. D. 496, 140 
 
 § 78). N. Y. Supp. eg'l (1913); aff'd 209 
 
 ^= People ex rel. Jamaica W. S. N. Y. 599, 103 N. E. 1130. 
 
800 BUSINESS CORPORATIONS IN NEW YORK §§ 657, 658 
 
 an excessive franchise tax against it must affirmatively show 
 that the assessment is excessive and that it is entitled to have 
 it reduced." " ... the assessment of a special franchise 
 may be reduced so as to equalize it with other assessments in 
 the same locality." ^^ The review contemplated by the forty- 
 sixth (formerly forty-fifth) section of the Tax Law, so far as 
 inequality of assessment is concerned, relates to assessments 
 or valuations of different franchises alone, and not their com- 
 parison with the assessments of any other kinds of property." 
 The court will not compel the State Board of Tax Commis- 
 sioners to change its assessment or valuation of a special 
 franchise so as to make it correspond with that of the local 
 assessors wherein the corporation taxed operates.^" 
 
 § 657. Id. : Costs. — The statute governing costs in certiorari 
 proceedings to review assessments on real and personal prop- 
 erty and on special franchises is given in full hereinafter.^ 
 A relator which has come into court and has succeeded in 
 reducing an assessment by an amount greater than half the 
 reduction claimed before the assessing officers may have costs 
 and disbursements against the tax district, represented by 
 the tax commissioners.^ A relator obtaining a reduction by 
 certiorari of more than one-half the assessment claimed before 
 the assessing officers for its special franchises is entitled to 
 costs and disbursements.^ 
 
 § 658. Id.: Appeals.— An appeal may be taken by either 
 party from an order, judgment or determination under 
 certiorari proceedings as from an order, and the appeal must 
 be heard and determined in like manner as appeals in the 
 Supreme Court from orders, and all issues and appeals in any 
 such proceeding have preference over all other civil actions 
 and proceedings in all courts.* " ... the proceeding by 
 certiorari against assessors, given by chapter 269 of the Laws 
 
 " People ex rel. Buffalo & Lake ' Tax L. § 294 (L. 1909, c. 61). 
 
 Erie Traction Company v. Tax Com- ^ People ex rel. Consolidated 
 
 missioners, 156 A. D. 466, 142 N. Y. Water Co. v. Woodbury, 67 Misc. 
 
 Supp. 116 (1913) ; aff'd 209 N. Y. 503, 122 N. Y. Supp. 904 (1910) ; 
 
 502, 103 N. E. 778. Tax L. § 294 (Consol. L. c. 60). 
 
 ^ People ex rel. Delaware, Lacka- ^ People ex rel. New York Mail 
 
 wanna & Western R. R. Co. v. Tax and Newspaper Transportation Co. 
 
 Commissioners, 134 A. D. 765, 119 v. Tax Commissioners, 157 A. D. 
 
 N. Y. Supp. 260 (1909). 686, 142 N. Y. Supp. 758; aff'd 210 
 
 "People ex rel. New England N. Y. 623, 104 N. E. 1138; Tax L. 
 
 Telegraph Co. v. Woodburv, 63 § 294. 
 
 Misc. 1, 116 N. Y. Supp. 209 (1909). * Tax L. § 295 (L. 1909, c. 61). 
 
 "" People ex rel. New England 
 Telegraph Co. v. Woodbury, 63 
 Misc. 1, 116 N. Y. Supp. 209 (1909). 
 
§ 659 TAXATION 801 
 
 of 1880, is peculiar and exceptional among special proceed- 
 ings; . . . it is governed in all respects by the act by 
 which it is provided ; . . . appeals therein are to be had 
 and treated in all respects as appeals from orders, — and 
 . . . costs on such appeals, when allowed in the discretion 
 of the court, are to be taxed as motion costs, and not as the 
 costs of an appeal from a judgment." ^ The appellate court 
 on a review by certiorari under the Tax Law is bound to 
 assume at the outset that the valuation of a special franchise 
 fixed by the State Board of Tax Commissioners is correct; 
 and one assailing its validity must make it conclusively 
 appear that the method by which the assessors arrived at the 
 result complained of was incorrect, and that the assessment 
 does not represent the fair value of the property assessed.'' 
 § 659. Id.: Refund; Apportionment of Mixed Assessments; 
 Collection After Removal from County; Collection by Supp. 
 Pro.; Contempt, Fines, Imprisonment; Dismissal of Proceed- 
 ings; Cancellation for Lack of Jurisdiction or of Personalty; 
 Failure of Collector to Pay Over; Sequestration of Corporation 
 Not Paying; Recovery of Surplus from Sale. — The statute 
 makes provision for refund of taxes found by certiorari pro- 
 ceedings not to be due ; ' for apportionment when premises of 
 one person have been wrongfully taxed in with premises of 
 another ; * for collection of a tax from one who has removed 
 after taxation to another county ; ° for proceedings supple- 
 mentary to execution to collect a tax of over ten dollars;" 
 for contempt, fines and imprisonment for non-payment of 
 tax ; " for dismissal of the proceeding to collect a tax when the 
 court deems just;" for cancellation of a personal tax void 
 for want of jurisdiction or uncollectible for want of person- 
 alty;" for failure of the collector to pay over moneys col- 
 lected ; " for sequestration of the property of a corporation 
 failing to pay taxes ; " and for recovery of a surplus from the 
 sale of any property for unpaid taxes." When the State 
 becomes liable by statute to refund a tax paid, which was 
 illegal and void, the right to interest follows without any 
 
 = People ex rel. Oak Hill Cemetery «Id. § 297 (L. 1909, e. 61). 
 
 Assn. V. Pratt, 66 Hun, 578, 21 « Id. § 298 (L. 1916, c. 323, § 80). 
 
 N. Y. Supp. 663 (1893); aff'd 138 "Id. § 299 (L. 1909, c. 61). 
 
 N. y. 655, 34 N. E. 513. "Id. § 300 (L. 1909, e. 61). 
 
 « People ex rel. Jamaica W. S. " Id- § 301 (L. 1909, c. 374) . 
 
 C!o. V. Tax Commissioners, 196 N. Y. ^^^d. § 302 (L. 1916, c. 323, § 81). 
 
 39 89 N. E. 581 (1909). "Id. §§ 303-305 (L. 1909, e. 61). 
 
 'Tax L. § 296 (L. 1916, c. 323, "Id. § 306 (L. 1916, c. 323, § 82). 
 
 §79). i°Id. § 307 (L. 1909, c. 61). 
 B. C. N. Y.— 51 
 
802 BUSINESS CORPORATIONS IN NEW YORK §§ 660-662 
 
 express provision of law on the subject." "When a railroad 
 corporation supinely waits three years after rejection by a 
 board of tax supervisors of its claim for a refund of taxes in 
 excess of what it should have paid and accepted the amount 
 determined as due from it for taxes, it cannot reverse or set 
 aside the action of the board unless it shows their lack of 
 good faith/' The ' ' jurisdiction of the court to issue the order 
 for the examination [of a corporation in proceedings supple- 
 mentary to execution under the Tax Law] does not rest on the 
 appearance of the corporation before the tax department, but 
 upon the fact that the tax has been returned by the proper 
 collector, uncollected for want of personal property out of 
 which to collect the same. ' ' '° 
 
 § 660. Id.: Certiorari to Review State Income and Fran- 
 chise Taxes, In General. — The determination of the Tax Com- 
 mission upon any application made to it by any corporation 
 for revision and resettlement of any account stating its 
 annual income tax for the privilege of exercising its franchise 
 in New York State may be reviewed in the manner prescribed 
 by and subject to the provisions of section one hundred and 
 ninety-nine of the Tax Law.^° The determination of the 
 Comptroller upon any application made to him by any cor- 
 poration for a revision and resettlement of any account for 
 franchise tax may be reviewed both upon the law and the 
 facts.' 
 
 § 661. Id.: Petition or Affidavit, Who May Make.— The 
 determination of the Comptroller on an application for revi- 
 sion and resettlement of a corporation's franchise tax may be 
 reviewed upon certiorari by the Supreme Court at the- 
 instance of any person or corporation affected thereby, and 
 in the name and on behalf of the People of the State.' The 
 same rule governs certiorari to review a corporation's State- 
 income-franchise tax as determined by the Tax Commission.' 
 
 § 662. Id.: Where and When Made.— The determination of 
 the Comptroller on an application for revision and resettle- 
 ment of an account settling a corporation's franchise tax may 
 be reviewed by the Supreme Court.' The same holds true of 
 
 " People ex rel. Knickerbocker Co., 179 A. D. 396, 166i N. Y. Supp. 
 
 Trust Co. V. Kelsey, 114 A. D. 319, 269 (1917) : Tax L. S 299 (L. 1909, 
 
 99 N. Y. Supp. 852 (1906). c. 62). 
 
 '^People ex rel. Erie R. R. Co. v. ^o ^g^ l_ g 219 (L. 1918, c. 417). 
 
 Supervisors, 193 N. Y. 127, 86 N. E. ^ Tax L. § 199 (L. l&Ofl, c. 62). 
 
 348 (1908); Tax L. § 256, now ^ Tax L. § 199 (L. 1909, c. 62). 
 
 § 296. m. § 219 (L. 1918, e. 417). 
 
 Corcoran v. Kellogg Structural ^ Tax L. § 199 (L. 1900, c. 62) . 
 
§§ 663-665 TAXATION 803 
 
 review by certiorari of a corporation's state-income-francMse 
 tax as determined by the Tax Commission/ Apparently such 
 a petition must be presented to a term of the Appellate 
 Division of the Supreme Court or at Special Term; because 
 those terms only can grant the writ." No certiorari to -review 
 any audit and statement of an account or any determination 
 by the Comptroller under the statute imposing a franchise 
 tax upon corporations can be granted unless notice of appli- 
 cation therefor is made within thirty days after the service 
 of the notice of such determination.'' The same holds true of 
 review by certiorari of a corporation's State-income-franchise 
 tax as determined by the Tax Commission.^ 
 
 § 663. Id.: Form, Contents and Grounds. — The petition or 
 afl&davit to review by certiorari the account of a franchise tax 
 of a corporation stated by the Comptroller on an application 
 to him for revision and resettlement thereof must be in the 
 name and on behalf of the People of New York State.° The 
 same holds true of review by certiorari of a corporation's 
 State-income-franchise tax as determined by the Tax Com- 
 mission." If by petition, it must be verified ; and whether by 
 petition or affidavit, it may be accompanied by other written 
 proof and must show a proper case for the issuing of the 
 writ." 
 
 § 664. Id.: Notice. — Eight days' notice must be given the 
 Comptroller of an application for a writ of certiorari on his 
 determination of a corporation's franchise tax." The same 
 holds true of an application to review the Tax Commission's 
 determination of a corporation's franchise tax." The same 
 save that the notice must be to the Tax Cornmission.^^ 
 
 § 665. Id.: Deposit of Tax and Filing of Undertaking. — ■ 
 Before making an application to the Supreme Court for a 
 writ of certiorari to review the Comptroller's determination 
 of a corporation's franchise tax there must be " (1) deposited 
 with tbe State Treasurer the full amount of the taxes, per- 
 centage, interest, and other charges audited and stated in his 
 account of such tax, and (2) filed with the Comptroller an 
 undertaking 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 Comp- 
 
 = Id. § 219 (L. 1918, e. 417). ^"Id. § 219 (L. 1918, c. 417). 
 
 «C. C. P. ^ 2127. lie. C. P. § 2127. 
 
 ^Tax L. § 200 (L. 1909, c. 62). "Tax L. § 200 (L. 1909, c. 62). 
 
 ^Id. § 219 (L. 1918, c. 417). ^^ Id. § 219 (L. 1918, c. 417). 
 
 "Tax L. § 199 (L. 1900, e. 62); "Tax L. S 200 (L. 1900, c. 62). 
 C. C. P. § 2127. 
 
804 BUSINESS CORPORATIONS IN NEW YORK §§ 666-668 
 
 troUer affirmed, the applicant for the writ will pay all costs 
 and charges which may accrue against him or it in the prose- 
 cution of the writ, including costs of all appeals. The same 
 holds true on certiorari to review a State-income-franchise 
 tax, except that the undertaking should be filed with the Tax 
 Commission.^^ A corporation seeking a writ of certiorari to 
 review a franchise tax assessment must deposit with the State 
 Treasurer the tax sought to be reviewed as a condition 
 precedent to obtaining the writ, even though its petition 
 alleges that taxes assessed and paid by two other corporations 
 leased to it were illegal and void." 
 
 § 666. Id.: The Writ of Certiorari, When Allowed and 
 Effect. — The granting or refusal of the writ of certiorari to 
 review a corporation's franchise or State-income- franchise 
 tax is discretionary with the court." A writ of certiorari to 
 review a franchise or State-income-franchise tax does not 
 stay the execution of the determination to be reviewed or 
 affect the power of the body or officer to which or to whom it 
 is addressed." 
 
 § 667. Id.: Against Whom Directed.— The writ must be 
 directed to the body or officer whose determination is to be 
 reviewed, or to any other person having the custody of the 
 record or other papers to be certified, or to both, if necessary ; 
 and it must be directed to the board or body by the name, if 
 any, in which an action would lie against it ; otherwise to the 
 members thereof by their names." When the incumbent of 
 the office of State Comptroller changes between the time of 
 making an assessment against a corporation for taxation and 
 that of suing out a writ of certiorari to review it, the writ is 
 properly directed to the Comptroller as such, without naming 
 him or making the ousted incumbent a party; and the Comp- 
 troller in office can answer the writ.^" 
 
 § 668. Id.: Form and Contents. — The writ of certiorari to 
 review a franchise or a State-income-franchise corporate tax 
 must be in the name of the People of New York State.^ 
 
 ^^Id. § 219 (L. 1918, c. 417). "€. C. P. § 2129; Tax L. § 199 
 
 ^"People ex rel. Lehigh Valley B. (L. 1909, c. 61) ; Id. § 219 (L. 1918, 
 
 R. Co. V. Sohmer, 84 Misc. 518, 147 e. 417). 
 
 N. Y. Supp. 636 (1914); aff'd 169 2° Matter of the Tax against Tif- 
 
 A. D. 430, 154 N. Y. Supp. 1053; fany & Co., 80 Hun, 486, 30 N. Y. 
 
 Tax L. §§ 199, 200. Supp. 494 (1894) ; C. C. P. §S 2136, 
 
 " Tax L. § 199 (L. 1909, c. 61) ; 2129. 
 
 Id. § 219 (L. 1918, c. 417) ; C. C. P. ^ Tax L. § 199 (L. 1909, c. 61) ; 
 
 § 2127. Id. § 219 (L. 1918, c. 417), 
 
 ^« C. C. P. § 2131. 
 
§§ 669-671 TAXATIOK 805 
 
 § 669. Id.: Service Of. — Except when different directions 
 respecting the mode of service thereof are given by the court 
 granting it, a writ of certiorari directed to a person or per- 
 sons by name or his or their official title or titles must be 
 served upon each officer or other person to whom it is so 
 directed in the same manner as a summons in an action 
 brought in the Supreme Court; and a writ of certiorari 
 directed to a board or body or the members thereof must be 
 served by showing the original writ and delivering a copy 
 thereof to a majority of the members of such board or body; 
 unless the board or body is created by law and has a chairman 
 or other presiding officer appointed pursuant to law, when 
 service on him is sufficient ; or unless one or more of the per- 
 sons upon whom service should be made cannot after due 
 diligence be found, when the exhibition of the original writ 
 is dispensed with and service may be made as prescribed by 
 law for the service of a summons issued out of the Supreme 
 Court.^ A writ of certiorari must be served, except when the 
 court granting it differently directs, upon each officer or 
 other person to whom it is directed if directed to them by 
 name .or official title, or upon the corporation, in the same 
 manner as a summons in an action brought in the Supreme 
 Court, unless directed to a court or the judges thereof having 
 a clerk appointed pursuant to law when it may be served by 
 filing the writ with the clerk.^ 
 
 § 670. Id.: The Return to the Writ, When and Where 
 Returnable. — A writ of certiorari must be made returnable 
 within twenty days, after the service thereof at the office of 
 the clerk of the county designated therein wherein the deter- 
 mination to be reviewed was made, if issued from the 
 Supreme Court; and if the county designated in the writ is 
 not the proper county the court upon motion may amend the 
 writ accordingly; and thereupon all papers on file must be 
 transferred to the clerk of the county where the writ is made 
 returnable by the amendment.* After a writ of certiorari has 
 been issued, the time to make a return thereto may be enlarged 
 as a similar proceeding may be taken in an action brought in 
 the same court and triable in the county where the writ is 
 returnable.^ 
 
 § 671. Id.: Form and Contents of Return. — The Comptroller, 
 for the purpose of review by certiorari of his revision or 
 resettlement of an account stating a corporation's franchise 
 
 ^C. C. P. § 3071; Tax L. § 199 = C. C. P. § 2130. 
 
 (L. 1909, § 62) ; Id. § 219 (L. 1918, * C. C. P. § 2132. 
 c. 417). ' =C. C. P. § 2133. 
 
806 BUSINESS CORPORATIONS IN NEW YORK §§ 672, 673 
 
 tax, must return on the certiorari the ' accounts and all the 
 evidence before him on the application for such revision or 
 resettlement, and all the papers and proofs upon the original 
 statement of such account and all proceedings thereon." The 
 same holds true of the Tax Commission on review by cer- 
 tiorari of its determination of the State-income-franchise tax 
 of the corporation/ The return must be annexed to the writ, 
 or copy thereof served, with a transcript annexed, certified by 
 the person served, of the record or proceedings, and a state- 
 ment of the other matters specified in and required by the 
 writ.' A return by the Comptroller is not conclusive as to the 
 facts on certiorari to review taxes on a corporation's capital 
 stock if it be not a definite denial of the relator's statement 
 in a petition; e. g., that it is a manufacturing corporg.tion." 
 The Comptroller is required to return to a certiorari to review 
 his tax assessment of a domestic corporation's capital stock 
 the accounts and all the evidence submitted to him; but his 
 decision will not be disturbed unless the relator produces the 
 evidence showing his error.^° The Comptroller need not 
 return the grounds of his refusal to revise or readjust a fran- 
 chise tax." 
 
 § 672. Id.: Filing of. — The return must be filed in the office 
 where the writ is returnable, according to the command 
 thereof." 
 
 § 673. Id.: Hearing. — Either party may notice the cause 
 for hearing at any time after the return is complete."' The 
 cause must be heard at a term of the Appellate Division of 
 the Supreme- Court held within the judicial department 
 embracing the county where the writ was returnable." If, 
 on certiorari from the Comptroller's determination on an 
 application for revision and resettlement of a corporation's 
 franchise tax, the original or resettled accounts are found 
 erroneous or illegal, either in point of law or of fact, by the 
 Supreme Court, the accounts reviewed must then be corrected 
 and restated." The same holds true on review by certiorari 
 
 »Tax L. § 199 (L. 1909, c. 62). "People ex rel. New York Realty 
 
 Ud. § 219 (L. 1918, c. 417). Ck)rporation v. Miller, 92 A. D. 116, 
 
 ^ C. C. P. § 2134. 87 N. Y. Supp. 341 (1904) ; Tax L. 
 
 ° People ex rel. Edison Co. v. § 196 (L. 1806, c. 908, § 196). See 
 
 Campbell, No. 1, 88 Hun, 527, 34 now Tax L. § 199. 
 
 N. Y. Siipp. 711 (1895); L. 1889, ^^ C. C. P. § 2134. 
 
 c. 463. " C. C. P. § 2138. 
 
 1° People ex rel. Postal Telegraph " C. C. P. ^ 2138. 
 
 Cable Co. v. Campbell, 70 Hun, 507, "Tax L. § 199 (L. 1909, c. 62). 
 
 24 N. Y. Supp. 208 (1893) ; L. 1889, 
 
 c. 463, § 20. 
 
§ 673 TAXATION 807 
 
 of the Tax Conmiission's determination , of a corporation's 
 State-income-franchise tax.^" When notice is given, the per- 
 son served may produce affidavits or other written proofs, 
 upon the merits, in opposition to the application." | The court 
 in its discretion may permit either party to produce affidavits 
 or other written proofs relating to any alleged error of fact 
 or any other question of fact which is essential to the juris- 
 diction of the body or officer to make the determination to be 
 reviewed, where the facts in relation thereto are not 
 sufficiently stated in the return and the court is satisfied they 
 cannot be made to appear by means of an order for a further 
 return/* The questions involving the merits to be determined 
 by the court upon the hearing are the following only: (1) 
 Whether the body or officer had jurisdiction of the subject- 
 matter of the determination under review; (2) whether the 
 authority conferred upon the body or officer in relation to 
 that subject-matter has been pursued in the mode required by 
 law, in order to authorize it or him to make the determination ; 
 (3) whether in making the determination any rule of law, 
 affecting the rights of the parties thereto has been violated, 
 to the prejudice of the relator; (4) whether there was any 
 competent proof of all the facts necessary to be proved in 
 order to authorize the making of the determination; and (5) 
 if there was such proof, whether there was upon all the evi- 
 dence such a preponderance of proof against the existence of 
 any of those facts that the verdict of a jury affirming the 
 existence thereof, rendered in an action in the Supreme Court 
 triable by a jury, would be set aside by the court as against 
 the weight of evidence.^' On a tax certiorari a new trial of 
 the relator's assessability may be had, but on the issues joined 
 by the pleadings (viz., the petition and return) only; so that 
 when the relator simply asserts that it has earned a stated 
 surplus, without alleging what are its capital stock and assets, 
 it cannot on certiorari show by its books or otherwise that its 
 own statement of its assets and liabilities was false or 
 erroneous.^" The burden is on a relator to show any error of 
 the State Comptroller in imposing a tax on it.^ A return on 
 review of a franchise tax assessment which is not traversed 
 
 .^"Id. § 219 (L. 1918, c. 417). 146 N. Y. Supp. 646 (1914); afif'd 
 
 "C. C. P. § 2128; Tax L. § 199 213 N. Y. 658, 107 N. E. 1084. 
 
 (L. 1909, c. 61) ; Id. § 219 (L. 1918, Franchise tax. 
 
 0. 417). ^People ex rel. Western Electric 
 
 ^^C. C. P. § 2139. Co. V. Campbell, 80 Hun, 466, 30 
 
 "C. C. P. § 2140. N. Y. Supp. 472 (1894); afE'd 145 
 
 ^"People ex rel. McClure Publiea- N. Y. 587, 40i N. E. 239; L. 1889, 
 
 Lions, Inc., v. Purdy, 161 A. D. 541, chs. 353, 463. 
 
808 BUSINESS CORPORATIONS IN NEW YORK §§ 674-676 
 
 must be assumed to be true so far as it states relevant facts 
 but not legal conclusions.^ 
 
 § 674. Id.: Final Order. — The court, upon the hearing, may 
 make a findl order annulling or confirming, wholly or partly, 
 or modifying, the determination reviewed, as to any or all of 
 the parties ; and if the determination reviewed is annulled or 
 modified, the court may order and enforce restitution in like 
 manner, with like effect, and subject to the same conditions 
 as when a judgment is reversed upon appeal.^ The final 
 order of the court upon the certiorari must be entered in the 
 office of the clerk where the writ was returnable ; but before 
 it can be enforced an enrollment thereof must be filed, and for 
 that purpose the clerk must attach together and file in his 
 office the papers upon which the cause was heard, a certified 
 copy of the final order, and a certified copy of each order 
 which in any way involves the merits or necessarily affects 
 the final order ; and such filing is a sufficient authority for any 
 proceeding by or before the body which or the officer who 
 made the determination reviewed which the final order of the 
 court directs or permits.* 
 
 § 675. Id.: Costs. — Costs not exceeding fifty dollars and 
 disbursements may be awarded by the final order in favor 
 of or against either party ; in the discretion of the court." 
 
 § 676. Id.: Appeals. — From any determination of the 
 Supreme Court upon any review upon certiorari by it of the 
 determination of the Comptroller on an application for 
 revision and resettlement by him of an account stated by him 
 of a corporation's franchise tax, an appeal to the Court of 
 Appeals may be taken by either party." The same holds true 
 of appeals from the determination of a corporation's state- 
 income-franchise tax by the Tax Commission.'' When the 
 execution of the final order in certiorari proceedings of the 
 Supreme Court is stayed by an appeal to the Court of 
 Appeals, the proceedings below are stayed in like manner.' 
 A difference between the State Comptroller and the Appel- 
 late Division, not as to the amount of a corporation's prop- 
 erty held within the State, and taxable for franchise tax pur- 
 poses, but as to the character of part of it, is a legal conclusion 
 reviewable by the Court of Appeals.' 
 
 ^People ex rel. N. Y. C. & H. R. « Tax L. § 199 (L. 1909, c. 62). 
 
 R. R. Co. V. Keno, 61 Misc. Mb, 114 ^Id. § 219 (L. 1918, c. 417). 
 N. Y. Supp. 1094 (1908). « C. C. P. § 2145. 
 
 ' C. C. P. §§ 2141, 2142. » People ex rel. Commercial Cable 
 
 * C. C. P. §§ 2144-2145. Co. v. Morgan, 178 N. Y. 433 (1904). 
 
 = C. C. P. § 2143. 
 
§§ 677, 678 TAXATION 809 
 
 § 677. Id.: Defective or Omitted Returns; When One Certio- 
 raried Out of Office, Dead; ietc; Bringing in Interested Parties; 
 Substitution of Mandamus for Certiorari. — The statute pro- 
 vides for procedure on defective or omitted returns j'^" for 
 procedure when the officer certioraried has rounded out his 
 term of office ;^^ for bringing in parties interested ;" for cases 
 in which the officer or other person whose duty it is to make 
 the return has died, absconded, removed from the State or 
 become insane ;^^ and for substitution by amendment of the 
 remedy by mandamus for that by certiorari." 
 
 § 678. Stopk Transfer Tax, In General. — If stock brokers 
 affix stamps which they purchased to stocks they sell under an 
 act of the legislature later held unconstitutional and are 
 never reimbursed therefor they may recover the value thereof 
 of the State. It seems that even if the brokers' acts in 
 erroneously affixing the stamps be assumed to be the acts of 
 their customers, the suing brokers may be treated as trustees 
 suing for the benefit of their customers and their liability to 
 such customers after recovery can be enforced against them 
 as trustees." The nature of a statute imposing a tax upon 
 all agreements or instruments for the transfer of shares of 
 corporate stock is that of an excise tax on the transfer." 
 Although classification of stock for the purpose of imposing 
 thereon a transfer tax into stock having a hundred dollars or 
 any fraction thereof of face value is constitutional, yet classi- 
 fication of such stock into shares of stock having one hundred 
 dollars or fraction thereof of face value is unconstitutional, 
 as affording no proper basis of taxation." The fact that a 
 tax on the transfer of corporate stock taxes the transfer of 
 certificates of stock in a foreign corporation when made by a 
 non-resident in this State does not make it violative of the 
 commerce clause of the Federal Constitution.^^ A tax on the 
 transfer of stock based on its face value "is an excise tax 
 
 ^°C. C. p. § 2135. (N.S.) 585, 101 N. E. 783 (1913): 
 
 " Id. § 2136. Tax L. § 270. 
 
 ^^d. § 2137. • "People ex. rel. Farrington v. 
 
 "Id. § 2139. Mensehing, 187 N. Y. 8, 10 L.R.A. 
 
 "Id. §2148-a. ' (N.S.) 625, 79 N. E. 884 (1907); 
 
 ^=Van Antwerp v. State of New L. 19106, e. 414, § 315, amend'd Tax 
 
 York, 218 N. Y. 422, 113 N. E. 497 L. § 241, by imposing a tax "on 
 
 ■ (1916) ; L. 1906, e. 414, amending each share of one hundred dollars 
 
 L. 1905, c. 241, § 315, held uncon- of face value or fraction thereof " 
 
 stitutional ( Tax L. § 270) ; and L. instead of on " each hundred dollars 
 
 1910, c. 186 (Tax L. § 280), giving of face value or fraction thereof." 
 
 right of recovery against State. . ^* People ex rel. Hatch v. Rear- 
 
 "U. S. Radiator Co. v. State of don, 184 N. Y. 431, 8 L.R.A. (N.S.) 
 
 New York, 208 N. Y. 144, 46 L.R.A. 314, 77 N. E. 970 (1906) ; U. S. 
 
810 BUSINESS CORPORATIONS IN NEW YORK § 678 
 
 which need not depend upon any principle of valuation or on 
 any notice to the taxpayer. . . . Neither notice nor griev- 
 ance day is required, for no valuation is made except by the 
 statute itself, and there is no provision in either [the State 
 or Federal] Constitution requiring such a tax to be laid on 
 an a<^ valorem basis. "^° A law imposing a tax "on all 
 sales, or agreements to sell, or memoranda of sales or 
 deliveries or transfers of shares or certificates of stock. . . . 
 on each hundred dollars of face value or fraction thereof " 
 is valid and constitutional.^" The statute imposing a tax 
 on transfers of corporate stock is not unconstitutional because 
 it precludes one from recovering on his contract to sell stock 
 when he pays the tax which he has failed to pay through 
 inadvertence, as its effect is not to forfeit property but to 
 deny the offender the right to enforce through the courts of 
 this State a contract which he has himself made unenforce- 
 able.^ A statute is unconstitutional which authorizes an 
 investigation to be conducted by a state official the purpose 
 of which is the detection of violations of a statute imposing 
 a tax on the transfer of corporate stock, and the procedure 
 of which is to compel a party to produce his private books as 
 evidence against himself, and the sequel of which is penalties 
 and criminal prosecution.^ Provision is made in the statute 
 (hereinafter quoted) for the preparation and sale by the State 
 Comptroller of stock transfer tax stamps; for new designs 
 of stamps ; for penalties for using old designs -and for sur- 
 render thereof to the State Comptroller ; and for sale of such 
 stamps to the public by banks and authorized agents of the 
 State Comptroller.' The law gives the State Comptroller 
 power to procure dies for the stamp, clerical assistance, etc.* 
 The statute requires registration with the State Comptroller 
 of parties negotiating in shares or certificates of stock, and 
 stock brokerage businesses and corporations having transfer 
 offices or agencies in New York State." It also requires such 
 
 Const, art. 1, § 8, par 3; Tax L. L. 1905, c. 241, as amend'd L. 1906, 
 
 § — . c. 414. 
 
 ^° People ex rel. Hatch v. Rear- ^ People ex fel. Ferguson v. Rear- 
 don, 184 N. T. 431, 8 L.R.A.(N.S.) don, 197 N. Y.-236, 27 L.R.A.(N.S.) 
 314, 77 N. E. 970 (1906). 141, 90 N. E. 829 (1910); Tax L. 
 
 =° People ex rel. Hatch v. Rear- § 12. 
 
 don, 184 N. Y. 431, 8 L.R.A.(N.S.) 'Tax L. §§ 271, 271-a (L. 1913, 
 
 314, 77 N. E. 970 (1906) ; U. S. c. 811, and L. 1916, e. 552, respec- 
 
 €onst. art. 1, § 8, par. 3; N. Y. tively). 
 
 Const, art. 3, §' 15. * Tax L. § 274 (L. 1909, c. 61). 
 
 ^Sheridan v. Tucker, 145 A. D. ''Tax L. § 275-a (L. 1913, c. 779). 
 145, 129 N. Y. Supp. 18 (1911); 
 
§ 678 TAXATION 811 
 
 parties, stock brokerage businesses and corporations to keep 
 in form prescribed by the State Comptroller a book of account 
 of the particulars of every sale, agreement to sell, delivery or 
 transfer of shares or certificates of stock and the stamps used 
 in connection therewith, as well as a stock-certificate account- 
 transfer-ledger, book or register recording various details 
 and particularly the evidence of payment of the stock transfer 
 tax.^ These books and the stock certificates and memoranda 
 recorded therein must be kept two years, and must be open 
 at certain periods to the State Comptroller's inspection, who 
 may have mandamus to procure such inspection/ He may 
 also sue to' recover statutory penalties for failure to pay the 
 tax.* A party failing to keep such books, memoranda or cer- 
 tificates, or altering or destroying them, or making false 
 entries therein, or refusing inspection thereof, or otherwise 
 violating the statute is guilty of a misdemeanor and on con- 
 viction must pay from five hundred to five thousand dollars ' 
 fine or be imprisoned for from three months to two years, or 
 both." A blanket civil penalty of a forfeiture of five hundred 
 dollars to the People of the State is provided for each and 
 every violation of these provisions of the law imposing a tax 
 on the transfer of stock for which a penalty is not otherwise 
 specifically provided." The State Comptroller must bring an 
 action in his name as such in any court of competent jurisdic- 
 tion for the recovery of any civil penalty, and any moneys 
 collected by him must be paid into the State Treasury; and 
 in an action against a corporation or its transfer agent to 
 recover a penalty because of its transfer of stock upon the 
 books or records of the corporation without requiring the 
 payment of the stock transfer tax, the failure of the corpora- 
 tion or its transfer agent, on the demand of the cpmptroller 
 or his duly authorized representative, to produce the sur- 
 rendered certificate or memoranda of sale with the required 
 stamps attached, constitutes prima facie proof of the non- 
 payment of the tax imposed by the two hundred and seventieth 
 section of the Tax Law." The taxes imposed by the stock 
 transfer tax law and their revenues must be paid by the 
 State Comptroller into the State Treasury and must be appli- 
 cable to the general fund and to the payment of all claims and 
 demands which are a lawful charge thereon.^^ No transfer 
 of stock made after June first, nineteen hundred and five, on 
 
 <= Tax L. § 276 (L. 1913, c. 779). " Tax L. § 277 (L. 1912, e. 292). 
 
 nd. "Tax L. § 277 (L. 1912, e. 292). 
 
 ^Id. " Tax L. § 279 (L. 1909, c. 61). 
 
 »Id. 
 
812 BUSINESS CORPORATIONS IN NEW YORK § 679 
 
 which a stock transfer tax. is imposed by law, can be made 
 the basis of any action or legal proceedings, if the tax is not 
 paid at the time of the transfer ; nor can' proof thereof be 
 offered or received in evidence in any court in New York 
 State." 
 
 § 679. Id.: On What Imposed. — The stock transfer tax is a 
 tax imposed with respect to the stock of any domestic or 
 foreign corporation on all (a) sales of such stock, (b) agree- 
 ments to sell such stock, (c) memoranda of sale of such stock, 
 (d) deliveries of shares or certificates of such stock and (e) 
 transfers of shares or certificates of such stock, which may be 
 made after June first, nineteen hundred and five." It is 
 immaterial to the imposition of the tax whether such sale, 
 agreement, memoranda, delivery or transfer be made (a) 
 upon or shown by the books of the corporation, or (b) by any 
 assignment in blank, or (c) by any delivery, or (d) by any 
 paper, or (e) by any agreement, or (f) by any memorandum, 
 or (g) by any other evidence of sale or transfer; it is 
 immaterial whether it be intermediate or final; and it is 
 immaterial whether it invest the holder with the beneficial 
 interest in or legal title to such stock, or merely with the pos- 
 session or use thereof for any purpose, or to secure the future 
 payment of money, or the future transfer of any stock." The 
 tax is not imposed upon an agreement evidencing the deposit 
 of stock certificates as collateral security for money loaned 
 thereon if such stock certificates are not actually sold; nor 
 upon the stock certificates so deposited ; nor upon mere loans 
 of stock or the return thereof." The transfer of an inter- 
 mediate certificate of a corporation issued on increase of its 
 capital stock to its stockholders entitling them to buy the 
 increased stock according to their holdings and to interest on 
 the portion paid in, together with the right of making the 
 final payments and receiving the final certificate, is a transfer 
 of stock subject to tax." A transfer of a certificate of stock, 
 though it be not a transfer of the stock and invest the trans- 
 feree solely with the legal title as distinguished from the 
 beneficial interest, is taxable; the phrase " legal title " in the 
 statute refers to a naked appearance of title or a limited 
 
 "Tax L. § 279 (L. 1909, c. 61). "Tax L. § 270 (L. 1913, c. 779). 
 
 As to what constitutes a transfer "Tax L. § 270 (L. 1913, c. 779). 
 
 of stock within the statute taxing '"Tax L. § 270 (L. 1913, c. 779). 
 
 stock transfers, see note in 46 L.R.A. '' Sohmer v. Hebden, 165 A. D. 
 
 (N.S.) 585. 853, 856, 151 N. Y. Supp. 346 
 
 On validity of statute imposing (1915), dissenting opinion of Wood- 
 
 ipecial tax on transfer of corporate ward, J., on which Court of Appeals 
 
 stock, see note in 8 L.R.A. (N.S.) reversed, 216 N. Y. 728; Tax L. 
 
 314. § 270. 
 
§ 679 TAXATION 813 
 
 title appearing complete on its f ace.^* The original issuance 
 of stock is not a transfer or sale thereof necessitating the 
 afiSxation of stamps.^" When one corporation purchases 
 certain assets of each of four corporations under contracts 
 entitling each of these last four corporations to a designated 
 number of shares of stock of the one corporation as a con- 
 sideration for the sale, but the certificates were issued to a 
 trust company as trustee of ,a voting trust, and the trust com- 
 pany, at each of the four corporations' request, issues to each 
 stockholder therein a certificate for the number of shares 
 proportionate to the number of the shares of its stock owned 
 by him, the certificates so issued by the trust company are 
 taxable as evidencing a transfer of stock, as the four corpora- 
 tions became owners of such stock on their creation and, being 
 a separate entity distinct from its stockholders, its request to, 
 and acquiescence therein by the trust company to issue cer- 
 tificates to their respective stockholders, was a corporate act 
 constituting a taxable transfer.^" A transfer of corporate 
 stock by agreement (1) for the adjustment of a debt (2) 
 which legally, upon the conditions being performed, trans- 
 ferred the title of the certificates for such stock from a trust 
 company, acting as depository under the agreement to man- 
 agers acting under the agreement to adjust the debt, and (3) 
 which legally transfers the title of the stock itself from such 
 managers to a new set of voting trustees, constitutes a double 
 " transfer " of stock taxable as two transfers, in spite of the 
 fact that for convenience (or for the purpose of evading pay- 
 ment of the tax) the voting trustee who acquired the title 
 from the trust company directed the latter as agent to deliver 
 the stock to the new trustees.^ A delivery of stock to syndi- 
 cate managers to enable them under an agreement to pledge 
 the stock as security for their note with the proceeds of which 
 unissued stock should be bought which should be delivered 
 to the stockholders delivering the stock to the managers in 
 proportion to their existing holdings on payment of their 
 
 ^^ Bonbright & Co. v. State of New " People v. Dufiy-Mclnnemey Co., 
 
 York, 166 A. D. 640, 151 N. Y. 122 A. D. 336, 106 N. Y. Supp. 878 
 
 Supp. 35 (1915) ; Tax L. § 270, as (1907) ; aff'd 193 N. Y. 636, 86 N. E. 
 
 amend'd L. 1911, c. 352. U. S. 1129; Tax L. § 315 et seq. (L. 1905, 
 
 Radiator Corp. v. State of N. Y., e. 241). 
 
 208 N. Y. 144, 46 L.R.A.(N.S.) 585, ^^ United States Radiator Co. v. 
 
 101 N. E. 783, held not determina- State of New York, 208 N. Y. 144, 
 
 tive since amendment. "A transfer 46 L.R.A.(N.S.) 585, 101 N. E. 783 
 
 of the certificate itself, the mere (1913) ; Tax L. § 270. 
 
 ' scrap of paper,' to use a recent ^ Hudson & Manhattan R. R. Co. 
 
 famous expression, is made taxable v. State of New York, 180 A. D. 81, 
 
 now as well as a transfer of the 167 N. Y. Supp. 515 (1917) ; Tax L. 
 
 share of stock." § 270 (L. 1912, c. 292). 
 
814 BUSINESS CORPORATIONS IN NEW YORK §§ 680, 681 
 
 pro rata share of the amount paid therefor is a transfer 
 requiring a tax.^ The " transfer " of stock requiring stock 
 transfer stamps does not mean the " vesting of title in the 
 vendee merely by the election of the vendor " but contem- 
 plates " something more than a theoretical change of title. 
 They contemplate some physical act ; the delivery of a certifi- 
 cate; the execution and delivery of a bill of sale; and entry 
 upon the books of the corporation." ^ " Stock transfer taxes 
 accrue upon the cancellation and surrender of a stock certifi- 
 cate standing in the name of an accommodation holder and the 
 making out of a new stock certificate in the place thereof in 
 the name of another accommodation holder, and the indorse- 
 ment of the new certificate in blank by him, the actual owner- 
 ship of the stock remaining at all times in the defendant." '" 
 
 § 680. Id.: Amount and Computation of Tax. — The stock 
 transfer tax is two cents on each one hundred dollars of face 
 value of the stock, or fraction thereof; and, if the shares or 
 certificates of stock are issued without designated monetary 
 value, the tax is at the rate of two cents for each and every 
 share of such stock.* 
 
 § 681. Id.: Stamps and Payment. — It is the duty of the 
 person or persons making or effectuating the sale or transfer 
 to procure, affix and cancel the stamps and pay the tax 
 imposed.' The payment of such tax mu~st be denoted by 
 an adhesive stamp or stamps affixed as follows: (1) To the 
 books of the corporation if the sale or transfer is evidenced 
 only by such books;* (2) To the surrendered certificate if the 
 transaction is effected by the delivery or transfer of a certifi- 
 cate;' (3) To a bill or memorandum of sale to be made and 
 delivered by the seller to the buyer if the ease be one of an 
 agreement to sell or of a sale effected by delivery of the cer- 
 
 ^ Wing V. Smith, 173 A. D. 57, On the question of liability to pay 
 
 159 N. Y. Supp. 454 (1916) ; Tax L. transfer or inheritance tax in re- 
 
 § 270 (L. 1913, c. 779) ; Tax L. spect of stock in domestic corpora- 
 
 § 315 (L. 1906, c. 414). tion belonging to the estate of a 
 
 * Phelps-Stokes Estates, Inc. v. nonresident, see notes in 19 L.R.A. 
 
 Nixon, 222 N. Y. 93, 118 N. E. 241 (N.S.) 887; 25 L.R.A.(N.S.) 384. 
 (1917); Tax L. §§ 270, 278. De- For authorities discussing the 
 
 fendant offered to purchase of plain- question as to validity of statute 
 
 tiff certain stock deposited by a imposing special tax on transfer of 
 
 third party if last-named did not corporate stock, see note in 8 L.R.A. 
 
 take it up before a certain date — (N.S.) 314. 
 
 which he did not. Held, no "trans- ''Tax L. § 270 (L. 1913, c. 779). 
 
 far" needing stamps. ? Tax L. § 270 (L. 1913, c. 779). 
 
 =" Travis v. Ann Arbor Co., 180 " Tax L. § 270 (L. 1913, c. 779). 
 
 A. D. 799 (1917) ; Tax L. § 270. It ^ Tax L. § 270 (L. 1913, c. 779). 
 
 was held there were two taxable 
 transfers. 
 
§§ 682, 683 TAXATION 815 
 
 tificate assigned in blank.® When the sale or transfer is 
 evidenced only by the corporate books, the person making 
 or effectuating such sale or transfer must procure and furnish 
 to the corpo'ration the requisite stamps, and the corporation 
 must affix and cancel them ; when the case is one of an agree- 
 ment to sell or one of a sale effected by delivery of the cer- 
 tificate assigned in blank, apparently either the buyer or seller 
 may affix and cancel the stamps, but the bill or memorandum 
 of such sale to which the stamps must be affixed and cancelled 
 must be made and delivered by the seller to the buyer/ In 
 every case in which an adhesive stamp is used to denote the 
 payment of the stock transfer tax the person using or affixing 
 it must write or stamp thereupon the initials of his name and 
 the date upon which it is attached or used, and must cut or 
 perforate the stamp in a substantial manner so that it cannot 
 be again used.* No further tax is imposed upon the delivery 
 of the certificate of stock, or upon the actual issue of a new 
 certificate, when the original certificate of stock is accom- 
 panied by the duly stamped memorandum of sale provided 
 for by law.' 
 
 § 682. Id.: Bill, Memorandum or Agreement of Sale. — ^Every 
 such bill or memorandum of sale or agreement to sell must 
 show (1) the date of the, transaction which it evidences, (2) 
 the name of the seller, (3) the stock to which it relates, (4) 
 the number of shares thereof, and (5) a number upon its face 
 which shall not be borne on any other bill or memorandum of 
 sale made by the seller on any given day." The identification 
 number on a bill or memorandum of sale must in all cases be 
 recorded in the book of account required by law to be kept 
 by every one negotiating shares or certificates of stock or 
 transacting a brokerage business." 
 
 § 683. Id.: Penalties for Not Paying Tax, Not Cancelling or 
 Not Affixing, or Illegally Using, Stamps.—". . . the pur- 
 pose of the section was to deny to an offender who violates 
 its provisions the right to enforce through the courts a con- 
 tract which he by his own inadvertence or wrong has made 
 unenforceable ; ' ' and it does not prevent proof by a would-be 
 vendee of stock of a sale thereof instead of a pledge, as claimed 
 by the vendor, though no stamps were affixed as part of the 
 transaction.^^ The fact that the tax on transfers of stock was 
 not paid by the seller at the time of sale through inadvertence 
 
 " Tax L. §270 (L. 1913, e. 779). "Tax L. §§ 270, 276 (L. 1913, 
 
 Ud. c. 779). 
 
 ' Tax L. § 273 (L. 1911, e. 352). '^^Hall v. Davis, 95 Misc. 315, 159 
 
 " Tax L. § 2Z'0 (L. 1913, c. 779). N. Y. Supp. 00 (1916); Tax L. 
 
 10 
 
 Tax L. § 270 (L. 1913, e. 779). § 278 (L. 1909, e. 62). 
 
816 BUSINESS CORPORATIONS IN NEW YORK § 683 
 
 and ignorance of the law does not save him from having his 
 action to recover the purchase price unpaid thereon dis- 
 missed." The penalty of being considered guilty of a mis- 
 demeanor and, upon conviction thereof paying a fine of not 
 less than five hundred nor more than one thousand dollars 
 or being imprisoned for not more thaii six months or of both 
 paying such fine and suffering such imprisonment in the 
 discretion of the court is imposed in some cases for failure to 
 pay the stock transfer tax and in some cases for failure to have 
 stamps affixed: (1) For failure to pay the tax, upon any 
 person or persons liable to pay it, and any one who acts in 
 the matter as agent or broker for such person or persons, 
 who makes any sale, transfer or delivery of shares or cer- 
 tificates of stock; and (2) For failure to have stamps affixed, 
 upon any person who in pursuance of the sale or transfer 
 of or agreement, delivers any stock or evidence of the sale 
 or transfer of or agreement to sell any stock, or bill or memo- 
 randum thereof, or who transfers or causes it to be trans- 
 ferred upon the books or records of the corporation, and any 
 corporation the stock of which is sold or transferred which 
 transfers or causes it to be transferred upon its books, with- 
 out having such stamps affixed.^' If any person makes use of 
 an adhesive stamp to denote the payment of the stock trans- 
 fer tax without effectually cancelling it by writing or stamping 
 thereupon the initials of his name and the date upon which it 
 is attached or used, and without cutting or perforating the 
 stamp in a substantial manner so that it cannot be again used, 
 such person is deemed guilty of a misdemeanor, and upon 
 conviction thereof must pay a fine of not less than two hundred 
 nor more than five hundred dollars, or be imprisoned for not 
 less than six months, or both, in the discretion of the court." 
 Any person who (1) wilfully removes or knowingly permits to 
 be removed or (2) alters or knowingly permits to be altered, 
 the cancelling or defacing marks of any stamp with intent 
 to use such stamp, or (3) knowingly or wilfully buys, prepares 
 for use, uses, has in his possession or suffers to be used any 
 washed, restored or counterfeit stamp, or (4) intentionally 
 removes or causes to be removed or knowingly permits to be 
 removed, any stamp, is guilty of a misdemeanor, and on con- 
 viction thereof is liable to a fine of not less than five hundred 
 
 '^Sheridan v. Tucker, 145 A. D. ^= Tax L. § 272 (L. 1912, c. 292). 
 
 145, 129 N. Y. -Supp. 18 (1911) ; " Tax L. § 273 (L. 1911, c. 352). 
 
 L.- 1905, c. 241, as amend'd L. 1906, 
 c. 414. 
 
§ 683 TAXATION 817 
 
 nor more than one thousand dollars, or to imprisonment for 
 not more than one year, or by .both such fine and imprison- 
 ment, at the discretion of the court." Any person, firm, com- 
 pany, association or corporation who or which does not pro- 
 cure, affix and cancel stock transfer tax stamps and pay the 
 statutory tax, or delivers any stock or evidence of the sale or 
 transfer of or agreement to sell any stock, or bill or memo- 
 randum thereof, or transfers or causes it to be transferred 
 upon the corporate books or records; and any corporation 
 which transfers it or causes it to be transferred on its books, 
 without having the stamps affixed, in addition to other 
 statutory penalties, forfeits to the People of the State a civil 
 penalty of ten dollars for each and every share of stock so sold 
 or transferred or entered upon the books of the corporation.^^ 
 
 "Tax L. § 275 (L. 1912, c. 292). "Tax L. § 277 (L. 1912, e. 292). 
 B.C.N.Y.— 52 
 
CHAPTER Xn. 
 
 FOREIGN CORPORATIONS. 
 
 XVII. Foreign Corporations. 
 
 A. Definitions, § 684. 
 
 B. Rights, Powers and Liabilities under New York Laws. 
 
 1. In General, § 685. 
 
 2. As to Real Estate, § 686. 
 
 3. As to Proceedings Supplementary to Execution, § 687. 
 
 4. As to Assignments, Preferential or Otherwise, § 688. 
 
 5. As to Monopoly, Merger and Sequestration, § 689. 
 
 6. As to Banking and Political Contributions, § 690. 
 
 C. License or Certificate To Do Business in New York. 
 
 1. In General, § 691. 
 
 2. Papers to be Filed Before License or Certificate Issues, 
 
 § 692. 
 
 3. Form of License or Certificate, § 693. 
 
 4. What Corporations Entitled To, § 694. 
 
 5. When Corporations " Doing Business " in New York So As 
 
 To Need License, § 695. 
 
 6. Penalty for Not Obtaining License or Making and Keeping 
 
 Alive Designation of Agent, § 696. 
 
 7. Revocation for Nuisance, § 696-a. 
 
 8. Voluntary Surrender, § 696-b. 
 
 D. Doing Business or Employing Capital in New York, 
 
 1. Governing Statutes, § 697. 
 
 2. In General, § 698. 
 
 3. When Business Must Be Done, § 699. 
 
 4. What Kind of Business is Meant by Statute, § 700. 
 
 5. Sporadic Transactions in New York, § 701. 
 
 6. When Has Office in New York. 
 
 a. In General, § 702. 
 
 b. Plus Something More, § 703. 
 
 7. Transactions in New York Through Agents or Salesmen, 
 
 § 704. 
 
 8. Transactions Through Commission Merchants in New 
 
 York, § 705. 
 
 9. Miscellaneous Cases, § 706. 
 
 E. What Constitutes Doing a Manufacturing Biisiness in New 
 
 York, § 707. 
 r. Books. 
 
 1. In General, § 708. 
 
 2. Stock Book. 
 
 a. In General, § 709. 
 
 b. What Corporations Must Keep, § 710. 
 
 c. Where To Be Kept, § 711. 
 
 d. Form and Contents, § 712. 
 
 e. Inspecting and Making Extracts From, § 713. 
 
 f. Penalty for Refusing Inspection, § 714. 
 
 818 
 
FOREIGN CORPORATIONS 819 
 
 XVII. Foreign Corporations — Continued: 
 
 G. Annual Report to Secretary of State. ' 
 
 1. When To Be Made, § 715. 
 
 2. Contents and Form, § 716. 
 
 3. Filing of Report, § 717. 
 
 4. Penalty for Failure to Make and File, § 718. 
 H. Taxation. 
 
 1. Right to Tax Foreign Corporations, § 719. 
 
 2. Real and Personal Property Taxes. 
 
 a. In General, § 720. 
 
 b. Place of Taxation, § 721. 
 
 c. What Taxable, § 722. 
 
 d. Exemptions, § 723. 
 
 3. On Sums Invested in New York Business, § 724. 
 
 4. Special Franchise Tax, § 725. 
 
 5. Franchise Tax or Income Tax, § 726. 
 
 6. License Tax. 
 
 a. What Corporations Subject to, § 727. 
 
 b. To Whom Paid, § 728. 
 
 c. When To Be Paid, § 729. 
 
 d. For What Paid, § 730. 
 
 e. Amount and Computation of Tax, § 731. 
 
 i. Tax Commission Fixes Capital Taxable, Examines 
 Corporate Books, Records and Employees; and 
 Comptroller Collects Taxes, § , 732. 
 
 g. Penalty for Failure To Pay, § 733. 
 
 7. Of Manufacturing Corporations, § 734. 
 I. Actions By and Against. 
 
 1. In General, § 735. 
 
 2. By One Foreign "Corporation or a Non-Resident Against 
 
 Another Foreign Corporation, § 736. 
 S. By. , 
 
 a. In General, § 737. 
 
 b. In What Court and County, § 738. 
 
 c. When May Bring. 
 
 aa. In General, § 739. 
 
 bb. When Have Not Obtained License to Do Busi- 
 ness and Paid Fee Therefor. 
 aaa. In General, § 740. 
 bbb. When. Doing Business in New York, 
 
 § 741. 
 ccc. On Contract When No License Obtained. 
 aaaa. In General, § 742. 
 bbbb. What Contracts May not Be 
 
 Sued On, § 743. 
 cecc. By Assignee, § 744. 
 ddd. On Any Cause When License Fee Not 
 Paid, § 745. 
 
820 BUSINESS CORPORATIONS IN NEW YORK 
 
 XVII. Foreign Corporations — Continued: 
 
 I. Actions By and Against, 3 — Continued: 
 
 d. Pleading, Practice and Evidence. 
 aa. In General, § 746. 
 bb. Verification of Pleadings, § 747. 
 cc. Statement and Proof of Corporate Name and 
 
 Incorporation, § 748. 
 dd. Security for Costs, § 749. 
 ee. Corporate Books, § 750. 
 
 ff. As to Obtaining License and Paying Fee for 
 Privilege of Doing Business in New 
 York. 
 aaa. In General, § 751. 
 bbb. As to Pleading or Proving Corporation 
 
 is a Stock Corporation, § 752. 
 ccc. When No License Fee Paid, § 753. 
 ddd. When Assignee Sues, § 754. 
 eee. Necessity and Manner of Pleading in 
 
 Complaint, § 755. 
 fff. Necessity and Manner of Pleading as 
 
 Defense, § 756. 
 ggg. Necessity and Manner of Proof Of 
 Compliance or Non-Compliance with 
 Statute, § 757. . 
 4. Against. 
 
 a. In General, § 758. 
 
 b. Who May Sue and For What. 
 
 aa. In General, § 759. 
 
 bb. Attorney-General, § 760. 
 
 c. In what Court and County, § 761. 
 
 d. When Barred By Statute of Limitations, § 762. 
 
 e. Service of Process. 
 
 aa. Governing Statutes, § 763. 
 bb. In General, § 764. 
 
 cc. On President, Vice-President, Treasurer, Assist- 
 ant Treasurer, Secretary, Assistant 
 Secretary and Officers with Corre- 
 sponding Functions. 
 aaa. In General, § 765. 
 
 bbb. On Officer Passing Through or Tempo- 
 rarily In State, § 766. 
 eee. On Officer Who Has Resigned, § 767. 
 ddd. On Officer In State as Witness, § 768. 
 dd. On Agent Designated For Service of Process, 
 
 § 769. 
 ee. On Secretary of State, § 770. 
 ff. On Cashier, Director or Managing Agent. 
 aaa. In General, § 773. 
 bbb. On Director, § 772. 
 ccc. On Managing Agent. 
 
 aaaa. In General, § 773. 
 bbbb. Who Is "Managing Agent,'' 
 §774. 
 
FOREIGN CORPORATIONS 821 
 
 XVII. Foreign Corporations — Continued: 
 
 I. Actions By and Against, i— Continued: 
 
 t. Service of Notice of Sale on Foreign Corporate 
 
 Mortgagor, § 775. 
 g. Pleading, Practice and Evidence. 
 aa. In General, § 776. 
 bb. What Law governs, § 777. 
 cc. Necessity and Manner of Alleging Corporate 
 
 Existence and Plaintiff's Residence, § 778. 
 dd. Necessity and Manner of Denying Corporate 
 
 Existence, § 779. 
 ee. Necessity and Manner of Proving Corporate 
 
 Existence, § 780. 
 ff. Verification of Pleadings, § 781. 
 gg. In Actions to Recover on Evidence of Debt, 
 
 § 782. 
 hh. Examination of Books, § 783. 
 ii. Pleading Usury, § 784. 
 
 jj. When Corporation Not Personally Served and 
 Does Not Appear, § 785. 
 J. Receivers. 
 
 1. Appointment. 
 
 a. When New York Courts Will Appoint. 
 
 aa. In General, § 791. 
 bb. In Supp. Pro., § 792. 
 
 b. Kind of Receivers New Tork Courts Will Appoint, 
 
 § 793. 
 
 c. Revocation of Appointment, § 794. 
 
 d. Notice of Appointment, § 796. 
 
 2. Powers of. 
 
 a. In General, § 796. 
 
 b. When Appointed In Another State, § 797. 
 
 c. Of Ancillary Receiver Appointed in New York, § 798. 
 
 3. Accounting and Compensation, § 799. 
 
 4. Actions By and Against. 
 
 a. In General, § 800. 
 
 b. Service of Process on, § 801. 
 
 K. Officers, Directors and Stockholders of Foreign Corporations. 
 
 1. What Law Governs Contracts of, with Corporation, § 802. 
 
 2. When New York Courts Will Entertain Actions By and 
 
 Against. 
 
 a. In General, § 803. 
 
 b. Testing Title to Office of, § 804. 
 
 3. Liabilities Of. 
 
 a. In General, § 805. 
 
 b. Of Directors fov Unauthorized Dividends, § 806. 
 
 c. Of Officers and Directors to Account for Injury to or 
 
 Loss of Corporate Property, § 807. 
 
 d. Of Stockholders for Corporate Debts, § 808. 
 
 e. Of Stockholders for Unpaid Subscriptions, § 809. 
 
 § 684. Foreign Corporations, Definitions. — Every corpora- 
 tion which is not a domestic corporation — that is, incorpo- 
 rated by or under the laws of the State or Colony of New 
 
822 BUSINESS CORPORATIONS IN NEW YORK § 685 
 
 York — is a foreign corporation, except as provided by the 
 Code of Civil Procedure for the purpose of construing such 
 code.^ For the purpose of the Code of Civil Procedure a 
 foreign corporation is defined to be any other than a corpora- 
 tion created by or under the laws of New York State, or 
 located in New York State a,nd 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 nineteenth day of 
 April, in the year seventeen hundred and seventy-five.^ 
 
 § 685. Id.: Rights, Powers and Liabilities Under New York 
 Laws; In General. — ^^The courts of this State recognize not only 
 the legal existence of corporations created under charters from 
 other states, but the rights and immunities conferred upon the 
 corporators, except so far as these are cut down by our own 
 legislation.' ". . . a corporate franchise granted by one 
 State cannot be revoked or annulled by the courts of another, 
 and especially in a proceeding in which the corporation is 
 not a party. " * " 'This State cannot prohibit a foreign cor- 
 poration from selling within the State merchandise to be man- 
 ufactured without the State; nor can it impose conditions 
 which operate directly upon such a sale, so as to be a burden 
 {citations) ; nor can it deny to such a corporation the right to 
 maintain an action upon such a contract of sale until the cor- 
 poration has procured the certificate . . . " ° No law of 
 New York makes it illegal for a foreign corporation to guar- 
 antee payment of the principal and interest as due, of bonds 
 of another corporation; and such an obligation is valid at 
 common law.° ". . . in case a foreign corporation is 
 engaged in business in this State, where all its property is 
 situated, it becomes amenable to the laws of this State to the 
 same extent as a domestic corporation. ' ' ^ Foreign corpora- 
 tions, asking the privilege of doing business under the laws 
 of New York cannot be exempt from the obligations and 
 liabilities which attach to domestic corporations ; ' ' and as to 
 the business transacted here, the company must be regarded 
 as domiciled by the residence of its general agent and its 
 local organization. ' ' ^ The statutory provisions for the exam- 
 
 ^ Gen. Corp. L. § 3, subd. 5 ' (1898) ; Gen. Corp. L. § 15 (L. 1892, 
 
 (L. 1909, c. 28). c. 687). 
 
 ^C. C. P. § 3343, subd. 18. «Dougan v. Evansville & Terre 
 
 'Merrick v. Van Santvoord, 34 Haute R. R. Co., 15 A. D. 483, 44 
 
 N. Y. 208 (1866). N. Y. Supp. 503 (1897). 
 
 "Merrick v. Van Santvoord, 34 'Gray v. Fuller, 17 A. D. 29, 44 
 
 N. Y. 208 (1866). N. Y. Supp. 883 (1897). 
 
 ^Hargraves Mills v. Harden, 25 'Martine v. International Life 
 
 Misc. '665, 56 N. Y. Supp. 937 Ins. See, 53 N. Y. 339 (1873). 
 
§ 686 FOREIGN CORPORATIONS • 823 
 
 ination of a corporation before trial apply to a foreign as well 
 as to a domestic corporation." A foreign corporation which 
 has not obtained any license to do business in New York may 
 nevertheless " file a lien under the Mechanics' Lien Law of 
 this State, where the material is actually delivered in this 
 State, and used in the construction of the building against 
 which the lien is filed."" A contract made in the name of 
 a foreign insurance corporation in this State by an appointee 
 of its agent here, authorized by it to receive insurance pro- 
 posals, to act as surveyor, to appoint surveyors and to attend 
 to the duties of his agency as nrescribed by the company, 
 binds the corporation." Although the Secretary of State 
 seems to have authority to revoke a certificate issued to a 
 foreign corporation to do business in New York only for 
 failure by it to designate a person on whom process against 
 it may be served, yet it seems that by authorizing an action 
 by the People to redress violations by a foreign corporation 
 of the statutes of the State, the Legislature intended to permit 
 the court to annul the corporation's right to do business 
 here.^^ 
 
 § 686. Id.: As to Real Estate. — ^Any foreign corporation (1) 
 doing business in New York State and (2) created under the 
 laws of (a) the United States, or (b) any State or Territory 
 of the United States, or (c) any foreign state or nation which 
 borders on the United States of America and which by its 
 laws confers similar privileges on corporations created by 
 the laws of the State of New York, may acquire and hold such 
 real property in New York State as may be necessary for its 
 corporate purposes in the transaction of its business in this 
 State, and may convey such realty by deed or otherwise in 
 the same manner as a domestic corporation.^^ Any foreign 
 corporation may purchase at a sale (1) upon the foreclosure 
 of any mortgage held by it, or (2) upon any judgment or 
 decree for debts due it, or (3) upon any settlement to secure 
 such debts, any real property within New York State covered 
 by or subject to such mortgage, judgment, decree or settle- 
 Payment of premiums by a citizen 30 Misc. 20&, 61 N. Y. Supp. 974 
 of the Confederate States on a life (1900) ; Gen. Corp. L. §§ 15., 16. 
 insurance policy issued by a f breign ^^ Kuney v. Amazon Insurance 
 
 corporation doing business here is Go,. 36 Hun, 66 (18'85). 
 excused during the continuance of ^^ People v. American Ice Co., 135 
 
 the Civil War. • A. D. 180, 120 N. Y. Supp. 41 
 
 'Bluthenthal & Bickart, Inc. v. (1909); Gen. Corp. L. § 15; Gen. 
 Crowley, No. 2, 138 A. D. 845, 123 Corp. L. § 131. 
 N. Y. Supp. 520 (191O0; C. C. P. *'Gen. Corp. L. § 20 (L. 1910, 
 § 370 et seq. c. 66). 
 
 ^^ Matter of Simonds Furnace Co., 
 
824 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 ment ; and may hold such realty for not exceeding five years 
 from the date of such purchase, and convey it by deed or 
 otherwise in the same manner as a domestic corporation." 
 Any foreign corporation may take by devise any real property 
 situated within the State, and may hold it for not exceeding 
 five years from the time when the right to the possession 
 thereof vests in it as such devisee, and may convey it by deed 
 or otherwise in the same manner as a domestic corporation.^^ 
 The statutory permission to a foreign corporation to do busi- 
 ness in New York and acquire realty therein like a domestic 
 one does not confer the right of eminent domain." " By 
 comity we recognize the existence of a corporation in another 
 State, and permit it to exercise the powers with which it is 
 endowed in our own, unless such exercise is repugnant to our 
 policy, or injurious to our interests. It is not more contrary 
 to State policy to allow an artificial than a natural person of 
 another State to take a testamentary gift of money from a 
 donor residing here."" The law of this State prohibiting 
 religious corporations from selling their real property with- 
 out leave of the court does not extend to foreign corpora- 
 tions." Under the laws of New York State a foreign corpora- 
 tion incorporated for the purpose of dealing in the purchase 
 and sale of real property may come into this State and trans- 
 act here such kind of corporate business." A conveyance by 
 a foreign corporation de facto, possessing some charter 
 capacity to acquire and convey realty, of real estate in this 
 State, is unimpeachable as ultra vires unless some statute of 
 New York expressly or impliedly disable it from dealing in 
 land in this State.^" 
 
 "Gen. Corp. L. § 21 (L. 1909, 
 c. 28). • 
 
 "Gen. Corp. L. § 21 (L. 1909, 
 c. 28). 
 
 '°Whitaker v. Kilby, 55 Misc. 
 -337, 106 N. T. Supp. 511 (1907); 
 Gen. Corp. L. §§ 15, 16, 17 ; Transp. 
 Corps. L. §§ 100, 101, 102. 
 
 ^'' Sherwood v. American Bible So- 
 ciety, 40 N. Y. (1 Keyes) 561 
 (1864). 
 
 ^niuck V. Hitchcock, 212 N. Y. 
 283, 106 N. E. 75 (1914); Relig. 
 Corps. L. § 12, and Gen. Corp. L. 
 § 21. 
 
 ^'Lancaster v. Amsterdam Im- 
 provement Co., 140 N. Y. 576, 24 
 L.R.A. 322, 35 N. E. 964 (1894). 
 
 ^"Lancaster v. Amsterdam Im- 
 provement Co., 140 N. Y. 576, 24 
 L.R.A. 32'2, 35 N. E. 964 (1894). 
 
 On right of foreign corporation, 
 to own real estate, see note in 24 
 L.R.A. 322. 
 
 On conveyance by public service 
 corporation to foreign corporation 
 incapable of taking title, continued 
 duty and liability of former to mem- 
 bers of public, see note in 33 L.R.A. 
 (N.S.) 362. 
 
 As to who may take advantage of 
 statute rendering, foreign corpora- 
 tion incapable of taking title to 
 real property, see note in 33 L.R.A. 
 (N.S.) 355. 
 
§§ 687, 688 FOREIGN CORPORATIONS 825 
 
 § 687. Id. : As to Proceedings Supplementary to Execution.— 
 
 ' ' Proceedings supplementary to execution are not authorized 
 when based upon judgments against domestic corporations 
 or against foreign corporations doing business in or having 
 an agency in this State, except in proceedings brought by or 
 against the People of the State. ... A foreign corpora- 
 tion not doing business in the State, nor having any business 
 or fiscal agency therein nor an agency for the transfer of its 
 stock, does not come within the prohibition of the statute, and 
 proceedings may be maintained upon a judgment against such 
 a foreign corporation. ' ' ^ The provisions of the Code of Civil 
 Procedure relating to proceedings supplementary to execution 
 apply to a foreign corporation doing no business and having 
 no agency in this State.^ A foreign corporation not having 
 a place of business within this State cannot be exami'ned as 
 a judgment debtor in supplementary proceedings for the 
 •purpose of the appointment of a receiver of its assets to be 
 applied upon an execution; but the creditor may seek relief 
 in equity.^ 
 
 § 688. Id. : As to Assignments, Preferential and Otherwise. — 
 A foreign corporation may validly make a general assignment 
 for the benefit of creditors under the laws of this State pro- 
 vided such assignment is also valid under the law of the cor- 
 poration 's domicile.* A general assignment in this State by 
 a foreign corporation without preference except to employees 
 in pursuance of New York laAvs will be upheld although void 
 under the law of the corporation 's home state.' " . . . the 
 laws of New York prohibiting the transfer by a corporation 
 of any portion of its assets to give preference to a creditor 
 in anticipation of insolvency " do not apply to a transfer by 
 a foreign corporation.* The statute prohibiting preferences 
 by a corporation in this State does not apply to foreign cor- 
 porations ; but a statute providing that, in all general assign- 
 ments for the benefit of creditors, any preference is not valid 
 
 ^Keystone Publishing Co. v. Hill ° First National Bank v. Rock 
 
 Dryer Co., 55 Misc. 625, 105 N. Y. City Falls Paper Co., 22 Misc. 599, 
 
 Supp. 894 (1907); C. C. P. §§ 1812, 50 N. Y. Supp. 746 (1898). The 
 
 2463. corporation was a manufacturing 
 
 ^ Logan V. MeCall Publishing Co., one but did its industrial business 
 
 140 N. Y. 447, 35 N. E. 665 (1893) ; in New York. 
 
 C. C. P. §§ 1810, 1812, 2463. « Lane v. Wheelwright, 69 Hun, 
 
 ^ Stevens v. Page, 4 Misc. 517, 24 180, 23 N. Y. Supp. 576 (1893) ; 
 
 N. Y. Supp. 698 (1893) ; C. C. P. afE'd 143 N. Y. 634, 37 N. E. 826. 
 §§ 2463, 1812, 1810. 
 
 * Rogers v. Pell, 154 N. Y. 518, 
 49 N. E. 75 (1898). 
 
826 BUSINESS CORPORATIONS IN NEW YORK ;, 089 
 
 except to the amount of one-third in value of the assigned 
 estate left after deducting wages, etc., does apply to a 
 foreign corporation/ A foreign corporation doing business 
 in New York and transferring property to its officers in con- 
 templation of insolvency is not subject to the statute in this 
 State which would make such a transfer by a domestic cor- 
 poration void.^ 
 
 § 689. Id.: As to Monopoly, Merger and Sequestration. — 
 No foreign corporation doing business in New York State 
 must 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." 
 Any foreign stock corporation authorized to do business in 
 New York 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 acquires and becomes and is possessed of all the estate, 
 property, rights, privileges and franchises of such other cor- 
 poration, and they vest in and are held and enjoyed by it as 
 fully and entirely and without change or diminution as they 
 were before held and enjoyed by such other corporation, and 
 are managed and controlled by the board of directors of the 
 possessor corporation and in its name, but without prejudice 
 to any liabilities of such other corporation or the rights of 
 any creditors thereof." The statute of this State relating to 
 sequestration proceedings against corporations applies to 
 domestic and not to foreign corporations; and while a New 
 York court will entertain a creditor's bill to recover property 
 which has been fraudulently disposed of by a foreign corpora- 
 tion in this State, it is necessary in order that jurisdiction 
 should attach that the fraudulent disposition of the property 
 should be proven." 
 
 ' Matter of Halsted, 42 A. D. 101, » St. Corp. L. § 14 (L. 1909, 
 
 58 N. Y. Supp. 898 (1S99); St. c. 61). 
 
 Corp. L. § 48, now § 66; General ^^ St. Corp. L. § 15 (L. 1909, 
 
 Assignment Act, § 30 (L. 1877, c. 61). 
 
 c. 466). ' "Dreyfus & Co. v. Seale & Co., 
 
 * Worthington v. Pfister Book- 37 A. D. 351, 55 N. Y. Supp. 1111 
 
 binding Co., 3 Misc. 418, 23 N. Y. (1899) ; C. C. P. § 1784. 
 Supp. 295' (1893); L. 1890, e. 564, 
 §48. 
 
§§ 690-692 FOREIGN CORPORATIONS 827 
 
 § 690. Id;: As to Banking and Political Contributions.— No 
 
 foreign corporation other than one formed under or subject 
 to the banking laws of New York State or of the United 
 States, except as permitted by such laws, is by any implication 
 or construction deemed to possess the power of carrying on 
 the business of discounting bills, notes or other evidences of 
 debt, of receiving deposits, of buying and selling bills of 
 exchange, or of issuing bills, notes or other evidences of debt 
 for circulation as money, or of engaging in any other form 
 of banking; or of receiving for transmission or transmitting 
 money by draft, traveler's check, money order or otherwise, 
 except an express company having contracts with railroad 
 companies, or a transatlantic steamship company, or a tele- 
 graph company, or a corporation incorporated prior to the 
 year eighteen hundred and fifty to promote the welfare of 
 emigrants." The prohibition against political contributions 
 by corporations is made by the statute effective on all cor- 
 porations " doing- business in this state," and, consequently, 
 must be held binding on foreign corporations if they do busi- 
 ness in New York.'' The subject of political contributions 
 by corporations is fully treated in regard to domestic cor- 
 porations, and reference is made to that treatment." 
 
 § 691. Id.: License or Certificate to Do Business in New York, 
 In General. — As a condition of permitting the use by a foreign 
 corporation of its institutions the State of New York pre- 
 scribes certain rules with which foreign corporations must 
 comply. The principal point to determine in the relations 
 between a foreign corporation and the State of New York 
 is whether or not it^does business or employs capital in this 
 State ; and this point'is fully treated in the following sections. 
 
 § 692. Id.: Papers To Be Filed Before License of Certificate 
 Issues. — Before granting to any foreign corporation a certifi- 
 cate to do business in New York, the New York Secretary of 
 State must require it to file in his office (1) a copy of its 
 charter or certificate of incorporation (a) in the English lan- 
 guage and (b) sworn to, and (2) a statement (a) under its 
 corporate seal and (b) the signature of its president, vice- 
 president or other acting head, particularly setting forth (c) 
 the business or objects of the corporation which it is engaged 
 in carrying on or which it proposes to carry on within New 
 York State, and (d) a place within the State of New York 
 which is to be its principal place of business, and designating 
 
 1^ Gen. Corp. L. § 22 (L. 1909, " See § 432, supra. 
 
 c. 28). 
 
 "Gen. Corp. L. § 44 (L. 1909, 
 c. 28). 
 
828 BUSINESS CORPORATIONS IN NEW YORK § 693 
 
 (e) a person upon whom process against the corporation may 
 be served within New York State, and specifying (f) the 
 oflSce or place of business of such person (which must be at 
 the place where such corporation is to have its principal place 
 of business within New York State) and the street and street 
 number thereof if any, if within a city, or other suitable desig- 
 nation of the particular locality; and (3) the written consent 
 of the person designated; and the Secretary of State may 
 require the execution of any such designation or consent to 
 be authenticated as he deems proper, and may refuse to file 
 it without such authentication." The statement filed by a 
 foreign corporation with the New York Secretary of State, 
 along with its charter, when it obtains a certificate to do busi- 
 ness in New York, must contain a designation, authenticated 
 as the Secretary of State deems proper, of a person upon 
 whom process against the corporation may be served within 
 New York State, who must have an office or place of business 
 at the place where such corporation is to have its principal 
 place of business in New York State, and who must give his 
 written consent to such designation, also authenticated as the 
 Secretary of State deems proper, to accompany the corpora- 
 tion 's statement, which continues in force either until revoked 
 by an instrument, authenticated as the Secretary of State 
 deems proper, in writing (by the corporation) designating in 
 like manner some Other person upon whom process against 
 the corporation may be served in New York State, or until 
 the filing in the same office of a written revocation of such 
 consent executed by the person so designated and authenti- 
 cated as the Secretary of State deems proper." The Sec- 
 retary of State collects a fee of fifty "dollars for filing the 
 statement and designation and copy of certificate of incor- 
 poration of a foreign corporation desiring to do business in 
 this State." 
 
 § 693. Id. : Form of License or Certificate.— No foreign stock 
 corporation (other than a moneyed corporation) can do busi- 
 ness in New York State without having first procured from 
 the New York Secretly of State a certificate (1) that it has 
 complied with all the requirements of law to authorize it to do 
 business in New York State and (2) that the business of the 
 corporation to be carried on in New York State is such as 
 may be lawfully carried on by a corporation incorporated 
 
 "Gen. Corp. L. § 16 (L. 1900, "Executive L. § 26 (L. 1917, 
 
 c. 28). . ■ c. 69^ 
 
 ^"Gen. Corp. L. § 16 (L. 1909, 
 
 ^c. 28). 
 
§§ 694^696 FOREIGN CORPORATIONS 829 
 
 under the laws of New York State for such or similar busi- 
 ness, or, if more than one kind of business, by two or more 
 corporations so incorporated for such kinds of business 
 respectively.^' 
 
 § 694. Id.: What Corporations Entitled To.— The New York 
 Secretary of State must deliver such certificate to every such 
 corporation so complying with the requirements of law, except 
 that no such certificate must be granted to any foreign corpo- 
 ration (a) having the same name as an existing domestic 
 corporation, or (b) having a name so nearly resembling the 
 name of an existing domestic corporation as to be calculated 
 to deceive, or (c) having as a part of its name the word 
 " trust," " bank," " banking," " insurance," " assurance," 
 " indemnity," " guarantee," " guaranty," " savings," 
 " investment," " loan," or " benefit " — unless the corpora- 
 tion using one of such words be a moneyed or insurance 
 corporation." No business corporation can be authorized 
 to do business in New York State unless its name has such 
 word or words, abbreviation, affix or prefix, therein or thereto, 
 as will clearly indicate that it is a corporation as distin- 
 guished from a natural person, firm or co-partnership; or 
 unless such corporation uses with its corporate name, in New 
 York State, such an affix or prefix."* A foreign corporation 
 will not be authorized by the New York Secretary of State 
 to do business in New York if its name does not clearly indi- 
 cate it to be a corporation, even though another foreign corpo- 
 ration of which it is the reorganized successor had the same 
 name as that which the successor has, and was authorized to 
 do business under that name in New York."" 
 
 § 695. Id.: When Corporation "Doing Business" in New 
 York So as to Need License.— The statute requiring foreign 
 corporations to obtain a certificate or license makes them 
 procure it as a condition precedent to doing business in New 
 York.^° The question of whether a corporation is or is not 
 doing business in New York arises in connection with its taxa- 
 tion as well as its licensing and is therefore discussed under a 
 separate heading.^ 
 
 § 696. Id.: Penalty for Not Obtaining License or Making 
 and Keeping Alive Designation of Agent. — Neither any 
 foreign stock corporation nor any assignee of such corporation 
 
 "G«n. Corp. L. § 15 (L. 1909, ""People ex rel. United Verde 
 
 c. 28). • ' Copper Co. v. Hugo, 181 A. D. 149 
 
 "Gen. Corp. L. § 15 (L. 1909, (1917) ; Gen. Corp. L. §§ 6, 15. 
 c. 28). ^"Gcn. Corp. L. § 15 (L. 1909, 
 
 "»Gen. Corp. L. § 6 (L. 1917, c. 28). 
 c. 594). ^ See § 697 et seq., infra. 
 
830 BUSINESS CORPORATIONS IN NEW YORK § 696-a 
 
 nor any person claiming under such corporation _ or such 
 assignee, or under either of them, can, if such foreign stock 
 corporation do business in New York State, maintain any 
 action in New York State upon any contract made by it in 
 this State, unless prior to the making of such contract the 
 foreign corporation has procured the statutory certificate 
 from the Secretary of State.' The New York Secretary of 
 State may revoke the authority of a foreign corporation to do 
 business in New York if it does not, within thirty days of (a) 
 the death or (b) removal from the place where the corporation 
 has its principal place of business within New York of its 
 designated agent or (c) filing by such agent of revocation of 
 his consent to act as such, designate in like manner and with 
 such authentication as the Secretary of State deems proper 
 another person upon whom process against the corporation 
 may be served within New York State ; and process against 
 the corporation in an action upon any liability incurred within 
 New York State before such revocation may, after such death 
 or removal or revocation of consent and before another desig- 
 nation is made, be served upon the Secretary of State.^ The 
 Secretary of State may refuse to file any designation by a 
 foreign corporation of an agent on whom process may be 
 served in this State, or any revocation by the corporation of 
 such designation or by the agent of his consent to be such, or 
 any consent by the agent to act as such, if such designation, 
 revocation or consent be executed without such authentication 
 as the Secretary of State deems proper.* 
 
 § 696-a. Id.: Revocation for Nuisance. — Any corporation 
 organized under the laws of any State other than New York 
 and other than corporations operating railroad or steamboat 
 lines, which so conducts its business, without New York State, 
 by the emission or discharge of dust, smoke, gas, steam or 
 offensive, noisome or noxious odors or fumes, so as to 
 unreasonably injure or endanger the health or safety in New 
 York State of any considerable number of the people of New 
 York State, is deemed guilty of a nuisance and its certificate 
 of authority to do business in New York State is deemed 
 revoked and annulled in the manner prescribed by the statute 
 and must not be revived except as prescribed in the statute.' 
 Complaints may be made to the State Commissioner of Health 
 
 2 Gen. Corp. L. § 15 (L. 1909, * Gen. Corp. L. S 1.6 (L. 1909, 
 
 e. 28). ■> c. 28). 
 
 'Gen. Corp. L. § IG (L. 1909, 'Gen. Corp. L. i$§ 200, 202 (L. 
 
 c. 28). 1917, e. 292). 
 
1 696-a FOREIGN CORPORATIONS 831 
 
 by any person, association or corporation aggrieved, by peti- 
 tion or complaint in writing, setting -forth any act or thing 
 done or omitted to be done claimed to constitute a nuisance 
 within the provisions of the statute.' Upon the presentation 
 of such a complaint, the State Commissioner of Health must 
 cause a copy thereof to be served upon the corporation com- 
 plained of in the manner provided by law for the service of 
 a summons, accompanied by a notice directed to such cor- 
 poration requiring that the matters complained of be abated 
 or that the charges be answered in writing within a time to 
 be specified by such Commissioner/ If the charges contained 
 in such complaint be not thus satisfied, and it appears to the 
 Conmaissioner of Health that there are reasonable grounds 
 therefor, he must cause such charges to be investigated in 
 such manner and by such means as he deems proper, and fix 
 a time for a hearing upon such complaint and cause notice 
 thereof to be forwarded to the complainant and the corpora- 
 tion complained of.' If the State Commissioner of Health, 
 or his successor, after; such notice to such corporation, and 
 an opportunity for a hearing being given it, finds that it is 
 so conducting its business, without New York State, as to 
 unreasonably injure or endanger the health or safety in New 
 York State of any considerable number of people of New 
 York State, he must file such findings in duplicate in the 
 offices of the Secretary of State and the Attorney-General.* 
 A certificate of the Secretary of State giving notice of the 
 filing of such findings must be served upon the corporation 
 or upon its designated agent and thereupon its certificate of 
 authority to do business in New York State is suspended for 
 the period of thirty days." Any person who exercises or 
 attempts to exercise any powers by virtue of a certificate of 
 authority which has been so suspended; dtiring the period of 
 such suspension, is guilty of a misdemeanor." If at the 
 expiration of such period the State Commissioner of Health 
 upon further proof and opportunity to such offending cor- 
 poration to be heard finds and determines that it continues 
 to conduct its business so as to constitute such nuisance, he 
 must cause a notice of such determination to be served upon 
 the corporation or its designated agent and published once 
 
 "Gen. Corp. L. § 200 (L. 1917, "Gen. Corp. L. § 2a0 (L. 1917, 
 
 c. 292). c. 292). 
 
 'Gen. Corp. L. § 200 (L. 1917, ^^ Gen. Corp. L. § 200 (L. 1917, 
 
 e. 292). e. 292). 
 
 = Gen. Corp. L. § 200 (L. 1917, ^^ Gen. Corp. L. § 200 (L. 1917, 
 
 c. 292). c. 292). 
 
832 BUSINESS CORPORATIONS IN NEW YORK § 696-b 
 
 a week for two successive weeks in the official State paper." 
 On the tenth day aftep such service and publication the cer- 
 tificate of authority of such corporation to do business in New 
 York State is deemed to be revoked and cancelled." Any 
 person who exercises or attempts to exercise any powers by 
 virtue of a certificate of authority which has been so revoked 
 is guilty of a misdemeanor." When any corporation has 
 ceased to perform the acts or maintain the nuisance by reason 
 of which its certificate of authority has been revoked and 
 satisfactorily guarantees that it will not perform such acts 
 or maintain such nuisance in the future, its certificate of 
 authority may be revived in the manner prescribed by the 
 statute with the same force and effect as if such certificate 
 had not been revoked." If such corporation files a petition 
 in writing with the New York State Commissioner of Health 
 setting forth that the nuisance in fact no longer exists and it 
 appears that there are reasonable grounds therefor, the Com- 
 missioner must cause an investigation to be made in such 
 manner and by such means as he deems proper, and if after 
 such investigation he finds and certifies that such corporation 
 has ceased to conduct' its business so as to constitute such 
 nuisance and files such findings in duplicate in the offices of 
 the Secretary of State and Attorney-General, the corpora- 
 tion's certificate of authority is deemed to be revived with 
 full force and effect." A supplemental certificate of the Sec- 
 retary of State must be served and published in like manner, 
 and upon such service and publication such revival becomes 
 effective; but such revival does not prevent a subsequent 
 revocation of the certificate of the same corporation for the 
 same or a similar offense." 
 
 § 696-b. Id.: Voluntary Surrender. — ^A foreign corporation 
 having authority under section sixteen of the General Cor- 
 poration Law to do business in New York State may sur- 
 render such authority by filing in the office of the New York 
 State Secretary of State a certificate (a) under its corporate 
 seal, and (b) under the signature of its president, vice-presi- 
 dent or other acting head, with (c) proof attached of execution 
 in the form prescribed by section three hundred and nine of 
 the Real Property Law, and with (d) the certificate of 
 authority attached (unless such certificate of authority has 
 
 "Gen. Corp. L. § 200 (L. 1917, "Gen. Corp. L. § 201 (L. 1917, 
 c. 292). e. 292). 
 
 "Gen. Corp. L. § 200 (L. 1917, "Gen. Corp. L. § 201 (L. 1917, 
 c. 292). e. 292). 
 
 "Gen. Corp. L. S 200 (L. 1917, "Gen. Corp. L. § 201 (L. 1917, 
 c. 292). c. 292). 
 
§ 697 FOREIGN CORPORATIONS 833 
 
 been lost or destroyed, in which event there must be attached 
 an affidavit of the president, vice-president, secretary or other 
 officer of the corporation to the effect that such certificate has 
 been lost or destroyed, as the case may be)." Such certificate 
 of surender must set forth: (1) The name of the corpora- 
 tion; (2) the State under the laws of which it is formed; (3) 
 the date on which it received authority to do business in New 
 York State; (4) revocation of its designation of the person 
 upon whom process against it might be served in New York 
 State ; (5) the surrender of its authority to do business in New 
 York State and, as evidence of such surrender, its return to 
 the New York State Secretary of State, for cancellation, of 
 its certificate of authority to do business in New York State, 
 or its loss or destruction." On the filing of such certificate 
 the Secretary of State must make a note of the filing thereof 
 on his index of corporations and thereupon the corporation's 
 authority to do business within New York State ceases and 
 determines, and no such corporation doing business in New 
 York State after the filing of such certificate of surrender of 
 authority can maintain any action in New York State upon 
 any contract made by it in New York State subsequent to the 
 filing of such certificate of surrender of authority.^" The 
 filing of such certificate does not, however, affect any action 
 pending at the time of such surrender, or affect any action in 
 New York State upon any contract made by the corporation 
 in New York State before the filing of the certificate of sur- 
 render of authority.^ Process against the corporation in an 
 action .upon any liability incurred within New York State 
 before the filing of such certificate of surrender of authority 
 may, after the filing thereof, be served upon the Secretary 
 of State of the State of New York.^ At the time of such 
 service the plaintiff must pay the Secretary of State two 
 dollars, to be included in his taxable costs and disbursements, 
 and the Secretary of State must forthwith mail a copy of such 
 process to such corporation, if its address or the address of 
 any officer thereof is known to him.'' 
 
 § 697. Doing Business or Employing Capital in New York, 
 Governing Statutes. — One statute prohibits a foreign stock 
 corporation from doing business in New York unless it has 
 
 " Gen. Corp. L. § 16-a (L. 1918, ^ Gen. Corp. L. § 16-a (L. 1918, 
 
 c. 193). c. 193). 
 
 ^» Gen. Corp. L. § 16-a (L. 1918, ^ Gen. Corp. L. § 16-a (L. 1918, 
 
 c. 193). c. 193). 
 
 ^ Gen. Corp. L. § 16-a (L. 1918, ^ Gen. Corp. L. § 16-a (L. 1918. 
 
 c. 193). c. 193). 
 
 B. C." N. Y.— 53 
 
834 BUSINESS CORPORATIONS IN NEW YORK § 698 
 
 been licensed to do it by the Secretary of State ; and prohibits 
 such a corporation so doing business from suing in this State 
 on any contract made by it in this State before obtaining such 
 a license.^ A second statute requires a foreign corporation 
 doing business in New York to appoint a resident agent upon 
 whom process against it may be served as a condition prece- 
 dent to licensing it.° A third statute requires every foreign 
 corporation doing business in New York to make an annual 
 report to the Secretary of State.' A fourth statute requires 
 every foreign corporation having an office for the transaction 
 of business in New York to keep a stock-book.* A fifth statute 
 imposes upon a foreign corporation authorized to do business 
 under the General Corporation Law a license fee for the 
 privilege of exercising its corporate franchises or carrying 
 on its business in New York State, to be computed on the basis 
 of its capital stock employed by it within this State." A sixth 
 statute imposes upon a foreign manufacturing or mercantile 
 corporation for the privilege of doing business in New York. 
 State an annual franchise tax to be computed upon the basis 
 of its net income for. the preceding year." A seventh statute 
 imposes upon a foreign corporation, other than a manufactur- 
 ing or mercantile one, " doing business " in this State, an 
 annual franchise tax to be computed on the basis of the 
 amount of its capital stock employed during the preceding 
 year within New York State." An eighth statute taxes non- 
 residents doing business in New York State on the capital 
 invested in such business."" It is, therefore, important to 
 know when the. courts will consider a foreign corporation to 
 be doing business or employing capital in New York. 
 
 § 698. Id.: In General.— The policy of New York State is 
 not to impose any unconscionable restrictions on- the trans- 
 actions of foreign corporations within its boundaries, and its 
 statutory requirement that they obtain certificates from its 
 
 ''Gen. Corp. L. § 10 (L. 1909, "'^ Tax L. § 7 (L. 1909, c. 61). 
 
 c. 28). Transactions pursuant to agree- 
 
 °Gen. Corp. L. § 16 (L.' 1909, ment with local dealer to sell product 
 
 c. 28). of foreign corporation within State 
 
 ' St. Corp. L. § 34 (L. 1909, as doing business therein, see note 
 
 c. 61). in 44 L.R.A.(N.S.) 1094. 
 
 * St. Corp. L. § 33 (L. 1909, On effect of agreement by foreign 
 
 c. 61). corporation to install article within 
 
 'Tax L. § 181 (L. 1917, c. 490). the State to bring it within statute 
 
 "Tax L. § 209 (L. 1918, c. 276). regulating foreign corporations, see 
 
 '^Tax L. § 182; Tax L. § 207 (L. note in 14 L.R.A.(N.S.) 674. 
 1917, c. 726). 
 
§ 698 FOREIGN CORPORATIONS ' 835 
 
 Secretary of State if they do business here is not intended to 
 prohibit ' ' all corporate transactions by foreign corporations, 
 irrespective of their nature, or of the condition under which 
 they occurred ... 'To bring into operation the statutory 
 provision, the facts should show more than a solitary, if not 
 accidental, transaction . . . They should establish that 
 the corporation was conducting a continuous business. To be- 
 ' doing business in this State ' implies corporate continuity 
 of conduct in that respect ; such as might be evidenced by the 
 investment of capital here, with the maintenance of an office 
 for the transaction of its business, and those incidental cir- 
 cumstances, which attest the corporate intent to avail itself 
 of the privilege to carry on a business. "^^ A foreign corpo- 
 ration, by refraining from making any contract within this 
 State, cannot transact any amount of business here and escape, 
 taxation while still having recourse to the New York courts 
 to enforce its rights." A foreign corporation not doing busi- 
 ness in New York may sue an individual in this State though 
 it have no license to do business in this State.^* " It is only 
 when a foreign corporation, ' doing business in this State,' 
 in competition with domestic corporations, has made a con- 
 tract within this State, that it is denied the aid of our courts 
 in its enforcement unless it has complied with the statute, and 
 has become, in practical effect, a domestic corporation for all 
 purposes ... it is demanded that in return for the 
 privileges of suing upon local contracts in the courts of this 
 State, the foreign corporation must place itself in a situation 
 where it can be sued with equal convenience within this 
 State. " ^^ A certificate of authority to do business in New 
 York is not a condition precedent to an action by a foreign 
 corporation in this State unless it appears that it is doing 
 business in New York." 
 
 ^^Penn Collieries Co. v. Mc- ^= Eclipse Silk Mfg. Co. v. Hiller, 
 
 Keever, 183 N. Y. 98, 2 L.R.A. 145 A. D. 568, 129 N. Y. Supp. 879 
 
 (N.S.) 127, 75 N. E. 935 (1905) ; (1911) ; Gen. Corp. L. § 15. 
 
 Gen. Corp. L. § 15. "Lukens Iron & Steel Co. v. 
 
 ^^ International Text Book Co. v. Payne, 13 A. D. 11, 43 N. Y. Supp. 
 
 Connelly, 67 Misc. 49, 124 N. Y. 376 (1897); L. 1892, c. 687, § 15. 
 
 Supp. 603 (1910) ; aff'd 140 A. D. See now Gen. Corp. L. § 15. 
 
 939, 125 N. Y. Supp. 1125; Tax L. Compelling designation of person 
 
 § 181; Gen. Corp. L. § 15. upon whom process may be served 
 
 ^* Batchelder & Lincoln Co. v. as a condition of right of foreign 
 
 Knopf, 54 A. D. 329, 66 N. Y. Supp. corporation to do business in the 
 
 513 (1900); Gen. Corp. L. § 15 (L, State, see note in 1 L.R.A.(NJS.> 
 
 1892, c. 687). 558. 
 
836 BUSINESS CORPORATIONS IN NEW YORK §§ 699, 700 
 
 § 699. Id. : When Business Must Be Done.— Obtaining by a 
 foreign corporation of a license to do business in New York 
 some time before the year in which it is assessed for a per- 
 sonal property tax is not conclusive that it is carrying on 
 business in this State so as to be liable to taxation." The 
 prohibition against a foreign corporation which does business 
 in New York suing on a contract made here unless it has a 
 license applies not only to a company doing business here at 
 the time the action is commenced but doing business before 
 getting a license.^* Under a statute that no foreign corpo- 
 ration doing business in New York should do so after 
 December thirty-first, eighteen hundred ninety-two, without 
 having procured a certificate from the Secretary of State, but 
 that any contract made prior thereto might be enforced in the 
 State thereafter, a foreign corporation shipping goods Janu- 
 ary fourth, eighteen hundred ninety-three, pursuant to an 
 order delivered to it in another State on November first, 
 eighteen hundred ninety-two, is not doing business contrary 
 to the statute." 
 
 § 700. Id.: What Kind of " Business " Is Meant By Statute. 
 — The words " doing business " in the statutes regulating 
 domestic has no different meaning when used in the statutes 
 regulating foreign corporations, and means simply to put 
 them on an equal footing, not inhospitality to the foreign com- 
 panies.™ In determining whether a foreign corporation is 
 doing business in this State so as to be precluded from suing 
 in New York unless it has obtained a certificate from the Sec- 
 retary of State, ' ' doing business relates to the ordinary busi- 
 ness which the corporation was organized to do."^ The 
 business of a foreign corporation done in this State which 
 requires it to obtain a license before it can sue in New York 
 on a contract made in New York is such business as it was 
 
 "People ex rel. Goetz Silk v. Gladstone, 164 A. D. 370, 149 
 
 Mfg. Co. V. Wells, 42 Misc. 86, 85 N. Y. Supp. 807 (1914) ; Gen. Corp. 
 
 N. Y. Supp. 533 (1903); aff'd 93 L. § 15. 
 
 A. D. 613, 87 N. Y. 1144; L. 1896, ^ Kline Brothers & Co. v. German 
 
 c. 908, § 7. Union Fire Ins. Co., 147 A. D. 790, 
 
 ^» Portland Co. v. Hall & Grant 132 N. Y. Supp. 181 (1911); afif'd 
 
 Construction Co., 121 A. D. 779, 210 N. Y. 534, 103 N. E. 1125; Gen. 
 
 106 N. Y. Supp. 649 (1907) ; Gen. Corp. L. § 15. A Elorida tobacco 
 
 Corp. L. § 15 (L. 1892, c. 687, as corporation having an office in this 
 
 amend'd). State used by its president and con- 
 
 " Novelty Mfg. Co. v. Connell, 88 tracting for insurance here for its 
 
 Hun, 254, 34 N. Y. Supp. 717 property there is not " doing busi- 
 
 (1895); L. 1892, c. 687, § 15. ness" in this State. 
 
 ^"Angldile Computing Scale Co. 
 
§ 701 FOREIGN CORPORATIONS 837 
 
 primarily organized to do and nqt the incidents,! business of 
 insuring its property located in another state, nor yet the 
 employment of an agent to solicit orders to be sent to and 
 accepted by it, doing business in another state.' The statute 
 requiring a foreign corporation "doing business" in this 
 State to secure a certificate from the Secretary of State, etc., 
 is to protect domestic corporations and is not generally 
 violated, if the foreign corporation is doing its regular busi- 
 ness within its home State and is not maintaining a branch 
 with offices, etc., in this State, by its making contracts, etc., 
 here through agents, unless a manipulation of agents violate 
 the spirit of the statute.* 
 
 § 701. Id.: Sporadic Transactions in New York. — A single 
 act cannot constitute doing business by a foreign corporation 
 in this State.* Two distinct sales only alleged in a complaint 
 by a foreign corporation does not constitute doing business in 
 this State so as to require a license by the plaintiff as a pre- 
 requisite to suit.* " The crucial test in (sic) doing business 
 within the meaning of this statute is not an isolated trans- 
 action within the State. or the transshipment of goods from 
 the home office, pursuant to orders taken by drummers within 
 the State, but it is the establishment of an agency or branch 
 office within our State limits. " " A foreign corporation is not 
 doing business in this State so as to be precluded from suing 
 on a contract made in New York because of failure to procure 
 a certificate from the Secretary of State if the transaction in 
 question was the only one in the nature of a sale in which it 
 had engaged in this State and consisted of preliminary 
 negotiations had in an office in this State for which it paid 
 nothing though its name appeared thereon and it had some of 
 its property there ; and of the vendee signing an order blank 
 and cheque which were sent by the person having the office 
 
 ^Cummer Lumber Co. v. Asso- City Cooperage Co., 112 A. D. 62, 
 
 eiated Mamifacturers' Ins. Co., 67 98 N. Y. Supp. 113 (1906); Gen. 
 
 A. D. 151, 73 N. Y. Supp. 668 Corp. L. § 15 (L. 1904, c. 490). 
 
 (1901); aff'd 173 N. Y. 633, 66 « Vaughn Machine Co. v. Light- 
 
 N. E. 1106. house, 64 A. D. 138, 71 N. Y. Supp. 
 
 ^ Angldile Computing Scale Co. v. 799 (1901) ; Gen. Corp. L. § 15 (L. 
 
 Gladstone, 164 , A. D. 370, 149 1892, c. 687, § 15). An incorporator 
 
 N. Y. Supp. 807 (1914) ; Gen. Corp. made in this State a contract with a 
 
 L. § 15. resident that the corporation would 
 
 *New York Terra-Cotta Co. v. deliver him a machine. The cor- 
 
 Williams, 102 A. D. 1, 92 N. Y. poration sold machines by eorre- 
 
 Supp. 808 (1905) ; aff'd 184 N. Y. spondence as well as by personal 
 
 579, 77 N. E. 1192; Gen. Corp. L. contact, sending them direct from 
 
 § 15 (L. 19€1, c. 583). out of the State into the State. It 
 
 ° Ozark Cooperage Co. v. Quaker had no office in New York. 
 
838 BUSINESS CORPORATIONS IN NEW YORK § 702 
 
 ^vhere the corporation's wap to the latter at its home address, 
 whence the goods were shipped; and the person received his 
 commission/ A foreign corporation is not doing business in 
 this State so as to be precluded from suing therein in the 
 absence of a certificate from the Secretary of State because 
 deliveries were made by it from time to time over a period of 
 ten months under a contract negotiations for which were 
 begun in New York and continued largely by correspondence 
 from its place of business in a foreign state, it having no place 
 of business in New York.* The facts that letters were 
 addressed by individuals in this State to a foreign corporation 
 in another State which had no office here, never obtained any 
 permission to transact business in this State and did not 
 generally transact business with other persons in this State, 
 soliciting a renewal policy of insurance on property here, 
 and that the foreign corporation accepted and mailed the 
 policy to this State, are not sufficient to constitute the trans- 
 action of business by it in New York.' A foreign corporation 
 doing business within its own State may come into this State 
 and enforce payment of a claim arising out of a sale of goods 
 within this State although it has obtained no certificate from 
 the Secretary of State of New York." A foreign corporation 
 is not doing business in this State within the meaning of the 
 statute requiring it if so doing to procure a license from the 
 Secretary of State when it has done no business therein 
 beyond presenting for sale and selling to individual pur- 
 chasers, or floating on the market, either its stocks or its 
 bonds." 
 
 § 702. Id.: When Has Office in New York, In General.— 
 " . . . it is not necessary that a foreign corporation 
 maintain an office in this State in order to transact business 
 here and to come within the prohibition of the statute."" 
 A foreign corporation which has its " home office " in this 
 
 ' Acorn Brass Mfg. Co. v. Ruten- N. Y. Supp. 807 (1914) ; Gen. Corp. 
 
 berg, 147 A. D. 533, 132 N. Y. Supp. L. § 15. 
 
 600 (1911); Gen. Corp. L. § 15, as "Union Trust Co. v. Sickels, 125 
 
 amend'd L. 1901, cc. 96, 538, and L. A. D. 105, 109 N. Y. Supp. 262 
 
 1904, c. 490. (1908) ; Gen. Corp. L. § 15. 
 
 * Haddam Granite Co., Inc., v. . Single or isolated transaction by 
 
 Brooklyn Heights R. R. Co., 131 foreign corporation as doing busi- 
 
 A. D. 685, 116 N. Y. Supp. 96 ness within the State, see note in 
 
 (1909); Gen. Corp. L. § 15. 10 L.R.A.lN.S.) 693. 
 
 ° Huntington v. Sheehan, 206 ^^ Woodbridge Heights Construc- 
 
 X. Y. 486, 100 N. E. 41 (1912). tion Co. v. Gippert, 92 'Misc. 204, 
 
 "Angldile Computing Scale Co. 155 N. Y. Supp. 363 (App. T. 
 
 V. Gladstone, 164 A. D. 370, 149 1915) ; Gen. Corp. L. § 15. 
 
§ 703 FOREIGN CORPORATIONS 839 
 
 State does business here."^^ A foreign corporation maintain- 
 ing in this State its only business office whence all the products 
 of its mills at home are sold and moneys collected is doing 
 business in New York." A foreign corporation maintaining 
 numerous offices in New York and superintendents in 
 charge thereof, with power of employment and dismissal of 
 assistants, qualified to give and giving mathematical instruc- 
 tion is doing business in New York.^^ A foreign corporation 
 is not subject to a franchise tax in this State on the theory 
 that it is doing business in New York because it has an office 
 in New York which takes orders for insertion of advertise- 
 ments in foreign states, sends the orders to the corporation's 
 home office, and deposits the charge in New York to the credit 
 of the corporation which cheques against it in its home state." 
 A foreign corporation authorized to do business in New York 
 is not " doing business " in this State so as to be subject to 
 municipal taxation because it has an office here with furniture 
 used for directors' meetings and declaration of dividends on 
 preferred stock, and because it has money in bank here used 
 to pay such dividends." 
 
 § 703. Id.: Plus Something More.— A foreign corporation 
 cannot claim that it is not doing business in the State and has 
 no capital invested in it so as to escape taxation if it imports 
 foreign goods and sells them here; has continuity in the 
 course of its business; maintains an office here at which the 
 proceeds of sales of its goods are received and deposited in 
 bank ; and has here a bank account out of which are defrayed 
 all the expenses of the business in this country, the surplus 
 only being remitted to its native country at a convenient 
 period.^* A foreign corporation which has obtained a license 
 to do business in New York State, maintains an office, sales- 
 room and storage rooms and keeps goods for sale and sells 
 them in this State, is carrying on a permanent business in 
 
 " Strout Farm Agency V. Hunter, Supp. 686 (1898). "Office con- 
 
 85 Misc. 476, 148 N. Y. Supp. 924 veniences are permitted here to a 
 
 (1914) ; Gen. Corp. L. § 15. foreign corporation doing business 
 
 "People ex rel. Union Stdphur in another State to solicit orders to 
 
 Co. V. Glynn, 125 A. D. 328, 109 be executed in other States without 
 
 N. Y. Supp. 868 (1908) ; Tax L. liability to our franchise tax." 
 §S 181, 182 (L. 1907, c. 734). "People ex rel. Dives-Pelican Co. 
 
 *= International Textbook Co. v. v. Feitner, 77 A. D. 189, 78 N. Y. 
 
 Connelly, 67 Misc. 49, 124 N. Y. Supp. 1017 (1902) ; L. 1896, c. 908, 
 
 Supp. 603 (1910) ; afif'd 140 A. D. §. 7. 
 
 939, 125 N. Y. Supp. 1125; Gen. ^^pgopj^ g^ ^gi ^racy & Oppen- 
 
 Corp. L. § 15. heim Co. v. Wells, 183 N. Y. 264, 76 
 
 "People ex rel. Kellogg Co. v. N. E. 24 (1905). 
 Roberts, 30 A. D. 150, 51 N. Y. 
 
840 BUSINESS CORPORATIONS IN NEW YORK § 703 
 
 New York and is taxable, even though it does not manufacture 
 any of its goods in New York." A foreign corporation is 
 " doing business " in this State so as to be liable to taxation 
 when its officers have their offices at permanent offices of the 
 company here, in which the directors hold their annual uieet- 
 ings and declare and pay dividends ; when its bullion is sent 
 and sold here and the proceeds received here and partly used, 
 deposited and loaned here.^" A foreign corporation which has 
 obtained a license to do business in New York, has uninter- 
 ruptedly sold and delivered goods from its principal place of 
 business in this State, has kept on hand continuously a stock 
 of goods, has had a regular bank account to defray local 
 expenses, has determined in its New York office terms of sale, 
 credits and collections, etc., is taxable in New York, though 
 the proceeds over the expenses of the office in this State were 
 at once remitted to the home office and it did no manufacturing 
 in New York.^ A foreign corporation has no capital stock 
 employed in New York so as to be subject to taxation if it 
 manufactures all its goods in its home state, rents part of a 
 building in New York in which is an office in charge of a sell- 
 ing agent where are kept and distributed to a number of 
 traveling agents and to customers samples, pays about twenty 
 employees and incidental expenses from the New York office 
 by monthly remittances from the home office, has an average 
 monthly balance in bank in New York of five thousand dollars 
 (less than its ever present outstanding indebtedness in New 
 York), takes orders at its New York office both from its sales- 
 men in this State and others, all of which are approved or 
 disapproved at the home office and filled thence.'' A foreign 
 corporation should not be subjected to taxation on capital 
 invested in this State when it maintains a sales-room in New 
 York City, keeps an average stock on hand there of $8,000, 
 has half a dozen employees there, keeps no bank account in 
 the State but gets money needed here weekly by draft on it in 
 another State, and goods shipped it here are mainly reshipped 
 to places outside this State.' A foreign corporation which 
 
 ^' People ejc rel. Carey Manufac- ner, 31 Misc. 553, 65 N. Y. Supp. 
 
 turing Co. v. Commissioners, 39 518 (1900). 
 
 Misc. 282, 79 N. Y. Supp. 485 ^People ex rel. Washington Mills 
 
 (1902). Co. V. Roberts, 8 A. D. 201, 40 
 
 ^"People V. Horn Silver Mining N. Y. Supp. 417 (1896); aff'd 151 
 
 Co., 105 N. Y. 76, 11 N. E. 155 N. Y. 619, 45 N. E. 1134; L. 1890, 
 
 (1887); L. 1880, c. 542, as amend'd c. 522. 
 
 L. 1881, c. 361, and L. 1882, c. 151. ^ People ex rel. Tower v. Wells, 98 
 
 See now Tax L. § 182. A. D. 82, 90 N. Y. Supp. 313 
 
 ^ People ex rel. Collar Co. v. Feit- (1904) ; aff'd 182 N. Y. 553, 75 
 
§ 704 FOREIGN CORPORATIONS 841 
 
 has an office in this State for the transaction of business, 
 makes a contract here to supply materials for and to build 
 elevators, builds them, furnishing the labor needed to build 
 them and alleges as ground of recovery a substantial per- 
 formance of the contract by which they were built here, is 
 doing business in New York.* A deposit paid and to be repaid 
 in New York on non-acceptance of a contract by a foreign cor- 
 poration at its home office and maintenance by it of an office 
 in this State from which it carried on business in the State, 
 constitute a doing of business in the State precluding the cor- 
 poration from suing on the contract here in the absence of a 
 certificate from the Secretary of State to it/ A foreign corpo- 
 ration is not " doing business " in this State so as to be 
 debarred from suing therein unless it has a license if it has 
 no office or capital here; and consigns its goods to a store- 
 keeper paying his own rent who sells them on salary and com- 
 mission under an agreement terminable by him or it on notice, 
 the payments being made direct to a bank.* 
 
 § 704. Id.: Transactions in New York Through Agents or 
 Salesmen. — A foreign corporation manufacturing goods in its 
 home state and occasionally shipping them to New York pur- 
 suant to orders taken by agents within this State is not 
 " doing business " in New York.' " But soliciting and tak- 
 ing orders within the State by coromercial travelers is not 
 ' doing business within this State ' within the meaning of the 
 act where plaintiff has no capital employed, nor goods stored, 
 nor branch office within the State." * A foreign corporation 
 shipping goods into New York on orders obtained, by its 
 drummers in this State is not doing business in this State so 
 as to be precluded from suing for want of a license.' That 
 orders for goods sold by a foreign corporation suing to 
 recover their price were obtained in this State is not equiv- 
 alent to their being sold and delivered in New York ; and does 
 not constitute " doing business " in this State." Orders 
 
 N. E. 1132; Tax L. 8 7 (L. 1896, ' Novelty Tufting Machine Co. v. 
 
 c. 908). Hntkoff, 56 Misc. 522, 107 N. Y. 
 
 * Portland Co. v. Hall & Grant Supp. 88 (1907); Gen. Corp. L. 
 
 Construction Co., 121 A. D. 779, 106 § 15. 
 
 N. Y. Supp. 649 (1907) ; Gen. Corp. » Vio Chemical Co. v. Studholme, 
 
 L. § 15 (L. 1892, c. 687, as amend'd). 53 Misc. 470, 103 N. Y. Supp. 463 
 
 'American Case & Roister Co. v. (1907); aflf'd 121 A- D- 927; Gen. 
 
 Griswold, 143 A. D. 807, 128 N. Y. Corp. L. § 15. 
 
 Supp. 206 (1911); G«n. Corp. L. 'Murphy Varnish Co. v. Connell, 
 
 § 15. 10 Misc. 553, 32 N. Y. Supp. 492 
 
 «Lederwecke v. Capitelli, 92 Misc. ' (1894) ; Gen. Corp. L. § 15. 
 
 260, 155 N. Y. Supp. 651 (1915) ; " St. Albans Beef Co. v. Aldridge, 
 
 Gen. Corp. L. § 15; 112 A. D. 803, 99 N. Y. Supp. 398 
 
842 BUSINESS CORPORATIONS IN NEW YORK § 704 
 
 obtained by traveling salesmen upon exhibition for a foreign 
 corporation do not constitute doing business in this State 
 so as to preclude the corporation from suing on a contract 
 made by it in this State because it has obtained no certificate 
 from the Secretary of State." A foreign corporation may 
 sue in this State without having obtained a license to do busi- 
 ness on a contract made in New York by its traveling sales- 
 man subject to approval and execution by it at its home 
 office." A foreign corporation soliciting orders in New York, 
 by agents or traveling salesmen sent from its home office, 
 which did not become binding till accepted and approved at 
 its home office is not ' ' doing business within this State. ' ' " 
 " The procuring of orders for goods by commercial agents 
 traveling in this State, which orders have to be transmitted to 
 the home office in another State for approval there, and then 
 the goods shipped from the home place of business to the pur- 
 chaser in this State, where the foreign corporation has no 
 office or place of business, does not, I think, constitute ' doing 
 business in this State ' within the meaning of the statute." " 
 A foreign corporation soliciting orders in New York through 
 agents which are filled direct from its factory in its home state 
 to the buyer, having, as an incident to such solicitation, a lease 
 of an office in New York City in which it kept samples worth 
 several thousand dollars, and also keeping a bank account 
 there with ai_ average balance of several thousand dollars, is 
 not taxable for franchise tax on its business in this State or 
 on account of such lease, the value of such samples or such 
 bank balance." A foreign corporation taking orders through 
 an agent residing in New York and paying him his salary and 
 the rent of his house where he took orders and it temporarily 
 stored packages in process of delivery from its home office, 
 is not doing business in New York so as to be liable to a fran- 
 chise tax.^° 
 
 (1906) ; G«n. Corp. L. § 15 (L. 1904, 432 (1896) ; Gen. Corp. L § 15 (L. 
 
 c. 490). 1892, c. 687). The purchaser gave 
 
 ^^ Page & Co. V. Sherwood, 146 his note to the foreign corporation 
 
 A. D. 618, 131 N. Y. Supp. 322 which was executed, made payable 
 
 (1911) ; Gen. Corp. L. § 15. and delivered to its agent in this 
 
 ^^ National Knitting Co. v. Bron- State, but was given for , an order 
 
 ner, 20 Misc. 125, 45 N. Y. Supp. which, though taken here, was trans- 
 
 714 (1897); L. 1892, c. 687, § 15. mitted to and accepted in its home 
 
 "Jones V. Keeler, 40 Misc. 221, State. 
 
 81 N. Y. Supp. 648 (1903) ; L. 1901, ^'People ex rel. Smith Co. v. Rob- ' 
 
 c. 538. erts, 27 A. D. 455, 50 N. Y. Supp. 
 
 "Tallapoosa Lumber Co. v. Hoi- 355 (1898). 
 
 bert, 5 A. D. 559, 39 N. Y. Supp. "People ex rel. Brewing Co. v. 
 
§§ 705, 706 FOREIGN CORPORATIONS 843 
 
 § 705. Id.: Transactions Through Commission Merchants in 
 New York. — The obtaining by a resident commission merchant 
 of orders for goods in behalf of a foreign corporation, the 
 sending of such orders to it for approval and the filling "thereof 
 by transmission of the goods direct from its factories, is not 
 doing business in New York so as to subject it to a franchise 
 tax." The consignment of goods by a non-resident or foreign 
 manufacturing corporation to a resident commission-mer- 
 chant for cash sale does not constitute a doing business by the 
 corporation within this State within the meaning of the 
 statute imposing a franchise tax." A foreign corporation is 
 not doing business in this State so as to preclude it from suing 
 without first having obtained a license because its president 
 came to a city in New York and arranged with a commission 
 man there to buy fruit in the foreign state and ship it to such 
 city, billed at cost and accompanied by a draft on the com- 
 mission man for the cost which the latter was to honor, and 
 then sell the fruit and divide any profit equally with the 
 foreign corporation." A foreign corporation sending goods 
 from its home ofiice direct to a purchaser in New York on an 
 order taken in this State by commission merchants is not 
 doing business in New York so as to be precluded from suing 
 for the purchase price in this State because of its failure to 
 procure a license and pay a tax.^" A foreign corporation 
 having no office in this State, but consigning the product it 
 manufactures in its foreign mill to a commission merchant 
 doing business in this State, with authority to sell the goods, 
 receive the proceeds and remit is not doing business in this 
 State so that it cannot sue in New York without procuring a 
 certificate from the Secretary of State authorizing it to do 
 business in New York.^ 
 
 § 706. Id.: Miscellaneous Oases. — ^A foreign corporation is 
 not carrying on business in New York so as to be liable to a 
 personal property tax if it has an agent in this State whose 
 
 Roberts, 22 A. D. 282, 47 N. Y. Roberts, 25 A. D. 13, 48 N. Y. 
 
 Supp. 949 (1897); L. 1895, c. 240; Supp. 1028 (1898). 
 
 L. 1880', c. 542, as amend'd. ^^ Brown Seed Co. v. Richardson, 
 
 Authorities discussing the question 53 Misc. 517, 103 N. Y. Supp. 243 
 
 as to whether soliciting trade is (1907) ; Gen. Corp. L. § 15. 
 
 doing business within the State are ^° Waller v. Rothfield, 36 Misc. 
 
 collated in notes in 9 L.R.A.(N:S.) 177, 73 N. Y. Supp. 141 (1901); 
 
 1214; 23 L.R.A.(N.S.) 834; L.R.A. L. 1892, c. 687, § 15; L. 1896, c. 908, 
 
 1916E, 236. § 181. 
 
 '^^ People ex rel. Cotton Oil Co. v. ^ Brookford Mills, Inc., v. Bald- 
 Roberts, 25 A. D. 13, 48 N. Y. Supp. win, 154 A. D. 553, 139 N. Y. Supp. 
 1028 (1898). 195 (1913); Gen. Corp. L. § 15. 
 
 ^* People ex rel. Cotton Oil Co. v. Establishing agency to handle a 
 
844 BUSINESS CORPORATIONS IN NEW YORK § 706 
 
 compensation is solely commissions on orders obtained by 
 him and who pays for part of the corporation's only office, 
 while it pays the rest ; if the only other employee in New York 
 is an office boy ; if aU orders are approved at its home office ; if 
 all goods are shipped thence to the New York office and thence 
 distributed ; and if all payments are made direct to the home 
 office.^ A foreign corporation placing a sum with a domestic 
 partnership in which it became a special partner and through 
 which it sold in this State all its manufactured products is 
 doing business in this State so as to be subject to pay a fran- 
 chise tax.^ A foreign corporation does not employ any of 
 its capital within the State of New York so as to be subject 
 to tax on its capital " employed within this State " when it 
 has no property in the State except office furniture, disburses 
 no money here and incurred no obligations except rent for its 
 office and salary for its agent, which were discharged by 
 cheques drawn in its home state on a bank there and there 
 paid.* A foreign corporation which apportions the territory of 
 the country and leases and licenses persons and corporations 
 the use of telephones in the apportioned districts, with neces- 
 sary appliances, upon terms securing its profit and security, 
 but which requires that the licensees and lessees conduct their 
 business with their own capital and under their own manage- 
 ment, is not doing business in this State so as to be subject 
 to a tax upon its capital stock employed herein.' A foreign 
 holding corporation is taxable as doing business for a profit 
 and employing its capital within this State if it receives divi- 
 dends through its constituent companies in which it holds 
 stock.* A foreign coi'poration loaning money on bond and 
 mortgage and selling the bonds which has an office in this 
 State, a license for an investment business from the New 
 York banking department, two of its offices here, and which 
 
 corporation's products within the 34 N. E. 753 (1893) ; L. 1880, c. 542, 
 
 State as doing business therein see as araend'd L. 1881, c. 36; L. 1888, 
 
 note in 18 L.R.A.(N.S.) 142. c. 501; L. 1889, c. 463. See now 
 
 ^ People ex rel. Goetz Silk Mfg. Tax L. § 182. 
 
 Co. V. Wells, 42 Misc. 86, 85 N. Y. 'People v. American Bell Tele- 
 
 Supp. 533 (1903) ; alE'd 93 A. D. phone Co., 117 N. Y. 241, 22 N. E. 
 
 613, 87 N. Y. Supp. 1144; L. 1896, 1057 (1889) ; L. 1880, c. 542, as 
 
 c. 908, § 7: "Non-residents of the amend'd L. 1881, c. 361, and L. 
 
 state doing business in the state 1885, c. 501. See now Tax L. § 182. 
 
 . . . shall bp taxed . . ." "People ex rel. Manhattan Silk 
 
 'People ex rel. Badische Fabrik Co. v. Miller, 125 A. D. 296, 109 
 
 V. Roberts, 152 N. Y. 59, 36 L.R.A. N. Y. Supp. 866 (1908) ; aff'd 197 
 
 756, 46 N. E. 761 (1897). N. Y. 577, 91 N. E. 1119; Tax L. 
 
 * People ex rel. Harlan & HoUings- §§ 181, 182 (L. 1901, c. 558i. 
 worth Co. V. Campbell, 139 N. Y. 68, 
 
S 707 FOREIGN CORPORATIONS 845 
 
 deposits proceeds of sales in New York in this State for 
 remittance to its home state, employs part of its capital here 
 and must pay a franchise tax.^ A foreign corporation having 
 headquarters in New York whence directions were given and 
 orders received for a business of selling goods exclusively in 
 foreign countries employs no capital in this State so as to be 
 liable for a license fee." A foreign corporation the business 
 of which is to buy, hold and sell, under 'supervision in this 
 State, securities of corporations organized and doing busi- 
 ness in foreign states, is subject to a license tax on moneys 
 on deposit, securities and furniture had and employed in New 
 York/" A foreign corporation is not doing' business here so 
 as to be precluded from suing on a contract in the absence of 
 a license if the order was made here addressed to it at its 
 home office where it was accepted and whence the goods were 
 shipped; it maintained a salesroom in the State at which only 
 samples and no books were kept ; and all employees were paid 
 from the home state, no bank account being kept in New 
 York." A foreign corporation having no office in New York 
 and doing no business in this State other than furnishing and 
 installing furnaces and doing work under a contract therefor 
 which was submitted in this State and accepted there and 
 approved in a foreign State, as usual, by the foreign corpora- 
 tion's secretary, is not doing business in this State so as to be 
 precluded from. suing because it has no certificate from the 
 Secretary of State." 
 
 § 707. Id.: What Constitutes Doing a Manufacturing Busi- 
 ness in New York. — Prior to the statute subjecting foreign cor- 
 porations doing business in New York State to a franchise 
 tax based on income as distinguished from the previously 
 existing franchise tax imposed generally on foreign corpora- 
 tions based on capital stock employed in this State, foreign 
 manufacturing corporations to the extent of their capital 
 actually employed in this State in manufacturing and in the 
 sale of the product of such manufacturing were exempted 
 from such franchise tax if at least forty per cent of their 
 capital stock were invested in property in New York and used 
 
 * People ex rel. New England 521, 74 N. E. 1124; Tax L. §§ 181, 
 
 Loan & Trust Co. v. Roberts, 25 182 (L. 1901, c. 558). 
 
 A. D. 16, 49 N. Y. Supp. 10' (1898) ; "-iBurrowes Co. v. Caplin, 127 
 
 afi'd 156 N. Y. 688, 50 N. E. 1120. A. D. 317, 111 N.. Y. Supp. 498 
 
 "People ex rel. Dutilh-Smith & Co. (1908) ; G-en. Corp. L. § 15. 
 
 V. Miller, 90 A. D. 545, 85 N. Y. "White Furnace Co. v. Miller 
 
 Supp. 849 (1904). Transfer Co., 131 A. D. 559, 115 
 
 '■" People ex rel. North American N. Y. Supp. 625 (1909) ; Gen. Corp. 
 
 Co. V. Miller, 90 A. D. 560, »6 N. Y. L. § 15. 
 Supp. 386 (1904); aff'd 182 N. Y. 
 
846 
 
 BUSINESS CORPORATIONS IN NEW YORK 
 
 § 707 
 
 by it in its manufacturing business therein ; and decisions ren- 
 dered under that statute as to what corporations were so 
 exempt are collated in the note,^^ and in other sections."* 
 
 "The statute referred to is Tax 
 L. § 183. " When it is apparent 
 that all that is done here by a 
 foreign corporation, organized for 
 manufacturing purposes and en- 
 gaged in such business in the state 
 of its creation, consists of some in- 
 cidental additional work to its manu- 
 factured products sent here from the 
 other state where its actual manu- 
 facturing operations are authorized 
 by its charter and carried on, such 
 as may be conveniently and suitably 
 added at the place where the goods 
 are exposed for sale, this is not car- 
 rying on the business of manufac- 
 turing within the meaning of the 
 statute. Such a corporation cannot 
 Send its manufactured products here 
 in an incomplete state, and then by 
 putting the several parts together, 
 and by adjusting them to each other, 
 or by performing some compara- 
 tively slight operation upon the arti- 
 cle or on the parts of which it is 
 composed, though it may involve 
 necessary labor before suitable for 
 use or sale, entitle itself to exemp- 
 tion on the ground that it is carry- 
 ing on a manufacturing business." 
 People ex rel. Roebling's Sons' Co. 
 v. Wemple, 138 N. Y. 582, 34 N. E. 
 386 (1893) ; Corp. Tax Act, L. 1880, 
 e. 542, as amended L. 1881, c. 361; 
 L. 1885, c. 359 ; L. 1889, c. 353. (The 
 charter provided for manufacturing 
 in the home state only and for an 
 office in New York, on the storage 
 floors of which two or three men 
 adapted the manufactured articles, 
 e. g., by attaching loops to wire 
 ropes for use as switching rods. ) "A 
 manufacturing corporation of an- 
 other state cannot bring its products 
 here, and by putting the several 
 parts together and adjusting them to 
 each other, or by performing upon 
 the article some slight operation, 
 though it may involve labor that 
 may be necessary before using it or 
 
 exposing it for sale, and thereby en- 
 title itself to exemption from taxa- 
 tion on the ground that it is carry- 
 ing on manufacturing within this 
 state." People ex rel. Seth Thomas 
 Clock Co. V. Wemple, 133 N. Y. 323, 
 31 N. E. 238 (1892) ; L. 1880, c. 542, 
 as amend'd L. 1881, c. 361, L. 1882, 
 c. 151; L. 1885, c. 359; L. 1889, 
 c. 353. A foreign manufacturing 
 corporation which has a place for 
 the sale of its goods in New York, 
 for which it pays rent and hires 
 agents and from which it sells its 
 products is subject to a New York 
 corporation tax on its business in 
 this State. People ex rel. Parke, 
 Davis & Co. V. Roberts, 91 Hun, 158, 
 36 N. Y. Supp. 368 (1895); aff'd 
 149 N. Y. 608, 44 N. E. 1127; U. S. 
 Const, art. 4, § 2. A foreign corpo- 
 ration conducting in this State the 
 business of making paint by mixing 
 oil and white lead into a paste, put- 
 ting the paste in a tank and adding 
 oil, turpentine and a dryer, stirring 
 and grinding the result and running 
 the result into cans, is doing a man- 
 ufacturing business, insofar as taxa- 
 tion goes, whether or not it itself 
 make all the ingredients or articles 
 which go to make up the finished 
 product. People ex rel. Devoe Co. 
 V. Roberts, 51 A. D. 77, 64 N. Y. 
 Supp. 494 (1900). A foreign cor- 
 poration manufacturing in New 
 York kindling wood by buying green 
 slabs from logs, sawing them into 
 strips, cutting the strips into pieces, 
 kilndrying the strips, gathering the 
 dried strips into bundles, compress- 
 ing the bundles and tying them — 
 all by machinery — is engaged in 
 carrying on manufacture and is not 
 liable to a franchise tax. People ex 
 rel. Standard Wood Co. v. Roberts,. 
 20 A. D. 514, 47 N. Y. Supp. 122 
 (1897) ; L. 1880, c. 542, as amended. 
 "*§ 726, infra, and § 572 et seq.,^ 
 supra. 
 
§§ 708, 709 FOREIGN CORPORATIONS 847 
 
 § 708. Id.: Books, In General.— The books of a foreign cor- 
 poration " may be used to prove its corporate acts or trans- 
 actions and . . . are presumptive evidence for that pur- 
 pose even where the corporation is a party."" The pro- 
 visions of a foreign statute for winding up corporations will 
 not be enforced in this State to the prejudice of residents of 
 or persons doing business in New York, especially when the 
 remedy sought is unknown to the courts of New York, e. g., 
 a motion by the foreign liquidator to compel the production 
 of certain books." In the absence of -proof that the books of 
 a defendant foreign corporation are in this State no order 
 can be made authorizing their examination." An order requir- 
 ing a witness to deposit the books of a corporation doing busi- 
 ness in this State with a commissioner appointed by a foreign 
 court to take testimony here in an action pending therein is 
 improper ; it should merely require him to produce them." A 
 trustee depository of stock of a foreign corporation is not 
 chargeable with knowledge of the law of the corporation's 
 home state, differing from the law of New York, so as to ma.ke 
 it liable for failure to have the stock transferred to its name 
 as trustee and for loss resulting from such failure through its 
 attachment by the depositor's creditors under such foreign 
 law.^^ 
 
 § 709. Id. : Stock Book, In General. — A complaint by a stock- 
 holder of a foreign corporation to recover the penalty 
 imposed by statute for failure to permit inspection by him of 
 its books must allege that the corporation is a stock corpora- 
 tion; and if it is not the defendant may take advantage of 
 the objection at any time — even after withdrawal of its 
 demurrer.^^ A trustee appointed on the bankruptcy of a 
 
 ^* Sigua Iron Oo. v. Brown, 171 tents relating to the subject-matter 
 
 N. Y. 488, 64 N. E. 194 (1902) ; of the order should be produced and 
 
 C. C. P. §§ 929, 930. delivered to those seeking the order, 
 
 ^•"' Matter of Great Northern Con- within a reasonable time to be fixed 
 
 siruction Co., 50 Misc. 467, 100 in the order. Ervin v. Oregon Ry. 
 
 N. Y. Supp. 564 (1906); C. C. P. & Navigation Co., 22 Hun, 566 
 
 §§ 914, 915. (1880). 
 
 " Snow, Church & Co. v. Snow- " Matter of Randall, 87 A- D. 245, 
 
 Church Co., 80 A. D. 40, 29 N. Y. 84 N. Y. Supp. 294 (1903). 
 
 Snpp. 842 (1903). An order di- ^^New Jersey Construction Co. v. 
 
 reeting the examination of the books Farmers' Loan & Trust Co., 39 Misc. 
 
 of a foreign corporation may prop- 672, 80 . N. Y. Supp. "622 (1903). 
 
 erly direct that such of the books Had the stock paid dividends or the 
 
 as are within the state be produced ; amount deposited been ^ enough to 
 
 but, in respect of books at its home control the corporation,' the rule 
 
 ^office in a distant state, should di- might be different. V, 
 
 rect that sworn copies of their con- " Seydel v. Corporation 'tiiquidat- 
 
848 BUSINESS CORPORATIONS IN NEW YORK § 710 
 
 stockholder of a foreign corporation occurring pending an 
 action by such stockholder to recover a penalty from a resi- 
 dent transfer agent for refusing to exhibit the corporate books 
 cannot intervene after judgment is rendered for the stock- 
 holder on behalf of the latter 's creditors, although he may be 
 entitled to the proceeds if the judgment is affirmed on appeal."" 
 § 710. Id.: What Corporations Must Keep. — Every foreign 
 stock corporation having an office for the transaction of busi- 
 ness in New York State, exteept moneyed and railroad corpora- 
 tions must keep a stock book.^ It is the having by a foreign 
 corporation of an office in this State for the transaction of 
 business, and not the doing of the business or the extent 
 thereof, which determines if it must keep its stock book in 
 New York; and leaving its blank stock certificates and its 
 stock book with an agent who delivers new certificates 
 delivered to it by the corporation to persons presenting old 
 ones is not doing business in such sense.^ The existence within 
 the State of a transfer agent of a foreign corporation does not 
 constitute the maintenance of an office by it in New York for 
 the transaction of Jjusiness; so that no liability attaches to 
 such corporation for a refusal by such agent to permit an 
 inspection of its stock books pursuant to the statute providing 
 for such inspection of the books of a foreign corporation 
 " haying an office for the transaction of business in this 
 State. " ^ A foreign corporation does not have an office for 
 " the transaction of business in this State " so as to be liable 
 for the statutory penalty for failure to keep a list of stock- 
 holders at its office in this State, if its entire arrangement in 
 this State can ' ' be fairly summarized as furnishing and con- 
 stituting an headquarters for salesmen traveling in that 
 locality where they might meet customers and conduct corre- 
 spondence."* A foreign corporation which has merely a 
 
 ing Co., 46 Misc. 576, &2 N. Y. Co., 211 N. Y. 420, 106 N. E. 667 
 
 Supp. 225 (1905) ; St. Corp. L. § 53 (1914) ; St. Corp. L. § 33. The cor- 
 
 (L. 1897, c. 384), now § 33. poration was organized and had its 
 
 ^"Althause v. Giroux Consolidated factory and general offices in Penn- 
 
 Mines Co., 150 A. D. 580, 135 N. Y. sylvania ; sold goods in New York 
 
 Supp. 500 (1912) ; St. Corp. L. § 53. through traveling salesmen whose 
 
 ^ St. Corp. L. § 33 (L. 1916, orders were transmitted to the Penn- 
 
 e. 127). sylvania office and were thence filled 
 
 ''Althause v. Guaranty Trust Co., if approved; rented office in New 
 
 78 Misc. 181, 137 N. Y. Supp. 945 York with stenographer, typewriter, 
 
 (1912) ; St. Corp. L. § 33. office furniture, name and that of 
 
 'Wadsworth v. Equitable Trust vice-president and manager on door, 
 
 Co., 153 A. D. 737, 138 N. Y. Supp. to which small cash amounts for 
 
 842 (1912) ; St. Corp. L. § 33. postage, carfare, etc., were for- 
 
 *Hovey v. De Long Hook & Eye warded from Pennsylvania: had no 
 
§§ 7H-713 FOREIGN CORPORATIONS 849 
 
 transfer agency in New York is subject to the law requiring 
 a foreign corporation having in this State an office for the 
 transaction of business to keep a stock-book, and to the penalty 
 imposed for refusal to permit inspection thereof.' An officer 
 in this State of a foreign corporation which has not any 
 stock book in this State is not liable for the statutory penalty 
 imposed on corporate officers for refusal after demand to 
 allow a stockholder to inspect such book." 
 
 § 711. Id.: Where To Be Kept.— The stock book required to 
 be kept by a foreign corporation must be kept in its office in 
 New York State for the transaction of business in such State, 
 or, if the corporation has in New York State a transfer agent 
 (whether such agent be a corporation or a natural person) 
 such stock book may be deposited in the office of such agent.^ 
 Every foreign stock corporation having an office for the 
 transaction of business in this State, except moneyed and 
 railroad corporations, has imposed upon it by statute the duty 
 of keeping a stock book which shall be open for the inspection 
 of the persons designated by law, although if it maintain a 
 transfer agent within the State it has the option of depositing 
 the required stock book in the office of the agent, where it 
 may be inspected, instead of keeping it in the corporation's 
 office for the transaction of business.* 
 
 § 712. Id.: Form and Contents. — ^^The stock book of a foreign 
 corporation must contain (1) the names, alphabetically 
 arranged, of all persons who are stockholders of the corpora- 
 tion, showing (2) their places of residence, (3) the number 
 of shares of stock held by them respectively, (4) the time when 
 they respectively became the owners of such shares of stock, 
 and (5) the amount paid on such shares of stock.' 
 
 § 713. Id.: Inspecting and Making Extracts from.— A foreign 
 corporation's stock book kept in its office for the transaction 
 of business in New York State must be open daily during 
 business hours for inspection and making extracts therefrom 
 by any (1) judgment creditor of the corporation (2) officer 
 of New York State authorized by law to investigate the affairs 
 
 bank account or books of any kind ' St. Corp. L. § 33 (L. 1916, 
 
 in New York. c. 127). 
 
 'People ex rel. Miles v. Montreal * Wadsworth v. Equitable Trust 
 
 & Boston Copper Co., 40 Misc. 282, Co., 153 A; D. 737, 138 N. Y. Supp. 
 81 N. Y. Sypp. 974 (1903) ; St. 842 (1912) ; St. Corp. L. § 33. 
 Corp. L. § 53 (L. 1897, c. 384, § 3), » St. Corp. L. § 33 (L. 1916, 
 now § 33. c. 127). 
 
 "Kellner v. Shelley, 178 A. D. 657, 
 166 N. Y. Supp. 833 (1917); St. 
 Corp. L. § 33 (L. 1909, c. 61). 
 B.C.N.Y.— 54 
 
850 BUSINESS CORPORATIONS IN NEW YORK § 713 
 
 of any such corporation, (3) person who has been a stock- 
 holder of record in such corporation for at least six months 
 immediately preceding his demand, (4) person holding stock 
 of such corporation to an amount equal to five per centum 
 of all of its outstandihg shares, (5) person thereunto in writ- 
 ing authorized by the holders of stock of such corporation to 
 an amount equal to five per centum of all of its outstanding 
 sha,res; and the stock book of any such foreign corporation 
 which has in New York State a transfer agent (whether such 
 agent be a corporation or a natural person) with which or 
 whom such stock book is deposited must be open to inspection 
 at all times during the usual hours of transacting business to 
 any (1) stockholder, (2) judgnrient creditor, or (3) ofiicer of 
 the State of New York authorized by law to investigate the 
 affairs of such corporation." Whatever rights a stockholder 
 has to examine the books of his foreign corporation in New 
 York come to him by statute and not by the common law." 
 Under a statute providing without qualification that corpora- 
 tions ' stock books shall be open daily during business hours 
 for the inspection of stockholders, a stockholder has an 
 absolute right and the corporation an absolute duty; and no 
 statement or proof of any particular intent upon the part of 
 the person demanding the inspection is required — all that 
 is needed is .that the applicant be a stockholder and that he 
 prefer his request during business hours." " A stockholder 
 has done all that he can do when he has gone to the office 
 [of his foreign corporation] and made demand upon the 
 person apparently in charge that an inspection be per- 
 mitted."" A case for the statutory penalty for failure to 
 exhibit corporate books on demand of a stockholder is not 
 made out by an oral and written demand upon two officers of 
 a corporation, which had not been dissolved but had ceased 
 to do business, made at a stockholder's office in the corner of 
 which the corporate books were deposited." A demand for 
 inspection of corporate stock books made after commence- 
 ment of an action for refusal of an earlier demand is basis for 
 
 " St. Corp. L. § 33 (L. 1916, dated Gold Mining Co., 49 Misc. 233, 
 
 c. 127). 97 N. Y. Snpp. 391 (1906); St. 
 
 "People ex rel. Singer v. liiick- Corp. L. §§ 29, 53, now §§ 32, 33. 
 erbocker Trust Co., 38 Misc. 446, 77 " Fuller v. O'Connor, 61 Misc. 
 
 N. Y. Supp. 1000 (1902). 279, 113 N. Y. Supp. 684 (1908); 
 
 " Henry v. Babcock & Wilcox Co., St. Corp. L. § 53, now § 33. The 
 196 N. Y. 302, 89 N. E. 942 (1909) ; two officers consulted counsel who 
 St. Corp. L. § 53, see now § 33. the next day mailed a list of stock- 
 Foreign corporations. holders to the enquirer. 
 
 ^^ Pelletreau v. Greene Consoli- 
 
§ "13 FOREIGN CORPORATIONS 851 
 
 a second suit, as such a procedure is not to be condemned 
 as a cumulation of penalties.'' ". . . the ofificers and 
 agents of a corporation are not required to exhibit the [stock-] 
 book to persons who demanded to see them, where such per- 
 sons are unknown to them, without first exacting reasonable 
 proof of the identity of the said demandants that they are 
 in fact the persons who are the stockholders of the com- 
 pany."" "The right [of a stockholder] to inspect the 
 [corporate stock] book includes the right on the part of the 
 stockholder to aid his memory by copying therefrom " to a 
 reasonable extent." The State statute permitting inspection 
 of a stockholder of his corporation's stock book applies to 
 foreign as well as domestic corporations." 
 
 The power of the courts to compel by mandamus or 
 judgment the production for examination by any stock- 
 holder of the stock books of a corporation is not impaired 
 by the statute permitting such inspection of corporate 
 stock books." ". . . the courts of this State have no 
 jurisdiction to grant upon an application by a stock- 
 holder of a foreign corporation a writ of mandamus to 
 compel an inspection by him of the books and records 
 of such corporation, and . . . the right to such inspec- 
 tion is enforcable only by the courts of the State in 
 which the corporation has its legal existence. " ^° A stock- 
 holder in a foreign corporation cannot have from the courts 
 of New York mandamus to compel it to permit him to inspect 
 its books, if he have no legal ■ or equitable action pending 
 against it.' A stockholder of a foreign corporation having 
 an office in this State may mandamus the agents in charge 
 thereof to compel them to allow him to examine its books 
 
 ^^ Gould V. Oljrmpic Mining Co., ^' People ex rel. Lorge v. Consoli- 
 
 49 Misc. 612, 96 N. Y. Supp. 455 dated National Bank, 105 A. D. 400, 
 
 (1905) ; St. Corp. L. § 53, now § 33. 94 N. Y. Supp. 173 (1905) ; St. 
 
 "Theile v. Merlis, 85 Misc. '351, Corp. L. § 29 (L. 1901, c. 354), now 
 
 147 N. Y. Supp. 406 (1914) ; St. § 32. 
 
 Corp. L. § 33. Production of a cer- " St. Corp. L. § 33 (L. 1916, 
 
 tiflcate of stock in a name identical c. 127). 
 
 with demandant's, of a written de- ^"Matter of Mitchell v. Northern 
 
 mand for inspection acknowledged Security Oil & Transportation Co., 
 
 by him before a notary and of an- 44 Misc. 514, 90 N. Y. Supp. 60 
 
 other person, unknown to defend- (1904). 
 
 ant, to identify demandant, insuffi- ^ Matter of Rappleye, 43 A. D. 84, 
 
 cient. 59 N. Y. Supp. 338 (1899); St. 
 
 " Henry V. Babcock & Wileox Co., Corp. L. § 29 (L. 1892, c. 688), 
 
 196 N. Y. 302, 89 N. E. 942 (1909) ; now § 32, relates only to domestic 
 
 St. Corp. L. § 53, now § 33. corporations. 
 
852 BUSINESS CORPORATIONS IX NEW YORK § 714 
 
 showing what a stock book would show if it kept one.'' An 
 alternative but not a peremptory writ of mandamus should 
 issue to a resident transfer agent of a foreign corporation to 
 compel him to exhibit its transfer book to a stockholder, when 
 the question whether he is such agent is raised on the appli- 
 cation.' The court has power to order a reference to take 
 proof of the facts alleged on both sides of an application for 
 peremptory mandamus against a foreign corporation and its 
 agents to compel it and them to permit a stockholder to 
 inspect its transfer books." 
 
 § 714. Id.: Penalty for Refusing Inspection.— For any 
 refusal to allow, a foreign corporation's stock book to be 
 inspected such corporation and the officer or agent so refusing 
 each forfeit the sum of fifty dollars, to be recovered by the 
 person to whom such refusal was made ; but it is a defense to 
 any action for penalties that the person suing therefor has 
 within two years sold or offered for sale any list of stock- 
 holders of such corporation or of any other corporation or 
 has aided or abetted any person in procuring any stock list 
 for any such purpose." A foreign stock corporation bound 
 by statute to keep a stock book at its office in this State for 
 the transaction of business which does not do so is liable to 
 the statutory penalty to a stockholder who applies according 
 to law for leave to inspect such book.* A claim that a statute 
 imposing a penalty for failure to permit inspection of the 
 stock book of a foreign corporation is unconstitutional because 
 the penalty is more severe than in the case of a domestic 
 corporation is untenable.' A foreign corporation is not liable 
 to any penalty for failure to exhibit its stock book on demand 
 if at the time of the demand the book is in the possession of 
 the United States government by virtue of a subpoena; and 
 the corporation's failure to exhibit on such demand a list of 
 persons who have bought stock after seizure of the stock book 
 by the government does not subject it to the penalty.* A 
 corporation refusing to allow a stockholder to inspect its 
 
 ^ People ex rel. Singer v. Knicker- foreign corporation to inspect books, 
 
 bocker Trust Co., 38 Misc. 446, 77 see note in 45 L.R.A. 454. 
 
 N. Y. Supp. 1000 (1902) ; St. Corp. = St. Corp. L. § 33 (L. 1916, 
 
 L. § 53 (L. 1897, c. 384, § S)', now e. 127). 
 
 § 33. ' Hovey v. Procter & Gamble Co., 
 
 ' People ex rel. Daniels v. Craw- 139 A. D. 521, 124 N. Y. Supp. 128 
 
 ford, 68 Hun, 547, 22 N. Y. Supp. (1910) ; St. Corp. L. § 33. 
 
 1025 (1893). ' Pelletreau V. Greene Consolidated 
 
 * People ex rel. Del Mar v. St. Gold Mining Co., 49 Misc. 233, 97 
 
 Louis & San Francisco Ry. Co., 44 N. Y. Supp. 391 (1906) ; St. Corp. 
 
 Hun, 552 (1887). L. §§ 29, 53, now §§ 32, 33. 
 
 On right of stockholders of * Otto y. Franklin's, Incorporated, 
 
§ 714 FOREIGN CORPORATIONS 853 
 
 books, under an intermediate court's ruling that such refusal 
 was justified in a like case, is not subject to a penalty pre- 
 scribed by statute for such refusal, because the Court of 
 Appeals later decides that in a case such as the one in ques- 
 tion inspection was proper." One will not be awarded by the 
 court the statutory penalty for failure by a corporation to 
 permit him to inspect its books when the refusal arose after 
 he had refused to give his reasons, after he had had an hour's 
 inspection, while two other actions by him against the same 
 corporation were awaiting judicial decision after trial, and 
 when, further, the object was to aid in circularizing to effect 
 the sale of stock of other compaijies and the demandant had in 
 four months brought fourteen actions against different com- 
 panies to recover the same penalties." A stockholder of a 
 foreign corporation may recover the penalty imposed by 
 statute when it refuses to allow him to take extracts from a 
 book which purported to be kept according to the statute but 
 did not contain the street and number of urban stockholders 
 and had " unknown " written in the column provided for the 
 amount paid on stock as to more than half the stockholders." 
 The penalty imposed on a foreign corporation for refusing 
 to exhibit its stock book in this State to a stockholder is 
 recoverable if the demand for inspection and refusal thereof 
 is made at its or its transfer agent's office in New York; 
 it is not necessary for the stockholder to go elsewhere." On 
 proof of a demand made of a corporation appointed by a 
 foreign corporation as its transfer agent in New York for 
 inspection of the foreign corporation 's stock book by a stock- 
 holder of the latter and refus.al, the stockholder may recover 
 the statutory penalty from the corporate agent and from the 
 principal corporation, too, if the point is not raised that the 
 principal was relieved from such penalty on depositing the 
 stock book with its agent ; and the fact that the book does not 
 contain every particular item required by the statute to 
 be recorded therein is no defense." A corporate agent can- 
 not be subjected to the penalty imposed by statute for failure 
 
 90 Misc. 311, 153 N. Y. Supp. 107 Supp. 628 (1905) ; St. Corp. L. § 53, 
 
 (1915). now § 33. 
 
 'Hollaman v. El Arco Mines Co., "Recknagel v. Empire Self-Light- 
 
 137 A. D. 862, 122 N. Y. Supp. 852 ing Oil Lamp Co., 24 Misc. 193, 52 
 
 (1910) ; St. Corp. L. § 33. N. Y. Supp. 635 (1898) ; St. Corp. 
 
 '"Althause v. Giroux, No. 2, 56 L, § 53 (L. 1897, e. 384), now § 33. 
 
 Misc. 511, 107 N. Y. Supp. 193 " Tyng v. Corporation ,Trust Co., 
 
 (1907); St. Corp. L. § 53. (L. 1892, 104 A. D. 486, 93 N. Y. Supp. 928 
 
 c. 688), now § 33. (1905) ; St. Corp. L. § 53 (L. 1897, 
 
 "Fay V. Coughlin-Sandford c. 384, § 3), now § 33. 
 Switch Co., 47 Misc. 687, 94 N. Y. 
 
854 BUSINESS CORPORATIONS IN NEW YORK § 715 
 
 to permit inspection of the stock book of his foreign corpora- 
 tion if he did not have it in the office when and where demand 
 was made to inspect it." The ' ' agent " of a foreign corpora- 
 tion made liable for the penalty imposed by statute for failure 
 to allow a stockholder to inspect the stock book kept in this 
 State is not an agent appointed to make sales, with no power 
 to procure a stock book and no knowledge of the stockholders, 
 but a ' ' transfer agent ' ' by whom the book could be kept and 
 upon whom an obligation to allow an inspection was imposed." 
 One questionably an officer, though a stockholder, of a foreign 
 corporation wiU not be held liable for the penalty imposed 
 by statute for refusing to allow inspection of its stock book 
 in this State when the demand was made of him only a couple 
 of months after the statute became law, he said when asked 
 to show the book that he could not because there was none 
 in the State, the corporation learned of the statute only after 
 such demand and then procured such a book.^° One may have 
 the penalty prescribed by statute on failure of a corporation 
 to permit inspection by its stockholder of its stock book even 
 though the stock was transferred to him by another in order 
 to permit such inspection to enable him to try to buy the 
 holdings of other stockholders on the books and not for any 
 hostile purpose toward the corporation." 
 
 § 715. Id.: Annual Report to Secretary of State, When to 
 Be Made. — Every foreign stock corporation doing business 
 within New York State (except moneyed and railroad cor- 
 porations) must make a report to the Secretary of State each 
 year during the month of January, unless it is doing business 
 without the United States, when the time set is the first day 
 of May." A corporation endeavoring to sell its stock abroad 
 and by obtaining foreign patents to prevent foreigners from 
 manufacturing its own distinctive product is not doing busi- 
 ness without the United States so as to be relieved from 
 filing an annual report until the first of May under the 
 statute requiring domestic and foreign stock corporations 
 " doing business without the United States " to file such a 
 report ' ' before the first day of May. ' ' " 
 
 " Gould V. Olympic Mining Co., Co., 54 Misc. 220, 104 N. Y. Supp. 
 
 49 Misc. 612, 96 N. Y. Supp. 455 361 (1907) ; Si. Corp. L. § 53, now 
 
 (1905) ; St. Corp. L. § 53, now § 33. § 33. 
 
 '=Hovey v. Eiswald, 139 A. D. ^' St. Corp. L. § 34 (L. 1909, 
 
 433, 124 N. Y. Supp. 130 (19100; c. 61). 
 
 St. Corp. L. § 33. ^'West v. Grosvenor, 102 A. D. 
 
 i« Green v. Shain, 22 Misc. 720, 49 266, 92 N. Y. Supp. 429 (1905) ; St. 
 
 IT. Y. Supp. 1061 (1898) ; St. Corp. Corp. L. § 30 (L. 1897, e. 384), now 
 
 L. § 53 (L. 1897, c. 384), now § 33. § 34. 
 
 ^^ Lawshe v. Royal Baking Powder 
 
§§ 716-719 FOREIGN CORPORATIONS 
 
 855 
 
 § 716. Id.: Contents and Form.— The report must (1) be as 
 of the first day of January, and state (2) the amount of the 
 corporation's capital stock, (3) the proportion of the capital 
 stock actually issued, (4) the amount of its debts or an amount 
 which they do not exceed, (5) the amount of its assets or an 
 amount which they at least equal, (6) the names of (a) all 
 the directors, (b) all the officers, and (c) the person designated 
 in the manner prescribed by law as a person upon whom 
 process against the corporation may be served within New 
 York State.'" The report must be made by (1) the president, 
 or (2) a vice-president, or (3) ^ secretary, or (4) the treas- 
 urer of the corporation.^ 
 
 § 717. Id.: Piling of Report.— The report must be filed in 
 the office of the Secretary of State of New York.' 
 
 § 718. Id.: Penalty for Failure to Make and File.— If a 
 foreign corporation's annual report to the Secretary of State 
 of New York is not made and filed, no penalty is imposed 
 unless written request so to do is made by a creditor or stock- 
 holder ; BO that it is not customary to make and file the report 
 unless such request is made. If it is made, the president or 
 a vice-president or the treasurer or a secretary of the cor- 
 poration who thereafter neglects or refuses to make and file 
 such report within ten days after the written request so to 
 do has been made by such creditor or stockholder forfeits to 
 the People of the State the sum of fifty dollars for every day 
 he so neglects or refuses.' 
 
 § 719. Id.: Taxation, Right to Tax Foreign Corporations.— 
 The jurisdiction of this State to impose a tax on foreign cor- 
 porations is gained by reason of the business which they are 
 privileged to do here under the protection of our laws.* The 
 acts imposing taxes upon foreign corporations doing business 
 in this State are constitutional.^ Commissioners assessing 
 the capital stock in this State of a foreign corporation may 
 take into consideration the refusal of its officer, testifying 
 on its application for reduction, to state anything as to its 
 business in its home state, as they have the right to know 
 the amount of its business there.® A foreign corporation is 
 
 V. Roberts, 159 N. Y. 70, 45 L.R.A. 
 126, 53 N. E. 685 (1899). 
 
 ^People V. Horn Silver Mining 
 Co., 105 N. Y. 76, 11 N. E. 155 
 (1887) ; L. 1880, c. 542, as amead'd 
 L. 1881, c. 361, and L. 1882, c. 151. 
 
 * People ex rel. Claflin Co. v. Feit- 
 ner, 58 A. D. 468, 69 N. Y. Supp. 
 410 (1901) ; Tax L. § 36 (L. 1896, 
 
 
 '"St. 
 
 Corp. 
 
 L. 
 
 § 
 
 34 
 
 (L. 
 
 1909, 
 
 e. 
 
 61). 
 
 
 
 
 
 
 . 
 
 
 ^■st. 
 
 Corp. 
 
 L. 
 
 § 
 
 34 
 
 (L. 
 
 1909, 
 
 c. 
 
 ■61). 
 
 
 
 
 
 
 
 
 ^St. 
 
 Corp. 
 
 L. 
 
 § 
 
 34 
 
 (L. 
 
 1909, 
 
 c. 
 
 61). 
 
 
 
 
 
 
 
 
 ^St. 
 
 Corp. 
 
 L. 
 
 § 
 
 34 
 
 (L. 
 
 1909, 
 
 c. 
 
 61). 
 
 
 
 
 
 
 
 
 * People ex 
 
 rel. 
 
 A. 
 
 J. Johnson Co. 
 
856 BUSINESS CORPORATIONS IN NEW YORK § 720 
 
 as much amenable as a domestic corporation to a proceeding 
 by the taxing authorities for proceedings supplementary to 
 execution to collect a tax imposed.** 
 
 § 720. Id.: Real and Personal Property Taxes, In General. — 
 Nonresidents of New York State are taxable (1) if doing 
 business in this State, 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 residents of this State; 
 and (2) if doing business in this State or not, on personal 
 property having an actual situs in this State and Hot forming 
 a part of capital invested in business in this State, unless 
 exempt by law, except that in the latter case money, negoti- 
 able or collateral securities deposited by, or debts owing to 
 such non-residents, are not to be considered personal prop- 
 erty.^ The thirty-first section of the Tax Law regulates the 
 procedure for the assessment of doniestic corporations only, 
 and not of foreign ones, which are cared for by the seventh 
 section.' In the main office of the Department of Taxes and 
 Assessments of the City of New York is kept a record called 
 " The annual record of the assessed valuations of real and 
 personal estate of corporations."" The receiver of taxes 
 must proceed in enforcing the collection and payment of taxes 
 against corporations and their officers, directors or trustees 
 in the same manner as against individuals; and such taxes 
 must be paid out of the funds of the company and be ratably 
 deducted from the dividends of those stockholders whose 
 stock was taxed or be charged upon such stock if no dividends 
 be afterward declared." The personal property of a foreign 
 corporation should be assessed as that of a non-resident 
 individual." Commissioners in assessing a foreign corpora- 
 tion may consider all statements submitted and sworn to by 
 it in determining if it is doing business in New York." A 
 foreign corporation is properly assessed for capital invested 
 
 c. 908) ; Greater N. Y. Charter, § 895 » Greater N. Y. Charter, § 893 (L. 
 
 (L. 1897, c. 378). 1901, c. 466). 
 
 «» Matter of Bruere, 174 A. D. ^"Greater N. Y. Charter, § 921 
 
 298 (1916); Tax L. § 299 (L. 1909, (L. 1901, c. 466). 
 
 c. 62). ^^New York Milk Products Co. v. 
 
 On taxation of capital stock of Damon, 57 A. D. 261, 68 N. Y. Supp. 
 
 foreign corporations, generally, see 183 (1901) ; afE'd 172 N. Y. 661, 65 
 
 note in 58 L.R.A. 523. N. E. 1119; Tax L. § U (L- 1896, 
 
 ■''Tax L. § 7 (L. 1909, c. 61). c. 908). 
 
 'New York Milk Products Co. v. "People ex rel. McShane Mfg. 
 
 Damon, 57 A. D. 261, 68 N. Y. Co. v. Barker, 23 A. D. 530, 48 N. Y. 
 
 Snpp. 183 (1901) ; afPd 172 N. Y. Supp. 558 (1897) ; afE'd 155 N. Y. 
 
 661, 65 N. E. 1119; Tax L. §§ 7, 11 665, 49 N. E. 1103; L. 1855, c. 37. 
 
 (L. 1896, c. 908). See now Tax L. § 7. 
 
§ 721 FOREIGN CORPORATIONS 857 
 
 in business in this State as personal property if its property 
 is continuously under the protection of the laws of New York, 
 the proceeds of its sales in this State are not immediately 
 remitted to its home state office, part of its capital is practi- 
 cally invested and reinvested in New York, credit is given in 
 New York in the usual way, bills receivable are retained in 
 this State for collection in due course and it has obtained a 
 certificate to do business in New York." Merchandise which, 
 if it were in specie in this State, would be subject to taxation, 
 is not removed from New York because belonging to a foreign 
 corporation, if it enters into thegeneral business conducted in 
 this State, has been sold upon credit in New York, the credit 
 has not expired and credit therefore is given in bpoks kept iii 
 the State." ". . . for foreign capital transrnitted here, 
 for the purpose of being loaned [though by a foreign corpora- 
 tion] to our own citizens, and employed by them in their busi- 
 ness, no tax should be assessed either upon the foreign 
 capitalist or his agent residing in this State." ^' 
 
 § 721. Id.: Place of Taxation. — Nonresidents doing business 
 here are taxable on the capital invested in such business at 
 the place where such business is carried on, and on personalty 
 not forming part of such capital in the tax district where 
 situated.^" The real estate of all incorporated companies 
 liable to taxation must be assessed in the tax district in which 
 it lies, in the same manner as the real estate of individuals." 
 All the personal estate of every incorporated company liable 
 to taxation on its capital must be assessed in the tax district 
 where the principal office or place for transacting the financial 
 concerns of the company is ; or if such company have no prin- 
 cipal office, or place for transacting its financial concerns, then 
 in the tax district where the operations of siich company are 
 carried on." Foreign corporations doing business, and 
 having a principal office or place for the transaction of their 
 financial concerns in this State are to be assessed in the town 
 or ward where such office is located, exclusively, for all their 
 personal estate liable, to taxation in this State." 
 
 ^^ People ex rel. Crane Co. v. Feit- v. Comm'rs of Taxes, etc., 59 N. Y. 
 
 ner, 49 A. D. 108, 62 N. Y. Supp. 40 (1874); L. 1851, c. 176, § 2; 
 
 1107 (1900) ; Tax L. § 7 (L. 1896, L. 1855, c. 37. See now Tax L.' § 7. 
 
 c. 908). "Tax L. § 7 (L. 1909, c. 61). 
 
 "People ex rel. Yellow Pine Co. "Tax L. § 11 (L. 1909, c. 62). 
 
 V. Barker, 23 A. D. 524, 48 N. Y. "Tax L. § 11 (L. 1909, e. 62). 
 
 Supp. 553 (1897); aff'd 156 N. Y. "People ex rel. Bay State Shoe 
 
 665, 49 N. E. 1103; L. 1855, c. 37. & Leather Co. v. McLean, 80 N. Y. 
 
 See now Tax L. § 7. 254 (1880); L. 1855, c. 37. See 
 
 ^° People ex rel. Bank of Montreal now Tax L. § 7. The head-note of 
 
858 BUSINESS CORPORATIONS IN NEW YORK § 722 
 
 § 722. Id.: What Taxable. — Foreign corporations are of 
 course taxable on their real property situated in New York 
 State ; and on capital invested in any business which they do 
 in this State and on personal property (exclusive of money, 
 negotiable collateral securities deposited by, or debts owing 
 to them) having an actual situs here which does not form part 
 of such capital.^" The furniture and goods for sale kept by a 
 foreign corporation in its New York office are taxable in this 
 State.^ A foreign corporation manufacturing in another 
 country, maintaining a selling ' agency in New York City, 
 remitting all the agency's net proceeds to the home office, and 
 renting quarters here for the agency, is not taxable on the 
 value of its goods on hand for sale here though it is taxable 
 on the value of the office furniture in the agency.^ A personal 
 property tax against a foreign corporation is iniposed not 
 against the corporation but against specific property; and 
 before it can deduct from such property, viz. the amount 
 invested in business in this State, debts which it owes, it must 
 show that such debts were incurred in the relation to its invest- 
 ments in business in New York.^ Debts due a foreign cor- 
 poration on open accounts for imported goods sold in original 
 packages are taxable.* While no tax can be imposed on 
 imported goods in the hands of the importer in the original 
 packages, or on their sale, yet a tax may be imposed on the pro- 
 ceeds of their sale if they have become part of the common 
 mass of property within the State, so as to have a situs here ; 
 and the deposits of a foreign corporation in bank in this State, 
 invested here ; and notes held by it here, and not in the course 
 of transmission to the home office, are taxable here.° The 
 mains, pipes and tanks for receiving and distributing natural 
 gas, located in a municipality of this State and belonging to a 
 foreign corporation, are taxable as real estate at their full 
 and true value, and the privilege of laying and maintaining 
 
 British Commercial Life Ins. Co. v. heim Co. v. Wells, 42 Misc. 423, 87 
 
 Com'rs of Taxes, 31 N. Y. 32 N. Y. Supp. 84 (1904); aff'd 104 
 
 (1865), reads: "The place for as- A. D. 629, 93 N. Y. Supp. 1143; 
 
 sessment of a foreign corporation, Tax L. § 7 (L. 1896, c. 908). 
 
 doing business in this State, for the ^ People ex rel. Ehinlap's Express 
 
 purposes of taxation, is where the Co. v. Raymond, 54 Misc. 330, 105 
 
 principal business of the corporation N. Y. Supp. 1007 (1907). 
 
 is transacted." * People ex rel. Burke, Ltd. v. 
 
 ™Tax L. § 7 (L. 1909, c. 61). O'Donnel, 62 Misc. 560 (1909), 115 
 
 ^People ex rel. Martin Bros. Co. N. Y. Supp. 140. 
 
 V. Barker, 14 Misc. 382, 36 N. Y. 'People ex rel. Burke v. Wells, 
 
 Supp. 76 (1895). 184 N. Y. 275, 12 L.R.A.(N.S.) 905, 
 
 ^People ex rel. Farcy & Oppen- 77 N. E. 19 (1906). 
 
§§ 723, 724 FOREIGN CORPORATIONS 859 
 
 them can be taxed solely under some special statute affecting 
 franchises." 
 
 § 723. Id. Exemptions. — On personal property actually 
 situated here and not forming part of its capital invested 
 here on which it is taxed, a foreign corporation is taxable 
 unless it is exempt by law or it consists of money, negotiable 
 collateral securities, deposited by, or debts owing to it.'' 
 'I The general rule is that all property within this State is 
 liable to taxation, and when a claim of exemption is made, it 
 must clearly appear, and the party claiming it must be able 
 to point to some provision of law plainly giving the exemp- 
 tion."* " Assuming that the personal property of an incor- 
 poration which is located abroad or outside of the State, is at 
 all entitled to exemption, the change should be permanent, 
 positive and unequivocal. If such an exemption can be 
 upheld at all, it cannot be sustained where the change is only 
 for a season, uncertain and vacillating, and merely consists in 
 the building of vessels which are owned by an incorporation 
 which has a location for the purpose of taxation within the 
 State."" 
 
 § 724. Id.: On Sums Invested in New York Business. — A 
 foreign corporation is taxable on its capital invested in busi- 
 ness in this State which it does." Foreign corporations are 
 included within the terms of the act taxing non-residents 
 doing business in this State on all sums invested in such 
 business." The act taxing non-residents doing business in 
 this State on all sums invested in such business does not per- 
 mit the deduction of debts from such sums." Under a statute 
 requiring all non-residents doing business in the State to 
 be taxed " on all sums invested in any manner in said busi- 
 ness the same as if they were residents, "-if a foreign corpo- 
 ration buys property here and pays cash for a portion of it 
 and promises to pay the balance at some future day it is 
 taxable only on the sum paid, as a sum " invested," and not 
 on the sum promised to be paid: " The non-resident corpo- 
 
 « People ex ret Keystone Gas i" Tax L. § 7 (L. 1909, c. 61). 
 
 Co. V. Martin, 48 Hun, 193 (1888); "People ex rel. Thurber, Wyland 
 
 L. 1881, c. 293. Co. v. Barker, 141 N. Y. 118, 23 
 
 'Tax L. § 7 (L. 1909, c. 61). L.R.A. 95, 35 N. E. 1073 (1894); 
 
 * People ex rel. Savings Bank of L. 1855, e. 37. See now Tax L. § 7. 
 
 New London v. Coleman, 135 N. Y. "People ex rel. Thurber, Wyland 
 
 231, 31 N. E. 1022 (1892) ; 1 R. S. Co. v. Barker, 141 N. Y. 118, 23 
 
 388, § 4. L.R.A. 95, 35 N. E. 1073 (1894) ; 
 
 ^ People ex rel. Pacific Mail L. 1855, c. 37. See now Tax L. § 7. 
 Steamship Co. v. Comm'rs of Taxes, 
 64 N. Y. 541 (1876). 
 
860 BUSINESS CORPORATIONS IN NEW YORK §§ 725, 726 
 
 ration investing a siim of money in this State is to be assessed 
 for the full sum it invests here, although it may owe debts 
 enough outside of such investment to render it insolvent. 
 The indebtedness it has incurred in the transaction from 
 which the purchase of the property is the result, is no part of 
 the sum it has invested in such purchase and no assessment 
 can be made which includes the amount of that indebted- 
 ness." " A foreign manufacturing corporation is not assess- 
 able under a statute making all persons doing business in 
 New York as merchants, etc., and not residents of this State, 
 taxable on all sums invested in such business, the same as 
 though residents, if it has a salesroom in New York City to 
 which it sends manufactured goods to be sold, the proceeds 
 of which are at once remitted to the home office less a small 
 amount to pay the expenses of the business conducted in New 
 York City, and if it had in its New York office goods for sale 
 averaging in value fifteen thousand dollars and office furni- 
 ture worth five hundred dollars." 
 
 § 725. Id.: Special Franchise Tax. — A foreign corporation 
 which has received from the State a certificate entitling it to 
 the rights and priAdleges accorded to a like domestic corpora- 
 tion and which is performing the functions of a public corpo- 
 ration in transporting natural gas is taxable as for a special 
 franchise though it has no express consent from a town's 
 officials to lay its pipes across highways if it does in fact do 
 so and has done so for a long time without objection from the 
 town and with the express consent of the adjoining property 
 owners." 
 
 § 726. Id.: Franchise Tax or Income Tax.— For the privilege 
 of doing business in New York State every foreign manu- 
 facturing and every foreign mercantile corporation must 
 annually pay in advance for the year beginning November 
 first next preceding an annual franchise tax to be computed 
 by the tax commission upon the basis of its net income for its 
 fiscal or the calendar year next preceding, which is presump- 
 tively the income on which it pays a tax to the United States." 
 
 " People ex rel. Milling Co. v. Gas Co. v. Priest, 152 A. D. 249, 136 
 
 Barker, 147 N. Y. 31, 29 L.R.A. 393, N. Y. Supp. 575 (1912). 
 
 41 N. E. 435 (1895) ; L. 1855, c. 37. " Tax L. § 209 (L. 1918, c. 276). 
 
 See now Tax L. § 7. Corporations liable to a tax under 
 
 "People ex rel. Sherwin Co. v. § 184 of the Tax Law, or owning or 
 
 Barker, 5 A. D. 246, 39 N. Y. Supp. operating elevated or surface rail- 
 
 151 (1896) ; aflf'd 149 N. Y. 623, 44 roads not operated by steam, or 
 
 N. E. 1128; L. 1855, c. 37. See now formed for supplying water or gas 
 
 Tax L. § 7. or for electric or steam heating, 
 
 "People ex rel. United Natural lighting or power purposes and lia- 
 
§ 726 
 
 FOREIGN CORPORATIONS 
 
 861 
 
 What corporations are to be considered manufacturing and 
 mercantile corporations has been previously discussed." The 
 license tax paid by a foreign manufacturing or mercantile 
 corporation is similar to that paid by any other foreign cor- 
 poration ; while the franchise tax paid by it is now based on 
 its income instead of the amount of its capital employed in 
 New York. Eeference is made to the appropriate section of 
 this work for a discussion of its franchise-income tax.^' 
 Foreign corporations having officers, agent or representatives 
 within New York State must annually on or before July first 
 transmit to the Tax Commission a similar report as must 
 domestic corporations." The other details of the law 
 imposing a State tax upon the income of foreign corporations 
 are equally pertinent to domestic corporations and have 
 already been treated,^" 
 
 ble to a tax .under §§ 185 and 186 
 of the Tax Law are exempt from the 
 franchise-income tax. See §§ 572, 
 573 and 574, supra, of this book. 
 
 " See § 572 et seq., supra. De- 
 cisions as to foreign manufacturing 
 corporations when they escaped tax- 
 ation as to so much of their capital 
 employed within New York if it 
 equalled forty per cent of their capi- 
 tal are given in this note and in a 
 note to section 707, supra. A foreign 
 manufacturing corporation which 
 kills cattle, refrigerates them, sells 
 some and cooks or smokes others, 
 makes the fat into oil and the scraps 
 into fertilizer, and sells the hides 
 and horns, all partly in this State, 
 but also receives in New York beef 
 from its home state which is prac- 
 tically completed for market there, 
 placed here in the ice house and sold 
 from there, is not wholly engaged in 
 manufacturing in New York so as 
 to escape taxation'on the amount of 
 its capital stock employed within 
 New York. People ex rel. Schwarzs- 
 child Co. V. Roberts, 11 A. D. 449, 
 42 N. Y. Supp. 317 (1896); aflf'd 
 156 N. Y. 690, 50 N. E. 1121. In 
 determining what tax on its capital 
 employed in this State a foreign 
 manufacturing corporation must pay 
 it is not proper to consider that its 
 
 capital stock employed in this State 
 is in proportion to the whole capital 
 stock as the amount of sales made in 
 this Sate is to the total amount of 
 sales made everywhere; but the value 
 of goods kept in hand in this State 
 and money on deposit here, used in 
 its business, and not sales made here 
 by sample with delivery from the 
 foreign factory, are the proper basis 
 of taxation. People ex rel. Seth 
 Thomas Clock Co. v. Wemple, 133 
 N. Y. 323, 31 N. E. 238 (1892) ; L. 
 1880, c. 542, as amend'd L. 1881, 
 c. 361; L. 1882, c. 151; L. 1885, 
 c. 359, and L. 1889, c. 353. See now 
 Tax L. §§ 181, 182. In determining 
 the tax which a foreign manufactur- 
 ing corporation must pay on its 
 capital employed in this State " the 
 rule must be the same whether the 
 corporation is weak or strong, 
 whether its total product is a few 
 thousand dollars or millions." Peo- 
 ple ex rel. Seth Thomas Clock Co. 
 V. Wemple, 133 N. Y. 323, 31 N. E. 
 238 (1892); L. 1880, c. 542, as 
 amend'd L. 1881, o. 361; L. 1882, 
 e. 151; L. 1885, c. 359; L. 1889, 
 c. 353. See now Tax L. §§ 181, 1«2. 
 
 ^*See § 726, supra. 
 
 "See § 577 et seq., supra, 
 
 '"See §§ 570-587, supra. 
 
862 BUSINESS CORPORATIONS IN NEW YORK § 726 
 
 Every foreign corporation not paying a franchise tax 
 based npon its income as a manufacturing or mercantile cor- 
 poration must pay in advance an annual tax for the privilege 
 of doing business in New York State, which must be computed 
 on the basis of the amount of its capital stock employed 
 during the preceding year within this State, unless exempt 
 by special provision of law; and as the tax is arrived at in 
 the same way for a foreign as for a domestic corporation, 
 reference is made to the treatment of this subject herein- 
 before in regard to domestic corporations.^ ' ' The amount of 
 the [franchise] tax does not depend upon the precise length 
 of time for which the corporation carries on business, or upon 
 the amount of business done."^ The franchise, tax on a 
 foreign corporation is " for the privilege of exercising its 
 corporate franchises " within this State, is based on the 
 amount of the capital stock employed in New York, and is to 
 be imposed notwithstanding its capital stock is used in a busi- 
 ness which in its nature constitutes commerce b'etween the 
 States/ It seems that even if a foreign corporation's busi- 
 ness is interstate or foreign commerce it is no objection per 
 se to the imposition of a franchise tax upon it.* The tax 
 imposed on the capital of a foreign corporation doing busi- 
 ness in this State is not in conflict with the provisions of the 
 Federal Constitution conferring on Congress the exclusive 
 power to regulate commerce between the States, as " the 
 property of a foreign corporation engaged in foreign or inter- 
 state commerce may be taxed equally with like property of a 
 domestic corporation engaged in the same business, but a tax 
 or other burden imposed upon the property of either corpo- 
 ration because it is used to carry on that commerce, or upon 
 the transportation of persons or property, or for the naviga- 
 tion of the public waters, over which the transportation is 
 made, is invalid and void, as interference with and obstruc- 
 tion of the power of congress in the regulation of com- 
 merce." ° The State of New York cannot tax a foreign cor- 
 poration upon its business carried on in this State which is 
 exclusively the business of interstate commerce; in other 
 
 ^Tax L. § 182 (L. 1916, c. 323). * People ex rel. International Ele- 
 
 See § 588 et seq., supra. vating Co. v. Roberts, 116 A. D. 30, 
 
 'People ex rel. International Ele- 101 N. Y. Supp. 184 (1906). 
 
 vating Co. v. Roberts, 116 A. D. 30, ^ People ex rel. Southern Cotton 
 
 101 N. Y. Supp. 184 (1906). OU Co. v. Wemple, 131 N. Y. 64, 
 
 ' People ex rel. Union Sulphur Co. 29 N. E. 1002 (1892) ; L. 1881, 
 
 V. Glynn, 125 A. D. 328, 109 N. Y. c. 361. See now Tax L. § 182. 
 Supp. 868 (1908) ; Tax L. §§ 181, 
 182 (L. 1907, c. 734). 
 
§ 726 FOREIGN CORPORATIONS 863 
 
 words, a State cannot ' ' tax a foreign corporation whose busi- 
 ness in such State is exclusively that of interstate commerce, 
 for the privilege of transacting that business here." 'The 
 State of New York does not infringe the Federal Constitu- 
 tional provision giving the Congress power, to the exclusion 
 of the States, to regulate commerce with foreign nations, by- 
 taxing the capital stock employed by a foreign corporation 
 in this State if some, though a small part of its business is 
 domestic, while the most of it is foreign commerce/ This 
 State cannot tax. the franchises of foreign corporations 
 because they are derived from and are taxable by the govern- 
 ment of their creation only ; and so it is that the tax in New- 
 York on foreign corporations is computed on the basis of the 
 capital employed by them in this State, which means only 
 such of the capital as is represented by the value of property, 
 whether of money, goods or other tangible things.' " If a 
 foreign corporation or a corporation created by the laws of a 
 sister State employs the whole or a portion of its capital here, 
 and thus has the benefit and protection of the government and 
 laws of the State to the extent of the capiital so employed, 
 there is no reason why it should not be subjected, to the 
 extent of the capital so employed, to the same burdens and 
 obligations as a domestic corporation. The tax is not 
 imposed upon its property, but for the privilege which is 
 extended to it by the State of doing business here as a cor- 
 poration and in its corporate name. ' ' * While a foreign cor- 
 poration cannot be taxed as to its property situate outside 
 the State, as to its business not done here or as to its 
 franchise, yet it may be taxed on its business done here; 
 and a tax on the business of a foreign corporation will be 
 construed to mean a tax on its business in this State." 
 " The jurisdiction to tax .foreign corporations . . . 
 depends upon the existence of two ooncurring conditions, 
 namely, that the corporation sought to be taxed shall be 
 ' doing business ' in this State, and, second, that its capital 
 
 ^ People ex rel. Pennsylvania R. * People ex rel. A. J. Johnson Co. 
 
 R. Co. V. Wemple, 138 N. Y. 1, 19 v. Roberts, 159 N. Y. 70, 45 L.R.A. 
 
 L.R.A. 694, 33 N. E. 720 (1893); 126, 53 N. E. 685 (1899). 
 
 L. 1880, c. 542; L. 1881, c. 361; L. ^People ex rel. Southern Cotton 
 
 1882, c. 151; L. 1885, e. 501; L. 1890, Oil Co. v. Wemple, 131 N. Y. 64, 
 
 c. 522, § 3. See now Tax L. § 182. 29 N. E. 1002 (1892) ; L. 1881, 
 
 ' People ex rel. Klipstein & Co. v. c. 361. See now Tax L. § 182. 
 
 Roberts, 36 A. D. 597, 55 N. Y. "People v. Equitable Trust Co., 
 
 Supp. 950 (1899) ; afE'd 167 N. Y. 96 N. Y. 387 (1884) ; L. 1880, c. 542, 
 
 617, 00 N. E. 1117; U. S. Const. as amend'd L. 1881, e. 361. See now 
 
 art. 1, § 10. Tax L. § 182. 
 
864 BUSINESS CORPORATIONS IN NEW YORK § 726 
 
 or some portion thereof shall have been ' employed within 
 this State. ' " " " While, in most cases, a foreign corpora- 
 tion doing business within this State will employ some 
 portion of its capital in the prosecution of such business, 
 it is quite possible that the business which is prosecutes here 
 may not require the use of any part of its capital, and, 
 when this is the case, there can be no taxation for the 
 reason that there is no basis for taxation, since the basis for 
 the tax is the ' amount of capital stock employed within this 
 State.' "" " The small amount invested. [by a foreign cor- 
 poration] in office furnishings and the fact that it rented an 
 office in the City of New York and held it under lease, did not 
 alone justify the imposition of the tax. . . ."" The basis 
 for the assessment of the franchise tax against a foreign 
 corporation doing business in this State is the capital and not 
 the capital stock employed in New York." " . . . ' the 
 amount of capital stock ' made by statute the basis of taxa- 
 tion, cannot exceed the amount authorized by its charter. ' ' " 
 ' ' The general rule is that the capital stock of a foreign cor- 
 poration employed in this State is represented by the actual 
 value of its property within this State, whether in money or 
 goods or other tangible things (citation), not exceeding the 
 amount authorized by its charter. " " " . . . the capital 
 
 ^^ People ex rel. Chicago Junction the payment of certain bonds issued 
 
 Rys., etc., v. Roberts, 154 N. Y. 1, by it, other facts being also present, 
 
 47 N. E. 974 (1897) ; L. 1880, was held not taxable, 
 c. 542, and amendments. See now ^' People ex rel. Chicago Junction 
 
 Tax L. § 182. Rys., etc., v. Roberts, 154 N. Y. 1, 
 
 " People ex rel. Chicago Junction 47 N. E. 974 (1897) ; L. 1880, 
 
 Rys., etc., v. Roberts, 154 N. Y. 1, c. 542, and amendments. See now 
 
 47 N. E. 974 (1897) ; L. 1880, Ta^ L. § 182. 
 
 c. 542, and amendments. See now " People ex rel. National Enamel- 
 Tax L. 182. A New Jersey invest- ing Co. v. Miller, 112 A. D. 880, 98 
 ment company, managed by ten di- N. Y. Supp. 751 (1906) ; Tax L. 
 rectors two of whom resided in New § 182 (L. 1901, c. 558). 
 York, having an office in Jersey City ^^ People ex rel. Advertising Co. 
 where meetings to elect directors v. Roberts, 4 A. D. 288, 39 N. Y. 
 were annually held, and an office in Supp. 448 (1896) ; afE'd 151 N. Y. 
 New York City at an annual rent 621, 45 N. E. 1135. The foreign 
 of $1,500, containing furniture worth corporation had an authorized and 
 $1,000, and paying $10,000 a year fully paid capital of $5,000. It em- 
 to a treasurer, secretary, clerk and ployed $40,000, and made $20,00 a 
 stenographer employed in New York year in its business in New York. 
 City, the whole capital of which was The Comptroller's valuation of 
 invested in stock and bonds of an $40,000 as the amount of its cap- 
 Illinois corporation, as contemplated ital stock employed in this State was 
 on its organization, and the stock of reduced to $5,000. 
 which Illinois company was depos- ^'People ex rel. Contracting Co. 
 ited in New York as security for v. Roberts, 27 A. D. 400, 50 N. Y. 
 
§ 726 FOREIGN CORPORATIONS 865 
 
 of a foreign corporation employed within the State is repre- 
 sented by the actual value of its property within this State, 
 whether in money or goods or other tangible things {citations), 
 less, very likely, the amount which, in a proper case, may be 
 deemed to be income or profits. ' ' " Government bonds con- 
 stituting the investment by a foreign corporation of its 
 accumulated surplus moneys for use in lean years should not 
 be' included as capital employed by it in this State in deter- 
 mining its franchise tax/* A foreign corporation should not be 
 exempted entirely from franchise taxation because all its 
 capital is employed in the foreign State and an amount 
 employed in this State is a part of its surplus; nor that such 
 amount is expended on structures on leased ground which 
 might by law become the property of the owner." A foreign 
 corporation, all the assets of which are invested in the stock 
 of a domestic corporation and the sole income of which is the 
 dividend it receives upon such stock, is not subject to a 
 franchise or license tax.^" A foreign holding corporation is 
 taxable on money invested in its constituents' stock if such 
 was one of its purposes.^ In determining the capital stock of 
 a foreign corporation in order to impose the franchise tax 
 because of its being partly within this State, stock held by it 
 in another foreign corporation, entirely without the State, is 
 part of its capital but if it is not employed in this State it is 
 not to be considered in computing the holding company's 
 franchise tax, and the form of the consideration for its 
 purchase is immaterial.^ Surplus earnings of a foreign cor- 
 poration invested in real estate in this State, under lease and 
 not occupied by it, but on which it intends to erect new build- 
 ings when the lease expires and to use a small portion for its 
 offices and to lease the rest, are not a part of its capital stock 
 employed in this State but an independent investment, not 
 
 Supp. 302 (1898) ; aff'd 158 N. Y. 2° People ex rel. Edison Light & 
 
 666, 52 N. E. 1125; L. 1880, c. 542, Power Installation Co. v. Kelsey, 
 
 as amend'd. See now Tax L. § 182. 101 A. D. 205, 91 N. Y. Supp. 709 
 
 "People ex rel. New England (1905); Tax L. § 181 (L. 1901, 
 
 Loan & Trust Co. v. Roberts, 25 c. 558); Tax L. § 182 (L. 1901, 
 
 A. D. 16, 49 N. Y. Supp. 10 (1898) ; c. 558). 
 
 aflf'd 156 N. Y. 688, 50 N. E. 1120. ^ People ex rel. Manhattan Silk 
 
 Franchise tax. Co. v. Miller, 125 A. D. 296, 109 
 
 ^^ People ex rel. International Ele- N. Y. Supp. 866 (1908); aff'd 197 
 
 vating Co. v. Roberts, 116 A. D. 30, N. Y. 577, 91 N. E. 1119; Tax L. 
 
 101 N. Y. Supp. 184 (1906). §§ 181, 182 (L. 1901, e. 558). 
 
 ^® People ex rel. Long Dock Mills ^ People ex rel. New York Central, 
 
 & Elevator v. Wilson, 121 A. D. 376, etc., R. R. Co. v. Knight, 173 N. Y. 
 
 106 N. Y. Supp. 1 (1907); aff'd 193 255, 65 N. E. 1102 (1903). 
 N. Y. 671, 87 N. E..1125. 
 B. C. N. Y.— 55 
 
866 BUSINESS CORPORATIONS IN NEW YORK § 726 
 
 subject to taxation.' " The doctrine, as settled by authority, 
 is that the incorporeal right of discovery is protected by 
 national authority against all interference ; but the use of the 
 tangible property, which comes into existence by the applica- 
 tion of the discovery, is not beyond the control of State 
 legislation. ' ' ^ The copyrights of a foreign corporation doing- 
 business here cannot be included in the valuation of its capital 
 employed in this State for the purpose of determining the 
 amount of tax it must pay ; although the plates, instruments, 
 books, etc., are taxable.^ " While the good will of a corpo- 
 ration has been held at times to be a part of the capital 
 employed within this State, it has never been so held where 
 substantially all the business of the corporation was carried 
 on in foreign countries."" It seems that "good will 
 embraces at least two elements, the advantage of continuing 
 an established business in its old place, and of continuing it 
 under the old style or name ; ' ' and when it results from the 
 exercise by a foreign corporation of its franchise and busi- 
 ness in this State, and is inseparable from that business, it is 
 taxable here.' In determining the value of a foreign corpo- 
 ration's capital stock employed in New York, for the purpose 
 of assessing its franchise tax, the value of its trade mark may 
 be concidered as part of its capital stock employed in the 
 State." In determining the franchise tax to be paid by a cor- 
 poration incorporated in a foreign State but doing business 
 and having its only real office in this State it is proper tO' 
 include claims by it against non-residents on advertising con- 
 traetb obtained for periodicals published by it from persons 
 all over the country.' Keference is made to the immediately 
 succeeding sections of this work, dealing with the license tax 
 on a foreign corporation, for further decisions of that shall 
 and what shall not be considered capital of the foreign corpo- 
 
 ^ People ex rel. Singer ilfg. Co. ^ People ex rel. A. J. Johnson Co. 
 
 V. Wemple, 150 N. Y. 46, 44 N. E. v. Roberts, 159 N. Y. 70, 45 L.R.A. 
 
 787 (1896) ; Corp. Tax Act, L. 1880, 126, 53 N. E. 685 (1899) ; Tax L. 
 
 c. 542, as amend'd L. 1885, c. 501. § 182. Dictum in opinion of Vann, J. 
 
 See now Tax L. § 182. * People ex rel. Spencerian Pen 
 
 * People ex rel A. J. Johnson Co. Co. v. Kelsey, 105 A. D. 132, 93 
 
 V. Roberts, 159 N. Y. 70, 45 L.R.A. N. Y. Supp. 971 (1905) ; aff'd 
 
 126, 53 N. E. 685 (1899). Copy- 185 N. Y. 546, 77 N. S. 1195; Tax 
 
 right. L. § 181 (L. 1901, e. 558). 
 
 ^ People ex rel. A. J. Johnson Co. " People ex rel. Williams Co. v. 
 
 V. Roberts, 159 N. Y. 70, 45 L.R.A. Sohmer, 151 A. D. 764, 137 N. Y. 
 
 126, 53 N. E. 685 (1899). Supp. 23 (1912); Tax L. § 182. 
 
 'People ex rel. Dutilh-Smith & 
 Co. V. Miller, 90 A. D. 545, 85 N. Y. 
 Supp. 849 (1904). 
 
§§ 727-729 FOREIGN CORPORATIONS 867 
 
 ration employed in New York, as the license as well as the 
 franchise tax are based on such employment of the corporate 
 capital. In seeking to offset its indebtedness against its 
 capital on ascertainment of its liability for a franchise tax in 
 this State, a foreign corporation cannot deduct debts con- 
 tracted for its general business throughout the country, but 
 only debts for the use or on account of its business in New 
 York." It may be that in some cases the indebtedness within 
 this State of a foreign holding corporation should be offset 
 against capital employed within the State in determining its 
 tax, but this is only when the indebtedness is in respect of the 
 specific assets which are found within the State and not when 
 the indebtedness is general, i. e., is incurred generally in the 
 business, in which case it should be deducted from the sum of 
 the company's assets wheresoever found and an amount 
 offset against the value of the assets within this State as will 
 be proportionate." 
 
 § 727. Id.: Taxation: License Tax, What Corporations Sub- 
 ject To. — Every foreign corporation (except banking corpora- 
 tions, fire, marine, casualty and life insurance companies, 
 co-operative fraternal insurance companies, and building and 
 loan associations) doing business in New York State must 
 pay a license fee." 
 
 § 728. Id.: To Whom Paid. — A foreign corporation's license 
 fee is to be paid to the New York State Treasurer for the use 
 of the State." 
 
 § 729. Id.: When to be Paid. — The statute says that no 
 foreign corporation doing business in New York can sue in 
 the courts of this State without getting a receipt for the New 
 York State license fee within thirteen months after beginning 
 such business." 
 
 "People ex rel. National Enamel- stock employed by it within New 
 
 ing Co. V. Miller, 112 A. D. 880, 98 York during the first year of earry- 
 
 N. Y. Supp. 751 (1906) ; Tax L. ing on its business and that " the 
 
 § 182 (L. 1901, c. 558). tax imposed by this section on a 
 
 ^^ People ex rel. Manhattan Silk corporation not heretofore subject 
 
 Co. V. Miller, 125 A. D. 296, 109 to its provisions shall be paid on the 
 
 N. Y. Supp. 866 (1908) ; aflf'd 197 first day of December, nineteen hun- 
 
 N. Y. 577, 91 N. E. 1119; Tax L. dred and one, unless on sranh date 
 
 §§ 181, 182 (L. 1901, c. 558). such corporation shall not have em-j 
 
 ^^Tax L. § 181 (L. 1917, c. 490). ployed capital within the State for 
 
 "Tax L. § 181 (L. 1917, c. 490). a period of thirteen months, in which' 
 
 ^* Tax L. § 18; " The statute as case it shall be paid within the time| 
 
 it formerly read which directed otherwise provided by this section"! 
 
 that the license fee payable by a has, as' its only possible interpreta- 
 
 foreign corporation is to be com- tion, this: "that if the corporation 
 
 puted upon the basis of the capital has not done business for twelve^ 
 
8G8 BUSINESS CORPORATIONS IN NEW YORK «S 730, 731 
 
 § 730. Id.: For What Paid.— The license fee paid by a 
 foreign corporation is paid for the privilege of exercising its 
 corporate franchises or carrying on its business in such cor- 
 porate organized capacity in the State of New York." The 
 tax imposed upon foreign corporations under the one hundred 
 and eighty-first section of the Tax Law, though measured by 
 the amount of capital employed in this State, is a license tax 
 upon corporations authorized to do business under that law." 
 
 § 731. Id.: Amount and Computation of Tax. — The license 
 fee paid by a foreign corporation is one-eighth of one per 
 centum, to be computed upon the basis of the capital stock 
 employed by it within New York State during the first year 
 of carrying on its business in this State, which first payment 
 must not be less than ten dollars ; and if any year thereafter 
 any such corporation employs more than eight thousand dol- 
 lars of its capital stock within New York State on which a 
 license fee has not been paid then a license fee at the rate of 
 one-eighth of one per centum is due and payable upon any 
 such increase." The measure of the amount of capital stock 
 employed in New York State is found in this way: (1) Take 
 the issued capital stock; (2) take the gross assets employed 
 in any business within New York State; (3) take the gross 
 assets wherever employed in business ; (4) find what the pro- 
 portion of the second item, viz., gross assets employed in this 
 State, is to the third item, viz., gross assets employed every- 
 where; (5) take that proportion of the issued capital stock, 
 and you have the measure of the amount of capital stock 
 employed in this State." For purposes of taxation, the capital 
 stock of a corporation invested in the stock of another cor- 
 poration is deemed to be assets located where the physical 
 property represented by such stock is located." ". . . the 
 Comptroller has no right to review his own decision by 
 arbitrarily reassessing and readjusting a license fee imposed 
 and paid (citation) ; and ... a foreign corporation should 
 be assessed upon the amount of capital employed by it within 
 
 months it shall pay the license fee "Tax L. § 181 (L. 1917, c. 490). 
 
 at the time otherwise prescribed in ^° International Text Book Co. v. 
 
 the section, to wit, between twelve Tone, 220 N. Y. 313, 115 N. E. 914 
 
 and thirteen months after it shall (1917) ; Tax L. § 181. 
 
 have commenced to employ capital ^' Tax L. § 181 (L. 1917, c. 490). 
 
 within the State." People ex rel. "Tax L. § 181 (L. 1917, c. 490). 
 
 Dutilh-Smith & Co. v. Miller, 90 "Tax L. § 181 (L. 1917, c. 4901. 
 A. D. 545, 85 N. Y. Supp. 849 
 (1904); Tax L. § 181 (L. 1901, 
 0. 558). 
 
§ 732 FOREIGN CORPORATIONS 869 
 
 this State and not upon the amount of its capitalization."'" 
 The Comptroller cannot by his own motion correct what he 
 deems an error by himself or his predecessor in determining 
 the license fee of a foreign corporation by increasing it, unless 
 there has been an increase in its capital stock employed in 
 New York.^ The. basis for the assessment of the license fee 
 against a foreign corporation for doing business in this State 
 IS the capital and not the capital stock employed in New York.' 
 The license fee of a foreign corporation should be computed 
 on the amount of its capital employed in this State and not on 
 the amount of its authorized capital stock.' The license tax 
 imposed upon foreign corporations for the privilege of doing 
 business in this State is to be based upon the par value of the 
 capital stock which is employed in business in the State.* 
 Though that percentage of machines leased by a foreign cor- 
 poration in this State to all its leased machines in all the states 
 might be held to represent its only capital employed in New 
 York, for the franchise and license tax purposes, if it neither 
 had a place of business in New York nor employed additional 
 capital therein, yet if these conditions do not exist such will 
 not be held the capital employed here.' 
 
 § 732. Id.: Tax Commission Fixes Capital Taxable, 
 Examines Corporate Books, Records and Employees, and 
 Comptroller Collects Taxes. — The amount of capital upon 
 which a foreign corporation 's license fees are to be paid, must 
 be fixed by the State Tax Commission, which has the same 
 authority to examine the books and records in New York State 
 of such foreign corporation and its employees as it has in the 
 case of domestic corporations." The Comptroller of the State 
 of New York has the same power to issue his warrant for the 
 collection of license fees due from a foreign corporation as 
 he now has with regard to domestic corporations.' 
 
 ^ People ex rel. Nesmith & Con- (1905) ; aff'd 182 N. Y. 526, 74 
 
 stantine Co. v. Miller, 105 A. D. 326, N. E. 1123; Tax L. § 181 (L. 1901, 
 
 94 N. Y. Supp. 193 (1905); Tax L. c. 558). 
 
 § 181 (L. 1901, c. 558). * People ex rel. EUicott-Fisher Co. 
 
 1 People ex rel. Spencerian Pen v. Sohmer, 148 A. D. 514, 132 N. Y. 
 
 Co. V. Kelsey, 105 A. D. 132, 93 Supp. 789 (1911)^ aff'd 206 N. Y. 
 
 N. Y. Supp. 971 (1905); aff'd 185 634, 99 N. E. 1115;. Tax L. § 181, 
 
 N. Y. 546, 77 N. E. 1195; Tax L. as amend'd L. 1906, c. 474. 
 
 § 181 (L. 1901, e. 558). ''People ex rel. Vending Co. v. 
 
 = People ex rel. National Enamel- Kelsey, 101 A. D. 325, 91 N. Y. 
 
 ing Co. V. Miller, 112 A. D. 880, 98 Supp. 955 (1905) ; aff'd 181 N. Y. 
 
 N. y. Supp. 751 (1906); Tax L. 512, 73 N. E. 1130; Tax L. § 181 
 
 § 181 (L. 1901, c. 558). (L. 1901, c. 558). 
 
 'People ex rel. Consolidated Gin- » Tax L. § 181 (L. 1917, c. 490). 
 
 seng Co. of America v. Kelsey, 106 ^ Tax L. § 181 (L. 1917, c. 490). 
 A. D. 175, 93 N. Y. Supp. 369 
 
870 BUSINESS CORPORATIONS IN NEW YORK §§ 733-735 
 
 § 733. Id.: Penalty for Failure to Pay.— No action can be 
 maintained or recovery had in any of the courts of New York 
 State by a foreign corporation doing business in this State 
 after thirteen months from the time of beginning such busi- 
 ness within the State without obtaining a receipt from the 
 Comptroller of New York State for the payment of the license 
 fee upon the capital stock employed by it within New York 
 State during the first year of carrying on its business in this 
 State.^ 
 
 § 734. Id.: Manufacturing Corporations. — The law enacted 
 in nineteen hundred seventeen and amended in nineteen 
 hundred eighteen subjecting both domestic and foreign manu- 
 facturing corporations to a franchise tax based on income 
 exempted manufacturing corporations from assessment on 
 any personal property or capital stock, as provided in the 
 twelfth section of the Tax Law, and from the franchise tax 
 imposed by the one hundred and eighty-second section of the 
 Tax Law.*" Prior to such law of nineteen seventeen-eighteen 
 a manufacturing corporation, subject to the franchise tax 
 imposed by the one hundred eighty-second section of the Tax 
 Law, was exempted to the extent of its capital actually 
 employed in this State in manufacturing and in the sale of the 
 product of such manufacturing if at least forty per centum 
 of its capital stock was invested in property in this State and 
 used by it in its manufacturing business in this State. 
 
 § 735. Id.: Actions By and Against, In General. — There is 
 no reason why the courts of this State should refuse to 
 recognize a corporation organized under the laws of another 
 state even though all its incorporators, directors, etc., are 
 citizens of this State.° The fact that all the incorporators 
 save one of a foreign corporation are citizens and residents 
 of this State does not deprive it of recognition by the courts 
 of New York." Belief will not be withheld by our courts from 
 a corporation because it is incorporated in another state." 
 So long as a foreign corporation exists and is recognized by 
 the courts and authorities of its domicile it is entitled to the 
 same recognition here unless it appears that it was formed 
 for purposes illegal here, or was doing acts prohibited by the 
 laws of this State to its own citizens and corporations." For 
 
 *Tax L. § 181 (L. 1917, c. 490). "Diamond Match Co. v. Roeber, 
 
 ^ Tax L. § 219-j (L. 1918, c. 417). 106 N. Y. 473, 13 N. E. 419 (1887). 
 
 ^Demarest v. Flack, 128 N. Y. ^^ United States Vinegar Co. v. 
 
 205, 13 L.R.A. 854, 28 N. E. 645 Schlegel, 143 N. Y. 537, 38 N. E. 
 (1891). 729 (1894). 
 
 ^'' Lancaster v. Amsterdam Im- 
 provement Co., 140 N. Y. 576, 24 
 L.R.A. 322, 35 N. E. 964 (1894). 
 
§ 736 FOREIGN CORPORATIONS 871 
 
 the purpose of determining the venue of an action in this 
 State to which a foreign corporation is a party it cannot be 
 considered a resident of any county in this State or of the 
 State itself. ^^ For the purpose of determining the venue of 
 an action a foreign corporation is a nonresident though it has 
 obtained a certificate permitting it to do business in New 
 York, and a corporation organized under the laws of the 
 United States is a resident, and of that county of New York 
 State in which it has its principal place of business." When 
 a party wishes to prove an act or transaction of a foreign 
 corporation, the latter 's original books may be used for that 
 purpose as presumptive evidence, whether any or all of the 
 parties are or are not members of the corporation ; or a copy 
 of such books or of an entry therein, verified by the deposition 
 taken as prescribed by law or the oral testimony taken at the 
 trial of the person who made it or of a person who has 
 examined and compared it with the original book or the entry 
 therein, may be used with like effect as the original books, 
 provided 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 evidence proposed to be given ; but 
 such methods of proving a foreign corporation 's act or trans-, 
 action cannot be availed of when it is a party to the action 
 and seeks to prove its own act or transaction in its own 
 behalf.^^ The statute makes a debt owing to a decedent by a 
 foreign corporation personal property at the place where the 
 bond, note or other instrument is, for the purpose of con- 
 ferring jurisdiction upon the surrogate.^* The statute pro- 
 vides how to serve a citation upon a foreign corporation." 
 § 736. Id.: By One Foreign Corporation Against Another 
 Foreign Corporation. — An action by one foreign corporation 
 against another may be maintained (1) to recover damages 
 for the breach of a contract (a) made within New York State 
 or (b) relating to property situated within New York State 
 at the time of the making of the contract, (2) to recover real 
 property situated within New York State, (3) to recover a 
 
 ^^ Shepard & Morse Lumber Co. ganized under the laws of the United 
 
 ■V. Burleigh, 27 A. D. 99, 50 N. Y. States, to the county in which the 
 
 Supp. 135 (1898). latter had its principal place of 
 
 "Remington & Sherman Co. v. business. 
 
 Niagara Bank, 54 A. D. 358, 66 ^= C. C. P. §§ 929, 930,- 931. 
 
 N. Y. Supp. 560 (1900); C. C. P. '"C. C. P. § 2517. 
 
 § 984. The foreign corporation " C. C. P. §§ 2525, 2526. 
 
 plaintiff was ordered to change the Generally on right of foreign cor- 
 
 place of the trial of its action porations to sue, see note in 24 
 
 against a domestic corporation, or- L.R.A. 289. 
 
872 BUSINESS CORPORATIONS IN NEW YORK § 736 
 
 chattel which is replevied within New York State, (4) when 
 the cause of action arose within New York State except when 
 the object of the action is to affect the title to real property 
 situated without New York State, and (5) when a foreign cor- 
 poration is doing business within New York State." The 
 cases relating to actions by non-resident individuals and 
 foreign corporations alone are here considered ; those govern- 
 ing actions by resident individuals and domestic corporations 
 against foreign corporations are hereinafter discussed." The 
 courts of New York have no jurisdiction of the subject-matter 
 of a litigation between foreign corporations except in the case 
 provided in the statute.^" The statute allowing a right of 
 action against a foreign corporation by a non-resident 
 " where a foreign corporation is doing business in this 
 State ' ' is not retroactive.^ The courts of this State have no 
 jurisdiction of an action by a foreign corporation against 
 another foreign corporation on the ground of business being 
 done in New York State unless the corporation sued, as dis- 
 tinguished from the corporation suing, is doing business 
 within this State.^ It seems that the statute permitting a non- 
 resident or foreign corporation to maintain an action against 
 a foreign corporation when the last is doing business within 
 this State is unconstitutional, " since it permits an action to 
 be maintained against a foreign corporation which happens 
 to be doing business in the State of New York upon a cause 
 of action which arose outside of it and not connected in any 
 way with the business there done. ' ' ' 
 
 The statutory limitation of the jurisdiction of the courts of 
 this State in actions by foreign corporations against foreign 
 corporations to those in which the cause of action arose within 
 this State is a valid exercise of the power of the State, and 
 when the cause of action is the enforcement of a judgment 
 rendered in a foreign jurisdiction it is not one which in the 
 contemplation of the statute arose within the State.* In an 
 action by a non-resident individual against a foreign corpo- 
 
 ^* C C. P. S 1780. Paris, 166 A. D. 64, 151 N. Y. Supp. 
 
 >« See §§ 758, 759, infra. 604 (1915) ; C. C. P. § 1780, subd. 4, 
 
 ^ Snow, Church & Co. v. Snow- added by L. 1913, c. 60. 
 
 Church Co., 80 A. D. 40, 80 N. Y. 'Fairclough v. Southern Pacific 
 
 Supp. 512 (1903) ; C. C. P. § 1780. Co., 171 A. D. 496, 157 N. Y. Supp. 
 
 • Morrison v. Baltimore & Ohio 862 (1916) ; L. 1913, c. 60, adding 
 
 R. R. Co., 177 A. D. 613, 164 N. Y. subd. 4 to § 1780, C. C. P. 
 
 Supp. 258 (1917); C. C. P. § 1780, ^Anglo-American Prov. Co. v. 
 
 subd. 4 (L. 1913, c. 60). " Davis Prov. Co., 169 N. Y. 506, 62 
 
 ^U. S. Asphalt Refining Co. v. N. E. 587 (1902); C. C. P. § 1780, 
 
 Comptoir National D'Escompte de subd. 3. 
 
§ 736 FOREIGN CORPORATIONS 873 
 
 ration the jurisdiction of a New York court must depend on 
 the fact that the cause of action arose within this State.' In 
 determining whether a cause of action by a non-resident . 
 against a foreign corporation arose within the State so as to 
 warrant suit on it in New York, the allegations of the com- 
 plaint alone may be considered and the action may be main- 
 tained " if the breach of the contract occurred within this 
 State," no matter where the contract was made.' An action 
 may be maintained in New York by a non-resident against a 
 foreign corporation in a case wherein the courts of this State 
 have possession and jurisdiction of property and are attempt- 
 ing to determine its ownership, and the presence of the 
 foreign corporation as a formal party at least is necessary to 
 the complete disposition of the case and the accomplishment 
 of justice.'' The courts of New York have jurisdiction of 
 actions against foreign corporations brought by non-residents 
 to recover damages for the breach of a contract made within 
 this State.* One foreign corporation cannot sue another 
 foreign corporation in the courts of New York for a cause of 
 action arising in a foreign state, wherein both have their 
 offices, upon a contract made and wholly to be performed, and 
 the alleged breach of which occurred, within that state." A 
 non-resident may sue a foreign corporation in the courts of 
 New York under a contract for services to be performed 
 partly in this State where plaintiff's headquarters were and 
 most of his time was spent.^" The courts of this State have 
 jurisdiction of an action by one foreign corporation against 
 another on a contract containing no provision as to the place 
 of performance if demand and refusal to perform take place 
 in New York without reason for refusal or claim that per- 
 formance is to be at any other time or place, as the cause of 
 action then arises in this State ; and the fact that the decree 
 rendered will affect realty outside this State is immaterial to 
 the court's jurisdiction if the case involves fraud, trust or 
 contract." An action to recover damages for breach of a 
 
 = Fenkart v. Bodenmann, 64 Misc. ^ Duquesne Club v. Penn Biank of 
 
 140, 118 N. Y. Sui^p. 1 (1909) ; Pittsburgh, 35 Hun, 391 (1885) ; C. 
 
 C. C. P. § 1780, subd. 3. C. P. § 1780; U. S. Const, art. 14, 
 
 ® Rosenblatt v. Jersey Novelty Co., § 1. 
 
 45 Misc. 59, 90 N. Y. Supp. 816 ^^ Strawn v. Brandt-Dent Co., 71 
 
 (1904); C. C. P. § 1780. A. D. 234, 75 N. Y. Supp. 698 
 
 ' Holmes v. Camp, 219 N. Y. 359, (1902) ; affi'd 175 N. Y. 463, 67 N. E. 
 
 114 N. E. 841 (1916); C. C. P. 1090; C. C. P. § 1780, subd. 3. 
 
 S 1780. " Wrightsville Hardware Co. V: 
 
 ^Watson V. Boston Woven Cord- Assets Realization Co., 159 A. D. 
 
 age Co., 75 Hun, 115, 26 N. Y. 849, 144 N. Y. Supp. 991 (1913); 
 
 Supp. 1101 (1894). C. C. P. § 1780, subd. 3. 
 
874 BUSINESS CORPORATIONS IN NEW YORK § 736 
 
 contract made in New York by a foreign corporation to deliver 
 bonds to a copartnership composed of individuals resident in 
 this State in consideration for work to be done by them in a 
 foreign state may be enforced in the courts of this State by 
 another foreign corporation to which the contract has been 
 assigned." A corporation incorporated in a foreign country 
 may sue in the courts of this State to enjoin another corpora- 
 tion organized in the same country and individuals, residents 
 of this State, appointed as arbitrators under an agree- 
 ment between such corporations, from proceeding with the 
 arbitration." 
 
 _ It is not necessary to give the courts of this State jurisdic- 
 tion of an action by non-residents against a foreign corpo- 
 ration that all the plaintiffs should have been citizens and 
 clothed with right to sue when the action was commenced if 
 after the action was commenced one intervened as party plain- 
 tiff who is a resident and the cause of action be not jointly 
 vested in the parties plaintiff and be not one to which the 
 resident plantiff was a necessary party when started by the 
 non-resident ; and this is true though judgment in the action 
 was entered before the law was passed permitting suit by a 
 non-resident against a foreign corporation." An action by 
 one a non-resident when suit is brought and at the time the 
 contract sued on was made against a foreign corporation must 
 be dismissed at any stage of the proceeding when the facts 
 are called to the court's attention." A suit against a foreign 
 corporation which could only be maintained by a resident 
 may be instituted by a clerk in a stockbroker's office who had 
 never had any connection with the corporation until, for the 
 purpose of enabling him to bring the action in question, a 
 bona fide but non-resident stockholder deposited money with 
 the stockbroker to the clerk's credit, who drew his cheque on 
 the stockbroker for the amount of the deposit to the order of 
 the depositing non-resident stockholder, who thereupon 
 handed the clerk a certificate for shares of stock in the com- 
 pany, endorsed in blank, which it was never attempted to have 
 transferred." The right of a non-resident to assign his claim 
 
 '2 O'Brien v. Peoria Water Co., 5 Copper Co., 169 A. D. 206, 154 
 
 A. D. 229, 39 N. Y. Supp. 121 N. Y. Supp. 596 (1915); C. C. P. 
 
 (1896) ; C. C. P. § 1780. There was § 1780, as amend'd L. 1913, c. 60. 
 
 nothing to show where payment of ^^ Jones v. Burr Brothers, Inc., 
 
 the honds was to he made. 142 A. D. 640, 127 N. Y. Supp. 478 
 
 "Direct U. S. Cable Co. v. Do- (1911); C. C. P. § 1780. 
 
 , minion Telegraph Co., 84 N. Y. 153 ^* Brvin v. Oregon Ry. & Naviga- 
 
 (1881). tion Co., 35 Hun, 544 (1885). 
 
 ^* Grant v. Greene Consolidated 
 
§ 737 FOREIGN CORPORATIONS 875 
 
 against a foreign corporation to a resident for the express 
 purpose of enabling the latter to sue thereon does not extend 
 so far as to permit an assignment after the commencement of 
 the action." 
 
 The court has power to decline jurisdiction of an action, by 
 a non-resident against a foreign corporation which the statute 
 permits it to entertain." The courts of New York will not 
 entertain an action by one foreign corporation against 
 another relating to realty in their home state.'" The courts 
 of New York have no jurisdiction of an action by one who at 
 the time of its commencement and trial was a non-resident 
 against a foreign corporation to affect property in a still 
 different state.^ A non-resident's cause of action not arising 
 within this State, based upon a foreign statute, not relating 
 to property within this State, in which the defendant is a 
 foreign corporation, should not be entertained in the courts of 
 this State.' The Supreme Court will retain jurisdiction of 
 an action on contract brought in New York by one foreign 
 corporation against another when the plaintiff through its 
 agent, then temporarily in New York, accepted in New York 
 City the telegram of the defendant from without the State 
 offering the goods in question — even though the court might 
 refuse jurisdiction.^ 
 
 § 737. Id.: By, In General.—" But it is well settled that a 
 foreign corporation may sue in the courts of this State ; and 
 equally well settled that such suit is allowed only by the 
 comity existing between one state or country, and another. 
 . . . A corporation not allowed to sue in its own state, cer- 
 tainly cannot be allowed by the friendly courtesy of another 
 to bring its action here. " ^ " . . . prima facie, a foreign 
 corporation may sue on a note here the same as a domestic 
 
 " Ervin v. Oregon Ry. & Naviga- alleged moneys of the company were 
 
 tion Co., 28 Hun, 269 (18-82) ; C. C. on deposit in New York. 
 
 P. § 1780. ^ Payne v. New York, Susque- 
 
 ^* Bagdon v. Philadelphia & Read- hanna & Western R. R. Co., 157 
 
 ing Coal & Iron Co., 178 A. D. 662, A. D. 302, 142 N. Y. Supp. 241 
 
 165 N. Y. Supp. 910 (1917) ; C. C. (1913) ; app. dism'd, 211 N. Y. 557, 
 
 P. § 1780 (L. 1913, c. 60). 105 N. E. 1092; C. C. P. § 1780. 
 
 " Cumberland Coal & Iron Co. v. = Wakefield Mills Co. v. Whitman 
 
 Hoffman Steam Coal Co., 30 Barb. Mills, — Misc. — (1918), N. Y. 
 
 159 (1859). L. J., April 17, p. 208; C. C. P. 
 
 ^° Johnson v. Victoria Chief Cop- § 1780. 
 
 per Mining & Smelting Co., 150 ^ Hoyt v. Thompson, 5 N. Y. 320 
 
 A. D. 653, 135 N. Y. Supp. 1070 (1851). 
 (1912); C. C. P. § 1780. It was 
 
876 BUSINESS CORPORATIONS IN NEW YORK §§ 738, 739 
 
 corporation or natural person. ' ' * Once a foreign corporation 
 has begun suit in New York on a cause permitted by statute 
 jt cannot discontinue, even on payment of costs, if the defend- 
 ant objects, even though it has no license to do business in this 
 State." An objection to the legal capacity of a foreign corpo- 
 ration to sue is waived if not raised by demurrer or answer.* 
 
 § 738. Id.: In What Court and County.— The City Court 
 has no jurisdiction of an action by a foreign corporation 
 against a non-resident on a cause not arising in New York 
 city in which the summons was not served in such city.^ The 
 Municipal Court cannot take jurisdiction of an ^.ction by a 
 foreign corporation because its jurisdiction cannot be in 
 excess of that of the County Court, which could not entertain 
 such an action.* An action not specified in the nine hundred 
 eighty-second and eighty-third sections of the Code of Civil 
 Procedure by a foreign corporation should properly be tried 
 in a county in which one of the defendants in this State per- 
 manently resides — and this is not changed by such defend- 
 ant's business interests, official position and temporary 
 sojourn being in another county.' "... a foreign cor- 
 poration operating a railroad in this State is within the 
 contemplation of . . . [the statute providing that an 
 action must be tried in the county in which one of the parties 
 resided at the commencement thereof], is a State corporation 
 and is to be deemed a resident of this State for the purpose 
 of determining the particular locality within the State where 
 its actions shall be tried." ^'' 
 
 § 739. Id.: When May Bring, In General. — An action may 
 be maintained by a foreign corporation in like manner and 
 subject to the same regulations as when the action is brought 
 by a domestic corporation, except as otherwise specially pre- 
 scribed 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 
 
 * Mutual Benefit Life Ins. Co. v. * Lake Geneva Ice Co. v. Selvage, 
 
 Davis, 12 N. Y. 569 (1855). 28 Misc. 581, 59 N. Y. Supp. 544 
 
 = Barney & Smith Car Co. v. Bliss (1899). 
 
 Co., 100 Misc. 21, 164 N. Y. Supp. » Mills & Gibb v. Starin, 119 A. D. 
 
 800 (1917); G«n. Corp. L. § 15. 336, 104 N. Y. Supp. 230 (1907); 
 
 " Pyro-Gravure Co. v. Staber, 30 C. C. P. § 984. 
 
 Misc. 65S, 64 N. Y. Supp. 520 " Policy v. Lehigh Valley Railroad 
 
 (1900) ; C. C. P. §§ 488, 498, 499. Co., 138 A. D. 636, 122 N. Y. Supp. 
 
 'Globe Yarn Mills v. Bilbrough, 708 (1910); aif'd 200 N. Y. 585, 94 
 
 2 Misc. 100, 21 N. Y. Supp. 2 N, E. 1098; C. C. P. § 984. 
 (1892); C. C. P. §§ 315, 316, 1779, 
 3170. 
 
§ 740 FOREIGN CORPORATIONS 877 
 
 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, provided that such prohibition does 
 not affect the validity of a meeting of the stockholders or 
 directors of a foreign corporation held within the State when 
 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 New York State." A 
 foreign corporation is to be barred from suing in the courts of 
 New York only as provided by statute." A foreign corpora- 
 tion may recover in this State the amount of the indebtedness 
 to it of a domestic corporation from one who was a director 
 thereof when the indebtedness was incurred if the domestic 
 corporation's charter makes every director personally liable 
 to an amount in excess of such indebtedness for all debts 
 incurred by his corporation during his administration; and 
 the corporate creditor need not first recover judgment against 
 the corporate debtor." A stockholder's interest in the capital 
 of a domestic corporation is property situated in this State, 
 and an action by him, who is also a stockholder in a foreign 
 corporation owning the stock of the domestic one, in the name 
 of the foreign corporation which has refused to sue, to compel 
 restitution to the foreign corporation of shares of the stock 
 of the domestic corporation which individual directors of the 
 foreign corporation had fraudulently had transferred to them- 
 selves, may be maintained by him in New York and he may 
 have service of process therein by publication, though himself 
 a non-resident." 
 
 § 740. Id.: When Has Not Obtained License to Do Business 
 and Paid Fee Therefor, In General. — No foreign stock corpo- 
 ration doing business in New York State can maintain any 
 action in this 'State upon any contract made by it in this State 
 unless prior to the making of such contract it has procured 
 from the New York 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 
 
 " C. C. P. S 1779. " Holmes v. Camp, 219 N. Y. 359,. 
 
 ^= Fresno Home Packing Co. v. 114 N. E. 841 (1916); C. C. P. 
 
 Turle & Skidmore, GO Misc. 79, 111 § 443, subd. 3; § 438, stibd. 5; 
 
 N. Y. Supp. 839 (1908) ; aff'd 132 § 1780. 
 
 A. D. 930, 117 N. Y. Snpp. 1134; Generally on right of nonresident 
 
 den. Corp. L. § 15. to sue, see note in 70 L.R.A. 513. 
 
 "State Bank of Rock Valley v. 
 Andrews, 2 Misc. 394, 21 N. Y. 
 Supp. 948 (1893). 
 
878 BUSINESS CORPORATIONS IN NEW YORK § 740 
 
 to be carried on in this State is such as may be lawfully 
 carried on by a corporation incorporated under the laws of 
 New York 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." This prohibition 
 also applies to any assignee of such foreign stock corporation 
 and to. any person claiming under such stock corporation or 
 such assignee or under either of them.^° No action can be 
 maintained or recovery had in any of the courts of New, York 
 State by a foreign corporation doing business in this State 
 after thirteen months from the time of beginning such busi- 
 ness within the State without obtaining a receipt from the 
 Comptroller of New York State for the payment of the license 
 fee upon the capital stock employed by it within New York 
 State during the first year of carrying on its business in this 
 State." The statutory requirement that a foreign corpora- 
 tion pay a license fee for the privilege of cajrying on busi- 
 ness in this State is not an express prohibition against doing 
 business without a license but an imposition of a penalty 
 through withholding the right to sue unless a license fee is 
 paid, and is in the nature of a condition subsequent ^ while, 
 the statutory mandate that a foreign corporation do not do 
 business in this State without first procuring a certificate 
 from this State's Secretary is a prohibition against doing busi- 
 ness here and is in the nature of a condition precedent; so 
 that in order to establish a cause of action by a foreign cor- 
 poration in the State compliance with the latter statute must 
 be alleged and proven, while noncompliance with the former 
 must be availed of by answer.^* A foreign corporation not 
 having a license to do business in New York may neverthe- 
 less sue in its courts if it does nothing in this State except in 
 furtherance of interstate commerce.^" The fact that a plain- 
 tiff foreign corporation has, at the time of making a contract 
 in this State on which it sues, paid the franchise tax required 
 by law of foreign corporations duly authorized to do business 
 in this State, will not avail it if it has not prior to the making 
 of the contract obtained a license to do business in New 
 
 ^'^Gen. Corp. L. § 15 (L. 1909, "International Text Book Co. v. 
 
 c. 28). Tone, 220 N. Y. 313, 115 N. E. 914 
 
 ^«Gen. Corp. L. § 15 (L. 1909, (1917); Gen. Corp. L. § 15 (L. 
 c. 28). 1909, c. 23) ; Tax L. § 181 (L. 1909, 
 
 "Tax L. § 181 (L. 1917, c. 490). c. 60), 
 
 " Wood V. Selick & Ball, 190 N. Y. 
 217, 83 N. E. 21 (1907); Tax L. 
 § 181; Gen. Corp. L. § 15. 
 
§§ 741, 742 FOREIGN CORPORATIONS 879 
 
 York.^° A foreign corporation which has no right (by reason 
 of not complying with New York law) to transact the business 
 it carries on in this State as a manufacturing corporation 
 cannot enjoin a domestic corporation from using as its name 
 one identical with that of the foreign corporation if the 
 former has honestly adopted the name only after full inquiry 
 from the Secretary of State of New York of its right to do 
 so, and if there be no proof of any fraudulent intent in adopt- 
 ing such name/ A foreign corporation, though it has not 
 procured a certificate authorizing it to do business here, may 
 have an injunction against the use by a domestic corporation 
 of a name similar to its own, pending a suit by it in this State 
 to enjoin the use of such name on the ground of unfair com- 
 petition ; because th^ statute requiring such a certificate only 
 bars an action on contract by a corporation not obtaining 
 
 § 741. Id.: When Doing Business in New York. — Only foreign 
 corporations " doing business " in New York are within the 
 purview of the statutes prohibiting actions by them in New 
 York imless they have obtained licenses to do business and 
 paid the fees therefor; and what constitutes " doing busi- 
 ness " under these statutes has been already discussed.^ A 
 foreign corporation which is lessee of a building in this State 
 and is "subletting it for profit is engaged in doing business in 
 this 'State.* 
 
 § 742. Id.: On Contract When No License Obtained, In 
 General. — ^^The only penalty imposed by statute upon a 
 foreign corporation doing business in New York for 
 its failure to obtain, prior to the making of a contract 
 in New York by it, a certificate or license from the 
 New York Secretary of State permitting it to do business 
 in this State, is that it may not maintain any action in New 
 York upon any contract made by it in New York before obtain- 
 
 . ^° Emmerich Ck). v. Sloane, 108 § 15. The feet that the plaintiff had 
 
 A. D. 330, 95 N. Y. Supp. 39 not complied with Tax L. § 181, was 
 
 (1905) ; Gen. Corp. L. § 15 (L. 1904, held immaterial. The defendant, 
 
 c. 490) ; Tax L. § 181 (L. 1895, formerly the plaintiff's president, 
 
 c. 240). ' had resigned and immediately 
 
 ^American Tartar Co. v. Ameri- formed the corporation complained 
 
 can Tartar Co., 57 A. D. 411, 68 of, under the name Hoevel Sand- 
 
 N. Y. Supp. 236 (1901). The blast Machine Co. of New York, Inc. 
 
 foreign corporation was incorporated ^ See § 697 et seq., supra. 
 
 before the domestic. * Cassidy's Ltd. v. Rowan, 99 Misc. 
 
 ^ Hoevel Sandblast Machine Co. v. 294, 163 N. Y. Supp. 1079 (1917) ; 
 
 Hoevel, 167 A. D. 548, 153 N. Y. Gen. Corp. L. § 15. 
 Supp. 35 (1915); Gen. Corp. L. 
 
880 BUSINESS CORPORATIONS IN NEW YORK § 742 
 
 ing such license.^ The effect of the statute forbidding any 
 foreign stock corporation doing business in this State to 
 maintain any action in New York on any contract made by it 
 in this State unless prior to the making of such contract it 
 has procured a certificate permitting it to do business in New 
 York is solely to prevent such corporation from suing on 
 such contract in this State ; it does not invalidate the contract 
 or prevent the other party to it from suing such corporation 
 thereon in this State." ". . . the statutory requirement 
 [of obtaining a license] which is made a condition precedent 
 to the maintenance of an action upon contract by a foreign 
 corporation has no application to an action against such cor- 
 poration for tort. ' ' ' The statute prohibiting a foreign cor- 
 poration from bringing action in this State until it had pro- 
 cured a license from the Secretary of State " was simply 
 declaratory of the policy of the State that foreign stock cor- 
 porations should not carry on any business in this State, 
 which similar corporations organized under its laws could not 
 lawfully conduct. Its purpose was not to avoid contracts; 
 but to provide for an effective supervision and control of 
 the business proposed to be carried on here by foreign cor- 
 porations. It provided no penalty, in the event of a non- 
 compliance, other than the suspension of civil remedies."* 
 A foreign corporation must have obtained a license to do 
 business in New York riot only before bringing action on a 
 contract made by it in this State but before entering into the 
 contract, as a condition precedent to suit on the contract.* 
 ". . . the inhibition of the statute, as touching the main- 
 tenance of an action, goes to a case only where the corpora- 
 tion, so doing business, also sues upon a contract made within 
 
 ^ Gen. Corp. L. S 15 (L. 1909, phalte Co. v. The Mayor, 155 N. Y. 
 
 e. 28). 373, 49 N. E. 1043 (1898) ; L. 1892, 
 
 ^Mahar v. Harrington Park Villa c. 687, § 15. 
 
 Sites, 204 N. Y. 231, 38 L.R.A. ' BischofE v. Automobile Touring 
 
 (N.S.) 210, 97 N. E. 587 (1912); Co., 97 A. D. 17, 89 N. Y. Supp. 
 
 Gen. Corp. L. § 15. The older cases, 594 (1904) ; G«n. Corp. L. § 15 (L. 
 
 such as that following, no longer ob- 1901, c. 538). 
 
 tain: The inhibition against action ' Neuchatel Asphalte Co. v. The 
 
 in this State by a foreign corpora- Mayor, 155 N. Y. 373, 49 N. E. 
 
 tion upon a contract made within 1043 (1898) ; L. 1892, c. 687, § 15. 
 
 this State until it shall have pro- * South Amboy Terra Cotta Co. v. 
 
 cured a certificate from the Secre- Poerschke, 45 Misc. 358, 90 N. Y. 
 
 tary of State endures only while it Supp. 333 (1904) ; Gen. Corp. L. 
 
 is without such certificate: the con- § 15, as amend'd L. 1901, c. 538. 
 tract itself stands. Neuchatel As- 
 
§ 743 FOREIGN CORPORATIONS 881 
 
 the State."" To prevent a foreign corporation from suing 
 in this State on a contract made by it on the ground that it 
 has not obtained a license from the Secretary of State it 
 must appear that it is doing business in the State and that the 
 contract was made by it in New York." ' ' The inhibition of 
 the maintenance of an action by a foreign corporation, or its 
 assignee, where no certificate has been procured . . ., is 
 directed only against actions on contracts made within the 
 State, and . . . where the papers do not disclose the 
 fact that the contract was made within the State it is not 
 necessary to aver compliance with the statutory condition in 
 the matter of the certificate, for the purposes of an attach- 
 ment."^^ 
 
 § 743. Id.: What Contracts May Not Be Sued On.— The 
 statute prohibiting a foreign corporation from suing in this 
 State on a contract unless it has obtained a license from the 
 Secretary of State for New York does not apply to such a 
 contract made before the statute was enacted." A foreign 
 corporation doing business in this State before the enactment 
 of the statute prohibiting a foreign corporation from suing 
 in New York unless it had obtained a license from the Secre- 
 tary of State may sue without having obtained such a license 
 on any contract made by it before such enactment, and the 
 fact that the debt on which it sues was not due during the 
 existence of default in filing its annual report does not relieve 
 it from liability." A contract to build and erect elevators 
 in a building in New York for its use made by a foreign cor- 
 poration is not interstate business under the exclusive control 
 of the Federal Government so as to relieve the company 
 from the obligation of securing a license as a prerequisite to 
 suit on the contract in the courts of this State.^^ 'An action 
 
 ^° American Broom & Brush Co. v. as a defense to an action by eorpora- 
 
 Addickes, 19 Mitec. 36, 42 N. Y. tion against officer or agent, see note 
 
 Supp. 871 (1896) ; L. 1912, c. 687, in L.R.A.1916A, 646. 
 
 § 15. ^^ Atlantic Construction Co. v. 
 
 "International Textbook Co. v. Kreusler, 40 A. D. 268, 57 N. Y. 
 
 Connelly, 67 Misc. 49, 124 N. Y. Supp. 983 (1899); Gen. Corp. L. 
 
 Supp. 603 (1910); aff'd 140 A. D. § 15 (L. 1892, c. 687). 
 
 939, 125 N. Y. Supp. 1125; Gen. "Providence Steam Co. v. Con- 
 
 Corp. L. § 15. nell, 86 Hun, 319, 33 N. Y. Supp. 
 
 "Box. Board & Lining Co. v. 482 (1895); Gen. Corp. L. § 15 (L. 
 
 Vineennes Paper Co., 45 Misc. 1, 90 1892, e. 687). 
 
 N. Y. Supp. 836 (1904); aff'd 98 "Portland Co. v. Hall & Grant 
 
 A. D. 623, 90 N. Y. Supp. 1105; Construction Co., 121 A. D. 779, 106 
 
 Gen. Corp. L. § 15. N. Y. Supp. 649 (1907) ; Gen. Corp. 
 
 On failure to comply with condi- L. § 15 (L. 1892, c. 687, as amend'd). 
 tion of doing business in fhe state 
 B.C.N.Y.— 56 
 
882 BUSINESS CORPORATIONS IN NEW YORK § 744 
 
 may be maintained by a foreign corporation doing business 
 in this State w.ithout a license on a unilateral contract by a 
 borrower of money from it within this State to repay ; because 
 the corporation itself makes no contract/® A lease made by 
 a foreign corporation as lessor and a New Yorker as lessee 
 signed by the latter outside the United States but delivered in 
 New York is a contract made in this State." A contract by 
 one foreign corporation with another by which the former 
 ships from a foreign State to the latter in this State goods 
 pursuant to the latter 's order by letter written in this State 
 and mailed to the former outside the State, is not completed 
 until acceptance in such foreign State, and is,. therefore, made 
 there; but, as default in the contract occurs only when the 
 latter corporation makes default in payment, if such payment 
 ought to have been made in New York, the cause of action on 
 the contract arises in New York and suit may be brought 
 in this State.'^ Defendants, one of which is a foreign corpora- 
 tion, if successful in the action, may maintain an action on 
 the undertaking given to obtain an attachment against them 
 in the first action, even though the corporate foreign defend- 
 ant has not obtained a license to do business in this State; 
 because the contract in the undertaking is not one made by 
 it." A foreign corporation may sue in this State to fore- 
 close a mechanic's lien for goods furnished in this State 
 direct to the owner under the only contract by it for work to 
 be done in this State which it has undertaken, though not 
 authorized to do business in New York.^° 
 
 § 744. Id.: By Assignee. — A prohibition against an assignee 
 of a foreign corporation suing on a claim by it under contract 
 when it had not obtained a license in this State added to a 
 statute wliich till then had only debarred the corporation 
 itself from suing does not apply to a contract made before 
 the amendment's passage.^ An action upon a contract made 
 
 "Commercial Coal & Ice Co. v. 159 N. Y. Supp. 979 (City Ct., 
 
 Polhemus, Nos. 1 & 2, 128 A. D. N. Y. C, 1916) ; Gen. Corp. L. § 15. 
 
 247, 112 N. Y. Supp. 566 (1908); ^"New York Terra-Cotta Co. v. 
 
 Gen. Corp. L. § 15. Williams, 102 A. D. 1, 92 N. Y. 
 
 " Cassidy's Ltd. v. Rowan, 99 Supp. 808 (1905) ; aff'd 184 N. Y. 
 
 Misc. 274, 163 N. Y. Supp. 1079 579, 77. N. E. 1192; Lien L. § 3 
 
 (1917) ; Gen. Corp. L. § 15. (L. 1897, c. 418) ; Gen. Corp. L. 
 
 "Shelby Steel Tube Co. v. Bur- § 15 (L. 1901, c. 583). 
 
 gess Gun Co., 8 A. D. 444, 40 N. Y. ^McNamara v. Keene, 49 Misc. 
 
 Supp. 871 (1896) ; C. C. P. § 1780, 452, 98 N. Y. Supp. 860 (1906) ; St. 
 
 subd. 3. Corp. L. § 15, as amend'd L. 1901, 
 
 ^^ Sterling Manufacturing Co. v. c. 538. 
 National Surety Co., 94 Misc. 604, 
 
§§ 745, 746 FOREIGN CORPORATIONS 883 
 
 by ail individiial and assigned to a foreign corporation is 
 not witliin the statutory inhibition of suit by a foreign cor- 
 poration which has not obtained a license to do business/ An 
 action by assignees of receivers of a foreign corporation on a 
 contract made by it in this State before appointment of the 
 receivers for it (in its home State) cannot be maintained by 
 the receivers if it could not have been maintained by the cor- 
 poration when the contract was made by reason of its failure 
 to obtain a license to do business in New York/ 
 
 § 745. Id.: For Any Cause When License Fee Not Paid.— 
 The penalty imposed by statute against a foreign corpora- 
 tion doing business in New York without obtaining within 
 thirteen months from beginning such business a receipt for its 
 license fee is a prohibition against maintenance by it in this 
 State of any action.* The prohibition in the Tax Law against 
 a foreign corporation maintaining any action unless it has 
 paid its license fee applies only to a foreign corporation 
 " authorized to do business under the General Corporation 
 Law " ; so that a foreign corporation not shown to need a 
 license to do business in this State is not within the prohibi- 
 tion.° Neither a foreign corporation which has done busi- 
 ness in this State for more than one year and has not a receipt 
 for its license fee, nor its assignee has any standing to sue in 
 a New York court.® Failure of a foreign corporation to 
 obtain a certiiicate of authority does not prevent it from 
 recovering on a counterclaim put forward by it to an action 
 on a contract against it in this State ; but its failure to pay a 
 license tax does.'' 
 
 § 746. Id.: Pleading, Practice and Evidence, In General.— 
 While a foreign corporation appearing in court must estab- 
 lish its right to bring the suit and make the contract it seeks 
 to enforce, it need not set forth in the pleadings the authority 
 on which it sustains its right but may show it on the hearing 
 of the cause.* On a motion by defendants to compel plaintiff 's 
 
 '^ O'Reilly, Skelly & Fogarty Co. v. ® Kinney v. Reid Ice Cream Co., 
 
 Greene, 18 Misc. 423, 41 N. Y. Supp. 57 A. D. 206, 68 N. Y. Supp. 325 
 
 1056 (1896). (1901); Tax L. § 181 (L. 1896, 
 
 ^ Myers v. Spangenberg & McLean c. 908). 
 
 Co., 65 Misc. 475, 120 N. Y. Supp. '' American Ink Co. v. Riegel Sack 
 
 174 (1909) ; Gen. Corp. L. § 15 (L. Co., 79 Misc. 421, 140 N. Y. Supp. 
 
 Ifl04, c. 490). 107 (1913) ; Gen. Corp. L. § 15 and 
 
 * Tax L. § 181 (L. 19-17, c. 490>. Tax L. § 181. 
 
 ^ Portland Co. v. Hall & Grant * Marine & Fire Ins. Bank of Ga. 
 
 Construction Co., 121 A. D. 779, 106 v. Jaunoey, 1 Barb. 486 (1847). 
 N. Y. Supp. 649 (1907) ; Gen. Corp. 
 L. § 15 (L. 1904, c. 490'); Tax L. 
 § 181 (L. 1901, c. 558). 
 
884 BUSINESS CORPORATIONS IN NEW YORK §§ 747, 748 
 
 attorneys to produce their authority for commencing an 
 action by their client, a foreign corporation, the question 
 whether the plaintiff has ceased to exist under the laws of its 
 home State cannot he gone into." 
 
 § 747. Id.: Verification of Pleadings. — The agent of or the 
 attorney for a foreign corporation may verify a pleading by 
 it." 
 
 § 748. Id.: Statement and Proof of Corporate Name and 
 Incorporation. — In an action or special proceeding brought 
 by a corporation the defendant is deemed to have waived anj^ 
 mistake in the statement of the corporate name unless the 
 misnomer is pleaded in the answer or other pleading in the 
 defendant's behalf." In an action brought by a foreign cor- 
 poration the complaint must state it to be such and the State, 
 country or government by or under the laws of which it was 
 created, but need not set forth or specially refer to any act 
 or proceeding by or und«r which it was created." In an 
 action brought by 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 cor- 
 poration.^" ". . . an omission to set forth the State, 
 country or government by or under whose laws the alleged 
 foreign corporation was created, cannot be said to be one of 
 substance which can be taken advantage of by demurrer. ' ' " 
 Whenever, by the laws of any other state or territory, or the 
 Dominion of Canada, a copy of the certificate of organization 
 or incorporation or any other certificate, certified or exempli- 
 fied by any officer or officers in such state or territory or 
 dominion, is or shall be prima facie evidence of the due forma- 
 tion, creation, existence, organization or capacity of any 
 corporation created, organized or located in such state, terri- 
 tory or dominion, or claiming so to be, such certificate or 
 certificates, duly exemplified, or a duly exemplified copy 
 thereof, must be received in all actions and proceedings in 
 New York 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."* 
 
 ° Havana City Ry. Co. v. Ceballos, " Fraser v. Granite State Provi- 
 25 Misc. 660, 56 N. Y. Supp. 360 dent Assn., 8 Misc. 7, 28 N. Y. Supp. 
 
 (1898). 65 (1894) ; C. C. P. § 1775. 
 
 " C. C. P. § 525. "^ Gen. Corp. L. § 9, para. 2 
 
 " C. C. P. § 1777. (L. 1909, c. 28). In United States 
 
 ^^ C. C. P. § 1775. Vinegar Co. v. Schlegel, 143 N. Y. 
 
 ^"C. C. P. ■§ 1776. 537, 38 N. E. 729 (1894), it was 
 
§§ 749-751 FOREIGN CORPORATIONS 885 
 
 § 749. Id.: Security for Costs.— The defendant in an action 
 brought in a court of record may require security for costs 
 to be given when the plaintiff was when the action was com- 
 menced a foreign corporation; but if there are two or more 
 plaintiffs the defendant cannot require security for costs to 
 be given unless he is entitled to require it of all the plaintiffs." 
 
 § 750. Id.: Corporate Books. — A foreign corporation suing 
 in this State may be compelled to allow the one it sues to 
 inspect its books as to matters to which such one is entitled 
 to a discovery in connection with the action.^* 
 
 § 751. Id.: As to Obtaining License and Paying Fee for 
 Privilege of Doing Business In New York, In General. — 
 ". . . when a foreign corporation brings a suit in the 
 courts of this State and states a good cause of action in the 
 complaint, it will be assumed that it is rightfully in the State 
 and properly in the court until the contrary is made to 
 appear."" A complaint by a foreign corporation alleging 
 upon its face a good cause of action cannot be dismissed if 
 there is nothing before the trial court warranting the pre- 
 sumption that it is doing business in this State.^* A motion 
 to dismiss without stating the ground, based on failure of 
 proof of issuance to a- plaintiff foreign corporation of a cer- 
 tificate authorizing it to do business in the State, cannot be 
 urged for the first time upon appeal." What is stated in the 
 bill of particulars given by a foreign plaintiff corporation is 
 not to be considered in determining whether or not it is 
 entitled to sue by reason of not having obtained a license 
 to do business in New York.^" A foreign manufacturing 
 
 held that proof of the eorporate nent to the defendant's claim to the 
 
 character of a foreign corporation latter, verified by an officer of the 
 was not sufficiently made by putting ' former, and to exhibit its books, so 
 
 in evidence the certificate of the sec- far as pertinent, to defendant at its 
 
 retary of its home state that it. is home office on reasonable (two 
 
 duly incorporated and a certificate days') notice. 
 
 signed and acknowledged by five " Eclipse Silk Mfg. Co. v. Hiller, 
 
 persons described as incorporators, 145 A. D. 568, 129 N. Y. Supp. 879 
 
 duly filed in such secretary's office; (1911); Gen. Corp. L. § 15. 
 
 but proof should also be made of the ^^ Alpha Portland Cement Co. v. 
 
 law of the home state that such Schratwieser Fireproof Construction 
 
 papers established the corporate Co., 146 A. D. 571, 131 N. Y. Supp. 
 
 character. 142 (1911) ; Gen. Corp. L. § 15. 
 
 ^^ C. C. P. §§ 3268, 3270. " Boynton Furnace Co. v. Trohn, 
 
 " National Distilling Co. v. Van 141 A. D. 773, 136 N. Y. Supp. 695 
 
 Emden, 120 A. D. 746, 105 N. Y. (1910) ; Gen. Corp. L. § 15. 
 
 Supp. 657 (1907). But, rather than '" St. Albans Beef Co. v. Aldridge, 
 
 make the plaintiff bring its books to 112 A. D. 803, 99 N. Y. Supp. 398 
 
 this State, it will be ordered to give (1906) ; Gen. Corp. L. § 15 (L. 1904, 
 
 a copy of the parts thereof perti- c. 490). 
 
886 BUSINESS CORPORATIONS IN NEW YORK § 752 
 
 corporation having its principal and so far as affects this 
 State its only office in its home State cannot be considered to 
 be doing business in this State so as to have to obtain, and 
 allege in an action the obtention of a license to do business in 
 New York, because it employed an agent who resided in New 
 York and sold the goods for the price of which the action is 
 brought under a written contract addressed to and accepted 
 by the corporation in its home State.^ A note made in another 
 State and sued on here by a foreign corporation is not a con- 
 tract made in this State so as to require proof by the corpora- 
 tion that it has obtained a license to do business in New York 
 as a condition precedent to bringing action on the note/ 
 
 § 752. Id.: As to Pleading or Proving Corporation Is a Stock 
 Corporation. — When it is alleged that the plaintiff is a foreign 
 corporation, there is a presumption that it is a foreign stock 
 corporation, and if it appear that the action is on a contract 
 made in this State no cause of action is stated unless the com- 
 plaint allege that the plaintiff has received a license to do 
 business in New York.^ A foreign corporation doing busi- 
 ness in New York and not alleged or proven to be a stock 
 corporation must, if a complaint by it aver its compliance with 
 the laws of this State and an answer thereto deny this specifi- 
 cally, prove on the trial that it has complied with the statute 
 governing foreign corporations or else be out of the Courts 
 of New York.* From a complaint by a foreign corporation 
 which shows on its face that it is a corporation doing business 
 and which could have been incorporated in New York as a 
 stock but not as a membership corporation, it will be assumed 
 that it is a stock corporation ; and, if it is suing on a contract 
 made by it in New York, it must allege compliance with the 
 statute requiring it to obtain a license.^ If there be no alle- 
 gation in answer to a complaint by a foreign corporation that 
 it is a stock corporation, and the complaint does not make the 
 fact appear, no defense can be set up against the plaintiff's 
 right to sue on the ground that it has not obtained a license 
 to do business in the State.® 
 
 ^ Harvard Co. v. Wicht, 99 A. D. * Strout Farm Agency v. Hunter, 
 
 507, 91 N. Y. Supp. 48 (1905) ; Tax 85 Misc. 476, 148 N. Y. Supp. 924 
 
 L.J 181 (L. 1896, c. 908). (1914); Gen. Corp. L. §§ 15, 16. 
 
 - Great Northern Moulding Co. v. ° Chicago Crayon Co. v. Slattery, 
 
 Bonewur, No. 1, 128 A. D. 831, 113 68 Misc. 148, 123 N. Y. Supp. 987 
 
 N. Y. Supp. 60 (1908) ; Gen. Corp. (1910) ; Gen. Corp. L. § 15. 
 
 L. §15. "Portland Co. v. Hall & Grant 
 
 ' Portland Co. v. Hall & Grant Construction Co., 121 A. D. 779, 106 
 
 Construction Co., 123 A. D. 495, 108 N. Y. Supp. 649 (1907) ; Gen. Corp. 
 
 N. Y. Supp. 821 (1908) ; Gen. Corp. L. § 15 (L. 1904, c. 490). 
 •L. § 15 (L. 1892, e. 687). 
 
§§ 763-755 FOREIGN CORPORATIONS 887 
 
 § 753. Id.: When No License Fee Paid.— A defendant in an 
 action by a foreign corporation or its assignee seeking to 
 defeat it by reason of the corporation's failure to pay its 
 license fee to the Secretary of this State must allege in the 
 answer that the amount of the license fee had been assessed 
 by the comptroller and that more than thirty days had elapsed 
 before the fee was paid.' 
 
 § 754. Id. : When Assignee Sues. — ' ' . . . the defense avail- 
 able against the [foreign] corporation under the statute 
 [requiring it to pay a tax or otherwise not to sue] would also 
 be good as against the [corporation's] assignee [suing here] 
 except as to negotiable paper taken in good faith from the 
 corporation before maturity."* The assignee of a foreign 
 corporation cannot sue on a contract made by the latter in 
 the State where it did business without alleging and proving 
 that the assignor corporation had obtained the statutory 
 license to do business in New York.® An individual assignee 
 of a foreign corporation suing in this State need not allege 
 that the assignor is a foreign corporation and that it is 
 created under the laws of such ,or such a State and country ; 
 but if he did have to. do so, an allegation that the assignor 
 is e. 5^., " a Pennsylvania corporation " suffices." 
 
 § 755. Id.: Necessity and Manner of Pleading in Complaint. — 
 A complaint in an action by a foreign corporation on contract 
 should not be dismissed on the ground that it has not 
 obtained the statutory certificate to do business if the com- 
 plaint and the answer, neither one, alleges the corporation 
 is doing business or the contract was made in this State, and 
 there is no evidence to such effect.^^ A foreign stock corpora- 
 tion is properly nonsuited if its complaint does not allege 
 obtention by it of a license to do business in New York.^^ 
 When it appears from a complaint that the plaintiff is a 
 foreign stock corporation which must have procured a certifi- 
 cate from the Secretary of State before it made the contract 
 
 ' Halsey v. Jewett Dramatic Co., ^^ Stafford Manufacturing Co. v. 
 
 190 N. Y. 231, 83 N. E. 25 (1907) ; Newman, 75 Misc. 636, 133 N. Y. 
 
 Tax L. § 181. Supp. 1073 (1912) ; Gen. Corp. L. 
 
 * Halsey v. Jewett Dramatic Co., § 15. 
 
 190 N. Y. 231, 83 N. E. 25 (1907) ; "Wood v. Seliek & Ball, 114 
 
 Tax L. § 181. A. D. 743, lOO N. Y. Supp. 119 
 
 " Manufacturers' Commercial Co. (1906) ; aff'd 190 N. Y. 217, 83 N. E. 
 
 V. Blitz, 131 A. D. 17, 115 N. Y. 21; Gen. Corp. L. § 15 (L. 1901, 
 
 Supp. 402 (1909); Gen. Corp. L. c. 538); C. C. P. § 499. But see 
 
 § 15. O'Reilly, Skelly & Fogarty Co. 
 
 "Roberts v. Pioneer Iron Works, v. Greene, 18 Misc. 423, 41 N. Y. 
 
 125 A. D. 207, 109 N. Y. Supp. 230 Supp. 1056 (1890) ; L. 1892, c. 687, 
 
 (1908) ; C. C. P. § 1775. § 15. 
 
388 BUSINESS CORPORATIONS IN NEW YORK § 756 
 
 sued on, the complaint is demurrable unless it allege that such 
 certificate has been obtained." " If a foreign corporation 
 alleges in its complaint that it is doing business in this State 
 and alleges the making of the contract sued upon in this State 
 it must also allege compliance with section fifteen of the Gen- 
 eral Corporation liaw, otherwise the complaint is demurrable 
 {citation). ... a complaint states a good cause of action 
 and is not demurrable unless it appears on the face of the 
 complaint that the foreign corporation was doing business 
 in this State and that it made the contract sued upon in this 
 State. " " It is a necessary statement of a cause of action by 
 a foreign corporation doing business in this State seeking to 
 recover on a contract made by its agent in this State that 
 it allege that it is so doing business and that before making 
 the contract it had procured the proper certificate from the 
 Secretary of State." A statement in a complaint by a foreign 
 corporation on a contract that it is such and is duly authorized 
 to do business in New York is a conclusion of fact sufficient to 
 comply with the statutory mandate that it shall have procured 
 a certificate to do business.'^ 
 
 § 756. Id.: Necessity and Manner of Pleading, As Defense. — 
 The cases in this section on pleading compliance or non-com- 
 pliance with the New York State statutes governing foreign 
 corporations operating in this State must be considered 
 together with the cases in the next section on proving such 
 compliance or non-compliance, in whatever condition the 
 pleadings may be. The absence of an averment in a complaint 
 by a foreign corporation that it has paid the New York statu- 
 tory license fee is not a demurrable defect." ". . . a 
 failure on the part of a foreign corporation doing business in 
 this State to allege due authority thus to transact business 
 does not affect the substance of ' a claim by it ' and is not 
 available upon a demurrer that the complaint does not state 
 facts sufficient to constitute a cause of action. " " A defendant 
 seeking to avoid payment claimed to be due a foreign corpora- 
 
 ^* Welsbach Co. v. Norwich Gas & " United Building Material Co. v. 
 
 Electric Co., 96 A. D. 52, 89 N. Y. Odell, 67 Misc. 584, 123 N. Y. Supp. 
 
 Supp. 284 (1904) ; aflE'd 180 N. Y. 313 (1910) ; Gen. Corp. L. § 15. 
 
 533, 72 N. E. 1152; Gen. Corp. L. ^^ O'Reilly, Skelly & Fogarty Co. 
 
 § 15 (L. 1892, c. 687). v. Green, 18 Misc.. 423, 41 N. Y. 
 
 "Frick Co. v. Pultz, 162 A. D. Supp. 1056 (1896); L. 1895, c. 240. 
 
 209, 147 N. Y. Supp. 732 (1914) ; i» Emmerich v. Sloane, 108 A. D. 
 
 Gen. Corp. L. § 15; C. C. P. § 1779. 330, 95 N. Y. Supp. 39 (1905) ; Gen. 
 
 "Angldile Computing Scale Co. Corp. L. § 15 (L. 1904, c. 490). 
 V. Gladstone, 164 A. D. 370, 149 
 N. Y. Supp. 807 (1914) ; Gen. Corp. 
 L. § 15. 
 
§-756 FOREIGN CORPORATIONS 889 
 
 tion plaintiff under a contract on the ground that the making 
 of it by plaintiff was void as constituting " doing business " in 
 this State without having obtained a certificate, ' etc., from 
 the Secretary of State, must allege in his answer that the 
 plaintiff is a foreign corporation doing business in the State 
 if the complaint does not show these facts.™ The point that 
 a foreign corporation bringing suit has not obtained a license 
 to do business in New York need not be covered by affirmative 
 allegation in the complaint but must be raised as matter of 
 defense to be taken advantage of.^ The objection to the main- 
 tenance of an action by a foreign corporation that it has not 
 complied with legal requirements permitting it to do business 
 in New York is an affirmative defense which must be plead to 
 be made available.^ An objection that a foreign corporation 
 plaintiff cannot recover in an action without showing that it 
 had complied with the statute requiring a foreign corpora- 
 tion to obtain from the Secretary of State a certificate of 
 authority to do business in New York is not tenable unless 
 affirmatively set out as matter of defense in the answer.^ It 
 has been held that a defendant, by generally denying upon 
 information and belief ^ foreign corporation's complaint, 
 waives its right to question the plaintiff's failure to plead 
 compliance with the laws of New York in regard to permis- 
 sion to do business in this State.* ". . . if the complaint 
 in an action by a foreign corporation shows that the cause of 
 action alleged is upon a contract made in this State by a 
 foreign corporation which is doing business in this State, and 
 fails to allege that the corporation had, before making the 
 contract, procured the certificate required by section fifteen 
 of the General Corporation Law, then, in that event, the conj- 
 plaint is demurrable."* ". . . if the complaint in an action, 
 
 ^^ Angldile Computing Scale Co. ^ Woodward Lumber Co. v. Gen- 
 V. Gladstone, 164 A. D. 370, 149 ' eral Supply and Construction Co., 
 
 N. Y. Supp. 807 (1914); Gen. Corp. 60 Misc. 367, 113 N. Y. Supp. 628 
 
 L. § 15. (1908). Per contra: "It does not 
 
 ^NicoU V. Clark, 13 Misc. 128, 34 appear from the complaint, nor can 
 
 N. Y. Supp. 159 (1895) ; L. 1892, it be inferred from the facts pleaded 
 
 c. 687, § 15. therein, that the plaintiff was doing 
 
 ^ Fuller & Co. v. Schrenk, 58 business in this State or that the 
 
 A. D. 222, 88 N. Y. Supp. 781 contract which is the basis of this 
 
 (1901) ; afe'd 171 N. Y. 671, 64 N. E. action was made in this State. That 
 
 1126; G«n. Corp. L. § 15 (L. 1892, being the fact, the complaint is not 
 
 c. 687). demurrable because it fails to allege 
 
 'International Society v. Dennis, that the plaintiff procured from the 
 
 76 A. D. 327, 78 N. Y. Supp. 497 Secretary of State the certificate re- 
 
 (1902) ; L. 1892, c. 687, § 15. f erred to." 
 
 * Harris Press Co. v. Demarest 
 Pattern Co., 47 Misc. 624, 94 N. Y. 
 Supp. 462 (1905). 
 
890 BUSINESS CORPORATIONS IN NEW YORK § 757 
 
 brought either by the corporation or its assignee, shows that 
 the cause of action alleged was upon a contract made in this 
 State by a, foreign stock corporation which is doing business 
 in this State, the complaint is demurrable if it fails to allege in 
 addition that the corporation had before making the contract 
 procured the certificate required by section fifteen of the 
 General Corporation Law (citations). The prohibition by the 
 statute of the enforcement of contracts made by a foreign 
 corporation extends only to actions upon contracts made 
 within this State by a foreign stock corporation (other than 
 a moneyed corporation) doing business within this State 
 (citation). It follows that, unless the complaint shows these 
 facts as to the character of. the corporation, and its doing busi- 
 ness and making the contracts within the State, the complaint 
 is not demurrable because it fails to allege that the required 
 certificate was procured. ' ' * An answer to a complaint by a 
 foreign corporation should be allowed to be amended on the 
 trial so as to permit an allegation that plaintiff was a foreign 
 corporation doing business in New York which had not 
 secured a license, if the pleadings failed to aver that plaintiff 
 was doing business in this State, as such an amendment would, 
 if established, defeat plaintiff's right of recovery and plaintiff 
 could not claim surprise/ 
 
 § 757. Id.: Necessity and Maimer of Proof Of Compliance 
 or Non-compliance with Statute.— Proof of the corporate char- 
 acter of a foreign corporation is not sufficiently made by 
 putting in evidence the certificate of the Secretary of its home 
 State that it is duly incorporated and a certificate signed and 
 acknowledged by five persons described as incorporators, duly 
 filed in such Secretary's oflfice; but proof should also be made 
 of the law of the home State that such papers established the 
 corporate character.* A foreign corporation suing in this 
 State on a written contract, which avers it is a foreign cor- 
 poration and has obtained a license to do business in New 
 York, and which averment is denied, has the burden of prov- 
 ing this as a condition precedent to recovery." A certificate 
 of incorporation of a plaintiff in a foreign State and a cer 
 tificate of nonpayment by plaintiff of the statutory license 
 
 "Union Trust Co. v. Sickels, 125 * United States Vinegar Co. v. 
 
 A. D. 105, 109 N. Y. Supp. 262 Schlegel, 143 N. Y. 537, 38 N. E. 
 
 (1908) ; Gen. Corp. L. § 15. 729 (1894). 
 
 'Steiger Trunk & Bag Co. v. » Pittsburgh Plate Glass Co. v. 
 
 Whamcliffe, 62 Misc. 14, 114 N. Y. Ravitch, 58 Misc. 191, 108 N. Y. 
 
 Supp. 462 (1909'); Qen. Corp. L. Supp. 1103 (1908); Gen. Corp. L. 
 
 £ 15. § 15. 
 
§ 758 FOREIGN CORPORATIONS 891 
 
 fee in New York are insufficient to throw plaintiff out of court, 
 in an action by it in this State to recover for goods sold." 
 Proof of compliance with the statute requiring a foreign cor- 
 poration doing business in New York to secure a license from 
 the Secretary of State must be made by the corporation or its 
 assignee when suing on a contract by the corporation made in 
 New York ; non-compliance is not a matter of defense." When 
 the evidence properly admitted on the trial in an action by a 
 foreign corporation shows it is a foreign stock corporation 
 doing business in New York State and suing on a contract 
 made within this State, it must prove it has obtained author- 
 ization to do business within this State before the making of 
 the contract in order to recover, even though no such defense 
 was raised in the answer." 
 
 § 758. Id.: Actions Against, In General. — The statute per- 
 mitting actions against foreign corporations is not uncon- 
 stitutional because it is not in terms limited to foreign cor- 
 porations doing business in the State." New York courts 
 obtain jurisdiction of an action by a resident against a foreign 
 corporation engaged in business in this State though the 
 cause of action sued on has no relation in its origin to the 
 business here transacted." A foreign corporation is doing 
 business in New York so as to be subject to suit by a 
 resident if it maintains an office here in charge of one 
 soliciting business for it upon the door of which is its 
 name and upon the stationery of which person is its name, 
 the office expenses being paid by it; though the agent did 
 business on his own account also, and it had no property in 
 this State except office furniture, and its transactions in New 
 York were not numerous or continuous though substantial, 
 and were always submitted to it for approval by its agent.^^ 
 A foreign corporation is subject to the general jurisdiction of 
 the courts of this State if they have jurisdiction of the subject 
 of the action and personal service is made on it according to 
 
 " Stem V. Childs, 26 Misc. 419, ^' Interocean Forwarding Co. v. 
 
 56 N. Y. Supp. 192 (1899) ; L. 1896, McCormick & Co., — Misc.— 
 
 c. 908, § 181. (1917) ; N. Y. L. J. Dee. 28; N. Y. 
 
 ^^Manufacturers' Commercial Co. Sp. T.; C. C. P. § 1780. 
 
 V. Blitz, 131 A. D. 17, 115 N. Y. " Tanza v. Susquehanna Coal Co., 
 
 Supp. 402 (1909) ; Gen. Corp. L. 220 N. Y. 259, 115 N. E. 915 (1917). 
 
 § 15. ^' Interocean Forwarding Co. v. 
 
 ^^ American Can Co. v. Grassi McCormick & Co., — Misc. — 
 
 Contracting Co., Inc., 102 Misc. 230, (1917) ; N. Y. L. J. Dec. 28, Sp. T. 
 
 168 N. Y. Supp. 689 (1918). N. Y. Co.; C. C. P. § 1780. 
 
892 BUSINESS CORPORATIONS IN NEW YORK § 758 
 
 the statute.^' The court should exercise its discretion in 
 deciding if it will assume jurisdiction of an action by a non- 
 resident against a foreign corporation doing business in New- 
 York for a tort not done in connection with such business but 
 outside the State." The courts of this State may well decline 
 to exercise an equitable jurisdiction over a foreign corpora- 
 tion in a cause of action which arises abroad, affects only the 
 internal management of the corporation, and the judgment 
 in which can only be enforced by injunction against its individ- 
 ual members; but may send the party complaining to the 
 State where the corporation has a legal existence.^* A stock- 
 holder of a foreign corporation will not be aided by the courts 
 of this State in the administration of its assets after its legal 
 death by merger in another through an action to compel the 
 consolidated corporation, also a foreign corporation, to 
 account to the complaining stockholder and such other stock- 
 holders similarly situated as come in and contribute.^" A 
 defendant which is a foreign corporation and has no property 
 in New York cannot be bound by a judgment rendered against 
 it in an action in the courts of this State on a cause arising 
 in a foreign State, enforceable whenever any of its property 
 comes within this State.^° Once a foreign corporation has 
 appeared in an action in a New York court it is as subject 
 to the court's jurisdiction as if it were a domestic corpora- 
 tion.^ An appearance by a defendant foreign corporation by 
 attorney under a notice demanding a copy of the complaint 
 and stating that he waived no rights to contest the service of 
 the summons or contest the court's jurisdiction is a special 
 appearance.^ A foreign corporation waives any defect in 
 obtaining jurisdiction of it by appearing specially in the State 
 to remove the action to the Federal court, and moving to open 
 a judgment entered against it in the State court by default 
 
 " Heney v. Chartered Co., 71 '" Guffey v. Grand Trunk Ry. Co., 
 
 Misc. 237, 128 N. Y. Supp. 436 67 Misc. 553, 122 N. Y. Supp. 947 
 
 (1911). (1910). 
 
 " Waisikoski v. Philadelphia & ^ Dart v. Farmers' Bank at Bridge- 
 Reading Coal & Iron Co., 173 A. D. port, 27 Barb. 337 (1858). 
 538, 159 N. Y. Supp. 906 (1916); ^Eastern Products Corp'n v. 
 C. C. P. § 1780 (L. 1913, c. 60). Tenn. Coal & Iron R. R. Co., — 
 
 '* Howell V. Chicago & Northwest- Misc. — (1918) ; N. Y. L. J. Feb. 
 
 em Ry. Co., 51 Barb. 378 (1868). 27, Sp. T. N. Y. Co.; Gen. Corp. L. 
 
 •'Howe V. New York, New Haven §§ 15, 16; C. C. P. § 432, subd. 4. 
 & Hartford R. R. Co., 142 A. D. 
 451, 126 N. Y. Supp. 1090 (1911). 
 
§ 758 FOREIGN CORPORATIONS 893 
 
 after the action has been remanded to the State court.^ Action 
 may be brought in New York to which a foreign corporation 
 is a defendant if it is such because it refused to maintain the 
 action (brought by a stockholder) and if the action is to deter- 
 mine "the ownership of property over which the court has 
 jurisdiction and the foreign corporation is a necessary party 
 to such determination and if the foreign corporation does not 
 raise any objection to its being a party .^ A court which has 
 not been given jurisdiction of an action against a foreign cor- 
 poration cannot obtain it by the consent of the defendant ; and 
 the objection to the jurisdiction may be raised at any time, 
 even on appeal.^ The Supreme Court in one district may, 
 by order in a proceeding by a stockholder of a foreign cor- 
 poration for the appointment of an ancillary receiver and the 
 winding up of its affairs, enjoin an action already com- 
 menced by a creditor to enforce his claim in the Supreme 
 Court in another district, in connection with enjoining all 
 other actions against the corporation ; the order need not be 
 made in the creditor's action to bind him.® Stockbrokers 
 buying and selling cotton futures for a foreign savings bank 
 cannot recover from it a balance due when the transactions 
 are closed; not even on the theory that the contract, though 
 idtra vires, was executed, if the bank retained or had none of 
 the benefits therefrom/ The failure of a foreign corporation 
 to obtain a license to do business in this State does not permit 
 it to take advantage of its failure to defeat an action brought 
 against it here, as the statute requiring such a license was 
 not enacted for the benefit of foreign corporations.* Plain- 
 tiffs in an action against a foreign corporation in which they 
 are stockholders are bound by a judgment upon a similar 
 cause of action in favor of a stockholder whether the latter 
 action purported to be brought in behalf of all other stock- 
 holders or not.' An order modifying an injunction against 
 
 ^ Tiemey v. Helvetia Swiss Fire ' Jemison v. Citizens' Savings 
 
 Insurance Co., 138 A. D. 469, 122 Bank, 44 Hun, 412 (1887); 122 
 
 N. Y. Supp. 869 (ig'lO). N. Y. 135, 9 L.R.A. 708, 25 N. E. 
 
 * Holmes v. Camp, 219 N. Y. 359, 264. 
 
 114 N. E. 841 (1916); C. C. P. ^Gaul v. Kiel & Arthe Co., 199 
 
 § 1780. N. Y. 472, 92 N. E. 1069 (1910') ; 
 
 °Parkhurst v. Rochester Machine Gen. Corp. L. § 15. 
 
 Co., 65 Hun, 489, 20 N. Y. Supp. ^ Grant v. Greene Consolidated 
 
 395 (1892). The court was the Copper Co., 169 A. D. 206, 154 N. Y. 
 
 County Court. Supp. 596 (1915). 
 
 ° Phoenix Foundry v. North River 
 Construction Co., 33 Hun,- 156 
 (1884). 
 
894 BUSINESS CORPORATIONS IN NEW YORK § 759 
 
 prosecuting any suit against a foreign corporation, given on 
 appointment of an ancillary receiver for it in New York, so 
 as to not make it applicable to a certain creditor, cannot be 
 legally made if the only reason for the modification alleged 
 is the statement that the corporation was insolvent, atid its 
 directors knew it was, Avhen it bought the goods on which such 
 certain creditor's claim arises.^" The common law rule that 
 the dissolution of a corporation abates actions pending against 
 it will be held in this State not to apply to a foreign corpora- 
 tion here sued if a statute of the State of the corporation's 
 incorporation provides that its incorporations shall continue 
 bodies corporate even after dissolution for the purpose of 
 prosecuting and defending suits and of settling and closing 
 their affairs, because such a statute, regulating as it does 
 the corporation's existence and power, has extraterritorial 
 operation and effect even as does the statute under which 
 the corporation was created." A foreign corporation, dis- 
 solved and dead by decree of dissolution in its home State, is 
 alive in this State insofar as to permit action to be brought 
 against it, and its assets here, with which it is doing business 
 in New York, applied to payment of the liens of its creditors 
 in New York/^ An action against a foreign corporation for 
 which a liquidator has been appointed by its home country 
 on its dissolution cannot be continued against its directors 
 as trustees, not alleged to possess any of its property." 
 
 § 759. Id.: Who May Sue and For What, In General.— An 
 action against a foreign corporation may be maintained by 
 a resident of New. York State or a domestic corporation for 
 any cause of action, and by a foreign corporation or a non- 
 resident (1) when the action is to recover damages for the 
 breach of a contract made within New York State or 
 relating to property situated within New York State at the 
 time of the making thereof, (2) when the action is to recover 
 real property situated within New York State or a chattel 
 which is replevied within New York State, (3) when the 
 cause of action arose within New York State except when the 
 
 "Carson v. New York Terminal 585 (1901); dism'd 168 N. Y. 262, 
 
 Express Co., 74 Hun, 536, 26 N. Y. 61 N. E. 244. 
 
 Siipp. 639 (1893). "Wamsley v. Horton & Co., 12 
 
 "Sinnott v. Hanan, 214 N. Y. A. D. 312, 42 N. Y. Supp. 767 
 
 454, 108 N. E. 858 (1915) ; New (1896) ; afPd 153 N. Y. 687, 48 N. E. 
 
 Jersey Corporation sned in New 1105; C. C. P. § 757; Gen. Corp. L. 
 
 York. The statute was § 53 of the § 30 (L. 1892, c. 687). The latter 
 
 Corporation Act of New Jersey. statute does not apply to foreign 
 
 ^^ Hammond v. National Life corporations. 
 Assn., 58 A. D. 453, 69 N. Y. Supp. 
 
§ 759 FOREIGN CORPORATIONS 895 
 
 object of the action is to affect the title to real property 
 sitviated without New York State, and (4) when a foreign 
 corporation is doing business within New York State." The 
 decisions given in this section relate to actions against foreign 
 corporations by resident individuals or domestic corpora- 
 tions : — actions against foreign corporations by non-resident 
 individuals and foreign corporations have previously been 
 discussed.^' " An action against a foreign corporation can 
 be brought in the courts of this State only, 1st. By a resident 
 of this State, for any cause of action. 2d. By a plaintiff not 
 a resident of this State, when the cause of action has arisen, 
 or the subject of the action is situated, within this State. "^* 
 The jurisdiction of the Supreme Court of New York of an 
 action against a foreign corporation is limited to one " to 
 recover damages for the breach of a contract, made within 
 the State or relating to property situate within the State at 
 the time of the making thereof, or where it is brought to 
 recover real property situate within the State or a chattel 
 which is replevied within the State, or where the cause of 
 action arose within the State, except when the object of the 
 action is to affect the title to real property situate without 
 the State."" In order that an individual may maintain an 
 action against a foreign corporation he must either show that 
 he is a resident or that the cause of action arose within this 
 State: " it is immaterial that some prior owner of the claim 
 may have been a resident of this State. ' ' ^' Under a statute 
 allowing suit against a foreign corporation by " a resident of 
 this State,'' an executor, residing in this State, of a non-resi- 
 dent's estate, may sue.^® " While section seventeen hundred 
 and eighty of the Code of Civil Procedure provided that an 
 action may be maintained by a resident of this State against 
 a foreign corporation for any cause of action, it has not been 
 held that the section requires the courts of this State to take 
 jurisdiction in this class of actions simply because an admin- 
 
 " C. C. P. § 1780. ^^ Coolidge v. American Realty 
 " See § 736, supra. Co., 91 A. D. 14, 86 N. Y. Supp. 318 
 " House V. Cooper, 30 Barb. 157 (1904) ; C. C. P. § 1780. " It is the 
 (1858). Decided before the amend- status existing, where the cause of 
 ment relating to foreign corpora- action arose out of the State, at the 
 tions doing business in New York. time of the commencement of the 
 " Ervin v. Oregon Ry. &, Naviga- action, which determines the . ques- 
 tion Co!, 28 Hun, 269 (1882) ; C. C. tion as to whether the court can ac- 
 P. § 1780. , The statute since has quire jurisdiction by attachment." 
 added the provision covering cases ^^ Palmer v. Phoenix Mutual Life 
 when the' foreign corporation is Ins. Co., 84 N. Y. 63 (1881); Code, 
 doing business in New York. § 427, now C. C. P. 
 
896 BUSINESS CORPORATIONS IN NEW YORK § 759 
 
 istrator has been appointed in this State. ' ' ^° What is essential 
 to show one a resident of New York so as to permit suit in its 
 courts against a foreign corporation is the intent accom- 
 panied by the act of abiding in this State.^ The courts of this 
 State have jurisdiction of an action by a resident attorney 
 against a non-resident corporation to recover for legal ser- 
 vices rendered by him to it under a contract made in New 
 York, where part of the services were rendered, though the 
 price was not fixed by such contract.'' The courts of this 
 State will take jurisdiction of an action by a resident of this 
 State against a foreign corporation which has an office for 
 the regular transaction of business in this State to compel 
 the transfer on the corporation's books of shares of its duly 
 issued stock which have been assigned by their holder to the 
 plaintiff and surrendered by the latter to the duly registered 
 transfer agent of the corporation and accepted by him for 
 transfer and to compel the delivery of new certificates, as this 
 is not an attempt by the courts of this State to regulate the 
 internal management of a foreign corporation but simply the 
 enforcement of a contract between the corporation and its 
 members." The courts of this State will entertain an action 
 by a stockholder of a foreign corporation to enjoin a second 
 issue of its stock to be given as a bonus on sale of its bonds 
 at par if its principal office is in New York, plaintiff and all 
 its directors reside in New York and all its directors' 
 meetings are held in New York.* A resident individual 
 may sue a foreign corporation in the New York courts 
 in an action to sell certain bonds delivered by it as 
 collateral security of its promissory notes.' Before a foreign 
 corporation can be enjoined by New York courts from issuing 
 bonds or executing a mortgage on foreign real estate to secure 
 them it must appear that the execution of the mortgage would 
 be an injury or obstruction to rights of the plaintiff-creditor 
 which could be enforced in New York courts." A judgment 
 
 ^"Zeikus v.. Florida East Coast 109 N. E. 250 (1915). Quaere if 
 
 Ry. Co., 144 A. D. 91, 128 N. Y. any different considerations would 
 
 Supp. 933 (1911) ; C. C. P. § 1780. apply to an original issue of stock. 
 
 * Phelps V. New York, New Haven * Kraft v. Griffon Co., 82 A. D. 
 
 & Hartford R. R. Co., 17 A. D. 29, 81 N. Y. Supp. 438 (1903). 
 
 392, 45 N. Y. Supp. 178 (1897); = Coffin v. Chicago Northern Pa- 
 
 C. C. P. § 1780. cific Construction Co., 67 Barb. 337 
 
 ^Robeson v. Central R. R. Co., 76 (1875) ; Code, § 427. 
 
 Hun, 444, 28 N. Y. Supp. 104 « Rogers v. Michigan Southern & 
 
 (1894) ; C. C. P. § 1780. Northern Indiana R. R. Co., 28 
 
 ^Travis v. Knox Terpezone Co., Barb. 539 (1858). 
 215 N. Y. 259, L.R.A.1916A, 542, 
 
§§ 760, 761 FOREIGN CORPORATIONS 897 
 
 creditor of a foreign corporation may maintain an action in 
 this State to reach sufficient property, belonging to a domestic 
 corporation formed to take over the foreign one and in the 
 hands of persons other than the domestic company, to satisfy 
 its judgment against the foreign company/ The courts of 
 this State will not entertain an application by a judgment- 
 creditor of a creditor or of a foreign corporation to have its 
 receiver appointed in its home State appear and be examined 
 so as to make the receiver pay over to the applicant money 
 ■due the judgment-debtor.^ 
 
 § 760. Id.: Attomey-General.^,The Attorney-General may 
 maintain an action against a foreign corporation, either upon 
 his own information or upon the complaint of a private per- 
 son, if the foreign corporation (1) exercises within New York 
 State any corporate rights, privileges or franchises not 
 granted to it by the law of this State, (2) within this State 
 has violated any provision of law, or, contrary to law, has 
 done or omitted any act, or has exercised a privilege or fran- 
 chise, not conferred upon it by the law of New York State, 
 when, in a similar case, a domestic corporation would in 
 accordance with the one hundred and thirty-first section of 
 the General Corporation Law be liable to an action to vacate 
 its charter and to annul its existence; or (3) exercises within 
 New York State any corporate rights, privileges or franchises 
 in a manner contrary to the public policy of the State.' The 
 statute provides for a jury trial in such an action, and for an 
 injunction and compelling a witness to answer though he 
 incriminate himself, and for final judgment of ouster and 
 exclusion and costs and fine." Such an action must be brought 
 in the name of the People of the State and the proceedings 
 therein are the same as in an action by a private person except 
 as otherwise specially prescribed by statute." 
 
 § 761. Id.: In What Court and County.— The Municipal Court 
 has no jurisdiction of an action against a foreign corpora- 
 tion." If a foreign corporation have a place for the regular 
 transaction of business in a certain municipal court district 
 one suing it is entitled to bring his action in that district." 
 
 ' Clokey v. International Rubber ^^ McKenna v. Fireman's Insur- 
 
 Clothing Co., 28 Misc. 326, 59 N. Y. ance Co., 28 Misc. 173, 59 N. Y. 
 
 Supp. 878 (1899). Supp. 41 (1899). Decided under old 
 
 * Smith V. McNamara, 15 Hun, 447 Municipal Court Aot. 
 
 (1878). ^^Scharmann & Sons v. De Palo, 
 
 ' C. C. P. § 1948. • 66 A. D. 29, 72 N. Y. Supp. lO'OS 
 
 " C. C. P. §§ 1950, 1955, 1956. (1901) ; Greater N. Y. Charter, 
 
 "C. C. P. § 1984. § 1370 (L. 1897, c. 378). 
 
 • B.C.N.Y.— 57 
 
898 BUSINESS CORPORATIONS IN NEW YORK § 762 
 
 A foreign corporation sued by a non-resident in one county 
 of this State may have the venue of the action changed to 
 another county in which is its office and principal place 
 of business if it does not maintain an office, transact any 
 business or work its railroad in the former county." 
 
 § 762. Id. : When Barred by Statute of Limitations.—' ' . . . 
 it was the general object of the statute of limitations to save 
 the remedy of the creditor in all cases where he was prevented 
 from prosecuting the debtor in our courts, in consequence of 
 the absence of the latter from the State;" and, therefore, a 
 foreign -corporation debtor cannot avail itself of the shield 
 of the statute.^^ A foreign corporation which has strictly 
 complied with the provisions of the statute for service of 
 summons upon it by designating a person to be served for it 
 may invoke the defense of the Statute of Limitations to 
 an action against it." While the rule is that time during which 
 a person (natural or corporate) against whom a cause of 
 action has accrued, is absent from the State, is not to be 
 taken as any part of the time limited for the commencement 
 of an action, whether the limitation be prescribed by statute 
 or contract, yet this rule does not prevent a foreign insurance 
 corporation, which has subjected itself to the laws of this 
 State by obtaining a license and filing an appointment of the 
 superintendent of insurance as its attorney on whom process 
 may be served as if it were a domestic corporation, from 
 availing itself of a limitation on the commencement of an 
 action, whether contained in a statute or a contract to which 
 
 ^*Bubel V. Central Railroad Co. personal injuries due to its negli- 
 
 of N. J., 171 A. D. 456, 156 N. Y. gence if it be a foreign corporation; 
 
 Supp. 1094 (1916) ; C. C. P. § 1780, even though for more than six years 
 
 subd. 4, added L. 1913, c. 60. prior to the action it was lessee of 
 
 ^^ Olcott V. The Tioga R. R. Co., a railroad in this State and had 
 
 20 N. Y. 210 (1859). "A foreign property and an agent with an office 
 
 corporation sued in this State can- in this State. Rathbun v. Northern 
 
 not avail itself of the statute of limi- Central Ry. Co., 50 N. Y. 656 
 
 tations." Boardman v. Lake Shore (1872). When the foreign corpora- 
 
 & Michigan Southern Ry. Co., 84 tion has subjected itself to suit in 
 
 N. Y. 157 (1881). A foreign cor- New York State by designating 
 
 poration, defendant in an action in someone on whom process against 
 
 New York, cannot avail itself of the it may be served and by keeping the 
 
 Statute of Limitations of this State. designation alive, the reason of the 
 
 Robeson v. Central R. R. Co., 76 rule no longer exists. 
 Hun, 444, 26 N. Y. Supp. 384 ^^Wehrenberg v. New York, New 
 
 (1894). A defendant cannot claim Haven and Hartford R. R. Co., 124 
 
 the benefit of the statute of limita- A. D..205, 108 N. Y. Supp. 704 
 
 tions in an action against it for (1908) ; 0. C. P. § 432, subd. 2. 
 
§ 763 FOREIGN CORPORATIONS 899 
 
 it is a party." An action brought in this State against a 
 foreign corporation under a statute of its home State limit- 
 ing the period within which it may be brought is barred by 
 that time limit." A non-resident individual or corporation 
 who or which is defendant in an action by a non-resident, not 
 involving title or possession of realty in this State, may plead 
 the Statute of Limitations of his or its residence." 
 
 § 763. Id. : Service of Process, Governing Statutes. — Personal 
 service upon a foreign corporation of a summons in an action 
 or of any process or other paper whereby a special proceed- 
 ing is commenced in a court or before an officer (except when 
 the proceeding is to punish for contempt or special provision 
 for service is otherwise made by law) must be made by 
 delivery of a copy of the summons, process or paper to the 
 president, vice-president, treasurer, assistant treasurer, sec- 
 retary, assistant-secretary ; or, if the corporation lacks either 
 of such officers, to the officer performing corresponding 
 functions under another name, or, in any even,t, to the person 
 designated for the purpose as provided in the sixteenth sec- 
 tion of the General Corporation Law; or, if such a designation 
 is not in force, or neither such designee nor any other of the 
 officers heretofore specified can be found with due diligence, 
 to the cashier, director or a managing agent of the corpora- 
 tion within the State, but only to such cashier, director or 
 managing agent if either the foreign corporation has prop- 
 erty within New York State or the cause of action arose 
 therein ; or upon the Secretary of State if the action be upon 
 any liability incurred within New York State or the corpora- 
 tion has property within New York State and if the person 
 designated as provided in the sixteenth section of the Gen- 
 eral Corporation Law dies or removes from the place where 
 the corporation has its principal place of business within the 
 State of New York 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 New York State.^° The manner of personally serving 
 a summons upon a defendant foreign corporation is pre- 
 scribed in the statute hereinafter quoted.^ An order directing 
 
 " Comey v. United Surety Co., 217 way Co., 154 A. D. 130, 139 N. Y. 
 
 N. y. 268, 111 N. E. 832 (1916) ; Supp. 129 (1912) ; app. dism'd 212 
 Ins. L. §§ 9 and 30; C. C. P. § 401. - N. Y. 596, 106 N. E. 1042; C. C. P. 
 
 ^* Daily v. New York, Ontario & § 390. 
 
 Western Ry. Co., 26 Misc. §39, 57 '° C. C. P. §§ 432, 433. 
 
 N. Y. Supp. 485 (1899). ^ C. C. P. §§' 432-3 and 931a. 
 
 ^^ Smith V. Western Pacific Rail- 
 
900 BUSINESS CORPORATIONS IN NEW YORK § 7C4 
 
 the service of a summons upon a defendant foreign corpora- 
 tion by publication may be had ; and the procedure is given in 
 the statute hereinafter quoted.^ 
 
 § 764. Id.: In General. — ". . . a corporation has its 
 domicile and residence alone Avithin the bounds of the sov- 
 ereignty which created it, and ... is incapable of pass- 
 ing personallj- beyond that jurisdiction. . . . it is equally 
 true that a foreign corporation is permitted to sue in the 
 courts of this State, and that suits in personam may be 
 brought against it by service of process on its officers or 
 agents within the jurisdiction (citations). But suits by or 
 against foreign corporations are not maintained on the theory 
 that the corporation litigant is here in person, or that the 
 corporate entity attends its officers in their migrations from 
 one State to another, or that it is itself present wherever its 
 property may be, or its business may be transacted. The 
 jurisdiction . . . rests upon the ground that as a corpo- 
 ration nmst act by agents, it may through its agents subject 
 itself to the jurisdiction of a foreign tribunal. . . . When 
 a foreign corporation sends its agents into another State, or 
 transacts its business there, availing itself of the protection 
 of the laws of such State, there is no just reason why it should 
 not be deemed to have subjected itself through its agents to 
 the jurisdiction of that State, and be held to respond to an 
 action brought against it therein; upon process served on its 
 representatives."^ "A foreign corporation can come into 
 this State with its property, establish its business and make 
 and enforce its contracts here only by a natural person;" 
 and it is, therefore, " within the State in propria persona 
 for the purpose of the jurisdiction of the courts of the State, 
 and for the purpose of a judgment valid within the territorial 
 limits of the State, if the legislature of the State choose so to 
 enact," and may be served with process in this State on its 
 agent.* " The object of all service of process for the com- 
 mencement of a suit or any other legal proceeding is to give 
 notice to the party proceeded against, and any service which 
 reasonably accomplishes that end answers the requirements 
 of natural justice and fundamental law (citation) ; and what 
 
 ^C. C. P. §S 438-440. 'Plimpton v. Bigelow, 93 N. Y. 
 
 On exelusiveness of mode of serv- 592 (1883). 
 ice provided by statute requiring ' * Gibbs v. Queen Insurance Co., 63 
 foreign corporations to designate N. Y. 114 (1875) ; Code, § 427. 
 persons upon whom service of 
 'process may be made, see note in 5 
 L.R.A.(N.S.) 298. 
 
I 764 FOREIGN CORPORATIONS 901 
 
 service shall be deemed sufficient for that purpose is to be 
 determined by the legislative power of the country in which 
 the proceeding is instituted, subject only to the limitation that 
 the service must be such as may reasonably be expected to 
 give the notice aimed at . . . any service which would be 
 sufficient for commencing an action against a "domestic corpo- 
 ration could be authorized to commence an action against a 
 foreign corporation. ' ' ^ 
 
 " When a foreign corporation comes into this State, the 
 legislature, by virtue of its control over the law of remedies, 
 may define the agents of the corporation on whom process 
 may be served." ° The Code provision permitting service of 
 process against a foreign corporation by serving it on its 
 officers within this State is not unconstitutional if the corpo- 
 ration does business here upon the ground that it inseparably 
 provides for service upon foreign corporations not doing 
 business as well as upon those doing business within the 
 State.' A foreign hotel corporation is not doing business in 
 New York so as to permit service of process on its agent here 
 because such agent advertises and tries to get custom for it.' 
 " No precise rules can be formulated by which to determine 
 in each .case whether a foreign corporation is doing business 
 in this State . . . this question must largely be decided 
 by the particular facts in each case. But of course there are 
 certain undisputed general principles which may be applied 
 to the disposition of such a question. The fact that the cor- 
 poration is conducting the principal part of its business in 
 the State of its incorporation does not prevent it from so 
 prosecuting its business in another State as to bring it within 
 the character of a corporation doing business in the latter 
 . State. While it is true that the business which it is conduct- 
 ing in the latter State in order to give the courts thereof juris- 
 diction over it for the purpose now being discussed [viz. of 
 suit against it] must be part of the business for which it was 
 organized, it cannot be necessary in every case that the trans- 
 actions in said latter State shall be the performance of those 
 
 ' ^ Pope V. Terre Haute Car M'fg. '' Doller Co. v. Canadian Car and 
 
 Co., 87 N. Y. 137 (1881) ; C. C. P. Foundry Co., Ltd., 220 N. Y. 270, 
 
 §§ 432, 17S0. Service on the presi- 115 N. E. 711 (1917) ; C. C. P. 
 
 dent of a foreign corporation, hav- § 432, subd. 1. 
 
 ing no place of, and doing no busi- ^Krakowski v. White Sulphur 
 
 ness in New York, while temporarily Springs, Inc., 174 A. D. 440, 161 
 
 in. State on own pleasure trip, held N. Y. Sup.p. 193 (1916); C. C. P. 
 
 sufficient. § 432, subd. 1. 
 
 ° Tauza v. Susquehanna Coal Co., 
 220 N. Y. 259, 115 N. E. 915 (1917). 
 
902 BUSINESS CORPORATIONS IN NEW YORK § 761 
 
 particular acts which constitute the characteristic feature of 
 the business for which the corporation was organized.'" 
 Activities insufficient to make out the transaction of business 
 in New York under statutes prohibiting foreign corporations 
 fiom doing business in this State Avithout license may be 
 sufficient to bring the corporation within the State so as to 
 render it amenable to process." " In order to acquire juris- 
 diction over a foreign corporation, for the purpose of obtain- 
 ing a personal judgment against it, it is necessary that the 
 corporation be doing business within the State at the time 
 service is made and that service of process within the State 
 shall be upon an agent of the corporation duly authorized to 
 accept service. " " " . . . a foreign corporation which 
 can only do business in this State because of a license or cer- 
 tificate issued to it, after the 'issuance of such license or cer- 
 tificate, sustains precisely the same relation as do such corpo- 
 rations organized within this State ; . . . such license so 
 issued, when accepted, makes such foreign corporation, for 
 all the purposes of serving process for the protection of the 
 rights of its members, practically the same as if it were a 
 State corporation."^^ A foreign corporation licensed to' do 
 business in New York may be served with process here if its 
 certificate is still in force> its president, assistant secretary 
 and treasurer, and freight and passenger agent reside here." 
 After consolidation of two foreign corporations under a 
 foreign statute reserving to their creditors whatever rights 
 they had against either of such corporations, service in this 
 State of process by such a creditor on the person who was 
 the appropriate officer of one of such corporations at the 
 time of the consolidation is sufficient to give the courts of 
 this State jurisdiction of such corporation." Service of an 
 order for examination in proceedings supplementary to 
 
 ' Pomeroy v. Hocking Valley Ry. Life Insurance Co., 43 Misc. 251, 87 
 
 Co., 218 N. Y. 530, 113 N. E. 504 N. Y..Supp. 438 (1904). 
 
 (1916) ; C. C. P. § 432, subd. 1. " Matter of Wilcox, 123 A. D. 86, 
 
 '"Tauza v. Susequehanna Coal 108 N. Y. Supp. 483 (1908). The 
 
 Co., 220 N. Y. 259, 115 N. E. 915 Royal Arcanum was held liable to 
 
 (1917). Service upon the sales mandamus by an expelled member, 
 
 agent in New York of a foreign cor- " Burke v. Galveston, Houston & 
 
 poration was held sufficient to sub- Henderson R. R. Co., 173 A. D. 
 
 ject it to the jurisdiction of the New 221, 159 N. Y.. Supp. 379 (1916) ; 
 
 York courts in a suit by a resident Gen. Corp. L. § 15 (L. 1909, c. 28). 
 
 when it had a branch and salesmen '* Buell v. Baltimore & Ohio 
 
 in New York; its sales in New York Southwestern R. R. Co., 39 A. D. 
 
 were all subject to confirmation at 236, 57 N. Y. Supp. Ill (1899) ; 
 
 its home office, etc. C. C. P. § 432, snibd. 1. The foreign 
 
 " Johnston v. Mutual Reserve statute was Ohio B. S. § 3384. 
 
§ 765 FOREIGN CORPORATIONS 903 
 
 execution against a foreign corporation must be made upon 
 an officer of the corporation, and no one else; and service 
 upon a person designated for the purpose of receiving ser- 
 vice of a summons is not sufficient.^'' Service of process upon 
 an officer of the State appointed by a foreign corporation for 
 that purpose may validly be made on a public holiday, in 
 spite of the law making a holiday like Sunday for all pur- 
 poses as regards the transaction of business in the public 
 offices of the State, because such officer acts as agent of the 
 corporation in accepting service and not as an officer of the 
 State." 
 
 An action against a foreign corporation by substituted ser- 
 vice is in the nature of an action in rem, so that the courts 
 of New York acquire no jurisdiction of the action until there 
 is property of the corporation in the State, and it need not 
 take any notice of the action until a warrant of attachment 
 against such property issues and is levied." " Before you 
 begin your action against a foreign corporation by the service 
 of a summons upon it by delivery of a copy or by publication, 
 either there must be property of it in this State, or the cause 
 of action must have arisen therein; one or the other, and 
 either will suffice. " ^^ " . . . the requirement of section 
 four hundred and forty-three of the Code of Civil Procedure 
 that when service is made without the State under an order 
 for publication ' a notice must be served with the summons 
 in aU respects like the notice required by the last section ' is 
 a requirement affecting the jurisdiction of the court, and that 
 a failure to serve such a notice constitutes a jurisdictional 
 defect, and is not a mere irregularity. ' ' " 
 
 § 765. Id.: On President, Vice-President, Treasurer, Assist- 
 ant-Treasurer, Secretary, Assistant-Secretary and Officers 
 with Corresponding Functions, In General. — Personal service 
 upon a foreign corporation of a summons in an action or of 
 any process or other paper whereby a special proceeding is 
 commenced in a court or before an officer (except when the 
 proceeding is to punish for contempt or special provision for 
 
 '= Matter of Meyer v. Consolidated Co., 148 A. D. 298, 132 N. Y. Supp. 
 
 Ice Co., 196 N. Y. 471, 90 N. E. 1046 (1911) ; app. dism'd 210 N. Y. 
 
 54 (1900); Gen. Corp. L. § 16; C. 602, 104 N. E. 1131; C. C. P. 
 
 C. P. §§ 432, 433, 2444, 2452. §§ 1217, 638. 
 
 16 piynn V. Union Surety & Guar- ^' Gibbs v. Queen Insurance Co., 
 
 anty Co., 170 N. Y. 145, 63 N. E. 63 N. Y. 114 (1875); Code, § 427. 
 
 61 (1902); Public Holiday L. (L. ^^ Conklin v. Federal Trust Co., 
 
 1897, c. 1897). The officer was the 176 A. D. 572, 163 N. Y. Supp. 570 
 
 superintendent of insurance. (1917) ; C. C. P. §§ 443, 638, 768. 
 
 ^'Haase v. Michigan Steel Boat 
 
904 BUSINESS CORPORATIONS IN NEW YORK § 765 
 
 service is otherwise made by law) may always be made by 
 delivery of a copy of the summons, process or paper to the 
 president, A'ice-president, treasurer, assistant-treasurer, secre- 
 tary or assistant secretary.^" The statutory provision per- 
 mitting service in this State of summons in an action by a 
 resident as distinguished from a non-resident against a 
 foreign corporation personally on its president, vice-presi- 
 dent, treasurer or secretary, violates no provision of the 
 Federal or State Constitutions ; and it is not necessary in so 
 serving such an officer that designation of any person to 
 accept service upon the foreign corporation in this State shall 
 have been made by it/ Whether or not a corporation incor- 
 porated in another State is doing business within this 
 State so as to validate service of process on one of its officers 
 in this State ' ' must largely be decided by the particular facts 
 in each case. But of course there are certain undisputed 
 general principles which may be applied to the disposition of 
 such a question. The fact that the corporation is conducting 
 the principal part of its business in the State of its incorpo- 
 ration does not' prevent it from so prosecuting its business in 
 another state as to bring it within the character of a corpora- 
 tion doing business in the latter state. While it is true that 
 the business which it is conducting in the latter state in order 
 to give the courts thereof jurisdiction over it for the purposes 
 now being discussed must be part of the business for which it 
 was organized, it cannot be necessary in every case that the 
 transactions in said latter state shall be the performance of 
 those particular acts which constitute the characteristic 
 feature of the business for which the corporation was organ- 
 ized." ° Service binds a foreign corporation if made on its 
 president in this State who, with its counsel and all members 
 of the executive committee of its board of directors, resides 
 
 ="> C. C. P. §§ 432, 433. But see (1907) ; C. C. P. § 431, subd. 1, 
 
 Winslow V. Staten Island Rapid and § 1780. 
 
 Transit R. R. Co., 51 Hun, 298, ^Pomeroy v. Hocking Valley Ry. 
 
 4 N. Y. Supp. 169 (1889), holding Co., 218 N. Y. 530, 113 N. E. 504 
 
 that service of process cannot legally (1916) ; C. C. P. § 432, subd. 1, 
 
 be made on a corporation by deliver- and § 1780. Meetings of directors 
 
 ing it to its assistant treasurer, even and executive committee held in New 
 
 though the treasurer be a non-resi- York; corporation's secretary per- 
 
 dent and the assistant treasurer, in manently resided and had his office 
 
 addition to his ordinary duties, drew in New York; dividends were paid 
 
 cheques payable to the order of an- from and stock transferred in New 
 
 other clerk of the corporation. York. The corporation was held to 
 
 ^ Grant v. Cananea Con. Copper be conducting business in New York. 
 Co., 189 N. Y. 241, 82 N. E. 191 
 
§ 766 FOREIGN CORPORATIONS 905 
 
 in this State, where it meets ; and it has executed a large trust 
 mortgage in New York and deposited bonds with a trustee 
 here under a mortgage binding it to keep an office or agency 
 in New York for payment of the bonds secured; and the 
 services under the contract sued upon were rendered and the 
 contract itself made in this State.^ Service of process in an 
 action against a foreign corporation upon one acting in this 
 State as its cashier or treasurer is valid.* 
 
 § 766. Id.: On Officer Passinsr Through or Temporarily in 
 State. — The common law rule that jurisdiction over a foreign 
 corporation could not be acquired by the service of process 
 upon an officer thereof, outside of the State which gave it 
 existence, is changed by statute so that it may be obtained by 
 service of process on the president of the corporation tempo- 
 rarily in this State." Service of process in an action in this 
 State on an officer of a foreign corporation, resident in a 
 foreign state, while in transit through this State, is good.'' 
 Service upon a foreign corporation made by delivering the 
 process to its president while he is in this State, not on busi- 
 ness or in any official capacity, but solely while passing 
 through with his family to a watering place in another state, 
 is good.* Service cannot be made upon an officer of a foreign 
 corporation casually in the State on one business errand so 
 as to give the courts of this State jurisdiction of the corpo- 
 ration when it had had no representative of any kind in this 
 State for over a month before such service or done or solicited 
 any business here during that time, and mighty little at any 
 time.^ The requirements for due process as the basis of a 
 judgment whereby a defendant is deprived of its property 
 are not satisfied by service upon an officer of a foreign corpo- 
 ration having no business in New York and who is temporarily 
 
 = Smith V. Western Pacific Rail- Huron R. R. Co., 4 Hun, 114 
 
 way Co., 138 A. D. 244, 122 N. Y. (1875). The cause of action arose 
 
 Supp. 888 (1910). in New York. 
 
 * Russell V. Washington Life Ins. ' Sadler v. Boston & Bolivia Rub- 
 Co., 62 Misc. 403, 115 N. Y. Supp. ber Co., 140 A. D. 367, 125 N. Y. 
 960 (19-09) ; C. C. P. § 431. Supp. 407 (1910) ; afi'd 202 N. Y. 
 
 Validity of service of process 547, 95 N. E. 1139; C. C. P. § 432, 
 
 upon nonresident officer of foreign subd. 1. 
 
 corporation while in state in oonnec- * Pope v. Terre Haute Car & Mfg. 
 
 tion with transaction to which the Co., 24 Hun, 238 (1881); aff'd 87 
 
 action relates, 'see note in 43 L.R.A. N. Y. 137; C. C. P. § 432. 
 
 (N.S.) 1015. 'Bem«r v. Collier Co., 179 A. D. 
 
 ^Barnett v. Chicago & Lake 732, 167 N. Y. Supp. 39 (1917). 
 
906 BUSINESS CORPORATIONS IN NEW YORK §§ 767, 703 
 
 within the State for his own purposes." A domestic sales 
 manager of a foreign corporation employed to work at its 
 home office but temporarily in New York cannot be served 
 with process so as to bind it unless it was doing business 
 here."" 
 
 § 767. Id.: On Officer Who Has Resigned.— Service of 
 process against a foreign corporation by delivering it to one 
 who had resigned as its president a week before and whose 
 resignation had been accepted by the board of directors is 
 not binding upon the corporation although the resignation 
 was made to prevent such service and the corporation had 
 some three months ago resolved in its home state that it was 
 " dissolved, to take effect upon the sale and transfer of its 
 property, the settling of its business and the division of its 
 capital stock," if the steps taken pursuant to such resolution 
 are not shown.^^ 
 
 § 768. Id.: On Officer in State as Witness. — A non-resident 
 officer of a foreign corporation who comes voluntarily into 
 this State as a witness in an action in the New York courts to 
 which his corporation is a party is entitled to the privilege of 
 not having process against the corporation served upon him 
 while in attendance at the trial and for a reasonable time 
 thereafter to enable him to go home; but this privilege does 
 not hold good after the day on which the giving of testimony 
 ceases to his knowledge if he had nothing to do with the con- 
 duct of the trial.^^ The rule exempting a non-resident in this 
 State as a witness from service may be waived, and will be 
 held to be waived so as to make legal service of process in an 
 action relating to the same subject-matter as that in which 
 the witness came to testify upon such witness as an officer of 
 a corporate party if one of the directors present with such 
 officer told the attorney that the witness was such officer and 
 service could be made on him and they both knew what the 
 papers to be served were about." 
 
 ^° Riverside & Dan River Cotton ^^ Sizer v. Hampton & B'ranchville 
 
 Mills V. Menefee, 237 U. S. 189, as R. R. Co., 57 A. D. 390, 68 N. Y. 
 
 interpreted by the New York Court Supp. 232 (1901). 
 of Appeals in Doller Co. v. Canadian ^^ Weston v. Citizens National 
 
 Oar and Foundry Co., Ltd., 220 Bank, 64 A. D. 145, 71 N. Y. Supp. 
 
 N. Y. 270, 115 N. E. 711 (1917). 827 (1901). 
 
 "* Murray v. Dart Motor Truck On right to serve process in an 
 Co., — Misc. — (1918), N. Y. L. J. action against corporation upon non- 
 April 5, 1918, p. 70. resident officer who is within state as 
 
 ^^ Ervin v. Oregon Steam Naviga- a witness, see note in 24 L.R.A. 
 
 tion Co.. 22 Hun. 598 (1880). (l^.S.) 276; 52 L.R.A.(N.S.) 583. 
 
§ 769 FOREIGN CORPORATIONS 907 
 
 § 769. Id.': On Agent Designated for Service of Process.— 
 
 Personal service upon a foreign corporation of a summons in 
 an action or of any process or other paper whereby a special 
 proceeding is commenced in a court or before an officer 
 (except when the proceeding is to punish for contempt or 
 special provision for service is otherwise made by law) may 
 be made upon the person designated for the purpose as pro- 
 vided in the sixteenth section of the General Corporation 
 Law." Before a foreign corporation can be granted a cer- 
 tificate authorizing it to do business in New York it must file 
 in the office of the New York Secretary of State a statement 
 under its corporate seal and the signature of its president, 
 vice-president or other acting head designating a person upon 
 whom process against it may be served within New York 
 State, accompanied with the written consent of such person.^' 
 The person so desi^ated 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.^® Such designa- 
 tion must specify the office or place of business of such person 
 and, if it is within a city, the street and street number if any, 
 or other suitable designation of the particular locality." Such 
 designation, when consented to, continues in force until 
 revoked by an instrument in writing designating in like man- 
 ner some other person upon whom process against the corpo- 
 ration may be served in this State or until the filing in the 
 Secretary of State's office of a written revocation of his con- 
 sent executed by the person so designated.^* The object of a 
 statute requiring a foreign corporation doing business in this 
 State to designate some one in New York on whom process 
 against it may be served is to prevent the necessity of citizens 
 of New York having to go to a foreign jurisdiction to sue a 
 foreign corporation doing business here ; and not to prevent 
 the foreign corporation, once sued here, from removing to a 
 Federal court.^" An action on a transitory cause of action, 
 e. g., a contract to compensate for personal injuries sustained 
 by a resident of this State in another State through the 
 negligence of a foreign corporation, may be brought in this 
 
 c. 28), or, it may be added, until 
 the corporation voluntarily surren- 
 ders its authority to do business in 
 New York, as provided by Gen. 
 Corp. L. § 16-a (L. 1918, c. 193). 
 
 ^°Fisk V. Chicago, Rock Island & 
 Pacific R. R. Co., 53 Barb. 472 
 (1868); L. 1853, c. 466. 
 
 "C. c 
 
 . P. §§ 432, 433. 
 
 
 
 ^'Gen. 
 
 Corp. L. § 16 
 
 (L. 
 
 1909, 
 
 e. 28). 
 
 
 
 
 " Gen. 
 
 Corp. L. § 16 
 
 (L. 
 
 1909, 
 
 e. 28). 
 
 
 
 
 ^^ Gen. 
 
 Corp. L. § 16 
 
 (L. 
 
 1909, 
 
 c. 28). 
 
 
 
 
 ^' Gen. 
 
 Corp. L. § 16 
 
 (L. 
 
 1909, 
 
908 BUSINESS CORPORATIONS IN NEW YORK § 770 
 
 State by a resident against' a foreign corporation after service 
 of process on the " person upon whom process against the 
 corporation may be served within the State, ' ' duly designated 
 by the corporation pursuant to statute, if the foreign corpo- 
 ration is engaged in business in this State. . . . " . . . 
 vv'hen a foreign corporation is engaged in business in New 
 York and is here represented by an officer, he is its agent to 
 accept service though the cause of action has no relation to 
 the business here transacted."^" A body which has filed an 
 application for a certificate permitting it to do business in 
 this State wherein it refers to itself as a foreign corporation 
 and secures the certificate cannot by later claiming error in 
 the designation of itself and that it is a foreign copartnership 
 render void service of process upon its agent designated in its 
 application, particularly if the action against it in which 
 service was made would be barred if the service were avoided, 
 and there is no proof of the law of the foreign state establish- 
 ing that it is not a corporation.^ Service of a summons in an 
 action in this State's courts against receivers of a railroad 
 appointed by the Federal court is not valid if made either on 
 the corporation's agent in this State designated under § 16 
 of the General Corporation Law as him on whom process 
 against the corporation might be served or on the general 
 agent of the receivers in this State, if it be not shown that the 
 plaintiff could not in the exercise of due diligence make service 
 on the receivers within this State.^ 
 
 § 770. Id.: Upon Secretary of State.— Personal service of 
 the summons upon a foreign corporation or 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 or when special provision for the service thereof is 
 otherwise made by law), may be made upon the Secretary of 
 State (1) if the person designated as provided in the six- 
 teenth section of the General Corporation Law dies or 
 removes from the place where the corporation has its prin- 
 cipal place of business within New York State and (2) if the 
 corporation does not within thirty days after such death or 
 
 '" Bagdon v. Phil. & Reading C. the meaning and define the effect 
 
 & I. Co., 217 N. Y. 432, L.R.A. of a stipulation which it has filed." 
 
 1916F, 407, 111 N. E. 1075 (1916) ; ^ Wolski v. Booth & Flynn, Ltd., 
 
 Gen. Corp. L. | 16. " We are not 93 Misc. 651, 157 N. Y. Supp. 294 
 
 required to consider how service (1916) ; Gen. Corp. L. § 16. 
 
 conld be made if the defendant had ^ Gursky v. Blair, 218 N. Y. 41, 
 
 declined to file a stipulation" (as L.R.A.1916F, 359, 112 N. E. 431 
 
 to person on whom service might (1916) ; Gen. Corp. L. § 16, and C. 
 
 be made). "We are to ascertain C. P. § 432. 
 
§ 770 _ FOREIGN" CORPORATIONS 909 
 
 removal designate in like manner another person upon whom 
 process against it may be served within New York State, and 
 (3) if (a) the process in question is in an action upon any 
 liability incurred within this State or (b) the corporation has 
 property within the State, and (4) if the service upon the 
 Secretary of State is made in the interim between the desig- 
 nated agent's death, removal or revocation and the making 
 of another designation.^ Process against the corporation in 
 an action upon any liability incurred within New York State 
 before revocation of his consent by a person designated by a 
 foreign corporation as one on whom process against it may be 
 served may, after such person files a revocation of his consent 
 or after he diesi or removes from the place where the corpo- 
 ration has its principal place of business within New York 
 State, and before another designation is made, be served upon 
 the Secretary of State.* Whenever service of process against 
 a foreign corporation, in an action upon a liability incurred 
 in New York before revocation of its certificate to do business; 
 in this State, is made upon the Secretary of State, because no 
 qualified agent of the corporatioji exists upon whom such 
 service may be. made, the plaintiff, at the time of such service, 
 must pay to the Secretary of State two dollars, to be included 
 in his taxable costs and disbursements ; and the Secretary of 
 State must forthwith mail a copy of such notice to such corpo- 
 ration if its address, or the address of any officer thereof, is 
 known to him.' In determining whether service on the Secre- 
 tary of State is effective to bind a defendant foreign corpo- 
 ration no presumption can be indulged from its having 
 obtained a certificate to do business in the State that it has 
 property in the State." The burden is on a plaintiff suing a 
 foreign corporation to show that the case is_ one in which the 
 statutes permit service upon the Secretary of State so as to 
 bind the corporation.^ Service on the Secretary of State of 
 process against a foreign corporation in an action based on a 
 liability arising without the state is futile.^ The voluntary 
 
 ' C. C. P. §§ 432, 433. ''Eastern Products Corp'n v. Tenn. 
 
 *Gen. Corp. L. § 16 (L. 1909, Coal & Iron K R. Co., 102 Misc. 
 
 c. 28). . 557 (1918); N. Y. L. J. 'Feb. 27, 
 
 = Gen. Corp. L. § 16 (L. 1909, Sp. T. N. Y. Co.; Gen. Corp. L. 
 
 c. 28). §§ 15, 16; C. C. P. § 432, subd. 4. 
 
 * Eastern Products Corp'n v. Tenn. ' Eastern Products Corp'n v. Tenn. 
 
 Coal & Iron R. R. Co., 102 Misc. Coal & Iron R. R. Co., 102 Misc. 
 
 557 (1918); N. Y. L. J. Feb. 27, 557 (1918); N. Y. L. J. Feb. 27, 
 
 Sp. T. N. Y. Co. ; Gen. Corp. L. §§ 15, Sp. T. N. Y. Co.; Gen. Corp. L. 
 
 16; C. C. P. § 432, subd. 4. §§ 15, 16; C. C. P. § 432, subd. 4. 
 
910 BUSINESS CORPORATIONS IN NEW YORK § ITl 
 
 filing by a foreign corporation of a certificate surrendering 
 its authority to do business in New York does not affect any 
 action pending at the time of such surrender, or affect any 
 action in New York State upon any contract made by it before 
 the filing of such certificate of surrender ; and process against 
 it in an action upon any liability incurred within New York 
 State before the filing of such certificate of surrender may, 
 after its filing, be served upon the Secretary of State, to whom 
 the plaintiff, at the time of such service, must pay two dollars, 
 to be included in his taxable costs and disbursements, where- 
 upon the Secretary of State must inmiediately mail a copy of 
 such process to such corporation if its address or the address 
 of any officer thereof is known to him.*" 
 
 § 771. Id.: On Cashier, Director or Managing Agent, In 
 General. — Personal service of the summons in an action upon 
 a foreign corporation or 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 
 or when special provision for the service is otherwise made 
 by, law) may be made by -delivery of a copy thereof to the 
 cashier, a director or a managing agent of the corporation, 
 within New York State, if (1) (a) no designation by the 
 foreign corporation of a person upon whom process against it 
 may be served has been made by it as prescribed by the six- 
 teenth section of the General Corporation Law and is in force ; 
 or (b) neither the person so designated nor the president, 
 vice president, treasurer, assistant treasurer, secretary, 
 assistant secretary, or — if the corporation lacks either of 
 these officers — the officer performing corresponding func- 
 tions under another name, can be found with due diligence ; 
 and (2) (a) the corporation has property within New York 
 State or (b) the cause of action arose therein." The 
 ' ' cashier " of a corporation upon whom service may legally 
 be made of process against it is one who has charge of its 
 funds to the exclusion of anyone else — not a clerk receiving 
 money in one of its branches ; and the fact that process served 
 on the latter ultimately reaches the desired place does not 
 validate service on him.^° Service of a process on a foreign 
 corporation through its managing agent is not authorized 
 unless there is a failure to designate a person upon whom 
 
 *»Gen. Corp. L. § 16-a (L. 1918, tung Publishing Co., 91 A. D. 94, 
 
 c. 193). 86 N. Y. Supp. 438 (1904) ; C. C. P. 
 
 * C. C. P. §§ 432, 433. § 431. 
 ^° Eisenhof er v. New Yorker Zei- 
 
§ 772 FOREIGN CORPORATIONS 911 
 
 service can be made or there be neither of its officers specified 
 in the statute who can, by the exercise of due diligence, be 
 found within the State, and the corporation has property 
 within the State, or the cause of action arose therein ; and the 
 proofs of these facts are a condition precedent to the validity 
 of the service upon the managing agent." Before service of 
 process can be made upon a foreign corporation through its 
 * ' managing agent ' ' in this State it must appear affirmativeTy 
 that plaintiff used due diligence in an attempt to serve some 
 of the corporate officers specified in the statute.^' Before sum- 
 mons can be served on the managing agent in this State of a 
 foreign corporation it must affirmatively appear that plaintiff 
 used due diligence to serve some of the officers of the corpo- 
 ration specified in the statute as subject to service." " It is 
 the settled law that service of a summons upon the managing 
 agent of a foreign corporation in this State can only be 
 resorted to and made effectual as the commencement of an 
 action against the corporation in a court of this State, after 
 diligent efforts to obtain personal service upon one of such 
 officers therein has been made and failed."" Service upon 
 the managing agent of a foreign corporation without proof 
 of prior effort to serve its officers specified in the statute does 
 not give the court jurisdiction of the corporation." It is not 
 necessary for one serving a foreign corporation in an action 
 in this State through its managing agent to show affirma- 
 tively, on a motion by it to set aside the service, that no person 
 has been designated by it upon whom service could be made 
 and that the other officers enumerated in the statute as those 
 upon whom process may be served cannot with due diligence 
 be found within this State, if it appears from the papers sub- 
 mitted by the corporation on its motion to set aside the service 
 that such are the facts." 
 
 § 772. Id.: On Director. — " Personal service of the sum- 
 mons upon a foreign corporation can be made within the State 
 upon a director thereof only when the president, vice-presi- 
 dent, treasurer, assistant treasurer, secretary or assistant 
 
 " Vitolo V. Bee Publishing Co., 66 " Swift v. Matthews Engineering 
 
 A. D. 582, 73 N. Y. Supp. 273 Co., 178 A. D. 201, 165 N. Y. Supp. 
 
 (1901) ; C. C. P. § 432. 136 (1917) ; C. C. P. § 432, subd. 1. 
 
 "Karosas v. Susquehanna Coal ^^Birkenwald v. May Co., 179 
 
 Co., 172 A. D. 873, 158 N. Y. Supp. A. D. 658, 166 N. Y. Supp. 1073 
 
 1021 (1916) ; C. C. P. § 432. (1917) ; C. C. P. § 432, subd. 1. 
 
 ^^ Karosas v. Susquehanna Coal ^^ Perrine v. Ransom Gas Machine 
 
 Co., 172 A. D. 873, 158 N. Y. Supp. Co., 60 A. D. 32, 69 N. Y. Supp. 
 
 1021 (1916) ; C. C. P. § 432. 698 (1901) ; C. C. P. § 432. 
 
912 BUSINESS CORPORATIONS IN NEW YORK § 772 
 
 secretary or ofiScer performing corresponding functions can- 
 not be found with due diligence and no designation of a per- 
 son to accept service under section sixteen of the General 
 Corporation Law . . . is in force, or, if such a designa- 
 tion is in force, the person so designated cannot likewise be 
 found, and the corporation has property within the State, or 
 the cause of action arose therein."^' Service is sufficiently 
 made upon a foreign corporation in an action the cause of 
 which arises in this State by service of summons upon one 
 who is in fact a director thereof.^' Service of process on a 
 foreign corporation through delivery on a director in this 
 State is insufficient if all its property in New York consist of 
 its own unissued bonds, a map of another state, another of its 
 own line, part of a field map, three or four books, pamphlets 
 and prospectuses." Service of process on a foreign corpo- 
 ration not having any property in this State on a cause of 
 action arising in New York may be made on one of its 
 directors temporarily in the State on business of his own."* 
 A foreign corporation may be subjected to the jurisdiction of 
 the courts of this State by service of process on one of its 
 directors " when a cause of action is based upon a scheme by 
 a director and president of a New York corporation by and 
 with the incorporation of two other New York corporations, 
 to despoil the first corporation of its property rights, in per- 
 formance of which he caused a foreign corporation to be 
 formed, to which he assigned the first corporation's property 
 rights, so that upon the strength of those rights held by the 
 so formed foreign corporation, it mortgaged those" precise 
 rights and property to another New York corporation to 
 secure its bonds, and made another New York corporation its 
 selling agent therefor, ' ' as the cause of action may be said to 
 arise in New York.^ It is not sufficient to support service on 
 a director of a foreign corporation that it be executor of a 
 Mall of a decedent against whom the action would have accrued 
 had he lived and that the affidavit of the plaintitf aver the con- 
 clusion that it arose in New York.^ Printing on the letter head 
 
 " Donohue v. City AVater Power souri River R. R. Co., 70 N. Y. 223 
 
 Co., 159 A. D: 776, 144 N. Y. Supp. (1877) ; Code, § 134. 
 
 923 (1913); C. C. P. § 432; Gen. ^ Donohue v.' City Water Power 
 
 Corp. L. § 16. Co., 159 A. D. 776, 144 N. Y. Supp. 
 
 '* Childs V. Harris Mfg. Co., 104 923 (1913) ; C. C. P. § 432. 
 
 N. Y. 477, 11 N. E. 50 (1887); C. ^ Hansen v. American Seeuritv & 
 
 C. P. § 432, subd. 3. Trust Co., 159 A. D. 801, 144 X. Y. 
 
 " Barnes v. Mobile & Northwestern Supp. 839 (1913) ; C. C. P. §§ 432, 
 
 R. R. Co., 12 Hun, 126 (1877). 1836a; Gen. Corp. L. § 16. 
 
 ^Hiller v. Burlington and Mis- 
 
§§ 773, 774 FOREIGN CORPORATIONS 9ia 
 
 i 
 
 of a foreign corporation of certain names as those of its 
 directors creates a presumption that the bearers of the names 
 are such directors so as to justify service of process upon them 
 so as to bind the corporation.^* 
 
 § 773. Id.: On Managing Agent, In General.—" The Code 
 contemplates that before service is made on the managing 
 agent of a foreign corporation diligent efforts should be made 
 to serve the officers of the corporation or its agent designated 
 under the General Corporation Law."^ A foreign corpora- 
 tion may be served in an action in a court of this State which 
 is not a court of record in a way not permitted in an action in 
 a court of record, e. g., by serving a managing agent in charge 
 of one local store among a string of them stretched throughout 
 New York.* In order to make valid service of process on a 
 foreign corporation through its managing agent in this State 
 it is not necessary that it do or transact business in this State.^ 
 That a foreign corporation is informed by an individual 
 served in this State with process as its alleged " managing 
 agent " of the service does not give the courts of New York 
 jurisdiction of it if the individual was not in fact such man- 
 aging agent." When the grounds set forth in an application 
 by a foreign corporation to vacate service in this State of 
 process upon it through its alleged " managing agent " here 
 are really objections to the court's jurisdiction of the person 
 acquired through service of process (as distinguished from 
 jurisdiction of the subject-matter of plaintiff's alleged cause 
 of action), the practice is to entertain motions to vacate the 
 attempted service.' 
 
 § 774. Id.: Who is " Managing Agent." — " It is not neces- 
 sary that the office of the person to whom the summons is 
 delivered, in a suit against a foreign corporation, should be 
 precisely described as that of ' a managing agent '; because 
 . . . from the language of section 432 of the Code of Civil 
 Procedure, it wAs intended that any person holding some 
 responsible and representative relation to the company, such 
 
 ^^ Manuet Amusement Corp. v. ^ Jackson v. Schuylkill Silk Mills, 
 
 First Nat. Exhibitors' Circuit, Inc., 92 Misc. 442, 156 N. Y. Supp. 219 
 
 — Misc. — (1918), N. Y. L. J. (App. T. 1915); C. C. P. § 432; 
 
 May 9, 1918, p. 483. • Gen. Corp. L."§ 16. 
 
 ^Gursky v. Blair, 218 N. Y. 41, "Beck v. North Packing «fc Pro- 
 
 L.R.A.1916F, 359, 112 N. E. 431 vision Co., 159 A. D. 418, 144 N. Y. 
 
 (1916) ; C. C. P. § 432. Supp. 602 (1913) ; C. C. P. § 432. 
 
 * Sautter v. Atlantic & Pacific Tea ' Karosas v. Susquehanna Coal 
 
 Co., 92 Misc. 378, 156 N. Y. Supp. Co., 172 A. D. 873, 158 N. Y. Supp. 
 
 992 (Co. Ct., 1915); C. C. P. 1021 (1916). 
 §§ 2879, 432. 
 
 B. C.N.Y.— 58 
 
914 BUSINESS CORPORATIONS IN NEW YORK § 774 
 
 as the term ' managing agent ' would include, might be served 
 with the summons. " ' It is not necessary in order that service 
 upon a foreign corporation be sufficient that the person served 
 be described as " managing agent," provided he bear a 
 similar relationship to the corporation.' A person is a " man- 
 aging agent " of a foreign corporation so as to be a proper 
 person on whom to make binding service of process against it 
 if he is " of sufficient character and rank to make it reason- 
 ably certain that the defendant will be apprised of the service 
 made "; but it is not necessary that he have charge of the 
 whole business of the corporation." The appointment of a 
 person as an agent (not to accept process) of a foreign corpo- 
 ration in New York carries implied authority to accept service 
 against it." Service of process in an action against a foreign 
 corporation upon one in charge of its office in this State who 
 acts for it is sufficient as being made upon its " managing 
 agent."" A '* general sales manager " of a foreign corpo- 
 ration, who manages its sales in this State, hires and dis- 
 charges its traveling salesmen and has general charge of its 
 afifairs in New York, is " a managing agent " on whom 
 process may be served to get jurisdiction of the corporation, 
 even though subject to the direction and control of its home 
 office." A metropolitan agent for a foreign corporation is a 
 managing agent on whom process against the company may 
 be served ; and the relation of agency is not destroyed so as 
 to make bad service upon him for the corporation by a letter 
 from him to it notifying it of the termination of the agency 
 according to contract and saying he would do all possible to 
 assist his successor when appointed and meanwhile would 
 make daily reports of business in his office." One working in 
 New York for a foreign corporation on a basis of commissions 
 for business done, occupying an office on which is its sign, 
 advertising as its " eastern representative," so referred to 
 
 * Coler V. Pittsburgh Bridge Co., ^^ Tauza v. Susquehanna Coal Co., 
 
 146 N. Y. 281, 40 N. E. 779 (1895) ; 220 N. Y. 259, 115 N. E. 915 (1917). 
 C. C. P. § 432. One listed in the "Russell v. Washington Life Ins. 
 
 Chicago directory as " manager of Co., 62 Misc. 403, 115 N. Y. Supp. 
 
 the Pittsburgh Bridge Co.", in New 950 (1909) ; C. C. P. § 431. 
 York temporarily, who said he rep- " Jackson v. Schuylkill Silk Mills, 
 
 resented the company, could not be 92 Misc. 442, 156 N. Y. Supp. 219 
 
 served so as to bind the company. (App. T. 1915) ; C. C. P. § 432. ' 
 
 ' Breen v. Northwestern Realty **'Rath v. Ohio German Fire In- 
 
 Co., 52 Misc. 528, 102 N. Y. Supp. surance Co., 132 A. D. 692, 117 
 
 473 (1907). N. Y. Supp. 382 (1909); C. C. P. 
 
 I 1° Palmer v. Pennsylvania Co., 35 § 432. 
 Hun, 369 (1885) ; affd 99 N. Y. 679. 
 
§ 774 FOREIGN CORPORATIONS 915 
 
 by it in correspondence, doing all its business done in this 
 ■State and under general directions only, is its managing agent 
 on whom process may be served." A solicitor in this State for 
 advertising for a foreign corporation having full power to 
 make binding contracts for advertising in its behalf is not a 
 "managing agent" on whom process against it may be 
 legally served." Service of process on a foreign corporation 
 cannot be made on a representative in this State of the cor- 
 poration for securing for it contracts for advertising as being 
 its managing agent." Service is not good upon an individual 
 as " managing agent " of a foreign corporation when it 
 appears that he is a member of the New York Produce 
 Exchange, obtains orders and transmits them to the corpo- 
 ration, cannot fix prices or accept an order; that the corpo- 
 ration ships direct to customers such orders as it accepts ; that 
 he occasionally buys goods for it and others on the floor of 
 the Exchange under specific orders and maintains an office 
 partly paid for by it in the Exchange building; and that the 
 corporation's name appears in the directories but its tele- 
 phone number and address are not shown to be the same as 
 his.^^ One served with a summons in an action against a 
 foreign corporation is not to be considered its " managing 
 agent " so as to bind it by such service because he took it 
 while sitting in an office on the door whereof was its name and 
 he had authority from it only to solicit contracts for freight, 
 even though he sent the summons to the corporation and told 
 the process-server he was its representative." An assistant 
 secretary of a corporation whose only duty or service is the 
 signing of some of its scrip certificates is not a managing 
 agent on whom process against it may be served.^" 
 
 ^^ Palmer v. Chicago Evening Post its name on his door and files of its 
 
 Co., 85 Hun, 403, 32 'N. Y. Supp. paper in his office, copies of which 
 
 992 (1895) ; C. C. P. § 432, snbd. 3. he' would sell. 
 
 ^^Pontana v. Post Printing & ^*Beck v. North Packing & Pro- 
 Publishing Co., 87 A. D. 233, 84 vision Co., 159 A. D. 418, 144 N. Y. 
 N. Y. Supp. 308 (1903) ; C. C. P. Supp. 602 (1913) ; C. C. P. § 432. 
 § 432, subd. 3. ^"Josephy v. Kansas City, Mex- 
 
 " Vitolo V. Bee Publishing Co., ico & Orient Railway, 180 A. D. 313, 
 
 66 A. D. 582, 73 N. Y. Supp. 273 167 N. Y. Supp. 273 (1917). 
 
 (1901). The individual had news- ^° Sterett v. Denver & Rio Grande 
 
 paper advertising agency and so- R. Co., 17 Hun, 316 (1879) ; C. C. 
 
 licited advertisements for the foreign P. § 432, subd. 3. 
 
 corporation, among other publica- As to who is managing agent of 
 
 tions. He said he was its adver- foreign corporation for purpose of 
 
 tising manag'er and it by letter said service of process, see note in 23 
 
 he was its representative. He had L.R.A. 490; 4 L.R.A.(N.S.) 460. 
 
916 BUSINESS CORPORATIONS IN NEW YORK §§ 775-777, 
 
 § 775. Id.: Service of Notice of Sale on Foreign Corporate 
 Mortgagor. — The statute prescribes the method of service 
 upon a foreign corporation mortgagor of notice of sale on 
 foreclosure.^ 
 
 § 776. Id.: Pleading; Practice and Evidence; In General. — 
 If the sole objection to the right of a foreign corporation to 
 interpose a counterclaim be that it has not procured from the 
 Secretary of State for New York a certificate permitting it to. 
 do business in this State, the objection will not be upheld.^ 
 A foreign corporation of a distant state sued by an individual 
 under an alleged employment of him by it as its agent is 
 entitled to a bill of particulars giving the name of its officer 
 or agent or manager who employed such individual, if its two 
 agents or officers who have entire management of its affairs 
 in New York swear they know nothing of such individual's 
 alleged employment.^ Plaintiffs suing as stockholders of a 
 foreign corporation to prevent the issue of stock which will 
 depreciate their holdings need not plead the statutes of its 
 home state against the issue, as they rest on their common law 
 remedy to protect vested rights.* While an order for exam- 
 ination before trial of a defendant corporation is improper 
 if it authorizes the examination of its stated officers instead 
 of the corporation through them, yet it is not necessary to 
 vacate it if it appears it was plaintiff's desire to examine it 
 through them; but the Special Term should, instead, amend 
 the order accordingly.^ "A proceeding supplementary to 
 execution cannot be sustained upon a foreign judgment or a 
 judgment in rem. It must be a judgment by which the person 
 of the judgment debtor is bound. ' '^^ 
 
 § 777. Id.: What Law Governs.— The form of an action 
 brought in this State, against a foreign corporation, and the 
 method of procedure are matters of practice which are fixed 
 and governed by the laws of this State.* 
 
 ^ C. C. P. § 2389. ing Co., 176 A. D. 840, 163 N. Y. 
 
 ^Alsing Co. V. New England Supp. 261 (1917). 
 
 Quartz Co., 66 A. D. 473, 73 N. Y. =» Matter of Maltbie or Lobsitz 
 
 Supp. 347 (1-961); aff'd 174 N. Y. Mills Co., 223 N. Y. 227 (1918); 
 
 536; 66 N. E. 1110; Gen. Corp. L. C. C. P. §§ 2458, 435, 2435; Tax L. 
 
 § 15 (L. 1892, c. 687). § 299. A foreign corporation had 
 
 ^ Fruin-Bambrick Construction Co. property invested in business in New 
 
 V. Marks, 48 A. D. 51, 62 N. Y. York and was taxed thereon. It 
 
 Supp. 621 (190()). was held that on non-payment of the 
 
 * Ernst V. Elmira Municipal Im- tax it could not be examined in 
 
 provement Co., 24 Misc. 583, 54 supp. pro. 
 
 N. Y. Supp. 116 (1898). «Sinnott v. Hanan, 214 N. Y. 454, 
 
 ^Kram v. Jewish World Publish- 108 N. E. 858 (1915). 
 
§§ 778, 779 FOREIGN CORPORATIONS 917 
 
 § 778. Id.: Necessity and Manner of Alleging Corporate 
 Existence, and Plaintiff's Residence.— In an action brought 
 against a foreign corporation the complaint must state it to 
 be such and the State, country or government by or under the 
 laws of which it was created, but need not set forth or specially 
 refer to any act or proceeding by or under which it was 
 created.'^ The allegation in a complaint against a foreign cor- 
 poration that plaintiff transacts business in New York is not 
 equivalent to an allegation that he resides in this State and 
 is not, therefore, sufficient to permit him to sue in New York.' 
 A complaint in an action in the City Court against a foreign 
 corporation should allege that at its commencement plaintiff 
 was a resident if he could not sue if a non-resident.' A com- 
 plaint against a foreign corporation is not demurrable because 
 it does not allege the residence of the plaintiff in this State." 
 A complaint by an individual in an action in the City Court 
 against a foreign corporation is not demurrable because it 
 does not allege the residency of the plaintiff in this State." 
 Demurrer does not lie to a complaint against a foreign corpo- 
 ration on the ground that it does not allege the plaintiff's 
 residency in the State or the place where the contract sued on 
 was made." Amendment, after the close of a plaintiff's case, 
 of his complaint is proper to have it allege his residence in 
 this State in his action against a foreign corporation which 
 he is suing to recover damages arising from personal injuries 
 sustained while he was a resident of the corporation's home 
 state.*^ It is competent for the court on a trial to allow an 
 amendment of a complaint so as to charge that the defendant 
 is a foreign instead of a domestic corporation, as alleged.^* 
 
 § 779. Id,: Necessity and Manner of Denying Corporate 
 Existence. — ^In an action or special proceeding brought 
 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 
 
 ^ C. C. P. § 1775. Co., 15 Misc. 442, 37 N. Y. Supp. 
 
 ^Bogert V. Otto Gas Engine 213 (1896). 
 
 Works, 28 A. D. 463, 51 N. Y. Supp. '^ Carter v. H. Booth King & Bro. 
 
 118 (1898) : C. C. P. § 1780. Pub. Co., 26 Misc. 652, 56 N. Y. 
 
 "O'Reilly v. New Brunswick, Am- Supp. 382 (1899). 
 
 boy & N. Y. Steamboat Co., 28 Misc. " Voshefskey v. Hillside Coal & 
 
 112, 59 N. Y. Supp. 261 (1899); Iron Co., 21 A. D. 168, 47 N. Y. 
 
 C. C. P. §§ 315, 1780, 481, 499. Supp. 386 (1897). 
 
 " Herbert v. Montana Diamond ^* Stuart v. New York Herald Co., 
 
 Co., 81 A. D. 212, 80 N. Y. Supp. 73 A. D. 459, 77 N. Y. Supp. 216 
 
 717 (1903); C. C. P. § 1780. (1902). 
 
 ^^ Campbell v. Texas Central R. R. 
 
918 BUSINESS CORPORATIONS IN NEW YORK §§ 780-782 
 
 defendant's behalf." An answer to a complaint averring that 
 the defendant is a foreign corporation incorporated under the 
 laws of a certain foreign country which " denies, on its 
 information and belief, that at the time mentioned in the com- 
 plaint, or at any other time, the defendant was a foreign cor- 
 poration as is alleged in the complaint," raises no issue; 
 because under it the defendant can be either a foreign or 
 domestic corporation, formed in any country except the one 
 stated, and the only issue is one of its nationality, while the 
 statute requires an affirmative denial of the fact that the 
 defendant is a corporation." 
 
 § 780. Id.: Necessity and Manner of Proving Corporate 
 Existence. — In an action brought 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." If a complaint allege 
 that the defendant is a foreign corporation and the answer 
 deny this but do not affirmatively allege that it is not a corpo- 
 ration, the plaintiff need not prove on the trial the existence 
 of the corporation." Whenever by the laws of any other state 
 or territory, or the Dominion of Canada, a copy of the certifi- 
 cate of organization or incorporation 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 created, organized 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, must be received in all actions and proceed- 
 ings in New York State, in or before all courts and officers, 
 A\'ith the same force and effect in all respects as prima facie 
 evidence as aforesaid, as in such other state, territory or 
 dominion."* 
 
 § 781. Id.: Verification of Pleadings. — The agent of the 
 attorney for a foreign corporation may verify a pleading by 
 it." 
 
 § 782. Id.: In Actions To Recover on Evidence of Debt.— 
 In an action against a foreign corporation to recover damages 
 for the nonpayment of a promissory note or other evidence 
 
 " C. C. P. § 1777. 35 A. D. Ill, 54 N. Y. Supp. 70J 
 
 "Bengston v. Thingvalla Steam- (1898); C. C. P. § 1776. 
 
 ship Co., 31 Hun, 96 (1883) ; C. C. "» Gen. Corp. L. § 9, para. ! 
 
 P. § 1776. (L. 1906, c. 28). 
 
 " C. C. P. § 1776. " C. C. P. § 525. 
 
 "^^Nickerson v. Canton Marble Co., 
 
§§ 783, 784 rOREIGN CORPORATIONS 919 
 
 of debt for the absolute payment of money upoli demand or 
 upon a particular time, an order extending the time to answer 
 or demur must not be granted except by the court upon notice 
 to the plaintiff's attorney; and the plaintiff may take judg- 
 ment 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, or at the expiration of twenty days after the service 
 is complete if the service of the summons was otherwise than 
 personal, unless in either case the defendant serves with a 
 copy of his answer or demurrer a copy of an order of a judge 
 directing that the issues presented by the pleadings be tried.^° 
 There is no distinction between domestic and foreign corpora- 
 tions in the preference given by statute to an action ' ' against 
 a corporation, founded upon a note or other evidence of debt 
 for the absolute payment of money. ' ' ^ 
 
 § 783. Id.: Examination of Books. — ^In an action at law 
 against a foreign corporation subject to the jurisdiction of 
 the New York court for breach of a contract executed in this 
 State providing, inter alia, for inspection of its books by 
 the plaintiff, the latt-er is entitled not merely to an "examina- 
 tion of the corporation before trial but to an inspection of 
 its books.^ The Appellate Division has sustained an order 
 for the examination of the books of a foreign corporation 
 invoking the jurisdiction of the New York courts as a plain- 
 tiff, and an order for the production of the books of a foreign 
 corporation defendant in an action on a contract made in this 
 State by which plaintiff was entitled to an inspection of such 
 books; but it has not otherwise attempted to exercise its 
 jurisdiction so as to require a foreign corporation not doing 
 business here to bring from without the State and produce 
 within this jurisdicton its books or records — though it might 
 do so.^ 
 
 § 784. Id.: Pleading Usury. — The statute providing that " no 
 corporation shall hereafter interpose the defense of usury in 
 any action " applies to foreign as well as domestic corpora- 
 tions.* The subject of usury has been discussed in the three 
 hundred and ninety-sixth section of this work. 
 
 2° C. C. p. § 1778. ' Kram v. Jewish World Publish- 
 
 ^ Martin's Bank (Ltd.) v. Ama- ing Co., 176 A. D. 840, 163 N. Y. 
 
 zones Co., 98 A. D. 146, 90 N. Y. Supp. 261 (1917). 
 
 Supp. 734 (1904) ; C. C. P. § 791. * Southern Life- Insurance & 
 
 ^ Sullivan v. Ryan-Parker Con- Trust Co. v. Packer & Prentice, 17 
 
 struction Co., No. 1, 148 A. D. 243, N. Y. 51 (1858) ; L. 1850, c. 172. 
 
 132 N. Y. Supp. 344 (1911). 
 
920 BUSINESS CORPORA.TIONS IN NEW YORK §§ 785, 786 
 
 § 785. Id.: Procedure When Corporation Not Personally 
 Served and Does I'lot Appear. — When a defendant is a foreign 
 corporation and has not appeared and the plaintiff applies for 
 judgment when service has not been" made personally the 
 statute prescribes the papers plaintiff must produce and file." 
 When summons is not served personally on a defendant 
 foreign corporation and plaintiff applies for judgment for 
 default on failure of such defendant to demand a copy of the 
 complaint or plead, the statute prescribes the procedure which 
 must be. f ollowed.^ 
 
 § 786. Id.: Attachment, In General.— A warrant of attach- 
 ment may be obtained against the property of a defendant 
 foreign, corporation in an action to recover a sum of money 
 only as damages (1) for breach of any express or implied 
 contract other than a contract to marry, (2) for wrongful 
 conversion of personal property, (3) for an injury to person 
 or property in consequence of negligence, fraud or other 
 wrongful act, (4) for a wrongful act, neglect or default by 
 which the decedent's death was caused when the action is 
 brought by an executor or administrator and the foreign cor- 
 poration would have been liable to an action in favor of the 
 decedent by reason thereof if death had not ensued as pre- 
 scribed by the nineteen hundred and second section of the 
 Code of Civil Procedure.'' No attachment against a foreign 
 corporation should be allowed when it does not appear that 
 the contract on which the action .is brought was made, or 
 that the cause of action arose within this State.* ". . . it 
 is held, in respect to a corporation organized under the laws 
 of the United States, whose charter makes no provision for 
 the location of its main office: (1) That its main office is 
 located at the seat of the corporation's government, i. e., at 
 the regular meeting place of the board of directors; (2) that 
 a corporation is located in the State of New York if its prin- 
 cipal office or main office is there located; (3) that irrespective 
 of what constitutes its main office, a corporation which holds 
 its stockholders ' and directors ' meetings, maintains its execu- 
 tive offices and keeps its stock certificate books and corporate 
 records all in the State of New York, is located in the State 
 within the meaning of ' ' the statute permitting attachment 
 
 = C. C. P. § 1217. 8 Smith V. Union Milk Co., 70 
 
 ° C. C. P. § 1216. Hun, 348, 24 N. Y. Supp. 79 (1893) ; 
 
 ' C. C. P. § 635 et seq. afE'd 143 N. Y. 622, 37 N. E. 827. 
 
§ 787 . rOREIG^r CORPORATIONS 921 
 
 of its property as that of a foreign corporation.' One who 
 has brought an action against a foreign corporation, procured 
 an attachment, and had it levied upon by the sheriff before 
 a receiver in the corporation's home State or an ancillary 
 receiver in this State has been appointed, is entitled to issue 
 execution upon the entry of judgment and to have the sheriff 
 collect and pay over to him the money, upon receipt cff the 
 execution, unless the order appointing the receiver contain 
 an injunction against the prosecution of such one's action." 
 It is proper to consider on a motion to vacate a levy under 
 a warrant of attachment the question whether or not there 
 was anything in this State on which the sheriff could levy." 
 A party moving to vacate an attachment against a foreign 
 corporation must show by competent evidence, he not being 
 the defendant itself, that he acquired a lien upon or interest 
 in the defendant's property after it was attached; and the 
 same rule will be applied to his papers for vacation of as 
 will be applied to a creditor's papers on application for the 
 attachment." A bond given by surety to a foreign corpora- 
 tion against which an action has been brought and an attach- 
 ment had in this State as a condition for discharge of the 
 attachment holds good on reversal by the Appellate Division 
 of a judgment for defendant and direction of judgment 
 absolute for plaintiff, even though no stay of proceedings was 
 obtained when judgment below was entered for defendant.^^ 
 
 § 787. Id.: What Attachable.^". . . the fundamental 
 condition of attachment proceedings, that the res must be 
 within the jurisdiction of the court in order to an effectual 
 seizure, is not answered in respect to shares in a foreign 
 
 ® Gould V. Texas & Pacific Ry. Co., managing clerk when the order ap- 
 
 176 A. D; 818, 163 N. Y. Supp. 479 pointing the receiver was made, is 
 
 (1917), on the opinion below, insufficient, if such order prohibited 
 
 C. C. P. § 3343, subd. 18. the receiver from entering on his 
 
 '" Bennett v. Electric Construe- duties until such bond had been 
 
 tion Co., 8 A. D. 301, 40 N. Y. made and filed. 
 
 Supp. 1139 (1896). ^^Youngman v. Fidelity & De- 
 
 ^^ Bridges v. Wade, 113 A. D. 350, posit Co., 87 Misc. 456, 150 N. Y. 
 
 99 N. Y. Supp. 126 (1906) ; C. C. P. Supp. 788 (1914) ; aff'd 153 N. Y. 
 
 § 1780. Supp. 1151; C. C. P. §§ 688, 3343, 
 
 ^^ Belmont v. Sigua Iron Co., 12 subd. 12. 
 
 A. p. 441, 42 N. Y. Supp. 122 On liability of foreign corpora- 
 
 (1896). An affidavit of a managing tion which has complied with condi- 
 
 clerk of the attorneys, for the pur- tions of doing business in State to 
 
 pose of the motion, of a receiver, attachment as nonresident, see notes 
 
 which simply states the latter had, in 31 L.R.A.(N.S.) 278; L.R.A. 
 
 filed his bond and it had been ap- 1916D, 116; 
 proved, without showing he was 
 
922 BUSINESS CORPORATIONS IN NEW Y'ORK § 78 
 
 corporation by the presence here of its officers, or by thi 
 fact that the corporation has property and is transacting 
 business here;" so that shares of a non-resident, individua 
 defendant in such a corporation cannot be attached here ii 
 an action against him.^* When the certificates of stock of i 
 foreign corporation belonging to a non-resident of the Stati 
 are in the possession of a resident of this State, as pledgee 
 the interest of "the owner and pledgor can be levied upon unde; 
 a warrant of attachment against such owner, made by servic( 
 of a notice on the pledgee in the manner prescribed by sub 
 division 3 of section 649 of the Code.^' Certificates of stocl 
 in this State in the possession of a corporation with authority 
 to sell, though of a foreign corporation and owned by i 
 non-resident, may be levied upon and attached by the sherif 
 to satisfy a judgment had against their owner." Bonds o 
 a foreign corporation in the hands of its agent here t( 
 be delivered to such persons as should be willing to lend th( 
 company money on their security are not property of th( 
 company, liable to be seized under attachment or execution/ 
 A creditor of a foreign corporation may attach its chatteli 
 in this State in spite of a trust mortgage covering them validb 
 executed by it in a foreign State, barring all creditors fron 
 any benefit therefrom unless they accepted its terms an( 
 agreed to extend the time of payment of their debts unti 
 after the mortgage matured; because sudh an agreement i 
 against the policy of this State/* " . . . as a general prop 
 osition, it is the law that the debt of a foreign corporation 
 due to a non-resident, cannot be attached in this State; " bu 
 if the debt is the result of a contract made in New York an( 
 by its terms payable there, a levy thereon will not be vacatei 
 on the ground that the situs of the debt is outside the State; 
 A levy under a warrant of attachment cannot be made upo: 
 a debt due by a foreign corporation at the suit of a non-res 
 dent plaintiff, even though the foreign corporation is presei: 
 in the foreign State only through having its name on a bil 
 
 "Plimpton V. Bigelow, 93 N. Y. "Coddington v. Gilbert, 17 N. "5 
 
 592 (1883); C. C. P. § 647 " must 489 (1858). 
 
 be construed as applying to domes- ^' Bearing v. McKinnon Sash 
 
 tie corporaitions only." Hardware Co., 165 N. Y. 78, f 
 
 ^= Simpson v. Jersey City Con- N. E. 773 (1900). 
 
 tracting Co., 165 N. Y. 193, 55 "Lancaster v. Spotswood, 4 
 
 L.R.A. 796, 58 N. E. 896 (1900). Misc. 19, 83 N. Y. Supp. 57 
 
 " People ex rel. Wynn v. Grifen- (1903) ; aff'd 86 A. D. 627. 
 hagen, 167 A. D. 572, 152 N. Y. 
 Supp. 679 (1915); C. C. P. § 644 
 et seq. 
 
§ 788 FOREIGN" CORPORATIONS • 923 
 
 board, with hundreds of others, outside the offices of a com- 
 pany organized to comply with the law of that State, to give 
 a legal fiction to a principal office within the State, but the 
 real office of which is in New York where much of its business 
 is done, and which has been licensed to do business in New 
 York and pays taxes in New York.^° Resident individuals 
 may attach a debt due by a non-resident doing business in 
 this State to a foreign corporation and a resident individual 
 who are debtors of the plaintiffs by serving the warrant on 
 ihe non-resident debtor of the foreign corporation.^ A resi- 
 dent individual creditor of a foreign corporation having no 
 office in New York may attach a judgment indebtedness of 
 another foreign corporation, having an office and doing busi- 
 ness in this State, to the first foreign corporation, if the money 
 represented by the debt is within the court's jurisdiction.^ A 
 debt by a resident subscriber to stock of a foreign corporation, 
 in the shape of his unpaid subscription, the property of which 
 corporation has been involuntary put in the hands of a 
 receiver in such foreign State, is subject to attachment in this 
 State by a resident creditor of the corporation,' A cause of 
 action against a resident subscriber to stock of a foreign cor- 
 poration, of which a receiver has involuntarily been appointed 
 in its home State, on his unpaid subscription, is, for the pur- 
 poses of our attachment law, a debt due and owing the cor- 
 poration here, and is subject to levy under an attachment for 
 an indebtedness o.wing by the corporation.* A resident 
 creditor of a foreign corporation insured in a foreign cor- 
 poration cannot attach the indebtedness of the latter to the 
 former for loss sustained by fire if the policy was delivered in 
 a foreign State, as the presence of the thing within this State 
 is essential to attachment.' 
 
 § 788. Id.: Who May Attach. — " The papers, upon which a 
 foreign corporation, doing business in this State, in relation 
 
 2° Bridges V. Wade, 113 A. D. C. C. P. §§ 677, 678. "... with 
 
 350, 99 N. Y. Supp. 126 (1906) ; respect to creditors of the corpora- 
 
 C. C- P. § 1780. tion purusing their legal remedies 
 
 ^Flynn & White, 122 A. D. 780, in the courts of this State, effect 
 
 107 N. Y. Supp. 860 (1907). is not given here to the involuntary 
 
 ^ India Rubber Co. v. Katz, 65 transfer of the property of the 
 
 A. D. 349, 72 N. Y. Supp. 658 debtor by virtue of a foreign statu- 
 
 (1901). tory law." 
 
 ^ McNelus V. Stillman, 172 A. D. ^ Straus v. Chicago Glycerine Co., 
 
 307, 158 N. Y. Supp. 428 (1916) ; 46 Hun, 216 (1887) ; aff 'd 108 N. Y. 
 
 C. C. P. §§ 677, 678. 654, 15 N. E. 444; G. C. P.§§ 641, 
 
 ^ McNeius V. Stillman, 172 A. D. 644. 
 307, 158 N. Y. Supp. 428 (1916); 
 
924 BUSINESS CORPORATIONS IN NEW YORK § 789 
 
 to a transaction arising in such State, procures an attachment, 
 must show, for the purposes of the attachment, that the cor- 
 poration has complied with the provisions of the statute ; and 
 if such fact does not appear in the papers, upon which the 
 warrant of attachment was granted, the omission of such 
 allegation therefrom is legal cause for vacating the warrant of 
 attachment. " * In order to vacate an attachment against a 
 foreign corporation on the ground that it does not appear 
 that the plaintiff-foreign-corporation seeking the attachment 
 has filed the requisite certificate authorizing it to do business 
 in New York it must further appear that the plaintiff is doing 
 business in this State.' A foreign corporation seeking an 
 attachment and claiming to come within one of the exceptions 
 of the statute requiring a receipt of payment of its license fee 
 as a condition precedent to suing in New York must show 
 either that it comes within such exception or that it has not 
 been doing business in New York for so long a period as 
 thirteen months prior to the time of the application for the 
 attachment and commencement of the action, and, con- 
 sequently, that its time has not expired.* 
 
 § 789. Id.: Sufficiency of Moving Papers. — In order to sustain 
 an attachment against a foreign corporation the plaintiff's 
 affidavit of the elements of damage must not consist of con- 
 clusions but of facts.* An attachment against a foreign cor- 
 poration cannot stand unless the complaint, affidavit or other 
 papers on which the attachment is sought, show the essential 
 facts, and, if a necessary allegation is made on information 
 and belief, state the sources of the information and the 
 grounds of the belief.^" ' ' An affidavit in support of an attach- 
 ment must contain evidence from which the court can deter- 
 mine that the ultimate facts stated in the pleadings can be 
 substantiated."" The rule that an attachment against a 
 foreign" corporation will not be granted if the material facts 
 warranting it are plead or verified on information and belief. 
 
 ^ Reedy Elevator Co. v. American ^ Commercial Wood & Cement Co 
 
 Grocery Co., 24 Misc. 678, 53 N. Y. v. Northampton Portland Cemeni 
 
 Supp. 989 (1898) ; L. 1896, c. 908, Co., 41 Misc. 242, 83 N. Y. Supp 
 
 § 181. 609 (1903). 
 
 ' Commercial Wood & Cement Co. ^'' Slater v. American Palace Cai 
 
 V. Northampton Portland Cement Co., 146 A. D. 859, 131 N. Y. Supp 
 
 Co., 41 Misc. 242, 84 N. Y. Supp. 17 (1911). 
 
 38 (1903) ; L. 1892, e. 687, § 15. " Makepeace v. Dilltown Smoke 
 
 * Reedy Elevator Co. v. American less Coal Co., 179 A. D. 662, 16: 
 
 Grocery Co., 24 Misc. 678, 53 N. Y. N. Y. Supp. 83 (1917). 
 Supp. 989 (1898); L. 1896, c. 908, 
 S 181- 
 
§ 789 FOREIGN CORPORATIONS 925 
 
 unless the source of the information and the ground of the 
 belief are given, does not apply to a complaint by a former 
 employee to recover compensation, equivalent to the differ- 
 ence between the price fixed for goods by the corporation and 
 the price at which he sold them, plus a percentage of the fixed 
 price, though the price fixed is alleged on information and 
 belief in the complaint, provided the afi&davit supporting it 
 gives an unsworn statement, by one who had been in plain- 
 tiff's but at the time of the action was in defendant's employ, 
 of the fixed price." The positive allegation in affidavits in 
 support of a motion for a warrant of attachment against the 
 property of a corporation that it is a foreign corporation, 
 without giving the source of the affiant's knowledge or stat- 
 ing facts indicating that the averment is made upon personal 
 knowledge, is insufficient to confer jurisdiction." An attach- 
 ment granted on an affidavit that " the defendant is a non- 
 resident . . . being a corporation created . . . under 
 . . . the laws of the United Kingdom of Great Britain and 
 Ireland ' ' will be vacated — at least in the First Judicig,! 
 Department — as being granted on a mere averment on 
 information, without disclosure of the sources or proof of the 
 facts." A positive averment in a verified complaint or in an 
 affidavit that defendant is a foreign corporation is sufficient 
 to sustain an attachment on the theory that the defendant is 
 a foreign corporation." Papers are sufficient to sustain 
 an attachment against a coiporation on the ground that it 
 is incorporated in a foreign jurisdiction if it appears from 
 them that it is named as a corporation existing in a foreign 
 State ; that the transaction on which the claim is based took 
 place in such State ; and that the statement between it and the 
 original creditor of the settlement of the claim purports to 
 have been made in such State and is signed by the corporate 
 name with the additional words that it is such a foreign cor- 
 poration.^" "When one foreign corporation seeks to obtain 
 an attachment against another foreign corporation, it must, 
 as a prerequisite to obtaining the attachment, establish affirm- 
 
 ^^ Lewis V. Tindel-Morris Co., 109 176 A. D. 209, 161 N. Y. Supp. 986 
 
 A. D. 509, 96 N. Y. Supp. 576 (1916); C. C. P. § 1776. "It is 
 
 (1905). somewhat difficult to present hastily 
 
 ^'Dain's Sons Co. v. McNally Co., for the purposes of obtaining a war- 
 
 137 A. D. 857, 122 N. Y. Supp. 964 rant of attachment conclusive evi- 
 
 (1910) ; C. C. P. |§ 635, 636. dence that a corporation is a foreign 
 
 " Wilson V. Puritan Steamship corporation . . . " 
 
 Co., Limited, 58 Misc. 317, 110 ^^ Randolph v. Susquehanna Water 
 
 N. Y. Supp. 914 (1908). Co., 12 A. D. 479, 42 N. Y. Supp. 
 
 "Stiner v. Tennessee Copper Co., 411 (1896). 
 
926 BUSINESS CORPORATIONS IN NEW YORK §§ 790, 791 
 
 atively either that the contract sued upon was made, or else 
 that its cause of action thereon arose in this State." ". . . 
 before jurisdiction can be acquired to issue a warrant of 
 attachment against the property of a foreign corporation at 
 the instance of a foreign corporation or a non-resident, i1 
 must be first made to appear by affidavit that a cause of action 
 exists in favor of the plaintiff for a breach of a contract 
 * made within the State, or relating to property situated within 
 the State at the time of the making thereof.' " " 
 
 § 790. Id.: On What and How Sheriff May Levy.— Under a 
 warrant of attachment against a foreign corporation (othei 
 than one created by or under the laws of the United States ) , 
 the sheriff may levy upon the sum remaining unpaid upon a 
 subscription 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." When a 
 defendant who has not appeared is a foreign corporation and 
 the summons was served without the State or by publicatior 
 pursuant to an order therefor, the judgment can be enforced 
 only against the property which has been levied upon bj 
 virtue of the warrant of attachment at the time when th( 
 judgment is entered.^" The way in which the warrant oi 
 attachment requires the sheriff to satisfy a judgment agains 
 a foreign corporation is prescribed by statute.^ A warran 
 of attachment against a defendant foreign corporation neec 
 only state that the defendant is a foreign corporation; i 
 need not state that the cause of action arose within this Stati 
 or that the plaintiff is a resident thereof.^ 
 
 § 791. Receivers: Appointment; When New York Courts Wil 
 Appoint, In General. — The appointment in its home State o 
 receivers for a foreign corporation, while it may vest its prop 
 erty in them, does not take away from it title to its assets ii 
 this State so as to deprive the New York courts of the right t( 
 control such assets for the benefit of local creditors.' WhU 
 the courts of New York cannot exercise the power to wind u] 
 
 " Shelby Steel Tube Co. v. Bur- ' C. C. P. § 1370. 
 
 gess Gun Co., 8 A. D. 444, 40 N. Y. ^ Maury v. American Motor Co 
 
 Supp. 871 (1896) ; C. C. P. § 1780, 25 Misc. 657, 56 N. Y. Supp. 31 
 
 subd. 3. (1898) ; aff'd 38 A. D. 623, 57 N. "5 
 
 ^* People V. St. Nicholas Bank, 44 Supp. 1142. The moving paperi 
 
 A. D. 313, 60 N. Y. Supp. 719 however, should state plaintiff 
 
 (1899) ; C. C. P. §§ 635, 636, 1780. residency. 
 
 ^» C. C. P. § 646. ^ Courtright v. Vreeland, 64 Mis- 
 
 20 
 
 C. C. p. § 707. 46, 117 N. Y. Supp. 952 (1909). 
 
§ 791 FORiGlGN CORPORATIONS 927 
 
 a foreign corporation at the proceeding of a stockholder 
 which they may over a domestic corporation, they may in 
 equity take charge of a foreign corporation's property and 
 appoint a receiver for the benefit of creditors or stockholders.* 
 A New York court will not wind up the affairs of a corpora- 
 tion of a foreign country by appointment of a receiver, etc., 
 though such country has declared the corporation's charter 
 annulled, if the declaration also keeps the company in exist- 
 ence for certain purposes, e. g., of haying examination made 
 as to the amount it owes such country and of being collectively 
 responsible for the amount found due.^ The fact that a stock- 
 holder in a foreign corporation is also one of its officers does 
 not prevent him from bringing an action in this State, after 
 proceedings to dissolve it have been begun in its home State 
 in which its officers were prevented from administering its 
 assets, to preserve its assets by sequestration and temporary 
 receivership; because there is no officer empowered to hold 
 such assets."- The courts of this State, at the suit of a minority 
 of the officers of a foreign corporation who are stockholders 
 and personally interested in the distribution of a fund of the 
 corporation in^the possession of the majority officers who have 
 complete control of the corporation and are all residents of 
 New York, will, though all the stockholders of the corporation 
 are not parties to the suit and it is in process of voluntary 
 dissolution in its home State, appoint a receiver of such fund 
 and apply it first to the corporate creditors and secondly to 
 the stockholders in accordance with such dissolution proceed- 
 ings, if such resident officers' insolvency puts the fund in 
 jeopardy, they prevent suit by the corporation itself to pro- 
 tect such fund through being all its executive and a majority 
 of its administrative officers and the courts of the corpora- 
 tion's home State have no jurisdiction of them.'' A receiver 
 of a foreign corporation against which a judgment has been 
 entered and execution thereon returned unsatisfied may be 
 appointed if it submitted to the action by appearance.* A 
 receiver may be appointed in this State of an insolvent foreign 
 corporation, with its principal place of business in New York, 
 against which judgments have been recovered, on which 
 
 ^Murray v. Vanderbilt, 39 Barb. 694 (1899) ; C. C. P. §§ 1780, 1810, 
 
 140 (1863). subd. 3. 
 
 ^Hamilton v. Accessory Transit 'Redmond v. Hoge, 3 Hun, 171 
 
 Co., 26 Barb. 46 (1857). (1874). 
 
 " MacNabb v. Porter Air-Lighter * De Bemer v. Drew, 57 Barb. 438 
 
 Co., 44 A. D. 102, 60 N. Y. Supp. (1870). 
 
928 BUSINESS CORPORATIONS IN NEW YORK §§ 792, 7i. 
 
 executions are unsatisfied, and which has fraudulently dii 
 posed of its property in New York to the fraud and damag 
 of the complaining and other judgment creditors." Th 
 courts of this State have power at the instance of stockholdei 
 and for the protection of domestic creditors to appoint 
 receiver of the assets in this State of a foreign corporatio 
 which is insolvent, doing business in New York State, but hs 
 no officers in New York." The only purpose and excuse fc 
 appointing a receiver in a representative action by a stoc] 
 holder of a foreign corporation is to preserve assets. 
 ". . . a receiver of the property of an insolvent foreig 
 corporation situated in this State may be appointed to pr 
 serve the property pendente lite for the protection of tl 
 interests of New York creditors."" A resident judgmei 
 creditor praying for sequestration and distribution of tl 
 property of a debtor foreign corporation, though not entitle 
 to such relief because outside the court's jurisdiction to giv 
 may be granted a receivership.^' A non-resident stockholdc 
 in a foreign corporation may sue for the appointment of 
 receiver of its property in this State (though not to set asi( 
 an assignment for the benefit of creditors), without previoi 
 demand of the corporation for redress and irrespective of i 
 having obtained a license to do business." 
 
 § 792. Id.: In Supp. Pro. — Since nineteen hundred and eig 
 a domestic or foreign corporation is as subject to having 
 receiver appointed in proceedings supplementary to executi( 
 as an individual and is only subject to the liniitation contain( 
 in the twenty-four hundred and sixty-third section of the Co( 
 of Civil Procedure." 
 
 § 793. Id.: Kind of Receivers New York Courts Will Appoii 
 — The courts of this jurisdiction have power to appoint 
 receiver of the property and assets of a foreign corporatio 
 to preserve them from unlawful disposition and waste, thou, 
 
 ' Dreyfuss v. Seale, 18 Misc. 551, " Horton v. McNally Co., ] 
 
 41 N. Y. Supp. 875 (1896). A A. D. 322, 140 N. Y. Supp. v 
 
 receiver of the proi>erty of a foreign (1913). 
 
 corporation cannot, however, be ap- ^^ Dreyfuss v. Seale, 18 Misc. 5 
 
 pointed to wind up its afiairs; nor 41 N. Y. Supp. 875 (1896) ; C. C. 
 
 can its property be sequestrated for §§ 1784, 1207. 
 distribution pursuant to C. C. P. "Walter v. F. E. McAlister ( 
 
 § 1784. 21 Misc. 747, 48 N. Y. Supp. 
 
 " Hall V. HoUand House Co., 12 (1897) ; C. C. P. § 1780, subd. 3 
 Misc. 55, 33 N. Y. Supp. 50 (1895). ^^Rabbe v. Astor Trust Co., 
 
 '^ Sedgwick v. Seward Develop- Misc. 650, 114 N. Y. Supp. : 
 
 ment Co., 144 A. D. 455, 129 N. Y. (1909) ; L. 1908, c. 278, amen 
 
 Supp. 209 (1911). C. C. P. § 2463. 
 
§§ 794-797 FOREIGN CORPORATIONS 929 
 
 not to appoint a receiver of the foreign corporation itself." 
 In a representative resident stockholder's action in this State 
 against his foreign corporation with valuable and solvent 
 assets, to protect it from a fraudulent conspiracy by two 
 other resident stockholders controlling the board of directors 
 and officers, to denude it of its assets by transfer to other 
 foreign corporations in which such stockholders are interested, 
 the court will not appoint a general receiver of all its prop- 
 erty, wherever situated, but only of its property in this State, 
 leaving the general receiver to be appointed, if at all, in the 
 corporation's home State; though the court will try the issue 
 of conspiracy and will, if proper, enjoin the transfer and 
 require an accounting and restoration of corporate property, 
 even though outside its jurisdiction." 
 
 § 794. Id.: Revocation of Appointment. — A corporation- 
 creditor which has consented to the appointment in this State 
 of receivers for a foreign corporation-debtor cannot move 
 to set aside the receivership in this State on the ground that 
 the receivers appointed in the debtor 's home State have been 
 removed for lack of jurisdiction to appoint them.^* 
 
 § 795. id.: Notice of Appointment. — The statute requiring 
 notice to the Attorney-General of a proposed order appoint- 
 ing a temporary receiver of a corporation and sequestrating 
 its property applies to domestic corporations only, and not to 
 foreign corporations.'^' 
 
 § 796. Id.: Powers Of, In General. — Directors of a foreign cor- 
 poration who loan their individual funds to it in an effort to 
 tide over its temporary embarrassment and contract with it 
 for security for their loan are entitled to such security as 
 against a receiver appointed of the corporation on its being 
 made manifest that its embarrassment was not temporary.^" 
 
 § 797, Id.: When Appointed in Another State.—" 'While the 
 laws of a foreign State have no force, as such, in this State, 
 still our courts uphold the title of a foreign assignee or 
 receiver upon the principle of comity. If the title is by 
 virtue of a volunta,ry conveyance or transfer, it is sustained 
 as against all, including even domestic creditors, but if it 
 
 "Rensens v. Manufacturing and "MacNabb v. Porter Air-Lighter 
 
 Selling Co., 99 A. D. 214, 90 N. Y. Co., 44 A. D. 102, 60 N. Y. Supp. 
 
 Supp. 1010 (1904). 694 (1899); L. 1883, c. 378. 
 
 " Hallenborg v. Greene, 66 A. D. ^ Converse v. Sharpe, . 37 A. D. 
 
 590, 73 N. Y. Supp. 403 (1901). 399, 55 N. Y. Supp. 1080 (1899); 
 
 ^'Horton v. McNally Co., 155 aff'd 161 N. Y. 571, 56 N. E. 69. 
 A. D. 322, 140 N. Y. Supp. 357 
 (1913). 
 
 B.C.N.Y.— 59 
 
930 BUSINESS CORPORATIONS IN NEW YORK § 7' 
 
 depends on a foreign statute or judgment, it is sustaine 
 against all except domestic creditors. Subject to thei 
 superior rights, the plaintiff can reduce to possession all th 
 property of the defendant in this State, and can bring replevi 
 for that purpose or trover to recover damages for convei 
 sion. Notes and accounts may be collected by the unusual pr( 
 ceedings in our courts, which regard a foreign receiver a 
 representing the original owner, and open their doors to hii 
 as they do to a domestic receiver." ^ A receiver of a foreig 
 corporation appointed by the courts of the foreign State an 
 living there, having full jurisdiction in a suit for the windin 
 up of the affairs of the corporation, with power, so far as i 
 could be conferred by such appointment, to demand, sue foi 
 collect, receive and take into his possession all the property 
 effects and choses in action of said corporation, cannot mail 
 tain an action in the courts of New York against such coi 
 poration as sole defendant for the sole purpose of procurin 
 the appointment of an ancillary receiver in New Yoik 
 ' ' When an action by a foreign receiver to collect assets, unde 
 the authority of the court which appointed him, works n 
 detriment to any citizen of this State, and is not repugnant t 
 its policy, it would be a provincial and narrow view for ou 
 courts to refuse to extend the usual State comity. . . 
 While we should keep control of the subject, so as to see tha 
 no discrimination is practiced against our citizens, o 
 injustices done them either as to the substance of the liabilit; 
 or the method of procedure, Avhen the same result is attained 
 in practically the same way as, under similar circumstances 
 would be attained in the case of a domestic corporation, tlier 
 is no reason for Avithholding that aid which is now affordei 
 by the courts of almost all enlightened countries."' Whe: 
 the laws of a foreign State give a receiver of a corporatio: 
 there appointed the right to enforce its stockholders' liabilit 
 for corporate debts under it;i statutes he can sue to recove 
 against a stockholder in this State, even though the latter b 
 the only defendant, was not represented in court in the foreig: 
 State on the appointment of the receiver and the foreig: 
 statute imposing the liability provided no form of remedy 
 ' ' Where a receiver of a corporation is duly appointed by . 
 
 'Mabon v. Ongley Electric Co., 179, 47 L.R.A. 725, 56 N. E. 48 
 
 156 N. Y. 196, 50 N. E. 805 (1898). (1900). 
 
 ^Mabon v. Ongley Electric Co., ^Howarth v. Angle, 162 N. "5 
 
 156 N. Y. 196, 50 N. E. 805 (1898). 179, 47 L.R.A. 725, 56 N. E 48 
 
 ^Howarth v. Angle, 162 N. Y. (1900). 
 
§§ 798, 799 FOREIGN CORPORATIONS 931 
 
 court of a sister State and given authority to continue the 
 business of such corporation and to make purchases for that 
 purpose, such receiver may make such purchases in the State 
 in which he is appointed, or in any other State, without being 
 personally liable therefor, provided only that he discloses the 
 character in which he assumes to act, and the source of such 
 authority."^ A domiciliary foreign receiver of a foreign 
 corporation will be permitted to vote the stock of a domestic 
 corporation owned by the foreign corporation in preference to 
 an ancillary receiver appointed in New York of such foreign 
 corporation.* Although the rule seems to be thoroughly estab- 
 lished that the title of an assignee or receiver under involun- 
 tary or bankruptcy proceedings in a foreign State will not 
 be upheld as against an attachment obtained and served by a 
 resident of this State, yet the title which is vested by the 
 statutes of a foreign State in the statutory liquidator of a 
 corporation (insurance) incorporated in that State but doing 
 business in this will be upheld even as to property of such 
 corporation in this State as against one of its creditors resi- 
 dent in this State seeking to attach such property.' 
 
 § 798. Id.: Of Ancillary Receiver Appointed in New York. — 
 One appointed receiver of a foreign corporation, as ancillary 
 to a receiver appointed in its home State, by an order granting 
 him " the usual powers and duties of receivers according to 
 the laws of this State and the practice of this court," etc., 
 may settle (as distinguished from compromise) a claim aris- 
 ing under a lease.* If an insolvent foreign corporation has 
 conveyed away all its assets to one foreign receiver, so that 
 it owns nothing in this State, there is nothing as to which an 
 ancillary receivership in this State can attach or which the 
 ancillary receiver is entitled to collect.' 
 
 § 799. Id.: Accounting, and Compensation. — The accounts 
 of one appointed receiver of a foreign corporation in its home 
 State and ancillary receiver thereof in New York will not be 
 surcharged because he accounted in his hom'e State and sought 
 
 ^ Sager Manufacturing Co. v. fire, insurance corporation in hands 
 
 Smith, 45 A. D. 358, 60 N. Y. Supp. of Penna. insurance superintendent 
 
 849 (1899); afiE'd 167 N. Y. 600, 60 as statutory liquidator. 
 
 N. E. 1120. * Goodrich v. Sanderson, 35 A. D. 
 
 ^ American & British Mfg. Co. v. 546, 55 N. Y. Supp. 881 (1898) ; 2 
 
 International Power Co., 173 A. D. R. S. 41, § 7. 
 
 319, 159 N. Y. Supp. 582 (1916). ^ Chicago Title & Trust Co. v. 
 
 ' Martyne v'. American Union Fire German Insurance Co., 119 A. D. 
 
 Ins. Co., 216 N. Y. 183, 110 N. B. 347, 104 N. Y. Supp. 253 (1907). 
 502 (1916); Ins. L. § 63. Penna. 
 
932 BUSINESS CORPORATIONS IN NEW YORK §§ 800, 801 
 
 no advice from the courts of this State or did not obtain an 
 order from the New York courts authorizing him as ancillary 
 receiver to turn over funds in his hands to himself as principal 
 receiver, if his conduct has otherwise been proper. Ancil- 
 lary receivers in this State of a foreign corporation appointed 
 without authorization cannot be directed by the court to be 
 paid or reimbursed out of the corporation's property without 
 its consent." 
 
 § 800. Id.: Actions By and Against; In General. — ^A citizen of 
 New York State may invoke the aid of its courts to establish 
 any claim he may have against a receiver of a foreign corpo- 
 ration appointed in a foreign State who brings himself within 
 the jurisdiction of such courts, if the claim be founded upon 
 an agreement entered into with the receiver in his official 
 capacity and arise out of a transaction which occurred within 
 this State ; and failure to apply to the court for leave to sue 
 does not deprive it of jurisdiction." An auxiliary receiver 
 in this State for a foreign corporation's assets cannot, unless 
 it be shown he was appointed by judgment, or the powers of 
 a permanent receiver were conferred on him by court order, 
 or he has been specifically authorized by the court to main- 
 ,tain the action, sue to set aside as fraudulent a transfer of 
 assets and recover from the transferee the value thereof." 
 ". . . a foreign trustee, receiver or liquidator may, in a 
 proper case, sue in our courts a stockholder resident here, for 
 his proportionate liability as such stockholder." " Eeceivers 
 appointed to protect corporate property which has vested in 
 them by decree of the courts of a foreign State but who have 
 neither been substituted- in place of the corporation in an 
 action against it nor been made additional parties defendant 
 cannot appeal from a judgment against it." 
 
 § 801. Id.: Service of Process On. — Service of process against 
 a foreign corporation in the hands of Federal receivers can- 
 
 ^° Strauss v. Casey. Machine & '* Royal Trust Co. v. Harding, 155 
 
 Supply Co., 68 Misc. 474, 124 N. Y. A. D. 104, 140 N. Y. Supp. 9 
 
 Supp. 32 (1910). The provisions of (1913). 
 
 Art. II of the General Corporation ^^ Jones v. Woodin, 164 A. D. 79, 
 
 Law regulate the conduct of receiv- 149 N. Y. Supp. 377 (1914) ; 
 
 ers of domestic and not foreign cor- C. C. P. § 1296. 
 
 porations. On rights of receiver as to prop- 
 
 " Moe V. McNally Co., 138 A. D. erty outside of the jurisdiction in 
 
 480, 123 N. Y. Supp. 71 (1910). which, he is appointed, see note in 
 
 " Le Fevre v. Matthews, 39 A. D. 23 L.R.A. 52, 494. 
 
 232, 57 N. Y. Supp. 128 (1899). On power of receiver to sue out 
 
 ^^ Buckley v. Harrison, 10 Misc. of jurisdiction of appointment, see 
 
 683, 31 N. Y. Supp. 999 (1895). note in 4 L.R.A.(N.S.) 824. 
 
§§ 802, 803 FOREIGN CORPORATIONS 933 
 
 not legally be made upon their managing agent if it does not 
 appear that the receivers themselves could not have been 
 served." Service in an action by a resident against receivers 
 appointed by the Federal court of a non-resident corporation 
 may be had on an agent of the receivers if they have not 
 designated a person within this State to receive service and 
 have property in the State." 
 
 § 802. Id.: Officers, Directors and Stockholders of Foreign 
 Corporations: What Law Governs Contracts of, With Corpora- 
 tion. — ^A citizen of this State who becomes a shareholder in a 
 corporation organized under the laws of another State is 
 bound by the interpretation of the extent and obligation of 
 contracts entered into by him with such corporation which 
 the law of the foreign State show, so far as it does not violate 
 a statute or the settled policy of this State ; but such law will 
 be presumed the same as the common law of New York if it 
 be not alleged and proven here as a fact.^* 
 
 § 803. Id.: When New York Courts Will Entertain Actions 
 By and Against. — The courts of this State have jurisdiction of 
 a representative action by a stockholder to secure payment of 
 i dividends of his foreign-corporation's stock.^" A cause of 
 action by a resident stockholder of one foreign corporation 
 foT its benefit against another foreign corporation will be 
 entertained by- the courts of this State if it could have been 
 brought directly by the corporation to be benefited if it were 
 a domestic corporation, although it could not be entertained 
 as a direct action of one foreign corporation against another.™ 
 A non-resident plaintiff may attach in this State shares of 
 stock owned by a non-resident defendant in a foreign corpora- 
 tion if it has its chief place of business in a city of this State, 
 manufactures goods there, makes its business arrangements 
 there, paid its bills there, carries on its general business 
 there, and has for two of its three directors residents of that 
 city. The courts of this State will restrain a trustee of a 
 
 ^« Gursky v. Blair, 218 N. Y. 41, ^^ Southworth v. Morgan, 205 
 
 L:R.A.1916r, 359, 112 N. E. 431 N. Y. 293, 51 L.R.A.(N.S.) 56, 98 
 
 (1916); C. C. P. § 432. N. E. 490 (1912). 
 
 "Jacobs V. Blair, 157 A. D. 601, ^"Prouty v. Michigan Southern & 
 
 142 N. Y. Supp. 897 (1913) ; Jndi- Northern Indiana R. R. Co., 1 Hun, 
 
 cial Code (36 U. S. Stat, at Large, 655 (1874) ; Code, § 427, now 
 
 1104), § 65; C. C. P. §§ 432, 1780. C. C. P. 
 
 For authorities discussing the ^° Jacobs v. Mexican Sugar Refin- 
 
 question of service of process after ing Co., Ltd., 104 A. D. 242, 93 
 
 appointment of. foreign receiver N. Y. Supp. 776 (1905) ; C. C. P. 
 
 upon person designated by statute §§ 1779, 1780. 
 to receive service for corporation, 
 see note in 47 L.R.A.(N.S.) 179. 
 
934 BUSINESS CORPORATIONS IN NEW YORK §§ 804, 805 
 
 foreign corporation's stock for a purpose which cannot be 
 effectuated, from exercising any of the privileges of a stock- 
 holder as such trustee, during the pendency of an action 
 in this State to which the corporation is a party .^ An 
 assignee for the benefit of creditors of a foreign corporation 
 empowered by the foreign law to maintain any action the cor- 
 poration might, may bring an action in this State on behalf of 
 all the corporate creditors against all the original stock- 
 holders in this State (they being the only ones solvent and 
 liable), after exhausting the legal remedy in the foreign state, 
 and the indebtedness of the corporation after crediting all 
 amounts received from stockholders having been ascertained 
 in the foreign state.^ 
 
 §804. Id.: Testing Title to Office of.—". . . the courts of 
 this State will not undertake to set aside the election of officers 
 of a foreign corporation, nor will it restrain their action as 
 such." ' It seems that the courts of this State will not annul 
 the election of directors by the stockholders of a corporation 
 chartered in another State.* A question of whether or not 
 certain individuals are the real officers of a foreign corpo- 
 ration, which depends upon the answer to a further question 
 of whether or not a pivotal director was or Avas not a stock- 
 holder when elected and eligible to be a director, will not be 
 determined by a court of New York State on aii application to 
 enjoin those individuals from acting as the corporation's 
 officers; and such an injunction will, therefore, be denied.^ 
 
 § 805. Id.: Liabilities of, In General.— The officers, directors 
 and stockholders of a foreign stock corporation transacting 
 business in New York State (except moneyed and railroad 
 corporations) are liable in the same manner and to the same 
 extent, except as otherwise provided by the statute, as the 
 officers, directors and stockholders of a domestic corporation, 
 for the following acts heretofore discussed in their relation 
 to domestic corporations (to which discussion reference is 
 made): (1) The making of unauthorized dividends;" (2) 
 
 '^ Butler V. Standard Milk Flour * Travis v. Knox Terpezone Co., 
 
 Co., 146 A. D. 735, 131 N. Y. Supp. 215 N. Y. 259, L.R.A.1916A, 542, 
 
 451 (1911). 109 N. E. 250 (1916). 
 
 ^ Stoddard v. Lum, 159 N. Y. 265, ^ Washington Lighting Co. v. 
 
 45 L.R.A. 551, 53 N. E. 1108 Dimmick, 41 A. D. 596, 58 N. Y. 
 
 (1899). Illinois corporation. Supp. 682 (1899). 
 
 ^Butler V. Standard Milk Flour ° St. Corp. L. § 70 (L. 1909, 
 
 Co., 146 A. D. 735, 131 N. Y. Supp. c. 61), and § 289, supra. 
 451 (1911). 
 
§ 806 
 
 FOREIGN CORPORATIONS 
 
 935 
 
 unlawful loans to stockholders ; ' (3) making false certificates, 
 reports or public notices f (4) an illegal transfer of the stock 
 and property of such corporation, when it is insolvent or its 
 insolvency is threatened;' (5) the failure to file an annual 
 report." The liabilities of officers, directors and stockholders 
 of foreign corporations mentioned may be enforced in the 
 courts of New York State in the same manner as similar lia- 
 bilities imposed by law upon the officers, directors and stock- 
 holders of domestic corporations." There is no objection to 
 a resident creditor of a foreign corporation uniting in one 
 action various claims of the corporation against its officers 
 or others which are applicable to the payment of its debts to 
 him.^^ 
 
 § 806. Id.: Of Directors for Unauthorized Dividends. —The 
 right to enforce the liability of directors for declaring divi- 
 dends from capital may be given by the legislature of this 
 State to a foreign corporation itself the capital of which is 
 lessened, even though the laws of the state of its incorporation 
 give such right only to its stockholders, provided that the 
 latter state condemns the practice itself.^' Directors of a for- 
 eign corporation doing business in this State and subjecting 
 itself to the conditions established by the laws of this State 
 may be charged with liability if they declare dividends from 
 capital, if the statute imposing such liability was in force when 
 the corporation came into this State." Directors of a foreign 
 corporation doing business in this State may be held liable in 
 a representative stockholder's action in New York for the 
 amount of its capital dividend among stockholders in the 
 shape of a dividend prohibited by the home state of the corpo- 
 
 'St. Corp. L. § 70 (L. 1909, 
 e. 61), and § 349, supra. 
 
 *St. Corp. L. § 70 (L. 1909, 
 e. 61), and §§ 351, 352, supra. 
 
 ^St. Corp. L. § 70 (L. 
 c. 61), and § 350, supra. 
 
 "St. Corp. L. § 70 (L. 1909, 
 c. 61), and § 351, supra. 
 
 "St. Corp. L. § 70 (L. 1909, 
 c. 61). 
 
 ^^ Atlantic Dredging Co. v. Beard, 
 145 A. D. 342, 130 N. Y. Supp. 4 
 (1911); aff'd 203 N. Y. 584, 96 
 N. E. 415. 
 
 On right of State to impose per- 
 
 1909, 
 
 sonal liability on stockholder of 
 foreign corporation, see note in 33 
 L.R.A.(N..S.) 907. 
 
 On partnership liability of stock- 
 holders of foreign corporation de- 
 fectively or illegally incorporated, 
 see note in L.R.A.1916C, 217. 
 
 ^' Grerman- American Coffee Co. v. 
 Diehl, 216 N. Y. 57, 109 N. E. 875 
 (1916); St. Corp. L. §§ 28, 70, 
 N. J. corporation. 
 
 ^* German-American Coffee Co. v. 
 Diehl, 216 N. Y. 57, 109 N. E. 875 
 (1916); St. Corp. L. § 70. N. J. 
 corporation. 
 
936 BUSINESS CORPORATIONS IN NEW YORK § 807 
 
 ration." An action may be maintained in New York against a 
 director of a New Jersey corporation to recover the amount 
 of dividends declared in violation of the laws of that State, to 
 the same extent as if he were a director of a domestic corpo- 
 ration." The only right given by the statutes of New York 
 against directors of a foreign stock business corporation for 
 making unauthorized dividends is that given by the statutes 
 of the State chartering the corporation, so that if the statutes 
 of New York give the right for the corporation 's benefit while 
 the statutes of the chartering state ^give it for the benefit of 
 the individual stockholders, an action in New York on the 
 former theory will not be sustained.^' 
 
 § 807. Id.: Of OflScers and Directors to Account for Injury 
 to .or Loss of Corporate Property. — A foreign is as much 
 subject as a domestic corporation to the statute.^' A director 
 of a foreign corporation may bring an action in New York to 
 compel its president and one of its directors to account for his 
 conduct as such and repay money and the value of property 
 to the corporation which he has wasted ; but the courts of this 
 State will not appoint a receiver for such corporation, though 
 they will enjoin the defendant from disposing of or interfering 
 with the corporate property." The courts of this State haVe 
 jurisdiction of an action by a resident stockholder of a foreign 
 corporation to compel an accounting and the restoration by 
 stockholders and directors of the corporation within the juris- 
 diction of the New York courts for an illegal appropriation of 
 its stock by the increase of stock and its subsequent delivery 
 without consideration.^" A dissolved foreign corporation is 
 not a necessary party defendant to an action by a resident 
 
 "Hutchinson v. Stadler, 85 A. D. 413 (1914); aff'd 168 A. D. 913; 
 
 424, 83 N. Y. Supp. 509 (1903) ; St. Gen. Corp. L. § 91-a (L. 1913, 
 
 Corp. L. § 60 (L. 1897, c. 384, c. 633). 
 
 523) (prior to amendment of L. ^° Acker v. Coughlin, 103 A. D. 1, 
 
 1901, c. 354). 92 N. Y. Supp. 700 (1905) ; C. C. P. 
 
 ^"Hutchinson v. Curtiss, 45 Misc. § 1781. 
 
 484, 92 N. Y. Supp. 70 (1904); St. ^» Ernst v. Rutherford & Boiling 
 
 Corp. L. §§ 23, 60 ; N. J. Gen. Corp. Springs Gas Co., 38 A. D. 388, 56 
 
 L. § 30. N. Y. Supp. 403 (1899). It seems 
 
 " De Raismes v. United States that the New York courts would 
 
 Lithograph Co., 161 A. D. 781, 146 also entertain an action to control 
 
 N. Y. Supp. 813 (1914); Gten. Corp. the internal management of a 
 
 L. of N. J., § 30 (L, 1896, c. 185, foreign corporation if it were illegal 
 
 § 30) ; Stock Corp. L. of N. Y. and caused injury to individual 
 
 §§ 28, 70. stockholders resident in this State, 
 
 ^° German-American CofEee Co. v. though not if it constituted only a 
 
 Diehl, 86 Misc. 547, 149 N. Y. Supp. public wrong. 
 
§ 808, 809 FOREIGN CORPORATIONS 937 
 
 creditor to reach its assets in the hands of resident directors 
 applicable to its debts.^ A domestic creditor of a foreign cor- 
 poration which has been dissolved need not obtain a judgment 
 against it as a prerequisite to suing domestic direqtors of the 
 corporation into whose hands the creditor seeks to trace cor- 
 porate funds applicable to its debts.^ 
 
 § 808. Id.: Of Stockholders for Corporate Debts.— -The 
 courts of New York will not entertain jurisdiction of an action 
 against individual stockholders of a foreign corporation to 
 enforce their liability for its debts based on a statute of such 
 foreign state: certainly not if the suit is equitable and seeks 
 an accounting between creditors and stockholders, and neither, 
 the corporation nor its creditors are parties.^ A resident 
 holding bonds of a foreign corporation cannot hold a non- 
 resident stockholder therein for a liability imposed upon him 
 by the foreign statutes in the absence of any judgment in his 
 favor in the foreign state ; nor sustain an attachment against 
 the defendant.* 
 
 § 809. Id.; Of Stockholders for Unpaid Subscription — " It 
 is doubtless the rule that where a foreign statute which creates 
 the liability of a stockholder also provides a remedy for the 
 enforcement of that liability, such remedy is exclusive and 
 our courts will not intervene to enforce it (citations). But 
 it is also obvious that the remedy referred to in these cases is 
 the remedy against the stockholder who is a resident of this 
 and a non-resident of the state which is the domicile of the 
 corporation, for if it were not so no proceeding could be 
 instituted against stockholders residing in the domicile of a 
 corporation without cutting off any right of action against 
 stockholders who reside outside of that domicile ; " so that if 
 the only remedy prescribed by the foreign law is the right of 
 suit against stockholders in other jurisdictions, for all prac- 
 tical purposes the case is no different from one in which it 
 appears that the foreign statute has provided no remedy, and 
 the action against the stockholder in this State will be 
 
 ^ Atlantic Dredging Co. v. Beard, ^ Cleveland, Lorain & Wheeling 
 
 145 A. D. 342, 130 N. Y. Supp. 4 Ry. Co. v. Kent, 87 Hun, 329, 34 
 
 (1911); aff'd 203 N. Y. 584, 96 N. Y. Supp. 427 (1895). 
 
 N. E. 415. ^Brookman v. Merchants' Savings 
 
 ^ Atlantic Dredging Co. v. Beard, Bank, 31 Misc. 191, 65 N. Y. Supp. 
 
 145 A. D. 342, 130 N. Y. Supp. 4 54 (1900). 
 (1911); afif'd 203 N. Y.^584, 96 
 N. E. 415. 
 
938 BUSINESS CORPORATIONS IN NEW YORK § 809 
 
 upheld. "° It seems that there is no statute of New York 
 State prescribing, as a condition to the exercise therein of the 
 rights derived from a foreign state (New Jersey), as to the 
 liability of a stockholder of a corporation of such foreign 
 state for unpaid subscriptions to his stock, that he shall be 
 liable to the creditors up to the nominal value of his stock; 
 and the principles of the common law therefore apply.° An 
 action against a stockholder in a foreign corporation under 
 the statutes of the state of its incorporation to enforce his 
 statutory liability for its debts on its insolvency will not be 
 entertained in this State, especially if brought in a form 
 different from that which a creditor of a domestic corporation 
 may prosecute against a domestic stockholder/ 
 
 ° Shipman y. Treadwell, 200 N. Y. (1895) . The action was by a single 
 
 472, 93 N. E. 1104 (1911). Suit creditor against a single stockholder 
 
 by receiver of Ohio corporation to instead of a suit by or in behalf of 
 
 enforce statutory' liability under all creditors against all stockholders. 
 
 Ohio laws of stockholder in New On necessity of exhausting legal 
 
 York. remedies againsrt corporation before 
 
 * Southworth v. Morgan, 205 N. Y. invoking jurisdiction of equity to 
 
 293, 51 L.R.A.(N.S.) 56, 98 N. E. enforce liability on unpaid subscrip- 
 
 490. tion to stock, see note in 46 L.R.A. 
 
 'Marshall v. Sherman, 148 N. Y. (N.S.) 447. 
 9, 34 L.R.A. 757, 42 N. E. 419 
 
CHARTER. 
 
 GREATER NEW YORK CHARTER. 
 
 § 71. (L. 1901, c. 466.) The rights of the city in and to its water front, 
 ferries, wharf property, land under water, public landings, wharves, docks, streets, 
 avenues, parks, and all other public places are hereby declared to be inalienable. 
 
 § 72. (L. 1895, c. 629.) Every grant of or relating to a franchise of any 
 character to any person or corporation must, unless otherwise provided in this 
 act, be by ordinance of the board of aldermen or by resolution of the board of 
 estimate and apportionment or a contract executed by or under the authority 
 of the said board of estimate and apportionment, provided that every such 
 ordinance, resolution or contract shall be subject to the provisions of this act 
 with respect to approval by the mayor. But this section shall not apply to any 
 franchise, right or contract authorized by the board of rapid transit railroad 
 commissioners of The City of New York, 
 
 § 73. (L. 1905, c. 629.) After the approval of this act no franchise or right 
 to use the streets, avenues, waters, rivers, parkways or highways of the city 
 shall be granted by any board or officer of The City of New York under the 
 authority of this act to any person or corporation for a, longer period than 
 twenty-five years, except as herein provided, but such grant may, at the option 
 of the city, provide for giving to the grantee the right on a fair revaluation 
 or revaluations to renewals not exceeding in the aggregate twcnty-iive years. 
 Nothing in the foregoing provisions of this section contained shall apply to 
 consents granted to tunnel railroad corporations; nor shall anything in this 
 section or in this title contained apply to grants made pursuant to the rapid 
 transit act, chapter four of the laws of eighteen hundred and ninety-one or the 
 acts amendatory thereof. The board of esitimate and apportionment is hereby 
 authorized, in its discretion to grant a franchise or right to any railroad cor- 
 poration to use any of said streets, avenues, waters, rivers, parkways or high- 
 ways in The City of New York for the construction and operation of a tunnel 
 railroad underneath the surface thereof for any period not exceeding fifty years, 
 and any such grant may at the option of the city provide for giving to the 
 grantee the right, on a fair revaluation or revaluations, to renewals not exceed- 
 ing in the aggregate twenty-five years, provided, however, that any grant to 
 construct a tunnel railroad or renewal thereof, shall only be made after an 
 agreement has been entered into by such a tunnel corporation to pay to The City 
 of New York at least three per centum, of the net profits derived from the use 
 of any tunnel which it shall construct, after there shall have been first retained 
 by such company from such net profits a sum equal to five per centum upon the 
 sum expended to construct such tunnel. At the termination of any franchise or 
 right granted by the board of estimate ajid apportionment all the rights or 
 property of the grantee in the streets, avenues, waters, rivers, parkways and 
 highways shall cease without compensation. Eveiy such grant of a franchise 
 and every contract made by the city in pursuance thereof may provide that 
 upon the termination of the franchise or right granted by the board of estimate 
 and apportionment the plant of the grantee with its appurtenances, shall there- 
 upon be and become the property of the city without further or other com- 
 pensation to the grantee, or such grant and contract may provide that upon 
 
 [939] 
 
940 BUSINESS CORPORATIONS IN NEW YORK §§ 73, 74 
 
 such termination there sliall be a fair valuation of the plant which ahall be and 
 become the property of the city on the termination of the contract on paying 
 the grantee such valuation. If by virtue of the grant or contract the plant 
 is to become the city's without money payment therefor, the city shall have 
 the option either to take and operate the said property on its own account, 
 or to lease the same for a term not exceeding twenty years. If the original 
 grant shall provide that the city shall make payment for the plant and 
 property, such payment shall be at a fair valuation of the same as property, 
 excluding any value derived from the franchise; and if the city shall make 
 payment for such plant it shall in that event have the option either to operate 
 the plant and property on its own account or to lease the said plant and 
 property and the right to the lise of streets and public places in connection 
 therewith for limited periods, in the same or similar manner as it leases. the 
 ferries and docks. Every grant shall make adequate provision by way of for- 
 feiture of the grant, or otherwise, to secure efficiency of public service at rea- 
 sonable rates and the maintenance of the property in good condition throughout 
 the full term of the grant. The grant or contract shall also specify the mode 
 of determining the valuation and revaluations therein provided for. 
 
 § 74, (L. 1914, e. 467. Before any grant of a franchise or right to use 
 any street, avenue, waterway, parkway, park, bridge, dock, wharf, highway 
 or public ground or water within or belonging to the city shall be made by the 
 board of estimate and apportionment, public hearing shall be held upon the 
 petition therefor, at which citizens shall be entitled to appear and be heard. 
 No such hearing shall be held however, until notice thereof, and the petition 
 in full shall have been published at least ten days in the City Record, and at 
 least twice, at the expense of the petitioner, in two daily newspapers published 
 in the city, to be designated by the mayor. The board of estimate and appor- 
 tionment shall make inquiry as to the money value of the franchise or right 
 proposed to be granted and the adequacy of the compensation proposed to be 
 paid therefor, and shall embody ithe result of such inquiry in a form of contract, 
 with all the terms and conditions, including the provisions as to rates, fares 
 and charges. Such proposed contract, together with the form of resolution or 
 resolutions for the granting of the same, shall, but not until after the hearing 
 upon the petition, be entered on the minutes of the board of estimate and 
 apportionment, and such board shall, not less than twenty-seven days after 
 such entry and before authorizing such contract or adopting any such resolu- 
 tion, hold a public hearing thereon at which citizens shall be entitled to appear 
 and be heard. No such hearing shall be held until after notice thereof, and 
 the proposed contract and proposed resolution of consent thereto, in full, shall 
 have been published for at least fifteen days, except Sundays and legal holidays, 
 immediately prior thereto in the City Record, nor until a notice of such hear- 
 ing, together with the place where copies of the proposed contract and resolu- 
 tion of consent thereto may be obtained by all those interested therein, shall 
 have been published at least twice at the expense of the proposed grantee in 
 the two daily newspapers in which the petition and notice of hearing thereof 
 shall have been published. Every contract or resolution containing or making 
 such grant, shall require the concurrence of members of the board of estimate 
 and apportionment, entitled, as provided by law, to three-fourths of the total 
 number of votes to which all the members of the said board shall be entitled, 
 and the votes shall be shown by the ayes and noes, as recorded in the minutes 
 of the board. The separate and additional approval of the mayor shall be 
 necessary to the validity of every such contract or resolution. 
 
 This act shall apply to any renewal or extension of the grant or leasing of 
 the property to the same grantee, or to others. Within five days after the 
 
§§ 74-892 GREATER NEW YORK CHARTER 941 
 
 final execution of any contract made pursuant to any such resolution or any 
 such authorization, a copy of such contract, together with such resolution, duly 
 attested by the secretary of the board of estimate and apportionment, shall be 
 transmitted to each of the following: The comptroller, the corporation counsel, 
 the city clerk and the public service commission for the district having juris- 
 diction, to be preserved by them in the archives of their departments or 
 offices. All such certified copies shall be deemed to be public records. 
 
 § 75. (L. 1905, ^. 629.) The board of aldermen may, from time to time, 
 with respect to any grant which that board shall, under the authority of this 
 act, have the exclusive power to make, pass appropriate ordinances, not incon- 
 sistent with the constitution and laws of the state, to carry the provisions of 
 this title into effect, but shall not part with the right and duty at all times 
 to exercise in the interest of the public, full niiunicipal superintendence, regula- 
 tion and control in respect of all matters connected with such grant, and not 
 inconsistent with the terms thereof, 
 
 § 798. (L. 1915, e. 594.) Any corporation or association created by or 
 organized under the laws of any government other than the states of this 
 Union, and having assets, funds, or capital, not less in amount than one hun- 
 dred and fifty thousand dollars, invested in this state, shall be liable to taxa- 
 tion upon such assets, funds or invested capital as the same is levied or 
 assessed yearly by law, which tax shall be paid as follows: Such an amount 
 thereof as would be equal to two per centum upon its gross premiums received 
 for insurance upon property, in the city of New York shall, except as otherwise 
 in this title provided, be paid annually to the fire commissioner as treasurer of 
 the fire department, and the residue of said tax requisite to make up the\full 
 amount of taxation upon its capital shall be paid to the City of New York, as 
 in the case of ordinary taxation; and the payments so made as aforesaid shall 
 exempt such corporation or association making the same from any and alt 
 further taxation upon its premiums, capital or assets; and whenever such 
 capital shall be reduced below said sum of one hundred and fifty thousand 
 dollars, or withdrawn entirely, then, and in either event, such corporation or 
 association shall be liable to pay the tax upon its premiums as heretofore 
 provided in this title. 
 
 § 889. (L. 1911, c. 455). It shall be the duty of the deputy tax commis- 
 sioners, under the direction of the board of taxes and assessments, to assess all 
 the taxable property in the several districts that may be assigned to them for 
 that purpose by said board, and they shall furnish to the said board, under 
 oath, a detailed statement of all such property, showing that said deputies 
 have personally examined each and every house, building, lot, pier or other 
 assessable property, giving the street, lot, ward, town and map number of 
 such real estate embraced within said district, together with the name of 
 the owner or occupant, if known; also the sum for which, in their judg- 
 ment, each separately assessed parcel of real estate under ordinary circum- 
 stances would sell if it were wholly unimproved; and separately stated, the 
 sum for which under ordinary circumstances, the same parcel of real estate 
 would sell with the improvements, if any, thereon; with such other informa- 
 tion in detail relative to personal property or otherwise, as the said board 
 may, from time to time, require. Such deputies shall commence to assess real 
 and personal estate on the first day in April in each and every year not a. 
 Sunday or a legal holiday. 
 
 § 889-a. (1/. 1913, c. 324.) A building in course of construction, commenced 
 since the preceding first day of October and not ready for occupancy, shall 
 not be assessed. 
 
 § 892. (L. 1911, c. 455.) There shall be kept in the several offices established 
 by the department of taxes and assessments books to be called " the annual 
 
942 BUSINESS CORPORATIONS IN NEW YORK §§ 892-893 
 
 record of the assessed valuation of real and personal estate in the borough 
 
 of ," in which shall be entered in detail the assessed valuation of 
 
 such property within the limits of the several boroughs of the city of New 
 York as established by this act. In such books the assessed value of real 
 estate shall be set dowTi in two columns; in the first column shall be given, 
 opposite each separately assessed parcel of real estate, the sum for which such 
 parcel under ordinary circumstances would sell if wholly unimproved; and in 
 the second column shall be set down the sum for which the said parcel under 
 ordinary circumstances, would sell, with the improvements, if any, thereon. 
 The annual record of the assessed valuation of real property shall be open for 
 public inspection, examination and correction from the first day in October 
 not a Sunday or a legal holiday until the sixteenth day of November in each 
 year, and the annual record of the assessed valuation of personal estate shall 
 be open for public inspection, examination and correction from the first day in 
 October not a Sunday, or a legal holiday until the first day of December in 
 each year, but on the said respective days the same shall be closed to enable 
 the board of taxes and assessments to prepare assessment-rolls of the several 
 boroughs for delivery to the board of aldermen. The said board, previous to 
 and during the time the said books are open as aforesaid for inspection, shall 
 advertise the fact in the City Record and in such other newspaper or newspaper? 
 published in the several boroughs created by this act as may be authorized by 
 the board of city record. The taxable status of all persons and property 
 assessable for taxation in the city of New York shall be fixed for each year 
 on the day of October in the preceding year provided by law for the opening of 
 the books of annual record of the assessed valuation of real and personal 
 estate of that year.' 
 
 I § 892-a. (L. 1911, c. 455.) When prior to the first day of February, any 
 separately assessed parcel of real estate shall have been divided the board of 
 taxes and assessments may apportion the assessment thereof in such manner 
 as they shall deem to be just and equitable and forthwith cause the assessment 
 to be cancelled and new assessments, equal in the aggregate to the canceled 
 assessment, to be made on the proper books or rolls, and within five days there- 
 after shall cause written notice of the new assessments to be mailed to the 
 owners of record of the real estate so assessed at their last known residence 
 or business address and an affidavit of the mailing of such notice to be filed 
 in the main office. When such notice is mailed after the twenty-fifth day of 
 October such owners of real estate may apply for correction of such assess- 
 ments within twenty days after the mailing of such notice with the same force 
 and effect as if such -application were made on or before the fifteenth day of 
 November in any year. 
 
 § 893. (L. 1901, c. 466.) The department of taxes and assessments shall 
 cause to be prepared and kept in the main office of the department of taxes 
 and assessments a book to be called " the annual record of the assessed valua- 
 tions of real and personal estate of corporations," and it shall be the duty of 
 the deputy tax commis-sioners in the several districts in the several boroughs 
 which may be assigned to them for that purpose by the board of taxes and 
 assessments, under oath at their main office, at the time that such statement 
 is filed in any office of the department of taxes and assessments in any borough 
 other than in the main office in the borough of Manhattan, a duplicate detailed 
 statement of the assessable property of corporations, both real and personal, 
 which said statements of said deputy tax commissioners shall be entered upon 
 the books to be kept in the main office of the department of taxes and assess- 
 ments, to be known as the "Annual record of the assessed valuation of real 
 and personal estate of corporations." 
 
§§ 894-895 GREATER NEW YORK CHARTER 943 
 
 § 894. (L. 1911, c. 455.) The assessed valuation of all personal property- 
 shall be entered by said deputy tax commissioners, or by such other persons 
 as may be assigned to that duty by the department of taxes and assessments 
 in the several offices, in books, or rolls, in alphabetical order, of the names of 
 persons and corporations subject to taxation. No tax or assessftient shall be 
 void by reason of the name of the rightful owner or owners, whether individuals 
 or corporations, of real estate in any of the said boroughs not being inscribed 
 in the assessment rolls or lists; but in such case no tax shall be collected 
 except from the real estate so assessed. The assessed valuation of all real and 
 personal property of corporations shall be entered in duplicate in the office in 
 the borough where the same is assessed and in the main office of the department 
 of taxes and assessments in the borough of Manhattan. If, at any time prior 
 to the first day of January in any one year, it shall appear to the tax com- 
 missioners that a person assessed for taxation on personal estate on the books 
 or rolls of one borough should have been assessed therefor on the books or 
 rolls of another borough, they shall forthwith cause the assessment to be 
 .cancelled and a new assessment to be made on the proper books or rolls, and 
 within five days thereafter shall cause written notice of the new assessment 
 to be mailed to such person at his last known residence or business address 
 within the city of New York, and an affidavit of the mailing of such 
 notice to be filed in the main office. The person so notified may apply for 
 correction of such assessment on or before the twentieth day of January with 
 the same force and effect as if such application were made on or before the 
 thirtieth day of November in any year. 
 
 § 894-a. (L. 1906, c. 207.) So long as the books of annual record of the 
 assessed valuation of real and personal estate of the several boroughs remain 
 open for public inspection, examination and correction, the board of taxes and 
 assessments, after giving at least ten days' prior personal notice to the party 
 in interest, may add to the roll of assessment of such annual record any real 
 estate, or the name of the owner of any personal estate, and also the assessed 
 valuation of any such real or personal estate that may have been omitted from 
 such rolls on the day of the opening of such books. 
 
 § 895. (L. 1913, c. 324.) During the time that books shall be open to public 
 inspection as aforesaid application may be made by any person or corporation 
 claiming to be aggrieved by the assessed valuation of real or personal estate, 
 to have the same corrected.. If such application be made in relation to the 
 assessed valuation of real estate, it must be made in writing, stating the 
 ground of objection thereto. The board of taxes and assessments shall examine 
 into the complaint, as herein provided, and if in their judgment the assess- 
 ment is erroneous they shall cause the same to be corrected. If such applica- > 
 tion be made in relation to the assessed valuation of personal estate, the appli- 
 cant shall be examined under oath by a commissioner of taxes and assessments 
 or by an assistant commissioner or assistant to a commissioner, or by a deputy 
 tax commissioner, as herein provided, who are hereby authorized to administer 
 such oath, and if the assessment as hereinafter provided be determined by the 
 board of taxes and assessments to be erroneous, it shall cause the same to be 
 corrected and fix the amount of such assessment as the board of taxes and 
 assessments may believe to be just, and declare its decision upon and {sic — any) 
 application within the time and in the manner hereinafter provided. But the 
 commissioners of taxes and assessments may, during the last fifteen day's of 
 the month of November and during the months of December and January in 
 any year, act upon applications, examine applicants under oath and take other 
 testimony thereon, for the reduction of assessments upon either real or per- 
 sonal property filed in their offices on or before the fifteenth day of November 
 
944 BUSINESS CORPORATIONS IN NEW YORK §§ 895-898 
 
 preceding as to real estate, and on or before the thirtieth day of November pre- 
 ceding as to personal estate, and cause the amount of any assessment as cor- 
 rected by the board of taxes and assessments to be entered upon the assess- 
 ment rolls for the year for which such correction is made. 
 
 § 896. (L, 1911, c. 455.) The board of taxes and assessments may increase 
 at any time before the sixteenth day of November as to real estate, and before 
 the first day of December as to personal estate in each year or may diminish 
 at any time before the first day of December in each year, the assessed valua- 
 tion for any real or personal estate of any individual or corporation as in its 
 judgment may be just or necessary for the equalization of taxation; but it 
 shall not increase such valuations of the property of any individual or corpora- 
 tion after said books are opened for correction and review, except upon notice 
 given to the individual or corporation affected by such increase at least ten days 
 before the fifteenth day of December in each year. 
 
 § 897. (L. 1915, c. 592.) The board of taxes and assessments is hereby in- 
 vested with power to remit or reduce where lawful cause therefore is shown. 
 It may remit or reduce if found excessive or erroneous a tax imposed upon 
 real or personal property. It shall require a majority of the commissioners 
 of taxes and assessments to remit or reduce the assessed valuation of personal 
 property, and no tax or personal property shall be Temitted, canceled or 
 reduced, except to correct clerical errors, unless the person aggrieved shall satisfy 
 the board of taxes and assessments that illness or absence from the city had 
 prevented the filing of the complaint or making the application to the said board 
 within the time allowed by law for the correction of taxes. Any remission or 
 reduction of taxes upon the real estate of individuals or corporations must 
 be made within one year after the delivery of the books to the receiver of taxes 
 for the collection of such tax. After the expiration of one year from the 
 delivery of the books to the receiver of taxes, the comptroller, with the written 
 approval of the board of taxes and assessments, may correct any erroneous 
 assessment, or tax due to a clerical error, or to an error of description of any 
 parcel of real estate, contained in the annual record of assessed valuations of 
 real estate, and, if the taxes computed on said erroneous assessment have been 
 paid, the comptroller is authorized to refund the difference between the taxes 
 computed on the erroneous and the corrected assessments. 
 
 § 898. (L. 1911, c. 455.) The board of taxes and assessments from the whole 
 number of persons appointed as deputy tax commissioners shall, for each of the 
 boroughs wherein one of the offices of the department of taxes and assessments 
 is established and maintained, designate one or more deputy tax commissioners, 
 who shall, between the first day of October in each year and the sixteenth clay 
 of November following as to real estate, and the first day of December following 
 as to personal estate, receive applications for the revision and cancellation of 
 any assessments entered in the books of annual record of the assessed valuation 
 of real and personal estate in that borough, take testimony on such applications 
 and reduce the same to writing, and when so reduced to writing transmit such 
 applications and testimony, with his recommendation, to the board of taxes 
 and assessments at its main office in the borough of Manhattan, or to any 
 office of the department of taxes and assessments in any borough as the board 
 of taxes and assessments may prescribe. Such deputy tax commissioners as 
 may be designated for the purposes and as prescribed in this section are hereby 
 authorized between the first day of October and the first day of December 
 to administer oaths for the purpose of taking testimony upon all applications 
 for the revision or cancellation of assessments, and they are hereby required 
 and directed to transmit the evidence so taken and reduced to writing 
 within ten days after the evidence upon any application is taken, with 
 their recommendation, as hereinbefore described. The board of taxes and 
 
§§ 898-913 GREATER NEW YORK CHARTER 945 
 
 assessments shall hear at its main oflSce all applications of corporations for 
 revision and cancellation of assessments; and as to all other applications, the 
 said board may prescribe the time and place of hearing thereof in the several 
 boroughs and give such public notice thereof in the City Record and in at least 
 one newspaper in each borough as it may designate, and the board may make 
 such rules and regulations as may be appropriate and expedient to the end that 
 the taxpayers of each borough, other than corporations, may have a hearing in 
 the borough in which they reside or in which their property assessed is situated. 
 All testimony taken by the board of taxes and assessments by any commissioner 
 or by deputy tax commissioners, as herein prescribed, shall be reduced to writing 
 and shall constitute part of the record of the proceedings upon any assessment. 
 The decision of the board of taxes and assessments, upo?i any application for the 
 revision, reduotion or cancellation of any assessment and upon the evidence talcen 
 thereunder, shall, where the evidence is taken by the board of taxes and assess- 
 ments, be rendered within thirty days after the hearing upon such application 
 is closed, and in no case later than the first day of February. And where the 
 evidence upon any application is taken by any commissioner or a deputy tax 
 commissioner, the determination of the board of taxes and assessments shall be 
 rendered within thirty days after the application and the testimony thereunder 
 shall have been filed with the board of taxes and assessments at the main ofSce 
 of the department in the borough of Manhattan, and in no case later than the 
 first day of February. 
 
 § 905. (L. 1903, c. 210.) Nothing in this chapter shall affect any existing 
 and valid exemption from taxation heretofore created by law respecting any 
 property, real or personal, within the limits of the city oit New York, as con- 
 stituted by this act, and where by pre-existing laws stocks and bonds of any of 
 the municipalities hereby consolidated were heretofore exempt within such 
 municipalities from local taxation, the said stocks or bonds shall be exempt from 
 all taxation by the said city of New York except for State purposes. 
 
 § 906. (L. 1911, c. 455.) A certiorari to review or correct on the merits any 
 final determination of the board of taxes and assessments shall be allowed by the 
 supreme court or any justice thereof, directed to the commissioners of taxes 
 and assessments on the verified petition of the party aggrieved, but only on the 
 grounds which must be specified in such petition, that the assessment is illegal, 
 and giving the particulars of the alleged illegality, or that it is erroneous by 
 reason of overvaluation, or in case of real estate, that the same is erroneous by 
 reason of irregularity, in that the assessment has been made at a higher pro- 
 portionate valuation than the assessment of other real estate of like character in 
 the same ward or section or other real estate on the tax-rolls of the city for 
 the same year, specifying the instances in which such irregularity exists, and 
 the extent thereof, and stating that he is or will be injured thereby. Such 
 certiorari and all proceedings thereunder may be had and taken in the judicial 
 district where such real estate is situated, and may be begun at any time 
 before the first day of July following the time when the determination sought 
 to be reviewed or corrected was made. ' 
 
 § 908. (L. 1901, c. 466.) Whenever any act is required or authorized to be 
 done or any determination or decision made by the board of taxes and assess- 
 ments, or any other body or board, then in the absence of express provision to 
 the contrary, any such act, if done, or any such determination or decision, if 
 made by a majority of the body or board shall, within the meaning of this act, 
 be held to be the act, determination or decision of the body or board. 
 
 § 913. (L. 1901, c. 466.) The receiver of taxes upon receiving the assessment- 
 rolls and warrants shall immediately cause the assessment-rolls and warrants 
 for each of the several boroughs wherein he shall have an office, to be delivered 
 at and filed in such ofiice, and shall thereafter proceed to collect and receive said 
 
946 BUSINESS CORPORATIONS IN NEW YORK §§ 913-921 
 
 taxes from the several individuals and corporations assessed in the said assesa- 
 ment-rolls in the manner hereinafter prescribed. 
 
 § 914. (L. 1916, e. 17.) The receiver of taxes shall immediately after he shall 
 have received the assessment-rolls give public notice, for at least five days in the 
 City Record and in such newspaper or newspapers published in the several 
 boroughs as may be designated by the board of city record, or in default of any 
 newspapers being published in any borough, in such newspaper or newspapers 
 having a general circulation in such borough as the board of city record shall 
 direct, that said assessment-rolls have been delivered to him and that all taxes 
 shall be due and payable at his office in the said respective boroughs as follows: 
 
 All taxes upon personal property and one-half of all taxes upon real estate 
 shall be due and payable on the first day of May and the remaining and final 
 one-half of taxes on real estate shall be due and payable on the first of Xovember. 
 All taxes shall be and become liens on the real estate affected thereby, and shall 
 be construed as and deemed to be charges thereon on the respective days when 
 they become due and payable as hereinbefore provided and not earlier and shall 
 remain such liens imtil paid. 
 
 The second half of the tax on real estate which is due as hereinbefore pro- 
 vided on the first day of November following the payment of the first half, may 
 be paid on the first day of May or at any time thereafter, providing the first 
 half shall have been paid or shall be paid at the same time, and on such pay- 
 ments of the second half as may be made in such manner prior to November first 
 a discount shall be allowed from the date of payment to November first at the 
 rate of four per centum per annum. 
 
 § 916. (L. 1911, c. 455.) If any tax on personal estate or the first one-half 
 of any tax on real estate shall remain unpaid on the first day of June, after it 
 shall become due and payable, it shall be the duty of the receiver of taxes to 
 charge, receive and collect upon such tax so remaining unpaid on that day, 
 interest upon the amount thereof, at the rate of seven per centum per annum, 
 to be calculated from the day on which said taxes or such part thereof became 
 due and payable, as provided by section nine hundred and fourteen of this act, 
 to the date of payment; and such increase of percentage shall be paid over and 
 accounted for by such receiver from time to time, as a part of the tax collected 
 by him. If the final half of any tax on real estate shall remain unpaid on the 
 first day of December, after it shall be due and payable, it shall be the duty of 
 the receiver of taxes to charge, receive and collect upon such tax so remaining 
 unpaid on that day, interest upon the amount thereof, at the rate of seven per 
 centum per annum, to be calculated from the day on which said final half of said 
 tax becomes due and payable, as provided by section nine hundred and fourteen 
 of this act, to the date of payment; and such increase of percentage shall be 
 paid over and accounted for by such receiver from time to time, as a part 
 of the tax collected by him. 
 
 § 921. (L. 1901, c. 466.) The said receiver of taxes shall proceed in enforcing 
 the collection and payment of taxes against corporations or associations and their 
 oflScers and directors, or trustees, in the same manner as against individuals; 
 such taxes shall be paid out of the funds of the company and shall be ratably 
 deducted from the dividends of those stockholders whose stock was taxed, or 
 shall be charged upon such stock, if no dividends be afterward declared. 
 
CODES 
 
 CODE OF CIVIL PROCEDURE. 
 
 § 73. Attorney not to buy claim. An attorney or counsellor shall not,, flirecxiy 
 or indirectly, buy, or be in any manner interested in buying a bond', promissory 
 note, bill of exchange, book-debt, or other thing in action, with the intent and for 
 the purpose of bringing an action thereon. 
 
 § 74. Certain loans prohibited. An attorney or counsellor shall not, by him- 
 self, or by or in the name of another person, either before or after action brought, 
 promise or give, or procure to be promised or given, a valuable consideration 
 to any person, as an inducement to placing, or in consideration of having placed, 
 in his hands, or in the hands of another person, a demand of any kind, for the 
 purpose of bringing an action thereon, or of representing the claimant in the 
 pursuit of any civil remedy for the recovery thereof. But this section does not 
 apply to an agreement between attorneys and counsellors, or either, to divide 
 between themselves the compensation to be received. 
 
 § 75. Penalty. An attorney or counsellor, who violates either of the last 
 two sections, is guilty of a misdemeanor; and, on conviction thereof, shall be 
 punished accordingly, and must be removed from office by the supreme court. 
 
 § 76. Limitation of preceding sections. The last three section do not prohibit 
 the receipt, by an attorney or counsellor, of a bond, promissory note, bill of 
 exchange, book-debt, or other thing in action, in payment for property sold, or 
 for services actually rendered, or for a debt antecedently contracted; or from 
 buying, or receiving a bill of exchange, draft, or other thing in action for the 
 purposes of remittance, and without intent to violate either of those sections. 
 
 § 77. Same rule when party prosecutes in person, or when certain corpora- 
 tions prosecute. The last four sections apply to a person prosecuting an action 
 in person and to a corporation engaged in the business of conducting litigation 
 and providing counsel therefor, who or which does an act which an attorney or 
 counsellor is therein forbidden to do. 
 
 § 190. The jurisdiction of the Court of Appeals, in civil actions. From and 
 after the 31st day of May, 1917, the jurisdiction of the court of appeals shall, 
 in civil actions and proceedings, be confined to the review upon appeal of an 
 actual determination made by an appellate division of the supreme court in either 
 of the following cases, and no others: 
 
 1. An appeal may be taken as of right to said court from a judgment or order 
 entered upon the decision of an appellate division of the supreme court which 
 finally determines an action or special proceeding where is directly involved the 
 construction of the constitution of the state or of the United States, or where 
 one or more of the justices of the appellate division dissents from the decision of 
 the court, or where the judgment or order is one of reversal or modification. 
 
 2. An appeal may also be taken as of right to said court from an order of the 
 appellate division granting a new trial on exceptions, where the appellants stipu- 
 late that, upon affirmance, judgment absolute shall be rendered against them. 
 
 3. An appeal may also be taken from a determination of the appellate division 
 of the supreme court in any department, other than from a judgment or order 
 which finally determines an action or special proceeding, where the appellate 
 division allows the same, and certifies that one or more questions of law have 
 arisen which, in its opinion, ought to be reviewed by the court of appeals, in 
 which case the appeal brings up for review the question or questions so certified, 
 
 [947] 
 
948 BUSINESS CORPORATIONS IN NEW YORK §§ 190-341 
 
 and no other; and the court of appeals shall certify to the appellate division its 
 determination upon such questions. 
 
 4. An appeal may also be taken from a judgment or order entered upon the 
 decision of an appellate division of the supreme court which finally determines 
 an action or special proceeding, but which is not appealable as of right under 
 subdivision one of this section, where the appellate division shall certify that in 
 its opinion a question of law is involved which ought to be reviewed by the court 
 of appeals, or where, in case of the refusal so to certify, an appeal is allowed 
 by the court of appeals. Such an appeal shall be allowed when required in the 
 interest of substantial justice. 
 
 The provisions of this section shall not apply to an appeal taken to the court 
 of appeals prior to the first day of June, 1917, but an appeal so taken shall be 
 heard and determined under existing provisions of law. 
 
 § 315. Juiisdiction. The jurisdiction of the city court of the city of Xew 
 York, extends to the following cases: 
 
 1. An action against a natural person, or against a foreign or domestic corpora- 
 tion, wherein the complaint demands judgment for a sum of money only, or to 
 recover one or more chattels, with or without damages for the taking or detention 
 thereof. 
 
 2. An action to foreclose or enforce a lien upon real property in the city of 
 New York, created as prescribed by statute, in favor of a person, who has per- 
 formed labor upon, or furnished materials to be used in the construction, altera- 
 tion or repair of a building, vault, wharf, fence, or other structure; or who has 
 graded, filled in, or otherwise improved, a lot of land, or the sidewalk or street in 
 front of or adjoining a lot of land. 
 
 3. An action to foreclose or enforce a lien, for a sum not exceeding five thousand 
 dollars, exclusive of interest, upon one or more chattels. 
 
 4. The taking and entry of a judgment, upon the confession of one or more 
 defendants, where the sum, for which judgment is confessed, does not exceed five 
 thousand dollars, exclusive of interest from the time of malcing the statement, 
 upon which the judgment is entered. 
 
 i 316. The last section limited. The jurisdiction conferred by the last section 
 is subject to the following limitations and regulations: 
 
 1. In an action wherein the complaint demands judgment for a sum of money 
 only, the sum, for which judgment is rendered in favor of the plaintiff cannot 
 
 ■ exceed five thousand dollars, exclusive of interest, and costs as taxed; except 
 where it is brought upon a bond pr undertaking given in an action or special pro- 
 ceeding in the same court, or before a justice thereof; or to recover damages for a 
 breach of promise of marriage; or where it is a marine cause, as that expression 
 is defined in the next section. Where the action is brought upon a bond or other 
 contract, the judgment must be for the sum actually due, without regard to a 
 penalty therein contained; and where the money is payable in instalments, suc- 
 cessive actions may be brought for the instalments, as they become due. 
 
 2. In an action to recover one or more chattels, a judgment cannot be rendered 
 in favor of the plaintiff, for a chattel or chattels, the aggregate value of which 
 exceeds five thousand dollars. 
 
 § 341. Dome&tic corporation, etc., when deemed resident, etc. For the pur- 
 pose of determining the jurisdiction of a county court, in either of the cases 
 specified in the last section, a domestic corporation or joint-stock association, 
 whose principal pla«e of business is established, by or pursuant to a statute, or 
 by its articles of association, or whose principal place of business or any part 
 of its plant or plants, shops, factories or offices is actually located within the 
 county, or in case of a railroad corporation where any portion of the road 
 operated by it is within the county, it is deemed a resident of the county; and 
 personal service of a summons, made within the county, as prescribed in this act^ 
 
§§ 341-390 CODE OF CIVIL PROCEDURE 949 
 
 or personal service of a mandate, whereby a special proceeding is commenced, 
 Inade within the county, as prescribed in this act for personal service of a sum- 
 mons, is sufficient service thereof upon a domestic corporation wherever it is 
 located. Provided, however, that a city which shall include within its boundaries 
 more than one county shall not for the purpose of conferring jurisdiction on a 
 county court be deemed a, domestic corporation resident of any county so included. 
 § 370. Adverse possession under written instrument or judgment; what 
 constitutes it. For the purpose of constituting an adverse possession, by a 
 person claiming a title, founded upon a written instrument, or a judgment or 
 decree, land is deemed to have been possessed and occupied in either of the follow- 
 ing cases: 
 
 1. Where it has been usually cultivated or improved. 
 
 2. Where it has been protected by a substantial inclosure. 
 
 3. Where, although not inclosed, it has been used for the Supply of fuel, or of 
 fencing timber, either for the purposes of husbandry, or for the ordinary use of 
 the occupant. 
 
 Where a known farm or a single lot has been partly improved the portion of 
 the farm or lot that has been left not cleared, or not inclosed, according to the 
 usual course and custom of the adjoining country, is deemed to have been occu- 
 pied for the same length of time, as the part improved and cultivated. 
 
 § 382. Within six years. Within six years: 
 
 1. An action upon a contract obligation or liability, express or implied ; except 
 a judgment or sealed instrument. 
 
 2. An action to recover upon a liability created by statute; except a penalty 
 or forfeiture. 
 
 3. An action to recover damages for an injury to property, or a personal in- 
 jury; except in a case where a different period is expressly prescribed in this 
 chapter. 
 
 4. An action to recover a chattel. 
 
 5. An action to procure a judgment, other than for a sum of money, on 
 the ground of fraud, in a case which, on the thirty-first day of December, 1846, 
 was cognizable by the court of chancery. The cause of action, in such a case, 
 is not deemed to have accrued, until the discovery, by the plaintiff, or the person 
 under whom he claims, of the facts constituting the fraud. 
 
 6. An action to establish a will. Where the will has been lost, concealed, or 
 destroyed, the cause of action is not deemed to have accrued, until the discovery, 
 by the plaintiff, or the person under whom he claims, of the facts upon which its 
 validity depends. 
 
 7. An action upon a judgment or decree, rendered in a court not of record, 
 except where a transcript shall be filed, pursuant to section 3017 of this act, and, 
 also, except a decree heretofore rendered in a surrogate's court of the State. The 
 cause of action, in such a case, is deemed to have accrued when final judgment 
 was rendered. 
 
 § 388. Actions not before provided for. An action, the limitation of which 
 is not specially prescribed in this or the last title, must be commenced within 
 ten years after the cause of action accrues. 
 
 § 390. Action against a non-resident upon a demand barred by the law of his 
 residence. Where a cause of action, which does not involve the title to or 
 possession of real property within the State, accrues against a person, who is not 
 then a resident of the State, an action cannot be brought thereon in a court of 
 the State, against him or his personal representative, after the expiration of the 
 time, limited by the laws of his residence, for bringing a like action, provided 
 that if the limitation of the time fixed by the laws of his residence for bringing 
 such action be less than the time fixed by the laws of this State for a like action, 
 the limitation fixed by the laws of this State shall apply. This section shall not 
 
950 BUSINESS CORPORATIONS IN NEW YORK §§ 390^31 
 
 apply to a case in which a person is entitled, when this section as amended takes 
 effect, to commence such action, where he commences the same before the expira- 
 tion of six months after this section as amended takes effect; in which case the 
 provisions of law applicable thereto immediately before this section as amended 
 takes effect shall continue to be so applicable, notwithstanding the repeal thereof. 
 § 393. No limitation of action on bank notes, etc. This chapter does not 
 affect an action to enforce the payment of a bill, note, or other evidence of debt 
 issued by a moneyed corporation, or issued or put in circulation as money. 
 § 394. Action against directors, etc., of banks. This chapter does not affect 
 an action against a director or stockholder of a moneyed corporation, or banking 
 association, to recover a penalty or forfeiture imposed, to enforce a liability 
 created by the common law or by statute; but such an action must be brought 
 within three years after the cause of action has accrued. 
 
 § 399. Attempt to commence action in a court of record. An attempt to 
 commence an action, in a court of record, is equivalent to the commencement 
 thereof against each defendant, within the meaning of each provision of this act 
 which limits the time for commencing an action, when the summons is delivered, 
 with the intent that it shall be actually served, to the sheriff, or, where the 
 sheriff is a party, to a coroner of the county, in which that defendant, or one 
 of two or more co-defendants, who are joint contractors, or otherwise united in 
 interest with him, resides or last resided; or, if the defendant is a corpora- 
 tion, to a like officer of the county, in which it is established by law, or wherein 
 its general business is or was last transacted, or wherein its keeps, or has kept, 
 an oflSce for the transaction of business. But in order to entitle a plaintiff 
 to the benefit of this section, the delivery of the summons to an officer must be 
 followed, within sixty days after the expiration of the time limited for the actual 
 commencement of the action, by personal service thereof upon the defendant 
 sought to be charged, or by the first publication of the summons, as against that 
 defendant, pursuant to an order for service upon him in that manner. 
 
 § 400. Id.; in a court not of record. The last section, excluding the provision 
 requiring a publication or service of the summons within sixty days, applies to an 
 attempt to commence an action in a court not of record, where the summons is 
 delivered to an officer authorized to serve the same, within the city or town, 
 wherein the person resides or the corporation is located, as specified in that sec- 
 tion; provided that actual service thereof is made with due diligence. 
 
 § 401. Exception, when defendant is without the State. If, when the cause 
 of action accrues against a person, he is without the state, the action may be 
 commenced within the time limited therefor, after his return into the state. If, 
 after a, cause of action has accrued against a person, he departs from the state, 
 and remains continuously absent therefrom for the space of one year or more, or 
 if, without the knowledge of the person entitled to maintain the action, he resides 
 within the state under a false name, the time of his absence or of such residence 
 within the state under such false name is not a part of the time, limited for the 
 commencement of the action. But this section does not apply while a designation, 
 made as prescribed in section 430 or in subdivision second of section 432 of this 
 act remains in force. 
 
 § 431. How personal service of summons made upon a domestic corporation. 
 Personal service of the summons upon a defendant, being a domestic corpora- 
 tion, must be made by delivering a copy thereof, within the State, as follows: 
 
 1. If the action is against the mayor, aldermen, and commonalty of the 
 city of New York, to the mayor, comptroller, or counsel to the corporation. 
 
 2. If the action is against any other city, to the mayor, treasurer, counsel, 
 attorney, or clerk; or, if the city lacks either of those officers, to the officer 
 performing corresponding functions, under another name. 
 
§§ 431-436 CODE OF CIVIL PROCEDURE 951 
 
 3. In any other case, to the president or other head of the corporationj the 
 secretary or clerk to the corporation, the cashier, the treasurer, or a director 
 or managing agent. 
 
 § 432. Id.; 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 treasurer, secretary 
 or assistant secretary; or, if the corporation lacks either of those oflScers, to 
 the officer performing corresponding functions, under another name. 
 
 2. To a person designated for the purpose as provided in section 16 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 16 of the General Corpora- 
 tion 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 corporation 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. 
 
 § 433. Service of process, etc., to commence a special proceeding. The pro- 
 visions of this article, relating tp the mode of service of a summons, apply 
 likewise to the service of any process or other paper, whereby a special pro- 
 ceeding 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. 
 
 § 435. Order for service of summons from court of record, when defendant not 
 found, etc. Where a summons is issued in any court of record, an order for 
 the service thereof upon a -defendant, whether a domestic corporation, other 
 than a municipal corporation, a joint-stock or other unincorporated association 
 or a natural person, residing within the state may be made by the court, or 
 a judge thereof, or the county judge of the county where the action is triable 
 upon satisfactory proof, by the affidavit of a person, not a party to the action, 
 or by the return of the sheriff of the county where such defendant resides, or 
 has its principal office or place of business, that proper and diligent effort has 
 been made to serve the summons upon the defendant and that none of the 
 persons mentioned in subdivision three of section 431, nor the president or 
 treasurer of such association, can be found, or if the defendant is a natural 
 person, that the place of his sojourn cannot be ascertained, or if he is within 
 the state, that he avoids service, so that personal service cannot be made. 
 
 § 4S6. How service must be made. The order must direct that the service 
 of the summons be made, by leaving a copy thereof, and of the order, if the 
 defendant is a domestic corporation or joint-stock or other unincorporated 
 association at its principal office or place of business, or if a natural person 
 at the residence of the defendant, with a person of proper age, if upon reason- 
 able application, admittance can be obtained, and such person found who will 
 receive it; or, if admittance cannot be so obtained, nor such a person found, 
 by affixing the same to the outer or other door of the defendant's said place 
 of business or office, or of iiis residence, and by depositing another copy thereof, 
 properly enclosed in a postpaid wrapper, addressed to the defendant at its 
 said principal office or place of business, or to him at his place of residence, 
 
952 BUSINESS CORPORATIONS IN NEW YORK §§ 436-439 
 
 in the post-office at the place where he resides, or where said office, place of 
 business or residence is located, or upon proof being made by affidavit that no 
 such residence can be found, service of the summons may Se made in such 
 manner as the court may direct. 
 
 § 438. Cases in which service of summons by publication, etc., may be ordered. 
 An order directing the service of a summons upon a defendant, by publication, 
 may be made in either of the following cases: 
 
 1. Where the defendant to be served is «, foreign corporation; or, is an un- 
 incorporated association consisting of seven or more persons, having a president 
 and treasurer, neither of whom is a resident of this state; or, being a domestic 
 corporation, where after diligent effort, service cannot be made within the 
 state upon the presiiient or other head of the corporation, the secretary or 
 clerk to the corporation, the cashier, the treasurer or a director or managing 
 agent; or, being a natural person, is not a resident of the state; or where, 
 after diligent inquiry, the defendant remains unknown to the plaintiff, or the 
 plaintiff is imable to ascertain whether the defendant Is or is not a resident of 
 the state. 
 
 2. Where the defendant, being a resident of the state, has departed there- 
 from, with intent to defraud his creditors, or to avoid the service of a summons ; 
 or keeps himself concealed therein, with like intent. 
 
 3. Where the defendant, being an adult, and a resident of the state, has 
 been continuously without the state of New York more than six months next 
 before the granting of the order, and has not made a designation of a person, 
 upon whom to serve a summons in his behalf, as prescribed in section 430 of 
 this act; or a designation so made no longer remains in force; or service upon 
 the person so designated cannot be made within the state, after diligent effort. 
 
 4. Where the complaint demands judgment annulling a marriage, or for 
 a divorce, or a separation. 
 
 5. Where the complaint demands judgment, that the defendant be e.vcluded 
 from a vested or contingent interest in or lien upon, specific real or personal 
 property within the state; or that such an interest or lien in favor of either 
 party be enforced, regulated, defined, or limited; or otherwise affecting the 
 title to such property. 
 
 6. Where the defendant is a resident of the state or a domestic corporation; 
 and an attempt was made to commence the action against the defendant, as 
 required in chapter fourth of this act, before the expiration of the limitation 
 applicable thereto as fixed in that chapter; and the limitation would have 
 expired, within sixty days next preceding the application, if time had not been 
 extended by the attempt to commence the action. 
 
 7. Where the action is against the stockholders of a corporation, or joint- 
 stock company, and is authorized by a law of the state, and the defendant 
 is a stockholder thereof. 
 
 When a copy of the summons is required by subdivision first or subdivision 
 second of section 426 of this act, or by section 429 of this act, to be delivered 
 to a person other than the defendant, an order directing the service upon 
 such person by publication, may be made as prescribed in this section, as if 
 such person was the defendant in the action, and upon a verified complaint 
 and the same proof with respect to such person, as is required in the next 
 succeeding section with respect to a defendant. And sections 440 to 444, both 
 inclusive, apply to the proceedings in like manner as if such person was a 
 defendant. 
 
 § 439. Papers upon which order for publication may be made. The order 
 must be founded upon a verified complaint, showing a sufficient cause of action 
 against the defendant to be served, and proof by affidavit of the additional 
 facts required by the last section; and also, where the application is made upon 
 
§§ 439-446 CODE OF CIVIL PROCEDURE 953 
 
 the ground that the defendant is a foreign corporation, or not a resident of 
 the State, or in a case specified in subdivision fourth, fifth, or seventh of the 
 last section, that the plaintiff has been or will be unable, with due diligence, 
 to make personal service of the summons. 
 
 § 440. By whom order may be made; contents of order. The order may be 
 made by the court or by a judge thereof or the county judge of the county 
 where the action is triable. It must direct that service of the summons, upon 
 the defendant named or described in the order, be made by publication thereof 
 in two newspapers, designated in the order as most likely to give notice to 
 the defendant, for a specified time, which the judge deems reasonable, not 
 less than once a week for six successive weeks. It must also contain, either 
 a direction that, on or before the day of the first publication, the plaintiff 
 deposit in a post-office, branch post-ofBce or post-office station, one or more sets 
 of copies of the summons, complaint and order, each contained in a securely 
 closed post-paiid wrapper, directed to the defendant, at a place specified in the 
 order, or a statement that the court or judge, being satisfied, by the affidavits 
 upon which the order was granted, that the plaintiff cannot, with reasonable 
 diligence, ascertain a place or places, where the defendant would probably receive 
 matter transmitted through the post-office, dispenses with the deposit of any 
 papers therein. 
 
 § 443. Service without the State. 
 
 1. Where service is made without the State under an order for publication 
 of the summons, the papers specified in the last section must be previously 
 filed; and a notice must be served with the summons, in all respects like the 
 notice required by the last section, except that the words, " without the State 
 of New York," must be substituted for the words, " by publication." 
 
 2. In all eases when publication is ordered, personal service of a copy of 
 the summons and complaint and such notice, out of the State, is equivalent 
 to publication and deposit in the post-office. 
 
 3. In the cases specified in subdivision five of section 438 the summons may 
 be served without an order, upon a defendant without the State in the same 
 manner as if such service were made within the State, except that a copy of 
 the complaint shall be annexed to and served with the summons. 
 
 4. Service without the State is complete ten days after proof thereof is filed. 
 
 5. When the summons is served personally without the state the affidavit 
 of service must show that the person making it is a resident or citizen of 
 the state of New York, or a sheriff, or under sheriff, deputy sheriff, constable 
 of the county or other political subdivision in which the service is made, or 
 an officer authorized by the laws of this state to take acknowledgments of 
 deeds to be recorded in this state, an attorney and counsellor at law duly 
 qualified to practice in the state where such service is made or by a United 
 States marshal. 
 
 When such affidavit is made by a resident or citizen of the state of New 
 York, his place of residence, and street number, if any, shall be stated therein. 
 The affidavit of service made without the state shall contain the official designa- 
 tion of the person making it and shall have annexed thereto a certificate of 
 the proper official showing that the person before whom the affidavit was sworn 
 to was, at the time of administering the oath, qualified to act. 
 
 6. A judgment shall be conclusive upon a defendant on whom the summons 
 is personally served without the State, with respect to the property which is 
 the subject of the action, or which is attached therein, to the same extent as 
 if the service upon him were made within the State. 
 
 § 446. Who may be joined as plaintiffs. All persons having an interest in the 
 subject of the action, and in obtaining the judgment demanded, may be joined 
 as plaintiffs, except as otherwise expressly prescribed in this act. 
 
954 BUSINESS CORPORATIONS IN NEW YORK §§ 447-481 
 
 § 447. Who may be joined as defendants. Any person may be made a defend- 
 ant who has or claims an interest in the controversy adverse to the plaintiff 
 or who is a necessary party defendant for the complete determination or settle- 
 ment of a question involved therein, except as otherwise expressly prescribed 
 in this act. In any action brought affecting real estate upon which the people 
 of the State of New York have a claim to have a lien under the transfer 
 tax act, the said people of the state of New York may be made a party defend- 
 ant in the same manner as a private person, but where the people of the state 
 of New York are made a party defendant, as herein provided, the complaint 
 shall set forth, in addition to the matters required to be set forth by the 
 code of civil procedure, the name or names of the decedent or decedents against 
 whose estate there is an unpaid transfer tax, the place of residence of decedent 
 at the time of death, the heirs at law and next of kin of decedent and if 
 decedent left none that fact shall be stated, whether decedent died testate 
 or intestate, and whether the estate of decedent has been administered, and 
 if so where; and if not administered, such facts shall be stated; and also 
 that the people of the state of New York are made a party defendant for 
 no other reason than the lien of said transfer tax. Upon failure to state 
 such facts, the complaint shall be dismissed as to the people of the state 
 of New York. In such a case the summons must be served on the attorney- 
 general, who may appear in behalf of the people. 
 
 § 448. Parties united in interest, when to be joined; when one or more may 
 sue or defend for the whole. Of the parties to the action, those who are united 
 in interest must be joined as plaintiffs or defendants, except as otherwise 
 expressly prescribed in this act. But if the consent of any one, who ought to be 
 joined as a plaintiff, cannot be obtained, he may be made a defendant, the 
 reason therefor being stated in the complaint. And where the question is one 
 of a common or general interest of many persons; or where the persons, who 
 might be made parties, are very numerous, and it may be impracticable to 
 bring them all before the court, one or more may sue or defend for the 
 benefit of all. 
 
 § 449. Party in interest to sue. Trustee, etc., may sue alone. Every action 
 must be prosecuted in the name of the real party in interest, except that an 
 executor or administrator, a trustee of an express trust, or a person expressly 
 authorized by statute, may sue, without joining with him the person for 
 whose benefit the action is prosecuted. A person, with whom or in whose name, 
 a contract is made for the benefit of another, is a trustee of an express trust, 
 within the meaning of this section. 
 
 § 452. When court to decide controversy, or to order other parties to be 
 brought m. The court may determine the controversy, as between the parties 
 before it. where it can do so without prejudice to the rights of others, or by 
 saving their rights; but where a complete determination of the controversy 
 cannot be had without the presence of other parties, the court must direct 
 them to be brought in. And where a person, not a party to the action, has 
 an interest in the subject thereof, or in real property, the title to which may 
 in any manner be affected by the judgment, or in real property for injury to 
 which the complaint demands relief, and makes application to the court to 
 be made a party, it must direct him to be brought in by the proper amendment. 
 
 § 481. Complaint; what to contain. The complaint must contain: 
 
 1. The title of the action, specifying the name of the court in which it is 
 brought; if it is brought in the supreme court, the name of the county, which 
 the plaintiff designates as the place of trial; and the names of all the parties 
 to the action, plaintiff and defendant. 
 
 2. A plain and concise statement of the facts constituting each cause of 
 action without unnecessary repetition. 
 
 3. A demand of the judgment to which the plaintiff supposes himself entitled. 
 
§§ 484r-516 CODE OF CIVIL PROCEDURE 955 
 
 § 484. What causes of action may be joined in the same complaint. The 
 plaintiff may unite in the same complaint, two or more causes of action, whether 
 they are such as were formerly denominated legal or equitable, or both, where 
 they a.re brought to recover, as follows: 
 
 1. Upon contract, express or implied. 
 
 2. For personal injuries except libel, slander, criminal conversation or 
 seduction. 
 
 3. For libel or slander. 
 
 4. For injuries to real property. 
 
 5. Real property, in ejectment, with or without damages for the withholding 
 thereof. 
 
 6. For injuries to personal property. 
 
 7. Chattels, with or without damages for the taking or detention thereof. 
 
 8. Upon claims against a trustee, by virtue of a contract, or by operation 
 of law. 
 
 9. Upon claims arising out of the same transaction, or transactions connected 
 with the same subject of action, and not included within one of the foregoing 
 subdivisions of this section. 
 
 10. For penalties incurred under the forest, fish and game law. 
 
 11. For penalties incurred under the agricultural law. 
 
 12. For penalties incurred under the public health law. 
 
 But it must appear, on the face of the complaint, that all the causes of 
 action, so united, belong to one of the foregoing subdivisions of this section; 
 that they are consistent with each other; and, except as otherwise prescribed 
 by law, that they affect all the parties to the action; and it must appear upon 
 the face of the complaint, that they do not require different places of trial. 
 
 i 488. When he may demur. The defendant may demur to the complaint, 
 where one or more of the following objections thereto appear unon the face 
 thereof: 
 
 1. That the court has not jurisdiction of the person of the defendant. 
 
 2. That the court has not jurisdiction of the subject of the action. 
 
 3. That the plaintiff has not legal capacity to sue. 
 
 4. That there is another action pending between the same parties, for the 
 same cause. ■ 
 
 5. That there is a misjoinder of parties plaintiff. 
 
 6. That there is a defect of parties, plaintiff or defendant. 
 
 7. That causes of action have been improperly united. 
 
 8. That the complaint does not state, facts sufficient to constitute a cause 
 of action. 
 
 § 498. When objection may be taken by answer. — Where any of the matters 
 enumerated in section 488 of this act as grounds of demurrer, do not appear on 
 the face of the complaint, the objection may be taken by answer. 
 
 § 499. Objection; when deemed waived. If such an objection is not taken, 
 either by demurrer or answer, the defendant is deemed to have waived it; except 
 the objection to the jurisdiction of the court, or the objection that the complaint 
 does not state facts sufficient to constitute a cause of action. 
 
 § 507. Defendant may interpose several defences or counterclaims; rules relat- 
 ing thereto. A defendant may set forth, in his answer, as many defences or 
 counterclaims, or both, as he has, whether they are such as were formerly denomi- 
 nated legal or equitable. Each defence or counterclaim must be separately stated, 
 and numbered. Unless it is interposed as an answer to the entire complaint, it 
 tnust distinctly refer to the cause of action which it is intended to answer. 
 
 516. Cases where the court may require a reply. Where an answer contains 
 new matter, constituting a defence by way of avoidance, the court may, in its 
 discretion, on the defendant's application, direct the plaintiff to reply to the new 
 
956 BUSINESS CORPORATIONS IN NEW YORK §§ 516-549 
 
 matter. In that case, the reply, and the proceedings upon failure to reply, are 
 subject to the same rules as in the cases of a counterclaim. 
 
 § 525. Verification; how and by whom made. The verification must be made 
 by the affidavit of the party, or, if there are two or more parties united in interest, 
 and pleading together, by at least one of them, who is acquainted with the facts, 
 except as follows: 
 
 1. Where the party is a domestic corporation, the verification must be made 
 by an officer thereof. 
 
 2. Where the people of the State are, or a public officer, in their behalf, is the 
 party, the verification may be made by any person acquainted with the facts. 
 
 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 tlie 
 State, the county where he has his ofiice, and capable of making the affidavit; 
 or if there are two or more parties united in interest, and pleading together, 
 where neither of them, acquainted with the facts is within the county, and capable 
 of malting the affidavit ; or where the action or defence 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. 
 
 § 526. Fortn of affidavit of verification. The affidavit of verification must be 
 to the effect ihat the pleading is true to the knowledge of the deponent except 
 as to the matters therein stated to he alleged on information and belief, and that 
 as to those matters he believes it to be true. Where it is made by a person, other 
 than the party, he must set forth, in the affidavit, the grounds of his belief, as 
 to all matters not stated upon his knowledge, and the reason why it is not made 
 by the party. 
 
 § 533. Conditions precedent; how pleaded. In pleading the performance of a 
 condition precedent in a contract, it is not necessary to state the facts constitut- 
 ing performance; but the party may state, generally, that he, or the person 
 whom he represents, duly performed all the conditions on his part. If that alle- 
 gation is controverted, he must, on the trial, establish performance. 
 
 § 549. When the right to arrest depends upon the nature of the action. A 
 defendant may be arrested in an action, as prescribed in this title, where the 
 action is brought for either of the following causes: 
 
 1. To recover a fine or penalty. 
 
 2. To recover damages for a personal injury; an injury to property, including 
 the wrongful taking, detention or conversion of personal property; breach of a 
 promise to marry; misconduct or neglect in office, or in a professional employ- 
 ment; fraud, or deceit; or to recover a chattel where it is alleged in the com- 
 plaint that the chattel or a part thereof has been concealed, removied or disposed 
 of so that it cannot be found or taken by the sheriff and| with intent that it 
 should not be so foimd or taken, or to deprive the plaintiff of the benefit thereof ; 
 or to recover for money received, or to recover property or damages for the con- 
 version or misapplication of property where it is alleged in the complaint that 
 the money was received or the property was embezzled or fraudulently misapplied 
 by a public officer or by an attorney, solicitor or counsellor, or by an officer or 
 agent of a corporation or banking association in the course of his employment, 
 or by a factor, agent, broker, or other person in a fiduciary capacity. Where 
 such allegation is made, the plaintiff cannot recover unless he proves the same 
 on the trial of the action; and a judgment for the defendant is not a bar to the 
 new action to recover the money or chattel. 
 
 3. To recover moneys, funds, or property held or owned by the State, or held 
 or owned officially or otherwise for or in behalf of a public or governmental 
 interest by a municipal or other public corporation, board, oflScer, custodian, 
 
§§ 549-635 CODE OF CIVIL PROCEDURE \ 957 
 
 agency, or agent, of the State or of a city, county, town, village, or other division, 
 subdivision, department, or portion of the State, which the defehdant has, with- 
 out right, obtained, received, converted, or disposed of; or to recover damages for 
 SO obtaining, receiving, paying, converting, or disposing of the same. 
 
 4. In an action upon contract, express or implied, other than a promise to marry, 
 where it is alleged in the complaint that the defendant was guilty of a fraud in 
 contracting or incurring the liability, or that he has, since the making of the con- 
 tract, or in contemplation of making of the same, removed or disposed of his 
 property with intent to defraud his dTeditors, or is about to remove or dispose of 
 the same with like intent; but where such allegation is made, the plaintiff cannot 
 recover unless he proves the fraud on the trial of the action ; and a judgment for 
 the defendant is not a bar to a new action to recover upon the contract only. 
 
 § 603. Injunction, when the right thereto depends upon the nature of the 
 action. Where it appears, from the complaint, that the plaintiff demands and 
 is entitled to a judgment against the defendant, restraining the cojnmission or 
 continuance of an act, the commission or continuance of which, during the 
 pendency of the action, would produce injury to the plaintiff, an injunction 
 order may be granted to restrain it. The case, provided for in this section, 
 is described in this act, as a. case, where the right to an injunction depends 
 upon the nature of the action. 
 
 § 604. Id.; when the right thereto depends upon extrinsic facts. In either 
 of the following cases, an injunction order may also be granted in an action : 
 
 1. Where it appears, by affidavit, that the defendant, during the pendency of 
 the action, is doing, or procuring, or suffering to be done, or threatens, or is 
 about to do, to procure, or suffer to be done, an act, in violation of the plaintiff's 
 rights, respecting the subject of the action, and tending to render the judgment 
 ineffectual, an injunction order may be granted lo restrain him therefrom. 
 
 2. Where it apears, by affidavit, that the defendant, during the pendency of 
 the action, threatens, or is about to remove, or to dispose of his property, with 
 intent to defraud the plaintiff, 'an injunction order may be granted, to restrain 
 the removal or disposition. 
 
 § 610. Order must recite grounds; 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 persodal 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. 
 
 § 624. Damages sustained by a third person. Where the defendant enjoined 
 was an officer of a corporation, or joint-stock association, or a bailee, agent, trus- 
 tee, or other representative of another, and the damages, sustained by him, are 
 less than the sum specified in the undertaking, the court or the referee may also 
 separately ascertain and determine the damages sustained, by reason of the 
 injunction, by the corporation, association, or person, whom the defendant repre- 
 sents, to an amount not exceeding the surplus of the sum specified in the under- 
 taking; and those damages may be recovered in a separate action, brought as 
 prescribed in the next section. 
 
 § 635. In what actions. A warrant of attachment against the property of 
 one or more defendants in an action, may be granted upon the application of 
 the plaintiff, as specified in the next section, whether the action is to recover a 
 sum of money only, as damages for one or more of the following causes: 
 
 1. Breach of contract, express or implied, other than a contract to marry. 
 
 2. Wrongful conversion of personal property. 
 
958 BUSINESS CORPORATIONS IN NEW YORK §§ 635-644 
 
 3. An injury to person or property, in consequence of negligence, fraud or other 
 wrongful act. 
 
 4. A wrongful act, neglect or default by which the decedent's death was caused, 
 when the cause of action arose in this state before or after the passage of this 
 act and the action is brought by an executor or administrator against a natural 
 person who, or a corportion which would have been liable to an action in favor 
 of the decedent by reason thereof if death had not ensued as prescribed by section 
 1902 of this act. 
 
 § 636. What must be shown to procure the warrant. To entitle the plaintiff 
 to such a warrant, he must show, by affidavit, to the satisfaction of the judge 
 granting the same, as follows: 
 
 1. That one of the causes of action specified in the last section exists againsit 
 the defendant. If the action is to recover damages for breach of contract, tlie 
 affidavit must show that the plaintiff is entitled to recover a sum stated therein, 
 over and above all counterclaims known to him. 
 
 2. That the defendant is either a. foreign corporation or not a resident of tlie 
 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 concealed 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, or, where the defendant, being an 
 adult and a resident of the state, has been continuously without the state of New 
 York for more than six months next before the granting of the order of pub- 
 lication of the summons against him, and has not made a designation of a person 
 upon whom to serve a summons in his behalf, as prescribed in section 430 of 
 this act; or a designation so made no longer remains in force; or service upon 
 the person so designated cannot be made within the state, after diligent effort. 
 
 § 638. When and by whom the warrant may be granted. The warrant may be 
 granted by a judge of the court, or by any county judge, to accompany the 
 summons, or at any time after the commencement of the action, and before final 
 judgment therein. Personal service of the summons must be made upon the 
 defendant, against whose property the warrant is granted, within thirty days 
 after the granting thereof ; or else, before the expiration of the same time, service 
 of the summons by publication must be commenced, or service thereof must be 
 made without the State, pursuant to an order obtained therefor, as prescribed 
 in this act; and if publication has been, or is thereafter commenced, the service 
 must be made complete, by the coniinuance thereof. 
 
 § 641. Contents of warrant; to whom directed. The warrant must be sub- 
 scribed by the judge and the plaintiff's attorney, and must briefly recite the 
 ground of the attachment. It may be directed, either to the sheriff of a par- 
 ticular county, or, generally to the sheriff of any county. It must require the 
 sheriff to attach and safely keep, so much of the property, within his county, 
 which the defendant has, or which he may have, at any time before final judgment 
 in the action, as will satisfy the plaintiff's demand, with costs and expenses. The 
 amount of the plaintiff's demand must be specified in the warrant, as stated in 
 the affidavit. Warrants may be issued at the same time, to sheriffs of different 
 counties. 
 
 § 644. Sheriff must attach property of defendant. The sheriff must immedi- 
 ately execute the warrant, by levying upon so much of the personal and real prop- 
 
§§ 644-649 CODE OF CIVIL PROCEDURE 959 
 
 erty of the defendant, within his county, not exempt from levy and sale by virtue 
 of an execution, as will satisfy the plaintiff's demand, with the costs and expenses, 
 He must take into his custody all books of account, vouchers, and other papers, 
 relating to the personal property attached, and all evidences of the defendant's 
 title to the real property attached, which he must safely keep, to be disposed of, 
 as prescribed in this title. The sheriff, to whom a, warrant of attachment is 
 delivered, may levy, from time to time, and as often as is necessary, until the 
 amount, for which it was issued, has been secured, or final judgment has been 
 rendered in the action, notwithstanding the expiration of his term of office. 
 
 § 646. -Attachment of unpaid subscription to foreign corporation. Under a 
 warrant of attacliment 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 subscription to the capital stock of the corpora- 
 tion, 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. Id.; interest in shares or bonds. The rights or shares which the defend- 
 ant has in the stock of an association or corporation, or in a bond negotiable or 
 otherwise, 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 defendant had when they were so 
 attached. 
 
 § 648. Id; bond, note, etc. The attachment may also be levied upon a cause of 
 action arising upon contract; including a bond, promissory note or other instru- 
 ment 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 
 witliin the county. The levy of the attachment thereupon is deemed a levy upon, 
 and a seizure and attachment of, the debt represented thereby. The attachment 
 may also be levied upon a right or interest, present or future, to any of the prop- 
 erty or estate of a deceased person which may belong to the defendant and which 
 could be legally assigned by him as legatee or distributee, whether the same exists 
 by reason of the provisions of a last will and testament admitted to probate at 
 the time the attachment is granted, or by operation of the law in case of the 
 intestacy of the deceased. Levy of the attachment thereupon is deemed a levy 
 upon, and a seizure and attachment of, the rights and interests of the defendant 
 at the time of such levy, subject to the rights of the executor, administrator or 
 trustee or such state to administer the same according to law. 
 
 § 649. How property to be attached. A levy under a warrant of attachment 
 must be made as follows: 
 
 1. Upon real property, by filing with the clerk of the county, where it is situ- 
 ated a, notice of the attachment, stating the names of the parties to the action, 
 the amount of the plaintiff's claim, as stated in the warrant, and a description of 
 the particular property levied upon. The notice must be subscribed by the plain- 
 tiff's attorney, adding the office address; and must be recorded and indexed by 
 the clerk, in the same book, in like manner, and with like effect, as a, notice of 
 the pendency of an action. , 
 
 2. Upon the personal property, capable of manual delivery, including a bond, 
 promissory note, or other instrument for the payment of money, by taking the 
 same into the sheriff's actual custody. He must thereupon, without delay, deliver 
 to the person from whose possession the property is taken, if any, a copy of the 
 warrant, and of the affidavits upon which it was granted. 
 
 3. Upon other personal property, by leaving a certified copy of the warran* , and 
 a notice showing the property attached, with the person holding the same ; or, if 
 
960 BUSINESS CORPORATIONS IN NEW YORK §§ 649-688 
 
 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 a 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, or if it consists of a riglit or interest in an estate of a 
 deceased person arising under the provisions of a will or under the provisions of 
 law in case of intestacy, with the executor or trustee under the will, or the 
 administrator of the estate. 
 
 4. Upon property discovered in any action brought as prescribed in subdivision 
 two of section 655 of this act, by entering in the proper clerk's office, the judg- 
 ment rendered in said action, and thereafter levying on said property in the 
 manner prescribed in subdivision one, two and thiee of this section. 
 
 § 650. Certificate of defendant's interest to be furnished. Upon the applica- 
 tion of a sheriff, holding a warrant of attachment, the president 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, specify- 
 ing the rights or number of shares of the defendant, in the stock of the associa- 
 tion or corporation, with all dividends declared or incumbrances thereon; or the 
 amount, nature, and description of the property, held for the benefit of the defend- 
 ant, or to the defendant's interest in property so Jield, or of the debt of 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 to give such a cer- 
 tificate; 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 dis- 
 cretion of the court or judge, direct an appearance before a referee named therein. 
 
 § 677. Plaintiff may bring action in name of himself and the sheriff. The 
 plaintiff, by leave of the court or judge, procured as prescribed in the next 
 section, may. bring and maintain, in the name of himself and the sheriff jointly, 
 by his own attorney, and at his own expense, any action which, by the provisions 
 of this title, may be brought by the sheriff, to recover property attached, or the 
 value thereof, or a demand attached, or upon an undertaking given as prescribed 
 in this title, by a person other than the plaintiff; the plaintiff, in his own name 
 and the sheriff's jointly, may also bring and maintain any action which, by the 
 provisions of subdivision two of section 655 of article second of this title, may be 
 brought by the sheriff. The sheriff must receive the proceeds of such action, but 
 he is not liable for the costs or expenses thereof. Costs may be awarded, in such 
 an action, against the plaintiff in the warrant, but not against the sheriff. 
 
 § 678. How leave to bring such action procured. The court or judge must 
 grant leave to bring such an action, where it appears, that due notice of the 
 application therefor has been given to the sheriff; but, before doing so, the court 
 or judge may require that notice of the application be given to the plaintiff, in 
 any other warrant against the same defendant. And such terms, conditions, and 
 regulations may be imposed, in the order granting leave, as the court or judge 
 thinks proper, for the due protection of the rights and interests of all persons, 
 interested in the disposition of the proceeds of the action. 
 
 § 688. Undertaking to be given. Upon such an application, the defendant 
 must give an undertaking, vidth at least two sufficient sureties, to the effect that 
 
§§ 688-708 CODE OF CIVIL PROCEDURE 961 
 
 he will, on demand, pay to the plaintiff the amount of any judgment which may 
 be recovered in the action against him, not exceeding a siun gpeciiied in the under- 
 taking, with interest. The sum so specified must be, at least equal to the amount 
 of the plaintiff's demand, as specified in his affidavit; or, at the option of the 
 defendant, equal to the appraised value, according to the inventory, of the propr 
 erty attached; or, if the application is to discharge the attachment, as to a part 
 only of the property attached, to the appraised value of that portion. Upon such 
 application being made after final judgment, the defendant must give the security 
 required to perfect an appeal to the court of appeals from a final judgment, of the 
 same amount or to the same effect, and to stay the execution hereof. 
 
 § 707. When judgment enforceable only agains,t attached property. Where 
 a defendant, who has not appeared, is a non-resident <>f the State, or a foreign 
 corporation, and the summons was served without the State, or by publication, 
 pursuant to an order obtained 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. 
 
 §■ 708. Judgment in the principal action; how satisfied. Where an execution 
 against property is issued upon a judgment for the plaintiff, in an action 
 in which a warrant of attachment has been levied, the sheriff must satisfy 
 it, as follows : 
 
 1. He must pay over to the plaintiff all money attached by him, and , the 
 proceeds of all sales of perishable property, or of any vessel or share of interest 
 therein, or animals, sold by him, or of any debts, or other things in action 
 collected or sold by hinj; or so much thereof as is necessary to satisfy the 
 judgment. 
 
 2. If any balance remains due, he must sell, under the execution, the other 
 personal property attached, or so much thereof as is necessary; including rights 
 or shares in the stock of an association or corporation, or a bond or other 
 instrument for the payment of money, executed and issued, with the interest 
 coupons annexed, if any, by a government, state, county, public officer, or 
 municipal or other corporation, which is in terms negotiable, or otherwise, 
 whether past due, or yet to become due; but not including any other debt 
 or thing in action. If the proceeds of that property are insufficient to satisfy 
 the judgment, and the execution requires him to satisfy it out of any other 
 personal property of the defendant, he must sell the personal property, upon 
 which he has levied by virtue of the execution. If the proceeds of the personal 
 property, applicable to the execution, are insufficient to satisfy the judgment, 
 the sheriff must sell, under the execution, all the right, title, and interest, 
 which the defendant had in the real property attached, at the time when the 
 notice was filed, or at any time afterwards, before resorting to any other real 
 property. 
 
 3. If personal property attached, belonging to the defendant, ias passed 
 out of the hands of the sheriff, without having been sold or converted into 
 money, and the attachment has not been discharged as to that property, he 
 must, if practicable, regain possession thereof; and, for that purpose, he has 
 all the authority which he had, to seize the same under the warrant. A person, 
 who wilfully conceals or withholds such property from him, is liable to double 
 damages, at the suit of the party aggrieved. 
 
 4. Until the judgment is paid, he may collect the debts and other things 
 in action attached, and prosecute any undertaking, which he has taken in 
 the course of the proceedings, and apply the proceeds thereof to the payment 
 of the judgment. 
 
 5. At any time after levying the attachment, the court, upon the petition 
 
962 BUSINESS CORPORATIONS IN NEW YORK §§ 708-723 
 
 of the plaintiff, accompanied with an affidavit, specifying fully all the pro- 
 ceedings of the sheriff, since the levy under the warrant, the property attached, 
 and the disposition thereof; and the affidavit of the sheriff, showing that he 
 has used diligence, in endeavoring to collect the debts and other things in 
 action attached, and that a portion thereof remains uncollected; may direct the 
 sheriflF to sell the remaining portion, upon such terms, and in such manner, as 
 it thinks proper. Notice of the application must be given to the defendant's 
 attorney, if the defendant appeared in the action. If the summons was not 
 personally served on the defendant, and he did not appear, the court may make 
 such order as to the service of notice, as it thinks proper; or may grant the 
 application without notice. 
 
 § 713. Receiver; when appointed. In addition to the cases, where the appoint- 
 ment of a receiver is specially provided for by law, a receiver of property, 
 nvhich is the subject of an action, in the supreme court or a county court, 
 may be appointed by the court, in either of the following eases: 
 
 1. Before final judgment, on the application of a party who establishes an 
 apparent right to, or interest in, the property, where it is in the possession 
 of an adverse party, and there is danger that it will be removed beyond the 
 jurisdiction of the court, or lost, materially injured, or destroyed. 
 
 2. By or after the final judgment, to carry the judgment into effect, or to 
 dispose of the property, according to its directions. 
 
 3. After 'final judgment, to preserve the property, during the pendency of 
 an appeal. 
 
 The word, " property," as used in this section, includes the rents, profits, or 
 other income, and the increase, of real or personal property. 
 
 § 715. Security. A receiver, appointed in an action or special proceeding, 
 must, before entering upon his duties, execute and file with the proper clerk, a 
 bond to the people, with at least two sufficient sureties, in a penalty fixed by the 
 court, judge, or referee, making the appointment, 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 trans- 
 act business, shall be quivalent to the execution of said bond by two sureties. 
 And the court, or where th* 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. But the foregoing provisions of 
 this section do 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. A receiver who, having executed and filed a bond as 
 provided for in this section, 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 hear- 
 ing on said accounting. The same notice must be given to such surety or 
 sureties where the accounting is ordered on the petition of a person or persons 
 other than the receiver, and in no case shall the receiver's accounts be passed, 
 settled or allowed, unless the said notice provided for in this section shall 
 have first been given to the surety or sureties on the official bond of such 
 receiver. 
 
 § 723. Amendments by the court; disregarding immaterial errors, etc. The 
 court may, upon the trial, or at any other stage of the action, before or after 
 judgment, in furtherance of justice, and on such terms as it deems just, amend 
 any process, pleading, or other proceeding, by adding or striking out the name 
 of a person as a party, or by correcting a mistake in the name of a party, 
 or a mistake in any other respect, or by inserting an allegation material to 
 tlie case; or, where the amendment does not change substantially the claim or 
 
§§ 723-768 CODE OF CIVIL PROCEDURE 963 
 
 defence, by conforming the pleading or other proceedings to the facts proved. 
 And, in every stage of the action, the court must disregard an error or defect, 
 in the pleadings or other proceedings, which does not affect the substantial 
 rights of the adverse party. When amending a pleading or permitting the 
 service of an amended or supplemental pleading in a case which is on the 
 general calendar of issues of fact, the court may direct that the case retain 
 the place upon such calendar which it occupied before the amendment or new 
 pleading was allowed, and that the proceedings had upon the amended or 
 supplemental pleadings shall not affect the place of the case upon such calendar, 
 or render necessary the service of a new notice of trial. 
 
 § 755. Action; when not to abate. An action does not abate by any event, 
 if the cause of action survives or continues. A special proceeding does not 
 abate by any event, if the right to the relief sought in such special pro- 
 ceeding survives or continues, but this provision as to a special proceeding 
 applies only to cases where a party dies after this act takes effect. 
 
 § 756. Proceedings upon transfer of interest, or devolution of liability. In 
 case of a transfer of interest, or devolution Of liability, the action may be 
 continued, by or against the original party; unless the court directs the 
 person, to whom the interest is transferred, or upon whom the liability is 
 devolved, to be substituted in the action, or joined with the original party, 
 as the case requires. 
 
 § 757. Id.; when sole party dies and action survives. In case of the death 
 of a sole plaintiff or a sole defendant, if the cause of action survives or con- 
 tinues, the court must, upon a motion, allow or compel the action to be 
 continued, by or against his representative or successor in interest. In case 
 of the death of a sole party to a special proceeding after this act takes effect, 
 if the right to the relief sought in such proceeding survives or continues, the 
 court must, upon a motion, allow or compel such proceeding to be continued 
 by or against his representative or successor in interest. This provision as to 
 a special proceeding does not apply where provision for such continuance has 
 been otherwise made by law. 
 
 § 768. Id.; of a motion. An application for an order is a motion. Such 
 application or motion must be made to a court, or to a judge or justice thereof. 
 When the defendants have made default in appearing in an action or pro- 
 ceeding, any application or motion therein may be made to the court or to 
 it judge or justice thereof out of court. Where any of the defendants in an 
 action or proceedings have appeared all motions or applications thereafter 
 made in such action, or proceedings, except a, motion made for an extension 
 of time on two days' notice under rule twenty-four of the general rules of 
 practice which may be made to a judge, and except where it is otherwise author- 
 ized by law, must be made to the court, unless such defendants consent to the 
 making of such motion or application to a judge or justice out of court. 
 Except in the first judicial department an order which is authorized by statute 
 to be made at chambers may be made by the court. Any proceeding which 
 is required by statute to be instituted by petition may also be instituted by 
 an affidavit setting forth the matter which it is required that the petition 
 shall contain, accompanying a notice of an amplication for the relief which 
 would properly be prayed for in the petition; and in like manner a proceed- 
 ing which is required by statute to be instituted by affidavit may be instituted 
 by petition. The party making a motion may, in • the notice thereof, specify 
 one or more kinds of relief in the alternative or otherwise, and the adverse 
 party must, where at least eight days' notice of the motion shall be given, 
 at least one day prior to the time at which the motion is noticed to be heard, 
 serve upon the attorney for the moving party copies of the affidavits and papers 
 which he expects to read in opposition to the motion; he may, at least three- 
 
964 BUSINESS CORPORATIONS IN NEW YORK §§ 768-806 
 
 days prior to the time at which the motion is noticed to be heard, serve upon 
 the attorney for the moving party a notice, with or without affidavits or other 
 papers in support thereof, specifying any kind or kinds of relief in the alter- 
 native or otherwise to which he claims to be entitled in the action whether 
 the relief so asked for be responsive or not to the relief asked for by the 
 moving party. Upon the hearing of a motion relief shall not be denied to any 
 party because of defects or insufficiencies in the moving papers which can be 
 cured upon the hearing or before the entry of the order thereon, but the 
 court or judge shall direct that such defects or insufficiencies be cured or 
 supplied forthwith, and shall proceed to hear and consider the motion, or may 
 direct the motion to stand over to be heard at a subsequent time or place. In 
 either case it may award against the party in whose moving papers or applica- 
 tion such defect or insufiSciency appears, costs in favor of the adverse party. 
 Whenever a motion is made to set aside or vacate an order, judgment or 
 decree or any paper filed or proceeding taken, because of technical defects 
 therein, or because of defects or insufficiencies in the papers or proceedings 
 upon which it was made or entered and such defects or insufficiencies can, 
 without prejudice to intervening rights be cured or supplied, it shall be the 
 duty of the court to direct upon the hearing of such motion, that such defects 
 or insufficiencies in the order, judgment or decree, or in the papers or pro- 
 ceedings, be cured or supplied nunc pro tunc, awarding against the party in 
 whose order, judgment or decree, or in whose papers or proceedings such 
 defects or insufficiencies appear, costs in favor of the adverse party. The 
 pleadings in an action shall at all times when a motion is made therein be 
 deemed to be before the court altliough not specifically referred to in the 
 notice of motion. 
 
 § 803. Court may direct discovery of books, etc. A court of record, other 
 than a justices court in a, city, has power to compel a party to an action 
 pending therein, to produce and discover, or to give to the other party, an 
 inspection and copy, or permission to take a copy or photograph, of a book, 
 document, or other paper, or to make discovery of any article or property, 
 in his possession or under his control, relating to the merits of the action, or 
 of the defence therein. 
 
 § 804. Rules to prescribe the cases, etc. The general rules of practice must 
 prescribe the cases in which a, discovery or inspection may be so compelled, 
 and the proceedings for that purpose, where the same are not prescribed in 
 this act. 
 
 § 805. Petitiott for . discovery, and order thereupon. To entitle a party to 
 procure such a discovery or inspection, he must present a petition, praying 
 therefor, and verified by affidavit, to the court, or to a judge, authorized to 
 make an order in the action; upon which an order may be made, directing 
 the party, against whom the discovery or inspection is sought, to allow it, 
 or, in default thereof, to show cause before the court at a time and place, and 
 upon a notice, therein specified, why the prayer of the petition should not be 
 granted; and, if necessary or proper, that his proceedings be stayed until the 
 hearing of the application, although the stay exceeds twenty days. 
 
 § 806 Order, when and by whom vacated. An order, made as prescribed in 
 the last section, may be vacated, by the judge who granted it, or by the court, 
 upon satisfactory proof, by affidavit: 
 
 1. That it ought not to have been, granted, or that it has been complied 
 with; or 
 
 2. That the party required to make the discovery, or permit the inspection, 
 has not the possession or control of the book, document, or other paper, directed 
 to be produced or inspected. 
 
§§ 807-820-a CODE OF CIVIL PROCEDURE 965 
 
 § 807. Proceedings upon the return of the order. Upon the return of the 
 order to show cause, the court may make such an order, with respect to the 
 discovery or inspection prayed for, as justice requires. Where either is directed, 
 a, referee may be appointed by the order, to direct and superintend it; whose 
 certificate, unless set aside by the court, is presumptive, and except in proceed- 
 ings for contempt, conclusive evidence of compliance or non-compliance with 
 the terms of the order. A fixed sum, not exceeding twenty dollars, may be 
 added to the costs of the motion, for the fees of the referee. 
 
 § 808. Penalty for disobedience. Where an order, made as prescribed in the 
 last section, directs a discovery or inspection, the party in whose behalf it was 
 made, may, upon proof, by affidavit, that the adverse party has failed to obey it, 
 and upon notice to him, apply to the court, for an order to punish him for the 
 failure. Upon the hearing of the application, the court may, upon the payment 
 of such a sum, for the expenses of the applicant, as the court fixes, and upon 
 compliance with such other terms, as it deems just to impose, permit the party 
 in default to comply with the order for a discovery and inspection; and, for 
 that pvirpose, it may direct that the application to punish him stand over to a 
 future time. Upon the final hearing of th« application to punish the party in 
 default, the court, in a proper ease, may direct that his complaint be dismissed, 
 or his answer or reply be stricken, out, and that judgment be rendered accord- 
 ingly; or it may make an order, striking out one or more causes of action, 
 defences, counterclaims or replies, interposed by him; or that he be debarred 
 from maintaining a, particular claim or defence, in relation to which the dis- 
 covery or inspection was sought. Where the party has failed to obey an order, 
 allowing an inspection by the adverse party, and requiring him to furnish a 
 copy, or permit a copy to be taken, the court may also direct that the book, 
 document, or other paper, be excluded from being given in evidence; or it may 
 punish the party for a contempt; or both. 
 
 § 809. Effect of papers, etc., produced. A book, document, or other paper, 
 produced under an order made as prescribed in this article, has the same effect, 
 when used by the party requiring it, as if it was produced upon notice, accord- 
 ing to the practice of the court. 
 
 § 820. Interpleader by order in certain cases. A defendant against whom an 
 action to recover upon a contract, or an action of ejectment, or an action to 
 recover a chattel is pending, may, at any time before answer, upon proof, by 
 affidavit, that a person, not a party to the action, makes a demand against him, 
 for the sajne debt or property, without collusion with him, apply to the court, 
 upon notice to that person and the adverse party, for an order to substitute 
 that person in his place, and to discharge him from liability to either, on his 
 paying into court the amount of the debt, or delivering the possession of 
 the property, or its value, to such person as the court directs; or upon it 
 appearing that the defendant disputes, in whole or in part, the liability as 
 asserted against him by different claimants, or that he has some interest in 
 the subjecf>matter of the controversy which he desires to assert, his application 
 may be for an order joining the other claimant or claimants as co-defendants 
 with him in the action. The court may, in its discretion, make such order, 
 upon such terms as to costs and payments into court of .the amoimt of the debt, 
 or part thereof, or delivery of the possession of the property, or its value or 
 part thereof, as may be just, and thereupon the entire controversy may be 
 determined in the action. 
 
 § 820a. Interpleader in actions on contract. When any sum of money shall 
 be due and payable under or on account of a contract, and the whole, or any 
 part thereof, exceeding fifty dollars in amount, shall be claimed or demanded 
 by adverse claimants thereto, the debtor may bring suit in any court having 
 jurisdiction thereof, and of the parties, demanding judgment of interpleader. 
 
966 BUSINESS CORPORATIONS IN NEW YORK §§ 820-a-870 
 
 and that the debtor be permitted to pay the amount of the debt into court, and 
 that such debtor upon such payment into court be discharged from ajiy further 
 liability to any of the parties to the action. When service of the summons and 
 complaint shall have been made upon all such claimants, the plaintiff may make 
 application, by petition or upon affidavits for an order permitting and directing 
 the plaintiff to pay the amount of the debt into court, and that the plaintiff, 
 upon the payment into court of the amount of the debt as required by the order, 
 be discharged from any further liability to any of the defendants in such action, 
 and the court, upon satisfactory proof by affidavit or otherwise, as the court 
 may require, of the facts alleged in the complaint, and that the whole or part 
 of the debt is claimed adversely by the defendants without any collusion on the 
 part of the plaintiff, and that the amount thereof is not in dispute may make 
 such an order, upon such terms as to costs and disbursements payable out of the 
 money so adversely claimed as to the court may seem just, and upon the pay- 
 ment into court of the amount of such debt, and complying with the terms of 
 such order, the plaintiff shall stand discharged from any further liability to 
 any of the defendants in said action upon account of such debt and contract. 
 Notice of such application, together with copies of the papers upon which the 
 same is made, shall be personally served on each of the defendants, at least 
 five, and not more than fifteen days before the return day thereof. 
 
 § 837. When witness not excused from testifying. A competent witness shall 
 not be excused from answering a relevant questionj on the ground only that 
 the answer may tend to establish the fact, that he owes a debt, or is otherwise 
 subject to a civil suit. But this provision does not require a witness to give 
 an answer, which will tend to accuse himself of a crime or misdemeanor or to 
 expose him to a penalty or forfeiture; nor does it vary any other rule, respecting 
 the examination of a witness. 
 
 § 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; or unless 
 it was made while a member of such corporation and testifying as a witness 
 concerning a transaction of the corporation, when the official record of such 
 testimony shall be received. 
 
 § 868 Books, etc., of corporation, how produced. The production, upon a 
 trial, of a book or paper, belonging to or under the control of a corporation, 
 may be compelled, in like manner as if it was in the .hands, or under the control, 
 of a natural person. For that purpose a, subpoena duces tecum, or an order, 
 made as prescribed in the last section, as the case requires, must be directed 
 to the president, or other head of the corporation, or to the officer thereof, in 
 whose custody the book or paper is. 
 
 § 869. When personal attendance not required by subpoena duces tecum. In 
 a case specified in the last section, or where a subpoena duces tecum, or an order, 
 made as prescribed in section 866 or section 867 of this act requires a public 
 officer to attend, and bring a book or paper under his control, the subpoena or 
 order is deemed to be sufficiently obeyed, if the book or paper is produced by 
 a subordinate officer or. employee of the corporation, or in the public office, 
 who possesses the requisite knowledge to identify it, and to testify" respecting 
 the purposes for which it is used. If the personal attendance of a particular 
 officer of the corporation or public officer is required, a subpoena, without a 
 duces tecum clause, must also be served upon him. 
 
 § 870. Deposition of a party, etc. The deposition of a party to an action 
 pending in a court of record, or of a, person who expects to be a party to an 
 action about to be brought in such a court, may be taken at his own instance 
 or at the instance of an adverse party, or by a co-plaintiff or co-defendant at 
 any time before or during tlie trial as prescribed in this article. 
 
§§ 871-873 CODE OF CIVIL PROCEDURE 967 
 
 § 871. Deposition of a witness not a party. The deposition of a person not 
 a party, whose testimony is material and necessary to a party to an action, 
 pending in a court of record, or to a person who expects to be a party to an 
 action, about to be brought in such a court, by a person other than the person 
 to be examined, may also be talcen, as prescribed in this article. 
 
 § 872. Application; contents of affidavit. The person desiring to take a 
 deposition as prescribed in this article, may present to a judge of the court 
 in which the action is pending; or, if it is pending in the supreme court, to a, 
 county judge; or, if an action is not pending, but is expected to be brought, to 
 a judge of the supreme court, or to a county judge; an affidavit, setting forth 
 as follows: 
 
 1. The names and residences of all the parties to the action, and whether 
 or not they have appeared, and if either of them has appeared by attorney, the 
 name, and the residence or office address of the attorney; or, if no action is 
 pending, the names and residences of the expected parties thereto. 
 
 2. If an action is pending, the nature of the action, and the substance of the 
 judgment demanded, and the application is made by the defendant before 
 answer, or by either party after answer, the nature of the defense. 
 
 3. If no action is pending, the nature of the controversy which is expected 
 to be the subject thereof. 
 
 4. The name and residence of the person to be examined, and that the testi- 
 mony of such person is material and necessary for the party making such appli- 
 cation or the prosecution or defence of such action, and if the action is to 
 recover damages for personal injuries, that the defendant is ignorant of the 
 nature and extent of such personal injuries; and, at the option of the applicant, 
 the place where he is sojourning, or where he regularly transacts business. 
 
 5. If an action is pending, that the person to be examined is about to depart 
 from the State, or that he is so sick or infirm as to afford reasonable ground 
 to believe that he will not be able to attend the trial; or that any other special 
 circumstances exist which render it proper that he should be examined as 
 prescribed in this article. But this subdivision does not apply to a case where 
 the person to be examined is a party to the action. 
 
 6. If no action is pending, that the person expected to be the adverse party 
 is of full age and a resident of the State, or sojourning within the State; or 
 that he has an office within the State where he regularly transacts business in 
 person, specifying the place, and if it is in a city, the street and street 
 number or other designation of the particular locality; or, if two or more per- 
 sons are expected to be adverse parties, that each is of fuU age and so resident 
 or sojourning or has an office; also the circumstances which render it necessary 
 for the protection of the applicant's rights, that the witness's testimony should 
 be perpetuated. 
 
 7. Any other fact necessary to show that the case comes within one of the 
 two last sections. And if the party sought to be examined is a corporation, 
 joint-stock or other unincorporated association, the affidavit shall state the 
 name of the officers, directors, or managing agents thereof, or any of them 
 whose testimony is necessary and material, or the books and papers as to the 
 contents of which an examination or inspection is desired, and the order to be 
 made in respect thereto shall direct the examination of such persons and the 
 production of such books and papers, and on such examination the books or 
 papers, or any part or parts thereof may be offered and received in evidence 
 in addition to the use thereof by the witness to refresh his memory. 
 
 § 873. Order for examination. The 'judge to whom such an affidavit is pre- 
 sented must grant an order for the examination, if an action is pending. If no 
 action is pending he must grant it if there be reasonable ground to believe that 
 an action will be brought, as stated in the affidavit and that the application 
 
968 BUSINESS COEPORATIONS IN NEW YORK §§ 873-915 
 
 is inad« in good faith to preserve the expected testimony; otherwise he must 
 dismiss the application. Where the person to be examined is a party to a 
 pending action, or is expected to be a party to an action to be brought, the 
 order may, in the discretion of the judge, designate and limit the particular 
 matters as to which he shall be examined. In every action to recover damages 
 for personal injuries, the court or judge, in granting an order for the examina- 
 tion of the plaintiff before trial may, if the defendant apply therefor, direct 
 that the plaintiff submit to a physical examination by one or more physicians 
 or surgeons, to be designated by the court or judge, and such examination shall 
 be had and made under such restrictions and directions as to the court or 
 judge shall seem proper. In any action brought to recover damages for per- 
 sonal injuries, where the defendant shall present to the court or judge satis- 
 factory evidence that he is ignorant of the nature and extent of the injuries 
 complained of, the court or judge shall order that such physical examination 
 be made; and if the party to be examined shall be a female she shall be. entitled 
 to have such examination before physicians or surgeons of her own sex. The 
 order must require the party or persons to be examined to appear before the 
 judge, or before a referee named in the order, for the purpose of taking the 
 examination, at a time and place therein specified. The order must also direct 
 the time of service of a copy thereof; which must be made within the State, 
 not more than twenty, nor less than five days, before the time fixed for the 
 examination, unless special circumstances, making a different time of service 
 necessary, are shown in the affidavit, and that fact is recited in the order. 
 § 875. Service of order, etc. A copy of the order, and of the affidavit upon 
 which it was granted, must be served upon the attorney for each party to the 
 action, in like manner as a paper in the action; or, if a party has not appeared 
 in the action, they must be served upon him, as directed by the order. If no 
 action is pending, they must be personally served upon each of the persons, 
 named therein as expected adverse parties. 
 
 § 914. In what cases deposition may be taken. A party to an action, suit, 
 or special proceeding, civil or criminal, pending in a court without the State, 
 either in the United States, or in a foreign country, may obtain, by the special 
 proceeding prescribed in this article, the testimony of a witness, and, in connec- 
 tion therewith, the production of books and papers, within the State, to be 
 used in the action, suit or special proceeding. 
 
 § 915. Proceedings to obtain testimony. Where a commission to take testi- 
 mony, within the State, has been issued from the court in which the action, 
 suit, or special proceeding is pending; or where a notice has been given, or 
 any other proceeding has been taken, for the purpose of taking the testimony, 
 within the State, pursuant to the laws of the state or coimtry, wherein the 
 court is located, or pursuant to the laws of the United States, if it is a court 
 of the United States, the supreme court, or the county court, or a judge of 
 either court, shall, in a proper case, on the presentation of a verified petition 
 issue a subpoena to the witness, commanding him to appear before the commis- 
 sioner, named in the commission ; or before a commissioner, within the State, 
 for the state, territory, or foreign country, in which the notice was given, or 
 the proceeding taken; or before the officer designated in the commission, notice, 
 or ather paper, by his title of office; at a time and place specified in the 
 subpoena, to testify, in the action, suit, or special proceeding. If the witness 
 shall fail to obey the subpoena, or refuse to have an oath administered, or to 
 testify, or to produce a book or paper- pursuant to a subpoena, or to sub- 
 scribe his deposition, the court or judge issuing the subpoena shall, if it 
 is determined that a contempt has been committed, prescribe the punishment as 
 in the case of a recalcitrant witness in the supreme court. The general rules 
 of practice must prescribe rules for such proceedings. 
 
§§ 929-1013 CODE OF CIVIL PROCEDURE 969 
 
 § 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 section, 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 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 compared it with the 
 original book, or the entry therein. The witness must testify that the copy 
 produced is correct; that he made it, or compared it with the original; and 
 that he then knew that the original book so copied, or containing the entry. 
 Was the book of the corporation; or that it was then acknowledged to him 
 to be such, by an officer or receiver of the corporation, or a person having the 
 custody thereof, naming the person who made the acknowledgment; and he 
 must specify where, and in whose custody, the original was then kept. 
 
 § 931fl. Copy of designation of person upon whom to make service, as evidence. 
 An exemplified copy of a designation of a person upon whom to make service 
 filed by a foreign corporation as provided in section 16 of the General Corpora- 
 tion Law accompanied with a certificate that it has not been revoked, is a pre- 
 sumptive evidence of the execution thereof, and conclusive evidence of the 
 authority of the officer executing it. 
 
 § 984. Other actions, according to the residence of the parties. An action, 
 not specified in the last two sections, must be tried in the county, in which one 
 of the parties resided, at the commencement thereof. If neither of the parties 
 then resided in the State, it may be tried in any county, which the plaintiff 
 designates, for that purpose, in the title of the complaint. 
 
 § 987. When court may change the place of trial. The court may, by order, 
 change the place of trial, in either of the following eases: 
 
 1. Where the county, designated for that purpose in the complaint, is not 
 the proper county. 
 
 2. Where there is reason to believe, that an impartial trial cannot be had 
 In the proper county. 
 
 3. Where the convenience of witnesses, and the ends of justice, will be pro- 
 moted by the change. 
 
 § 1012. Qualification of the last section. But a reference shal not be made, 
 of course, upon the consent of the parties, in an action to annul the marriage, 
 or for a divorce or a separation; or an action against a corporation, to obtain 
 a dissolution thereof, the appointment of a receiver of its property, or the dis- 
 tribution of its property, unles it is brought by the attorney general; or an 
 action wherein a defendant, to be affected by the result of the trial, is au 
 infant. In a case specified in this section, where the parties consent to a 
 reference, the court may, in its discretion, grant or refuse a reference; and, 
 where a reference is granted, the court must designate the referee. If the 
 referee, thus designated, refuses to serve, or if a new trial of an action tried 
 by a referee, so designated, is granted, the court must, upon the application of 
 either party, appoint another referee. 
 
 § 1013. Compulsory reference for the trial of issues; in what cases it may 
 be made. The court may, of its own motion, or upon the application of either 
 
970 BUSINESS CORPORATIONS IN NEW YORK §§ 1013-1217 
 
 party, without the consent of the other, direct a trial of the issues of fact, 
 by a referee, where the trial will require the examination of a long account, 
 on either side, and will not require the decision of difficult questions of law. 
 In an action, triable by the court, without a jury, a reference may be made, 
 as prescribed in this section, to decide the whole issue, or any of the issues; 
 or to report the referee's finding, upon one or more specific questions of fact, 
 involved in the issue. 
 
 § 1015. Compulsory reference upon questions incidentally arising. The court 
 may likewise, of its own motion, or upon the application of either party, with- 
 out the consent of the other, direct a, reference to take an account, and report 
 to the court thereon, either with or without the testimony, after interlocutory 
 or final judgment, or where it is necessary to do so, for the information of the 
 court; and also to determine and report upon a question of fact arising in 
 any stage or the action, upon a motion, or otherwise, except upon the pleadings. 
 
 § 1185 When verdict to be taken, subject to the opinion of the court. Where, 
 upon the trial of an issue by a jury, th« case presents only questions of law, 
 the judge may direct the jury to render a verdict, subject to the opinion of 
 the court. Notwithstanding that such a verdict has been rendered, the judge 
 holding the trial term may, at the same term, set aside the verdict, and direct 
 judgment to be entered for either party, with like elTect and in like manner, as 
 if such a direction had been given at the trial. An exception to such a direc- 
 tion may be taken as presciibed in section 994 of this act. 
 
 § 1207. When judgment for plaintiff not to exceed judgment demanded. Where 
 there is no answer, the judgment shall not be more favorable to the plaintiff, 
 than that demanded in the complaint. Where there is an answer, the court may 
 permit the plaintiff to take any judgment, consistent with the case made by 
 the complaint, and embraced within the issue. 
 
 § 1216. Application for judgment in case of service by publication. Where 
 the summons was served upon the defendant without the state, or otherwise 
 than personally, if the defendant does not demand a copy of the complaint, or 
 plead, as the ease requires, witliin twenty days after the service is complete, 
 the plaintiff may apply to the court, or a judge or justice thereof, for the 
 judgment demanded in the complaint. Upon such an application, he must 
 file proof that the service is complete, and proof, by affidavit, of the defendant's 
 default. The court, or a judge or justice thereof, must require proof of the 
 cause of action, set forth in the complaint, to be made, either before such court, 
 or such judge or justice, or before a referee appointed for that purpose; except 
 that where the action is brought to recover damages for a personal injury, or 
 an injury to property, the damages must be ascertained by means of a writ 
 of inquiry as prescribed in the last section. If the defendant is a non- 
 resident, or a foreign corporation, the court, or a judge or justice to whom 
 such application is made, must require the plaintiff, or his agent or attorney, 
 to be examined on oath, respecting any payments to the plaintiff, or to any 
 one for his use, on account of his demand, and must render the judgment to 
 which the plaintiff is entitled. But before rendering judgment, the court, or 
 a judge or justice thereof, to whom the application is made, may, in any case, 
 in its, or their, discretion, require the plaintiff to file an undertaking, to abide 
 the order of the court touching the restitution of any estate or effects which 
 may be directed by the judgment to be transferred or delivered, or the restitu- 
 tion of any money that may be collected under or by virtue of the judgment, in 
 case the defendant or his representative applies and is admitted to defend the 
 action, and succeeds in his defense. 
 
 § 1217. Attachment and undertaking for restitution, required in certain 
 actions. A judgment shall not be rendered for a sum of money only, upon an 
 application made pursuant to the. last section, except in an action specified 
 
§§ 1217-1775 CODE OF CIVIL PROCEDURE 971 
 
 in section 635 of thia act. Where the defendant is a non-resident, or a foreign 
 corporation, and has not appeared, the plaintiff, upon the application for judg- 
 ment in such an action, must produce and file the following papers: 
 
 1. Proof, by affidavit, that a warrant of attachment, granted in the action, 
 has been levied upon property of the defendant. 
 
 2. A description of the property, so attached, verified by affidavit; with a 
 statement of the value thereof according to the inventory. 
 
 3. The undertaking mentioned in section 12,16, if one has been required. 
 § 1294. When party may appeal. A party aggrieved may appeal, in a case 
 
 prescribed in this chapter, except where the judgment or order, of which he com- 
 plains, was rendered or made upon his default. 
 
 § 1296. When a person entitled to become a party may appeal. A person 
 aggrieved, who is not a, party, but is entitled by law to be substituted, in place 
 of a party; or who has acquired, since the making of the order, or the ren- 
 dering of the judgment appealed from, an interest, which would have entitled 
 him to be so substituted, if it had been previously acquired, may also appeal, 
 as prescribed in this chapter, for an appeal by a party. But the appeal 
 cannot be heard, until he has been substituted in place of the party; and if he 
 unreasonably neglects to procure an order of substitution, the appeal may be dis- 
 missed, upon motion of the respondent. 
 
 § 1370. Requisites of execution for the collection of money; where a warrant 
 of attachment has been levied by sheriff. Where a warrant of attachment, 
 issued in the action, has been levied by the sheriff, the execution must substan- 
 tially require the sheriff to satisfy the judgment, as follows: 
 
 1. Where the judgment debtor is a non-resident, or a foreign corporation, and 
 the summons was served upon him or it, without the State, or otherwise than 
 personally, pursuant to an order obtained for that purpose, as prescribed in 
 chapter fifth of this act, and the judgment debtor has not appeared in the action ; 
 out of the personal property attached, and, if that is insufficient, out of the real 
 property attached. 
 
 2. In any other case, out of the personal property attached; and, if that is 
 insufficient, ou-t of the other personal property of the judgment debtor; if both 
 are insufficient, out of the real property attached; and, if that is insufficient, 
 out of the real property, belonging to him, at the time when the judgment was 
 docketed in the clerk's office of the county, or at any time thereafter. 
 
 § 1405. Personal property bound by execution. The goods and chattels of 
 a judgment debtor, not exempt, by express provision of law, from levy and sale 
 by virtue of an execution, and his other personal property, which is expressly 
 declared by law, to be subject to levy by virtue of an execution, are, when situated 
 within the jurisdiction of the officer, to whom an execution against property is 
 delivered, bound by the execution, from the time of the delivery thereof to the 
 proper officer, to be executed; but not before. 
 
 § 1502. Against whom action to be brought. Where the complaint demands 
 judgment for the immediate possession of the property, if the property is actually 
 occupied, the occupant thereof must be made defendant in the action. If it is not 
 so occupied, the action must be brought against some person exercising acts of 
 ownership thereupon, or claiming title thereto, or an interest therein, at the time 
 of the commencement of the action. 
 
 § 1650. This article applies to corporations. An action may be maintained, 
 as prescribed in this article, by or against a corporation, or by or against an 
 unincorporated association, as if was a natural person, or such an action may be 
 maintained by or against the receiver or other successor of any such corporation 
 or association-. 
 
 § 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 
 
972 BUSINESS CORPORATIONS IN NEW YORK §§ 1775-1780 
 
 defendant, as the case may be, is a corporation; must state whether it is a domes- 
 tic 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 exist- 
 ence of the corporation, imless the answer is verified, and contains an affirmative 
 allegation that the plaintiff, or the defendant, as the case may be, is not a cor- 
 poration. 
 
 § 1777. Misnomer, when waived. In an action or special proceeding, brought 
 by or against a corporation, the defendant is deemed to have waived any mis- 
 take in the statement of the corporate name, unless the misnomer is pleaded in 
 the answer, or other pleadings 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 
 attorney. In such an action, unless the defendant serves, with a copy of his 
 answer of demurrer, a copy of an order of a judge, directing that 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 spe- 
 cially 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 govern- 
 ment by or under which the corporation is created; or of an act, done at such a 
 meeting, which is not in conflict with tlie same laws, or the' laws of the State. 
 
 § 1780. When foreign corporation may be sued. An action agUnst a foreign 
 corporation may be maintained by a resident of the State, or by a domestic cor- 
 poration, 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. 
 
 4. Where a foreign corporation is doing business within this State. 
 § 1781. See Gen. Corp. L., § 90, infra. 
 
 § 1784. See Gen. Corp. L., § 100, infra. 
 § 1785. See Gen. Corp. L., § 101, irifra. 
 
§§ 1786-1902 CODE OF CIVIL PROCEDURE 973 
 
 § 1786. See Gen. Corp. L., § 102, infra. 
 
 § 1787. See Gen. Corp. L., § 103, infra. 
 
 § 1788. See Gen. Corp. L., §§ 104, 106, infra. 
 
 § 1789. See Gen. Corp. L., § 105, infra. 
 
 § 1790. See Gen. Corp. L., § 109, infra. 
 
 § 1791. See Gen. Corp. L., § 110, infra. 
 
 § 1792. See Gen. Corp. L., § 111, infra. 
 
 i 1793. See Gen. Corp..L., § 112, infra. 
 
 § 1794. See Gen. Corp. L., § 113, infra, 
 
 § 1795. See Gen. Corp. L., §.114, infra. 
 
 § 1796. See Gen. Corp. L., § 115, infra. 
 
 § 1810. See Gen. Corp. L., § 306, infra. 
 
 § 1811. See Gen. Corp. L., § 307, infra. 
 
 § 1812. Application of certain provisions to joint-stock associations. Section 
 1809 of the Code of Civil Procedure and sections 306 and 307 of the General Cor- 
 poration Law apply to an action or special proceeding, against a joint-stock 
 association created by or under the laws of the State, or a trustee, director, or 
 other officer thereof; or against a joint-stock association created by or under the 
 laws of another state, government, or country, or a trustee, director, or other 
 officer thereof, where the association 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. 
 
 § 1836-a. Actions by or against foreign executors or administrators. An 
 executor or administrator duly appointed in any other state, territory or district 
 of the United States or in any foreign country may sue or be sued in any Court 
 in this state in his capacity of executor or administrator in like manner and 
 under like restrictions as a nonresident may sue or be sued, if, within twenty 
 days after any such executor or administrator shall commence, or appear in, any 
 action or proceeding in any court in this state or within twenty days after he 
 shall be required or directed by summons or otherwise to appear therein, there 
 shall be filed in the office of the clerk of the court, in which such action or pro- 
 ceeding shall be brought or be pending, a copy of the letters testamentary or 
 letters of administration issued to such executor or administrator duly authen- 
 ticated as prescribed by section 2704 of . the code of civil procedure; in default 
 whereof all proceedings in such action or proceeding may be stayed until such duly 
 authenticated copy of such letters shall be so filed. 
 
 § 1879. Application of this article; what property cannot be reached. This 
 article does not apply to a case, where the judgment debtor is a corporation, 
 created by or under the laws of the State. Nor does it authorize the discovery 
 or seizure of, or other interference with, and property, which is expressly exempted 
 by law from levy and sale, by virtue of an execution; or any money, thing in 
 action, or other property, held in trust for a judgment debtor, where the trust 
 has been created by, or the fund so held in trust has proceeded from, a person 
 other than the judgment debtor; or the earnings of the judgment debtor for his 
 personal services, rendered within sixty days next befoi'e the commencement of 
 the action, where it is made to appear, by his oath or otherwise, that those earn- 
 ings are necessary for the use of a, family, wholly or partly supported by bi» 
 labor. 
 
 § 1902. Action for causing death' by negligence, etc. The executor or admin- 
 istrator duly appointed in this state, or in any other state, territory or district 
 of the United States, or in any foreign country, of a decedent, who has left, him 
 or her surviving a husband, wife, or next of kin, may maintain an action to 
 recover damages for a wrongful act, neglect, or default, by which the decedent's 
 death was caused, against a natural person who, or a corporation which, would 
 have been liable to an action in favor of the decedent by reason thereof if death. 
 
974 BUSINESS CORPORATIONS IN NEW YORK §§ 1902-1949 
 
 had not ensued. Such an action must be commenced within two years after the 
 decedent's death. When the husband, wife or next of kin do not participate in 
 the estate of decedent, under a will appointing an executor, other than such hus- 
 band, wife or next of kin, who refuses to bring such action, then such husband, 
 wife or next of kin shall be entitled to have an administrator appointed for the 
 purpose of prosecuting such action for their benefit. 
 
 § 1910. What claims or demands may be transferred. Any claim or demand 
 can be transferred, except in one of the following cases: 
 
 1. Where it is to recover damages for a personal injury, or for a breach of 
 promise to marry. 
 
 2. Where it is founded upon a grant, which is made void by a statute of the 
 State; or upon a claim to or interest in real property, a, grant of which, by the 
 transferor, would be void by such a statute. 
 
 3. \'\'here a transfer thereof is expressly forbidden by a statute of the State, 
 or of the United States, or would contravene public policy. 
 
 § 1919 Actions, etc., by or against associations of seven or more persons. 
 An action or special proceedings may be maintained, by the president or treasurer 
 of an unincorporated association, consisting of seven or more persons, to recover 
 any property, or upon any cause of action, for or upon which all the associates 
 mnY maintain such an action or special proceeding, by reason of their interest or 
 ownership therein, either jointly or in common. An action may likewise be main- 
 tained by such president or treasurer to recover from one or more members of 
 sueli association his or their proportionate share of any moneys lawfully expended 
 by such association for the benefit of such associates, or to enforce any lawful 
 claim of such association against such member or members. An action or special 
 proceeding may be maintained, against the president or treasurer of such an asso- 
 ciation, to recover any property, or upon any cause of action, for or upon which 
 the plaintiff may maintain such an action or special proceeding, against all the 
 associates, by reason of their interest or ownership, or claim of ownership therein, 
 either jointly or in common, or their liability therefor, either jointly or severally. 
 Any partnership, or other company of persons, which has a president or treasurer, 
 is deemed an association within the meaning of this section. 
 
 § 1948. Attorney-general may maintain action. The attorney-general may 
 maintain an action, upon his own information, or upon the complaint of a private 
 person, in either of the following cases; 
 
 1. Against a person who usurps, intrudes into, or unlawfully holds or exer- 
 cises within the State, a franchise or a public office, civil or military, or an office 
 in a domestic corporation. 
 
 2. Against a public officer, civil or military, who has done or suffered an act, 
 which by law works a forfeiture of his office. 
 
 3. Against one or more persons who act as a corporation, within the State, 
 without being duly incorporated; or exercises 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 cor- 
 porate rights, privileges or franchises, not granted to it by law of this state; or 
 whicli within the state, has violated any provision 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 131 of the General Corporation Law, be liable 
 to an action to vacate its charter and to annual its existence; or where exer- 
 cises within the state any corporate right.s, privileges or franchises in a, manner 
 contrary to the public policy of the state. 
 
 § 1949. Proceedings when complaint names rightful incumbent. In an action 
 brought as prescribed in the last section, for usurping, intruding into, unlaw- 
 fully holding, or exercising an. office, the attoreny-general, besides stating the 
 
§§ 1949-1956 CODE OF CIVIL PROCEDURE 975 
 
 cause of action in the complaint, may, in his discretion, set forth therein the 
 name of the person rightfully entitled to the ofiSce, and the facts showing his 
 right thereto; and thereupon, and upon proof, by affidavit, that the defendant, 
 by means of his usurpation or intrusion, has leceived any fees or emoluments 
 belonging to the office, an order to arrest the defendant may be granted by the 
 court, or a judge. The provisions of title first of chapter seventh of this act 
 apply to such an order, and the proceedings thereupon and subsequent thereto, 
 except where special provision is otherwise made in this title. For that pur- 
 pose, the order is deemed to have been made as prescribed in section 549" of this 
 act. Judgment may be rendered upon the right of the defendant, and of the 
 party so alleged to be entitled; or only upon the right of the defendant, as 
 justice requires. 
 
 § 1950. Action triable by jury. An action, brought as prescribed in this 
 article, is triable, of course and of right, by a jury, in like manner as if it was 
 an action specified in section 968 of this act, and without procuring an order, as 
 prescribed in section 970 of this act. 
 
 § 1951. AsSiUmption of ofiSce by person entitled. Where final judgment is 
 rendered, upon the right and in favor of the person so alleged to be entitled, he 
 may, after taking the oath of office, and giving an official bond, as prescribed by 
 law, take upon himself the execution of the office. He must, immediately there- 
 after, demand of the defendant in the action, delivery of all the books and papers 
 in the custody, or under the control, of the defendant, belonging to the office 
 from which the defendant has been so excluded. 
 
 § 1952. Proceedings to obtain books and papers. If the defendant refuses 
 or neglects to deliver any of the books or papers, demanded as prescribed in the 
 last section, he is guilty of a misdemeanor; and the same proceedings must be 
 taken to compel the delivery thereof, as are now or shall hereafter be prescribed 
 by law, where a person, who has held an office, refuses or neglects to deliver the 
 official books or papers to his successor. 
 
 § 195.^. Damages; how recovered. Where final judgment has been rendered, 
 upon the right and in favor of the person so alleged to be entitled, he may recover, 
 by action, against the defendant, the damages which he has sustained, in eon- 
 sequence of the defendant's usurpation, instrusion into, unlawful holding, or 
 exercise of the office. 
 
 § 1954. One action against several persons. Where two or more persons claim 
 to be entitled to the same office or franchise, the attorney-general may bring the 
 action against all, to determine their respective rights thereto. 
 
 § 1955. When injunction may be granted. In an action, brought as prescribed 
 in subdivision third or fourth of section 1948 of this act, the final judgment, in 
 favor of the plaintiff, must perpetually restrain the defendant or defendants from 
 the commission or continuance of the act or acts complained of. A temporary 
 injunction to restrain the commission or continuance thereof may be granted, 
 upon proof, by affidavit, that the defendant or defendants have violated any of 
 the provisions of either of the said subdivisions third or fourth of section 1948 of 
 this act. The provisions of title second of chapter seventh of this act apply to 
 such a temporary injunction, and the proceedings thereupon, except where provi- 
 sion is otherwise made in this title. For the purpose, the injunction order is 
 deemed to have been granted as prescribed in section 603 of this act. In the 
 trial of an action brought as prescribed in subdivision third or fourth of section 
 1948 of this act, a party or a witness is not excused from answering a question on 
 the ground that such answer will tend to incriminate him; but such answer 
 cannot be used as evidence against the person so answering, in a criminal action 
 or criminal proceeding. 
 
 § 1956. Final judgment in action for usurping oflSce, etc. In any other action 
 brought as prescribed in this article, where a defendant is adjudged to be guilty 
 
976 BUSINESS CORPORATIONS IN NEW YORK §§ 1956-2070 
 
 of usurping or intruding into, or unlawful!}- holding or exercising, an office, fran- 
 chise, or privilege, final judgment must be rendered, ousting and excluding him 
 therefrom, and in favor of the people or the relator, as the case requires, for the 
 costs of the action. As a part of the final judgment, the court may, in its dis- 
 cretion, also award, that the defendant, or, where there are two or more defend- 
 ■ants, that one or more of them, pay to the people a fine, not exceeding two 
 thousand dollars. The judgment for the fine may be docketed, and execution may 
 be issued thereupon, in favor of the people, as if it had meen rendered in an 
 action to recover the fine. The fine, when collected, must be paid into the treasury 
 of the State. 
 
 § 1975. Ultimate disposition of proceeds of actions, in court of the State; 
 upon petition of corporation, etc., aggrieved. Any corporation, board, officer, cus- 
 todian, agency, or agent, may, in behalf of any city, county, town, village, or other 
 division, subdivision, department, or portion of the State, which was not a party 
 to an action, brought as prescribed in this article, and which claims to be entitled 
 to the custody or disposition of any of the money, funds, damages, credits, or 
 other property, recovered by, or awarded to the plaintiff, by the final judgment 
 in the action, or any of the proceeds thereof, and not disposed of as prescribed in 
 the last section, present, at any time after the actual collection of the money, 
 and its payment into the State treasury, or the actual receipts of the property by 
 the people, to the supreme court, at a special term thereof held in the county of 
 Albany, a verified petition, setting forth the facts, and praying for the relief to 
 which he or it is entitled. Xotice of the application and a copy of the petition 
 must be served upon the attorney-general. Upon the hearing the court may make 
 such a final order, as justice requires, for the disposition of the money or other 
 property, as prescribed in the last section. 
 
 § 1984. Actions to be brought in the name of the people. An action, brought 
 as prescribed in this title, except an action to recover a penalty or forfeiture, 
 expressly given by law to a particular officer, must be brought in the name of the 
 people of the State ; and the proceedings therein are the same, as in an action by 
 a private person, except as otherwise specially prescribed in this title. 
 
 § 1986. Relator; when to be joined as plaintiff. Where an action is brought 
 by the attorney-general, as prescribed in this title, on the relation or information 
 of a person, having an interest in the question, the complaint must allege, and the 
 title of the action show, that the action is brought upon the relation of that 
 person. In such case, the attorney -general must, as a condition of bringing the 
 action, require the relator to give satisfactory security to indemnify the people, 
 against the costs and expenses thereof. Where security is so given all costs and 
 disbursements taxed in favor of the plaintiff shall be payable to the relator. 
 (Effective Sept. 1, 1918.) 
 
 § 1987. Costs; how collected against corporation and usurpers of franchise. 
 Where final judgment in an action, brought as prescribed in this title, is ren- 
 dered against a corporation, or persons claiming to be a corporation, the court 
 may direct the costs to be collected by execution against any of the persons claim- 
 ing to be a corporation; or by warrant of attachment, or other process, against 
 the person of any director or other officer of the corporation. 
 
 § 2068. When writ granted at special term. Except where special provision 
 therefor is otlierwise made in this article, a writ of mandamus can be granted 
 only at a special term of the supreme court held within the judicial district 
 embracing the county, wherein an issue of fact, joined upon an alternative writ 
 of mandamus is triable, as prescribed in this article. 
 
 § 2070. When peremptory mandamus to issue in first instance. A peremp- 
 tory writ of mandamus may be issued, in the first instance, where the appli- 
 cant's right to the mandamus depends only upon questions of law, and notice 
 of the application has been given to a judge of the court, or to the corporation. 
 
§§ 2070-2121 CODE OF CIVIL PROCEDURE 977 
 
 board, or other body, officer, or other person, to which or to whom it is directed. 
 The notice must be served, at least eight days before the application is heard; 
 unless a shorter time is prescribed by an order to show ca'use, made, where the 
 application is to the special term, by the court, or a judge thereof; or where the 
 application is to the appellate division, by the appellate division, or a justice 
 of the appellate division of that judicial, department. In such a ease the a,pplica- 
 tion must be founded upon affidavits, or other written proofs, a copy of which 
 must be served with the notice, or order to show cause. Where the court, board 
 or other-body to be served, consists of three or more members, the notice or order 
 to show cause, and the papers upon which the application is to be made, may be 
 served, as prescribed in the next section for service of an alternative writ of man- 
 damus. Except as prescribed in this section, or by special provision of law, a. 
 peremptory mandamus cannot be issued, until an alternative mandamus has been 
 issued and duly served, and the return day thereof has elapsed. 
 
 § 2071. Alternative writ; how served. An alternative writ of mandamus 
 must be served, by showing the original writ, and delivering a copy thereof, to 
 the person to be served. Where it is directed to a court, or to the judge or 
 judges of a court, it must be served, either in term time or in vacation, upon the 
 judge or judges of the court; except that, where the court consists of three or more 
 judges, service upon a majority of them is sufficient. Where it is to be served 
 upon a board or body, other than a corporation, service must be made upon a 
 majority of the members thereof, unless the board or body was created by law, 
 and has a chairman of other presiding officer, appointed pursuant to law;_ in which 
 case, service upon him is sufficient. Where the writ is to be served upon a cor- 
 poration, service thereof may be made upon any officer, upon whom a summons, 
 issued out of the supreme court, may be served. Where one or more of the persons, 
 upon whom to make service, as prescribed in this section, cannot, after due dili- 
 gence, be found, the exhibition of the original writ may be dispensed with, and 
 service may be made upon him or them, as prescribed by law for the service of a 
 summons, issued out of the supreme court. 
 
 § 2084. Issue of fact; where triable. An issue of fact, joined upon an alterna- 
 tive writ of mandamus, granted at a special term of the supreme court, is triable 
 in the county, wherein it is alleged in the writ, that the material facts took place, 
 unless the court directs it to be tried elsewhere.' An issue of fact, joined upon 
 an alternative writ of mandamus, granted at a term of the appellate division of 
 the supreme court, is triable in the county, which determines the judicial depart- 
 ment wherein the application for the writ must be made; unless the appellate 
 division directs it to be tried in another county of the same judicial department. 
 Upon the trial of an issue of fact, joined upon analternative writ of mandamus, 
 the verdict, report or decision must be returned to, and the final order thereupon 
 must be made by, the appellate division or the special term, as the case requires. 
 
 § 2120. Cases where writ may issue. The writ of certiorari regulated in this 
 article, except the writ specified in section 2124 of this act, is issued to review 
 the determination of a body or officer. It can be issued in one of the following 
 eases only: 
 
 1. Where the right to the writ is expressly conferred, or the issue thereof 
 is expressly authorized by a statute. 
 
 2. Where the writ may be issued at common law, by a court of general juris- 
 diction, and the right to the writ, or the power of the court to issue it, is not 
 expressly taken away by a statute. 
 
 § 2121. Cases where it cannot issue. A writ of certiorari cannot be issued, 
 to review a determination, made, after this article takes effect, in a civil 
 action or special proceeding, by a court of record, or a judge of a court of 
 record. 
 
978 BUSINESS CORPORATIONS IN NEW YORK §§ 2122-2128 
 
 § 2122. The same. Except as otherwise expressly prescribed by a statute, a 
 ■writ of certiorari cannot be issued, in either of the following cases: 
 
 1. To review a determination which does not finally determine the rights of 
 the parties, with respect to the matter to be reviewed. 
 
 2. Where the determination can be adequately reviewed, by an appeal to a 
 court, or to some other body or officer. 
 
 3. Where the body or officer, making the determination, is expressly author- 
 ized, by statute, to rehear the matter, upon the relator's application; unless 
 the determination to be reviewed was made upon a rehearing, or the time 
 within which the relator can procure a hearing has elapsed. 
 
 § 2123. When issued from supreme court. A writ of certiorari can be issued 
 only out of the supreme court, except in a case where another court is expressly 
 authorized by statute to issue it. 
 
 § 2124. When from another court. Any court of record, exercising jurisdic- 
 tion of an appellate nature, may issue a writ of certiorari, requiring the body 
 or officer whose proceedings are under review, to make a return to the court 
 issuing the writ, at a time and place, fixed by the court, and designated in the 
 writ, for the purpose of supplying any diminution, variance, or other defect, 
 in the record or other papers, before the court issuing the writ, in any case 
 where justice requires that the defect should be supplied, and adequate relief 
 cannot be obtained by means of an order. 
 
 § 2125. Limitation of time for review. Subject to the provisions of the next 
 section, a writ of certiorari to review a determination must be granted and 
 served, *ithin four calendar months after the determination to be reviewed 
 becomes final and binding, upon the relator, or the person whom he represents, 
 either in law or in fact. 
 
 § 2126. Id.; in case of disability. Tlie appellate division of the supreme court 
 may grant the writ, at any time within twenty months after the expiration 
 of the time limited in the last section, where the relator, or the person whom 
 he represents, was at the time when the determination to be reviewed became 
 final and binding upon him, either 
 
 1. \^'ithin the age of twenty-one years; or 
 
 2. Insane; or 
 
 3. Imprisoned on a criminal charge, or in execution upon conviction of a 
 criminal oflFence, for a term less than for life. 
 
 § 2127. Application for writ; where and how made. An application for the 
 writ must be made by, or in behalf of, a person aggrieved by the determination 
 to be reviewed; must be founded upon affidavit, or a verified petition, which may 
 be accompanied by other written proof; and must show a proper case for the 
 issuirtg of the writ. It can be granted only at a term of the appellate division 
 of the supreme court or at special term; and the granting or refusal thereof 
 is discretionary -with the court. 
 
 § 2128. When notice necessary; service thereof. Until provision is made, in 
 the general rules of practice, for requiring, or dispensing with notice of the 
 application for the writ, the court, to which the application for the writ is 
 made, may, in' its discretion, require or dispense with notice. A notice, when 
 it is necessary, must be served, with copies of the papers upon which the 
 application is to be made, upon the body or officer, whose determination is to 
 be reviewed, or upon such other person as the court directs, as prescribed in 
 this article for the service of a writ of certiorari. The service must be made, 
 at least eight days before the application, unless the court, by an order to show 
 cause, prescribes a shorter time. Where notice is given, the person served may 
 produce affidavits or other written proofs, upon the merits, in opposition to 
 the application. 
 
§§ 2129-2135 CODE OF CIVIL PROCEDURE 979 
 
 § 2129. To whom writ directed. The writ must be directed to the body or 
 officer, whose determination is to be reviewed; or to any other person having 
 the custody of the record or other papers to be certified; or to both if necessary. 
 Where it is brought to review the determination of a board or body, other 
 than a court, if an action would lie against the board or body, in its associate 
 or official name, it must be directed to the board or body, by that name; 
 otherwise it must be directed to the members thereof, by their names. 
 
 § 2130. Mode of service. A writ of certiorari must be served as follows, 
 except where different directions, respecting the mode of service thereof, are 
 given by the court granting it: 
 
 1. Where it is directed to a person or persons by name, or by his or their 
 official title or titles, or to a municipal corporation, it must be served, upon 
 each officer or other person, to whom it is so directed, or upon the corporation, 
 in the same manner as a summons in an action brought in the supreme court, 
 except as prescribed in the next two subdivisions of this section. 
 
 2. Where it is directed to a court, or to the judges of a court, having a 
 clerk appointed pursuant to law, service upon the court, or the judges thereof, 
 may be made by filing the writ with the clerk. 
 
 3. Where it is to be served upon any other board or body, or upon the 
 members thereof, it may be served as prescribed in section 2071 of this act, for 
 sei-vice, upon a like board or body, of an alternative writ of mandamus. 
 
 § 2131. Stay of proceedings. Except as prescribed in this section, a writ of 
 certiorari does not stay the execution of the determination to be reviewed, or 
 affect the power of the body or officer, to which or to whom it is addressed. 
 The court, which grants the writ, may, in its discretion, and upon such terms, 
 as to security or otherwise, as justice requires, direct, by a clause in the writ, 
 or by a separate order, that the execution of the determination be stayed, 
 pending the certiorari, and until the further direction of the court. A bond, 
 undertaking, or other security, given to procure such a stay, is valid and 
 effectual, according to its terms, in favor of a person beneficially interested 
 in upholding the determination to be reviewed, who is admitted as a party 
 to the special proceeding, as prescribed in section 2137 of this act. 
 
 § 2132. When .and where writ returnable. A writ of certiorari must be made 
 returnable, within twenty days after the service thereof, at the office of the 
 clerk of the court. If it was issued from the supreme court, it must be made 
 returnable at the office of the clerk of the county, designated therein, wherein 
 the determination to be reviewed was made; and, if the county, designated in 
 the writ, -is not the proper county, the court, upon motion, may amend the 
 writ accordingly. Thereupon all papers on file must be transferred to the 
 clerk of the county, where the writ is made returnable by the amendment. 
 
 § 2133. Subsequent proceedings as in an action. After a writ of certiorari 
 has been issued, the time to make a return thereto may be enlarged, or any 
 other order may be made, or proceeding taken, in the cause, in relation ■ to 
 any matter not provided for in this article, as a similar proceeding may 
 be taken in an action, brought in the same court, and triable in the county 
 where the writ is returnable. 
 
 § 2134. Return; when and how made. The clerk, with whom a writ of cer- 
 tiorari is filed, and each person, . upon whom a writ of certiorari is served, 
 as prescribed in section 2130 of this act, must make and annex to the writ, 
 or to the copy thereof served upon him, a, return, with a transcript annexed, 
 and certified by him, of the record or proceedings, and a statement of the 
 other matters, specified in and required by the writ. The return must be filed 
 in the office where the writ is returnable, according to the command thereof. 
 
 § 2135. Id.; how compelled; fees for making. If a return is defective, the 
 court may direct a further return. An omission to make a return, as required 
 
980 BUSINESS CORPORATIONS IN NEW YORK §§ 2135-2140 
 
 by a writ of certiorari, or by an order for a further return, may be punished, 
 as a contempt of the court. But a judge or clerk shall not be thus punished, 
 unless the relator, before the time when the return is required, pays him, 
 for his return, the sum of two dollars, and, in addition, ten cents for each 
 folio of the copies of papers required to be returned. • 
 
 § 2136. Id.; after term of office expired. A writ of certiorari may be issued 
 to, and a return to a writ of certiorari may be made by, an officer, whose term 
 of office has expired. Such an. officer may be punished for a failure to make 
 a return to the writ, as required thereby; or to make a further return, as 
 required by an order for that purpose. 
 
 § 2137. When third person may be brought in. Upon the application of a 
 person, specially and beneficially interested in upholding or annulling the 
 determination to be reviewed, the court may, in its discretion, admit him as 
 a party in the special proceedings, upon such terms as justice requires. And 
 a term of the appellate division of the supreme court, at which the cause is 
 noticed for hearing, and is placed upon the calendar, may, in », proper case, 
 direct that notice of the pendency of the special proceeding be given to any 
 person, in such a manner as it thinks proper; and may suspend the hearing 
 until notice is given accordingly. 
 
 § 2138. Hearing upon return. The cause must be heard at a term of the 
 appellate division of the supreme court, held within the judicial department, 
 embracing the county where the writ was returnable. Either party may 
 notice it for hearing, at any time after the return is complete. Except as 
 prescribed in the next section, it must be heard upon the writ and return, 
 and the papers upon which the writ was granted. 
 
 § 2139 Id.; upon affidavits. If the officer or other person, whose duty it is 
 to make a return, dies, absconds, removes from the State, or becomes insane, 
 after the writ is issued, and before making a return, or after making an 
 insufficient return; and it appears that there is no other officer or person, 
 from whom a sufficient return can be procured by means of a new certiorari; 
 the court may, in its discretion, permit affidavits, or other written proofs, 
 relating to the matters not sufficiently returned, to be produced, and may hear 
 the cause accordingly. The court may also, in its discretion, permit either party 
 to produce affidavits, or other written proofs, relating to any alleged error of 
 fact, or any other question of fact, which is essential to the jurisdiction of 
 the body or officer, to make the determination to be reviewed, where the facts, 
 in relation thereto, are not sufficiently stated in the return, and the court 
 is satisfied that they cannot be made to appear, by means of an cfrder for a 
 further return. 
 
 § 2140. Questions to be determined. The questions, involving the merits, to 
 be determined by the court upon the hearing, are the following, only: 
 
 1. Whether the body or officer had jurisdiction of the subject-matter of the 
 determination under review. 
 
 2. Whether the authority, conferred upon the body or officer, in relation 
 to that subject-matter, has been pursued in the mode required by law, in order 
 to authorize it or him to make the determination. 
 
 3. Whether, in making the determination, any rule of law, affecting the rights 
 of the parties thereto, has been violated, to the prejudice of the relator. 
 
 4. Whether there was any competent proof of all the facts, necessary to be 
 proved, in order to authorize the making of the determination. 
 
 5. If there was such proof, whether there was, upon all the evidence, such a 
 preponderance of proof, against the existence of any of those facts, that the 
 verdict of a jury, affirming the existence thereof, rendered in an action in the 
 supreme court, triable by a jury, would be set aside by the court, as against 
 the weigth of evidence. 
 
§§ 2141-2148-a CODE OF CIVIL PROCEDURE . 981 
 
 § 2141. Final order upon the hearing. The court, upon the hearing, may make 
 a final order, annulling or confirming, wholly or partly, or modifying, the 
 determination reviewed, aa to any or all of the parties. 
 
 § 2142. Restitution may be awarded. Where the determination reviewed is 
 annulled or modified, Ihe court may order and enforce restitution, in like 
 manner, with like efi'ect and subject to the same conditions, as where a judgment 
 is reversed upon appeal. 
 
 § 2143. Costs. Costs, not exceeding fifty dollars and disbursements, may be 
 awarded by the final order, in favor of or against either party, in the discretion 
 of the court. 
 
 § 2144. Entry and enrollment of final order. The final order of the court upon 
 the certiorari must be entered in the office of the clerk where the writ was 
 returnable. But before it can be, enforced, an enrollment thereof must be filed. 
 For that purpose, the clerk must attach together, and file in his office, the 
 papers upon which the cause was heard; a certified copy of the final order; 
 and a certified copy of each order, which in any way involves the merits, or 
 necessarily afi'ects the final order. 
 
 § 214.5. Effect thereof. The filing of the enrollment in the oflice of the clerk 
 where the final order is entered, as prescribed in the last section, is a sufiicient 
 authority for any proceeding, by or before the body which, or the officer who, 
 made the determination reviewed, which the final order of the court directs 
 or permits. But where the execution of the final order is stayed by an appeal 
 to the court of appeals, the proceedings below are stayed in like manner. 
 
 § 2146. "Body or officer;" "determination;" what they include. The expres- 
 sion, " body or officer," as used in this article, includes every court, tribunal, 
 board, corporation, or other person, or aggregation of persons, whose deter- 
 mination may be reviewed by a writ of certiorari ; and the word, " determina- 
 tion," as used in this article, includes every judgment, order, decision, adjudi- 
 cation, or other act of such body or officer, which is subject to be so reviewed. 
 
 § 2147. Application of this article to certain special cases. Where the right 
 to a writ of certiorari is expressly conferred, or the issuing thereof is expressly 
 authorized, by a statute, passed before, and remaining in force after, this article 
 takes effect, this article does not vary, or affect in any manner, any provision of 
 the former statute, which expressly prescribes a dififerent regulation, with 
 respect to any of the proceedings upon the certiorari to be issued thereunder. 
 
 § 5^148. Id.; to civil cases only. This article is not applicable to a writ of 
 certiorari, brought to review a determination made in any criminal matter, 
 except a criminal contempt of court. 
 
 § 2148a. Substitution by amendment of remedy by mandamus for that by 
 certiorari, and vice versa. Whenever a writ of certiorari shall be applied for or 
 granted under this article, and it shall appear at any stage of the proceedings, 
 or upon appeal, that the appropriate remedy upon the facts pleaded or proved 
 is mandamus, the proceedings may be amended upon such terms as may be just, 
 and may be continued and determined by the court and at the term where 
 then pending, or remitted to the proper term or court to be disposed of, in 
 order that the relief may he finally granted which is appropriate to the facts, 
 to the same extent as if the application had been in the first instance for a 
 writ of mandamus under article four of this title; and likewise, if a writ 
 of mandamus is applied for or issued under article four of this title, and it 
 shall appear, at any stage of the proceedings, or upon appeal, that certiorari 
 under this article is the appropriate remedy, the proceedings may be amended 
 accordingly upon such terms as are just, and continued and determined by the 
 court and at the term where then pending, or be remitted to the proper term 
 or court to be disposed of; and such relief may be finally ordered aa might 
 
982 BUSINESS CORPORATIONS IN NEW YORK §§ 2148-a-2389 
 
 have been granted if such writ of certiorari had been issued or applied for in 
 the first instance. And in either case, the court may correct by amendment all 
 defects and irregularities in matters of form, or procedure, and may bring 
 in all parties necessary to completely determine the matter and award the 
 appropriate relief upon the facts established. 
 
 § 2240. Precept; how served. The precept must be served as follows: 
 
 1. By delivering, to the person to whom it is directed, or, if it is directed 
 to a corporation, to an officer of the corporation, upon whom a summons, 
 issued out of the supreme court, in an action against the corporation, might 
 be served, a copy of the precept, together with a copy of the petition, and 
 at the same time showing him the original precept. 
 
 2. If the person, to whom the precept is directed, resides in the city or 
 town in which the property is situated, but is absent from his dwelling- 
 house, service may be made by delivering a copy thereof, together with a copy 
 of the petition, at his dwelling-house, to a person of suitable age and dis- 
 cretion, who resides there; or, if no such person can with reasonable diligence, 
 be found there, upon whom to make service, then by delivering a copy of the 
 precept and petition, at the property sought to be recovered, either to some 
 person of suitable age and discretion residing there, or if no such person can 
 be found there, to any person of suitable age and discretion employed there. 
 
 3. Where service cannot, with reasonable diligence, be made, as prescribed 
 in either of the foregoing subdivisions of this section, by affixing a copy of the 
 precept and petition upon a conspicuous part of the property. 
 
 If the precept is returnable on the day on which it is issued, it must be 
 served at least two hours before the hour at which it is returnable; in every 
 other case, it must be served at least two days before the day on which it 
 is returnable. 
 
 a 2284. Amount of fine. If an actual loss or injury has been produced to a 
 party to an action or special proceeding, by reason of the misconduct proved 
 against the offender, and the case is not one where it is specially prescribed by 
 law, that an action may be maintained to recover damages for the loss or 
 injury, a fine, sufficient to indemnify the aggrieved party, must be imposed 
 upon the offender, and collected, and paid over to the aggrieved party, under 
 the direction of the court. The payment and acceptance of such a fine consti- 
 tute a bar to an action by the aggrieved party, to recover damages for' the 
 loss or injury. Where it is not shown that such an actual loss or injury has 
 been produced, a fine must be imposed, not exceeding the amount of the com- 
 plainant's costs and expenses, and two hundred and fifty dollars in addition 
 thereto, and must be collected and paid, in like manner. A corporation may 
 be fined as prescribed in this section. 
 
 S 2.'J89. Notice of sale; how served. Service of notice of the sale, as pre- 
 scribed in subdivision fourth of the last section, must be made as follows: 
 
 1. Upon the mortgagor, his wife, widow, executor, or administrator, or a 
 subsequent grantee of the property, whose conveyance is upon record, or his 
 wife or widow; by delivering a copy of the notice, as prescribed in article 
 first of title first of chapter fifth of this act, for delivery of a copy of a. sum- 
 mons, in order to make personal service thereof upon the person to be served; 
 or by leaving such a copy, addressed to the person to be served, at his dwelling- 
 house, with a person of suitable age and discretion, at least fourteen days before 
 the day of sale. If said mortgagor is a foreign corporation, or being a natural 
 person, he, or his wife, widow, executor or administrator, or a subsequent 
 grantee, of the property whose conveyance is upon record, or his wife or widow, 
 is not a resident of or within the State, then service thereof may be made upon 
 them in like manner without the State, at least twenty-eight days prior to the 
 'iav of sale. 
 
§§ 2389-2447 CODE OF CIVIL PROCEDURE 983 
 
 2. Upon any other person, either in the same method, or by depositing a 
 copy of the notice in the post-ofBce, properly inclosed in a postpaid wrapper, 
 directed to the person to be served, at his place of residence, at least twenty- 
 eight days before the day of -sale. 
 
 § 2419. See Gen, Corp L., § . 170, infra. 
 
 § 2423. See Gen. Corp. L., §§ 176, 178, 181, 182, 184, infra. 
 
 § 2429. See Gen. Corp. L., §§ 191, 192, 194, infra. 
 
 § 2441. Ordei to examine person having property, etc., of judgment debtor. 
 Upon proof, by affidavit, or other competent written evidence, to the satisfaction 
 of the judge, that an execution against property has been issued, as prescribed in 
 section 2458 of this act, and either that it has been returned wholly or partly 
 unsatisfied, or that it has not been returned; and also that any person or cor- 
 poration has personal property of the judgment debtor, exceeding ten dollars in 
 value, or is indebted to him in a sum exceeding ten dollars; the judgment cred- 
 itor is entitled to an order, requiring that person or corporation to attend and 
 be examined concerning the debt, or other property, at a time and place, specified 
 in the order. The judge may, in his discretion, require notice of the subsequent 
 proceedings to be given to' the judgment debtor, in such a manner as he deems 
 just. But a receiver shall not be appointed without such a notice; except as 
 otherwise prescribed in article second of this title. 
 
 § 2444. Proceedings upon examination; adjournment. Upon an examination 
 under this article, each answer of a party or witness examined must be under 
 oath. A corporation must attend by, and answer under the oath of, an officer 
 thereof; and the judge may, in his discretion, specify the officer. Either party 
 may be examined as a witness, in his own behalf, and may produce and examine 
 other witnesses, as upon the trial of an action. The judge or referee may 
 adjourn any proceedings, under this article, from time to time, as he thinks 
 proper. 
 
 § 2446. Order permitting person indebted to pay debt to sheriff. At any time 
 after the commencement of a special proceeding, authorized by this article, and 
 before the appointment of a receiver therein, or the extension of a receivership 
 thereto, the judge, by whom the order or warrant was granted, or to whom it 
 is returnable, may, in his discretion, upon proof, by affidavit, to his satisfaction, 
 that a person or corporation is indebted to the judgment debtor, and upon such a 
 notice, given to such persons, as he deems just, or without notice, make an order, 
 permitting the person or corporation, to pay to a sheriff, designated in the order, 
 a sura, on account of the alleged indebtedness, not exceeding the sum which will 
 satisfy the execution. A payment thus made is, to the extent thereof, a discharge 
 of the indebtedness, except as against a transferee from the judgment debtor, in 
 good faith and for a valuable consideration, of w^hose rights the person or corpo- 
 ration had actual or constructive notice, when the paymesnt was made. 
 
 § 2447. Order requiring delivery of money or property to sheriff or receiver. 
 Where it appears, from the examination or testimony taken in a special proceed- 
 ing authorized by this article, that the judgment debtor has, in his possession 
 or under his control, money or other personal property, belonging to him ; or that 
 one or more articles of personal property, capable of delivery, his right to the 
 possession whereof is not substantially disputed are in the possession or under 
 the control of another person; the judge, by whom the order or warrant was 
 granted, or to whom it is returnable, may, in his discretion, and upon such a 
 notice, given to such persons, as he deems just, or without notice, make an order, 
 directing the judgment debtor, or other person, immediately to pay the money, 
 or deliver the articles of personal property, to a sheriff, designated in the order, 
 unless a receiver has been appointed, or a receivership has been extended to the 
 special proceeding, and in that case to the receiver. 
 
984 BUSINESS CORPORATIONS IN NEW YORK §§ 2452-2517 
 
 § 2452. Mode of service of certain orders. An injunction order, or an order 
 requiring a person to attend and be examined, made as prescribed in this article, 
 must be served as follows: 
 
 1. The original order, under the hand of the judge making it, must be exhib- 
 ited to the person to be served. 
 
 2. A copy thereof, and of the affidavit upon which it was made, must be 
 delivered to him. 
 
 Service upon » corporation is sufficient, if made upon an officer, to whom a 
 copy of a summons must be delivered, where a summons is personally served upon 
 the corporation; unless the officer is specially designated by the judge, as pre- 
 scribed in section 2444 of this act. 
 
 § 2458. Upon what judgment and to what county the execution must have 
 issued. In order to entitle a judgment-creditor to maintain either of the 
 special proceedings authorized by this article, the judgment must have been 
 rendered upon the judgment debtor's appearance or personal service of the sum- 
 mons upon him, for a sum not less than twenty-five dollars or substituted service 
 of the summons upon him in accordance with section 436 of the code of civil 
 procedure; and the execution must have been issued out of a court of record; 
 and either: 
 
 1. To the sheriff of the conty where the judgment debtor has, at the time of 
 the commencement of the special proceedings, a, place for the regular transaction 
 of business in person; or, 
 
 2. If the judgment debtor is then u resident of the state, to the sheriff of the 
 county where he resides; or. 
 
 3. If he is not then a resident of the state, to the sheriff of the county where 
 the judgment-roll is filed unless the execution was issued out of a court other 
 than that in which the judgment was rendered, and, in that case, to the sheriff 
 of the county where the transcript of the Judgment is filed. 
 
 § 2450. In what county judgment debtor, his bailee, etc., must attend. If 
 the judgment debtor, or other person, required to attend and be examined, as 
 prescribed in this article, or the officer of a corporation, required to attend in 
 its behalf, is, at the time of the service of the order upon him, a resident of the 
 State, or then has an office, within the State, for the regular transaction of 
 business in person, he cannot be compelled to attend, pursuant to the order, or 
 to any adjournment, at a place without the county wherein his residence or place 
 of business is situated. 
 
 § 2463. Cases where this chapter is not applicable; what property cannot be 
 reached. This article does not authorize the seizure of, or other interference 
 with, any property, which is expressly exempt by law from levy and sale by virtue 
 of an execution; or any money, thing in action, or other property, held in trust 
 for a judgment debtor, where the trust has been created by, or the fund so held 
 in trust has proceeded from a person, other than the judgment debtor; or the 
 earnings of the judgment debtor for his personal services, rendered within sixty 
 days, next before the institution of the special proceeding; when it is made to 
 appear, by his oath or otherwise, that those earnings are necessary for the use 
 of a family, wliolly or partly supported by his labor. 
 
 § 2517. Jurisdiction, how affected by locality of debts. For the purpose of 
 conferring jurisdiction upon a surrogate's court, a debt owing to a decedent by 
 a resident of the state is regarded as personal property situated within the 
 county where the debtor, or either of two or more joint debtors, resides; and a 
 debt owing to him by a domestic corporation is regarded as personal property 
 situated within the county where the principal office of the corporation is situ- 
 ated. But the foregoing provision does not apply to a debt evidenced by a bond, 
 promissory note, or other instrument for the payment of money only, in terms 
 negotiable, or payable to the bearer or holder. Such a debt, whether the debtor 
 
§§ 2517-2588 CODE OF CIVIL PROCEDURE 985 
 
 is a resident or a non-resident of the state, or a foreign or a domestic govern- 
 ment, state, county, public oflScer, association, or corporation is, for the purpose 
 of so conferring jurisdiction, regarded as personal property at the place where 
 the bond, note or other instrument is, either within or without the state. 
 
 § 2525. Citation; how served within state. Personal service of a citation 
 within the state shall be made as follows: 
 
 Upon an adult person, or upon an infant of the age of fourteen years or 
 upwards, by delivering a copy thereof to the person to be served. 
 
 Upon an infant under the age of fourteen years, by delivering a copy thereof 
 to the infant in person, and to his father, mother or guardian; or if there be 
 none within the state, or if the infant does not reside with a parent, to the per- 
 son having the care and control of him, or with whom he resides, or in whose 
 service he is employed. 
 
 Upon a person judicially declared to be incompetent to manage his affairs by 
 reason of lunacy, idiocy, or habitual drunkenness, or upon a corporation by 
 delivering a copy thereof in the manner prescribed for personal service of a 
 summons upon such a person, or upon a corporation in article first of title first 
 of chapter fifth of this act. Upon a public officer by delivering a copy thereof 
 to such officer, or to one of his duly constituted deputies. 
 
 Where it appears, by affidavit, to the satisfaction of the surrogate from whose 
 court a citation is issued, that proper and diligent effort has been made to serve 
 it as hereinbefore prescribed in this section upon a resident of the state whose 
 place of residence or place of business is known, and that the person to be served 
 cannot be found at his residence or place of business, and cannot be elsewhere 
 served within the state within a reasonable time, or, if found, that he evades 
 service, so that it cannat be made; the surrogate may make an order directing 
 that service thereof be made, as prescribed in section 436 of this act; and the 
 provisions of that section and of section 437 of this act, relating to the service 
 of a summons, apply to the" service of a citation, pursuant to an order made as 
 prescribed in this section. 
 
 Where it is necessary in any special proceeding to cite known creditors, and it 
 appears that the number of creditors or persons claiming to be creditors, residing 
 within the state of New York, upon whom citation is Required to be served, 
 exceeds fifty, service thereof may be made upon them by publication thereof in 
 such newspaper or newspapers and for such a length of time as shall be fixed 
 by the surrogate, and by the mailing of a copy of such citation to each of them 
 by deposit of a copy thereof in the post-office, properly enclosed in a postpaid 
 sealed wrapper addressed to each of them at his last known post-office address 
 as stated in the order, at least twenty days prior to the return day thereof. 
 
 I 2526. Service personally without the state, or by publication; when ordered. 
 The surrogate from whose court a citation is issued may make an order directing 
 the service thereof personally without the state, or by publication, in either of 
 the following cases: 
 
 1. Where it is to be served upon a foreign corporation, or upon a person who 
 is not a resident of the state. 
 
 2. Where the person to be served is a resident of the state, and substituted 
 service upon him cannot be authorized as provided in section 2525 of this chapter. 
 
 3. Where it is to be served upon a party, or a person required to be made a 
 party, whose name, or residence, cannot be ascertained. 
 
 4. Where it is to be served upon one or more unknown creditors, next of kin, 
 heirs, legatees or other persons, either individually or included in a class, to 
 whom a citation has been directed, designating them by a general description, 
 as prescribed in this chapter. 
 
 ■ § 2588 Who entitled to letters of administration. Administration in case of 
 intestacy must be granted to the persons entitled to take or share in the per- 
 
986 BUSINESS CORPORATIONS IN NEW YORK §§ 2588-2603 
 
 sonal property, who are competent and will accept the same, in the following 
 order : 
 
 1. To the surviving husband or wife. 
 
 2. To the children. 
 
 3. To the grandchildren. 
 
 4. To the father. 
 
 5. To the mother. 
 
 6. To the brothers. 
 
 7. To the sisters. 
 
 8. To any other next of kin entitled to share in the distribution of the estate, 
 preference being given to the person entitled to take the largest share in the 
 estate, except as hereinafter provided. 
 
 If a person entitled to take all the personal estate is an infant, or an incom- 
 petent, or has died, his guardian, committee or legal representative, as the case 
 may be, shall have a prior right to letters in his place and stead. 
 
 If all the persons entitled to take the personal estate are infants, or adjudged 
 incompetents, or, if no adult or competent person entitled to take or share in the 
 estate will accept the same, letters may be granted to the general guardian of 
 an infant or to the committee of an incompetent, in the place of such infant or 
 incompetent. 
 
 If no person entitled to take or share in the estate will accept the same or 
 an appointment is not made by consent as hereinafter provided, then adminis- 
 tration shall be granted as follows: 
 
 a. To tlie public administrator. 
 
 b. To the county treasurer of the county, or to the petitioner, in the discretion 
 of the surrogate. 
 
 c. To any other person or persons. 
 
 If several persons have an equal right to administration, they must be pre- 
 ferred in the following order: First, men to women; second, relatives of the 
 whole blood to those of the half blood; third, unmarried women to married. If 
 there are several persons equally entitled to administration, the surrogate may 
 grant letters to one or more of such persons. Administration may be granted 
 to one or more competent persons, jointly with, and upon the application 
 of, a person entitled; or to a competent person or persons not entitled, upon 
 the consent of all of the persons entitled to tf>ke or share in the estate who 
 are within tliis state and competent, which consent must be in writing, and 
 filed in the office of the surrogate. For the purposes of this section a trust com- 
 pany or other corporation authorized to act as administrator shall be included 
 in the word " person." 
 
 § 260.S. Letters of administration with will annexed; when and to whom 
 granted. If no person is named as executor in the will, or selected by virtue 
 of a power contained therein ; or if, at any time there is no executor, or adminis- 
 trator with the will annexed, qualified to act; the surrogate must, upon the 
 application of a creditor of the decedent, or a person interested in the estate of 
 the decedent, or having a lien upon any real property upon which the decedent's 
 estate has a lien, and upon such notice to the other creditors and persons inter- 
 esieU in tlie estate as the surrogate deems proper, issue letters of administration 
 with the will annexed, as follows: 
 
 1. To an executor or administrator of a sole legatee and devisee named in a 
 will or to the executor or administrator of a sole residuary legatee and devi.see 
 named in a will. 
 
 2. To one or more of the residuary legatees, who are qualified to act as admin- 
 istrators. A corporation which is a residuary legatee shall be qualified to act 
 as such administrator, although not specially authorized by its charter or any 
 provision of law. 
 
§§ 2603-2906 CODE OF CIVIL PROCEDURE 987 
 
 3. If there is no such residuary legatee or none who will accept, -then to one 
 or more of the principal or specified legatees so qualified. 
 
 4. If there is no such legatee or none who will accept, then to the husband, 
 or wife, or to one or more of the next of kin, or to one or more of the heirs 
 or devisees, so qualified. 
 
 If any of the above persons who would otherwise be entitled to letters is an 
 infant or an adjudged incompetent, administration may be granted to his 
 guardian or committee as the case may be, unless there is an adult or competent 
 person equally entitled who will accept the same. 
 
 5. If there is no qualified person, entitled under the foregoing subdivisions, who 
 will accept, then to the public administrator, and if there be none for the county, 
 to the treasurer of the county or to the petitioner in the discretion of the sur- 
 rogate, ana if neither will accept, to any creditor or competent person desig- 
 nated by the surrogate. 
 
 Except as to the right of priority as provided in this section, the provisions 
 of section 2588 of this chapter apply to an application for letters of administra- 
 tion with the will annex-ed. 
 
 § 2865. Actions by and against officers, etc.; and by executors, etc. An 
 action, cognizable by a justice of the peace, may be brought by or against a cor- 
 poration ; by or against a natural person in his own right ; by or against a town 
 or county officer in his official character; or by an executor or administrator, 
 trustee of an express trust, or a receiver in supplementary proceedings. 
 
 § 2879. Service of summons upon a corporation. Where the defendant to be 
 served is a corporation, or person, company or partnership doing business in 
 another county than that in which he or it resides, the summons may be per- 
 sonally 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 corporation in the supreme court might be delivered as prescribed in sections 
 431 and 432 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. 
 
 § 2906. What must be shown to procure a warrant. To entitle the plaintiff 
 to such a warrant, he must show, by affidavit, to the satisfaction of the justice 
 as follows: 
 
 1. That a sufficient cause of action exists against' the defendant, to recover 
 damages for one or more of the causes specified in the last section. If the 
 action is upon a judgment, or to recover for breach of a contract, the affidavit 
 must show that the plaintiff is entitled to recover a sum stated therein, over 
 and above all counterclaims known to him. 
 
 2. That the defendant is either a foreign corporation; or not a resident of 
 the State; or, if the defendant is a natural person, and a resident of the 
 State, that he has departed, or is about to depart, from the county where 
 he last resided, with intent to defraud his creditors, or to avoid the service of 
 a summons, or keeps himself concealed, with the like intent; or if the defend- 
 ant is a natural person, or a domestic corporation, that he or it has removed, 
 or is about to remove, property from the county where the defendant, being 
 a natural person, last resided, or, being a corporation, last kept its principal 
 office, or from the county in which the action is brought, 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 that the defend- 
 ant, being a natural person of full age, and a resident of the State, has been 
 continuously without the United States for the space of six months or more, 
 immediately before the application, and either that he has not made a designa- 
 tion of a person, upon whom to serve a summons in his behalf, as prescribed 
 in section 430 of this act, or that service upon the person so designated cannot 
 
988 BUSINESS CORPORATIONS IN NEW YORK §§ 2906-3202 
 
 be made, with due diligence, in the county where the person making the 
 designation resides. The affidavit must be filed with the justice, when the 
 warrant is granted. 
 
 § 3169. Proof necessary to obtain warrant of attachment. In order to entitle 
 the plaintiff to a warrant of attachment against property, he must show by 
 affidavit, to the satisfaction of the justice granting it, that a sufficient cause 
 of action exists against the defendant, to recover damages for one or more 
 causes specified in section 635 of this act, to an amount stated in the affidavit, 
 which, if the action is to recover damages for breach of contract, must be 
 stated over and above all counterclaims know to the plaintiff; and also that 
 the case is within one of the following subdivisions: 
 
 1. That the defendant is a foreign corporation, or being a natural person 
 is not a resident of the State. 
 
 2. That the defendant, being an adult and a resident of the borough of 
 Manhattan in the city of New York, has departed from the State, with intent 
 to defraud his creditors, or to avoid service of the summons, or keeps him- 
 
 . self concealed therein, with like intent; or that, after proper and diligent 
 effort to ascertain the place of the sojourn of such a resident adult defendant, 
 the same cannot be ascertained. 
 
 3. That the defendant, being an adult, has removed, or is about to remove, 
 property from the State, with intent to defraud his creditors, or that he has 
 assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete 
 property with the like intent. 
 
 4. That the defendant, being an adult and a resident of that borough has 
 been continously without the United States more than six months next before 
 the granting of the warrant, and has not made a designation of a person upon 
 whom to serve a summons in his behalf, as prescribed in section 430 of this 
 act ; or a designation so made no longer remains in force. 
 
 § 3170. Service of summons without the city, or by publication. An order, 
 directing the service of a summons, either without the city of New-York, 
 or by publication, may be granted by the court, or by a justice thereof; but 
 only in a case, where a warrant of attachment has been issued, as prescribed 
 in the last section, and personal service of the summons cannot be made, with 
 due diligence, within that city. The plaintiff, when he applies for such an 
 order, must show by affidavit, to the satisfaction of the court or justice, that 
 the case is within this section. Where an order is granted, as prescribed in 
 this section, service of the summons without that city may be made, as directed 
 in the order, either within or without the State. Sections 440 to 445, both 
 inclusive, and sections 638, 707, and 708 of this act apply to the service or 
 publication, pursuant to such an order, and to the proceedings relating to 
 the same, and subsequent thereto ; substituting the words, " the city of New- 
 York ", in place of the words, " the State ", wherever the latter words occur. 
 If the defendant is a resident of the city of New- York, the order must also 
 direct that a copy of the summons, complaint, and order be left at his residence, 
 specifying it, with a person of suitable age and discretion, if, upon reasonable 
 application, admittance can be obtained, and such a person found who will 
 receive it; or, if admittance cannot be so obtained, nor such a person found, 
 by affixing the same to the outer door of the residence so specified. 
 
 § 3203. Jurisdiction in civil actions. The jurisdiction of the city court of 
 Yonkers extends to the following civil actions only: 
 
 1. An action against a natural person, or against a foreign or domestic 
 corporation, wherein the complaint demands judgment for a sum of money 
 only, or to recover one or more chattels, with or without damages for the 
 taking, withholding, or detention thereof, 
 
 2. An action to foreclose or enforce a lien, upon real property in the city 
 
§§ 3203-3304 CODE OF CIVIL PROCEDURE 989 
 
 of Yonkera, created, as prescribed by statute, in favor of a person who has 
 performed labor, or furnished materials to be used, in erecting, altering, or 
 repairing a building, building lot, or appurtenance thereto, including fences, 
 sidewalks, paving, well, fountains, fish-ponds, ornamental and fruit trees, and 
 every other improvement to a building or building lot. 
 
 3. An action to foreclose or enforce a lien, for a sum not exceeding one 
 thousand dollars, exclusive of interest, upon one or more chattels. 
 
 § 3242. Costs where action brought by people, on relation of private person. 
 Where an action is brought, in the name of the people of the State, upon the 
 relation of a, private corporation or individual, as prescribed in section 1986 
 of this act, a judgment, awarding costs to the defendant, must award them, 
 against the relator, in the first instance; and against the people, only in case 
 an execution, issued thereupon against the property of the relator, is returned 
 unsatisfied. 
 
 § 3268. When defendant may require security for costs. The defendant, 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 
 
 1. A person residing without the state; or, if the action is brought in a 
 county court, except in the counties of Albany, Kings, Queens, Rensselaer and 
 Richmond, or in the city court of the city of New York, the city court of 
 Yonkers, or the city court of Albany, residing without the city or county, as 
 the case may be, wherein the court is located; or 
 
 2. A foreign corporation; or 
 
 3. A person imprisoned under execution for a crime; or 
 
 4. The official assignee of a person so imprisoned; the official assignee or 
 official trustee of a debtor; or an assignee in bankruptcy; where the action is 
 brought upon a cause of action, arising before the assignment, the appoint- 
 ment of the trustee, or the adjudication in bankruptcy., 
 
 § 3270. The last two sectiins qualified. In a case specified in either of the 
 last two sections, if there are two or more plaintifl's, the defendant cannot 
 require security for costs to be given, unless he is entitled to require it of 
 all the plaintiffs. 
 
 § 3304. Fees of county clerks generally. A county clerk is entitled, 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 searching and certifying the title to, and incumbrances upon real prop- 
 erty, for each year for which the search is made, for each name, and each 
 kind of conveyance or lien, five cents. 
 
 For a copy of an order, record, or other paper, entered or filed in his office, 
 eight cents for each folio. 
 
 For filing a transcript, and making an entry as prescribed in section 1258 
 of this act, twelve cents. 
 
 For issuing an execution upon a judgment, a transcript whereof, or of the 
 docket of which, has been filed in his office, fifty cents, to be paid by the party 
 at whose request the execution is issued, and to be collected by the sheriff 
 in addition to the sum due upon the judgment. 
 
 For recording and indexing a notice of the pendency of an action, filed in 
 his office, ten cents for each folio contained in the notice. 
 
 For cancelling such a notice, or a notice filed in his office, as prescribed in 
 section 649 of this act, twenty-five cents. 
 
 For recording any instrument, which must or ma,y legally be recorded by 
 him, ten cents for each folio. 
 
 For filing a certificate of satisfaction, or other satisfaction-piece of a mort- 
 gage, and entering the satisfaction, twenty-five cents. 
 
990 BUSINESS CORPORATIONS IN NEW YORK §§ 3304-3320 
 
 For affixing and indexing a notice of foreclosure of a mortgage, as prescribed 
 in section 2390 of this act, twenty-five cents. 
 
 For entering a minute that a mortgage has been foreclosed, ten cents. 
 
 For filing and entering a satisfaction of an assignment of a judgment, twelve 
 cents. 
 
 For filing and entering the bond of a collector or other officer authorized 
 to receive taxes, twelve cents. 
 
 For searching for such a bond, six cents. 
 
 For entering satisfaction thereof, twelve cents. 
 
 For sealing any paper, when required, twelve cents. 
 
 For filing and docketing notice of a mechanic's lien, ten cents. 
 
 For filing and entering specifications and all other papers relating to a 
 lien against a vessel, twenty-five cents. 
 
 For filing any paper required by law to be filed in his office, other than as 
 expressly provided for in this section, six cents. 
 
 For filing any paper deposited with him for safe keeping, six cents; and 
 for searching for such a paper, when required, three cents for each paper 
 necessarily opened and examined. 
 
 For a certificate, other than that a paper, for the copying of which he is 
 entitled to a fee, is a copy, twenty-five cents. 
 
 For inquiring into, determining, and certifying tlie sufficiency of the sureties 
 of a sheriff, fifty cents. 
 
 For attending upon the canvassing of votes, given at an election, two dollars. 
 
 For drawing the necessary certificates of the result of the canvass, eighteen 
 cents for each folio; and for the necessary copies thereof, nine cents for each 
 folio. 
 
 For notifying the governor that any person has taken an oath of office, ten 
 cents and the necessary postage. 
 
 For notifying the governor that any person has neglected to take an oath 
 of office, or to file or renew any security, within the time prescribed by law, 
 or of a, vacancy in an office in his county, ten cents and the necessary postage. 
 
 For notifying any person of his appointment to office, twenty-five cents, and 
 the expenses, actually and necessarily incurred in giving the notice, which the 
 comptroller deems reasonable. 
 
 For entering, in the minutes of the county court, a license to keep a ferry, 
 and for a copy thereof, one dollar. 
 
 For taking and entering a recognizance, from any person authorized to keep 
 a ferry, twenty-five cents. 
 
 But a county clerk is not entitled to any fee, under this section, for a 
 copy of, or for filing or certifying, any paper, in a civil action or- special 
 proceeding, in court of which he is ex-officio clerk. 
 
 § 330i'ia. Fees for certifying prepared copies. Whenever there shall be pre- 
 sented to any public officer for certification or exemplification, a previously 
 prepared legibly typewritten or printed copy of any document, paper, book or 
 record in such officer's custody, the fees in such case, for certification or 
 exemplification, shall be at the rate of three cents for each folio; but the 
 minimum total charge for certification or exemplification in all cases shall be 
 twenty-five cents. 
 
 § 3320. Receiver's commissions; cost of bonds; trustee's commissions. A 
 receiver, except as otherwise specially prescribed by statute, is entitled, in 
 addition to his necessary expenses, to such commissions, not exceeding five per 
 centimi upon the sums received and disbursed by him, as the court by which, 
 or the judge by whom, he is appointed allows. But if in any case the com- 
 missions of a temporary or permanent receiver, so computed, shall not amount 
 to one hundred dollars, said court or judge may in its or his discretion, allow 
 
§§ 3320-3343 CODE OF CIVIL PROCEDURE 991 
 
 said receiver such a sum, not exceeding one hundred dollars, for his com- 
 missions as shall be commensurate with the services rendered by said receiver. 
 Any receiver, assignee, guardian, trustee, committee, executor, administrator or 
 person appointed under section 111 of the Real Property law or under section 
 20 of the Personal Property law required by law to give a bond as such may 
 include, as a part of his necessary expenses, such reasonable sum, not exceed- 
 ing one per centum per annum upon the amount of such bond paid his surety 
 thereon, as such court or judge allows. Except as otherwise prescribed in 
 regard to a testamentary trustee, a trustee of an express trust is entitled, 
 and two or more trustees of such a trust are entitled, to be apportioned 
 between or among them according to the services rendered by them respec- 
 tively, as compensation for services as such, over and above expenses, to com- 
 missions as follows: For receiving and paying out all sums of principal not 
 exceeding one thousand dollars, at the rate of five per centum. For receiving 
 and paying out any additional sums of principal not exceeding ten thousand 
 dollars, at the rate of two and one-half per centum. For receiving and paying 
 out all sums of principal above eleven thousand dollars, at the rate of one 
 per centum. And for receiving and paying out income in each year, at the 
 like rates. In all cases a just and reasonable allowance must be made for the 
 necessary expenses actually paid by such trustee or trustees. If the value of 
 the principal of the trust estate or fund equals or exceeds one hundred 
 thousand dollars, each such trustee is entitled to the full commission on 
 principal, and on income for each year, to which a sole trustee is entitled, unless 
 the trustees are more than three, in which case three full commissions at the 
 . rates aforesaid must be apportioned between or among them according to the 
 services rendered by them respectively. If the instrument creating the trust 
 provides specific compensation for the services of the trustee or trustees, no 
 other compensation for such services shall be allowed unless the trustee or trus- 
 tees shall, before receiving any compensation for such services, by a written 
 instrument duly acknowledged, renounce such specific compensation. 
 
 § 3343. Micellaneous general definitions and rules of constriction. In constru- 
 ing this act, the following rules must be observed, except where a contrary 
 intent is expressly declared in the provision to be construed, or plainly appar- 
 ent from the context thereof: 
 
 2. The word, " mandate," includes a writ, process, or other written direc- 
 tion issued pursuant to law, out of a court, or made pursuant to law, by 
 a court, or a judge, or a person acting as a judicial officer, and commanding a 
 court, board, or other body, or an officer, or other person, named or otherwise 
 designated therein, to do, or to refrain from doing, an act therein specified. 
 
 3. The word, " judge ", includes a justice, surrogate, recorder, justice of the 
 peace, or other judicial officer, authorized or required to act, or prohibited from 
 acting, in or with respect to the matter or thing referred to in the provision 
 wherein that word is used. 
 
 4. The word, " clerk ", signifies the clerk of the court, wherein the action or 
 special proceeding is brought, or wherein, or by whose authority, the act is to 
 be done, which is referred to in the provision in which it is used. If the action 
 or special proceeding is brtught, or the act is to be done, in or by the authority 
 of the supreme court, it signifies the clerk of the county wherein the action or 
 special proceeding is triable, or the act is to be done. 
 
 5. The word, " report ", when used in connection with a trial, or other 
 inquiry, or a judgment, means a referees's report; and the word, "decision", 
 when used in the same connection, means the decision of the court upon a hear- 
 ing, or the trial of an issue, before the court, without a jury. 
 
 9. A "personal injury" includes libel, slander, criminal conversation, seduc- 
 tion, and malicious prosecution; also and assault, battery, false imprisonment, 
 or other actionable injury to the person either of the plaintiff, or of another. 
 
992 BUSINESS CORPORATIONS IN NEW YORK §§ 3343-3359 
 
 10. An "injury to property" is an actionable act, whereby the estate of 
 another is lessened, other than a personal injury, or the breach of a contract. 
 
 11. The word, " afiSdavit," includes a verified pleading in an action, or a 
 verified petition or answer in a special proceeding. 
 
 12. A warrant of attachment against property is said to be " annulled ", 
 when the action, in which it was granted, abates or is discontinued; or a, 
 final judgment, rendered therein in favor of the plaintiff is fully paid; or a 
 final judgment is rendered therein in favor of the defendant. But, in the 
 case last specified, a stay of proceedings suspends the effect of the annulment, 
 and the reversal or vacating of the judgment revives the warrant. 
 
 13. The term, " judgment creditor ", signifies the person who is entitled to 
 collect, or otherwise enforce, in his own right, a judgment for a sum of money, 
 or directing the payment of a sum of money. 
 
 14. A " judgment creditor's action " is an action brought as prescribed in 
 article first of title fourth of chapter fifteenth of this act, or any other action, 
 brought by a judgment creditor to aid the collection of a judgment for a sum 
 of money, or directing the payment of a sum of money. 
 
 16. A " distinct parcel " of real property is a part of the property which is 
 or may be set off by boundary lines, as distinguished from an undivided share 
 or interest therein 
 
 18. A " domestic corporation " is a corporation created by or under the 
 laws of the State; or located in the State, and created by or vmder 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 1775. Every other cor- 
 poration is a " foreign corporation ". 
 
 19. The terms, " trial juror ', and " trial jury ", are respectively equivalent 
 to the terms, " petit juror ", and " petit jury ", as used in the constitution 
 and laws of the State. The word, " notify ", as used, with respect to procur- 
 ing the attendance of a juror, is equivalent to the word, " summer ", as used in 
 the like connection, in the same constitution and laws. 
 
 20. The word, "action", refers to a. civil action; the word "judgment", 
 to a judgment in sueh an action ; the term, " special proceeding ", to a civil 
 special proceeding; the word, "order", to an order made in such an action 
 or special proceeding; the words, "an action of ejectment", to an action to 
 recover the immediate possession of real property. 
 
 § 3355. When this act deemed to have been passed, etc. For the purpose 
 of determining the effect of the different provisions of this act with respect to 
 each other, they are deemed to have been enacted simultaneously. For the 
 purpose of determining the effect of this act, upon other acts, and the effect of 
 other acts upon this act, chapters fourteen to twenty-two of this act, both 
 inclusive, are deemed to have been enacted on the twelfth day of January, in 
 the year 1880, and all acts passed after the last-mentioned date are to have the 
 same effect as if they were passed after those chapters. 
 
 § 3357. Title. This title shall be known as the condemnation law. 
 
 § 3358. Definitions. The term " person," when used herein, includes a. natural 
 person and also a corporation, joint-stock association, the state and a political 
 division thereof, and any commission, board, board of managers or trustees in 
 charge or having control of any of the charitable or other institutions of the 
 state ; the term " real property," any right interest or easement therein or 
 appurtenances thereto; and the term "owner," all persons having any estate, 
 interest, or easement in the property to be taken, or any lien, charge or in- 
 cumbrance thereon. The person instituting the proceedings shall be termed the 
 plaintiff; and the person against whom the proceeding is brought, the defendant. 
 
 § 3359. Proceeding to be taken as prescribed in this title. Whenever any per- 
 son is authorized to acquire title to real property, for a public use by condermia- 
 
§§ 3359-3362 CODE OF CIVIL PROCEDURE 993 
 
 tion proceeding for that purpose shall be taken in the manner prescribed in this 
 title. 
 
 § 3360. Petition to be presented; contents thereof. The proceeding shall be 
 instituted by the presentation of a petition by the plaintiff to the supreme court, 
 setting forth the following facts: 
 
 1. His name, place of residence, and the business in which engaged; if a cor- 
 poration or joint-stock association, whether foreign or domestic, its principal 
 place of business within the state, the names and places of residence of its prin- 
 cipal officers, and of its directors, trustees or board of managers, as the case 
 may be, and the object or purpose of its incorporation or association; if a 
 political division of the state, the names and places of residence of its principal 
 officers; and if the state, or any commission or board of managers or tru8.tees 
 in charge or having control of any of the charitable or other institutions of the 
 state, the name, place of residence of the officer acting in its or their behalf in 
 the proceedings. 
 
 2. A specific description of the property to be condemned, and its location, by 
 metes and bounds, with reasonable certainty. 
 
 3. The public use for which the property is required and a concise statement 
 of the facts showing the necessity of its acquisition for such use. 
 
 4. The names and places of residence of the owners of the property; if an 
 infant, the name and place of residence of his general guardian, if he has one; 
 if not, the name and place of residence of the person with whom he resides; if 
 a lunatic, idiot, or habitual drunkard, the name and place of residence of his 
 committee or trustee, if he has one; if not, the name and place of residence of 
 the person with whom he resides. If a non-resident, having an agent or attorney 
 residing in the state authorized to contract for the sale of the property, the 
 name and place of residence of such agent or attorney; if the name or place 
 of residence of any owner cannot after diligent inquiry be ascertained, it may 
 be so stated with a specific statement of the extent of the inquiry which has 
 been made. 
 
 5. That the plaintiff has been unable to agree with the owner of the property 
 for its purchase, and the r-easori of such inability. 
 
 6. The value of the property to be condemned. 
 
 7. A statement that it is the intention of the plaintiff, in good faith, to 
 complete the work or improvement, for which the property is ito be condemned; 
 ■and that all the preliminary steps required by law have been taken to entitle 
 him to institute the proceeding. 
 
 8. A demand for relief, that it may be adjudged that the public use requires 
 the condemnation of the real property described, and that the plaintiff is entitled 
 to take and hold such property for the public use specified, upon making com- 
 pensation therefor, and that commissioners of appraisal be appointed to 
 ascertain the compensation to be made to the owners for the property so taken. 
 
 § 3361. Notice annexed to petition; when petition and notice served. There 
 must be annexed to the petition a notice of the time an.d place at which it will 
 be presented to a special term of the supreme court, held in the judicial district 
 where the property or some portion of it is situated, and a copy of the petition 
 and notice must be served upon all the owners of the property at least eight days 
 prior to its presentation. 
 
 § 3362. How petition and notice served. Service of the petition and notice 
 must be made in the same manner as the service of a summons in an action in 
 the supreme court is required to be made, and all the provisions of articles one 
 and two of title one of chapter five of this act, which relate to the service of a 
 summons, either personally or in any other way, and the mode of proving service, 
 shall apply to the service of the petition and notice. If the defendant has an 
 agent or attorney residing in this state, authorized to contract for the sale of 
 
994 BUSINESS CORPORATIONS IN NEW YORK §§ 3362-3369 
 
 the real property described in the petition, service upon such agent or attorney 
 will be sufficient service upon such defendant. In case the defendant Is an infant 
 of the age of fourteen years or upwards, a copy of the petition and notice shall 
 also be served upon his general guardian. If he has one; if not, upon the person 
 with whom he resides. 
 
 § 3363. Appearance of infant, idiot, lunatic or habitual drunkard. If a. 
 defendant is an infant, idiot, lunatic or habitual drunkard, it shall be the duty 
 of his general guardian, committee or trustee, if he has one, to appear for him 
 upon the presentation of the petition and attend to his interests, and in case he 
 has none, or in case his general guardian, committee or trustee fails to appear 
 for him, the court shall, upon the presentation of the petition and notice, with 
 proof of service, without further notice, appoint a guardian ad litem for such 
 defendant, whose duty it shall be to appear for him and attend to his interests 
 in the proceeding, and if deemed necessary to protect his rights, the court may 
 require a general guardian, committee or trustee, or a guardian ad litem to give 
 security in such sum and with such sureties as the court may approve. If a ser- 
 vice other than personal has been made upon any defendant, and he does not appear 
 upon the presentation of the petition, the court shall appoint some competent 
 attorney to appear for him and attend to his interests in the proceeding. 
 
 § 3364. Appearance of parties generally. The provisions of law and of the 
 rules and practice of the court, relating to the appearance of parties in person 
 or by attorney in actions in the supreme court, shall apply to the proceeding 
 from and after the service of the petition, and all subsequent orders, notices 
 and papers may be served upon the attorney appearing and upon a guardian ad 
 litem in the same manner and with the same effect as the service of papers in an 
 action in the supreme court may be made. 
 
 § 336.5 Answer; contents thereof. Upon presentation of the petition and' 
 notice with proof of service thereof, an owner of the property may appear and 
 interpose an answer, which must contain a general or specific denial of each 
 material allegation of the petition controverted by him, or of any knowledge or 
 information thereof sufficient to form a belief, or a statement of new matter 
 constituting a defence to the proceeding. 
 
 § 3366. Verification of petition or answer. A petition or answer must be- 
 verified, and the provisions of this act relating to the form and contents of the 
 verification of pleadings in courts of reeord, and the persons by whom it may 
 be made, shall apply to the verfication. 
 
 § 3367. Trial; case; exceptions. The court shall try any issue raised by the- 
 petition and answer at such time and place as it may direct, or it may order 
 the same to be referred to a referee to hear and determine, and upon such trial 
 the court or referee shall file a decision in writing, or deliver the same to the 
 attorney for the prevailing party, within twenty days after the final submission 
 of the proofs and allegations of the parties, and the provisions of this act relat- 
 ing to the form and contents of decisions upon the trial of issues of fact by the 
 court or a referee, and to making and filing exceptions thereto, and the making 
 and settlement of a case for the review thereof upon appeal, and to the pro- 
 ceedings which may be had, in case such decision is not filed or delivered within 
 the time herein required, and to the powers of the court and referee upon such 
 trial, shall be applicable to a trial and decision under this title. 
 
 § 3368. Certain provisions of code applicable. The provisions of title one 
 of chapter eight of this act shall also apply to proceedings had under this title. 
 
 § 3369. Judgment; costs to defendant; commissioners. -Judgment shall be 
 entered pursuant to the direction of the court or referee in the decision filed. If 
 in favor of the defendant, the petition shall be dismissed, with costs to be taxed 
 by the clerk, at the same rates as are allowed, of course, to a defendant pre- 
 vailing in an action in the supreme court, including the allowances for proceed- 
 
§§ 3369-3371 CODE OF CIVIL PROCEDURE 995 
 
 ings before, and after notice of trial. If the decision is in favor of the plain- 
 tiff, or if no answer has been interposed and it appears from the petition that 
 he is entitled to the relief demanded, judgment shall be entered, adjudging that 
 the condemnation 'of the real property described is necessary for the public use, 
 and that the plaintiff is entitled to take and hold the property for the public 
 use specified, upon making compensation therefor, and the court shall thereupon 
 appoint three disinterested and competent freeholders, residents of the judicial 
 district embracing the county where the real property, or some part of it, is 
 situated, or of some county adjoining such judicial district, commissioners to 
 ascertain the compensation to be made to the owners for the property to be taken 
 for the public use specified, and fix the time and place for the first meeting of 
 the commissioners. Provided, however, that in any such proceeding instituted 
 within the first or second judicial district, such commissioners shall be residents 
 of the county where the real property, or some part of it, is situated, or of some 
 adjoining county. If a trial has been had, at least eight days' notice of such 
 appointment must be given to all the defendants who have appeared. The 
 parties may waive, in writing, the provisions of this section as to the residence 
 of the commissioners, and in that ease they may be residents of any county in 
 the State. Where owners of separate properties are joined in the same proceed- 
 ing, or separate properties of the same owner are to be condemned, more than 
 , one set of commissioners may be appointed. 
 
 § 3370. Powers and duties of commissioners. The commissioners shall take 
 and subscribe the constitutional oath of ofiice. Any of them may issue sub- 
 poenas and administer oaths to witnesses; a majority of them may adjourn the 
 proceeding before them, from time to time in their discretion. Whenever they 
 meet, except by appointmnt of the court or pursuant to adjournment, they shall 
 cause at least eight day's notice of such meeting to be given to the defendants 
 who have appeared, or their agents or attorneys. They shall view the premises 
 described in the petition, and hear the proof and allegations of the parties, and 
 reduce the testimony taken by them, if any, to writing, and after the testimony 
 in each case is closed, they, or a majority of them, all being present, shall, 
 without unnecessary delay ascertain and determine the compensation which ought 
 justly to be made by the plaintiff to the owners of the property appraised by 
 them; and, in fixing the amount of such compensation, they shall not make any 
 allowance or deduction on account of any real or supposed benefits which the 
 owners may derive from the public use for which the property is to be taken, 
 or the construction of any proposed improvement connected with such public use. 
 But in case the plaintiff is a railroad corporation and such real property shall 
 belong to any other railroad corporation, the commissioners on fixing- the amount 
 of such compensation, shall fix the same at its fair value for railroad purposes. 
 They shall make a report of their proceedings to the supreme court with the 
 minutes of the testimony taken by them, if any; and they shall each be entitled 
 to six dollars for services for every day they are actually engaged in the per- 
 formance of their duties, and their necessary expenses, to be paid by the plain- 
 tiff; provided, that in proceedings within the counties of New York and Kings, 
 such commissioners shall be entitled to such additional compensation not exceed- 
 ing twenty-five dollars for every such day, as may be awarded by the court, and 
 provided that in proceedings instituted by a village or any board thereof under 
 this title such commissioners shall be entitled to such additional compensation, 
 not exceeding five dollars for every such day, as may be awarded by the court. 
 § 3371. Confirmation or setting aside of report; deposit, when deemed a pay- 
 ment. Upon filing the report of the commissioners, any party may move for 
 its confirmation at a special term, held in the district where the property or 
 some part of it is situated, upon notice to the other parties who have appeared,. ' 
 arid tipon such motion, the court may confirm the report, or may set it aside for 
 
996 BUSINESS CORPORATIONS IN NEW YORK §§ 3371-3373 
 
 irregularity, or for error of law in the proceedings before the commissioners, or 
 upon tlie ground that the award is excessive or insuflScient. If the report is set 
 a^ide, the court may direct a rehearing before the same commissioners, or may 
 appoint new commissioners for that purpose, and the proceedings upon such 
 rehearing shall be conducted in the manner prescribed for the original hearing, 
 and the same proceedings shall be had for the confirmation of the second report, 
 as are herein prescribed for the confirmation of the first report If the report 
 is confirmed, the court shall enter a final order in the proceeding, directing that 
 compensation shall be made to the owners of the property, pursuant to the deter- 
 mination of the commissioners, and that upon payment of such compensation, 
 the plaintiff shall be entitled to enter into the possession of the property con- 
 demned, and take and hold it for the public use specified in the judgment. 
 Deposit of the money to the credit of, or payable to the order of the o^vner, 
 pursuant to the direction of the court, shall be deemed a payment within the 
 provisions of this title. 
 
 § 3372. Offer to purchase; costs; additional allowance. In all cases where 
 the owner is a resident and not under legal disability to convey title to real prop-, 
 erty the plaintiff, before service of his petition and notice, may make a written 
 offer to purchase the property at a specified price, which must within ten days 
 thereafter be filed in the oflBce of the clerk of the county where the property is 
 situated; and which canmot be given in evidence before the commissioners, or , 
 considered by them. The owner may at the time of the presentation of the 
 petition, or at any time previously, serve notice in writing of the acceptance 
 of plaintiff's offer, and thereupon the plaintiff mayj upon filing the petition, with 
 proof of the making of the offer, and its acceptance, enter an order that upon 
 payment of the compensation agreed upon, he may enter into possession of the 
 real property, described in the petition, and take and hold it for the public use 
 therein specified. If the offer is not accepted, and the compensation awarded by 
 the commissioners does not exceed the amount of the offer with interest from 
 the time it was made, no costs shall be allowed to either party. If the com- 
 pensation awarded shall exceed the amount of the offer with interest from the 
 time it was made, or if no offer was made, the court shall, in the final order, 
 direct that the defendant recover of the plaintiff the costs of the proceeding, to 
 be taxed by the clerk at the same rate as is allowed, of course, to the defendant 
 when he is the prevailing party in an action in the supreme court, including the 
 allowances for proceedings, before and after notice of trial, and the court may 
 also grant an additional allowance of costs, not exceeding five per centum upon 
 the amount awarded. The court shall also direct in the final order what sum 
 shall be paid to the general or special guardian, or committee or trustee of an 
 infant, idiot, lunatic or habitual drunkard, or to an attorney appointed by the 
 court to attend to the interests of any defendant upon whom other than per- 
 sonal service of the petition and notice may have been made, and who has not 
 appeared, for costs, expenses and counsel fees, and by whom or out of what fund 
 the same shall be paid. If a trial has been had, and all the issues determined in 
 favor of the plaintiff, costs of the trial shall not be allowed to the defendant, 
 but the plaintiff shall recover of any defendant answering the costs of such trial 
 , caused by the interposition of the unsuccessful defence, to be taxed by the clerk 
 at the same rate as is allowed to the prevailing party for the trial of an action 
 in the supreme court. 
 
 ii 3373. Judgment, how enforced; delivery of possession of premises; when 
 writ of assistance to issue. Upon the entry of the final order, the same shall 
 be attached to the judgment-roll in the proceeding, and the amount directed to 
 be paid, either as compensation to the owners, or for the costs or expenses of the 
 'proceeding, shall be docketed as a judgment against the person who is directed to 
 pay the same, and it shall have all the force and effect of a money judgment in an 
 
§§ 3373-3376 CODE OF CIVIL PROCEDURE 997 
 
 action in the supreme court, and collection thereof may be enforced by execution 
 and by the same proceedings as judgments for the recovery of money in the 
 supreme court may be enforecd under the provisions of this act. When pay- 
 ment of the compensation awarded, and costs of the proceedings, if any, has been 
 made, as directed in the final order, and a certified copy of such order has been 
 served upon the owner, he shall, upon demand of the plaintiff, deliver possession 
 thereof to him, and in case possession is not delivered when demanded, the plain- 
 tiff may apply to the court without notice, unless the court shall require notice 
 to be given, upon proof of such payment and of service of the copy order, and 
 of the demand and non-compliance therewith, for a writ of assistance, and the 
 court shall thereupon cause such writ to be issued, which shall be executed in the 
 same manner as when issued in other cases for the delivery of possession of real 
 property. 
 
 § 3374. Abandonment and dicontinuance of proceeding. Upon the application 
 of the plaintiff to be made at any time after the presentation of the petition 
 and before the expiration of thirty days after the entry of the final order, upon 
 eight day's notice of motion to all other parties to the proceeding who have 
 appeared therein or upon an order to show cause, the court may, in its discretion, 
 and for good cause shown, authorize and direct the abandonment and discontinu- 
 ance of the proceeding, upon payment of the fees and expenses, if any, of the 
 commissioners, and the costs and expenses, directed to be paid in such final order, 
 if such final order shall have been entered, and upon such other terms and con- 
 ditions as the court may prescribe; and upon entry of the order granting such 
 application and upon compliance with the terms and conditions therein prescribed, 
 payment of the amount awarded for compensation, if such compensation shall 
 have been theretofore awarded, shall not be enforced, but in such case, if such 
 abandonment and discontinuance of the proceedings be directed upon the applia- 
 tion of the plaintiff, the order granting such application, if permitting a renewal 
 of such proceedings, shall provide that proceedings to acquire title to such lands 
 or any part thereof shall not be renewed by the plaintiff without a tender or 
 deposit in court of the amount of the award and interest thereon. 
 
 § 3375. Appeal from final order; stay of proceedings. Appeal may be taken 
 to the appellate division of the supreme court froin the final order, within the 
 time provided for appeals from orders by title four of chapter twelve of this 
 act; and all the provisions of such chapter relating to appeals to the appellate 
 division of the supreme court from orders of the special term shall apply to such 
 appeals. Such appeal will bring up for review all the proceedings subsequent to 
 the judgment, but the judgment and proceedings antecedent thereto may be 
 reviewed on such appeal, if the appellant states in his notice that the same will 
 be brought up for review, and exceptions shall have been filed to the decision of 
 the court or the referee, and a case or a case and exceptions shall have been 
 made, settled and allowed, as required by the provisions of this act for the 
 review of the trial of actions in the supreme court without a jury. The pro- 
 ceedings of the plaintiff shall not be stayed upon such an appeal, except by order 
 of the court, upon notice to him, and the appeal shall not affect his possession 
 of the property taken, and the appeal of a defendant shall not be heard except 
 on his stipulation not to disturb such possession. 
 
 . § 3376. Appeal by plaintiff to a{>pellate division of Supreme Court. If a trial 
 has been had and judgment entered in favor of the defendant, the plaintiff may 
 appeal therefrom to the appellate division of the supreme court within the time 
 provided for appeals from judgments by title four of chapter twelve of this act, 
 and all the provisions of said chapter relating to appeals from judgments shall 
 apply to such appeals; and on the hearing of the appeal the appellate division 
 may afiirm, reverse or modify the judgment, and in case of reversal may grant a 
 new trial, or direct that judgment be entered in favor of the plaintiff. If the 
 
998 BUSINESS COip'ORATIONS IN NEW YORK §§ 3376-3380 
 
 judgment is a£Srmed, costs shall be allowed to the respondent, but if reversed or 
 modified, no costs of the appeal shall be allowed to either party. 
 
 § 3377. Court may direct a new appraisal. On the hearing of the appeal from 
 the final order the court may direct a new appraisal before the same or new 
 comissioners, in its discretion, and the report of such commissioners shall be 
 final and conclusive upon all parties interested. If the amount of the com- 
 pensation to be paid is increased by the last report, the difference shall be a 
 lien upon the land appraised, and shall be paid to the parties entitled to the same, 
 or shall be deposited as the court shall direct; and if the amount is diminished, 
 the difference shall be refunded to the plaintiff by the party to whom the same 
 may have been paid, and judgment therefor may be rendered by the court, on the 
 filing of the last report, against the parties liable to pay the same. 
 
 § 3378. Conflicting claimants. If there are adverse and conflicting claimants 
 to the money, or any part of it, to be paid as compensation for the property taken, 
 the court may direct the money to be paid into the court by the plaintiff, and 
 may determine who is entitled to the same, and direct to whom the same shall 
 be paid, and may, in its discretion, order a, reference to ascertain the facts on 
 which such determination and direction are to be made. 
 
 § 3379. Plaintiff in possession may have stay of proceedings on giving security. 
 At any stage of the proceeding the court may authorize the plaintiff, if in pos- 
 session of the property sought to be condemned to continue in possession, and 
 may stay all actions or proceedings against him on account thereof, upon giving 
 security, or depositing such sum of money as the court may direct to be lield as 
 security for the payment of the compensation which may be finally awarded to 
 the owner therefor and the costs of the proceedings, and in every such case the 
 owner may conduct the proceeding to a conclusion, if the plaintiff delays or 
 neglects to prosecute the same. When the final award to any owner is less than 
 fifty dollars, in proceedings to condemn a right of way, for telephone or tele- 
 graph poles and wires, the allowance of costs, if any, and the amount thereof not 
 exceeding that prescribed by statute, shall be in the discretion of the court in 
 any action or proceeding that may have been or may hereafter be stayed, if the 
 telephone or telegraph poles and wires, in such action or proceeding so stayed, 
 shall have been erected for more than three years prior to the commencement 
 thereof. 
 
 § 3380. Temporary possession pending proceedings. When an answer to the 
 petition has been interposed, and it appears to the satisfaction of the court that 
 the public interests will be prejudiced by delay, it may direct that the plaintiff 
 be permitted to enter immediately upon the real property to be taken, and <levote 
 it temporarily to the public use specified in the petition, upon depositing with 
 the court the sum stated in the answer as the value of the property, and which 
 sum shall be applied, so far as it may be necessary for that purpose, to the pay- 
 ment of the award that may be made, and the costs and expenses of the pro- 
 ceeding, and the residue, if any, returned to the plaintiff, and, in case the petition 
 should be dismissed, or no award should be made, or the proceedings should be 
 abandoned by the plaintiff, the court shall direct that the money so deposited, 
 80 far as it may be necessary, shall be applied to the payment of any damages 
 which the defendant may have sustained by such entry upon and use of his 
 property, and his costs and expenses of the proceedings, such damages to be 
 ascertained by the court, or a referee to be appointed for that purpose, and if 
 the sum so deposited shall be insufficient to pay such damages, and all costs and 
 expenses awarded to the defendant, judgment shall be entered against the plain- 
 tiff for the deficiency, to be enforced and collected in the same manner as a judg- 
 ment in the supreme court; and the possession of the property shall be restorec' 
 to the defendant. 
 
§§ 3381-3384 CODE OF CIVIL PROCEDURE 999 
 
 § 3381. Notice of pendency of action to be filed. Upon service of the peti- 
 tion, or at any time afterwards before the entry of the final order, the plaintiff 
 may file in the clerk's office of each county where any part of the property is 
 situated, a notice of the pendency of the proceeding, stating the names of the 
 parties and the object of the proceeding, and containing a brief description of the 
 property affected thereby, and from the time of filing, such notice shall be con- 
 structive notice to a purchaser, or incumbrancer of the property affected thereby, 
 from or against a defendant with respect to whom the notice is directed to he 
 indexed, as herein prescribed, and a person whose conveyance or incumbrance is 
 subsequently executed or subsequently recorded, is bound by all proceedings 
 taken in the proceeding, after the filing of thp notice, to the same extent as if 
 he. was a party thereto. The county clerk must immediately record such notice 
 when filed in the book in his office kept for the purpose of recording notices of 
 pendency of actions, and index it to the name of each defendant specified in the 
 direction appended at the foot of the notice, and subscribed by the plaintiff or 
 his attorney. 
 
 § 338S?. Practice in cases not herein provided for. In all proceedings under 
 this title, where the mode or manner of conducting all or any of the proceedings 
 therein is not expressly provided for by law, the court before whom such pro- 
 ceedings may be pending, shall have the power to make all necessary orders and 
 give necessary directions to carry into effect the object and intent of this title, 
 and of the several acts conferring authority to condemn lands for public use, 
 and the practice in such cases shall conform, as near as may be, to the ordinary 
 practice in such court. 
 
 § 3383. Repealing clause limitations. So much of all acts and parts of acts as 
 prescribed a method of procedure in proceedings for the condemnation of real prop- 
 erty for a public use is repealed, except such acts and parts of acts as prescribed a 
 method of procedure for the condemnation or real property for public u§e as a 
 highway, or as a street, avenue, or public place in an incorporated city or village, 
 or as may prescribe methods of procedure for such condemnation for any public use 
 for by, on behalf, on the part, or in the name of the corporation of the city of New 
 York, known as the mayor, aldermen, and commonalty of the city of New York, or 
 by whatever name known, or by or on the application of any board, department, 
 commissioners or other officers acting for or on behalf or in the name of such 
 corporation or city, or where the title to the real property so to be acquired vests 
 in such corporation or in such city; and all proceedings for the condemnation of 
 real property embraced within the exceptions enumerated in this section are 
 exempted from the operation of this title. 
 
 I 3384. When act takes effect. This title shall take effect on the first day 
 of May, 1890, and shall not affect any proceeding previously commenced. 
 
PENAL CODE 
 
 f 245. Punishment for assault in third degree. Assault in the third degree 
 is punishable by imprisonment for not more tnan one year, or by a fine of not 
 more than five hundred dollars, or both. 
 
 § 246. Use of force not unlawful in certain cases. To use or attempt, or 
 oflfer to use, force or violence upon or towards the person of another is not 
 unlawful in the following cases: 
 
 1. When necessarily committed by a public ofiScer in the performance of a 
 legal duty; or by any other person assisting him or acting by his direction; 
 
 2. When necessarily committed by any person in arresting one who has com- 
 mitted a felony, and delivering him to a public officer competent to receive him 
 in custody; 
 
 3. When committed either by the party about to be injured or by another 
 person in his aid or defense, in preventing or attempting to prevent an offense 
 against his person, or a trespass or other unlawful interference with real or 
 personal property in his unlawful possession, if the force or violence used is 
 not more than sufficient to prevent such offense; 
 
 4. When committed by a parent or the authorized- agent of any parent, or 
 by any guardian, master, or teacher, in the exercise of a lawful authority to 
 restrain or correct his child, ward, apprentice or scholar, and the force or 
 violence used is reasonable in manner and moderate in degree; 
 
 5. When committed by a carrier of passengers, or the authorized agents or 
 servants of such carrier, or by any person assisting them, at their request, in 
 expelling from a carriage, railway car, vessel or other vehicle, a passenger who 
 refuses to obey a lawful and reasonable regulation prescribed for the conduct 
 of passengers, if such vehicle has first been stopped and the force or violence 
 used is not more than sufficient to expel the offending passenger, with a 
 reasonable regard to his personal safety ; 
 
 6. When committed by any person in preventing an idiot, lunatic, insane 
 person, or other person of unsound mind, including persons temporarily or 
 partially deprived of reason, from committing an act dangerous to himself 
 or to another, or in enforcing such restraint as is necessary for the protection 
 of his person or for his restoration to health, during such perid only as shall 
 be necessary to obtain legal authority for the restraint or custody of his 
 person. 
 
 [1000] 
 
MUNICIPAL COURT CODE OF NEW YORK CITY 
 
 § 6. Jutisdiction. The municipal court code of the city of New York shall have 
 jurisdiction : 
 
 1. Of the following actions when the amount claimed in the summons does not 
 exceed one thousand dollars, exclusive of interest and costs: an action upon a 
 contract, express or implied, other than a contract to marry ; an action to recover 
 a fine or penalty; an action to establish a mechanic's lien on real property 'and to 
 recover a personal judgment for the amount due; an action to foreclose a lieii on 
 a chattel ; an action to recover damages for an escape from the jai'. liberties of 
 any county within the city of New York; an action to recover damages for fraud 
 or deceit, or for a personal injury or an injury to property, except actions to 
 
 .recover damages for assault, battery, malicious prosecution, false imprisonment, 
 libel, slander, criminal conversation, seduction, or loss of society of husband or 
 wife; an action to take, state and determine the account between partners after 
 dissolution or other termination of their partnership relations, and to render 
 judgment for the amount so found to be due,' but in no event for more than one 
 thousand dollars. 
 
 2. Of the following actions and proceedings: an action to recover a chattel or 
 chattels the aggregate value of which does not exceed one thousand dollars, with 
 or without damages for the taking or detention thereof ; a simamary proceeding 
 authorized by the code of civil procedure to recover possession of real property 
 situated wholly or partly within the district where the application is made, and 
 in such a proceeding it shall not be necessary for the court to sign the. warrant, 
 but it may be signed by the clerk; an action in behalf of the people of the state 
 or the city of New York, brought by the direction of a commissioner of public 
 charities or an overseer of the poor, upon a bastardy or abandonment bond; an 
 action upon the bond of a marshal of the city of New York. 
 
 3. To issue or vacate a requisition to replevy, a warrant of attachment, a war- 
 rant to seize a chattel and an order of arrest; to grant or vacate a stay of 
 execution or of other proceedings, including a Warrant in summary proceedings to 
 recover possession of real property, provided that in summary proceedings no stay 
 shall be granted for more than five days; to render judgment in an action, or to 
 make a final order in a summary proceeding, upon confession or upon the Consent 
 of both parties. 
 
 4. Of actions and summary proceedings, within the foregoing limitations, by or 
 against the city of New York; by or on behalf of the people of the state of New 
 York; by or against a domestic corporation or a foreign corporation; by or 
 against a domestic or foreign executor or administrator in his representative 
 capacity; by or against a committee of an incompetent. 
 
 5. Of actions and proceedings of which the municipal court of the city of New 
 York had jurisdiction on the 31st day of August, 1915. 
 
 6. To provide systems of conciliation and arbitration and to enter judgment 
 upon an award of arbitrators. 
 
 7. To open a default; to direct or set aside a verdict; to vacate, amend, correct 
 or modify any process, mandate, judgment, order or final order, in furtherance of 
 justice, for any error in form or substance; to grant a new trial upon any of the 
 grounds for which a new trial may be granted by the supreme court in an action 
 pending therein, including the grounds of fraud and newly discovered evidence. 
 
 [1001] ■ 
 
1002 BUSINESS CORPORATIONS IN NEW YORK §§ 17-40 
 
 § 17. Venue. 1. An action must be brought in a district in which either the 
 plaintiff or defendant or one of the plaintiffs or one of the defendants resides, 
 unless all the plaintiffs or all the defendants reside out of the city of New York, 
 in which case the action may be brought in any district ; but an action brought by 
 the assignee of the cause of action shall, upon the demand of a defendant made as 
 provided in subdivision two of this section, be transferred to the district in which 
 the defendant resides, and the court must make an order for such transfer, as 
 provided in said subdivision. The district in which is situated the place for the 
 regular transaction of business of an individual who does not reside in the city of 
 Xevv York, and the place where a corporation transacts its general business or 
 keeps an office or has an agency established for the transaction of business, or is 
 established by law, shall be deemed the place of residence under the provisions of 
 this section. The city of New York may sue or be sued in any district, except 
 as provided in subdivision three of this section. 
 
 2. If the action is brought in the wrong district, it may nevertheless remain 
 there unless the defendant demands that it be transferred. Such demand must be 
 made in writing and filed with the clerk before or at joinder of issue and must 
 specify the district to which the defendant desires the action to be transferred and 
 facts under oath showing that such district is the proper one. The court must 
 thereupon transfer the action to the proper district, and may in its discretion 
 impose five dollars costs against the plaintiff. 
 
 3. All actions by or on behalf of the city of New York, or any department 
 thereof, to recover a fine or penalty, must be brought in the district where the 
 violation pf law occurred. 
 
 4. An action or special proceeding may upon consent be transferred by the 
 court to a district other than that in which it is pending. 
 
 5. Nothing in this section shall be construed to prevent the board of justices 
 from designating a part or parts of the court where special classes of cases shall 
 be brought or tried, or the president of the board of justices from transferring 
 cases from one district to another in the same borough. 
 
 § 21. Method of serving summons. 1. The summons may be served upon the 
 defendant within the city of New York in like manner as though the summons 
 issued out of the supreme court, except as otherwise provided in this act or in the 
 rules, provided that it shall not be served by publication. 
 
 § 40. Grounds,; affidavit. To entitle the plaintiff to a warrant of attachment 
 he must show by affidavit to the satisfaction of the court: 
 
 1. That a cause of action for which a warrant of attachment may be granted 
 exists against the defendant; and if the action is based upon a breach of contract, 
 that the plaintiff is entitled to recover a sum stated, in excess of all counterclaims 
 known to him. 
 
 2. That the defendant is either a foreign corporation or not a resident of the 
 state; or, if the defendant is a natural person and a resident of the city of New 
 York, that he has departed or is about to depart therefrom with intent to defraud 
 his creditors or to avoid the service of a summons, or keeps himself concealed 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 city of New 
 York 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 and signa- 
 ture, or under the hand and signature of a duly authorized agent made with his 
 knowledge and acquiescence, as to his financial responsibility or standing; or, that 
 
 ;the defendant, being a natural person of full age and a resident of the state, has 
 been continuously without the state for the space of six months or more immedi- 
 
§§ 40-108 MUNICIPAL COURT CODE — N. Y. CITY 1003 
 
 ately before the application, and either that he has not made a designation of a 
 person upon whom to serve a summons in his behalf as prescribed in section 430 
 of the code of civil procedure, or that a designation so made no longer remains in 
 force. 
 
 The affidavit must be filed in the office of the clerk of the court in the district 
 in which the action is brought. 
 
 § 94. Order that issues be tried unnecessary in action against corporation. 
 In an action against a corporation, an order directing that the issues presented 
 by the pleadings be tried shall not be required. 
 
 § 108. The same; affidavit on application. The party desiring to take a 
 deposition as prescribed in the last preceding section, must present to the court 
 in the district where the action or special proceeding is pending, an affidavit 
 showing : 
 
 1. The title and nature of the action or proceeding and the name and resideiice 
 of the person to be examined; and that the testimony of such person is material 
 and necessary for the prosecution or defense of the action or proceeding. 
 
 2. That the person to be examined is about to depart from the city of New York, 
 or that he is so sick or infirm as to afford reasonable ground to believe that he will 
 not be able to attend the trial, or that any other special circumstances exist which 
 render it proper that he should be examined ; but this subdivision does not apply 
 where the person to be examined is a party to the actions, except in case of his 
 sickness or infirmity. 
 
 3. If the party sought to be examined is a corporation, the affidavit shall state 
 the names of thfe officers or directors thereof whose testimony is necessary and 
 material, or the books and papers as to the contents of which an examination or 
 inspection is desired ; and the order to be made in respect thereto shall direct the 
 examination of such persons and the production of such books and papers. 
 
CONSOLIDATED LAWS 
 
 BUSINESS CORPORATIONS LAW. 
 
 § 1. Short title. This chapter sliall be known as the " Business Corporations 
 Law." 
 
 § 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 pro- 
 vided in the education' law, by making, signing, acknowledging and filing a 
 certificate which shall contain: 
 
 ' 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 preferred 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 corpora- 
 tion 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. 
 
 !). 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 subscriljers 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 eolnplied 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 by-laws must so provide. 
 
 § Z-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 employing an attorney or attorneys to furnish 
 legal advice, draw legal papers or perform legal services of any kind or descrip- 
 tion, either directly for' the person, persons or corporation for whose use such 
 services are rendered, or for the corporation retaining such attorney in com- 
 pliance 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 corporation, in any certificate filed 
 under the provisions of this chapter, in whatsoever language the same may be 
 sv't forth, shall not be held or construed to confer on the corporation the power 
 
 [1004] 
 
§§ 2-a-6 BUSINESS CORPORATIONS LAW 1005 
 
 to transact any business specified in this section as a purpose for which the 
 creation of a corporation under this chapter is prohibited; and particularly 
 when the stated objects of a corporation include the collection of debts or 
 accounts, 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. 
 
 § 3. Restrictions upon commencement of business. No such corporation shall 
 incur any debts until the amount of capital specified in its certificate of incor- 
 poration, as the amount of capital with which it will begin business, shall have 
 been paid in in money or property. 
 
 ■ § 4. Reorganization of existing corporations. Any stock corporation hereto- 
 fore organized, except a moneyed or transportation corporation, or a corpora- 
 tion the business of which partakes of the nature of banking or insurance, may 
 reincorporate under this chapter in the foUow^ing 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 
 oflBce is situated, once a week, for at least three successive weeks, and by serv- 
 ing upon each stockholder, at least three weeks before the meeting, a copy of 
 such notice either personally or by depositing it in the post-office, postage pre- 
 paid, 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 choos- 
 ing 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 rein- 
 corporate 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 eorpora.tion 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 iiad 
 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. 
 
 § 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 cor- 
 poration 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 presi- 
 dent or vice-president and secretary or treasurer, and filed in the office 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. 
 
 § 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 corporation, 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 treas- 
 urer 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 
 
1006 BUSINESS CORPORATIONS IN NEW YORK §§ 6-8 
 
 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 
 corporation. If the corporation is formed as or becomes a full liability cor- 
 poration all the stockholders of the coporation 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 corpora- 
 tion and returned unsatisfied, and all the stockholders shall contribute a pro- 
 portionate 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 oth^r 
 stockholders in the corporation in a joint or several action the proper portion 
 due by them and each of them, of the amount paid by him on any such judg- 
 ment. 
 
 § 7. Consolidation of corporations. Any two or more corporations organized 
 under the laws of this state for the purpose of carrying an any kind of business 
 of the siame or of a similar nature, which a corporation organized under this 
 chapter might carry on, may consolidate such corporations into a single cor- 
 poration, 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 corpora- 
 tions, 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 opera- 
 tions 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 corporations, and the number 
 of shares into which the same is to 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. 
 
 § 8. Submission of consolidation agreement to stockholders. Such agree- 
 ment 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 newspaper 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 lospective 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 corporation, and a sworn copy of the proceedings of such meetings, made 
 by the secretaries thereof, respectively, and attached thereto, shall be pre- 
 sumptive 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 corporation 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. 
 
§§ 8-10 BUSINESS CORPORATIONS LAW 1007 
 
 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 iii which such new corporation may 
 have its place of business, upon at least eight days' notice to the new corpora- 
 tion, for the appointment 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 cor- 
 poration, and such stock may be held or disposed of by such new corporation. 
 Where any consolidation has been heretofore or shall be hereafter efl'ected pur- 
 suant 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 agree- 
 ment 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 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 herein 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. 
 
 I 9. Powers of consolidated corporations. Such new corporation in additioii 
 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 provisions 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 
 dr carry on any kind of business which each of the consolidating corporations 
 was authorized by law to conduct. 
 
 § 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 trans- 
 ferred to and vested in such new corporation, without further act or deed; and 
 
1008 BUSINESS CORPORATIONS IN NEW YORK §§ 10-28 
 
 all claims demands, property and every other interest shall be as effectually 
 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 cor- 
 porations, parties to such agreement and act, shall not be deemed to revert 
 or be in any way impaired by reasqn of this chapter, or anything done by virtue 
 thereof, but shall be vested in the new corporation by virtue of such act of con- 
 solidation; and all the rights, privileges, franchises and property of the corpora- 
 tions, 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 cor- 
 porations, parties to such consolidations. 
 
 § 11. Sights of creditors of old corporations. The rights of creditors of any 
 corporation that shall be &o consolidated shall not in any manner be impaired, 
 nor any liability or obligation for the payment of any money due or to jjecome 
 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 corpora- 
 tion 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 con- 
 solidated 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 judgment, 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 proceeding may be 
 pending. 
 
 § 25. Definition. For the purposes of this article, the words " corporation," 
 " company," " association," " exchange," " society " or " union " shall be 
 synonymous. 
 
 § 26. Incorporation. Five or more persons may become a co-operative corpora- 
 tion, company, association, exchange, society or union for the purpose of con- 
 ducting a general producing, manufacturing and merchandising business, on the 
 co-operative plan as limited in this article, in articles of common use, includ- 
 ing farm products, food supplies, farm machinery and supplies and articles of 
 domei-tic and personal use, by making, signing, acknowledging and filing a 
 certificate in the form and manner prescribed by article two of this chapter. 
 
 § 27. Application of corporate law. The provisions of the business corpora- 
 tions law, the general corporation law and the stock corporation law shall 
 apply to co-operative corporations formed under this article, except where such 
 provisions are in conflict with this article. 
 
 § 2S. Directors; ofiScers. Every such corporation shall be managed by a 
 board of not less than five directors. The directors shall be elected by and from 
 the stockholders at such time and for such term as the by-laws may prescribe, 
 and shall hold office until their successors are elected, and shall enter upon the 
 discharge of their duties. The officers of every such corporation shall be a 
 president, one or more vice-presidents, a secretary and a treasurer, who shall 
 be elected annually by the directors, and each of whom must be a director. 
 The office of secretary and treasurer may be combined. A majority of the stock- 
 holders may, at any regular or special meeting, duly called, remove any director 
 or officer for cause, and fill the vacancy. 
 
§§ 29-34 BUSINESS CORPORATIONS LAW 1009 
 
 § 29. Amendment of certificate. The stockholders ot any such corporation 
 may, by a three-fourths vote, at any regular meeting, or at any special meeting 
 called for that purpose on ten days' notice to the stockholders, amend its cer- 
 tificate of incorporation. The power to amend shall include the power to in- 
 crease or diminish the amount of capital stock and the number of shares; but 
 such amoiuit shall not be diminished below the amount of paid-up capital at 
 the time the amendment is adopted. The certificate of the action of such 
 meeting shall be executed and filed in the manner prescribed by section sixty- 
 four of the stock corporation law. 
 
 § 30. Stock and stockholders. The capital stock of any such corporation 
 shall be divided into shares of the par value of five dollars each. A stockholder 
 in any such corporation shall not own shares of a greater aggregate par value 
 than five thousand dollars, except as hereinafter provided. A stockholder shall 
 be entitled to but one vote, without regard to the amount of stock held by him. 
 Certificates of stock shall not be issued to any subscriber until fully paid, but 
 the by-laws of the corporation may allow subscribers to vote as stockholders, 
 if part of the stock subscribed for has been paid for in cash. No stock shall be 
 transferred without the written consent of the corporation indorsed on the 
 certificate of stock. The corporation shall have the first right to purchase at 
 par any stock of a stockholder ofl'ered for transfer or the stock of any deceased 
 or retiring stockholder, or of any stockholder who shall have purchased of or 
 sold to the corporation goods of the value of less than one hundred dollars in 
 any one corporation year. 
 
 § 31. Written vote of stockholders. At any regularly called general or special 
 meeting of the stockholders the written vote of an absent stockholder signed by 
 him shall be received and counted, provided he shall have been previously 
 notified, in writing, of the exact motion or resolution upon which such vote is 
 taken and a copy of the same is forwarded with and attached to his written 
 vote. 
 
 § 32. Subscription of stock in other corporations. At any duly called regular 
 or special meeting at which at least a majority of the stockholders may be 
 present or represented a co-operative corporation may, by a majority vote of the 
 stockholders present or represented, subscribe for shares and invest its reserve 
 fund to an amount not to exceed twenty-five per centum of its capital, in the 
 capital stock of amy other co-operative corporation. 
 
 § 33. Purchasing business of other corporations or persons. Whenever a 
 co-operative corporation shall purchase- the business of another corporation, 
 person or persons, it may pay for the same wholly or partly by the issue of 
 shares of its capital stock to an amount which at par value would equal the 
 fair market value of the business so purchased; and the transfer to the cor- 
 poration of such business at such valuation shall be equivalent to payment in 
 cash for the shares of the stock so purchased. No such purchase shall be made 
 until the proposal therefor shall have been submitted by the directors to a 
 meeting of the stockholders, together with an itemized inventory of assets and 
 liabilities of the vendor, including the value of the good will as a separate item, 
 and such proposal shall have been ratified by a vote of at least two-thirds of 
 the total number of stockholders. If the cash value. of such purchased business 
 exceed one thousand dollars, the directors may hold the shares in excess of 
 one thousand dollars in trust for the vendor and dispose of the same to such 
 persons, and within such times, as may be agreed upon, and pay the proceeds 
 thereof as received from time to time to the former owner of such business. 
 
 § 34. Earnings; dividends. The directors, subject to revision by the stock- 
 holders at any general or special meeting, shall apportion the net earnings by 
 first paying dividends on the paid-up capital stock at a, rate not exceeding six 
 per centum per annum. They shall set aside not less than ten per centum of the 
 
1010 BUSINESS CORPORATIONS IN NEW YORK §§ 34-51 
 
 net earnings for a reserve fund until the reserve fund shall equal thirty per 
 centiun of the paid-up capital stock. They shall also annually set aside five 
 per centum of the net earnings for an educational fund to be used in teaching 
 co-operation. The remainder of the net earnings shall be distributed by uniform 
 dividend to members of the first class and members of tlie second class. Jlem- 
 bers of the first class shall include stockholders and employees. Members of 
 the second class shall include non-stockholders who shall during any fiscal year 
 do business with the corporation amounting to not less than one hundred dol- 
 lars. Dividends shall be paid on purchases amounting to one hundred dollars 
 and over from or by members and on the amount earned by each employee dviring 
 the fiscal year. Members of the first class and employees shall be entitled to 
 dividends at double the rate of dividends to which members of the second class 
 shall be entitled. Dividends to non-shareholders may be credited on account of 
 such non-shareholders, in the purchase of capital stock of the corporation. In 
 productive corporations, including creameries, canneries, elevators, factories, and 
 the like, dividends shall be calculated on raw material delivered instead of on 
 goods purchased. If the corporation be both a selling and a productive concern, 
 the dividends may be on both raw material delivered and on goods purchased. 
 
 The net earnings of such corporation shall be distributed at such times as 
 the by-laws shall prescribe, but such distribution shall be made at least once 
 every twelve months. 
 
 § 35. Dissolution. If any such corporation, for five consecutive years, shall 
 fail to declare a dividend upon the shares of its paid-up capital stock, five or 
 more stockholders may present a petition to the supreme court of a county in 
 which the principal office of the corporation is situated, praying for its dissolu- 
 tion upon such ground. If upon the hearing the allegations of the petition are 
 found to be true, the court may adjudge such corporation dissolved. 
 
 § 36. Annual report. Every co-operative corporation shall, annually, on or 
 before the thirty-first day of October, make a report to the secretary of state, 
 containing the name of the corporation, its principal place of business, and 
 generally a statement as to its business, showing the total amount of business 
 transacted, the number of stockholders, the amount of capital stock subscribed 
 for and paid in, the total expenses of operation, the amount of indebtedness or 
 liabilities, and its profits and losses. 
 
 § 37. Existing co-operative corporations and associations. An existing co- 
 operative corporation, company or association heretofore organized and doing 
 business in this state may file with the secretary of state a written certificate 
 signed and sworn to by the president and secretary to the fact that such 
 corporation has, by a majority vote of its stockholders, decided to accept the 
 provisions of this article, and thereupon such corporation shall be deemed to 
 have abandoned its certificate filed under any other law and be subject to the 
 provisions of this article. 
 
 § 38. Corporate name. No corporation shall be formed under this article 
 unless there be affixed or prefixed to the name thereof, as required by section 
 six of the general corporation law, such word or words or abbreviation as will 
 indicate that it is a corporation as distinguished from a natural person, firm 
 or copartnership. No corporation hereafter organized under any general law 
 other than this article shall use the term " co-operative " or any other derivative 
 of the term " co-operate " as part of its corporate name. 
 
 CIVIL RIGHTS LAW. 
 
 § 51. Action for injunction and for damages. Any person whose name, por- 
 trait or picture is used within this state for advertising purposes or for the 
 purposes of trade without the written consent first obtained as above provided 
 
§ 26 CIVIL RIGHTS — EXECUTIVE LAWS 1011 
 
 may maintain an equitable action in tlie supreme court of this state against 
 tlie person, firm or corporation so using his name, portrait or picture, to pre- 
 vent and restrain the use thereof; and may also sue and recover damages for 
 any injuries sustained by reason of such 'use and if the defendant shall have 
 knowingly used such person's name, portrait or picture in such manner as is 
 forbidden or declared to be unlawful by the last section, the jury, in its dis- 
 cretion, may award exemplary damages. But nothing contained in this act 
 shall be so construed as to prevent any person, iirm or corporation, practicing 
 the profession of photography, from exhibiting in or about his or its estab- 
 lishment specimens of the work of such establishment, unless the same is 
 continued by such person, firm or corporation after written notice objecting 
 thereto has been given by the person portrayed. 
 
 DECEDENT ESTATE LAW. 
 
 § 120. Actions for wrongs, by or against executors and administrators. For 
 wrongs done to the property, rights or interests of another, for which an action 
 might be maintained against the wrong-doer, such action may be brought by the 
 person injured, or after his death, by his executors or administrators, against 
 such wrong-doer, and after his death against his executors or adminis- 
 trators, in the manner and with the like effect in all respects, as actions 
 founded upon contracts. This section shall not extend to an action for 
 personal injuries, as such action is defined in section thirty-three hundred 
 and forty-three of the code of civil procedure; except that nothing herein con- 
 tained shall affect the right of action now existing to recover damages for 
 injui-ies resulting in death. 
 
 EXECUTIVE LAW. 
 
 § 26. Fees. The secretary of state shall collect the following fees: 
 
 1. For entering a caveat, twelve and a half cents. 
 
 2. For searching the records in his oflSce 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 certificate under seal of his 
 oflSce, attached thereto; and this fee shall be the same whether such copy be 
 made by the secretary of state or previously prepared and presented to him 
 for certification, any other law to the contrary notwithstanding. 
 
 5. For a certificate under the great seal of the state, two dollars. 
 
 6. For recording a certificate, notice or other paper required to be recorded, 
 except as otherwise provided by this section, twenty-five cents per folio. 
 
 7. For a certificate as to 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, two dollars. 
 
 8. For every patent for lands under water, five dollars for each parcel 
 included therein, and for every other patent the sum of five dollars except 
 when the parcels conveyed exceed five in number, when an additional sum of 
 one dollar shall be charged for each lot in excess of five embraced in such 
 patent. 
 
 9. For each license granted to a peddler, the sum of two dollars. 
 
 10. For filing the original certificate of incorporation of a railroad corpora- 
 tion, fifty dollars; for filing the original certificate of incorporation of any 
 other stock corporation, twenty-five dollars; for filing the original certificate 
 
1012 BUSINESS CORPORATIONS IN NEW YORK § 340 
 
 of incorporation drawn under article three or article twelve of the mem- 
 bership corporations law, twenty-five dollars; for filing a consent to, or cer- 
 tificate of, increase of capital stock, pursuant to either section six or sixty- 
 three or sixty-four of the stock corporation law, ten dollars; for filing a cer- 
 tificate of merger, pursuant to section fifteen of the stock corporation law, 
 twenty-five dollars; for filing an agreement for the consolidation of two or more 
 railroad corporations, fifty dollars; for filing an agreement for the consolidation 
 of two or more corporations other than railroad corporations, twenty-five 
 dollars; for filing an amended certificate of incorporation, pursuant to either 
 section seven of the general corporation law or section eighteen or twenty-two 
 of the stock corporations law, ten dollars; for filing a certificate of change of 
 number of directors, pursuant to section twenty-six of the stock corporation 
 law, ten dollars; for filing a certificate of reorganization, pursuant to section 
 nine of the stock corporation law, twenty-five dollars; for filing a certificate of 
 extension or revival of corporate existence, twenty-five dollars. 
 
 11. For filing the statement and designation and copy of certificate of incor- 
 poration of a foreign corporation desiring to do business in the state, fifty 
 dollars. 
 
 12. For certified copies of the evidence and proceedings of the board of 
 audit on appeal to the supreme co.irt, to be paid by the appellant on serving 
 notice of appeal, fifteen cents per folio. 
 
 13. For registering a notice of a mining claim as required by section eighty- 
 three of the public lands law, and recording same, five dollars. 
 
 14. For registering a trade mark, name, brand, device or label, in pursuance 
 of law, for the registry of which no other fee is exacted, five dollars. 
 
 15. For a certificate under subdivision three of section nine of the general 
 corporation law, twenty^five dollars. 
 
 No fee shall be collected for copies of records furnished to state officers for 
 use in their official capacity. 
 
 § 42. J"'ees. The comptroller shall collect the following fees: 
 
 1. For copies of all papers'and records not required to be certified or other- 
 wise 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. 
 
 4. For opening a new account for part of the consideration due on any lot 
 or piece of land, or for a discharge for any such part, where no new accoimt 
 shall have been opened, two dollars. 
 
 5. For a deed of land sold for taxes containing the description of but one 
 piece, fifty cents, and for every additional piece described in the same, ten 
 cents. 
 
 6. For searching the records in his office, on request, fifteen cents for the 
 first book examined, and ten cents for each subsequent book. 
 
 GENERAL BUSINESS LAW. 
 
 § 340. Contracts for monopoly illegal and void. Every contract, agreement, 
 arrangement or combination whereby a monopoly in the manufacture, produc- 
 tion or sale in this state of any article or commodity 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 main- 
 taining 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 
 
§§ 340-344 GENERAL BUSINESS LAW 1013 
 
 business, trade or occupation is or may. be restricted or prevented, is hereby 
 declared to be against public policy, illegal and void. 
 
 § 341. Penalty. Every person or corporation, or any officer or agent thereof, 
 who shall make or attempt to make or enter into any such contract, agreement, 
 arrangement or combination, or who within this state shall do any act- pursuant 
 thereto, or in, to\yard 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 twenty 
 thousand dollars. An indictment based on a violation of any of the pro- 
 visions of this section must be found within two years after its commission. 
 
 § 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 consummation of any contract, agreement, arrangement or combina- 
 tion herein prohibited, wherever the same may have been made. 
 
 § 343. Procedure; application for order. Whenever the attorney-general has 
 determined to commence an action or proceeding under this article, he may pre- 
 sent to any justice ,of the supreme court, before beginning such action or 
 proceeding, an application in writing, for an order directing the persons men- 
 tioned in the application to appear hefore a justice of the supreme court, or 
 a referee designated in such order, and answer such questions as may be put 
 to them or to any of them, and produce such papers, documents and books 
 concerning any alleged illegal contract, arrangement, agreement or combina- 
 tion in violation of this article; and it shall be the duty of the justice of the 
 supreme court, to whom such application for the order is made, to grant such 
 application. The application for such order made by the attorney-general may 
 simply show upon his information and belief that the testimony of such 
 person is material and necessary. The provisions of the code of civil procedure, 
 chapter nine, title three, article one, relating to the application for an order 
 for the examination of witnesses before the commencement of an action and 
 the method of proceeding on such examinations, shall not apply except as 
 herein prescribed. The order shall be granted by the justice of the supreme 
 court to whom the application has been made, with such preliminary injunction 
 or stay as may appear to such ^justice to be proper and expedient, and shall 
 specify the timfe when and place where the witnesses are required to appear, 
 and such examination shall be held either in the city of Albany, or in the 
 judicial district in which the witness resides, or in which the principal office 
 within the state, of the corporation aflFected, is located. Ihe justice or referee 
 may adjourn such examination from time to time and witnesses must attend 
 accordingly. The testimony of each witness must be subscribed by him, and 
 all must be filed in the office' of the clerk of the county in which such order 
 for examination is filed. 
 
 §■ 344. Order for examination. The order for such examination must be 
 signed by the justice making it, and the service of a, copy thereof, with an 
 indorsement by the attorney-general, signed by him, to the effect that the per- 
 son named therein is required to appear and be examined at the time and 
 place, and before the justice or referee specified in such indorsement, shall be 
 sufficient notice for the attendance of witnesses. Such indorsement may con- 
 tain a clause requiring such person to produce on such examination all books, 
 papers and documents in his possession, or under his control, relating to the 
 
1014 BUSINESS CORPORATIONS IN NEW YORK §§ 344^373 
 
 subject of such examination. The order shall be served upon the person 
 named in the indorse:aient aforesaid by showing him the original order^ and 
 delivering to and leaving with him, at the same time, a copy thereof indorsed 
 as above provided, and by paying or tendering to him the fee allowed by law to 
 witnesses subpoenaed to attend trials of civil actions in a court of record in 
 this state. 
 
 § 345. No person excused from answering. No person shall be excused from 
 attending and testifying, or from producing any books, papers or other docu- 
 ments before any court, magistrate or referee, upon any investigation, proceed- 
 ing or trial, pursuant to or for a violation of any of the provisions of this 
 article, upon the ground or for the reason that the testimony or evidence, docu- 
 mentary or otherwise, required of him may tend to convict him of a crime or 
 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, docu- 
 mentary or otherwise. And no testimony so given or produced shall be received 
 against him upon any criminal investigation, proceeding or trial. 
 
 § 346. Powers of referee. A referee appointed as provided in this article 
 possesses all the powers and is subject to all the duties of a referee appointed 
 under section ten hundred and eighteen of the code of civil procedure, so far 
 as practicable, and may punish for contempt a witness duly served as pre- 
 scribed in this article for non-attendance or refusal to be sworn or to testify 
 or to produce books, papers and documents according to the direction of the 
 indorsement aforesaid, in the same manner, and to the same extent as a referee 
 appointed to hear, tj-y and determine an issue of fact or of law. 
 
 § 370. Rate of interest. The rate of- interest upon the loan or forbearance 
 of any money, goods, or things, in action, except as otherwise provided by law, 
 shall be six dollars uxxjn one hundred dollars, for one year, and at that rate, for 
 a greater or less sum, or for a longer or shorter time. 
 
 § 371. Usury forbidden. No person or corporation shall, directly or indirectly, 
 take or receive in money, goods or things in action, or in any other way, any 
 greater sum or greater value, for the loan or forbearance of any money, goods or 
 things in action, tham is above prescribed. 
 
 § 372. fiecovery of excess. Every person who, for any such loan or forbear- 
 ance, shall pay or deliver any greater sum or value than is above allowed to be 
 received, and his personal representatives, may recover in an action against the 
 person who shall have taken or received the same, and his personal representa- 
 tives, the amount of the money so paid or value delivered, above the rate afore- 
 said, if such action be brought within one year after such payment or delivery. 
 
 If such suit be not brought within the said one year, and prosecuted with 
 effect, then the said sum may be sued for and recovered with costs, at any time 
 within three years after the said one year, by any overseer of the poor of the 
 town where such payment may have been made, or by any county superintendent 
 of the porr of the county, in which the payment may have been made. 
 
 § 373. Usurious contracts void. All bonds, bills, notes, assurances, convey- 
 ances, all other contracts or securities whatsoever, except bottomry and respond- 
 entia bonds and contracts, and all deposits of goods or other things whatsoever, 
 whereupon or whereby there shall be reserved or taken, or secured or agreed 
 to be reserved or taken, any greater sum, or greater value, for the loan or 
 forbearance of any money, goods or other things in action, than is above pre- 
 scribed, shall be void. 
 
 Whenever it shall satisfactorily appear by the admissions of the defendant, 
 or by proof, that any bond, bill, note assurance, pledge, conveyance, contract, 
 security or any evidence of debt, has been taken or received in violation of the 
 
§§ 10-20 GENERAL CONSTRUCTION LAW 1015 
 
 foregoing provisions, the court shall declare the same to be void, and enjoin any 
 prosecution thereon, amd order the same to be surrendered and canceled. 
 
 § 374. Corporations prohibited from interposing defense of usury. No cor- 
 poration shall hereafter interpose the defense of usury in any action. The term 
 corporation, as used in this section, shall be construed to include all associations^ 
 and joint-stock companies having any of the powers and privileges of corpora- 
 tions not possessed by individuals or partnerships. 
 
 GENERAL CONSTRUCTION LAW. 
 
 § 10. Acknowledge and acknowledgment. The terms acknowledge and 
 acknowledgment, when used with reference to the execution of an instrument or 
 writing other than a deed of real property, include a compliance with the pro- 
 visions of the next section by either such proof or acknowledgment. 
 
 § 11. Acknowledgment or proof of instrument. When the execution of any 
 instrument or writing is authorized or required by law to be acknowledged, or 
 to be proven so as to entitle it to be filed or recorded in a public office, the 
 Bcknowledgment may be taken or the proof made before any officer then and 
 there authorized to take the acknowledgment or proof of the execution of a deed 
 of real property to entitle it to be recorded in a county clerk's office, and shall 
 be made and certified in the same manner as such acknowledgment or proof of 
 such deed. 
 
 § 12. Affidavit. When an affidavit is authorized or required it may be sworn 
 to before any officer authorized by law to take the acknowledgment of deeds 
 in this state, unless a particular officer is specified before whom it is to be 
 taken. 
 
 § 13. Adjournment of meeting. Any meeting referred to in section forty-one 
 of this chapter may be adjourned by a less number than a quorum. 
 
 § 14. Bond and undertaking. A provision of law authorizing or requiring a 
 bond to be given shall be deemed to have been complied with by the execution 
 of an undertaking to the same effect. 
 
 § 15. Chattels. The term chattels includes goods and chattels. 
 
 § 16. Choose. The term choose includes elect and appoint. 
 
 § 17. CivU code and criminal code. The term civil code means the code of 
 civil procedure. The term criminal code means the code of criminal procedure. 
 
 § 18. Consolidated Laws. The term Consoldiated Laws shall mean the com- 
 pilation of the statutes prepared by the board of statutory consolidation and the 
 amendments thereof. 
 
 § 19. Day, calendar. A calendar day includes the time from midnight to 
 midnight. Sunday or any day of the week specifically mentioned means a 
 calendar day. 
 
 § 20. Day computation. A number of days specified as a period from a 
 certain day within which or after or before which an act is authorized or 
 required to be done means such nmnber of calendar days exclusive of the calen- 
 dar day from which the reckoning is made. Sunday or a public holiday, other 
 than a half holiday, must be excluded from the the reckoning if it is the last day 
 of any such period, or if it is an intervfening day of any such period of two 
 days. In computing any specified period of time from a specified event, the day 
 upon which the event happens is deemed the day from which the reckoning is 
 made. The day from which any specified period of time is reckoned shall be 
 excluded in making the reckoning. 
 
1016 BUSINESS CORPORATIONS IN NEW YORK §§ 21-31 
 
 § 21. Folio. The term folio shall mean one hundred words, counting each 
 figure as a word. When an officer empowered by law to do so shall order an 
 official advertisement published in a newspaper in display type or to be so dis- 
 played as to leave an unusual quantity of blank space in the advertisement, or 
 to contain pictures or diagrams, or where the character of such advertisement 
 requires it, such advertisement shall be paid for by measurement over all of such 
 space necessarily used, two square inches of space to count as one folio. When 
 there are over fifty and under one hundred words, they sjiall be counted as one 
 folio; but a less number than fifty words shall not be counted, except when the 
 whole statute, notice or order contains less than fifty words. 
 
 § 22. Gender. Words of the masculine gender include the feminine and the 
 neuter, and may refer to a corporation, or to a board or other body or assemblage 
 df persons; and, when the sense so indicates, vrords of the neuter gender may 
 refer to any gender. 
 
 § 23. Heretofore and hereafter. Each of the terms, heretofore, and hereafter, 
 in any provision of a statute, relates to tlie time such provision takes effect. 
 § 24. Holidays; half-holiday. The term holiday includes the following days 
 in each year: the first day of January known as New Year's day; the twelfth 
 day of February, known as Lincoln's birthday; the twenty-second of February, 
 known as Washington's birthday; the thirtieth day of May, known as memorial 
 day; the fourth day of July, know as independence day; the first ilonday of 
 September, known as labor day; the twelfth day of October, known as Columbu.s 
 day, and the twenty-fifth day of December, known as Christmas day, and if eitlier 
 of such days is Sunday, the next day thereafter; each general election day and 
 each day appointed by the president of the United States or by the governor of 
 this state as a day of general thanksgiving, general fasting and prayer, or other 
 general religious observances. The term half-holiday includes the period from 
 noon to midnight of each Saturday which is not a holiday. 
 
 § 25. Holiday in contractual obligations. Where a contract by its terms 
 requires the payment of money or the performance of a condition on a public 
 holiday, such payment may be made or condition performed on the next business 
 day succeeding such holiday, with the same force and effect as if made or per- 
 formed in accordance with the terms of the contract. 
 
 § 26. Judge. Tlie term judge includes every judicial officer authorized, alone 
 or with others, to hold or preside over a court of record. 
 
 § 27. Last, preceding, next and following. A reference to the last or pre- 
 ceding section, or other provision of a statute, means the section or other divi- 
 sion immediately preceding, and a reference to the next or following section or 
 other division of a statute means the section or other division immediately fol- 
 lowing. 
 
 § 28. Lunatic and lunacy. The terms lunatic and lunacy include every kind 
 of unsoundness of mind except idiocy. 
 
 § 29. Men. The term men includes boys. 
 
 § 30. Month, computation. A number of months after or before a certain 
 day shall be computed by counting such niunber of calendar months from such 
 day, exclusive of tlie calendar month in which such day occurs, and shall include 
 the day of the month in the last month so counted having the same numerical 
 order in days of the month as the day from which the computation is made, 
 unless there be not so many days in the last month so counted, in which case the 
 period computed shall expire with the last day of the month so counted. 
 
 § 31. Month in statute, contract and public or private instrument. In a stat- 
 ute, contract or public or private instrument, unless otherwise provided in such 
 contract or instrument or by law, the term month means a calendar month and 
 not a lunar month. 
 
§§ 32-42 GENERAL CONSTRUCTION LAW 1017 
 
 § 32. Municipal ofticers. A reference to several officers of a municipal cor- 
 poration holding the same office, or to a board of such officers, shall be deemed to 
 refer to the single officer holding such office, when but one person is chosen to 
 fill such office in pursuance of law. 
 
 § 33. Notice. When a notice is required to be given to a board or body, 
 service of such notice upon the clerk or chairman thereof shall be sufficient. 
 
 § 34. Now. The term now in any provision of a statute referring to other 
 laws in 'force, or to persons in office, or to any facts or circumstances as existing, 
 relates to the laws in force, or to the person in office, or to the facts or circum- 
 stances existing, respectively, immedately before the taking effect of such pro- 
 vision. 
 
 § 35. Number, singular and plural. Words in the singular number include 
 the plural, and in the plural number include the singular. 
 
 § 36. Oath, affidavit and swear. The terms oath and affidavit include every 
 mode authorized by law of attesting the truth of that which is stated. The 
 term swear includes every mode authorized by law for administering an oath. 
 
 § 37. Person. The term person includes a corporation and a joint-stock 
 association. When used to designate a party whose property may be the subject 
 of any offense, the term person also includes the state, or any other state, gov- 
 ernment or country which may lawfully own property in the state. 
 
 § 38. Property. The term property includes real and personal property. 
 
 § 39. Property, personal. The term personal property includes chattels, 
 money, things in action, and all written instruments themselves, as distinguished 
 from the rights or interests to which they relate, by which any right, interest, 
 lien, or incumbrance in, to or upon property, or any debt or financial obligation 
 is created, acknowledged, evidenced, transferred, discharged or defeated wholly or 
 in part, and everything, except real property, which may be the subject of 
 ownership. 
 
 Oil wells and all fixtures connected therewith, situate on lands leased for oil 
 purposes and oil interests, and rights held under and by virtue of any lease or 
 contract or other right or license to operate for or produce petroleum oil, shall 
 be deemed personal property for all purposes except taxation. 
 
 § 40. Property, real. The term real property includes real estate, lands, 
 tenements aiyl hereditaments, corporeal and incorporeal. 
 
 § 41. Quorum and majority. Whenever three or more public officers are 
 given any power or authority, or three or more persons are charged with any 
 public duty to be performed or exercisted by them jointly or as a board or 
 similar body, a majority of all such persons or officers at a meeting duly held 
 at a time fixed by law, or by any by-law duly adopted by such board or body, 
 or at any duly adjourned meeting of such meeting, or at a meeting duly 
 held upon reasonable notice to all of them, may perform and exercise such 
 power, authority or duty, and if one or more of such persons or officers shall 
 have died or have become mentally incapable of acting, or shall refuse or neglect 
 to attend any such meeting, a majority of the whole number of such persons 
 or officers shall be a quorum of such board or body, and a majority of such a 
 quorum, if not less than a, majority of the whole number of such persons or 
 officers may perform and exercise any such power, authority or duty. 
 
 § 42. Register of county. Any act done in pursuance of law by the register 
 of a county shall be deemed to be a, compliance with any provision of law 
 authorizing or requiring such act to be done by the county clerk of such 
 county, and any instrument or writing filed, entered or recorded in pursuance 
 of law in the office of a register .of a county, shall be deemed to be a compliance 
 with any provision of law authorizing or requiring such paper to be filed, 
 entered or recorded, as the case may be, in the office of the clerk of such county. 
 
 ♦ 
 
1018 BUSINESS CORPORATIONS IN NEW YORK §§ 42-57 
 
 The term county clerk when used in relation to conveyances of real property or 
 the filing or recording of instruments which are or may be filed in the office 
 of the register of a county, shall include the register of each county in which 
 there is a register. 
 
 § 43. Seal of court, public oflScer or corporation. A seal of a court, public 
 officer or corporation may be impressed directly upon the instrument or writing 
 to be sealed, or upon wafer, wax or other adhesive substance affixed thereto, or 
 upon paper, or other similar substance affixed thereto by mucilage or other 
 adliesive substance. 
 
 § 44. Seal, private. The private seal of a person, other than a corporation, 
 to any instrument or writing shall consist of a wafer, wax or other similar 
 adhesive substance affixed thereto, or of paper or other similar substance affixed 
 thereto, by mucilage or otheir adhesive substance, or of the word " seal," or the 
 letters " L. S." opposite the signature. 
 
 § 45. Seal, private as, corporate seal. An instrument or writing duly executed, 
 in the corporate name of a corporation, which shall not have adopted a cor- 
 porate seal, by the proper officers of the corporation under their private seals, 
 shall be deemed to have been executed under the corporate seal. 
 
 § 46. Signature. The term signature includes any memorandum, mark or 
 sign, written or placed upon any instrument or writing with intent to execute 
 or authenticate such instrument or writing. 
 
 § 47. State. The term state, when used generally to include every state of 
 the United States, includes also every territory of the United States and the 
 District of Ck>lumbia. 
 
 § 48. Tense, present. Words in the present tense include the future. 
 
 § 49. Territory. The term territory when used generally to include every 
 territory of the United States, includes also the District of Columbia. 
 
 § 50. Time, computation. Time shall continue to be computed in this state 
 according to the Gregorian or new style. The first day of each year after the 
 year seventeen hundred and fifty-two is the first day of January, according to 
 such style. 
 
 § 51. Time, night. Night time includes the time from sunset to sunrise. 
 
 § 52. Time, standard. The standard time throughout this state is that of 
 the seventy-fifth meridian of longitude west from Greenwich, except that at two 
 o'clock ante meridian of the last Sunday in March of each year *uch standard 
 time throughout this state shall be advanced one hour, and at two o'clock ante 
 meridian of the last Sunday in October, of each year such standard time through- 
 out this state shall, by the retarding of one hour, be returned to the mean 
 astronomical time of the seventy-fifth meridian of longitude west from Green- 
 wich, and all courts and public officers, and legal official proceedings, shall- be 
 regulated thereby. 
 
 § 53. Time, use of standard. Any act required by or in pursuance of law to 
 be performed at or within a prescribed time, shall be performed according to 
 the standard time. 
 
 § 54. Village. The term village means an incorporated village. 
 
 § 55. Women. The term women includes girls. 
 
 § 56. Writing and written. The terms writing and written include every 
 legible representation of letters upon a material substance, except when applied 
 to the signature of an instrument. 
 
 § 57. Year, common and leap. For the purpose of computing and reckoning 
 the days of the year in the same regular course in the future, every year, the 
 number of which in the Christian era is a multiple of four, is a bisextile or leap 
 year consisting of three hundred and sixty-six days, unless such number of year 
 is a multiple of one hundred and the first two figures thereof treated as a 
 
§§ 57-58, 1-3 GENERAL CORPORATION LAW 1019 
 
 separate number is not a multiple of four, and every year which is not a leap 
 year is a comnaon year consisting of three hundred and sixty-five days. 
 
 § 5S. Year in statute, contract and public or private instrument. The term 
 year in a statute, contract, or any public or private instrument, means three 
 hundred and sixty-five days, but the added day of a leap year and the day im- 
 mediately preceding shall for the purpose of such computation be counted as one 
 day. In, a statute, contract or public or private instrument, the term year 
 means twelve months, the term half year, six months, and the term a quarter 
 of a year, three months. 
 
 GENERAL CORPORATION LAW. 
 
 § 1. Short title. This chapter shall be known as the " General Corporation 
 Law." 
 
 § 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 cerporations described in accord- 
 ance with this classification shall include all corporations theretofore formed 
 belonging to such class. 
 
 § 3. Definitions. 1. A "municipal corporation" includes a county, town, 
 school district, village and city and any other territorial division of the state 
 established by law with powers of local government. 
 
 2. A " stock corporation " is a corporation having a capital stock divided 
 into shares, and which is authorized by law to distribute to the holders thereof 
 dividends or shares of the surplus profits of the corporation. 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 corpora'tion. 
 
 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 desig- 
 nated to manage the affairs of the corporation., 
 
 7. The term " certificate of incorporation " shall include articles of associa- 
 tion or any other written instruments required by law to be filed, to effect 
 the incorporation of a corporation, including a certified copy of an original 
 certificate of incorporation filed for such purpose in pursuance of law. 
 
 8. The term " member of a, corporation " shall include every person having 
 
1020 BUSINESS COEPOEATIONS IN NEW YORK §§ 3-5 
 
 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 reference to a 
 non-stock corporation, includes the operations for the conduct of which it is 
 incorporated. 
 
 11. The term " corporate law " or " laws," when used in any law forming a 
 part of the consolidation of the general laws of the state of which this chapter 
 is a part, means the general statutes of this state relating to corporations 
 included in such consolidation. 
 
 12. The existence of an easement in real property acquired or reserved by a 
 municipal corporation, a railroad corporation or other transportation cor- 
 poration, shall not be deemed an encumbrance upon such real property under 
 any law relating to investments in mortgages upon real property by corpora- 
 tions, trustees, executors, administrators, guardians or other persons holding 
 trust funds, but the effect of such an easement upon the real property which 
 it affects, shall be taken into consideration in determining the value thereof. 
 
 § 4. Qnahlications 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 corporation formed by the reincorpora- 
 tion 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. 
 
 § 5. Filing and recording certificates of incorporation. 1. Every certificate 
 of incorporation and every amended or supplemental certificate, and every 
 certificate which alters the provisions of any certificate of incorporation or aiiy 
 
 ■ 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 
 tlie secretary of state, and shall be by him duly recorded and indexed in books 
 specially provided therefor, and a certificed copy of such certificate or amended 
 or supplemental certificate with a certificate of the secretary of state of such 
 filing and record, or a duplicate original of such certificate or amended or supple- 
 mental 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. Nothing herein contained, 
 however, shall be deemed to prohibit a corporation from having and using a cor- 
 porate name or title in a language other than the English language if the same 
 
 'be in English letters or characters. All taxes required by law to be paid before 
 or upon incorporation and the fees for filing and recording such certificate must 
 be paid before filing. No corporation shall ex»rcise any corporate powers or 
 privileges until such taxes and fees have been paid. 
 
 2. Whenever under any law now or heretofore in force the certificate of incor- 
 poration of any corporation other than a stock corporation was or is required 
 to be filed in more than one public office, a certified copy of such 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. 
 
§§ 6-9 GENERAL CORPORATION LAW 1021 
 
 § 6. Corporate names. 1. No certificate of incorporation of a proposed cor- 
 poration 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 ofiice for the purpose of efliecting its 
 incorporation, or of authorizing it to do business in this i state; nor shall any 
 corporation except a religious, charitable or benevolent corporation or bar asso- 
 ciation be authorized to do business in this state unless its name has such word 
 or words, abbreviation, affix or prefix, therein or thereto, as will clearly indicate 
 that it is a corporation as distingished ifrom a natural person, firm or copartner- 
 ship; or unless such corporation uses with its corporate name, in this state, such 
 an aflSx or prefix. A corporation formed by the reincorporation, reorganization 
 or consolidation of other corporations or upon the sale of the property or fran- 
 chises of a corporation, or a corporation acquiring or becoming possessed of all 
 the estate, property, rights, privileges and franchises of any other corporation or 
 corporations by merger, may have the same name as the corporation or one of the 
 corporations to whose franchises it has succeeded. No corporation shall be here- 
 after organized under the laws of this state with the word " trust," " bank," 
 " banking," " insurance," " assurance," " indemnity," " guarantee," " guaranty," 
 " title," " casualty," " surety," " fidelity," " bonding," " savings," " investment," 
 " loan " or " benefit " as part of its name, except a corporation formed under 
 the banking law or the insurance law. 
 
 § 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 acknowledg- 
 ment 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 unathorized 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 certifi- 
 cate 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 certificate. 
 
 The amendment of a certificate under this section shall be without prejudice 
 to any pending action or proceeding, or to any rights previously accrued. 
 
 § 8. Lost or destroyed certificates. If either of the certificates of incorpora- 
 tion shall be lost or destroyed after filing, a certified copy of the other certificate 
 may be filed in the place of the one 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. 
 
 § 9. Certificate and other papers as evidence; evidence of consolidation. 
 I. The certificate of incorporation of any corporation duly filed shall be pre- 
 svimptive 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. 
 
1022 BUSINESS CORPORATIONS IN NEW YORK §§ 9-11 
 
 2. Whenever, by the laws of any other state or territory, or the dominion 
 of Canada, a copy of the certificate of organization or incorporation 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, organized or located in such state, territory or dominion, 
 or claiming so to be, such certificate or certificates, duly exemplified, or a duly 
 exemplified copy thereof, shall be received in all actions and proceedings in 
 this state, in or before all courts and officers, with the same force and effect 
 in all respects as prima facie evidence as aforesaid, as in such other state, 
 territory or dominion. 
 
 3. Where two or more corporations have been or shall hereafter be consolidated 
 and merged into a new corporation, a certificate of the secretary of state under 
 his official seal concisely stating the names of the respective corporations con- 
 solidated, the dates of the filing of the certificates respectively of the incor- 
 poration 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 respec- 
 tive 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 agree- 
 ment and proceedings, and of the other facts so certified by him. 
 
 § 10. Limitation of powers; provisions of certificate. 1. No coroporation 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 pro- 
 vision 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 obligations or the performance of any duty imposed by law. 
 
 § 11. Grant of general powers. Every corporation as such has power, though 
 not specified in the law under which it is incorporated: 
 
 1. To have succession for the period specified in its certificate of incorpora- 
 tion or by law, and perpetually when no period is specified. 
 
 2. To have a common seal, and alter the same at pleasure. 
 
 3. To acquire by grant, gift, purchase, devise or bequest, to hold and to 
 dispose of such property as the purposes of the corporation shall require, sub- 
 ject to such limitations as may be prescribed by law. 
 
 4. To appoint such officers and agents as its business shall require, and to 
 fix their compensation, and 
 
 5. To malce by-laws, not inconsistent with any existing law, for the manage- 
 ment 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 con- 
 trol the action of its directors. No by-law adopted by the board of directors 
 regulating the election of directors or officers shall be valid unless published 
 for at least once a week for two successive weeks in a newspaper in the county 
 where the election is to be held, and at least thirty days before such election. 
 
§§ 11-16 GENERAL CORPORATION LAW 1023 
 
 Subdivisions four and five of this section shall not apply to municipal corpora- 
 tions. 
 
 § 13. Acquisition of additional real property. When any corporation, except 
 a life insurance corporation, shall have sold or conveyed any part of its real 
 property, the supreme court may, notwithstanding any restriction of a general 
 or special law, authorize it to purchase and hold from time to time other real 
 property, upon satisfactory proof that the value of the property so purchased 
 does not exceed the value of the property so sold and conveyed within the 
 three years next preceding the application. 
 
 § 14. Acquisition of property without the state. Any domestic corporation 
 transacting business in other states or foreign countries may acquire and dis- 
 pose of such property as shall be requisite for such corporation in the convenient 
 transaction of its business. Any domestic corporation establishing or maintain- 
 ing a charitable, philanthropic or educational institution within this state may 
 also carry on its work and establish or maintain one or more branches of such 
 institution or an additional institution or additional institutions in any other 
 state, the District of Columbia or in any part of the territories or dependencies 
 of the United States of America or in any foreign coxmtry 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 therefor. But nothing in this section contained shall 
 be construed as exempting from taxation property to any additional amount 
 than is now allowed to such corporation under existing laws. 
 
 § 15. Certificate of authority of a foreign corporation. No foreign stock cor- 
 poration 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 of 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 foreign 
 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 certificate. 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 corpora- 
 tion 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 dorpora- 
 tion, other than a moneyed or insurance corporation, with the word " trust," 
 " bank," " banking," "insurance," " assurance," " indemnity," " guarantee," 
 "guaranty," "title," "casualty," "surety," "fidelity," "bonding," "savings," 
 " investment," " loan " or " beniefit," as a part of its name. 
 
 § 16. Proof to be filed before granting certificate. Before granting such cer- 
 tificate the secretary of state shall require every such foreign corporation to 
 filed in his office a sworn copy in the English language of its charter or certifi- 
 cate 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. 
 
1024 BUSINESS CORPORATIONS IN NEW YORK §§ 16, 16-a 
 
 The person so designated must have an oiffice or place of business, at the place 
 where such corporation is to have its principal place of business within this 
 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 designa- 
 tion shall be accompanied with the written consent of the person designated and 
 shall continue in force until revoked by an instrument in writing designating 
 in like manner some other person upon whom process against the corporation 
 may be served in this state or until the filing in the same office of a written 
 revocation of said consent executed by the person so designated. If the person 
 so designated dies or removes from the place where the corporation has its 
 principal place of business within the state, or files such revocation of his con- 
 sent, and the corporation does not within thirty days after such death or 
 removal or revocation of consent designate in like manner another person upon 
 whom process against it may be served within the state, the secretary of state 
 may revoke the authority of the corporation to do business within the state, 
 and process against the corporation in an action upon any liability incurred 
 within this state before such revocation, may, after such death or removal, or 
 revocation of consent, and before another designation is made, be served upon 
 the secretary of state. At the time of such service the plaintiff shall pay to 
 the secretary of state two dollars, to be included in his taxable costs and dis- 
 bursements, and the secretary 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 authentication. 
 
 § 16-a. Certiiicate of surrender of authority. A foreign corporation having 
 authority under section sixteen of this chapter to do business in this state, 
 may surrender such authority by filing in the office of the secretary of state, 
 a certificate under its corporate seal and the signature of its president, vice 
 president, or other acting head, setting forth: 
 
 1. The name of the corporation and the state under whose laws it is formed. 
 
 2. The date on which it received authority to do business in this state. 
 
 3. Revoking its designation of the person upon whom process against the cor- 
 poration may be served in this state. 
 
 4. That it surrenders its authority to do business in this state and that, 
 as evidence of such surrender, it returns to the secretary of state, for cancel- 
 lation, its certificate of authority to do business in this state, or that sucli 
 certificate has been lost or destroyed. 
 
 Proof of execution in the form prescribed by section three hundred and nine 
 of the l-eal property law shall be attached. The certificate of authority shall 
 be attached to the certificate of surrender, unless such certificate of authority 
 has been lost or destroyed, in which event, there shall be attached an affidavit 
 of the president, vice president, secretary, or other officer of the corporation, 
 to the effect that such certificate has been lost or destroyed, as the case may be. 
 On the filing of such certificate, the secretary of state shall make a note of 
 the filing thereof on his index of corporations and thereupon the authority of 
 the corporation to do business within this state shall cease and determine, and 
 no such corporation doing business in this state after the filing of such certifi- 
 cate of surrender of authority shall maintain any action in this state upon any 
 contract made by it in this state subsequent to the filing of such certificate of 
 surrender of authority. The filing of such certificate shall not, however, affect 
 any action pending at the time of such surrender, or affect any action in the 
 state upon any contract made by the corporation in this state before the filing 
 
§§ 16-a-23 GENERAL CORPORATION LAW 1025 
 
 of the certificate of surrender of authority. Process against the corporation in 
 an action upon any liability incurred within this state before the filing of such 
 certificate of surrender of authority may, after the filing thereof, be served 
 upon the secretary of state. At the time of such service, the plaintiff shall pay 
 to the secretary of state tveo dollars to be included in his taxable coats and 
 disbursements, and the secretary of state shall forthwith mail a copy of such 
 process to such corporation, if its address or the address of any officer thereof, 
 is known to him. [L. 1918, c. 193.] 
 
 § 20. Acquisition of real property in this state by certain foreign corporations. 
 Any foreign corporation doing business in this state and created under the 
 laws of the United States, or of any state or territory thereof, or of any foreign 
 state or nation which borders the United States of America and which by its 
 laws confers similar privileges on corporations created by the laws of the state 
 of New York, may require and hold such real property in this state as may 
 be necessary for its corporate purposes in the transaction of its business in 
 this state, and convey the same by deed or otherwise in the same manner as 
 a domestic corporation. [General Corporation Law, 1890, c. 563, § 12, as 
 amended and made section 17 by L. 1892, c. 687.] 
 
 § 21. Acquisition by foreign corporation of real property in this state. Any 
 foreign corporation may purchase at a sale upon the foreclosure of any mort- 
 gage 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 property situated within this state and hold the same for 
 not exceeding five years from the date of such purchase, or from the time when 
 the right to the possession thereof vests in such devisee, and convey it by 
 deed or otherwise in the same manner as a domestic corporation. 
 
 § 22. Prohibition of banking powers. No corporation, domestic or foreign, 
 other than a corporation formed under or subject to the banking laws of this 
 state or of the United States, except as permitted by such laws, shall by any 
 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, of buying and selling bills of exchange, or of issuing bills, notes 
 or other evidences of debt for circulation as money, or of engag- 
 ing in any other form of banking; nor shall any such corporation, 
 except an express company having contracts with railroad companies for 
 the operation of an express service upon the lines of such railroad companies, 
 or a transatlantic steamship company, or a. telegraph company, or a corporation 
 incorporated prior to the year eighteen hundred and fifty, to promote the welfare 
 of emigrants, possess the power of receiving money for transmission or of trans- 
 mitting the same, by draft, traveler's check, money order or otherwise. 
 
 § 23. Qualification of members as voters. Unless otherwise provided in the 
 certificate of incorporation, every stockholder of record of a stock corporation 
 shall be entitled at every meeting of the corporation to one vote for every share 
 of stock standing in his name on the books of the corporation; and at every 
 meeting of a non-stock corporation, every member, unless disqualified by the 
 by-laws, shall be entitled to one vote. The stockholders of a stock corporation 
 by a by-law adopted by a vote at any annual meeting, or at any special meeting 
 duly called for such purpose, may prescribe a period, not exceeding forty days 
 prior to meetings of the stockholders, during which no transfers 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 payment 
 
1026 BUSINESS CORPORATIONS IN NEW YORK §§ 23-25 
 
 of necessary expenses thereof, shall issue to such pledgor or to such actual 
 owner of such stock, a proxy to vote thereon. Xo 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 members of the corporation may vote at such 
 meeting in person or by proxy, subject to the provisions of this chapter. 
 
 § 23-a. Stock held in fiduciaty capacity; how voted. Fiduciaries, whether 
 appointed by last will and testament or by the court, shall have the same right 
 and power, either in person or by proxy, at all corporate meetings to vote any 
 and all shares of stock held by them in a fiduciary capacity, in any corporation 
 organized under the laws of this state, as the deceased or legal owner thereof 
 had in his lifetime. And where such stock is registered on the books of such 
 corporation in the name of, or has passed by operation of law or by virtue of 
 any last will and testament, to more than two fiduciaries, and dispute shall arise 
 among them, the said shares of stock shall be voted by a majority of such 
 fiduciaries, and in such inanner and for suth purpose as such majority shall 
 authorize, direct, or desire the same to be voted. If the number of fiduciaries 
 shall be even and they shall be equally divided upon the question of voting such 
 stock, it shall be lawful for the court having jurisdiction of their accounts, upon 
 petition filed by any of such fiduciaries or by any party in interest, to direct 
 the voting of such stock by the person or persons beneficially interested in the 
 manner which, in the opinion of such court, will be for the best interests of the 
 parties beneficially interested in the stock. Fiduciaries, whether appointed by 
 last >\'ill and testament, filed in any court of this state, or by any court of this 
 state, shall have all the foregoing rights and powers, subject to the foregoing 
 limitations, to vote any and all shares of stock, held by them in a fiduciary 
 capacity, in any corporation, organized under the laws of any other state, pro- 
 viding nothing in the laws of tlie state, imder which the corporation was organ- 
 ized, proliibits the exercise of such rights and powers. [L. 1918, c. 472.] 
 
 § 24. Cumulative voting. The certificate of incorporation of any stock cor- 
 poration may provide that at all elections of directors of such corporation, each 
 stockliolder 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 provisions of 
 this section. 
 
 § 25. Voting trust agreements. A stockholder may, by agreement in writing, 
 transfer his stock to any person or persons for the purpose of vesting in him or 
 them the right to vote thereon for a time not exceeding five years upon terms 
 and conditions stated, pursuant to which such person or persons shall act; 
 every other stockholder, upon his request 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 certificates 
 therefor issued to such transferee or transferees in which it shall appear that 
 they are issued pursuant to such agreement and in the entry of such transferee 
 
§§ 25-29 GENERAL CORPORATION LAW 1027 
 
 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 agreement shall be filed in the ofiice of the corporation where its principal 
 business is transacted and be open to the inspection of any stockholder, daily, 
 during business hours. 
 
 § 26. Proxies. Every member of a corporation, except a religious corpora- 
 tion, entitled to vote at any meeting thereof may so vote by proxy. 
 
 Xo officer, clerk, teller or bookkeeper of a corporation formed under or subject 
 to the banking law shall act as proxy for any stockholder at any meeting of any 
 such 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. 
 
 § 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 subsBribe the following oath : " I do solemnly swear 
 that in voting at this election I have not, either directly, indirectly or impliedly 
 received any promise or any sum of money or any thing of value to influence 
 the giving of my vote or votes at this meeting or as a consideration therefor." 
 Any person offering to vote as proxy for any other person shall present 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 of any such sum of money or any 
 thing of value to influence the giving of my vote at this meeting, or as a con- 
 sideration 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, . 
 
 § 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 successor has been elected. 
 
 § 29. Mode of calling special election of directors. If the election has not 
 been held on the day so designated, the directois shall forthwith call a meeting 
 of the members of the corporation for the purpose of electing directors, of which 
 meeting notice shall be given in the same manner as of the annual meeting for 
 the election of directors. 
 
 If such meeting shall not be so called within one month, or, if held, shall 
 result in a failure to elect directors, any member of the corporation may call a 
 meeting for the purpose of electing directors by publishing a notice of the time 
 and place of holding such meeting at least once in each week for two successive 
 weeks immediately preceding the election, in a newspaper published in the county 
 where the election is to be held and in such other manner as may be prescribed 
 in the by-laws for the 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 ppst-office address, a copy of such notice at least two weeks before 
 the meeting. 
 
1028 BUSINESS CORPORATIONS IN NEW YORK §§ 30-34 
 
 § 30. Mode of conducting special election of directors. Such meeting shall be 
 held at the ofiBce of the corporation, or it 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 can not be h^d, at some other place in the city, village or 
 town where such office or place is or was located. 
 
 At such meeting the members attending shall constitute a quorum. They 
 may elect inspectors of election and 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. 
 
 § 31. Qualification of voters and canvass of votes at special election. In the 
 absence at such meeting of the books of the corporation showing who are mem- 
 bers 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 corporation, 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 stand- 
 ing in his name on the books of the corporation. 
 
 The inspectors shall return and file such statements, with a certificate of the 
 result of the election, verified by them, in the office of the clerk of the county in 
 which such election is held, and the persons so elected shall be the directors of 
 the corporation. 
 
 § 32. Powers of supreme court respecting elections. The supreme court shall, 
 upon the application of any person or corporation aggrieved by or complaining 
 of any election of any corporation or any proceeding, act or matter touching 
 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 alle- 
 gations of the parties, or otherwise inquire into the matters or causes of com- 
 plaint, and establish the election or order a new election, or make such order 
 and give such relief as right and justice may require. 
 
 § 33. Stay of proceedings in actions collusively brought. If an action ia 
 brought against a corporation by the procurement or default of its directors, 
 or any of them, to enforce any claim or obligation declared void by law, or to 
 which the corporation has a valid defense, and such action is in the interest 
 or for the benefit of any director, and the corporation has by his connivance made 
 default of 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, 
 setting forth the facts, for a stay of proceedings in such action, and on proof 
 of the facts in such further manner and upon such notice as the court may 
 direct, it may stay such proceedings or set aside and vacate the same, or grant 
 such other relief as may seem proper, and which will not injuriously affect an 
 innocent party, who, without notice of such wrongdoing and for a valuable con- 
 sideration, has acquired rights under such proceedings. 
 
 § 34. Quorum of directors and powers of majority. The affairs of every cor- 
 poration shall be managed by its board of directors, at least one of whom shall 
 be a citizen of the United States and 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 
 
§§ 34r-38 GENERAL CORPORATION LAW 1029 
 
 one-third of its number. Subject to the by-laws, if any, adopted by members 
 of a corporation, the directors may make necessary by-laws of the corporation. 
 § 35. Directors as trustees in case of dissolution. Upon the dissolution of 
 any corporation, its directors, unless other persons shall be appointed by the 
 legislature, or by some court of competent jurisdiction, shall be the trustees of 
 its creditors, stockholders or members, and shall have full power to settle its 
 affairs, collect and pay outstanding debts, and divide among the persons entitled 
 thereto the money and other property remaining after payment of debts and 
 necessary expenses. 
 
 Such trustees shall have authority to sue for and recover the debts and property 
 of the corporation, by their name as such trustees, an^ shall jointly and severally 
 be personally liable to its creditors, stockholders or members, to the extent of 
 its property and effects that shall come into their hajids. 
 
 § 36. Forfeiture for non-user. If any corporation, except a railroad, turnpike, 
 plank-road or bridge corporation, shall not organize and commence the trans- 
 action 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. 
 § 37. Extension of corporate existence. Any domestic corporation at any 
 time before the expiration thereof, may extend the term of its existence beyond 
 the time specified in its original certificate of incorporation, or by law, 
 or in any certificate of extension of corporate existence, by the consent 
 of the stockholders owning two-thirds in amount of its capital stock, 
 or if not a stock corporation, by the consent of two-thirds of its members, 
 which conesent shall be given either in writing or by vote at a special meeting 
 of the stockholders called for that purpose, upon the same notice as that required 
 for the annual meetings of the 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 
 acknowledge by the president or a vice-president, and by the secretary or an 
 assistant secretary of the corporation, and if a corporation formed imder or sub- 
 ject to the banking law shall be filed in the office of the superintendent of 
 banks, if an insurance corporation, in the office of the superintendent of insur- 
 ance, and otherwise in the office of the secretary of state, and shall by such 
 officer be duly recorded and indexed in a book specially provided therefor, and a 
 certified copy of such certificate, with a certificate of such officer of such filing 
 and record, or a duplicate original of such certificate, shall be filed and similarly 
 recorded and indexed in the office of the clerk of the eounty wherein the cor- 
 poration has its principal place" of business, and shall be noted in the margin 
 of the record of the original certificates of such corporation, if any, in such 
 offices, and thereafter the term of the existence of such corporation shall be 
 extended as designated in such certificate. 
 
 The certificate of incorporation of any corporation whose duration is limited 
 by such certificate or by law, may require that the consent of the stock- 
 holders 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 cor- 
 poration, shall be requisite- to affect an extension of corporate existence as 
 authorized by this section. ' 
 
 § 38. Revival of corporate existence. If the term of existence of any domes- 
 tic corporation shall have expired and it shall be made satisfactorily to appear 
 to the supreme court that such corporation was legally organized pursuant to 
 any law of this state, and that it shall have issued its bonds payable at a 
 date beyond the date fixed in its charter or certificate of incorporation for the 
 • expiration of its corporate existence, and such bonds shall be unmatured and 
 unpaid, or, if a bank, incorporated under a general law of this state, that shall 
 have issued any other obligations or shall have incurred any other indebtednesE 
 
1030 BUSINESS CORPOEATIONB IN NEW YORK §§ 3S-t3 
 
 which at the date of the application shall be unsatisfied or unpaid the supreme 
 court may, upon the application of any person interested and upon such notice 
 to such other parties as the court may require, by order, authorize the filing 
 and recording of 'a certificate reviving the existence of such corporation, upon 
 such conditions and with such limitations as such order shall specify, and 
 extending such corporate existence for a term not exceeding the term for which 
 it was originally incorporated. Upon filing and recording 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 litigalion commenced after such expiration and pending a.t 
 the time of such revival. 
 
 § 39. Approval of certificates of extension or revival; when required. In the 
 case of a corporation formed under or subject to the banking law, no certificate 
 of extension or revival shall be filed or recorded unless it shall have 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 
 superintendent of insurance; and, if a turnpike or bridge corporation, it shall 
 not be filed imless 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. 
 § 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 turnpike, plank-road or bridge 
 corporation shall be lawfully owned by another 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 owning all the shares 
 of its capital stock. 
 
 § 41. Effect of extension. Every corporation extending its corporate exist- 
 ence under this chapter or under any general law of the state shall hereafter 
 be subject to the provisions of this chapter and of such general law, notwith- 
 standing any special provisions in its charter, and shall thereafter be deemed 
 t(i 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. 
 § 42. When notice of lapse of time unnecessary. Whenever under the pro- 
 visions of any of the corporate laws a corporation is authorized to take any 
 action after notice to its members or after the lapse of a prescribed period of 
 time, such action may be taken without notice and 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. 
 
 § 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 trustees, such agreement or action may 
 be taken by such directors, regularly convened as a board, and acting by a 
 majority of a quorum, except when otherwise expressly required by law or 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, 
 manage! 8 or trustees. At any meeting at which every member of the board of 
 
§§ 43-61 GENERAL CORPORATION LAW 1031 
 
 directors shall be present, though held without notice, any business may be 
 transacted which might have been transacted if the meeting had been duly called. 
 Except when otherwise required by law or the by-laws of the corporation, special 
 meetings of the members of the corporation may be called in the same manner 
 as the annual meeting thereof. 
 
 § 44. Political contributions prohibited; penalty. No corporation or joint- 
 stock association doing business in this state, except a corporation or associa- 
 tion organized or maintained for political purposes only, shall directly or in- 
 directly pay or use or offer, consent or agree to pay or use any money or prop- 
 erty 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 indemniiication of any person for moneys 
 or property so used. Any officer, director, stockholder, attorney or agent of any 
 corporation or joint-stock associaJ;ion which violates any of the provisions 
 of this section, who participates in, aids, abets or advises or consents to any 
 such violation, and any person who solicits or 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 evidence, documentary or 
 otherwise, required of him may tend to convict him of a crime or to subject 
 him to a penalty or forfeiture; but no person shall be prosecuted or subjected 
 to any penalty or forfeiture for or on account of any transaction, matter or 
 thing concerning which ho 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. 
 
 § 60. Petition by corporation to change name. A petition to assume another 
 corporate name may be made by a, domestic corporation other than a corporation 
 organized under the business corporations law, the transportation corporations law 
 or the membership corporations law, or organized under any law repealed by either 
 of those laws, whether incorporated by a general or special law, to the supreme 
 court at a special term thereof, held in the judicial district in which its 
 principal business office shall be situated, or, if it be other than a, stock 
 corporation, at a special term held in the judicial district in which its certifi- 
 cate 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 pr railroad corporation, the petition 
 must be authorized by a resolution of the directors of the corporation, and 
 approved, if a banking corporation, by the superintendent of banks; if an insur- 
 ance corporation, by the superintendent of insurance, and if a railroad cor- 
 poration, by the public service commission. The petition to change the name 
 of any other corporation must have annexed thereto a certificate of the secretary 
 of state, that the name which such corporation proposes to assume is not the 
 name of any other corporation appearing on his index of corporations as 
 authorized to do business under the laws of the State of. New York, or a name 
 which he deems so nearly resembling it, as to be calculated to deceive.* 
 
 § 61. Contents of petition. The petition must by 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. 
 
1032 BUSINESS CORPORATIONS IN NEW YORK §§ 61-63 
 
 or a name so nearly resembling it as to be calculated to deceive; and if it bo 
 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. 
 
 § 62. Notice of presentation of petition. If the petition be made by a cor- 
 poration 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 
 sliall 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 corporation, shall be designated by the superintendent of banks, if an 
 insurance corporation by the superintendent of insurance, or if a railroad 
 corporation, by the public service commission. In the city and county of Xew 
 York such notice shall be published once in each week for three successive weeks 
 in two daily newspapers published in such county. If the petition be made 
 by a domestic corporation organized under or subject to the religious or mem- 
 bership corporations law the court may dispense with the publication of the 
 notice of the presentation of such petition or require notice of such presentation 
 to be given to such persons and in such manner as the court thinks proper. A 
 copy of the petition and notice of motion shall be filed with the secretary of 
 state, and the proposed name shall thereupon be reserved for said corporation 
 until three weeks after the date of such motion, and until three weeks after 
 the date of any adjournment of such motion if notice of such adjournment 
 shall be filed with the secretary of state, and no certificate of incorporation of 
 a proposed corporation, having the same name as the name proposed in such 
 petition, or a name so nearly resembling it as to be calueulated to deceive, 
 shall be filed in any office for the purpose of effecting its incorporation, and 
 no corporation formed without -the state of New York having the same name 
 or a name so nearly resembling it as to be calculated to deceive shall be given 
 authority to do business in this .state. 
 
 § 63. Order authorizing change. If the court to which the petition is pre- 
 sented 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 petition has been duly authorized and that 
 notice of th^ presentation of tlie 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 in the 
 office of' the superintendent of insurance, or if it be a railroad corporation, 
 in the offices of the public service commissions. Such order shall also direct 
 the publication, within ten days after the entry thereof, of a copy thereof, in 
 a designated newspaper, in the county in which the order is directed to be 
 entered, once in each week for four successive weeks. The court may dispense 
 
§§ 63-71 GENERAL CORPORATION LAW 1033 
 
 with the publication of a copy of such order and require notice to be given to 
 such persons and in such manner as it thinks proper if the petition be made 
 by a domestic corporation organized under or subject to the religious or member- 
 ship corporations law. 
 
 § 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 it 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 fourteen and two thousand four hundred and fifteen of the code of civil 
 procedure for the change of the name of a corporation, shall be invalid 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. 
 
 And no proceedings heretofore had under the provisions of article three, 
 chapter twenty-three, consolidated laws, for the change of the name of a cor- 
 poration, shall be invalid by reason of the non-filing and recording of such 
 affidavit of the publication of the order changing such name within forty days 
 from the making of such order. 
 
 § 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, impeded or impaired in consequence of such 
 change of name. The plaintiff in the action or the party instituting the special 
 proceeding, or the people, as the case requires, may at any time, obtain an order 
 amending any of the papers or proceedings therein, by the substitution of the 
 new name, without costs and without prejudice to the action or proceeding. 
 
 § 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 pursuant to the provisions of 
 this article. 
 
 § 71. Petition. The proceeding shall be instituted by the presentation to the 
 supreme court of the district or the county court of the county where the real 
 property, or some part of it, is situated, by the corporation applicant, of a 
 petition setting forth the following facts: 
 
 1. The name of the corporation and of its directors, 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 incorpora- 
 tion and a reference to the statute under which it was incorporated. 
 
 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 resolutjon granting 
 such authority. 
 
 6. The market value of the remaining real property of the corporation and 
 the cash value of its personal assets, and the total amount of its debts and 
 liabilities, and how secured, if at all. 
 
1034 BUSINESS CORPORATIONS IN NEW YORK §§ 71-90 
 
 7. Tha application proposed to be made of the moneys realized from such 
 sale, mortgage or lease. 
 
 8. WTiere the consent of the shareholders, stockholders or members of the 
 corporation is required by law to be first obtained, a statement that such 
 consent has been given, and a copy of the consent, or a certified transcript of 
 the record of the meeting at which it was given, shall be annexed to the 
 petition. 
 
 9. A demand for leave to mortgage, lease or sell the real estate described. 
 The petition shall be verified in the same manner as a verified pleading in 
 
 an action in a court of record. 
 
 § 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, oflScer or creditor of the corporation or 
 otherwise, in which case the application shall be heard at the time and place 
 specified in such notice, and the court may in any case appoint a referee to 
 take the proofs and report the same to the court, with his opinion thereon. 
 Any person, whose interests may be affected by the proceeding, may appear upon 
 the hearing and show cause why the application should not be granted. 
 
 § 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. 
 
 § 74. Insolvent corporation. If the corporation is insolvent, or its property 
 and assets are insufficient to fully liquidate its debts and liabilities, the applica- 
 tion 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. 
 
 § 75. Service of notices. Service of notices, provided for in this article, may 
 be made cither 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. 
 
 § 76. Practice in cases not herein provided for. In all applications made 
 under this article, where the mode or manner of .conducting any or all of the 
 proceedings thereon is not expressly provided for, the court before whom such 
 application may be pending, shall have the power to make all the necessary 
 orders and give the proper directions to carry into effect the object and intent 
 of this article, or of any act authorizing the sale of corporate real property, 
 and the practice in such cases shall conform, as near as may be, to the ordinary 
 practice in such court. 
 
 § 90. Action against officers of corporation for misconduct. An action may 
 be maintained against one or more trustees, directors, managers, or other offi- 
 cers 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 conduct, including 
 any neglect of or failure to perform their duties, in the management and dis- 
 position of the funds and property, committed to their charge. 
 
 2. Compelling them to pay to the corporation, which they represent, or to its 
 creditors, any money, and the value of any property, which they have acquired 
 
§§ 90-101 GENERAL CORPORATION LAW 1035 
 
 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: exeroising his office, where it appears that 
 he has abused his trust. 
 
 4. Removing a defendant from his office, upon proof or conviction of mis- 
 conduct, 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, contrary to a provision 
 of law, or for a purpose foreign to the lawful business and objects of the 
 corporation, where the alienee knew the purpose 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 direct- 
 ing the trial by a jury of the issue of neglect or failfire of defendants to per- 
 form their duties; and for that purpose the questions to be tried must be pre- 
 pared and settled as prescribed in section nine hundred and seventy of the 
 code of civil procedure. 
 
 As to any litigation pending prior to September one, nineteen hundred and 
 seven, the provisions of this section as tjiey existed prior to that date shall 
 apply. 
 
 § 91. Who may bring such an action. An action may be brought, as pre- 
 scribed 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 officer of the corporation, having a 
 general superintendence of its concerns. 
 
 § 91-a. Actions against officers ■ by corporation, or receiver or trustee. The ' 
 supreme court shall also have and exercise jurisdiction in equity, at the suit 
 of a corporation, or of a receiver, or trustee in bankruptcy thereof, to compel 
 one or more trustees, directors, managers or other officers of the corporation to 
 account for injury to or losses of the funds, assets or property of the cor- 
 poration, caused by or through any neglect or-failure of the defendants to per- 
 form, or for violation of, their duties. The court must, upon the application 
 of either party, make an order directing the trial by jury of the issue of 
 negligence, and for that purpose the questions to be tried must be prepared 
 and settled as prescribed in section nine hundred and seventy of the code of 
 civil procedure. 
 
 § 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. 
 
 § 100. Action by judgment creditor for sequestration. Where final judgment 
 for a sum of money has been rendered against a corporation created by or vmder 
 ihe laws of the state, and an execution issued thereupon to the sheriff of the 
 county, whore the corporation transacts its general business, or where its 
 principal office is located, has been returned wholly or partly unsatisfied, the 
 judgment creditor may maintain an action to procure a judgment sequestrating 
 the property of the corporation, and providing for a distribution thereof, as 
 prescribed in section one hundred and twelve of this chapter. 
 
 § 101. Action to dissolve a corporation. In either of the following cases, an 
 action to procure a judgment, dissolving a corporation, created by or, under the 
 
1036 BUSINESS CORPORATIONS IN NEW YORK §§ 101-104 
 
 laws of the state, and forfeiting its corporate rights, privileges and franchises, 
 may be maintained, as prescribed in the next section: 
 
 1. Where the corporation has remained insolvent for at least one year. 
 
 2. Where it has neglected or refused, for at least one year, to pay and dis- 
 charge 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 unable 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. 
 
 § 102. Who may bring action to dissolve a corporation. An action specified 
 in the last section, may be maintained by the attorney-general, in the name 
 and in behalf of the people. And whenever a creditor or stockholder of any 
 corporation submits to the attorney-general a written statement of facts, veri- 
 fied 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 creditor or stockholder may apply to the proper court for leave to com- 
 mence such an action, and on obtaining leave may maintain the same accord- 
 ingly; and if there be no person in existence upon whom service of the sum- 
 mons can be made under the provisions of section four hundred and thirty-one 
 of the code of civil procedure, servifie of the summons in such action may be 
 made in such manner as the court upon application by petition may direct. 
 
 § 103. Temporary injunction in action authorized by this article. In an 
 action, brought as prescribed in this article, the court may, upon propf of the 
 lacts authorizing the action to be maintained, grant an injunction 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, during 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 corpora- 
 tion, 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 provisions of title 
 second of chapter seventh of the code of civil procedure, relating to the grant- 
 ing, vacating or modifying of an injunction order, apply to an injunction order, 
 granted as prescribed in this section; except that it can be granted only by 
 the court. 
 
 § 104. Temporary receiver. In such an action, the court may also, at. any 
 stage thereof, appoint one or more receivers of the property of tlie corporation. 
 A receiver, so appointed, before final judgment is a temporary receiver, until 
 final judgment is entered. A temporary receiver has power to collect and receive 
 the debts, demands, and other property of the corporation; to preserve the prop- 
 erty, and the proceeds of the debts and demands collected; to sell or otherwise 
 dispose of the property as directed by the couri; to collect, receive and preserve 
 the proceeds thereof; and to maintain any action or special proceeding, for 
 either of those purposes. He must qualify as prescribed by law for the qualifi- 
 cation of a permanent receiver. Unless additional powers are specially con- 
 ferred upon him, as prescribed in the next section, a temporary receiver has 
 only the powers specified in this section, and those which are incidental to the 
 exercise thereof. 
 
§§ 105-110 GENERAL CORPORATION LAW 1037 
 
 § 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 inter- 
 locutory 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 mate any distribu- 
 tion among the creditors or stockholders, before final judgment, unless he is 
 specially directed so to do by the court. 
 
 § 106. Permanent receiver. A receiver appointed by or pursuant to a final 
 judgment in the action, or a temporary receiver who is continued by the final 
 judgment, is a permanent receiver, and has all the powers and authority con- 
 ferred, and is subject to all the duties and liabilities imposed upon a receiver in 
 article eleven of this chapter. 
 
 § 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, state- 
 ment, 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 aggrieved, unless such neglect or refusal shall be satisfactorily 
 explained to the court, forthwith remove such receiver, and appoint some suit- 
 able person as receiver in his place. Such removal shall not vitiate or annul 
 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, interest at the rate of ten 
 per centum per annum on all moneys due to such party and retained by him 
 more than one day after such demand made as aforesaid. 
 
 § 108. Application for appointment of receiver. Applications made by the 
 attorney-general for the appointment of a receiver of a corporation shall be 
 made in the judicial district in which the action in which the appointment 
 is sought is triable. 
 
 § 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. 
 
 § 110. Separate action may be brought against officers and stockholders. 
 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 plaintifl" 
 in the action may maintain a separate action against them, to procure a, judg- 
 ment, declaring, apportioning and enforcing their liability. 
 
1038 BUSINESS CORPORATIONS IN NEW YORK §§ 111-131 
 
 § 111. Proceedings in such actions. In an action brought as prescribed in 
 either of the last two sections, the court must, when it is necessary, cause an 
 account to be taken of the property and of the debts of the corporation, and 
 thereupon the defendant's liability must be apportioned accordingly; but, if it 
 affirmatively appears, that the corporation is insolvent, and has no property 
 to satisfy its creditors, the court may, without taking such an account, ascertain 
 and determine the amount of each defendant's liability, and enforce the same 
 accordingly. 
 
 § 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 stock- 
 holders, 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 pre- 
 scribed by law, in case of the voluntary dissolution of a corporation. 
 
 § 113. Recovery of stock subscriptions. Where -the stockholders of the cor- 
 poration are parties to the action, if the property of the corporation is not 
 sufficient to discharge its debts, the interlocutory or final judgment, as the case 
 requires, must adjudge that each stockholder pay into court the amount due 
 and remaining unpaid, on the shares of stock held by him, or so much thereof 
 as is necessary to satisfy the debts of the corporation. 
 
 § 114. Liability of directors and stockholders. If it appears, that the prop- 
 erty of the corporation, and the sums collected or collectible from the stock- 
 holders, upon their stock subscriptions, are or will be insufficient to pay the 
 debts of the corporation, the court must ascertain the several sums, for which 
 the directors, trustees, or other officers, or the stockholders of the corporation, 
 being parties to the action, are liable; and must adjudge that the same be 
 paid i;ito court, to be applied, in such proportions and in such order as justice 
 requires, to the payment, of the debts of the corporation. • 
 
 § 115. Effect of this article. This article does not repeal or affect any special 
 provision of law, prescribing that a particular kind of corporation shall cease 
 to exist, or shall be dissolved, in a case or in a manner, not prescribed in this 
 article; or any special provision of law, prescribing the mode of enforcing the 
 liability of the stockholders of a particular kind of corporation. 
 
 § 130. Action by attorney-general to annul corporation when legislature 
 dii;ects. 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 corporation, or continuing its corporate existence, -upon 
 the ground that (lie act was procured upon a fraudulent suggestion, or the 
 concealment of a material fact, made by or with the knowledge and consent 
 of any of the persons incorporated. 
 
 § 131. Action by attorney-general to annul corporation by leave of court. 
 Upon leave being granted, as prescribed in the next section, the attorney-general 
 may bring an action against a corporation created by or under the laws of the 
 state, to procure a judgment, vacating the charter or annulling the existence of 
 the corporation, upon the ground that it has, either 
 
 1. Offended against any provision of an act, by or under which it was created, 
 altered or renewed, or an act amending the same, and applicable to the corpora- 
 tion; 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. 
 
§§ 131-171 GENERAL CORPORATION LAW 1039 
 
 4. Done or omitted any act, which amounts to a surrender of its corporate 
 rights, privileges, and franchises; or, 
 
 5. Exercised a privilege or franchise, not conferred upon it by law. 
 
 § 132. Notice of application for leave to commence action to annul corpora- 
 tion. Before granting leave, the court may, in its discretion, require such 
 previous notice of the application as it thinks proper, to be given to the cor- 
 poration', or any officer thereof, and may hear the corporation in opposition 
 thereto. 
 
 § 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. 
 
 § 134. Injunction and receiver in final judgment. Where any of the matters, 
 specified in section one hundred and thirty or section one hundred and thirty- 
 one of this article, are established in an action, brought as prescribed in either 
 of those sections, the court may render final judgment that the corporation, 
 and each ofiScer 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 dissolved upon its voluntary 
 application, as prescribed in article nine of this chapter. 
 
 § 135. Temporary injunction. In an action, brought as prescribed in this 
 article, an injunction order may be granted, at any stage of the action, restrain- 
 ■ ing 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 frajichise, liberty or privilege, 
 or transacting any business, not allowed by law. Such an injunction is deemed 
 one of those specified in section six hundred and three of the code of civil pro- 
 cedure, and all the provisions of title second of chapter seventh of the code of 
 civil procedure applicable to an. injunction, specified in that section, apply to an 
 injunction granted as prescribed in this section, except that it can be granted 
 only by the court. 
 
 § 136. Filing and publishing judgment. Where final judgment is rendered 
 against a corporation, in an action, brought as prescribed in this article, the 
 attorney-general must cause a copy of the judgment-roll to be forthwith filed in 
 the office of the secretary of state; who must cause a notice of the substance and 
 effect of the judgment, to be published, for four weeks, in a newspaper printed 
 in the county, wherein the principal place of business of the corporation was 
 located. 
 
 § 170. Petition for voluntary dissolution of corporation. If a majority of 
 the directors, trustees, or other officers, having the management of the concerns 
 of a corporation created by or under the laws of the state, discover that the 
 stock, effects, and other property thereof are not sufficient to pay all just 
 demands, for which it is liable, or to afford a reasonable security to those who 
 may deal with it; or if, for any reason, they deem it beneficial to the 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 cor- 
 poration, as prescribed in this article. 
 
 § 171. Directorsi or trustees may be required to petition. It shall be the duty 
 of a majority of the directors or trustees of every corporation created by or 
 under the laws of this state to present a petition as prescribed in the last section 
 whenever directed so to do by a majority in interest of its stockholders. 
 
1040 BUSINESS CORPORATIONS IN NEW YORK §§ 172-177 
 
 § 172. Petition when directors or trustees do not agree. If a corporation, 
 created under a general statute of the state for the formation of corporations 
 or under any special act or charter has an even number of trustees or directors 
 who are equally divided respecting the management of its affairs, or if the stock 
 of such corporation is equally divided into not more than two independent 
 ownerships or interests, or if the entire stock of the corporation is, at that 
 time, owned by the trustees or directors who are even in number or equally 
 divided representing the management of its affairs, or if the stock is so divided, 
 that one-half thereof is owned or controlled by persons favoring .the course of 
 part of the trustees or directors and one-half thereof is owned by persons favor- 
 ing 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. 
 
 § 173. Corporations excepted from two preceding sections. Sections one hun- 
 dred 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 cor- 
 poration formed to rent safes in burglftr and fire-proof vaults, or for the con- 
 struction or operation of a railroad, or for aiding in the construction thereof, 
 or for carrying on the business of banking or insurance, or intended to derive 
 a profit from the loan or use of money. 
 
 § 174. Contents of petition. Tlie petition must show that the case iS one of 
 those specified in sections one hundred and seventy and one hundred and seventy- . 
 two of this chapter, and must state the reasons, which induce the petitioner 
 or petitioners to desire the dissolution of the corporation. A schedule must be 
 annexed to the petition, containing the following matters, as far as the petition 
 or petitioners know, or have the means of knowing the same: 
 
 1. A full and true account of all the creditors of the corporation, and of all 
 unsatisfied engagements, entered into by, and subsisting against, the corporation. 
 
 2. A statement of the name and place of residence of each creditor, 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 person specified 
 in the last subdivision, and the nature of each debt, demand, or other engage- 
 ment. 
 
 4. A statement of the true cause and consideration of the indebtedness to each 
 creditor. 
 
 5. A full, just and true inventory of all the property of the corporation, and of 
 all the books, vouchers, and 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 corporation, 
 specifying the name of each stockholder; his residence, if is it 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. 
 
 § 175. Affidavit to be annexed to petition. An affidavit, made by each of 
 the petitioners, to the effect that the matters of fact, stated in the petition and 
 the schedule, are just and true, so far as the afliant knows or has means of 
 knowing the same, must be annexed to the petition and schedule. 
 
 § 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 ofiice of the corporation is located. 
 
 § 177. Corporations without stockholders. In the case of corporations 
 affected by the provisions of this article and not having stockholders, it shall 
 be sufficient for the purposes of this article to notify, name and refer to the: 
 
§§ 177-184 GENERAL CORPORATION LAW 1041 
 
 " members " of such corporations, instead of " stockholders," as herein pro- 
 vided. 
 
 § 178. Action by court upon petition for dissolution. In a ease 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 week after the granting of the order, why the corporation should 
 not be dissolved. 
 
 § 179. Publication of order to show cause why corporation should not be 
 dissolved. A copy of the order must be published, as prescribed therein, at 
 least once in each of the three weeks immediately preceding the time fixed therein 
 for showing cause, in one or more newspapers, specified in the other, published in 
 the city or county wherein the order is entered. 
 
 § 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 stock- 
 holder of the corporation, or as a person to whom an engagement of the cor- 
 poration 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-oflSce, inclosed in a postpaid wrapper, addressed to the person to be 
 served, at his residence, as stated in the schedule. 
 
 § 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 ofliee of the corporation is located. 
 
 § 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 cor- 
 poration, 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 belonging 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 receiver 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 filial 
 distribution among the creditors and stockholders, before final order in the 
 proceedings, imless he is specially directed so to do by the court. 
 
 § 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 ofliee of the coropration is located. 
 
 § 184. Injunction. If a temporary receiver be appointed, the court may, in 
 its discretion, on like motion and notice, with or without security, at any 
 stage of the proceeding before the final order, grant an injunction, restraining 
 the creditors of the corporation, from beginning any action against the said 
 corporation for the recovery of a sum of money, or from taking any further 
 proceedings in such an action theretofore commenced. Such injunction shall 
 have the same effect and be subject to the same provisions of law as if each 
 creditor upon whom it is served was named therein. 
 
1042 BUSINESS CORPORATIONS IN NEW YORK §§185-192 
 
 § 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. 
 
 § 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 th« parties, and determine the facts. 
 
 § 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 convenient speed. It must 
 contain a statement of the effects, credits, and other property, and of the debts 
 and other engagements, of the corporation, and of all other matters, pertaining 
 to its affairs. 
 
 § 188. Use of original papers on hearing. The court or the referee is entitled 
 to use, upon the hearing, the original petition, and the schedules annexed thereto; 
 and the clerk must transmit them accordingly, upon the written order of the 
 judge, or of the referee. In that case, they must be returned with the 
 decision or report. 
 
 § 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 th& 
 schedules annexed to the original petition, 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. 
 
 § 190. Final order. Where the hearing is before a referee, a motion 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-ofl5ce within the state, where such a notice may be served. The notice may 
 be served as prescribed in the code of civil procedure for the service of a paper 
 upon an attorney in an action. Where the hearing was before the court, a 
 motion for a final order may be made immediately, or at such n time and upon 
 such a notice, as the court prescribes. 
 
 § 191. Permanent receiver. Upon an application for a final order, if it appear 
 to the court in a case specified in section one hundred and seventy of this 
 chapter that the corporation is insolvent, or, in a case specified either in that 
 section, or in sections one hundred and seventy-one and one hundred and seventy- 
 two of this chapter, that for any reason a dissolution of the corporation will 
 be 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. The 
 order shall be entered in the office of the clerk of the county in which the 
 principal business office, or the principal place of business of the corporation is 
 located, and a certified copy thereof, if a banking corporation, shall be filed in 
 the office of the superintendent of banks; if an insurance corporation, in the 
 office of the superintendent of insurance; and if a business, transportation, rail- 
 road or membership corporation, in the office of the secretary of state. Upon the 
 entry of the order and the filing of a certified copy thereof as herein provided, 
 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. 
 
 § 192. Appointment of director, trustee oi other officer or s,tockhblder as 
 receiver. The court may, in its discretion, appoint a director, trustee, or other 
 officer, or a stockholder of the corporation, a receiver of its property. 
 
§§ 193-200 GENERAL CORPORATION LAW 1043 
 
 § 193. Certain sales, transfers and judgments void. A sale, assignment, 
 mortgage, conveyance, or other transfer, of any property of a corporation, made 
 after the filing of a petition as prescribed in this article, in payment of, or as 
 security for, an existing or prior debt, or for any other consideration; or a. 
 Judgment thereafter rendered against the corporation by confession, or upon 
 the acceptance of an offer, is absolutely void, as against the receiver appointed in 
 the special proceeding, and as against the creditors of the corporation. 
 
 § 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 creditors or others interested as the 
 court shall direct, which notice may be made by mail upon all persons and cor- 
 porations 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. 
 
 § 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. 
 
 § 200. Forfeiture of charter or revocation of certificate of authority of cor- 
 porations maintaining nuisances generated in another state. Any corporation 
 organized under the laws of this or any other state which shall so conduct its 
 business, without the state, by the emission or discharge of dust, smoke, gas, 
 steam or offensive, noisome or noxious odors or fumes, so as to unreasonably injure 
 or endanger the health or safety in this state of any considerable number of the 
 people of this state, shall be deemed guilty of a nuisance and the charter of such 
 corporation, if incorporated by or under any law of this state shall be deemed 
 forfeited in the manner prescribed in this section, or its certificate of authority 
 to do business in this state, if incorporated or formed under the laws of any 
 other state, shall be deemed revoked and annulled in the manner prescribed in 
 this section, and in either case shall be reviewed, except as prescribed in the 
 next section. Complaints may be made to the state commissioner of health by 
 any person, association or corporation aggrieved, by petition or complaint in 
 writing, setting forth any act or thing done or- omitted to be done claimed to 
 constitute a nuisance within the provisions of this section. Upon the presenta- 
 tion of such a complaint, the state commissioner of health shall cause a copy 
 thereof to be served upon the corporation complained of, in the manner provided 
 by law for the service of a summons, accompanied by a notice, directed to such 
 corporation, requiring that the matters complained of be abated, or that the 
 charges be answered in writing within a time to be specified by such com- 
 missioner. If the charges contained in such complaint be not thus satisfied and 
 it shall appear to such commissioner of health that there are reasonable grounds 
 therefor, he shall cause such charges to be investigated in such manner and by 
 such means as he shall deem proper and fix a time for a hearing upon such 
 complaint and cause notice thereof to be forwarded to the complainant and the 
 corporation complained of. If the state commissioner of health, or his suc- 
 cessor, after such notice to such corporation, and an opportunity for a hearing 
 being given to it, shall find that such corporation is so conducting its business, 
 without the state, as to unreasonably injure or endanger the health or safety in 
 this state of any considerable number of people of this state, he shall file such 
 findiiigs in duplicate in the offices of the secretary of state and the attorney- 
 general. A certificate of the secretary of state giving notice of the filing of such 
 findings shall be served upon the corporation, or upon the designated agent of a 
 
1044 BUSINESS CORPORATIONS IN NEW YORK §§ 200-220 
 
 foreign corporation authorized to do dusiness in this state, and thereupon the 
 charter of such corporation if incorporated by or under any law of this state, 
 or its certificate of authority to do business in this state, if incorporated or 
 formed under the laws of any other state, shall be suspended for the period of 
 thirty days. Any person who shall exercise or attempt to exercise any powers 
 under the charter of any corporation or by virtue of a certificate of authority 
 which has been so suspended, during the period of such suspension, shall be 
 guilty of a misdemeanor. If at tlie expiration of such period the state com- 
 missioner of health upon further proof and opportunity to such offending cor- 
 poration to be heard shall find and determine that such corporation continues to 
 conduct its business so as to constitute such nuisance, he shall cause a notice 
 of such determination to be served upon the corporation, or upon the designated 
 agent of a foreign corporation authorized to do business in this state, and pub- 
 lished once a week for two successive weeks in the official state paper. On the 
 tenth day after Such service and publication the charter of such corporation, if 
 incorporated by or under any law of this state, shall be deemed forfeited or its 
 certificate of authority to do business in this state, if incorporated or formed 
 under the laws of any other state, shall be deemed to be revoked and canceled. 
 Any person who shall exercise or attempt to exercise any powers under the 
 charter of any corporation which has been so forfeited or by virtue of a certi- 
 ficate of authority which has been so revoked, shall be guilty of a misdemeanor. 
 If, pursuant to this section, the charter of a domestic corporation be forfeited, 
 the attorney-general shall forthwith apply to the supreme court for the appoint- 
 ment of a receiver of its property, who shall have all the powers and duties, so 
 far as practicable, prescribed by articles ten-A and eleven of the general cor- 
 poration law. 
 
 § 201. Reinstatement. When any corporation lias ceased to perform the acta 
 or maintain the nuisance by reason of which its charter has been forfeited or 
 its certificate of authority revoked, and shall satisfactorily guarantee that it 
 will not perform sucli acts or maintain such nuisance in the future, the charter 
 or certificate of authority of such corporation may be revived in the manner 
 prescribed in this section with the same force and effect as if such charter had 
 not been forfeited or such certificate revoked. If such corporation shall file n, 
 petition in writing with the state commissioner of health setting forth that the 
 nuisance in fact no longer exists and it shall appear that there are reasonable 
 grounds therefor, such commissioner of health shall cause an investigation to 
 be made in such manner and by such means as he shall deem proper, and if after 
 such investigation, he shall find and certify that such corporation has ceased to 
 conduct its business so as to constitute such nuisance, and shall file such find- 
 ings in duplicate in the offices of the secretary of state and attorney -general, 
 the charter or certificate of authority of such corporation shall be deemed to be 
 revived with full force and effect A supplemental certificate of the secretary of 
 state shall be served and published in like manner, and upon such service and 
 publication, such revival shall become effective. Such revival shall not, however, 
 prevent a subsequent forfeiture or revocation of the charter or certificate of the 
 same corporation for the same or similar offense. This article shall not be 
 deemed to apply to a corporation organized and existing under the laws of the 
 state of Xew York and subject to the jurisdiction of the public service com- 
 mission under the public service commissions law or principally engaged in fur- 
 nishing power to such public service corporation. 
 
 § 202. Application of article. This article shall not apply to corporations 
 operating railroad or steamboat lines. 
 
 § 220. Dissolution of stock corporation before beginning business. The incor- 
 porators named in any certificate of incorporation filed for the purpose of 
 creating a domestic stock corporation, other than a moneyed or transportation 
 
§§ 220, 221 GENERAL CORPORATION LAW 1045 
 
 corporation, may, before the payment of any part of the capital, and before 
 beginning business, surrender 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 incorporator of such a corporation- shall be deceased, then the aforesaid cer- 
 tificate 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- 
 
 § 221. Dissolution of stock corporation before expiration of time limit. Any 
 stock corporation, except a moneyed or a railroad corporation, may be dissolved 
 before the expiration of the time limited in its certificate of incorporation or in 
 its charter as follows: 
 
 1. The board of directors of any such corporation may at a meeting called for 
 that purpose, upon at least three days' notice to each director, by a vote of a 
 majority of the whole board, adopt a resolution that it is in their opinion advisable 
 to dissolve such corporation forthwith, and thereupon shall call a meeting of the 
 stockholders 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 lias its principal office, at least once a week for three 
 weeks successively next preceding the time appointed for holding such meeting, 
 and on or before the day of the first publication of such notice, a copy thereof 
 shall be served personally on each stockholder, or mailed to him at his last 
 known post-office address. Such meeting shall be held in the city, town or vil- 
 lage 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 
 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 dissolution shall take place and signify such consent, 
 in writing, then such corporation shall file such consent, attested by its secretary 
 or treasurer, 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 corporation, in dupli- 
 cate, 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 principal office of such corporation is located, and at the 
 
1046 BUSINESS CORPORATIONS IN NEW YORK §§ 221-227 
 
 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 tlie same 
 in discharge of debts and obligations of such corporation, and, after paying and 
 adequately providing for the payment of such debts and obligations, to distribute 
 the balance of assets among the stockholders of said corporation, according to 
 their respective right and interests. 
 
 3. Said corporation shall nevertheless continue in existence for the purpose 
 of paying, satisfying and discharging any existing debts or obligations, collect- 
 ing 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 obligations 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 or both of such corporation and distribute them 
 among the stockholders, in lieu of money, in proportion to their interest therein, 
 but no such teale 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 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. 
 
 § 225. Security. A receiver, appointed in an action or special proceeding, 
 must, before entering upon his duties, execute and file with the proper clerk, a 
 bond to the people, with at least two sufficient sureties, in a penalty fixed by 
 the court, judge, or referee, making the appointment, conditioned for the faith- 
 ful 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 section does not apply to a case v.'here 
 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, having 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 Kis accounts not less- than eight days before 
 the day set for the hearing on said accounting. The same notice must be 
 given to such surety or sureties where the accounting is ordered on the petition 
 of a person or persons other than the receiver, and in no case shall the 
 receiver's accounts be passed, settled or allowed, unless the said notice provided 
 for in this section shall have first been given to the surety or sureties on the 
 ofiicial bond of such receiver. 
 
§§ 230-239 GENERAL CORPORATION LAW 1047 
 
 § 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. 
 
 § 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. 
 
 § 232. Receiver's title to property. Such receivers shall, from the time of 
 their having filed the security required by law, be vested with all the property, 
 real or personal, vested or contingent, of the corporation. 
 
 § 233. Transfer of assets of corporation to receiver. In all eases where 
 receivers have been or shall be appointed for any corporation of this state other 
 than an insurance company on application by the attorney-general, all property, 
 real and personal, and all securities of any kind and nature belonging to sucfi 
 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. 
 
 § 234. Security of receiver. Before entering upon the duties of their appoint- 
 ment, 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. 
 
 § 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. 
 
 § 236. Authority where there is more than one receiver. When there are 
 more receivers than one appointed, the debts and property of the corporation 
 may be collected and received by any one of them; and when there are more 
 than two receivers appointed every power and authority conferred^ on the 
 receivers may be exercised by any two of them. 
 
 § 237. Surviving receivers. The survivor or survivors of any receivers shall 
 have all the powers and rights given to receivers. All property in the hands 
 of any receiver at the time of his death, removal or incapacity, shall be 
 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. 
 
 § 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. 
 
 § 239. General powers of receivers. The said receivers shall have power: 
 
 1. To sue in their own names or otherwise, and recover all the property, 
 debts and things in action belonging or due or to become due to such corpora- 
 tion, whether accruing or maturing before or after the dissolution thereof and 
 whether vested or contingent at the time of such dissolution in the same 
 manner and with the like effect as such corporation might or could have done 
 if no receivers had been appointed; and no set-off shall be allowed in any such 
 suit, for any debt, unless it was owing to such creditor by such corporation 
 before the appointment of the receiver of such corporation, or unless it shall 
 have been duly contracted by such receiver subsequent to his appointment; 
 notwithstanding the notice to creditors the receivers may sue for and recover 
 any property or effects of the corporation and any debts due to it, at any time, 
 before the day appointed for the delivery or payment thereof; 
 
1048 BUSINESS CORPORATIONS IN NEW YORK §§ 239,240 
 
 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 attaching and keeping the same, to be allowed by the 
 court having jurisdiction; 
 
 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; 
 
 5. 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; 
 
 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 mort- 
 gages, 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 discharge all demands 
 against such person. 
 
 § 240. Power of receiver to institute proceedings to recover as,sets. When- 
 ever 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 appointment was made, 
 that he has good reason to believe that any officer, stockholder, agent or em- 
 ployee 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 surrendered to the receiver thereof; or that any person can testify con- 
 cerning 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 
 embezzlement, concealment, withholding, possession, control or wrongful dispo- 
 sition of such property; and at the time of making such order or at' any time 
 thereafter, the court may, in its discretion, enjoin and restrain 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 
 
§§ 240, 241 GENERAL CORPORATION LAW 1049 
 
 might tend to convict him of a criminal offense; but his testimony 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 serving 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 subpcena to appear and testify in 
 an action. 
 
 Any person appearing for examination in obedience to such order shall be 
 sworn by the court or referee to tell the truth, a;nd shall be entitled to be 
 represented on such examination by counsel, and may be cross-examined, or 
 may make any voluntary statement in his own behalf concerning the subject of 
 his examination which may seem to him desirable or pertinent thereto. 
 
 The court before which such examination is taken, as well as the referee, if one 
 be appointed for that purpose, shall have power to adjourn such examination 
 from time to time, and may rule upon any question or objection arising in the 
 course of such examination, to the same extent that might be done if the person 
 so examined were testifying as a witness in the trial of an action. 
 
 When the examination of any person under such order shall be concluded, the 
 testimony shall be signed and sworn to by the person so examined, and shall be 
 filed in the office of the clerk of the county where the action is pending, or was 
 tried, in which the receiver was appointed; and if from such testimony it shall 
 appear to the satisfaction of the court that any person so examined is wrong- 
 fully concealing or withholding, or has in his possession or under his control, 
 any property which of right, belongs to such receiver, the court may make an 
 order commanding the person so examined forthwith to deliver the same to 
 such receiver, who shall hold the same subject to the further order of the court 
 in relation thereto; and otherwise, the court may, at the conclusion of any such 
 examination, make such final order in the premises as the interests of justice 
 require. 
 
 § 241. Power of receiver in the settlement of controversies. If any contro- 
 versy shall arise between the receivers and any other person, 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 accord- 
 ing to the rules and practice of the supreme court. 
 
 When any witness to such controversy shall reside out of the county where 
 the said receivers resided at the time of their appointment, the referee or 
 referees appointed to hear said controversy shall have power to issue a com- 
 mission or commissions in like manner as justices of the peace are now author- 
 ized 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. 
 
1050 BUSINESS CORPORATIONS IN NEW YORK §§ 241-246 
 
 The officer before whom they shall be selected, shall certify such selection in 
 writing. Such certificate, or the written agreement of the parties, shall be filed 
 by the receivers in the office of a clerk of the supreme court, and an order shall 
 thereupon be entered by such clerk in vacation or in term, appointing the per- 
 sons 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 pending therein. 
 
 The report of the referees shall be filed in the same office where the order 
 for their appointment was entered, and shall be conclusive on the rights of 
 the parties, if not set aside by the court. 
 
 § 242. Power of receiver to employ counsel. If the receiver of a corpora- 
 tion employs counsel he shall within three months after he has qualified as 
 receiver enter into a written contract fixing the compensation of such counsel 
 at not exceeding a certain amount or a certain percentage of the sums received 
 and disbursed by him, which contract must be approved by the supreme court, 
 on at least eight days' notice te 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 expenses thereof, and no allowance shall be made for 
 costs or fees to any attorney of such policy-holder or depositor. It shall be 
 unlawful for receivers of an insurance, banking or railroad corporation, or trust 
 company to pay to any attorney or counsel any costs, fees or allowances until 
 the amounts thereof shall have been stated to the special term as provided in 
 section two hundred and forty-nine of this chapter, 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. 
 
 § 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 property, upon such trusts and for such purposes as 
 the court directs, subject to the direction of the court, from time to time, 
 respecting the disposition thereof. 
 
 § 244. Power of receiver to recover stock subscriptions. If there shall be 
 any sum remaining due upon any share of stock subscribed in such corporation, 
 the receiver shall immediately proceed to recover the same, unless the person 
 so indebted shall be wholly insolvent; and for that purpose may commence and 
 prosecute any action or proceeding for the recovery of such sum, without the 
 consent of any creditors of suph corporation. 
 
 § 245. Duty of receiver to convert assets into money. The receivers shall, 
 as speedily as possible, convert the property, real and personal, of the corpora- 
 tion into money. 
 
 § 246. Duty of receiver as to private sales. A receiver duly appointed in 
 this state by and pursuant to a judgment in an action, or by and pursuant to an 
 order in a special proceeding, may, upon application to the court by which such 
 judgment was rendered, or such order was made, and upon notice to such parties 
 as may be entitled to notice of applications made in such action or special pro- 
 ceeding, be authorized by the said court to sell or convey the property, whether 
 
§§ 246-251 GENERAL CORPORATION LAW 1051 
 
 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. 
 
 § 247. Duty of receiver to keep accQunts. 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. 
 
 § 248. Duty of receiver to serve copy of report upon attorney-general and 
 superintendent of banks. All receivers of insolvent corporations who are 
 required by law to make and file reports of their proceedings shall at the time of 
 making and filing such reports, serve a copy thereof upon the attorney-general 
 of this state, and receivers of such corporations as report to, and are under 
 the supervision of, the banking department shall on the first day of 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 respective trusts. 
 In case any receiver of an insolvent corporation shall neglect to make and file 
 a report of his proceedings for thirty days after the time he is required by law 
 to make and file such report, or shall neglect for the same length of time to 
 serve a copy thereof on the attorney-general, as required by this section the 
 attorney-general may make a motion in the supreme court for an order to 
 compel the making and filing and serving a copy on him of such report, or for 
 the removal of such receiver from his office. 
 
 § 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 com- 
 pany, to present every six months to the special term of the supreme court, 
 held in the judicial district wherein the place of trial or venue of the action 
 or special proceeding in which he was appointed may then be, on the first day 
 of its first sitting, after the expiration of such six months, and to file a copy 
 of the same, if a receiver of a bank or trust company, with the superintendent 
 of banks; if a receiver of an insurance 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. 
 
 § 250. Duty of receivers to give notice to creditors. The receivers immedi- 
 ately upon their appointment, shall give notice thereof which shall be published 
 for three weeks in a newspaper printed in the county where the principal place 
 of conducting the business of such corporation shall have been situated; and 
 therein shall require. 
 
 1. All persons indebted to such corporation, by a day and at a place therein 
 to be specified, to render an account of all debts and sums of money owing by 
 them respectively, to such receivers and to pay the same. 
 
 2. All persons having in their possession any property or effects of such 
 corporation to deliver the same to the said receivers by the day so appointed. 
 
 3. All the creditors of such corporation to deliver their respective accounts 
 and demands to the receivers or one of them, by a day to be therein specified, 
 not less than forty days from the first publication of such notice. 
 
 4. All persons holding any open or subsisting contract of such corporation, 
 to present the same in writing and in detail t() such receivers, at the time and 
 place in such notice specified. 
 
 § 251. Delivery of property and payment of debts to receiver after notice. 
 After the first publication of the notice of the appointment of receivers, every 
 
1052 BUSINESS CORPORATIONS IN NEW YORK §§ 251-259 
 
 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. 
 
 § 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. 
 
 § 253. Duty of receiver to call creditors' meeting. They shall call a general 
 meeting of the creditors of such corporation, within four months from the time 
 of their appointment by a notice to be published in the same manner, as herein- 
 before 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. 
 
 § 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. 
 
 § 255. Deduction of disbursements and commissions by receiver. Out of the 
 moneys in their hands the receivers may first deduct all the necessary disburse- 
 
 nts made by them in the discharge of their duty and such commissions as 
 may be allowed by law. 
 
 § 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 engagements of any kind, the receivers 
 may, with the consent of the party holding such engagement, cancel and discliarge 
 the same, by refunding to such party the premium or consideration paid thereon 
 by such corporation, or so much thereof as shall be in the same proportion to 
 the time which shall remain of any risk 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. 
 
 § 257. Retention of funds for subsisting contracts and pending suits. The 
 receivers shall retain out of the moneys in their hands, a suiBcient amount to 
 pay the sums, which they are hereinbefore authorized to pay, for the purpose 
 of cancelling 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. 
 
 § 258. Payment of debts not due. Every person to whom a corporation shall 
 be indebted on a valuable consideration, for any sum of money not due at the 
 time of such distribution, but payable afterwards, shall receive his proportion 
 with other creditors, after deducting a rebate of legal interest upon tlie sum 
 distributed, for the time imexpired of such credit. 
 
 § 259. Allowance of set-offs. Where mutual credit has been given by any 
 corporation, and any other person, or mutual debts have subsisted between such 
 corporation and any other person, the receivers may set off such credits or 
 debts, and pay the proportion or receive the balance due. But no set-ofiF shall be 
 
§§ 259-265 GENERAL CORPORATION LAW 1053 
 
 allowed of any claim or debt, which would not have been entitled to a dividend, 
 as hereinbefore directed. 
 
 No set-off shall be allowed by such receivers, of any claim or debt, which 
 shall have been purchased by, or transferred to, the person claiming its allow- 
 ance, which could not have been set off by him, in a suit brought by such 
 receivers. 
 
 § 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. 
 
 § 261. Order of payment by receiver. The receivers shall distribute 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. 
 
 § 262. Failure to file claim before first dividend. Every creditor who shall 
 have neglected to exhibit his demand before the first dividend, and who shall 
 deliver his accoimt 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. 
 
 § 263. Second dividend by receiver. If the whole of the property of such 
 corporation be not distributed on the first dividend, the receiver 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 coimty 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 corporation, except to the creditors having 
 suits against it, or against the receivers, pending at the time of such second 
 dividend, and except of the moneys which may be retained to pay such creditors, 
 as herein provided. 
 
 § 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 corporation, in proportion to the respective 
 amounts paid in by them, severally, on their shares of stock. 
 
 § 265. Disposition of moneys retained by receiver for suits. When any suit 
 pending at the time of the second dividend shall be terminated, they shall apply 
 the moneys retained in their hands for that purpose, to the payment of the 
 amount recovered, and their necessary charges and expenses; and if nothing 
 shall have been recovered, they shall distribute such moneys, afte* deducting 
 their expenses and costs, among the creditors and stockholders of the corpo- 
 ration, in the same manner as herein directed in respect to a second dividend. 
 
1054 BUSINESS COEPORATIONS IN NEW YORK §§ 266-275 
 
 § 266. Duty of receiver as to unclaimed dividend. If any dividend tliat 
 sliall have beien declared, shall remain unclaimed by the person entitled thereto 
 for one year after the same was declared, the receivers shall consider it as relin- 
 quished, and shall distribute it, on any subsequent dividend, among the other 
 creditors. 
 
 §■ 267. EfEect 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 having claims against such 
 corporation, by virtue of any open or subsisting 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. 
 
 § 268. Final accounting by receiver. A receiver shall apply within one year 
 after qualifying as such for a final settlement of his accounts and an order 
 for distribution, or shall apply to the court upon notice to the attorney-general 
 for an extension of time, setting forth the reasons why he is unable to close his 
 accounts, which order may be granted in the discretion of the court. The 
 attorney-general or any creditor, or any party interested, m?iy 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 ihe 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 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. 
 
 § 26!). Notice of final accounting. Previous to rendering such account the 
 receivers shall insert a notice of their intention to present the same, once in 
 eacli 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 
 nhich such account will be rendered. Said receivers shall also give notice to the 
 sureties on their official bonds, as provided in section two hundred and twenty- 
 seven of this chapter. 
 
 § 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 dis- 
 allow 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 cor- 
 poration. 
 
 § 271. Reference of final account. The referee to whom such account ehall 
 be referred, shall hear and examine the proofs, vouchers and documents offered 
 for or against such account, ajid shall report thereon fully to the court. 
 
 § 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. 
 
 § 273. Removal of receiver. Such receivers may be removed by the court. 
 
 § 274. Vacancy. Any vacancy created by removal, death or otherwise, may 
 be supplied by the court. 
 
 § 275. Renunciation by receiver. Any receiver who shall be desirous of 
 renouncing the trust vested in him may apply to the court from whim his 
 
§§ 275-278 GENERAL CORPORATION LAW 1055 
 
 appaintment was received, for an order to all persons interested, to show cause 
 why such renunciation should not be accepted. 
 
 iJuch application shall be accompanied by a full, true and just account of 
 all the transactions of such receiver, and particularly of the property, moneys 
 and effects received by him ; of all payments made, whether to creditors or other- 
 wise; 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 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 collection 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 thereupon cease; but 
 he shall, notwithstanding, remain subject to any liability he may have incurred, 
 at any time previous to the granting of such order, in the management of his 
 tru^t. 
 
 The expense of all proceedings in effecting such renunciation shall be paid by 
 the receiver making the application. 
 
 § 276. Control of receiver by court. The receivers shall be subject to the 
 control of the court and may be compelled to account at any time. 
 
 § 277. Commissions and expenses of receiver in voluntary dissolution. A 
 receiver appointed pursuant to article nine- is entitled, in addition to his neces- 
 sary 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 commensurate with the 
 services rendered by said receiver. 
 
 § 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 commissiojis, not exceeding two and one-half per centum upon the suma 
 
1056 BUSINESS CORPORATIONS IN NEW YORK §§ 278-304 
 
 received and disbursed by him, as the court by which or the judge by whom 
 he is appointed allows, but except upon a final accounting such a receiver shall 
 not receive on account of his services for. any one year a greater amount than 
 twelve thousand dollars, nor for any period less than a year more than at that 
 rate. Upon final accounting, the court may make an additional allowance to 
 such receiver, not exceeding two and one-half per centum upon the sums received 
 and disbursed by him, if the court is satisfied that he has performed services 
 that fairly entitle him to such additional allowance. Where more than one 
 receiver shall be appointed, the compensation herein provided shall be divided 
 between said receivers. 
 
 § 300. Application of preceding articles to certain corporations. Articles fifth, 
 sixth or seventh of this chapter do not apply to «, religious corporation; or to 
 ii municipal or other political corporation, created by the constitution, or by 
 or under the laws of this state; or to any corporation which the regents of the 
 university have power to dissolve, except upon the application of the regents, 
 or of the trustees of such a corporation; and in aid of its liquidation under such 
 dissolution. 
 
 § 301. OfScers and agents may be compelled to testify in certain actions. 
 In an action, brought as prescribed in article fifth, sixth or seventh, a stock- 
 holder, ofiSeer, alienee, or agent of a corporation, is not excused from answering 
 a question, relating to the maJiagement 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 ofi'ense, or to subject him to a penalty or forfeiture. Bvit his 
 testimony shall not be used, as evidence against him, in a criminal action or 
 special proceeding. 
 
 § 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 defendants, or any of them, for the recovery 
 of a sum of money, or from taking any further proceedings in such actions, 
 theretofore commenced. Such an injunction has the same effect, and, except 
 as otherwise expressly prescribed in this section, is subject to the same pro- 
 visions 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. 
 
 § 303. Creditors of corporation may be brought in to prove their claims in 
 certain actions. In such an action, the court may, at any stage of the action, 
 before or after final judgment, make an order requiring all the creditors of the 
 corporation to exhibit and prove their claims, and thereby make themselves par- 
 ties to the action, in such a manner, and in such a reasonable time, not less 
 than six months from the first pviblication 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. 
 
 § 304. When attorney-general must brii^ certain actions. Where the attorney- 
 general has good reason to believe, that an action can be maintained in behalf 
 
§§ 304-309 GENERAL CORPORATION LAW 1057 
 
 of the people of the state, as prescribed in articles fifth, sixth or seventh of the 
 chapter, except section one hundred and thirty of this chapter, he must bring 
 an action accordingly, or apply to a competent court for leave to bring an 
 action, as the case requires; if, in his opinion, the public interests require that 
 an action should be brought. In a case where the action can be brought only 
 by the attorney-general in behalf of the people, if a creditor, stockholder, 
 director, or trustee of the corporation, applies to the attorney-general for that 
 purpose, and furnishes the security required by law, the attorney-general must 
 bring the action, or apply for leave to bring it, if he has good reason to believe, 
 that it can be maintained. Where such an application is made section nineteen 
 hundred and eighty-six of the code of civil procedure applies thereto, and to 
 the action brought in pursuance thereof. 
 
 § 305. Requisites of injunction against corporations in certain cases. An 
 injunction order, suspending the general and ordinary business of a corporation, 
 or suspending from office, or restraining from the performance of his duties, a 
 trustee, director, or other officer thereof, can be graYited 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. 
 
 § 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 seventh of this 
 chapter. 
 
 2. An action brought for the foreclosure of a mortgage upon the property, 
 of which the receiver is appointed, where the mortgage debt, or the interest 
 thereupon, has remained unpaid, at least thirty days after it was payable, and 
 after payment thereof was duly demanded of the proper officer of the corpora- 
 tion and where either the income of the property is specifically mortgaged, or the 
 property itself is probably insufficient to pay the mortgage debt. 
 
 3. An action brought by the attorney-general, or by a stockholder, to preserve 
 the assets of a corporation, having no officer empowered to hold the same. 
 
 4. A special proceeding for the voluntary dissolution of a corporation. 
 
 5. Upon the application of the regents of the university, in aid of the liqui- 
 dation of a corporation whose dissolution they contemplate or have decreed; 
 or upon the application of the trustees of such a corporation, with notice to the 
 regents. 
 
 Where the receiver is appointed in an action, otherwise than by or pursuant 
 to a final judgment, notice of the application for his appointment must be 
 given to the proper officer of the corporation. 
 
 § 307. Juaicial suspension or removal of officer of corporation. A trustee, 
 director, or other officer of a corporation shall not be suspended or removed 
 from office, by a court or judge, otherwise than by the final judgment of a 
 competent court, in an action brought by the attorney-general, as prescribed 
 in section ninety of this chapter. 
 
 § 308. Application of the last three sections. The last three sections apply 
 to an action or special proceeding, against a corporation created by or under 
 the laws of the st^te, 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. 
 
 § 309. Misnomer not available in. action against stockholder. Wliere an 
 action, authorized by a law of the state, is brought against one or more per- 
 sons, 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 
 B. C. N. Y.— 67 
 
1058 BUSINESS CORPORATIONS IN NEW YORK §§ 309-313 
 
 ground that the plaintiflF has joined with him, as a defendant in the action, a 
 person, whose name appears on the stock-books of the corporation, as a stock- 
 holder 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, am«nd 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. 
 
 § 310. Appraisal of property of insolvent corporation. Whenever by reason 
 of the provisions of any law of this state it shall become necessary to appraise 
 in whole or In part the property of any corporation in the hands of a 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. 
 
 § 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, creditors, policy-holders, depositors or 
 other beneficiaries interested in the proper and speedy distribution of the assets 
 of any Insolvent corporation will be subserved thereby, make a motion in the 
 supreme court at a special term thereof, in any judicial district: 
 
 1. For an order removing the receiver of any insolvent corporation and 
 appointing a receiver thereof in his stead, or, 
 
 2. To compel him to account, or, 
 
 3. For such other and additional order or orders as to him may seem proper 
 to facilitate the closing up of the affairs of such receivership, and 
 
 Any appeal from any order made upon any motion under this section shall be 
 to the appellate division of the department in which such motion Is made. 
 
 § 312. Service of papers; upon attorney-general. A copy of all motions and 
 all motion papers, and a copy of any other application to the court, together 
 with a copy of the order or judgment to be proposed thereon to the court, in 
 every action or proceeding for the dissolution of a 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 judgment, 
 unless the attorney-general shall appear on the return day and shall have been 
 heard In relation thereto; and any order or judgment granted in any action or 
 proceeding aforesaid, without such service of such papers upon the attorney- 
 general, shall be void, and no receiver of any such corporation shall pay to any 
 person any money directed to be paid by any order or judgment made in any 
 such action or proceeding, until the expiration of eight days after a certified 
 copy of such order or judgment shall have been served as aforesaid upon the 
 attorney-general. 
 
 § 313. Designation of depositories of funds in order appointing receiver. All 
 orders appointing receivers of corporations shall designate 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 
 
§§ 313-331, 2 GENERAL CORPORATION — LABOR LAW 1059 
 
 funds shall be made elsewhere, except upon the order of the court upon due 
 notice given to the attorney-general. 
 
 § 314. Application to the court in certain actions and proceedings. AH appli- 
 cations to the court shall be made in the judicial district where the principal 
 office of the corporation against which proceedings are taken is located, except- 
 ing 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. 
 
 § 315. County wherein action may be brought by attorney-general on behalf 
 of the people. An action or proceeding brought by the attorney-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. 
 
 § 316. Preferences in actions or proceedings by or against receivers. AU 
 actions or other legal proceedings and appeals therefrom or therein brought by 
 or against a receiver of any of the insolvent corporations referred to in this 
 chapter, shall have a preference upon the calendars of all courts next in order 
 to actions or proceedings brought by the people of the state of New York. 
 
 § 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. 
 
 § 321. Conflicting corporate laws. If in any corporate law there is or shall 
 be any provision in conflict with any provisions of this chapter or of the stock 
 corporation law, the provisions so conflicting shall prevail, and the provision of 
 this chapter or of the stock corporation law with which it conflicts shall not 
 apply in such a case. If in any such law there is or shall be a provision relating 
 to a matter embraced in this chapter or in the stock corporation law, but not 
 in conflict with it, such provision in such other law shall be deemed to be in 
 addition to the provision in this chapter or in the stock corporation law relating 
 to the same subject-matter, and both provisions shall in such case, be applicable. 
 
 § 331. Construction. Nothing in this chapter shall be construed to impair 
 any right or liability which any existing corporatioii, its officers, directors, stock- 
 holders 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 teikes efl'ect, by virtue of any special act of the legislature creating such 
 corporation or creating or defining any such right or liability, unless such 
 special act is repealed by this chapter or the other general laws hereinbefore 
 mentioned. 
 
 LABOR LAW. 
 
 § 2. Definitions. 1. Whenever used in this chapter: 
 
 The term " employee " means a mechanic, workingman or laborer who works 
 for another for hire. 
 
 The term " employer " means the person employing any such mechanic, working- 
 man or laborer, whether the owner, proprietor, agent, superintendent, foreman 
 or other subordinate. 
 
 The term " factory " includes any mill, workshop, or other manufacturing 
 establishment and all buildings, sheds, struetures or other places used for or in 
 connection therewith, where one or more persons are employed at manufacturing, 
 including making, altering, repairing, finishing, bottling, canning, cleaning or 
 laundering any article or thing, in whole or in part, except, dry dock plants 
 engaged in making repairs to ships, and except power houses, generating plants, 
 bams, storage houses, sheds and other structures owned or operated by a public.- 
 
1060 BUSINESS CORPORATIONS IN NEW YORK § 2 
 
 service corporation, other than construction or repair shops, subject to the juris- 
 diction of the public service commission under the pxiblic service commissions 
 law. The provisions of this chapter affecting structural changes and alterations, 
 shall not apply to factories or to any buildings, sheds, structures, or other places 
 used for or in connection therewith, where less than six persons are employed at 
 manufacturing except as otherwise prescribed by the state industrial commission 
 in its rules. 
 
 The term " factory building " means any building, shed or structure which, or 
 any part of which, is occupied by or used for a factory, and in which at least 
 one-tenth or more than twenty-five of all the persons employed in the building 
 are engaged in work for a factory but. shall not include a building used exclu- 
 sively for dwelling purposes above the first story. The provisions of this chapter 
 shall, so far as prescribed by the state industrial commission in its rules, also 
 apply to any building, not a factory building within the meaning thereof, any 
 part of which is occupied by or used for a factory. 
 
 The term " mercantile establishment " means any place where goods, wares 
 or merchandise are offered for sale and shall include any building, shed or 
 structure, or any part thereof, which is occupied in connection with such establish- 
 ment. The provisions of this chapter affecting structural changes and alterations, 
 shall not apply to mercantile establishments where less than six persons are 
 employed except as otherwise prescribed by the state industrial commission in 
 its rules. 
 
 The term " tenement house " means any house or building, or portion thereof, 
 which is either rented, leased, let or hired out, to be occupied, or is occupied in 
 ■whole or in part as the home or residence of three families or more living inde- 
 pendently of each other and doing their cooking upon the premises, and includes 
 apartment houses, flat houses and all other houses so occupied, and for the pur- 
 poses of this chapter shall be construed to include any building on the same lot 
 with any such tenement house and which is used for any of the purposes specified 
 in section one hundred of this chapter. 
 
 The term " department " means the department of labor of the state of 
 New York. 
 
 The term " commission " means the industrial commission of the state of 
 New York. 
 
 The term " rule " means any rule or regulation made by the industrial com- 
 mission and any amendment or repeal thereof. 
 
 Whenever, in this chapter, authority is conferred upon the state industrial 
 commission, it shall also be deemed to include its deputies or a deputy acting 
 under its direction. Whenever the enforcement of any of the provisions of this 
 cliapter is committed to any local officer or officers, by any law now in force or 
 hereafter enacted, such local officer or officers with respect to the matters thus 
 committed to them shall be deemed to have the powers and jurisdicti9n of the 
 industrial commission of the state of New York to the extent specified in the law 
 committing the enforcement of such provisions to such local officer or officers. 
 
 2. Prohibited employment. Whenever the provisions of this chapter prohibit 
 the employment of a person in certain work or under certain conditions, the 
 employer shall not permit, suffer or allow such person to so work, either with 
 or without compensation, and in a prosecution or action therefor lack of consent 
 on the part of the employer shall be no defense. 
 
 3. Work shall be deemed to be done for a factory within the meaning of this 
 chapter whenever it is done at any place, upon the work of a factory or upon 
 any of the materials entering into the product of the factory, whether under con- 
 tract or arrangement with any person in charge of or connected with such factory 
 directly or indirectly through the instrumentality of one or more contractors or 
 other third persons. 
 
§§9-12,280 LABOR — PENAL LAWS lOttl 
 
 § 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 corporation, 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, telegraph and telephone 
 conipany, every express company, every corporation 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 cor- 
 poration thereof, either as a contractor or a subcontractor 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 corporation shall hereafter 
 pay such employees in scrip, commonly known as store money-orders. No person, 
 firm or corporation engaged in carrying on public work under contract with the 
 state or with any municipal corporation of the state, either as a contractor or 
 subcontractor therewith, shall, directly or indirectly, conduct or carry on what 
 is commonly known as a company store, if there shall, at the time, be any store 
 selling supplies within two miles of the place where such contract is being 
 executed. Any person, firm or corporation violating the provisions of this section 
 shall be guilty of a misdemeanor. 
 
 § 11. When wages are to be paid. Every corporation or joint-stock associa- 
 tion, 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 payment. 
 
 But every person or corporation operating a steam surface railroad 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 proceeding 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 section. If a corporation or joint- 
 stock association, its lessee or other person carrying on the business thereof, 
 shall fail to pay the wages of all its employees, 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 commissioner of labor in his name of ofiice in a 
 civil action. 
 
 PENAL LAW. 
 
 § 280. Corporations and voluntary associations not to practice law. It shall 
 be unlawful for any corporation or voluntary association to practice or appear 
 as an attorney-at-law for any person other than itself in any court in this state 
 or before any judicial body, or to make it a business to practice as an attorney- 
 at-law, for any person other than itself, in any of said courts or to hold itself 
 out to the public as being entitled to practice law, or render or furnish legal 
 services or advice, or to furnish attorneys or counsel or to render legal services 
 of any kind in actions or proceedings of any nature or in any other way or 
 manner, or in any other manner to assume to be entitled to practice law or to 
 assume, use or advertise the title of lawyer or attorney, attorney-at-law, or 
 equivalent terms in any language in such manner as to convey the impression 
 that it is entitled to practice law, or to furnish legal advice, services or counsel, 
 or to advertise that either alone or together with or by or through any person 
 whether a duly and regularly admitted 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 
 
1062 BUSINESS CORPORATIONS IN NEW YORK §§ 280-660 
 
 any corporation or voluntary association 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 
 dr may be instituted in any court or before any judicial body, or for the purpose 
 of so representing any person in the pursuit of any civil remedy. Any cor- 
 poration or voluntary association violating the provisions of this section shall 
 be liable to a fine of not more than five thousand dollars and every efficer, trus- 
 tee, director, agent or employee of such corporation or voluntary association 
 who directly or indirectly engages in any of the acts herein prohibited or assists 
 such corporation or voluntary association to do such prohibited acts is guilty 
 of a misdemeanor. The fact that 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 or voluntary association to do the 
 acts prohibited herein nor shall such fact be a defense upon the trial of any 
 of the persons mentioned herein for a violation of the provisions of this section. 
 This section shall not apply to any corporation or voluntary association law- 
 fully engaged in a business authorized by the provisions of any existing statute, 
 nor to a corporation or voluntary association lawfully engaged in the examina- 
 tion and insuring of titles to real property, nor shall it prohibit a corporation 
 or voluntary association from employing an attorney or attorneys in and about 
 its own immediate affairs or in any litigation to which it is or may be a 
 party, nor shall it apply to organizations organized for benevolent or charitable 
 purposes, or for the purpose of assisting persons without means in the pursuit 
 of any civil remedy, wliich ejtiistence, organization or incorporation may be 
 approved by the appellate division of the supreme court of the department in 
 which the principal office of said corporation or voluntary association may be 
 located. 
 
 Nothing lierein contained shall be construed to prevent a corporation from 
 furnishing to any person, lawfully engaged in the practice of the law, such 
 information or such clerical services in and about his professional work as, 
 except for the provisions of this section, may be lawful, provided that at all 
 times the lawyer receiving such information or such services shall maintain 
 full professional and direct responsibility to his clients for the information and 
 services so received. But no corporation shall be permitted to render any serv- 
 ices which cannot lawfully be rendered by a person not admitted,, to practice 
 law in this state nor to solicit directly or indirectly professional employment 
 for a lawyer. 
 
 § 660. Frauds in the organization of cotporations. A person who: 
 
 1. Without authority Subscribes the name of another to or inserts the name 
 of another in any prospectus, circular or other advertisement or announcement 
 of any corporation or joint-stock association existing or intended to be formed, 
 with intent to permit the same to be published, and thereby to lead persona 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, know- 
 ing that such person does not intend in good faith to comply with the terms 
 thereof, or under any understanding or agreement, that the terms of such sub- 
 scri'ption or agreement are not to be complied with or enforced. 
 
 Is guilty of a misdemeanor. 
 
§§ 661, 662 PENAL LAW 1063 
 
 § 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 corporation, who knowingly exhibits a false, 
 forged or altered book, paper, voucher, security or other instrument of evidence 
 to any public ofBcer or'board authorized by law to examine the organization of 
 such corporation, 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 punish- 
 able by imprisonment in a state prison not exceeding ten years. 
 
 § 662. Fraudulent issue of stocks and bonds. An officer, agent or other person 
 m the service of any joint-stock company or corporation 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 government or country, who wilfully and knowingly 
 with intent to defraud: 
 
 1. Sells, pledges or issues, or causes to be sold, pledged or issued, or signs 
 or executes, or causes to be signed or executed with intent to sell, pledge or 
 issue, or causes to be sold, pledged or issued, any certificate or instrument pur- 
 porting to be a certificate of evidence of the ownership of any sliare or shares 
 of such company or corporation, 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 ^ower of such company or corporation or of the limit 
 imposed by law or otherwise upon its power to create or issue stock or evidences 
 of debt; or, 
 
 2. Reissues, sells, pledges or disposes of, or causes to be reissued, sold, pledged 
 or disposed of, and surrendered or canceled certificates, 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 dolIaVs, or by both. 
 
 § 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 intended: 
 
 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 required 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 author- 
 ized 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 agreement to sell the same, 
 unless at the time of such sale or agreement he is an actual owner of such 
 share. 
 
1064 BUSINESS CORPORATIONS IN NEW YORK §§ 664-668 
 
 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. 
 
 § 665. Misconduct of directors, ofiacers, agents and employees of corporations. 
 A director, ofiBcer, agent or .employee of any corporation or joint-stock associa- 
 tion who: 
 
 1. Knowingly receives or possesses himself of any of its property 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 containing 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 corporation as required by 
 law, or to exhibit or allow the same to be inspected, and extracts to be taken 
 therefrom by any person entitled by law to inspect the same, or take extracts 
 therefrom; or, 
 
 5. If a notice of an application for an injunction affecting the property or 
 business of such joint-stock association or corporation is served upon him, 
 omits to disclose the fact of such service and the time and place of such appli- 
 cation to the other directors, ofiicers 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. 
 
 § 667. Presumption of knowledge of corporate condition and business and of 
 assent thereto by directors,; definitions. It is no defense to a prosecution for 
 a violation of tlie provisions of this article and article twenty-six, that the 
 corporation is a foreign corporation, if it carries on business or keeps an oflBce 
 therefor in this state. 
 
 The term " director " as used in this article and article twenty-six includes 
 any of tlie persons having, by law, the direction or management 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 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 there- 
 from to be entered on the minutes of the directors. If absent from such meet- 
 ing, 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 writing 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 of any such meeting and violates an oath 
 taken by him in pursuance of law as such inspector, or violates the provisions 
 
§§668-890,1-6 PENAL — STOCK CORPORATION LAWS 1065 
 
 of an oath required by law to be taken by him as such inspector, or is guilty of 
 any dishonest or corrupt conduct as such inspector, 
 
 Is guilty of a misdemeanor. 
 
 § 890. Officer of corporation selling fraudulent shares. An officer, agent or 
 other person employed by any company or corporation existing 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 script, certificate or other evidence of the ownership or transfer of any share 
 or share of the capital stock of such company or corporation, or a bond or 
 other evidence of debt of such company or corporation, 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 prescribed in section eight hundred and ninety-three of this 
 chapter for that offense, may also be sentenced to pay a fine not exceeding three 
 thousand dollars. 
 
 STOCK CORPORATION LAW. 
 
 § 1. Short title. This chapter shall be known as the " Stock Corporation 
 law." 
 
 § 5. Application of article. This article except sections eight, fifteen, sixteen, 
 seventeen and eighteen thereof, shall not apply to moneyed corporations. 
 
 § 6. Power to borrow money and mortgage property. In addition 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, except purchase-money 
 mortgages and mortgages authorized by contracts 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 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 cor- 
 poration, 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. AVhen 
 authorized by like consent, the -directors under such regulations as they may 
 adopt, may confer on the holder of any debt or obligation, whether secured or 
 unsecured, evidenced by bonds of the corporation, 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. 
 
1066 BUSINESS CORPOEATIONS IN NEW YORK § 6, 7 
 
 1. A copy of such mortgage; or resolution of directors autliorizing the issue 
 of such bonds; 
 
 2. That the holders of not less than two-thirds of the capital stock of the 
 coporatdon 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 necessary 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. 
 
 § 7. Validating corporate mortgages. Whenever any mortgage affecting prop- 
 erty or franchises within this state heretofore or hereafter 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 mortgage 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 execution of such 
 mortgage has been duly and sufficiently consented to, and authorized by stock- 
 holders as required by any provision of law. After any such mortgage hereto- 
 fore 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 conclusive evidence that 
 the execution of such mortgage has been duly and sufficiently consented to, and 
 authorized by stockholders as required by jny provision of law, and its validity 
 shall not be impaired by reason of any defect or insufBciency 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 mortgage heretofore recorded because 
 of insufBciency of consent by stockholders 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 consent 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 mortgage shall be presumptive evidence only as first above provided. When- 
 ever hereafter, in compliance with any law of this state, the officers of any 
 corporation shall have made and filed and recorded a certificate that the execu- 
 tion 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 
 
§§ 7-9 STOCK CORPORATION LAW 1067 
 
 thereof, iii favor of aiiy and all persons who in good faith shall receive or pur- 
 chase, for value, any bond or obligation purporting to be secured by such mort- 
 gage, 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 com- 
 mission having jurisdiction thereof to any mortgage by a railroad corporation. 
 
 § 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 stockholder appearing as such upon the books of 
 the corporation, personally or by mail at his last-known post-ofiSce address at 
 least sixty days prior to such meeting, guarantee the bonds of any other domes- 
 tic corporation engaged in the same general line of business; and any stock 
 corporation owning the entire capital stock of any other domestic stock cor- 
 poration 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 cor- 
 poration, 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. 
 
 § 9. Reorganization upon sale of corporate property and frauchisies. When 
 the property and franchises of any domestic stock corporation 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 fran- 
 chises 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 property 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 corpora- 
 
 .tion, 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 corpora- 
 tion, 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 
 
10G8 BUSINESS CORPORATIONS IN NEW YORK g§ 9-11 
 
 shall be vested with, and be entitled to exercise and enjoy, all the rights, privi- 
 leges 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 cor- 
 poration. Any proceedings heretofore taken in substantial compliance with this 
 section as hereby amended, and any and all incorporations based thereon are 
 hereby ratified and confirmed. 
 
 § 10. Contents of plan or agreement. At or previous to the sale the pur- 
 chasers 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, stockholders, , or any 
 of them, of the corporation owning such property and franchises at the time 
 of the sale, and of holders of claims for materials, supplies and equipment 
 furnished, and for injuries and damages sustained, in and about the operation, 
 maintenance or construction of any or all the property formerly owned or 
 leased to said corporation, and for the representation of such interests in tlie 
 bonds or stock of the new corporation 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 liolders, and 
 owners of any or all 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 m\ist not be 
 inconsistent with the laws of the state and shall be binding upon the corporation, 
 until changed as herein 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 pro- 
 visions 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 or any claims for materials, supplies 
 and equipment furnished, or any claims for injuries and damages sustained, in 
 and about the operation, maintenance or construction of any or all the prop- 
 erty formerly owned or- leased to said 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 or reorganization, and may establish 
 preferences in favor of any portion 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 
 incorporation. 
 
 § 11. Sale of property; possession of receiver and suits against him. The 
 supreme court may direct a sale of the whole of the property, rights and fran- 
 chises 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 ohly, 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 franchises, 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 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 
 
§§ 11-15 STOCK CORPORATION LAW 1069 
 
 section would be or remain liable, or to the same extpnt that the new corpora- 
 tion woiild be had it done or omitted the acts complained of. 
 
 § 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 vil- 
 lages in exchange 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 therewith. 
 
 § 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 
 liave 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 writ- 
 ing and duly acknowledged and filed in the office of the secretary of state, by a 
 vote of the stockholders of said corporation at a special meeting of the stock- 
 holders called for that purpose, or such change has been effected by an act of 
 legislature creating a separate and distinct county wholly within the limits and 
 boundaries of a then existing county or counties. When such change shall be 
 authorized by the stockholders or effected by the creation of a new county 
 wholly within the limits and boundaries of the then existing county or counties: 
 as herein provided, the president and secretary and a majority of the directors 
 of such corporation shall sign a certificate stating the name of said corporation, 
 the city, toAvn and county where its principal office and place of business was 
 originally located, and to which it may have been subsequently changed, and 
 the city, town and county to which il 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 directors of said corporation and their respective places of residence, 
 which certificate shall be verified by the oaths of all the persons signing the 
 same, and when so signed and verified, shall be filed in the office of the secretary 
 of state and a duplicate thereof in the office of the clerk of the count;^ 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, and thereupon the principal office and place 
 of business of such corporation shall be changed as stated in said certificate. 
 
 § 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. 
 
 § 15. Merger. Any domestic stock corporation and any foreign stock cor- 
 poration 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 secre- 
 tary 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 
 
1070 BUSINESS CORPORATIONS IN NEW YORK §§ 15-18 
 
 thereupon it shall acquire and become, and be possessed of all the estate, prop- 
 erty, rights, privileges and franchises of such other corporation, and they shall 
 vest in and be held and enjoyed by it as fully and entirely and without change 
 or diminution as the same were before held and enjoyed by such other corpora- 
 tion, and be managed and controlled by the board of directors of such pos- 
 sessor corporation, and in its name, but without prejudice to any liabilities of 
 such other corporation 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. 
 
 § 18. Voluntary sale of franchise and property. A stock corporation, except 
 a railroad corporation and except as otherwise provided by law, with the con- 
 sent of two-thirds of its stock, may sell and convey its property, rights, privi- 
 leges and franchises, or any interest therein or any part thereof to a domestic cor- 
 poration, 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 character, and a domes- 
 tic corporation the principal business of which is carried 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 including 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 franchises thereby 
 transferred, and in case of a sale to a foreign corporation 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 corpora- 
 tion conveying them. Before such sale or conveyance shall be made such con- 
 sent shall be obtained at a meeting of the stockholders called upon like notice 
 as that required for an annual meeting. 
 
 § 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 appoint 
 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 stock- 
 holder, 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 stockholders 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 corporation. 
 
 § 18. Alterations or extension of business. Any stock corporation heretofore or 
 hereafter organized under any general or special law of this state may alter its 
 certificate of incorporation so as to include therein any purposes, powers or 
 
§§ 18, 19 STOCK CORPORATION LAW 1071 
 
 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 amended cer- 
 tificate, executed by the president and secretary, stating the alteration pro- 
 posed, 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 pur- 
 pose 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. 
 
 § 19. Issuance of shares of stock without nominal or par value. Upon the 
 formation or the reorganization of any stock corporation, other than a moneyed 
 corporation, and other than a corporation under the jurisdiction of any public 
 service commission, the certificate of incorporation may provide for the issuance 
 of the shares of stock of such corporation, other than preferred stock having 
 a preference as to principal, without any nominal or par value, by stating in 
 such certificate: 
 
 (1) The number of shares that may be issued by the corporation, and if any 
 of such shares be preferred stock, the preferences thereof. If such preferred 
 stock or any part thereof shall have a preference as to principal, the certificate 
 shall state the amount of such preferred stock having such preference, the 
 paTtieular character of such preferences, and the amount of each share thereof, 
 which shall be five dollars or some multiple of five dollars, but not more than 
 one hundred dollars. 
 
 (2) The amount of capital with which the corporation will carry on business, 
 which amount shall be not less than the amount of preferred stock (if any) 
 authorized to be issued with a preference as to principal, and in addition thereto 
 a sum equivalent to five dollars or to some multiple of five dollars for every 
 share authorized to be issued other than such preferred stock; but in no event 
 shall the amount of such capital be" less than five hundred dollars. 
 
 Such statements in the certificates shall be in lieu of any statements pre- 
 scribed by the law under which the corporation shall have been formed or 
 reorganized as to the amount or the maximum amount of its capital stock or 
 the number of shares into which the same shall be divided, or of the amount or 
 the par value of such shares. 
 
 Each share of such stock without nominal or par value shall be equal to every 
 other share of such stock, subject to the preferences given to the preferred stock 
 if any authorized to be issued. Every certificate for such shares without nominal 
 or par value shall have plainly written or printed upon its face the number of 
 such shares which it represents and the number of such shares which the corpo- 
 ration is authorized to issue, and no such certificate shall express any nominal or 
 par value of such shares. The certificates for preferred shares having a pref- 
 erence as to principal shall state briefly the amount which the holders of each 
 of sueh preferred shares shall be entitled to receive on account of principal 
 from the surplus assets of the corporation in preference to the holders of other 
 shares, and shall state briefly any other rights or preferences given to the 
 holders of such shares. 
 
 Such corporation may issue and may sell its authorized shares, from time to 
 time, for such consideration as may be prescribed in the certificate of incor- 
 poration, or for such consideration as shall be the fair market value of such 
 shares, and, in the absence of fraud in the transaction, the judgment of the 
 board of directors as to such value shall be conclusive; or for such consideration 
 
1072 BUSINESS CORPORATIONS IN NEW YORK §§ 19-21 
 
 as shall be consented to by the holders of two-thirds of each class of shares then 
 outstanding at a meeting called for that purpose in such manner as shall be 
 prescribed by the by-law. Any and all shares issued as permitted by the sec- 
 tion shall be deemed fully paid and non-assessable and the holder of such shares 
 shall not be liable to the corporation or to its creditors in respect thereof. 
 
 § 20. Commencement of business; authorized debts. No corporation formed 
 pursuant to section nineteen hereof shall begin to carry on business or shall 
 incur any debts until the amount of capital stated in its certificate of incor- 
 poration shall have been fully paid in money, or in property taken at its actual 
 value. In ease the amount of capital stated in its certificate of incorporation 
 shall be increased as herein provided, such corporation shall not increase the 
 amount of its indebtedness then existing until it shall have received in nuiney 
 or property the amount of such increase of its stated capital. The directors of 
 the corporation assenting to the creation of any debt in violation of this section 
 shall be liable jointly and severally for such debt; but no action shall be 
 brought under the foregoing provision of this section unless within one year 
 after the debt shall have been incurred the creditor sliall have served upon the 
 director written notice of intention to hold him personally liable for such debt. 
 Any director who, because of any such liability under this section, shall pay 
 any debt of the corporation, shall be subrogated to all rights of the creditor 
 in respect thereof against the corporation and its property and also shall be 
 entitled to contribution from all other directors of the corporation similarly 
 liable for the same debt and the personal representative of any such director 
 who shall have died before making such contribution. 
 
 Xo such corporation shall declare any dividend which shall reduce the 
 amount of its capital below the amount stated in the certificate as the amount 
 of capital with which the corporation will carry on business. In case any such 
 dividend shall be declared, the directors in' whose administration the same shall 
 Iiave been declared, except tho^^ who may have caused their dissent there- 
 from to be entered upon the minutes of such directors at the time or who were 
 not present when such action was taken, shall be liable jointly and severally 
 to such corporation and to the creditors thereof to the full amount of any loss 
 sustained by such corporation or by its creditors respectively by reason of such 
 dividend. 
 
 § 21. Taxation. The organization tax payable under section one hundred 
 and eighty of the tax law by any corporation issuing such shares without 
 designated monetary value shall be at the rate of five cents on each such share 
 which the corporation is authorized to issue, and a like tax upon any subse- 
 quent increase thereof. The tax payable under section two hundred and seventy 
 of the tax law in respect of any sale or agreement of sale or any memorandum 
 of sale or delivery or transfers of shares or certificates of any share without 
 designated monetary value hereafter issued by any such corporation issuing Huch 
 shares shall be at the rate of two cents for each and every share of such 
 stock so transferred. The franchise tax upon any corporation issuing such 
 shares of stock payable under section one hundred and eighty-two of the tax 
 law shall be determined by taking as a base such portion of the net assets of 
 the corporation as its gross assets employed in any business within, this state 
 bear to its entire gross assets wherever employed in business, and the rate of 
 such franchise tax shall be fixed in the manner provided in said section one 
 hundred and eighty-two of the tax law. For this purpose the rate of dividends 
 shall be computed by dividing the total amount of dividends which has been 
 paid during the year by the amount of the net assets of the corporation upon 
 the first day of such year. 
 
§§ 22-24 STOCK CORPORATION LAW 1073 
 
 § 22. Increase or reduction of shares or capital. Any corporation formed 
 or reorganized pursuant to section nineteen may amend its certificate of incor- 
 poration so as to increase or to reduce the number of shares which it may 
 issue, or so as to increase or to reduce the amount of its stated capital, by 
 filing, in the manner provided for the original certificate of incorporation, a 
 certificate of amendment under seal executed by its president or a vice-president 
 and by its secretary or its treasurer, stating the amendment proposed and that 
 the same has been duly authorized by a vote of a majority of the directors and 
 also by the vote of the holders of at least three-fifths of the outstanding shares 
 of each class issued by the corporation, at a meeting of the stockholders called 
 for the purpose in the manner provided in section sixty-three hereof, and by 
 filing with such certificate of amendment a copy of the proceedings of such 
 meeting, made, signed, verified and acknowledged by the president or a vice- 
 president and by the secretary or the treasurer of the corporation; but an 
 amendment cannot be made under this section unless as so amended the certifi- 
 cate of incorporation could lawfully have been filed under section nineteen qf 
 this chapter. In case of a reduction of the amount of capital of a corporation, 
 a certificate setting forth the whole amount of the ascertained debts and liabil- 
 ities of the corporation shall be made, signed, verified and acknowledged by 
 the president or a vice-president and by the secretary or the treasurer, of the 
 corporation and shall be filed with the certificate of amendment; and such 
 certificate of amendment shall have endorsed thereon the approval of the comp- 
 troller to the effect that as so stated the reduced amount of capital is sufficient 
 for the proper purposes of the corporation and is in excess ,of its ascertained 
 debts and liabilities. 
 
 § 23. Amount of capital stock and of shares within meaning of other laws. 
 For the purpose of any rule of law or of any statutory provision (other than 
 the foregoing sections nineteen, twenty, twenty-one and twenty -two) relating 
 to the amount of the capital stock of a corporation or the amount or par value 
 of its shares, the aggregate amount of the capital stock of any such corporation 
 formed pursuant to section nineteen heTeof shall be deemed to be the aggregate 
 amount specified in the certificate or amended certificate of incorporation or of 
 reorganization as the amount of capital with which the corporation will carry 
 on business; the amount or the par value of each share of preferred stock 
 having a preference as to principal shall be deemed to be the amount thereof 
 so specified in such certificate or such amended certificate; and the amount or 
 the par value of each other share shall be deemed to be an aliquot part of 
 the aggregate capital so spiecified in such certificate or in such amended certifi- 
 cate in excess of the specified amount (if any) of the preferred stock therein 
 authorized to be issued with a preference as to principal. 
 
 § 24. Certificate of reorganization. Any stock corporation heretofore or here- 
 after organized under any general law, other than a corporation belonging to 
 one of the classes specifically excepted by section nineteen of this chapter, may 
 be reorganized so that such corporation, its officers, directors and stockholders, 
 shall acquire and enjoy all the rights, privileges, powers and exemptions, and 
 become subject to all of the liabilities and obligations imposed by sections nine- 
 teen to twenty-three, inclusive, of this chapter, upon the filing and recording, 
 pursuant to section five of the general corporation law, of a certificate, which 
 shall be entitled and endorsed " Certificate of reorganization of pursu- 
 ant to section twenty-four of the stock corporation law," (the blank space 
 being filled in with the name of the corporation) and which certificate shall 
 state : 
 
 1. The name under which the corporation was originally organized, and if it 
 has been changed, the present corporate title. 
 
1074 BUSINESS CORPORATIONS IN NEW YORK § 24 
 
 2. The law under which the corporation was organized, by year of passage, 
 chapter number, and article if any. 
 
 3. The date on which, and the public office or offices in which its certificate 
 of incorporation was filed. 
 
 4. The amount of capital stock authorized by its certificate of incorporation, 
 and if that amount has been changed, the date of filing of each certificate or 
 consent authorizing a change, and the amount to which the capital stock was 
 increased or reduced by each such certificate or consent. 
 
 5. The amount of each payment of taxes for the privilege of organizing or 
 of increasing the capital stock of the corporation. 
 
 6. The number of shares into which the capital stock has been divided, and, 
 if classified, the number and par value of the shares included in each class 
 together with the preferences or distinctive features of the shares of each class. 
 
 7. The number of shares of each class issued and outstanding. 
 
 8. The number of shares that may henceforth be issued by the corporation, 
 which may be either less than, or equal to or in excess of the number of 
 shares into which the capital stock was previously divided, and all of the mat- 
 ters and things required to be stated in an original certificate of incorporation 
 by subdivision one of section nineteen of this chapter. 
 
 9. If any of the new shares are to be preferred, the number of shares to be 
 included in each class and the preferences thereof, which preferences must be 
 such as are authorized by law at the time of reorganization. 
 
 10. The amount of capital with which the corporation' will carry on business, 
 which shall be iij all respects as required by subdivision two of section nine- 
 teen of this chapter. 
 
 11. The terms upon which the new shares of the reorganized corporation shall 
 be issued in place of the outstanding shares of stock. 
 
 12. It may also prescribe the consideration for which the reorganized cor- 
 poration may issue and sell its authorized shares, or it may authorize the 
 board of directors to issue and sell its authorized shares from time to time, 
 for such consideration, as shall be the fair market value of said shares, and, 
 in the absence of fraud in the transaction, the judgment of the board of 
 directors as to such value shall be conclusive. 
 
 Nothing shall be included in such certificate other than as authorized by 
 this section, and it shall be either: 
 
 (a) Signed and acknowledged by every stockholder of record of the corpora- 
 tion, or his duly authorized proxy, and shall have annexed an affidavit of the 
 custodian of the stock book to the effect that the persons who have executed 
 the certificate, in person or by proxy, constitute the holders of record of all 
 of the shares of stock of the corporation, irrespective of class, issued and 
 outstanding, or; 
 
 (b) Signed and acknowledged by the president or a vice-president and the 
 secretary or treasurer of the corporation, who shall make and annex an affidavit 
 stating that they have been authorized and directed to execute and file the 
 certificate by the votes, cast in person or by proxy, of the holders of record 
 of two-thirds or more of each class of the outstanding shares of stock, irrespec- 
 tive of any provision of the certificate of incorporation purporting to deny 
 voting powers to the holders of any class of stock, at a meeting called and held 
 upon written notice mailed to each stockholder at least two weeks before the 
 date set for the meeting and published once a week for at least two successive 
 weeks in a newspaper published and circulating in the county wherein the 
 principal office of the corporation is located; and that such notice did expressly 
 state the purpose of the meeting to be that of reorganizing the corporation 
 pursuant to section twenty-four of the stock corporation law, so as to permit 
 
§§ 24^24-e STOCK CORPORATION LAW 1075 
 
 the issuance of shares without par value, and did state the terms upon which 
 the outstanding shares of stock were to be exchanged for the new shares. 
 
 § 24-a. Comptroller's approval of reduction of capital. If the amount of 
 capital stated in the certificate of reorganization as that with which the cor- 
 poration will carry on business, be less than the total amount of the par value 
 of the previously issued and outstanding capital stock, there shall be annexed 
 to such certificate an affidavit of the president or a vice-president and the secre- 
 tary or treasurer of the corporation, setting forth the whole amount of the 
 ascertained debts and liabilities of the corporation; and, in such case, the 
 certificate of reorganization shall have endorsed thereon the approval of the 
 comptroller to the effect that the amount of capital stated in the certificate 
 as that with which the corporation will carry on business is sufficient for the 
 proper purposes of the corporation and is in excess of its debts and liabilities. 
 
 § 24-b. Restriction upon incurring of debts. No corporation reorganized under 
 section twenty-four of this chapter shall incur any debts subsequent to the 
 filing of the certificate of reorganization until it shall have assets of an actual 
 value at least equal to the amount of capital stated in its certificate of reor- 
 ganization as that with which it will carry on business. The directors of a 
 corporation assenting to the creation of a debt in violation of this section 
 shall be jointly and severally liable for such debt in like manner as provided, 
 and subject to the conditions and limitations imposed by section twenty of 
 this* chapter. 
 
 § 24-c. Liability upon existing obligations. The liability of the corporation, 
 its officers, directors and stockholders for corporate debts contracted or obliga- 
 tions incurred prior to the filing of the certificate of reorganization pursuant to 
 section twenty-four of this chapter shall be unafl'ected thereby, but for the 
 purpose of enforcing and recovering upon such claims creditors shall have the 
 same right of recourse against the corporation, or against its officers, directors 
 and stockholders individually that they would have had if the corporation had 
 not been reorganized, and there shall be especially reserved and saved to such 
 creditors all of the rights and benefits conferred by sections fifty-six to fifty- 
 nine, inclusive, of this chapter, subject to the conditions, limitations and restric- 
 tions imposed by those sections. 
 
 Except as provided by this section the new shares issued by the reorganized 
 corporation shall be deemed fully paid and nonassessable and the holder of 
 such shares shall not be liable to the corporation or to its creditors in respect 
 thereof. 
 
 § 24-d. Not to be construed as dissolution or re-incorporation. No proceedings 
 taken under section twenty-four of this chapter shall be deemed to work a 
 dissolution, or to create a new corporation or to interrupt in any way the con- 
 tinuity of existence of the corporation affected. 
 
 § 24-e. Reorganization tax. Every corporation reorganized pursuant to sec- 
 tion twenty-four of this chapter shall pay to the state treasurer for the 
 privilege of such reorganization a tax of the same amount, and computed in 
 like manner as upon the organization of a new corporation, authorized to . 
 issue shares of the same number and kinds as the reorganized corporation, 
 less one-half of the aggregate amount of all sums previously paid for the 
 privilege of organizing or of increasing the capital stock; provided however, 
 that every corporation so reorganized shall pay a tax for the privilege of such 
 reorganization, which in no case shall be less than twenty-five dollars. Neither 
 the secretary of state nor the county clerk shall file any certificate of reorganiza- 
 tion under section twenty-four of this chapter until he is furnished with a 
 receipt for such tax from the state treasurer. 
 
1076 BUSINESS CORPORATIONS IN NEW YORK §§ 25, 26 
 
 § 25. Directors. The directors of every stock corporation shall be chosen at 
 the time and place fixed by the by-laws of the corporation 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 either published 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, op delivered personally or mailed, not less 
 than ten nor more than twentj days before the election, to each person who 
 appears on the books of the corporation as a stockholder; if mailed, it shall 
 be directed to a, stockholder at his address as it appears on such books. Ihe 
 by-laws may require such notice to be published and also mailed or delivered as 
 above provided. In the case of a domestic stock life insurance corporation no 
 such election shall be valid unless a copy of such notice shall have been filed 
 in the oflSee of the superintendent of insurance at least ten days before the 
 day of such election in addition to the publication or service thereof, or both, 
 required above. Whenever any of the directors of a domestic stock life insur- 
 ance corporation shall have resigned and successors shall have been chosen pur- 
 suant to the provisions of the by-laws of the corporation, such successors shall 
 not take office nor exercise the duties thereof until ten days after written 
 notice of their election shall have been filed in the office of the superintendent 
 of insurance. Policyholders of an insurance corporation shall be eligible to elec- 
 tion as directors, whether or not they be stockholders. At least one-fourth in 
 number of the directors of evei-y stock corporation shall be elected annually. 
 [L. 1018, e. 267.] 
 
 § 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 oAvning a majority of the stock of 
 the corporation shall so determine, at a meeting to be held on two weeks' notice 
 in writing to each stockholder of record. Such notice shall be served personally 
 or by mail, directed to each stockholder at his last known post-office address. 
 Proof of the service of such notice shall be filed in the office of the corporation 
 at or before the time of such meeting. The proceedings of such meeting shall 
 be entered in the minutes of the corporation and a transcript thereof verified 
 by the president and secretary of the meeting shall be filed in the offices where 
 the original certificates of incorporation were filed. Such increase or reduction 
 may also be effected by unanimous consent without a meeting, in which case 
 there shall be filed in the offices herein specified the unanimous consent of the 
 stockholders in writing, signed by them, or their duly authorized proxies, but 
 no such consent shall be valid unless there is annexed thereto an affidavit of the 
 custodian 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 insurance corporation, the consent of the 
 superintendent of insurance, shall be first obtained to such increa,se 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 directors 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 
 
§§ 26-30 STOCK CORPORATION LAW 1077 
 
 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 
 he divided among such classes as nearly as practicable in proportion to the 
 respective numbers of directors constituting each class prior to such increase. 
 
 § 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 neglect 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. 
 
 § 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 corporation or its creditors respectively 
 by reason of such withdrawal, division or reduction. ' But this section shall not 
 prevent a division and distribution of the assets of any such corporation remain- 
 ing 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 partial settle- 
 ment of a debt owing to the corporation, which by the board of directors shall 
 be deemed to be bad or doubtful. 
 
 § 29. Lability of directors for loans .to stockholders. No loan of moneys shall 
 be made by any stock corporation, except a moneyed corporation, or by any 
 officer thereof out of its funds to any stockholder 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 assenting 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 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. 
 
 § 30. Officers. The directors of a stock corporation may appoint from their 
 number a president, and may appoint a secretary, treasurer, and other officers, 
 agents and employees, who shall respectively have such powers and perform' 
 such duties in the management of the property and affairs of the 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 security .for the faithful performance of his duties, and may remove 
 him at pleasure. The policyholders of an ■ insurance corporation shall be 
 eligible to election or appointment as its officers. 
 
1078 BUSINESS CORPORATIONS IN NEW YORK §§ 31, 32 
 
 § 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 director or ofiBcer of a moneyed corporation 
 shall be eligible to election or appointment as inspector. Each inspector 
 shall be entitled to a reasonable compenaation for his services, to be paid by 
 the corporation, and U any inspector shall refuse to serve, or neglect to attend 
 at the election, or his oflSce become vacant, the meeting may appoint an 
 inspector in his place unless the by-laws otherwise provide. The inspectors 
 appointed to act at any meeting of the stockholders shall, before entering 
 upon the discharge of their duties, be sworn to faithfully execute 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. 
 
 § 32. Books to be kept. Every stock corporation shall keep at its office cor- 
 rect books of account of all its business and transactions, and a book to 
 be known as the stock book, containing the names, alphabetically 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 owners thereof, and the amount paid 
 thereon. On or before May first, nineteen hundred and eighteen, every 
 domestic stock life insurance corporation shall cause to be filed in the office 
 of the superintendent of insurance a list of the stockholders of such cor- 
 poration showing their places of residence and the number of shares held by 
 them respectively. The stock book of every such corporation shall be open 
 daily, during at least three business hours, for inspection by any judgment 
 creditor of the corporation; or by any person who shall have been, stock- 
 holder of record in such corporation for at least six months immediately pre- 
 ceding his demand; or by any person holding stock of such corporation to an 
 amount equal to five per centum of all its outstanding shares; or by any 
 person thereunto in writing authorized by the holders of stock of such cor- 
 poration to an amount equal to five per centum of all of its outstanding shares. 
 Persons so entitled to inspect stock books 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 
 <ihall have been entered in such book as required by this section, by an 
 entry showing from and to whom transferred, nor, in the case of a domestic 
 stock life insurance corporation until ten days , after written notice of such 
 transfer shall have been filed in the office of the superintendent of insurance. 
 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 corporation or any 
 of its officers, directors or stockholders. Every corporation 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 corporation 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 provided in 
 this section, the corporation and such officer or agent shall each forfeit and 
 
§§ 32-34 STOCK CORPORATION LAW 1079 
 
 pay to the party injured a penalty of fifty dollars for every such neglect or 
 refusal, and all damages resulting to him therefrom. It shall be a defense 
 to any action for penalties under this section that the person suing therefor 
 has within two years sold or offered for sale any list of stockholders of such 
 corporation or of any other corporation, or has aided or abetted any person 
 in procuring any stock list for any such purpose. iNTothing herein impairs 
 the power of the courts to compel by mandamus or judgment the production 
 for examination by any stockholder of the stock books of a corporation. 
 
 § 33. Stock books of foreign corporations. Every foreign stock corporation 
 having an office for the transaction of business in this state, except moneyed and 
 railroad corporations, shall keep therein a book to be known as a stock book, 
 containing the names, alphabetically arranged, of all persons who are stock- 
 holders 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 
 owners thereof, and the amount paid thereon. Such stock book shall be open daily, 
 during business hours, for inspection by any judgment creditor of such corpo- 
 ration; by any officer of this state authorized by law to investigate the affairs 
 of any such corporation; by any person who shall have been stockholder of 
 record in such corporation for at least six months immediately preceding his 
 demand; by any person holding stock of such corporation to an amount equal 
 to five per centum of all of its outstanding shaies; or by any person thereunto- 
 in writing authorized by the holders of stock of such corporation to an amount 
 equal to five per centum of all of its outstanding shares. Persons so entitled to 
 inspect stock books may make extracts therefrom. 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 siuch 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 fifty dollars to be recovered by 
 the person to whom such refusal was made. It shall be a defense to any person 
 for penalties under this section that the person suing therefor has within two 
 years sold or offered for sale any list of stockholders of such corporation or of 
 any other corporation or has aided or abetted any person in procuring any stock 
 list for any such purpose. Nothing herein impairs the power of the courts to 
 compel by mandamus or judgment the production for examination by any 
 stockholder of the stock books of a corporation. 
 
 § 34. Annual report to secretary of state. Every domestic stock corporation 
 and every foreign stock corporation doing business within this state, except 
 moneyed and railroad corporations, shall annually, during the month of January, 
 or if doing business without the United 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 exceed. 
 
 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 tan days after 
 
1080 BUSINESS CORPORATIONS IN NEW YORK §§ 34-53 
 
 written request so to do shall have been made by a creditor or by a stockholder 
 of the corporation, shall forfeit to the people the sum of fifty dollars for every 
 day he shall so neglect or refuse. 
 
 § 3S. 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 material representation, the officers 
 and directors signing the same shall jointly and severally be personally liable to 
 any person who has become 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 repre- 
 sentation therein shall have been communicated either directly or indirectly to 
 the person so becoming a creditor or stockholder and he became such creditor or 
 stockholder upon the faith thereof. Xo 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. 
 
 § 50. Issue and transfers of stock. The stock of every stock corporation shall 
 •be represented by certificates prepared by the directors and signed by the presi- 
 dent or vice-president and secretary or treasurer and sealed with the seal of the 
 corporation, and thall 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. 
 
 § 51. Transfers of stock by stockholder indebted to corporation. If a etock- 
 iiolder 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. 
 
 § 52. Purchase of stock of other corporations. Any stock corporation, domestic 
 or foreign, now existing or hereafter organized, except moneyed corporations, 
 may purchase, acquire, hold and dispose of the stocks, bonds and other evidences 
 of indebtedness of any corporation, domestic or foreign, and issue in exchange 
 therefore 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 certificate 
 amendatory thereof or supplementary thereto, filed in pursuance of law, or if 
 the corporation whose stock is so purchased,- acquired, held or disposed of, is 
 engaged in a business similar to that of such stock coporation, or engaged in 
 the manufacture, use or sale of the property, or in the construction or operation 
 of works necessary 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 corporation 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 corpo- 
 ration, the same as if they were individually stockholders therein and the cor- 
 poration holding such stock shall possess and exercise in respect thereof, all the 
 rights, powers and privileges of individual owners or holders of such stock. 
 
 § 63. SuI>scriptions to stock. If the whole capital stock shall not have been 
 subscribed at the time of filing the certificate of incorporation, the directors named 
 in the certificate may open books of subscription 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. 
 
§§ 53-57 STOCK CORPORATION LAW 1081 
 
 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. 
 § 54. Time of payment of subscriptions to stock. Subscriptions to the capital 
 stock of a corporation shall be paid at such times and in such instalments as the 
 board of directors may by resoltuion require. 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 cor- 
 poration, 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 pajments thereon will be 
 forfeited for the use of the corporation. 
 
 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 de- 
 ducted 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 thereafter 
 or an action may be brought or proceedings instituted to close up the business 
 of the corporation as in the case of an insolvent corporation. If a receiver of 
 the assets of the corporation has been appointed, all unpaid subscriptions to 
 the stock shall be paid at such times and in such instalments as the receiver or 
 the court may direct. 
 
 § 55. Consideration for issue of stock and bonds. 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. 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 transaction 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 corporation, but shall be reported as issued for property purchased. 
 
 § 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 
 stockholders of any existing corporation, under any general or special law, except- 
 ing 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. 
 
 § 57. Liabilities of stockholders to laborers, servants or employees. 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 termi- 
 
1082 BUSINESS CORPORATIONS IN NEW YORK §§ 57-61 
 
 nation of such services, that he intends to hold him liable, and shall commence 
 an action therefor within thirty days after the return of an execution unsatisfied 
 against the corporation upon a judgment recovered against it for services. 
 
 § 58. Non-liability in certain cases. No person holding stock in any cor- 
 poration 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 stockholder; but the person pledging such 
 stock shall be considered the 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, administrator, guardian or trustee 
 voluntarily invested the trust funds in such stocks, in which case he shall be 
 personally liable as a stockholder. 
 
 § 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 recoverable, with costs against the stockholder. No stockholder shall 
 be personally liable for any debt of the corporation not payable within two years 
 from the time it is contracted, nor unless an action for its collection shall be 
 brought against the corporation within two years after the debt becomes due; 
 and no action shall be brought against a stockholder after he shall have ceased 
 to be a stockholder, for any debt of the corporation, unless brought within two 
 years from the time he shall have ceased to be a stockholder. 
 
 S 60. Partly paid stock. The original or the amended certificate of incorpora- 
 tion of any stock corporation may contain a provision expressly authorizing the 
 issue of the whole or of any part of the capital stock as partly paid stock, sub- 
 ject to calls thereon until the whole thereof shall have been paid in. In such 
 case, if in or upon the certificate 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 employees pur- 
 suant 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. 
 
 § 61. Preferred and common stock. 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 
 
 1. 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 corporation is located, or 
 
 2. 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 sueli 
 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 request of 
 the holders of any preferred stock, by a two-thirds vote of its directors, exchange 
 the same for common stock, and issue certificates for conunon stock therefor, upon 
 such valuation as may have been agreed upon in the certificate of organization 
 
§§ 61-64 STOCK CORPORATION LAW 1083 
 
 of such corporation, or the issue of such preferred stock, or share for share, but 
 the total amount of such capital stock shall not be increased thereby. 
 
 § 62. Increase or reduction of capital stock. Any domestic corporation 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 addi- 
 tional 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 
 corporation, whether the capital be increased or reduced, its assets sha,ll at least 
 be equal to its debts and liabilities and the capital stock, as increased or reduced. 
 A domestic railroad corporation may increase or reduce its capital stock in the 
 manner herein provided, notwithstanding 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. 
 
 § 63. Notice of meeting to increase or reduce capital stock. Every svch 
 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 ofiice 
 of the corporation 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. 
 Kotice of the meeting, stating the time, place and object, and the amount of the 
 increase or reduction proposed, signed by the president or a vice-president and 
 the secretary, shall be published once a week, for at least two successive weeks, 
 in a newspaper in the county where its principal business office is located, if any 
 is published therein, and a copy of such notice shall be duly mailed to each 
 stockholder or member at his last-known post-office address at least two weeks 
 before the meeting or shall be personally served on him at least five days before 
 the meeting. 
 
 § 64. Conduct of such meeting; certificate of increase or reduction. 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 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 stockholders expressed in 
 writing signed by them or their duly authorized proxies, a certificate of the 
 proceedings showing a compliance with the provisions of this chapter, the amount 
 of capital theretofore authorized, 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 liabilities of the 
 corporation, shall be made, signed, verified and acknowledged 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, a duplicate thereof in the 
 office of the secretary of state, and, if a corporation formed under or subject to 
 the banking law, a triplicate thereof in the office of the superintendent of banks, 
 and if an insurance corporation, a triplicate thereof in the office of the superin- 
 tendent of insurance. In case of a reduction of the capital stock, except of a rail- 
 road corporation or a moneyed corporation, such certificate or consent hereinafter 
 
1084 BUSINESS CORPORATIONS IN NEW YORK §§ 64-66 
 
 provided for shall have indorsed thereon the approval of the comptroller, to the 
 effect that the reduced capital is suflScient for the proper purpose of the corpora- 
 tion, and is in excess of its ascertained debts and liabilities; and in case of the 
 increase 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 corporation 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 stockholders in writing, signed 
 by them or their duly authorized proxies, approved as aforesaid, has been filed, 
 the capital stock of such corporation 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 consent 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 manner as 
 the directors shall determine, except in the case of the reduction of the capital 
 stock of an insurance corporation, as an alternative to make good an existing 
 impairment. 
 
 § 65. Change in par value of shares. The number of shares into whicli the 
 capital stock of any stock corporation is divided may be increased or reduced by a 
 two-thirds vote of all stock duly represented 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 old stock. This 
 section does not authorize the increase or reduction of the capital stock of such 
 corporation. 
 
 § 66. Prohibited transfers to ofBcers or stockholders. No corporation which 
 shall have refused to pay any of its notes or other obligations, when due, in law- 
 ful 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 upbn any other consideration than the 
 full value of the property paid in cash. Xo conveyance, assignment or transfer 
 of any property of any such corporation by it or by any officer, director or stock- 
 holder 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 preferred claims and be entitled 
 to payment before any other creditors out of the corporation assets in excess of 
 valid prior liens or incumbrances. Xo corporation formed under or subject to the 
 banking, insurance or railroad law shall make any assignment in contemplation 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. Xo stockholder of any such corporation shall 
 make any transfer or assignment of his stock tlierein to any person in contempla- 
 tion of its insolvency. Every transfer or assignment or other act done in violation 
 of the foregoing provisions of this section shall be void. Xo conveyance, assign- 
 ment or transfer of any property of a corporation formed under or subject to the 
 
§§ 66-68 STOCK CORPORATION LAW 1085 
 
 banking law, exceeding in value one thousand dollars, shall be made by such cor- 
 poration, or by any oflScer 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 ofiBcers of the corporation in the transaction of 
 its ordinary business, and except payments in specie or other current money or in 
 bank bills made by such officers. No such conveyance, assignment or transfer 
 shall be void in the hands of a purchaser for a valuable consideration without 
 notice. Every director or officer of a corporation who shall violate or be con- 
 cerned 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. 
 
 § 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 petition, duly 
 verified by the owner, stating the name of the corporation, the number and date of 
 the certificate, if known, or if it can be ascertained by the petitioner; the num- 
 ber of shares named therein, to whom issued, and as particular a statement of 
 the circumstances attending such loss or destruction as the petitioner can give. 
 Upon the presentation of the petition the court shall made 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. 
 
 § 68. Order of court upon such application. Upon the return of the order, 
 with proof of. due service thereof, the court shall, in a summary 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 foimd, and that no suffi- 
 cient 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 ip 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 applica- 
 tion made by a domestic municipal corporation or by a public officer in behalf of 
 such corporation; and the court may direct the publication of such notice, either 
 before or after making such order as it shall deem proper. Any person claiming 
 any rights under the certificates alleged to have been lost or destroyed shall have 
 recourse to such indemnity, but in any application under the provisions of this 
 chapter, in which a domestic municipal corporation or a public officer in behalf of 
 such corporation, shall be by the foregoing provisions of this section excused from 
 depositing 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 
 
1086 BUSINESS CORPORATIONS IN NEW YORK §§ 68-81 
 
 be discharged from all liability to such person upon compliance with such order ; 
 and obedience to the order may be enforced by attachment against the officer or 
 officers of the corporation on proof of his or their refusal to comply with it. 
 
 § 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 three per centvim where it exceeds 
 one hundred thousand dollars, may make a written request to the treasurer or 
 chief fiscal officer thereof, for a statement of its affairs, under oath, embracing a 
 particular account of all its assets and liabilities, and the treasurer shall make 
 sucli 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 state- 
 ment, which shall at all times during business hours be exhibited to any stock- 
 holder demanding an examination thereof; but the treasurer of such chief fiscal 
 officer shall not be required to deliver more than one such statement in any one 
 year. The supreme court, or any justice thereof, may upon application, for good 
 cause shown, extend the time for making and delivering such certificate. For 
 every neglect or refusal of the treasurer or other chief fiscal officer 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. 
 
 § 70. Liabilities of officers, directors and stockholders of foreign corporations. 
 Except as otherwise provided in this chapter the officers, directors and stock- 
 holders of a foreign stock corporation transacting business in this state, except 
 moneyed and railroad corporations, shall be liable under the provisions of this 
 chapter, in the same manner and to the same extent as the officers, directors and 
 stoekliolders of a domestic corporation, for : 
 
 1. 'ilie 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 corporation, when it 
 is insolvent or its insolvency is threatened; 
 
 5. Tlie 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. 
 
 § 80. Laws repealed. Of the laws enumerated in the schedule hereto annexed, 
 that portion specified in the last column is hereby repealed. 
 
 § 81. When to take (effect. This chapter shall take effect inuuediately. 
 
 Schedule of Laws Repealed. 
 
 Laws of Chapter Sc;ction 
 
 1814 12 All (38th Sess.) 
 
 1825 325 1-3, 12 
 
 1828 20 15; 1I1[ 17, 18 (2d Meet.) 
 
 1828 21 1, K 180 (2d Meet.) 
 
 1830 71 All 
 
 1848 145 All 
 
 1853 176 All 
 
 1853 425 All 
 
 1853 460 All 
 
 1869 742 7 
 
 1875 392 8 
 
 1884 434 AU 
 
 1889 57 All 
 
*§ 1, 2 STOCK CORPORATION — TAX 1087 
 
 Schedule of Laws Eepealeb — Continued 
 
 Laws of Chapter Section 
 
 1890 564 All 
 
 1892 337 All 
 
 1892 688 All 
 
 1893 196 AH 
 
 1893 638 All 
 
 1893 700 All 
 
 1894 346 All 
 
 1896 929 AH 
 
 1896 932 1, pt. adding § 58 to L. 1892, c. 688 
 
 1897 384 All 
 
 1899 354 AH 
 
 1899 696 All 
 
 1900 128 All 
 
 1900 164 AH 
 
 1900 476 AH 
 
 1901 130 AH 
 
 1901 354 AH 
 
 1902 80 AH 
 
 1902 98 AH 
 
 1902 286 AH 
 
 1902 601 AH 
 
 1903 320 AH 
 
 1904.. 123 AH 
 
 1904 307 AH 
 
 1904 706 AH 
 
 1905 35 AU 
 
 1905 415 AH 
 
 1905 489 AH 
 
 1905 745 AH 
 
 1905 750 AH 
 
 1905 751 AH 
 
 1906 238 AU 
 
 TAX LAW. 
 
 § 1. Short title. This chapter shall be known as the "Tax Law." 
 
 § 2. Definitions. 1. " Tax district " as used in this chapter, means a political 
 
 subdivision of the state having a board of assessors authorized to assess property 
 
 therein for state, and county taxes. 
 
 2. " County treasurer " includes any officer performing the duties devolving 
 upon such office under whatever name. 
 
 3. The terms " land," " real estate," and "real property," as used in this 
 chapter, include the land itself above and under water, all buildings and other 
 articles and structures, substructures and superstructures, 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 tele- 
 graph lines, wires, poles and appurtenances; all supports and inclosures for elec- 
 trical conductors and other appurtenances upon, above and under ground; all 
 surface, underground 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, sub- 
 structures and superstructures, tracks and the iron thereon; branches, switches 
 und other fixtures permitted or authorized to be made, laid or placed in, upon. 
 
1088 BUSINESS CORPORATIONS IN NEW YORK §§ 2-4 
 
 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, substance 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 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 fqr taxation shall be deemed 
 to include the value of the tangible property of a person, copartnership, associa- 
 tion 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. 
 
 4. The term " special franchise " shall not be deemed to include the crossing 
 of a street, highway or public place outside the limits of a city or incorporated 
 village where such crossing is less than two hundred and fifty feet in length, 
 unless such crossing be the continuation of an occupancy of another street, high- 
 way or public place. This subdivision shall not apply to any elevated railroad. 
 
 5. The terms "personal estate," and "personal property," as used in this 
 chapter, include chattels, money, things in action, debs 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, how- 
 ever secured or wherever such securities shall be held; debts due by inhabitants 
 of this state to persons not residing within the United States for the purchase 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 : 
 
 1. Property of the United States. 
 
 2. Property of this state other than its wild or forest lands in the forest 
 preserve. 
 
 3. Property of a municipal corporation of the state held for a public use'^ 
 including real property held or used for cemetery purposes, and all lots and 
 plots therein conveyed by the municipal corporation as places for the burial of 
 the dead, except the portion of municipal property not within the corporation. 
 
 4. The lands in any Indian reservation owned by the Indian nation, tribe or 
 band occupying them. 
 
 5. All property exempt by law from execution, other than an exempt home- 
 stead. But real property purchased with the proceeds of a pension granted by 
 the United States for military or naval services, and owned by the pensioner, or 
 by his wife or widow, is subject to taxation as herein provided. Such property 
 shall be assessed in the same manner as other real property in the tax districts. 
 At the meeting of the assessors to hear the complaints concerning assessments, a 
 verified application for the exemption of such real property from taxation 
 may be presented to them by or on behalf of the owner thereof, which application 
 
§ 4 TAX LAW 1089 
 
 must show the facts on which the exemption ia claimed, including the amount 
 of pension money used in or toward the purchase of such property. No such 
 exemption on account of pension money shall be allowed in excess of five 
 thousand dollars. If the assessors are satisfied that the applicant is entitled to 
 the exemption, and that the amount of pension money exempt to the extent 
 authorized by the subdivision used in the purchase of such property equals or 
 exceeds the assessed valuation thereof, they shall enter the word " exempt " upon 
 the assessment roll opposite the description of such proprty. If the amount of 
 such pension money exempt to the extent authorized by this subdivision used 
 in the purchase of the property is less than the assessed valuation, they shall 
 
 enter upon the assessment-roll the words " exempt to the extent of 
 
 dollars" (naming the amount), and thereupon such real property, to the extent 
 of the exemption entered by the assessors, shall be exempt from state, county and 
 general municipal taxation, but shall be taxable for local school purposes, and for 
 the construction and maintenance of streets and highways. If no application for 
 exemption be granted, the property shall be subject to taxation for all purposes. 
 The entries above required shall be made and continued in each assessment of 
 the property so long as it is exempt from taxation for any purpose. The pro- 
 visions herein, relating to the assessment and exemption of property purchased 
 with a pension, apply and shall be enforced in each municipal corporation author- 
 ized to levy taxes. 
 
 6. Bonds of this state or any civil division thereof. 
 
 7. The real property of a corporation or association organized exclusively for 
 the moral or mental improvement of men or women, or for the religious, bible, 
 tract, charitable, benevolent, missionary, hospital, infirmary, educational, scien- 
 tific, literary, library, patriotic, historical or cemetery purposes, or for the 
 enforcement of laws' relating to children or animals, or for two or more such pur- 
 poses, and used exclusively for carrying out thereupon one or more of such 
 purposes, and the personal property of any such corportaion shall be exempt 
 from taxation. But no such corporation or association shall be entitled to any 
 such exemption if any officer, member or employee thereof shall receive or may be 
 lawfully entitled to receive any pecuniary profit from the operations thereof, 
 except reasonable compensation for services in effecting one or more of such 
 purposes, or as proper beneficiaries of its strictly charitable purposes; or if the- 
 organization thereof for any such avowed purpose be a guise or pretense for 
 directly or indirectly making any other pecuniary profit for such corporation or 
 association, or for any of its members or employees, or if it be not in goood faith 
 organized or conducted exclusively for one or more such purposes. The real prop- 
 erty of any such corporation or association entitled to such exemption held by it 
 exclusively for one or more of such purposes and from which no rents, profits 
 or income are derived, shall be so exempt, thoug^i not in actual use therefor" by 
 reason of the absence of suitable' buildings or improvements thereon, if the 
 construction of such buildings or improvements is in progress, or is in good 
 
 . faith contemplated by such corporation or association ; or if such real property 
 is held by such corporation or association upon condition that the title thereto 
 shall revert in case any building not intended and suitable for one or more of 
 such purposes shall be erected upon said premises or some part thereof. The real 
 property of any such corporation not so used exclusively for carrying out there- 
 upon one or more of such purposes but leased or otherwise used for other purposes, 
 shall not be exempt, but if a portion only of any lot or building of any such corpo- 
 ration or association is used exclusively for carrying out thereupon one or more 
 such purposes of any such corporation or association, then such lot or building • 
 shall be so exempt only to the extent of the value of the portion so used, and the 
 remaining or other portion, to the extent of the value of such remaining or othei 
 B. C. N. Y.— 69. 
 
1090 BUSINESS CORPORATIONS IN NEW YORK § i 
 
 portion, shall be subject to taxation; provided, however, that a lot or building 
 owned and actually used for hospital purposes, by a free public hospital, depend- 
 ing for maintenance and support upon voluntary charity, shall not be taxed aa 
 to a portion thereof leased or otherwise used for the purposes of income", when 
 such income is necessary for, and* is actually applied to the maintenance and sup- 
 port of such hospital, and further provided that the real property of any fraternal 
 corporation, association or body created to build and maintain a building or 
 buildings for its meeting or meetings of the general assembly of its members, or 
 subordinate bodies of such fraternity and for the accommodation of other fraternal 
 bodies or associations, the entire net income of which real property is exclusively 
 applied or to be used to build, furnish and maintain an asylum or asylums, a 
 home or homes, a school or schools, for the free education or relief of the members 
 of such fraternity, or for the relief, support and care of worthy and indigent 
 members of the fraternity, their wives, widows or orphans, shall be exempt from 
 taxation, and provided also that the real estate owned by a free public library, 
 situate outside of a city, shall not be taxed as to that portion thereof leased or 
 otherwise used for purposes of income, when such income is necessary for and 
 actually applied to the maintenance and support of such library. Property held 
 by any oflBcer of a religious denomination shall be entitled to the same exemptions, 
 subject to the same conditions and exceptions, as property held by a religious 
 corporation. 
 
 8. Real property of an incorporated association of present or former volunteer 
 fireman actually and exclusively used and occupied by such corporation and not 
 exceeding in value fifteen thousand dollars. 
 
 9. All dwelling-houses and lots of religious corporations while actually used by 
 the officiating clergymen thereof, but the total amount of such exemption to any 
 one religious corporation shall not exceed two thousand dollars. Such exemption 
 shall be in addition to that provided by subdivision seven of this section. 
 
 10. The real property of an agricultural society permanently used by it for 
 exiiibition grounds. 
 
 11. The real and personal property of a minister of the gospel or priest of any 
 denomination being an actual resident and inhabitant of this state, who is engaged 
 in the work assigned to him by the church or denomination to which he belongs, 
 or w;ho is disabled by impaired health from the performance of such duties, or 
 over seventy years of age, and the property of the widow of such minister while 
 she remains such and is an actual resident and inhabitant of this state, but the 
 total amount of such exemption on account of both real and personal property, 
 shall not exceed fifteen hundred dollars. 
 
 12. All vessels registered at any port in this state and owned by an American 
 citizen, or association, or by any corporation, incorporated under the laws of the 
 state of New York, engaged in ocean commerce between any port in the United 
 States and any foreign port, are exempted from all taxation in this state, for 
 state and local purposes; and all such corporations, all of whose vessels are 
 employed between foreign ports and ports in the United States, are exempted from 
 all taxation in this state, for state and local purposes, upon their capital stock, 
 franchises and earnings, xmtil and including December thirty-first, nineteen hun- 
 dred and twenty-two. 
 
 13. A bond, mortgage, note, contract, account or other demand, belonging to 
 any person not a resident of this state, sent to or deposited in this state for 
 collection; the products of another state, owned by a nonresident of this state 
 and consigned to his agent in this state for sale on commission for the benefit 
 of the owner; moneys of a nonresident of this state, under the control or in the 
 possession of his agent in this state, when transmitted to such agent for thft 
 purpose of investment or otherwise. 
 
§ 4 TAX LAW 1091 
 
 14. The deposits in any bank for savings' which are due depositors, the accu- 
 mulations in any domestic life insurance corporations, held for the exclusive benefit 
 of the insured, other than real estate and stocks, now liable for taxation; the 
 accumulations of any incorporated co-operative loan associations upon the shares 
 of such association held by any person; certificates of investment or other evi- 
 dences of indebtedness, together with any accumulations thereon, issued by any 
 investment company organized pursuant to the provisions of article seven of the 
 banking law and actually exercising the powers conferred by both subdivisions two 
 and four of section two hundred and ninety-three of the banking law; and per- 
 sonal property of any corporation, person, company or association transacting 
 the business of fire, casualty or surety insurance in this state equal in value to 
 the unearned premiums required by the laws of this state, or the regulations of 
 its insurance department, to be charged as a liability. 
 
 15. Moneys collected in the course of the business of any corporation, asso- 
 ciation or society doing a life or casualty insurance business or both, upon the 
 co-operative or assessment plan, and which are to be used for the payment of 
 assessments/ or for death losses or for both benefits to disabled members. 
 
 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. 
 
 17. The personal property in excess of one hundred thousand dollars of a mutual 
 life insurance corporation incorporated in this state before April tenth, eighteen 
 hundred and forty-nine. 
 
 18. Property real, from which no income is derived, and personal property,, 
 situated within any city of the first class and belonging to the medical society 
 of any county, which county is either wholly or partly within such city and which 
 society was heretofore incorporated under the provisions of chapter ninety-four,, 
 laws of eighteen hundred and thirteen, entitled "An act to incorporate medical 
 societies for the purpose of regulating the practice of physic and surgery in this 
 state," provided that such property is used for the purposes of such a society 
 and not otherwise, and provided that such exemption of property for any society 
 in the counties of Kings or New York shall not exceed one hundred and fifty 
 thousand dollars, and in any other coimty affected hereby shall not exceed fifty 
 thousand dollars. 
 
 19. Property real from which no rent is derived and personal property, situated 
 within any city of the first class and belonging to any incorporated pharmaceutical 
 society of any county which is either wholly or partly within such city, which 
 society has heretofore been or may hereafter be authorized and empowered by act 
 of the legislature to establish and which has established or may hereafter estab- 
 lish, a, college of pharmacy in such city; provided that such property is used for 
 the purposes of such college and not otherwise, and provided also that the exemp- 
 tion of such property for any society in the counties of Kings and New York 
 shall not exceed one hundred thousand dollars, and in any other county affected 
 hereby shall not exceed fifty thousand dollars. 
 
 20. The commissioners of the sinking fund of other chief financial board of any 
 city of the first class, may, in their discretion, by resolution, exempt from taxa- 
 tion for local purposes the real and personal property, or any part of it, of a 
 corporation or association organized to maintain an academy of music, if, in the 
 opinion of such board, the interests of such city require the maintenance of such 
 academy of music, ahd it shall appear that the property so exempted represents 
 or was purchased with the proceeds of popular or general subscription for the 
 erection of such academy of music. No property of such corporation or associa- 
 tion shall be exempt, except the real property consisting of such academy of 
 music and the furniture thereof, or personal property so subscribed and held for 
 the purpose of constructing such academy of music. No such exemption shall be= 
 
1092 BUSINESS CORPORATIONS IN NEW YORK §§ 4-15 
 
 made for any year unless it shall appear that, during the preceding year, the 
 corporation or association has not earned a net annual income upon the net cost 
 of such academy and the furniture thereof. 
 
 21. Household furniture and personal effects to the value of one thousand 
 dollars. 
 
 § 6. The assessment of real and personal property. All real and personal 
 property subject to taxation shall be assessed at the full value thereof, provided, 
 however, that the o^vner of personal property shall be allowed a deduction from 
 the full value of all his taxable personal property to the extent of the just debts 
 owing by him but no such deduction shall be allowed by reason of the indebted- 
 ness of the owner contracted or incurred in the purchase of non-taxable property 
 or securities owned by him or held for his benefit, nor for or on account of any 
 indirect liability as surety, guarantor, indorser or otherwise, nor for or on 
 account of any debt or liability contracted or incurred for the purpose of evading 
 taxation. 
 
 § 7. When property of nonresidents is taxable. 1. Nonresidents 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. 
 
 2. The personal property of non-residents of the state having an actual situs 
 in the state, and not forming a part of capital invested in business in the state, 
 sliall be assessed in the name of the owner thereof for the purpose of identification 
 and taxed in the tax district where such property is situated, unless exempt 
 by law. This subdivision shall not apply to money, or negotiable collateral secur- 
 ities, deposited, or debts owing to, such nonresidents nor shall it be construed 
 as in any manner modifying or changing the law imposing a tax on real estate 
 mortgage securities. 
 
 § 11. Place of taxation of property of corporations. The real estate of all 
 incorporated companies liable to taxation shall be assessed in the tax district 
 in which the same shall lie, in the same manner as the real estate of individuals. 
 All the personal estate of every incorporated 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 com- 
 pany 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 author'ized to pay the last preceding dividend resides. 
 
 § 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. 
 
 § 15. Report of exempt property. It shall be the duty of the board of assess- 
 ors of the several towns of this state, and the boards or officials charged with 
 the duty of assessing property for the purposes of taxation in the several cities 
 of the state, to furnish to the clerks of the boards of supervisors of their respec- 
 tive counties, or in th« case of the city of New York, to the city clerk of that 
 city, on or before thie first day of September in each year, » full and complete 
 
§§ 15-21 TAX LAW 1093 
 
 list and statement of all property situated within their respective districts exempt 
 or partially exempt from taxation under the laws of this state. Such list and 
 statement shall be made on blanks furnished by the tax commission, and in such 
 form and to contain and set forth all the information relative to such property 
 and the situation and value thereof, as may be required by the tax commission, 
 and to be verified in the same manner as assessments of property for the purposes 
 of taxation, and in the city of New York by the chief deputy of the department 
 of taxes and assessments. The tax commission shall prepare and transmit to 
 the clerk of the board of supervisors in each coimty and to the city clerk of the 
 city of New York, a sufficient number qf such blanks, on or before the first day 
 of June in each year, and th-e clerks of the boards of supervisors and the city 
 clerk of the city of New York shall forthwith, upon the receipt thereof, distribute 
 the same among the boards of assessors for use in preparing the statement herein 
 required. And it shall be the duty of the clerk of the board of supervisors of 
 each county and df the city clerk of the city of New York, to transmit such 
 completed lists xjr statements to the tax commission, on or before the first 
 day of October in each year, and the tax commission shall tabulate such state- 
 ments, and cause to be published in their annual report to the legislature, 
 a complete tabulated statement, based upon the statements so transmitted 
 to the tax commission, of all real esate in the several coimties of the 
 state which is exempt or partially exempt from taxation. Immediately upon 
 the receipt of the completed reports by th« various clerks of the boards of super- 
 visors, and the city clerk of the city of New York, those ofiicials shall prepare a 
 tabulated statement of the returns received and shall post a copy thereof, in a 
 conspicuous place, and in all cities of the state cause a copy thereof to be pub- 
 lished in the official paper or papers of said city twice, with an interval between 
 publications of three weeks, except such cities which publish a complete assess- 
 ment-roll. The expense of such publication shall be a city charge and shall be 
 audited and paid in the same manner as charges for other city notices are audited 
 and paid. 
 
 § 20. Ascertaining facts for assessment. The assessors in each tax district 
 shall annually between January first and July first, ascertain by diligent inquiry 
 all the property and the names of all the persons taxable therein. The comp- 
 troller shall on or about April fifteenth in each year transmit to the assessors 
 of each tax district a statement of all lands owned by the state in such district, 
 and such statement shall be used by the assessors in making up their assessment- 
 rolls and shall be considered by them as their authority to assess to the state 
 such of the lands described thereon as are legally subject to taxation. 
 
 § 21. Preparation of assessment-roll. 1. The assessors shall prepare aa 
 assessment-roll or rolls, the form of which shall be prescribed or approved by 
 the tax commission, so classified^ and arranged with respect to number of parts 
 and number of columns in each -part and with such entries and descriptions as 
 shall be sufficient to identify each separately assessed parcel or portion of real 
 estate with the approximate quantity of the square feet, square rods or acres 
 contained in such parcel or portion or a statement of the linear dimensions 
 thereof; each special franchise and the names of all persons and corporations 
 taxable on personal property, capital stock or capital invested in business and 
 bank stock. Assessments of real property, other than special franchises, shall 
 be carried in a separate part of the roll from the assessments of personal property. 
 2. The form of assessment-roll prescribed or approved by the tax commission 
 shall provide for the indication thereon, in appropriate columns, of the name 
 of the village, if in a village, the number of the school districts and the name or 
 number of any special district in which a special tax is levied for district pur- 
 poses, in which each parcel or portion of real property and each special franchise 
 
1094 BUSINESS CORPORATIONS IN NEW YORK §§ 21-28 
 
 described on such roll is situated or in which each person or corporation subject 
 to taxation for personal property in the tax district pursuant to this chapter, 
 resides, carries on business, has its principal place of business or in which its 
 operations are carried on or where the personal property is located, as the case 
 may be, and shall also provide for the entry of the assessments of real property, 
 special franchises and personal property respectively, made pursuant to the 
 chapter, and of the apportionments made pursuant to section forty of this 
 chapter. 
 
 3. In all cities there shall be an additional column in the assessment-roll 
 before the colvunn in which is set down the value of real property, and in such 
 additional column there shall be set down the value of the land exclusive of the 
 buildings thereon. The total assessment only can be reviewed. 
 
 4. When a tax map has been approved by the tax commission, reference to the 
 lot, block and section number or other identification numbers of any parcel on 
 said map shall be deemed a sufficient description of said parcel on the assessment- 
 roll. 
 
 5. A separate part shall be provided for the listing of property that is entirely 
 exempt from taxation. If the property is partially exempt it shall be listed 
 with the taxable property. 
 
 6. Provision shall also be made thereon for the entry of the amount of tax 
 levied for state, county, city, town, highway or special district purposes, against 
 each parcel or portion of real property, each special franchise and each person 
 or corporation for personal property, together with the date of payment thereof 
 and such other items and details as may be required. 
 
 7. The tax commission shall adopt regulations and rules for the preparation 
 and use of the assessment-roll and shall advise with and instruct boards of 
 assessors and other officers' as to their duties in respect thereto. 
 
 § 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 first, deliver to one of the assessors of the tax 
 district in which the company is liable tti he taxed a written statement in the 
 form prescribed by the tax commission 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 an officer of the corporation making the 
 report to the effect that it is in all respects just and true. If such statement 
 is not made within twenty days after the first day of June, or is insufficient, 
 evasive or defective, the assessors may compel the corporation 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 tax commission. Upon such statement being 
 furnished and the costs of the suit being paid, the tax commission, if it shall be 
 satisfied that such omission was not vrilful, may, in its discretion, discontinue 
 such suit. 
 
§§ 29-36 TAX LAW 1095 
 
 § 29. County clerks to furnish data respecting corporations. Between tuo 
 first and fifteenth days of June in each year the county clerk in each county of 
 the state, excepting counties wholly situate within the corporate limits of a 
 city, shall prepare from the records in his office and mail to each of the city 
 and town clerks in his said county, a certified statement containing the names 
 of every stock corporation, whose certificate of incorporation has been filed with 
 him since his last preceding annual statements to said several city and town 
 clerks, whose principal business office or chief place of business is designated in 
 its certificate of incorporation as being in such city or town or in any village 
 or hamlet therein, together with the fact of such designation and the names and 
 addresses of the directors of each such corporation so far as said county clerk 
 can discover the same from the certificate of incorporation or from the latest 
 certificate of election of directors of such corporation filed in his office. Each 
 city or town clerk receiving such statement shall forthwith file the same in his 
 office and mail a notice of such filing to each of the assessors of his city or town. 
 
 § 32. Corporations, how assessed. The assessors shall assess corporations 
 liable to taxation in their respective tax districts upon their assessment-rolls in 
 the following manner: 
 
 1. In the first column the name of each corporation, and imder 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 quaSitity 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, except 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 institutions. 
 
 5. In the fifth -column the value of any special franchise owned by it as fixed 
 by the state board of tax commissioners. 
 
 § 34. Assessment of omitted property. The assessors of any tax district shall, 
 upon their own motion, or upon the application of any taxpayer therein, enter 
 in the assessment-roll of the current year any property shown to have been 
 omitted from the assessment-roll of the preceding year, at the valuation of 
 that year, or if not then valued, at such valuation as the assessors shall deter- 
 mine for the preceding year. Assessments of special franchises that were 
 omitted shall be entered at the valuation fixed and equalized by the tax com- 
 mission. 
 
 § 36. Notice of completion of assessment-roll. The assessors shall complete 
 the assessment-roll on or before the first day of August, and make out a copy 
 thereof, to be left with one of their number, and forthwith cause a notice to be 
 conspicuously posted in three or more public places in the tax district, stating 
 that they have completed the assessment-roll, and that a copy thereof has been 
 left with one of their number at a specified place, where it may be seen and 
 examined by any person until the third Tuesday of August next following, and 
 that on that day they will meet at a time and place specified in the notice to 
 review their assessments. .In any city the notice shall conform to the require- 
 
1096 BUSINESS CORPORATIONS IN NEW YORK §§ 36-38 
 
 ments of the law regulating the time, place and manner of revising assessments 
 in such city. During the time specified in the notice the assessor with whom 
 the roll is left shall submit it to the inspection of every person applying for 
 that purpose. 
 
 § 36-a. Completion of assessment-roll; notice to non-residents. The assessors 
 shall between the first and fifth- day of August mail a notice, to each person 
 and corporation non-resident of their tax district, who has filed with the city or 
 town clerk, on or before the fifteenth day of June preceding, a, written demand 
 therefor. Such notice shall specify each parcel or portion of real property 
 separately assessed to said non-resident person or corporation and the assessed 
 valuation thereof. Upon application made on or before the third Tuesday of 
 August by any non-resident owner of real estate, or by a corporation, having 
 real property in more than one tax district in the county, the assessors shall 
 fix a time subsequent to the third Tuesday in August, but not later than the 
 thirty-first day of August, for a hearing and to review their assessment. 
 
 § 37. Hearing of complaints. The assessors shall meet at the time and place 
 specified in such notice, and hear and determine all complaints in relation to 
 such assessments brought before them, and for that purpose they may adjourn 
 from time to time. Such complainants shall file with the assessors a statement, 
 under oath, specifying the respect in which the assessment complained of is 
 incorrect, which statement must be made by the person assessed or whose prop- 
 erty is assessed, or by some person authorized to make such statement, and who 
 has knowledge of the facts stated therein. The assessors may administer oaths, 
 take testimony and hear proofs in regard to any such complaint and the assess- 
 ment to which it relates. If not satisfied that such assessment is erroneous, 
 they may require the person assessed, or hi*, agent or representative, or any 
 other person, to appear before them and be examined concerning such complaint, 
 and to produce any papers relating to such assessment with respect to his 
 property or his residence for the purpose of taxation. The assessors shall, after 
 said examination, fix the value of the property of the complainant and for that 
 purpose may increase or diminish the assessment thereof. If any such person, 
 or his agent or representative, shall wilfully neglect or refuse to attend and be 
 so examined, or to answer any material question put to him, such person shall 
 not be entitled to any reduction of his assessments. Minutes of the examina- 
 tion of every person examined by the assessors upon the hearing of any such 
 complaint shall be taken and filed in the office of the town or city clerk. 
 
 § 38. Correction and verification of tax-roll. When the assessors or a majority 
 of them shall have completed their roll, they shall severally appear before any 
 officer of their county authorized by law to administer oaths and shall severally 
 make and subscribe before such officer an oath in the following form : " We, 
 the undersigned, do severally depose and swear that we have set down in the 
 foregoing assessment-roll all the real estate situated in the tax district in 
 which we are assessors, according to our best information; and that, with the 
 exception of those cases in which the value of the said real estate has been 
 changed by reason of proof produced before us, and with the exception of those 
 cases in which the value of any special franchise has been fixed by the state 
 tax commission, we have estimated the value of the said real estate at the sums 
 which a majority of the assessors have decided to be the full value thereof; 
 and, also, that the said assessment-roll contains a true statement of the aggre- 
 gate amount of the taxable personal estate of each and every person named in 
 such roll over and above the amount of debts due from such persons, respectively, 
 and excluding such stocks as are otherwise taxable, and such other property as 
 is exempt by law from taxation, at the full vsdue thereof, accordins to our 
 
§§ 3&^0 TAX LAW 1097 
 
 test judgment and belief," which oath shall be written or printed on said roll, 
 signed by the assessors and certified by the officer. 
 
 § 39. Filing of roll and notice thereof. In cities the assessment-roll when 
 thus finally completed and verified shall be filed on or before September first, 
 in the office of the city clerk, there to remain for fifteen days for public inspec- 
 tion. The assessors shall forthwith cause a notice to be posted conspicuously 
 in at least three public places in the tax district and to be published in one or 
 more newspapers, if any, published in the city, that such assessment-roll has 
 been finally completed and stating that it has been so filed and will be open to 
 public inspection. At the expiration of such fifteen days, the city clerk shall 
 deliver such roll to a supervisor of the tax district embraced therein. In towns 
 assessors shall prepare and verify the assessment-roll, and make and certify 
 •one copy thereof. When the assessment-roll shall have been thus finally com- 
 pleted and verified, and the copy thereof certified the assessors shall, on or 
 before the fifteenth day of September, file the said certified copy in the office of 
 the town clerk, to remain for public inspection until delivered by the town 
 clerk to the supervisor of the town as hereinafter provided. The assessors shall 
 forthwith cause a notice to be posted conspicuously in at least three public 
 places in the tax district and to be published in one or more newspapers, if any, 
 published in the town, that such assessment-roll has been finally completed and 
 stating that such certified copy has been so filed. The original assessment- 
 roll shall on or before the first day of October be delivered by the assessors to 
 a supervisor of the tax district embraced therein. The certified copy of the 
 assessment-roll on file in the town clerk's office, as heretofore provided, shall 
 on the first day of November be delivered by the town clerk to a supervisor of 
 the tax district embraced therem who shall make such corrections as may 
 be made in the original roll by the board of supervisors and shall extend the 
 tax thereon so that such roll shall be in all respects a copy of the original roll 
 delivered to the collector and said certified copy shall thereafter be returned 
 by the supervisor to the office of the town clerk there to remain as a public 
 record. Notwithstanding the provisions of this section, the board of supervisors 
 of any county may require additional copies of the assessment-rolls of the 
 towns of such county to be made, and specify by whom such additional copies 
 shall be made, the date when the certified copy of the town assessment-roll shall 
 bo filed in the office of the town clerk, and the date when the original assess- 
 m-snt-roU shall be delivered to the supervisor of the town. [L. 1918, c. 279.] 
 
 § 40. Assessors to apportion valuation of railroad, telegraph,- telephone, pipe 
 line, water or gas companies and of special franchises among school and special 
 districts. The assessors of each town or city in which a railroad, telegraph, 
 telephone, water pipe line, or gas company, including a company engaged in the 
 business of supplying natural gas, is assessed by them or by the tax commis- 
 sion upon property lying in more than one school district or in one or more 
 special districts in which a tax is levied for district purposes shall after the 
 time fixed for hearing complaints and action thereon and prior to the final 
 completion of the roll, pursuant to section thirty-nine of this chapter, apportion 
 the. assessed valuation of the property of each of such corporations so made 
 by them or by the tax commission among such school and special districts. 
 Such apportionments shall be entered by the assessors in the appropriate column 
 of the assessment-roll and a certificate thereof signed by the assessors or a 
 majority of them shall be filed with the town or city clerk within five days 
 thereafter, and thereupon the valuations so apportioned shall become the valu- 
 ations of such property in such districts for the purpose of taxation for the 
 ensuing year. The town clerk shall furnish the trustees of school districts a 
 certified statement of the valuations apportioned to their respective districts. 
 
1098 BUSINESS CORPORATIONS IN NEW YORK §§ 40-45 
 
 In ease of the failure of the assessors to act, a supervisor of the town or 
 city shall make such apportionment on request of either the trustee of any 
 school district or the officers of any special district or the corporation assessed. 
 In case of any alteration in any school district affecting the valuation of such 
 property, the officer making the same shall fix and determine the valuations in 
 the districts affected for the current year. 
 
 § 41. Neglect or omissioa of duty by assessors. The assessors, in the execu- 
 tion of their duties, shall use the forms and follow the instructions and orders 
 transmitted to them, from time to time, by the tax commission. If any assessor 
 shall neglect or omit to perform any duty, the other assessors shall perform 
 such duty and shall certify upon the assessment-roll the name of the delinquent 
 assessor, stating therein the cause of such omission, and the assessment-roll, 
 when otherwise made and completed in accordance with the requirements of or 
 under this chapter shall be deemed to be the assessment-roll of the tax district. 
 If the assessors shall neglect to meet for the purpose of hearing grievances 
 any person aggrieved by the assessment may appeal to the board of super- 
 visors at its next meeting, which shall have the same power to review and 
 correct such assessment as the assessors have under this article. If any assessor 
 shall refuse or neglect to perform any duty or do any act required of him by 
 this chapter, he shall forfeit to the tax district the sum of fifty dollars, to be 
 receovered by the tax commission. 
 
 § 44. Special franchise report to tax commission. Every person, copartnership, 
 association or corporation subject to taxation on a special franchise, shall, 
 within thirty days after such special franchise is acquired, make a written 
 report to the tax commission containing a full description of every special fran- 
 chise possessed or enjoyed by such person, copartnership, association or corpo- 
 ration, a copy of the special law, grant, ordinance or contract under which 
 the same is held, or if possessed or enjoyed under a general law, a reference 
 to such law, a statement of any condition, obligation or burden imposed upon 
 such special franchise, or under which the same is enjoyed, together with any 
 other information relating to the value of such special franchise, required by 
 the tax commission. The tax commission may require an annual report and 
 from time to time a further or supplemental report from any such person, 
 copartnership, association or corporation containing information and data upon 
 such matters as it may specify. Every report required by this section shall 
 have annexed thereto the affidavit of the president, vice-president, secretary or 
 treasurer of the association or corporation, or one of the persons or one of the 
 members of the copartnership making the same, to the effect that the state- 
 ments contained therein are true. Such commission may prepare blanks to be 
 used in making the reports required by this section. Every person, copartner- 
 ship, association or corporation failing to make the report required by this 
 section, or failing to make any special report required by the tax commission 
 within a reasonable time specified by it, 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, and shall not be entitled 
 to review the assessment by certiorari, as provided by section forty-six of this 
 chapter. Acknowledgment of receipt of blank reports which contain the penalty 
 provisions of this section shall be deemed sufficient notice of such penalties. 
 
 § 45. Special franchise; full valuation and equalization by tax commission. 
 The tax commission shall annually fix and determine the full and actual valua- 
 tion of each special franchise subject to assessment in each city, town or village; 
 shall inquire into and ascertain as near as may be the percentage of the full 
 and actual value at which other real property in the city, town or village for 
 which such full valuation has been made, is being assesied, and by the rate of 
 
§§ 45-45-c TAX LAW 1099 
 
 equalization so established fix and determine the equalized valuation of each 
 special franchise subject to assessment. 
 
 § 45-a. Hearing on special fianchise valuations; notice. On determining the 
 full and actual valuation of a special franchise and the rate of equalization 
 thereof the tax commission shall immediately give notice in writing to the 
 person, copartnership, association or corporation affected, and to each city, town 
 or village in which such special franchise is subject to assessment, stating in 
 substance that such determinations have been made and the total full and 
 actual valuation and the rate of equalization thereof in each city, town and 
 village, and that the commission will njeet at its office in the city; of Albany 
 on a day specified in such notice, to hear and determine any complaint concern- 
 ing such full valuation and the rate of equalization. Such notice must be served 
 at least ten days before the day fixed for the hearing; and it may be served 
 on a copartnership, association or corporation by mailing a copy thereof to it 
 at its principal ofl5.ce or place of business and on a person, either personally 
 or by mailing it to him at his place of business or last known place of residence. 
 In' a town said statement shall specify the total amount 'of the assessment of 
 such special franchise, and the amount thereof in any village or villages therein. 
 "Section thirty-seven of this chapter applies so far as practicable to a hearing 
 by the tax commission under this section. 
 
 § 45-b. Special franchises; determination of final full and equalized valuation. 
 After hearing complaints as to such valuation and rate of equalization of the 
 special franchise the commission shall fix and determine ,the final full value 
 of each special franchise and ascertain the final rate of equalization and equalize 
 the final full value of each special franchise to such an amount as in its judg- 
 ment will place the special franchise on the same basis as the assessment of 
 other real property in the city, town or village in which the special franchise is 
 located. In ascertaining the basis of assessment of other real property or deter- 
 mining the final full and actual valuation of a special franchise, the tax com- 
 mission may, in its discretion, take testimony and hear proof, under oath or 
 otherwise, and may avail itself of all information on the subject appearing of 
 record in its office and all information which it may acquire in the discharge 
 of its duties, and may employ its experts, agents or other persons in procuring 
 any information it may require for. such purpose. 
 
 § 45-c. Certificate of special franchise valuations filed with localities. After 
 determining the final full and equalized valuation of a special franchise the 
 tax commission shall file with the clerk of the city, town or village in which 
 such special franchise is subject to assessment, a written statement duly certified 
 by the secretary of the commission of the valuation of each special franchise 
 assessed therein as finally fixed and equalized. In a town said statement shall 
 specify the total amount of the assessment of each special franchise, and the 
 amount thereof in any village or villages therein. In the c\Jty of Kew York said 
 statement shall be filed with the department of taxes and assessments. Such 
 statement shall be filed with the clerk of the village not later than the first 
 day of October and with the clerk of the city, or the department of taxes and 
 assessments in the city of N"ew York, not later than thirty days before the final 
 completion, verification and filing of the assessment-roll. The statement of 
 special franchise valuations in towns shall be made in duplicate, one copy to be 
 filed with the town clerk not later than August first, and the other copy with 
 the clerk of the board of supervisors of the county not later than September 
 first. 
 
 It shall be the duty of city, town and village clerks within five days after 
 th« final completion and filing of the assessment-roll, and the first posting or 
 publication of the notice thereof as required by law in their respective municipal 
 
1100 BUSINESS CORPORATIONS IN NEW YORK §§ 45-0-46 
 
 corporations and of the clerks of the boards of supervisors in each county 
 within five days" after the final revision of the assessment-roll and the annexation 
 of the warrant thereto to furnish the tax commission with said date or dates. 
 
 Each city clerk shall, within five days after the receipt by him of the state- 
 ment of the equalized valuations of a special franchise as fixed by the tax 
 commission, deliver a copy of such statement certified by him to the assessors 
 or other officers charged with the duty of making local assessments in said city. 
 Each town clerk shall, within five days after the receipt by him of the statement 
 of equalized valuations, deliver copies of such statement certified by him to 
 the supervisor of the town, and to the assessors of the town for which the 
 assessments have been made. Each village clerk shall, within five days after 
 the receipt by him of the statement of equalized valuations, deliver copies of 
 such statement certified by him to the assessors, if any, and if not to the trus- 
 tees of the village for which the assessments have been made. 
 
 The final equalized valuation of every special franchise in a city, town or 
 village as so fixed and determined by the tax commission shall be entered ,by 
 the assessors or other officers thereof in the proper part of the assessment-roll 
 before the final revision and certification of such roll by them and become a, 
 part thereof with the same force and eflfect as if such assessment had been 
 originally made by such assessors. 
 
 § 45-d. Special franchise; certification of final valuations to owners. The tax 
 commission, on filing said statement of the final equalized valuation of a special 
 franchise, shall give to the person, copartnership, association or corporation 
 affected written notice thereof, which notice shall contain a statement of the 
 full and actual value of such special franchise as finally fixed and determined 
 and the amount to which it has been equalized. In a town said statement 
 shall specify the total amount of the assessment of each special franchise, and 
 the amount thereof in any village or villages therein. Such notice may be 
 served on a copartnership, association or corporation affected by mailing a copy 
 thereof to it at its principal office or place of business, and on a person either 
 personally or by mailing it to him at his place of business or last known 
 place of residence. 
 
 § 45-e. Special franchise assessments subject to all taxes. The final equalized 
 valuation of every special franchise as fixed and determined by the tax com- 
 mission shall be the assessed valuation on which all taxes, based on such special 
 franchise for state, county, city, town, village, school, highway or other district 
 purposes shall be levied for the ensuing year. 
 
 § 45-f. Information by local officers. The assessors Or other taxing officers, 
 or other local oflScers in any city, town or village or district, or any state or 
 county officer, shall on demand furnish to the tax commission any information 
 required by them for the purpose of determining the full and equalized value 
 of a special franchise. 
 
 It shall be the duty of city, town, and village clerks within twenty days 
 after the taking effect of any law changing the boundaries of their respective 
 municipal corporations to furnish the tax commission with a statement giving 
 the details of and clearly showing said changes. Upon the granting of any 
 franchise to use the streets, highways, public places or public waters by the 
 proper officers of any city, town or village, it shall be the duty of the respective 
 clerks of said municipalities to furnish a copy of the same to the tax com- 
 mission. 
 
 § 46. Certiorari to review assessment. An assessment of a special franchise 
 by the tax commission may be reviewed in the manner prescribed by article 
 thirteen of this chapter, and that article applies so far as practicable to such 
 an assessment, in the same manner and with the same force and effect as if 
 
§§ 46-48 TAX LAW 1101 
 
 the assessment had been made by local assessors; a petition for a writ of 
 (Certiorari to review the assessment must be presented within fifteen days after 
 the final completion and filing of the assessment-roll, and the first posting or 
 publication of the notice thereof as required by law. Such writ must run to and 
 be answered by said tax commission and no writ of certiorari to review any 
 assessment of a special franchise shall run to any other board or officer unless 
 otherwise directed by the court or judge granting the writ. In cities a copy 
 of said writ and the petition for same shall be furnished to the corporation 
 coimsel or other law officer. An adjudication made in the proceeding instituted 
 by such writ- of certiorari sliall be binding upon the local assessors and any 
 ministerial officer who performs any duty in the collection of the taxes levied 
 upon said assessment in the same manner as though said local assessors or 
 officers had been parties to the proceeding. [L. 1918, e. 278.] 
 
 § 47. Tax commissioner to appear by counsel; employment of experts. In 
 any proceeding for the review of an assessment of a special franchise made by 
 by the state board of tax commissioners or the tax commission, said tax com- 
 mission is authorized to appear by counsel to be designated by the attorney- 
 general. The attorney-general or such counsel may einploy experts and the 
 'compensation of such counsel and experts and their necessary and proper 
 expenses and disbursements, incurred or made in sucli proceeding, and upon 
 any appeal therein, shall when audited and allowed as are other charges against 
 such tax district, be a charge upon the tax district upon whose rplls appears 
 the assessment sought to be reviewed. Where, in one proceeding, tliere is 
 reviewed the assessment of a special franchise in more than one tax district, 
 separate accounts shall be rendered for said costs, expenses and disbursements 
 to the proper officer of each of said tax districts and audited and allowed by 
 him as aforesaid. For the purposes of this section, the city of New Yorlc shall 
 be deemed one tax district. If provision shall not have been made for the 
 payment of such expense in any year, then the officers who are empowered by 
 law to make such provisions in any county, city, town or other political sub- 
 division of the state, are hereby authorized and directed to raise money to such 
 an amount as may be necessary, in any manner provided by law for meeting 
 expenses in anticipation of the collection of taxes and to pay such expense there- 
 from. The amount so raised shall be included in the amount to be raised bv 
 tax in the ensuing year. 
 
 § 48. Deduction from special franchise tax for local purposes. If, when the 
 tax assessed on any special franchise is due and payable under the provisions 
 of law applicable to the city, town or village in which the tangible property is 
 located, it shall appear that the person, copartnership, association or corporation 
 affected has paid to such city, town or village for its exclusive use within the 
 next preceding year, under any agreement therefor, or under any statute requir- 
 ing the same, any svim based upon a percentage of gross earnings, or any other 
 income, or any license fee, or any sum of money on account of such speciaj 
 franchise, granted to or possessed by such person, copartnership, association 
 or corporation, which payment was in the nature of a tax, all amounts so paid 
 for the exclusive use of such city, town or village except money paid or expended 
 for paving or repairing of pavement of any street, highway or public place, 
 and except in a city of the first class car license fees or tolls paid for the 
 privilege of crossing a bridge owned by the city, shall be deducted from any tax 
 based on the assessment made by the state tax commission for city, town or 
 village purposes, but not otherwise; and the remainder shall be the tax on such 
 special franchise payable for city, town or village purposes. The chamberlain 
 or treasurer of a city, the treasurer of a village, the supervisor of a town, or 
 other officer to whom any sum is paid for which a person, copartnership,. 
 
1102 BUSINESS CORPORATIONS IN NEW YORK §§ 48-180 
 
 association or corporation is entitled to credit as provided in this section, shall 
 not less than five nor more than twenty days before a tax on a special franchise 
 is payable, make and deliver to the collector or receiver of taxes or other officer 
 authorized to receive taxes for such city, town or village, his certificate show- 
 ing the seyeral amounts which have been paid during the year ending on the 
 day of the date of the certificate. On the receipt of such certificate the collector, 
 receiver or other officer shall immediately credit on the tax-roll to the person, 
 copartnership, association or corporation affected the amount stated in such 
 certificate, on any tax levied against such person, copartnership, association or 
 corporation on an assessment of a special franchise for city, town or village 
 purposes only, but no credit shall be given on account of such payment or 
 certificate in any other year, nor for a greater sum than the amount of the special 
 franchise tax for city, town or village purposes, for the current year ; and he shall 
 collect and receive the balance, if any, of such tax as required by law. 
 
 § 49. Tax on special franchise not to affect other taxes. The imposition or 
 payment of a tax on a special franchise as provided in this chapter shall not 
 relieve any association, copartnership or corporation from the payment of any 
 organization tax or franchise tax or any other tax otherwise imposed by article 
 nine of this chapter, or by any other provision of law; but tangible property 
 situated in, upon, under or above any street, highway, public place, or public 
 waters, subject to tax as special franchise as described in subdivision six of 
 section two, shall not be taxable except upon the assessment made as herein 
 provided by the tax commission. 
 
 § 180. Organization tax. Every stock corporation incorporated under any 
 law of this state shall pay to the state treasurer a tax of one-twentieth of one 
 per centum upon the amount of capital stock which the corporation is authorized 
 to have, and a like tax upon any subsequent increase. Provided, that in no 
 case shall such tax be less than ten dollars. Such tax shall be due and payable 
 upon the incorporation 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 the 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 subsequent increase thereof, a tax shall be paid only upon so much of such 
 increase as exceeds the amount of capital stock upon which a tax has been 
 before paid. In case of the consolidation of existing corporations into a corpora- 
 tion, 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 fur- 
 nished with a receipt for such tax from the state treasurer. If the board of 
 railroad commissioners or public service commission shall have heretofore granted 
 or the public service commission shall hereafter grant, such certificate and upon 
 an appeal from the determination of such board of railroad commissioners or 
 public service commission, such certificate has been or may hereafter be denied 
 the state treasurer shall refund the amount of tax so paid to the railroad cor- 
 
§§ 180-182 TAX LAW 1103 
 
 poration or corporations by which such tax was paid, upon proof of payment 
 being presented and appropriation being made therefor. 
 
 § 181. License tax on foreign corporations. Every foreign corporation, except 
 banking corporations, fire, marine, casualty and life insurance companies, 
 co-operative fraternal insurance companies, and building and loan associations, 
 doing business in this state, shall pay to the state treasurer, for the use of 
 the state, a license fee of one-eighth of one per centum fbr the privilege of 
 exercising its corporate franchises or carrying on its business in such corporate 
 or organized capacity in this state, to be computed upon the basis of the capital 
 stock employed by it within this state, during the first year of carrying on its 
 business in this state; which first payment shall not be less than ten dollars; 
 and if any year thereafter any such corporation shall employ more than eight 
 thousand dollars of its capital stock within this state on which a license fee 
 has not been paid then a license fee at the rate of one-eighth of one per centum 
 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 taxa- 
 tion, the capital of the 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 license fees shall 
 be paid shall be fixed by the state tax commission, which shall have the same 
 authority to examine the books and records in this state of such foreign cor- 
 porations, and the employees' thereof as it has in the case of domestic corpora- 
 tions and the comptroller shall have the same power to issue his warrant for 
 the collection of such license fees, as he now has with regard to domestic cor- 
 Dorations. No action shall be maintained or recovery had in any of the courts 
 in this state by such foreign corporation after thirteen months from the time 
 of beginning such business within the state, without obtaining » receipt from 
 the comptroller for the payment of the license fee upon the capital stock 
 employed by it within this state during the first year of carrying on its business 
 in this state. 
 
 § 182. Franchise tax on corporations. For the privilege of exercising its cor- 
 porate franchises in this state every domestic corporation, joint stock company 
 or association, and for the privilege of doing business in this state, every foreign 
 corporation, joint stock company or association, 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-rirst 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 
 
 (1) The assets do not exceed the liabilities, excl.usive 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. 
 
1104 BUSINESS CORPORATIONS IN NEW YORK §§ 182, 18$ 
 
 Then each dollar of the amount of capital stock employed in this state, deter- 
 mined as hereinbefore provided, shall be taxed at the rate of three-fourths of 
 one mill. If such dividend or dividends amount to less than six per centum on 
 the par value of the capital stock, and 
 
 ( 1 ) The assets exceed the liabilities, exclusive of capital stock, by an amount 
 equal to or greater than the par value of the capital stock, or 
 
 (2) The average. price at which such stock sold during said year is equal to 
 or greater than the par value. 
 
 Then the amount of capital stock, determined as hereinbefore provided to be 
 employed in this state, shall be taxed at the rate of one and one-half mills on 
 each dollar of the valuation of the capital stock employed in this state, but such 
 valuation shall not be less than 
 
 ( 1 ) The par value of such stock, 
 
 (2) The difference between the assets and liabilities, exclusive of capital 
 stock, 
 
 (3) The average price at which such stock sold during said year. 
 
 If such corporation, joint stock company or association shall have more than 
 one kind of capital stock, and upon one of such kinds of stock a dividend or 
 dividends amounting to six or more than six per centum upon the par value 
 thereon, has been made or declared, and upon the other no dividend has been 
 made or declared, or the dividend or dividends made or declared thereon amount 
 to less than six per centum upon the par value thereof, then the tax shall be 
 at the rate of one-quarter of a mill for each one per centum of dividends made 
 or declared upon the capital stock upon the par value of which the dividend or 
 dividends made or declared amount to six or more than six per centum, and in 
 addition thereto a tax shall be charged upon the capital stock 
 
 ( 1 ) Upon which no dividend, was made, or declared, or 
 
 (2) Upon which the dividend or dividends made or declared did not amount 
 to six per centum upon the par value 
 
 At the rate as hereinbefore provided for the taxation of capital stock upon 
 which no dividend was made or declared, or upon which the dividend or divi- 
 dends 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 produced 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, sav- 
 ings banks, institutions for savings, title guaranty, insurance or surety corpora- 
 tions, 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 
 manufacturing, and in the sale of the. product of such manufacturing, mining 
 corporations wholly engaged in mining ores within this state, agricultural 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 
 
g^ 183-187 TAX LAW 1105 
 
 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 transmission corpora- 
 tions and associations. Every corporation and joint-stock association formed 
 for steam surface railroad, canal, steamboat, ferry, except a ferry company 
 operating between any of the boroughs of the city of New York under a, lease 
 granted by the city, express, navigation, pipe line, transfer baggage express, 
 telegraph, telephone, palace car or sleeping ear purposes, and every other trans- 
 portation corporation not liable to taxation under sections one hundred and 
 eighty-five or one hvmdred and eighty-six of this chapter, shall pay for the 
 privilege of exercising its corporate franchises or 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 transmission business originating and terminating within this state, but 
 shall not include earnings derived from business of an interstate character. 
 
 § 185. Franchise tax on elevated railroads or surface railroads not operated 
 by steam. Every corporation, joint stock company or association owning or 
 operating any elevated railroad or surface railroad not operated by steam shall 
 pay to the state for the privilege of exercising its corporate franchise or carry- 
 ing on its business in such corporate or organized capacity within this state an 
 annual tax which shall be one per centum upon its gross earnings from all 
 sources within this state, and three per centum upon the amount of dividends 
 declared 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. 
 Any such railroad corporation whose property is leased to another railroad cor- 
 poration shall only be required under this section to pay a tax of three per 
 centum upon the dividends declared and paid in excess of four per centum 
 upon the amount of its capital stock, except that where the property leased is 
 operated by a receiver and the gross earnings are not included with the gross 
 earnings of the lessee for. the purposes of taxation under this section, then such 
 receiver shall be required to pay the tax upon gross earnings as hereinbefore 
 provided. 
 
 § 186. Franchise tax on water-works companies, gas companies, electric or 
 steam heating, lighting and power companies. Every corporation, joint-stock 
 company or association formed for supplying water or gas, or for electric or steam 
 heating, lighting or power purposes, shall pay to the state for the privilege of 
 exercising its corporate 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 declared 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. 
 
 § 187. Franchise tax on insurance corporations. An annual state tax for 
 the privilege of exercising corporate franchises or for carrying on business in 
 their corporate or organized capacity within this state equal to one per centum 
 on the gross amount of premiums received during the preceding calendar year 
 for business done at any time in this state, which gross amount of premiums 
 shall include all premiums received during such preceding calendar year on all 
 policies, certificates, renewals, policies subsequently cancelled, insurance and 
 
1106 BUSINESS CORPORATIONS IN NEW YORK §§ 187-192 
 
 reinsurance during such preceding calendar year, and all premiums that are 
 received during such preceding calendar year on all policies, certificates, 
 renewals, policies subsequently cancelled, insurance and reinsurance executed, 
 issued or delivered in all years prior to such preceding calendar year, whether 
 such premiums were in the form of money, notes, credits, or any other substitute 
 for money, but such gross amount of premiums shall not include premiums 
 refunded to policyholdeps as dividends or on cancellation or return of policies 
 nor amounts paid as reinsurance to such other companies as are subject to 
 taxation under this section, shall be paid annually into the treasury of the 
 state on or before the first day of June by the following corporations: 
 
 1. Every domestic insurance corporation, incorporated, organized or formed 
 under, by or pursuant to a, general or special law; 
 
 2. Every insurance corporation, incorporated, organized or formed under, by 
 or pursuant to the laws of any other state of the United States, and doing 
 business in this state, except a corporation doing a fire insurance business or a 
 marine insurance business. 
 
 3. Every insurance corporation, incorporated, organized or formed under, by 
 or pursuant to the laws of any state without the United States, or of any 
 foreign country, except such a corporation doing a life, health or casualty insur- 
 ance business, and doing business in this state; but the tax on gross premiums 
 of a corporation so incorporated, organized or formed and doing a fire or marine 
 insurance business within the state shall be equal to five-tenths of one per 
 centum. This section does not apply to a fraternal beneficiary society, order 
 or association, a corporation for the insurance of domestic animals, a town or 
 county co-operative insurance corporation, nor to any corporation subject to the 
 supervision of or required by or in pursuance of law to report to the superin- 
 tendent of banks; but this section does apply to an individual, or partnership, 
 or association of underwriters known as 'Lloyds in so far as corporations doing 
 the same kind of insurance business are subject to its provisions. The taxes 
 imposed by this section shall be in addition to all other fees, licenses or taxes 
 imposed by this or any other law, except that in assessing taxes under the 
 reciprocal provisions of section thirty-four of the insurance law, credit shall 
 be allowed for any taxes paid under this section. The term " insurance corpora- 
 tions " as used in this article, shall include a corporation, association, joint- 
 stock company or association, person, society, aggregation or partnership by 
 whatever name known doing an insurance business in this state. 
 
 § 192. Reports of corporations. Corporations liable to pay a tax under this 
 article shall report as follows : 
 
 1. Corporations paying franchise tax. Every corporation, association or joint 
 stock company liable to pay a tax under section one hundred and eighty-two 
 of this chapter shall, between the first day of November and the fifteenth day 
 of December in each year, make a written report to the tax commission 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. Upon written application the state 
 tax commission may, in its discretion, extend the time in which to make report, 
 but not beond the fifteenth day of February succeeding. 
 
 2. Transporation and transmission corporations. Every transportation or 
 transmission corporation, joint stock company or association liable to pay an 
 additional tax under section one hundred and eighty-four of this chapter, shall 
 also,, on or before August first in each year, make a written report to the tax 
 commission of its condition at the close of its business on June thirtieth preced- 
 
§ 192 TAX LAW 1107 
 
 mg, stating the amount of its gross earnings from all sources and the amount 
 of its gross earnings from its transporation or transmission business originating 
 and terminating within this state. 
 
 3. Elevated and surface railroad corporations.- Every corporation, joint-stock 
 company or association liable to pay a tax under section one hundred and eighty- 
 five of this chapter shall, on or before August first of each year, make a written 
 report to the tax commission of its condition at the close of its business on 
 June thirtieth preceding, stating the amount of its gross earnings from business 
 done in this state, the amoimt of dividends of every nature declared or paid 
 during the year ending June thirtieth, the authorized capital of the company 
 and the amount of capital stock actually issued and outstanding. 
 
 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 written report to the tax commission of its condition 
 at the close of its business on October thirty-first preceding, stating the amount 
 of its gross earnings 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. 
 
 5. Insurance corporations. Every insurance corporation liable to pay a tax 
 under section one hundred and eighty-seven of this chapter, shall, on or before 
 March first in each year, make a written report to the tax commission of its 
 condition at the close of its business on December thirty-first preceding, stating 
 the gross amount of all premiums referred to in section one hundred and eighty- 
 seven of this chapter, received during the preceding calendar year on business 
 done thereby in this state during the year ending with such day and at all times 
 prior thereto, whether the premiums were in money or in the form of notes, 
 credits or other substitute? for money. 
 
 6. Foreign bankers. Every foreign banker liable to pay a tax under section 
 one hundred and ninety-one of this chapter shall, on or before February first in 
 each year, make a written report to the tax commission of the condition of his 
 business on December thirty-first preceding, stating the amount of tax for which 
 he is liable under this article, and giving in detail the facts required by the last 
 preceding section for the purpose of ascertaining aaid computing the same. 
 
 7. Trust companies. Every company liable to pay a tax under section one 
 hundred and eighty-eight of this chapter shall, on or before August first in each 
 year, make a written report to the tax commission of its condition at the close 
 of business on June thirtieth preceding, separately stating the amount of its 
 capital stock, the amount of its surplus, and the amount of its undivided profits, 
 and containing such other data, information or matter as the tax commission 
 may require. 
 
 8. Saving banks. Every saving bank liable to pay a tax under section one 
 hundred and eighty-nine of this chapter, shall on or before August first in each 
 year, make a written report to the tax commission of its condition at the close 
 of business on June thirtieth preceding, stating the par value of its surplus, and 
 undivided earnings and containing such other data, information or matter as the 
 tax commission may require. 
 
 9. Investment companies. Every investment company liable to pay a tax 
 imder section one hundred and eighty-eight-a of this chapter shall, on or before 
 August first in each year, make a written report to the tax commission of its 
 condition at the close of business on June thirtieth preceding, separately stating 
 the amount of its capital stock, the amount of its surplus, and the amount of its 
 undivided profits, and containing such other data, information or matter as the 
 tax commission may require. 
 
1108 BUSINESS CORPORATIONS IN NEW YORK §§ 193-196 
 
 § 193. Value of stock to be appraised. If the dividend or dividends 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 tax commission with the report provided 
 for in the last section. If the tax commission is not satisfied with the valuation 
 so made and returned it is authorized and empowered to make a valuation 
 thereof, and settle an account upon the valuation so made by it, and tlie 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 corporation, 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 rejjorts shall contain any other data, information or matter which 
 the tax commission may require to be included therein, and it may prescribe the 
 form in which such reports shall be made and the form of oath thereto, Wlien 
 so prescribed such forms shall be used in making the report. The commission 
 may- require at any time a further or supplemental report under this article, 
 which shall contain information and data upon such matters as the commission 
 may specify. 
 
 § 195. Powers of tax commission to examine into affairs of corporations. In 
 case any report required by any of the preceding sections of this article shall be 
 unsatisfactory to the commission, or if any such report is not made as herein 
 required, the commission 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 it for the taxes, percentage and interest due 
 the state from such corporation, association, joint-stock company, person or 
 partnership. The commission shall also have power to examine or cause to be 
 examined, in case of a failure to report or in case the report is unsatisfactory to 
 it, 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 its information, and may appoint a commissioner by a written 
 appointment under its official seal for that purpose. Every commissioned so 
 appointed shall be authorized to make such examination 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 commission. 
 The commission shall, therefrom, or from any other data which shall be satis- 
 factory to it, order and state an accoimt for the tax due the state, together with 
 the expenses of such examination and the taking of such testimony and proofs. 
 Such expenses shall be fixed and adjusted by the commission. 
 
 § 196. Notice of s,tatement of tax; interest. Upon auditing and stating every 
 accovmt for taxes under this article, the commission 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 
 accovints 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 and shall be added thereto and collected therewith by the comptroller. 
 
§§ 197, 198 TAX LAW 1109 
 
 § 197. Payment of tax and penalty for failure. A tax imposed by section 
 one hundred and eighty-two or one hundred and eighty-six of this chapter shall 
 be due and payable into the state treasury on. or before the fifteenth day of Janu- 
 ary in each year. A tax imposed by section one hundred and eighty-four of this 
 chapter on a transportation or transmission corporation, or by section one hun- 
 dred 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-eight-a 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 required by this article, 
 the corporation, associaion, 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 commission, within any 
 reasonable time to be specified by the commission, 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 tax commission. If an 
 application be filed with the commission 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 commission may at any time, 
 upon notice thereof sent to the person, partnership, company, association or 
 corporation against whom it is stated, revise and readjust such account and if 
 it shall be made to appear upon any such application, by evidence submitted to 
 it or otherwise, that any such account included taxes or other charges which 
 could not have been lawfully demanded, or that payment has been illegally made 
 or exacted of any such account, the commission shall resettle the same according 
 to law and the facts, and charge or credit, as the case may require, the differ- 
 ence, if any, resulting from such revision or resettlement upon the accounts for 
 taxes of or against any such person, partnership, company, association or cor- 
 poration. 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, associa- 
 tion or corporation liable to pay taxes imder article nine of this chapter, and 
 the assignee of the whole or any part of such credit on filing with the commission 
 such assignment shall thereupon be entitled to credit on the books of the com- 
 mission 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 commission shall forthwith send 
 written notice of its determination upon such application to the applicant, and 
 to the attorney-general, which notice may be sent by mail to its post-office address. 
 
1110 BUSINESS CORPORATIONS IN NEW YORK §§ 199-202 
 
 § 199. Review of determination of tax commission by certiorari. The deter- 
 mination of the commission upon any application made to it 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 commission shall return, on such certiorari, the accounts and all the evidence 
 before it on such application, and all the papers and proofs upon the original 
 statement of such account and all proceedings thereon. If the original or reset- 
 tled accounts shall be foimd 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 corrected 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. 
 
 i 200. Regulations as to such writ of certiorari. No certiorari to review 
 any audit and statement of an account or any determination by the commission 
 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 commission 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 commission, in such amount 
 and with such sureties as a justice of the supreme court shall approve, to tha 
 effect that if such writ is dismissed or the determination of the commission 
 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 commission 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, partnership, company, 
 association or corporation against which such account 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 comptroUer 
 and pay to the state treasurer the money collected by virtue thereof, by a time to 
 be therein specified, not less than sixty days from date of the warrant. Such 
 warrant shall be a lien upon and shall bind the real and personal property 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 imder this article by any corporation, 
 association, joint-stock company, partnership or person liable to taxation there- 
 imder, 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 
 
§§ 202-207 TAX LAW 1111 
 
 information as may be in his possession as may lead to the recovery of any taxes 
 clue 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 prepara- 
 tion 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 per- 
 son, 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 delinquent cor- 
 porations. 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 commission under the provisions of this article. 
 If any such account shall remain unpaid at the expiration of one year after 
 notice of the statement thereof has been sent as required by this article, and 
 the comptroller 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 property 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, or under 
 section one hundred and eighty-eight-a of this article, other than for an organiza- 
 tion 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 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 associations taxable under the provisions 
 of sections twenty-four, to twenty-four-g, both inclusive, 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 prescribed 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, provided, however, that as to real estate in the hands of 
 persons who are owners thereof who would be purchasers in good faith but for 
 such tax or penalty, and as to the lien on real estate of mortgages held by per- 
 sons who would be holders thereof in good faith but for such tax or penalty, all 
 taxes and penalties which have prior to April first, nineteen hundred aed seven- 
 teen become due and payable pursuant to this article, and which have not been 
 
1112 BUSINESS CORPORATIONS IN NEW YORK §§ 207-211 
 
 referred to the attorney-general pursuant to section two hundred and three of 
 this chapter, shall cease to be a lien on such real estate as against such pur- 
 chasers or holders, after the expiration of ten years from the time when such 
 tax became due and payable. 
 
 § 208. Definitions. As used in this article. 1. The term " corporation " 
 includes a joint-stock company or association; 
 
 2. The words " tangible personal property " shall be taken to mean corporal 
 personal property, such as machinery, tools, implements, goods, wares and mer- 
 chandise, and shall not be taken to mean money, deposits in bank, shares of 
 stock, bonds, notes, credits or evidences of an interest in property and evidences 
 of debt. [L. 1918, c. 417.] 
 
 § 209. Franchise tax on corporations based on net income. For the privilege 
 of exercising its franchise in this state in a corporate or organized capacity every 
 domestic manufacturing and every domestic mercantile corporation, and for the 
 privilege of doing business in this state, every foreign manufacturing and every 
 foreign mercantile corporation, except corporations specified in the next section, 
 shall annually pay in advance for the year beginning November first next pre- 
 ceding an annual franchise tax, to be computed by the tax commissioner upon the 
 basis of its net income for its fiscal or the calendar year next preceding, as 
 hereinafter provided, which income is presumably the same as the income upon 
 which such corporation is required to pay a tax to the United States. [L. 1918, 
 c. 276.] § 5. The sections of such chapter amended by this act shall be con- 
 strued as having been in effect, as so amended, as of the date of the original 
 enactment of article nine-a of the tax law, as added by chapter 726 of the laws 
 of 1917. 
 
 § 210. Corporations exempt from article. Corporations wholly engaged in the 
 purchase, sale and holding of real estate for themselves, holding corporations 
 whose principal income is derived from holding the stocks and bonds of other 
 corporations and corporations liable to a tax under sections one hundred and 
 eighty-four to one hundred and eighty-nine inclusive of this chapter, banks, 
 saving banks, institutions for savings, title guaranty, insurance or surety cor- 
 porations, shall be exempt from the payment of the taxes prescribed by this 
 article. [L. 1918, c. 417.] 
 
 § 211. Keports of corporations to tax commission. Every corporation taxable 
 imder this article as well as foreign corporations having officers, agents or 
 representatives within the state shall annually on or before July first, or within 
 thirty days after the making of its report of net income to the United States 
 treasury department for any fiscal or calendar year, transmit to the tax com- 
 mission a report in the form prescribed by the tax commission specifying: 
 
 1. The name and location of the principal place of business of such corpora- 
 tion, the state under the laws of which organized, and the date thereof; the 
 amovmt of its issued capital stock and the kind of business transacted. [L, 1918, 
 c. 417.] 
 
 2. The amount of its net income for its preceding fiscal or the preceding cal- 
 endar year as shown in the last return of annual net income made by it to the 
 United States treasury department, and if the corporation shall claim that such 
 return is inaccurate, the amount claimed by it to be the net income for such 
 period. [L. 1918, c. 276.] 
 
 3. The average monthly value for the fiscal or calendar year of its real prop- 
 erty and tangible personal property in each city, village or portion of a town 
 outside of a village within the state, and the average monthly value of all its 
 real property and tangible personal property wherever located. 
 
 4. The average monthly value for the fiscal or calendar year of bills and 
 accounts received for (a) personal property sold by the corporation from mer- 
 chandise manufactured by it within this state; (b) personal property sold by 
 
§§ 211-214 TAX LAW 1113 
 
 the corporation from merchandise owned by it and located within the state at 
 the time of the acceptance of the order, but not manufactured by it within this 
 state; and (c) services performed, based on all orders received at offices main- 
 tained by the corporation within this state, excluding bills and accounts receiva- 
 ble arising from sales made from a stock of merchandise or other property 
 located at a place of business maintained by the reporting corporation within 
 this state. Also the average total monthly value for the fiscal or calendar year 
 of bills and accounts receivable for (a) personal property sold by the corpora- 
 tion from merchandise manufactured by it; within and without the state (b) 
 personal property sold by the corporation from merchandise owned by it at the 
 time of the acceptance of the order but not manufactured by it; and (c) serv- 
 ices performed, based on orders received at offices maintained by the corporation, 
 excluding bills and accounts receivable on orders filled from a, stock of mer- 
 chandise or other property maintained by the reporting company. In case of a 
 corporation organized under the laws of another country a statement shall be 
 made showing its entire net income. [L. 1918, c. 417.] 
 
 5. The average total value for the fiscal or calendar year of the stock of other 
 corporations owned by the corporation, and the proportion of the average value 
 of the stock of such other corporations within the state of New York, as allocated 
 pursuant to section two hundred and fourteen of this chapter. 
 
 6. If the corporation has no real or tangible personal property within the 
 state, the city, village or portion of a town outside of a village in the state 
 in which is located the office in which its principal financial concerns within the 
 state are transacted. 
 
 7. Such other facts as the tax commission may require for the purpose of 
 making the computation required by this article. 
 
 8. Any corporation taxable hereunder may omit from its report the state- 
 ments required by subdivisions four and five by incorporating in its report a 
 consent to be taxed upon its entire net income. [L. 1918, u. 417.] 
 
 § 212. Reports by corporation on basis of fiscal year. A corporation which 
 reports to the United States treasury department on the basis of its fiscal year, 
 may report to the tax commission- upon the same basis. 
 
 § 213. Reports to be sworn to; forms. Every report required by this article 
 shall have annexed thereto the affidavit of the president, vice-president, secretary 
 or treasurer of the corporation to the effect that the statements contained 
 therein are true. Blank forms of report shall ,be furnished by the tax commis- 
 sion, on application, but failure to secure such a blank shall not release any 
 corporation from the obligation of making a report herein required. The com- 
 mission may require a further or supplemental report under this article to eon- 
 tain further information and data necessary for the- computation of the tax 
 herein provided. 
 
 § 214. Computation of tax. If the entire business of the corporation be 
 transacted within the state, the tax imposed by this article shall be based upon 
 the entire net income of such corporation for such fiscal or calendar year as 
 returned to the United States treasury department subject, however, to any 
 correction thereof for fraud, evasion or error, as ascertained by the state tax 
 commission. 
 
 If the entire business of such corporation be not transacted within the state, 
 the tax. imposed by this article shall be based upon -a proportion of such ascer- 
 tained net income, to be determined in accordance with the following rules: 
 
 The proportion of the net income of the corporation upon which the tax 
 under this article shall be based, shall be such portion of the entire net income 
 as the aggregate of 
 
 1. The average monthly value of the real property and tangible personal 
 property within the state. 
 
1114 BUSINESS CORPORATIONS IN NEW YORK §§ 214,214-a 
 
 2. The average monthly value of bills and accounts receivable for (a) personal 
 property sold by the corporation from merchandise manufactured by it within 
 this state; (b) personal property sold by the corporation from merchandise 
 owned by it and located within the state at the time of the acceptance of the 
 order, but not manufactured by it within this state; and (c) services performed 
 within this state, excluding bills and accounts receivable arising from sales 
 made from a stock of merchandise or other property located at a, place of busi- 
 ness maintained by the reporting corporation without this state. 
 
 3. The proportion of the average value of the stocks of other corporations 
 owned by the corporation, allocated to the state as provided by this section, 
 but not exceeding ten per centum of the real and tangible personal property 
 segregated to this state under this article, bears to the aggregate of 
 
 4. The average monthly value of all the real property and personal property 
 of the corporation, wherever located. 
 
 5. The average total value of bills and accounts receivable for (a) personal 
 property sold by the corporation from merchandise manufactured by it within 
 and without this state; (b) personal property sold by the corporation from 
 merchandise owned by it at the time of acceptance of the order but not manu- 
 factured by it; and (c) services performed both within and without this state, 
 based on orders received at offices maintained by the corporation, excluding bills 
 and accounts receivable on orders filled from a stock of merchandise or other 
 property maintained by the corporation. 
 
 6. The average total value of stocks of other corporations owned by this cor- 
 poration, but not exceeding ten per centum of the aggregate real and tangible 
 personal property set up in this report. 
 
 Real property and tangible personal property shall be taken at its actual value 
 where located. The value of share stock of another corporation owned by a 
 corporation liable hereunder shall for purposes of allocation of assets be appor- 
 tioned in and out of the state in accordance with the value of the physical 
 property in and out of the state representing such share stock. 
 
 It is further provided that every domestic corporation exercising its franchise 
 in this state and every foreign corporation doing business in this state, other 
 than those exempted by section two hundred and ten of this chapter, shall be 
 subject to a minimum tax of not less than ten dollars and not less than one 
 mill upon each dollar of the apportionment of the face value of its issued capital 
 stock apportioned to this state, which shall be determined by dividing the 
 amount of the real and tangible personal property in this state by the entire 
 amount of the real and tangible personal property as shown in the report, and 
 multiplying the quotient by the face value of the issued capital stock. If such 
 a corporation has stock without par value, then the base of the tax shall be on 
 such a portion of its paid in capital as its real and tangible personal property 
 in this state bears to its entire real and tangible personal property. [L. 1918, 
 e. 417.] 
 
 § 214-a. Taxation of merged or consolidated corporations. If any corporation 
 shall take over by merger or consolidation the assets or franchise of another cor- 
 poration doing business in *his state during the year ending with the thirty-first 
 day of October, such corporation shall make a consolidated report for all the 
 corporations so merged or consolidated as though the merged or consolidated 
 corporation had existed and done business as an entity throughout the year for 
 which the report is made and shall be taxed for the year to ensue upon the basis 
 of such report, and as hereinbefore provided in this article. [L. 1918, c. 292, 
 which says section " shall be construed as having been in effect as of the date of 
 the original enactment of article nine-a of the tax law, as added by chapter 726, 
 L. 1917."] 
 
§§ 215-219 TAX LAW 
 
 1115 
 
 § 215. Rate of tax. The tax imposed by this article shall be at the rate 
 of three per centum of the net income of the corporation or portion thereof tax- 
 able within the state, determined as provided by this article. 
 
 § 216. Penalty for failure to report. Any corporation which fails to make 
 any report required by this article shall be liable to a penalty of not more than 
 hve thousand dollars to be paid to the state, to be collected in a civil action, at 
 the instance of the tax commission ; and any officer of any such corporation who 
 makes a fraudulent return or statement with intent to defeat or evade the pay- 
 ment of the taxes prescribed by this article shall be liable to a penalty of not 
 more than one thousand dollars, to be collected in like manner. All moneys 
 recovered as penalties, for a failure to report or for making fraudulent reports 
 shall be paid to the state comptroller. 
 
 § 217. Powers of tax commission. The tax commission may for good cause 
 shown extend the time within which any corporation is required to report by 
 this article. If any report required by this article be not made as herein 
 required, the tax commission is authorized to make an estimate of the net 
 income of such corporation and of the amount of tax due under this article, 
 from any infonuation in its possession, and to order and state an account accord- 
 ing to such estimates for the taxes, penalties and interest due the state from 
 such corporation. If the tax imposed upon any corporation under this article 
 is based upon an estimate as provided in this section, the tax commission shall 
 notify such corporation of a time and place at which opportunity will be given 
 to the corporation to be heard in respect thereof. Such notice shall be mailed to 
 the post-office address of the corporation. All the authority and powers con- 
 ferred on the tax commission by the provisions of section one hundred and ninety- 
 five of the tax law shall have full force and effect in respect of corporations which 
 may be liable hereunder. 
 
 § 218. Revision and readjustment of accounts by tax commission. If an 
 application for revision be filed with the commission by a corporation against 
 which an account is audited and stated within one year from the time any such 
 accovuit shall have been audited and stated, the commission shall grant a hearing 
 thereon and if it shall be made to appear upon any such hearing by evidence sub- 
 mitted to it or otherwise, that any such account included taxes or other charges 
 which could not have been lawfully demanded, or that payment has been illegally 
 made or exacted of any such account, the commission shall resettle the same 
 according to law and the facts, and adjust the account for taxes accordingly, 
 and shall send notice of its determination thereon to the corporation and state 
 comptroller forthwith. 
 
 § 219. Review of determination of tax commission by certiorari and regula- 
 tions as to writ. The determination of the commission upon any application 
 made to it by any Corporation for revision and resettlement of any account, as 
 prescribed in this article, may be reviewed in the manner prescribed by and 
 subject to the provisions of section one hundred and ninety-nine of this chapter. 
 No certiorari to review any audit and statement of an account or any deter- 
 mination by the commission 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 commission 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 comptroller before making the application and an undertaking filed with the 
 commission, 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 deter- 
 mination of the commission affirmed, the applicant for the writ will pay all 
 costs and charges which may accrue against it in the prosecution of the writ, 
 including costs of all appeals. [L. 1918, c. 417.] 
 
1116 BUSINESS CORPORATIONS IN NEW YORK §§ 219-a-219-d 
 
 § 219-a. Audit and statement of tax. On or before the first day of November 
 in eacli year the tax commission shall audit and state the account of each cor- 
 poration known to be liable to a tax under this article, for its preceding fiscal 
 or the preceding calendar year, and shall compute the tax thereon and forthwith 
 notice the same to the state comptroller for collection. The tax commission 
 shall determine the portion of such tax to be distributed to the several counties 
 and the amounts to be credited to the several cities or towns thereof, when the 
 same is collected, and shall indicate such determination in noticing such tax to 
 the state comptroller. If the corporation has real property or tangible personal 
 property located in a village, or if it has no real or tangible personal property 
 in the state but the office in which its principal financial concerns within the 
 state are transacted is located in a village, the tax commission shall indicate 
 such facts to the state comptroller, with the name of the village in which such 
 office or property is located. 
 
 § 219-b. Notice of tax. Every report required by section two hundred and 
 eleven of this chapter shall contain the post-office address of the corporation and 
 lines or spaces upon which the corporation shall enter the portion of its net income 
 which it believes to be the basis upon which the tax shall be imposed under this 
 article, and the amount of such tax. Notice of tax assessment shall be sent by 
 mail to the post-office address given in the report, and the record that such 
 notice has been sent shall be presumptive evidence of the giving of the notice 
 and such record shall be preserved by the tax commission. 
 
 § 219-c. When tax payable. The tax hereby imposed shall be paid to the 
 state comptroller on or before the first day of January of each year or within 
 thirty days after notice of the tax has been given as provided in section two 
 hundred and nineteen-b of this chapter if such notice i^ given subsequent to the 
 first day of December of the year for which such tax is imposed. If such tax 
 be not so paid or in the case of additional taxes, if not paid within thirty days 
 after notice of such additional tax has been given as provided in section two 
 hundred and nineteen-d of this chapter and such notice of additional tax is given 
 subsequent to the first day of December of the year for which such additional 
 tax is imposed, the corporation liable to such tax shall pay to the state comp- 
 troller, in addition to the amount of such tax, or additional tax, the per centum 
 of such amount, plus one per centum for each month the tax or additional tax 
 remains unpaid. No such penalty or charge shall be added to the amount of such 
 tax or additional tax imposed for the year beginning November first, nineteen 
 hundred and seventeen, if such tax or additional tax is paid within thirty days 
 after the passage of this act. Each such tax or additional tax shall be a lien 
 upon and binding upon the real and personal property of the corporation liable 
 to pay the same from the time when it is payable until the same is' paid in full. 
 [L. 1918, c. 271.] 
 
 § 21!)-d. Corrections and changes. If the amount of the net income for any 
 year of any corporation taxable under this article as returned to the United 
 States treasury department is changed or corrected by the commissioner of 
 internal revenue or other officer of the United States or other competent authority, 
 such corporation, within ten days after receipt of notice of such change or 
 correction, shall make return under oath or affirmation to the tax commission of 
 such changed or corrected net income, and shall concede the accuracy of such 
 determiTiation or state wherein it is erroneous. 
 
 The tax commission shall ascertain, from such return and any other informa- 
 tion in the possession of the commission, the net income of such corporation for 
 the fiscal or calendar year for which such change or correction has been made 
 by such commissioner of internal revenue or other officer or authority. All the 
 authority conferred on the tax commission by the provisions of section one hun- 
 dred and ninety-five of this chapter is hereby granted to it in respect to the 
 
§§ 219-d-219-g TAX LAW 1117 
 
 ascertainment of such net income. The tax commission shall thereupon reaudit 
 and restate the account of such corporation for taxes based upon the net income 
 for such fiscal or calendar year, such reaudjt to be according to the net income 
 so ascertained by the tax commission. The proceedings and determination of the 
 tax commission in the making of such reassessment may be revised and readjusted 
 and reviewed in the manner provided by sections two hundred and eighteen and 
 two hundred and nineteen of this chapter, as in the case of an original assess- 
 ment of the tax. If from such reassessment it appears that such corporation shall 
 have paid under this article an excess of tax for the year for which such reassess- 
 ment is made, the tax commission shall return a statement of the amount of such 
 excess to the comptroller, who shall credit such corporation with such amount. 
 Such credit may be assigned by the corporation in. whose favor it is allowed to 
 a corporation liable to pay taxes under this article, and the assignee of the whole 
 or any part of such credit on filing with the commission such assignment shall 
 thereupon be entitled to credit upon 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. If from such reassessment it appears that an additional tax 
 is due from such corporation for such year, such corporation shall, within thirty 
 days after notice has been given as provided in section two hundred and nineteen-b 
 of this chapter by the tax commission, pay such additional tax. [L. 1918, c. 276, 
 which adds that this and the other sections amended by it " shall be construed 
 as having been in effect, as so amended, as of the date of the original enactment 
 of article nine-a of the tax law," as added by ch. 726, L. 1917]. 
 
 § 219-e. Warrant for the collection of taxes. If < the tax imposed by this 
 article be not paid within thirty days after the same becomes due, unless an 
 an appeal or other proceeding shall have been taken to review the same, 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 corporation owning the same, found within his 
 county, for the payment of the amount thereof, with the added penalties, interest 
 and the cost of executing the warrant, and to return such warrant to the comp- 
 troller and pay to him the money collected by virtue thereof by a time to be 
 thei-ein specified, not less than sixty days from the date of the warrant. Such 
 warrant shall be a lien upon and shall bind the real and personal property of the 
 corporation against whom 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 reqord, and shall be entitled to the same fees for 
 his services in executing the warrant, to be collected in the same manner. 
 
 § 219-f. Action for recovery of taxes; forfeiture of charter by delinquent 
 corporations. Action may be brought at any time by the attorney-general at the 
 instance of the comptroller, in the name of the state, to recover the amount 
 of any taxes, penalties and interest due under this article. If such taxes 
 be not paid within one year after the same be due, and the comptroller is 
 satisfied that the failure to pay the same is intentional he shall so report to the 
 attorney-general, who ^hall immediately bring an action in the name of the people 
 of -the state, for the forfeiture of the charter or franchise of any corporation 
 failing to make such payment, and if it be found that such failure was intentional, 
 judgment shall be rendered in each action for the forfeiture of such charter and 
 for its dissolution if a domestic corporation and if a foreign corporation for the 
 annulment of its franchise to do business in this state. 
 
 § 219-g. iJeposit of revenues collected. The state comptroller shall deposit 
 all taxes, interest and penalties collected under this article in responsible banks, 
 
1118 BUSINESS CORPORATIONS IN NEW YORK §g 219-g, 219-h 
 
 banking houses or trust companies in the state which shall pay the highest rate 
 of interest to the state for such deposit, to the credit of the state comptroller on 
 account of the franchise tax. And every such bank, banking house or trust com- 
 pany shall execute and file in his office an undertaking to the state, in the sum, 
 and with such sureties, as are required and approved by the comptroller, for the 
 safe keeping and prompt payment on legal demand therefor of all such moneys held 
 by or on deposit in such bank, banking house or trust company, with interest 
 thereon on daily balances at such rate as the comptroller may fix. Every such 
 undertaking shall have indorsed thereon, or annexed thereto, the approval of the 
 attorney-general as to its form. The state comptroller shall on the first day of 
 each month make a verified return to the state treasurer of all revenues received 
 by him under this article during the preceding month, stating by whom and wlien 
 paid, and shall credit himself with all payments made to county treasurers since 
 his last previous return pursuant to section two hundred and nineteen-h of this 
 chapter. 
 
 § 219-h. Disposition of revenues collected. The state comptroller shall on or 
 before the twenty-fifth day of each month pay into the state treasury to the 
 credit of the general fund all interest and penalties and two-thirds of all taxes 
 received by him under this article during the preceding calendar month, as 
 appears from the return made by him to the state treasurer. The balance of all 
 taxes collected and received by him under this article from any corporation, as 
 appears from the return made by him to the state treasurer, shall, on or before 
 the twenty-fifth day of April, July, October and January, for the quarter ending 
 with the last day of the preceding month, be distributed and paid by him to the 
 treasurers of the several counties of the state and disposed of by such treasurers, 
 in accordance with the following rules : 
 
 1. If the corporation has no tangible personal property within the state, such 
 payment shall be made to the county treasurer of the county in which is located 
 the office at which its principal financial concerns within the state are transacted ; 
 
 2. If the corporation has tangible personal pioperty, as shown by its report 
 pursuant to section two hundred and eleven, in but one city or town of the 
 state, such payment shall be made to the county treasurer of the county in 
 which such city or town is located; 
 
 3. If the corporation has tangible personal property in more than one city or 
 town of the state, as shown by its report pursuant to section two hundred and 
 eleven, such payment shall be made to the county treasurers of the counties in 
 which such cities or towns are located in the proportion that the average monthly 
 value of the tangible personal property of such corporation in the cities and 
 towns of such county bears to the average monthly value of all its real property 
 and tangible personal property within the state; 
 
 4. In making such payment to a county treasurer, the state comptroller shall 
 indicate the portion thereof to be credited to any city or town within the county 
 on account of the location therein of its principal financial office or property as. 
 determined by the preceding subdivisions, and if such principal financial office or 
 property is located in a village shall indicate the village in which it is located; 
 if such principal financial office or property is located in a city or town outside 
 of a village, the whole of such portion shall be paid to such city or town as 
 hereinafter provided; if such principal financial office or property is located in 
 a village, there shall be paid to such village as hereinafter provided such a part 
 of the entire amount credited to the town as the entire amount of taxes raised 
 by said village, or portion thereof in said town, during the preceding calendar 
 year for village and town purposes bears to the aggregate amount so raised by 
 the town and village during the preceding calendar year for town and village 
 purposes. 
 
§§ 219-h-219-j TAX LAW 
 
 1119 
 
 5. Aa to any comity wholly included within a city such payment shall be 
 made to the chamberlain or other chief fiscal officer of such city and be paid 
 into the general fund for city purposes; 
 
 6. As to any county not wholly included within a city the county treasurer 
 shall withm ten days after the receipt thereof pay to to the fiscal officer of a 
 city or to the chief fiscal officer of a village or to the supervisor of a town 
 the portion of a money received by him from the state comptroller to which such 
 city, village or town is entitled, which shall be credited by such officer to general 
 city, village or town purposes. [L. 1918, e. 417.] 
 
 § 219-i. Secrecy required of ^ officials; penalty for vioUtion. 1. Except in 
 accordance with proper judicial order or as otherwise provided by law, it shall 
 be unlawful for any tax commissioner, agent, clerk or other officer or employee to 
 divulge or make known in any manner the amount of income or any particulars 
 set forth or disclosed in any report under this article. Nothing herein shall be 
 construed to prohibit the publication of statistics so classified as to prevent the 
 identification of particular reports and the items thereof, or the publication of 
 delinquent lists showing the names of taxpayers who have failed to pay their 
 taxes at the time and in the manner provided by section two hundred and nine- 
 teen-c together with any relevant information which in the opinion of the comp- 
 troller may assist in the collection of such delinquent taxes; or the inspection by 
 the attorney-general or other legal representatives of the state of the report of any 
 corporation which shall bring action to set aside or review the tax based thereon, 
 or against whom an action or proceeding has been instituted in accordance with 
 the provisions of section two hundred and sixteen or two hundred and nineteen-f 
 of this article. 
 
 Reports shall be preserved for three years, and thereafter until the state tax 
 commission orders them to be destroyed. 
 
 2. Any offense against the foregoing provisions shall be punished by a fine not 
 exceeding one thousand dollars or by imprisonment not exceeding ori% year, or 
 both, at the discretion of the court and if the offender be an officer or employee of 
 the state he shall be dismissed from office and be incapable of holding any public 
 office in this state for a period of five years thereafter. 
 
 § 219-j. Exemptions from certain other taxation. After this article takes 
 effect, corporations taxable thereunder shall not be assessed on any personal 
 property or capital stock, as provided for in section twelve of this chapter, except 
 for taxes levied for the fiscal year ending December thirty-first, nineteen hundred 
 and seventeen, in taxing districts in which the fiscal year is coterminous with 
 the calendar year; and where taxes are required by law to be levied for local 
 purposes for a fiscal year beginning in nineteen hundred and seventeen and 
 ■ending in nineteen. hundred and eighteen, such corporations shall not be assessed 
 on any personal property or capital stock, as provided for in section twelve of 
 this chapter, except for taxes levied for such fiscal year. 
 
 If, in any taxing district, by reason of the provisions of this section as 
 originally enacted by chapter seven hundred and twenty-six of the laws of nineteen 
 hundred and seventeen, the assessment of the personal property or capital stock 
 of any such corporation has been omitted from the assessment-roll for the fiscal 
 year specifically referred to in the first paragraph of this section, the assessors 
 of such district shall enter the same in the assessment-roll first prepared after 
 this act goes into effect, at the valuation of such fiscal year, or if not then valued, 
 at such valuation as the assessors shall determine for such year. Before finally 
 fixing such valuation the assessors shall give to such corporation a notice of at 
 least five days and an opportunity to be heard with reference thereto. Such 
 property shall" be taxed at the rate per centum of the fiscal year in which it was 
 omitted from the assessment-roll. The whole amount of tax so imposed on the 
 personal property or capital stock of such corporations shall be deducted from 
 
1120 BUSINESS CORPORATIONS IN NEW YORK §§ 219-j 
 
 the aggregate of taxation otherwise to be levied on such taxing district for the 
 current year, before such tax is levied. 
 
 After tliis article taxes effect corporations taxable theretinder shall not be 
 required to pay the franchise tax imposed by section one hundred and eighty- 
 two of this chapter, or to make the reports called for in sections twenty-seven and 
 one hundred and ninety-two of this chapter, except that, for the purpose of 
 assessing the personal property or capital stock of such corporations as spe- 
 cifically provided in this section, such corporations may be required to make the 
 report called for in such section twenty-seven. Nothing herein shall be construed 
 to impair the obligation to pay franchise taxes due on or before the fifteenth 
 day of January, nineteen hundred and seventeen, or taxes on personal property 
 or capital stock assessed as specifically provided in this section, whether such 
 taxes have been or may hereafter be assessed. But if any corporation taxed 
 under this article shall have paid or shall hereafter pay taxes on personal prop- 
 erty or capital stock assessed as specifically provided in this section, for any 
 part of the calendar year nineteen hundred and eighteen, such corporation shall 
 be entitled to credit, with interest, as hereinafter provided, for the amount of 
 such part of the taxes so paid locally as the portion of the year nineteen hundred 
 and eighteen for which such taxes shall have been paid bears to the entire 
 calendar year. And if, in any taxing district, by reason of the provisions of 
 this section as originally enacted by chapter seven hundred and twenty-six of 
 the laws of nineteen hundred and seventeen, any such corporation shall have 
 paid or shall hereafter pay taxes on personal property of capital stock for the 
 year ending December thirty-first, nineteen hundred and eighteen, such corpo- 
 ration shall be entitled to credit, with interest, as hereinafter provided, for the 
 amount of taxes so paid locally. 
 
 Such credits shall be granted by the tax commission on the submission of satis- 
 factory proofs that the corporation is entitled thereto. The tax commission shall 
 forthwith notify the corporation and the comptroller of any credit so granted. 
 Such credit may be used by the corporation entitled thereto in the payment of 
 taxes charged against it under this article, or such credit or any part thereof 
 may be assigned by the corporation in whose favor it is allowed to a corporation 
 liable to pay taxes under this article, and the assignee of the whole or any part 
 of such credit on filing with the comptroller such assignment shall thereupon be 
 entitled to credit upon the books of the comptroller for the amount thereof on 
 the 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 is authorized and directed to charge such credits against the 
 several taxing districts in which the taxes credited were originally paid, and to 
 deduct such amount or amoimts from any taxes thereafter found due to such 
 taxing districts under the provisions of this article. If the amount so charged 
 against a taxing district is in excess of the amount in the possession of the 
 comptroller to be returned to such taxing district under this article, the comp- 
 troller shall enter such excess of credits upon his books against the state's share 
 of the taxes collected under this article and not previously accounted for to the 
 state treasurer. The comptroller shall advise the state treasurer of all such 
 proceedings and shall retain from any funds subsequently found due to any such 
 taxing district under this article a like amount which shall be deposited with 
 the state treasurer with an accounting therefor. [L. 1918, c. 271.] 
 
 [§ 2. Section two hundred and nineteen- j of such chapter as amended by this 
 act shall be construed as having been in effect, as so amended, as of the date of 
 original enactment of article nine-a of the tax law, as added by chapter seven 
 hundred and twenty-six of the laws of nineteen hundred and seventeen. [L. 1918, 
 c. 271).] 
 
§§ 219-k-253 TAX LAW . 1121 
 
 § 219-k. 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 prescribed by this article. ' 
 
 § 219-1. Personal property defined. The term " personal property," for the 
 purposes of the exemption from assessment and taxatioii thereon locally as 
 granted by section two hundred and nineteen-j of this chapter, shall include 
 such machinery and equipment affixed to the building as would not pass between 
 grantor and grantee as a part of the premises if not specifically mentioned or 
 referred to in the deed, or as would, if the building were vacated or sold, or the 
 nature of the work carried on therein changed, be moved, except boilers, ven- 
 tilating apparatus, elevators, gas, electric and water power generating apparatus 
 and shafting. An owner of a building is entitled to the same exemption under 
 this section as a lessee and every assessment of real property made subsequent to 
 June fourth, nineteen hundred and seventeen, shall be subject to the provisions 
 of this section as amended hereby. [L. 1918, c. 271.] 
 
 § 250. Definitions. The term " real property " as used in this article, in 
 addition to the definition thereof contained in section two of this chapter, 
 includes everything a conveyance or mortgage of which can be recorded as a 
 conveyance or mortgage of real property under the laws of the state. The 
 term " mortgage " as used in this article includes every mortgage or deed of 
 trust which imposes a lien on or aff'ects the title to real property, notwith- 
 standing that such property may form a part of the security for the debt or 
 debts secured thereby. Executory contracts for the sale of real property under 
 which the vendee has or is entitled to possession shall be deemed to be mort- 
 gages for the purposes of this article and shall be taxable at the amount un- 
 paid on such contracts. A contract or agreement by which the indebtedness 
 secured by any mortgage is increased or added to, shall be deemed a mortgage 
 of real property for the purpose of this article, and shall be taxable as such 
 upon the amount of such increase or addition. 
 
 § 251. Exemption from local taxation. All mortgages of real property situ- 
 ated within the state which are taxed by this article and the debts and the 
 obligations which they secure, together with the paper writings evidencing 
 the same, shall be exempt from other taxation by the state, counties, cities, 
 towns, villages, school districts and other local subdivisions of the state, 
 except that such mortgages shall not be exempt from the taxes imposed by 
 sections twenty-four to twenty-four-g, both inclusive, one hundred and eighty- 
 seven, one hundred and eighty-eight, one hundred and eighty-nine and article 
 ten of this chapter. 
 
 § 252. Exemptions. No mortgage of real property situated within this state 
 shall be exempt, and no person or corporation owning any debt or obligation 
 secured by mortgage of real property situated within this state shall be exempt, 
 from the taxes imposed by this article by reason of anything contained in any 
 other statute, or by reason of any provision in any private act or charter whicli 
 is subject to amendment or repeal by the legislature, or by reason of nonresi- 
 dence within this state or for any other cause. 
 
 § 253. Recording tax. A tax of fifty cents for each one hundred dollars and 
 each remaining major fraction thereof of principal debt or obligation' which is, 
 or under any contingency may be secured at the date of the execution thereof or 
 at any time thereafter by a mortgage on real property situated within the 
 state recorded on or after the first day of July, nineteen hundred and six, 
 is hereby imposed on each such mortgage, and shall be collected and paid as 
 provided in this article. If the principal debt or obligation which is or by any 
 contingency may be secured by such mortgage recorded on or after the first day 
 71 
 
1122 BUSINESS CORPORATIONS IN NEW YORK §§ 253-256 
 
 of July, nineteen hundred and seven, is less than one hundred dollars, a tax 
 of fifty cents is hereby imposed on such mortgage, and shall be collected and 
 paid as provided in this article. 
 
 § 254. Optional tax on prior mortgages. Whenever any mortgage other than 
 a mortgage specified in section two hundred and sixty-four has been recorded 
 proir to July first, nineteen hundred and six, the record ow-ner thereof may file 
 with the recording officer of the county in which the real property, or any 
 part thereof, on which said mortgage is a lien, is situated, a written state- 
 ment under oath verified by the record owner or the agent or officer of such 
 record owner describing such mortgage by giving the date of the same and the 
 liber and page of the record thereof together with the names of the parties thereto, 
 specifying the amount then remaining unpaid on the debt or obligation secured 
 thereby, and electing that it shall become subject to the tax prescribed by 
 section two hundred and fifty-three of this chapter. Whenever any unre- 
 corded mortgage has been executed and delivered prior to July first, nineteen 
 hundred and six, the owner thereof may record the same upon filing with the 
 recording officer a similar statement and paying the tax as herein prescribed. 
 A tax shall thereupon be computed, levied and collected upon the amount of 
 the principal debt or obligation unpaid at the time of the filing of such state- 
 ment, or of the recording of such mortgage and filing of such statement. 
 On the payment of such tax as herein provided, the recording officer shall 
 note on the margin of the record of such mortgage the fact of such statement 
 and of the amount of the tax paid, attested by his signature, whereupon such 
 mortgage and the debt or obligation secured thereby shall be entitled to the 
 exemptions and immunities conferred by this article, and all of the provisions 
 of this article shall thereafter be applicable to said mortgage. Whenever the 
 original mortgage is presented to the clerk together with the statement he 
 shall also note on said original mortgage the fact of the filing of the said 
 statement and also the amount of the tax paid duly attested by his signature, 
 which indorsement shall be conclusive evidence of the payment of such tax. 
 
 § 255. Supplemental mortgages. If subsequent to the recording of a mort- 
 gage on which all taxes, if any, accrued under this article have been paid, a 
 supplemental instrument or mortgage is recorded for the purpose of correcting 
 or perfecting any recorded mortgage, or pursuant to some provision or cove- 
 nant therein, or an additional mortgage is recorded imposing the lien thereof 
 upon property not originally covered by or not described in such recorded primary 
 mortgage for the purpose of securing the principal indebtedness which is or under 
 any contingency may be secured by such recorded primary mortgage, such 
 additional instrument or mortgage shall not be subject to taxation under this 
 article, unless it creates or secures a new or further indebtedness or obligation 
 other than the principal indebtedness or obligation secured by or which under 
 any contingency may be secured by the recorded primary mortgage, in which 
 case, a tax is imposed as provided by section two hundred and fifty-three of 
 this chapter on such new or further indebtedness or obligation, and shall be 
 paid to the proper recording officer at the time such instrument or additional 
 mortgage is recorded. If at the time of recording such instrument, or addi- 
 tional mortgage any exemption is claimed under this section, there shall be 
 filed with the recording officer and preserved in his office a statement under 
 oath of the facts on which such claim for exemption is based. The determina- - 
 lion of the recording officer upon the question of exemption shall be reviewable 
 by the tax commission. 
 
 § 256. Mortgages for indefinite amounts or for contract obligations. If the 
 principal indebtedness secured or which by any contingency may be secured 
 by a mortgage is not determinable from the terms of the mortgage, or if a 
 
§§ 256-258 TAX LAW 11:^3 
 
 mortgage is given to secure the performance by the mortgagor or any other 
 person of a contract obligation other than the payment of a specific sum -of 
 money and the maximum amount secured or which by any contingency may be 
 secured by the mortgage is not expressed therein, such mortgage shall be tax- 
 able under section two hundred and fifty-three of this chapter upon the value 
 of the property covered by the mortgage, which shall be determined by the 
 recording officer to whom such mortgage is presented for record, unless at the 
 time of presenting such mortgage for record the owner thereof shall file with 
 the recording officer a sworn statement of the maximum amount secured or 
 which under any contingency may be secured by the mortgage. If such maxi- 
 mum amount is expressed in the mortgage or in a sworn statement filed as 
 required by this section, such amount shall be the basis for assessing the tax 
 imposed by this article. A statement filed by the owner of a mortgage pursu- 
 ant to this section shall thereafter at all times be binding upon and conclusive 
 against such owjier, the holders of any bonds or obligations secured by such 
 mortgage and all persons claiming through the mortgagee any interest in the 
 mortgage or the mortgaged premises. If the maximum amount secured or which 
 by any contingency may be secured by the mortgage is not expressed in the 
 mortgage or in a sworn statement as authorized by tliis section, the recording 
 officer at the time such mortgage is offered for record may require the mort- 
 gagor or mortgagee to furnish him with proofs as to such facts as he deems 
 necessary for the purpose of computing the value of the property covered by 
 the mortgage and such proofs shall include an aifidavit of appraisal of the value 
 of the property made by at least two competent, disinterested persons and 
 shall be preserved in his office. His determination and copies of the proofs as to 
 the basis for computing the tax on such mortgage shall be forwarded to and 
 subject to review by the state tax commission. Such mortgage shall not be 
 recorded until the statement is filed or the proofs are furnished as required by 
 this article. 
 
 § 257. Payment of taxes. The taxes imposed by this article shall be payable 
 un the recording of each mortgage of real property subject to taxes there- 
 under. Such taxes shal be paid to the recording officer of any county in 
 which the real property or any part thereof is situated. It shall be the 
 duty of such recording ofiicer to indorse upon each mortgage a receipt for the 
 amount of the tax so paid. Any mortgage so indorsed may thereupon or there- 
 after be recorded by any recording officer and the receipt for such tax indorsed 
 upon each mortgage shall be recorded therewith. The record of such receipt 
 shall be conclusive proof that the amount of tax stated therein Jias been paid 
 upon such mortgage. 
 
 § 258. Effect of nonpayment of taxes. No mortgage of real property shall 
 be recorded by any county clerk or register, unless there shall be paid the tax 
 imposed by and as in this article provided. No mortgage of real property which 
 is subject to the taxes imposed by this article shall be released, discharged of 
 record or received in evidence in any action or proceeding, nor shall any assign- 
 ment of or agreement extending any such mortgage be recorded unless the taxes 
 imposed thereon by this article shall have been paid as provided in this article. 
 No judgment or final order in any action or proceeding shall be made for the 
 foreclosure or the enforcement of any mortgage which is subject to the tax 
 imposed by this article or of any debt or obligation secured by any such mort- 
 gage, unless the taxes imposed by this article shall have been paid as pro- 
 vided in this article; and whenever it shall appear that any mortgage has been 
 recorded or that any advance has been made on a prior advance mortgage or on 
 a corporate trust mortgage without payment of the tax imposed by this article 
 there shall be paid in addition to the amount of the tax a sum equal to one per 
 
1124 BUSINESS CORPORATIONS IN NEW YORK §§.258,259 
 
 centum thereof for each month the tax remains unpaid, which sum shajl be 
 added to the tax and paid or collected therewith. 
 
 § 259. Trust mortgages. In the ease of mortgages made by corporations in 
 trust to secure payment of bonds or obligations issued or to be issued there- 
 after, if the total amount of principal indebtedhess which under any contin- 
 gency may be advanced or accrue or which may become secured by any such 
 mortgage which is subject to this article has not been advanced or accrued 
 thereon or become secured thereby before such mortgage is recorded, it may 
 contain at the end thereof a statement of tlie amount which at the time of 
 the execution and delivery thereof has been advanced or accrued thereon, or 
 >\hi(Ii is then secured by such mortgage; thereupon the tax payable on the 
 recording of the mortgage shall be computed on the basis of the amount so 
 stated to have been so advanced or accrued thereon or which is stated to be 
 secured thereby. Such statement shall thereafter at all times be binding upon 
 and conclusive against the mortgagee, the holders of any bonds or obligations 
 secured by such mortgage and all persons claiming through the mortgagee any 
 interest in the mortgage or in the mortgaged premises. Whenever a further 
 amount is to be advanced under the original mortgage, or shall accrue thereon or 
 become secured thereby, the corporation making such mortgage shall pay the 
 tax on such amovuit at or before the time when such amount is to be advanced, 
 accrues or becomes secured and shall, at the time of paying such tax, file in the 
 oflice of the recording officer where such mortgage has been or is first recorded 
 and with the tax commission a statement, verified by the secretary, treasurer 
 or other proper officer, of said corporation of the amount of principal indebted- 
 ness to be so advanced, accruing or becoming secured, and the certification of 
 any bond or bonds by the trust mortgagee shall be deemed an advance under 
 this article. Such additional tax shall be paid to the recording officer where 
 such mortgage has been or is first recorded and a receipt therefor shall be 
 endorsed upon the mortgage and payment therefor shall be noted in the margin 
 of the record of such mortgage and if requested a duplicate receipt for such 
 payment shall also be given to the party paying such tax and the note of such 
 payment or additional payment or such receipt shall have the same force and 
 effect as the record of receipt of the tax which under this article is payable 
 at or before the recording of the mortgage. If such additional tax is jiot paid 
 as required by this section, the trust mortgagee shall not certify any bond or 
 other obligation issued on account thereof. The corporation making such mort- 
 gage or the owner of the property which secures the mortgage debt shall annually 
 within thirty days after July first, and until it shall appear by such statement 
 that the maximum amount of principal indebtedness secured by such mortgage 
 has been advanced, has accrued or become secured and the tax thereon paid, 
 file in the office of the tax commission and the recording officer where such mort- 
 gage has been or is first recorded a statement, verified by the secretary, treasurer 
 or other proper officer of said corporation, showing: 
 
 1. The name of the mortgagor and the mortgagee; 
 
 2. The date of the mortgage and the county where first recorded; 
 
 3. The maximum amount of principal debt or obligation which under any 
 contingency may be secured by such mortgage; 
 
 4. The amount advanced on such mortgage during the year, ending June 
 thirtieth preceding, with the date and amount of each advancement; 
 
 5. In the case of a mortgage recorded prior to July first, nineteen hundred and 
 six, the first annual statement filed under this section as hereby amended, shall 
 state the total amount advanced prior to July first, nineteen hundred and six, 
 and the date and the amount of each subsequent advancement to the end of 
 the period covered by the statement. 
 
§§ 259-264 TAX LAW 1125 
 
 A failure to file any statement required by this section within the specified 
 time shall subject the corporation or other person required to file such statement 
 to a penalty of not less than one dollar nor more than one hundred dollars for 
 each one thousand dollars of the maximum amount of principal indebtedness 
 which is or under any contingency may become secured by the mortgage, which 
 penalty in the aggregate shall not exceed the sum of five thousand dollars recov- 
 erable by the attorney-general in an action brought in the name of the people 
 of the state of New York. 
 
 § 264. Tax on prior advance mortgages. Whenever any part of the amount 
 of the principal indebtedness which is or under any contingency may be secured 
 by a mortgage recorded prior to July first, nineteen hundred and six, is 
 advanced after July first, nineteen hundred and six, the tax prescribed by sec- 
 tion two hundred and fifty -three of this article is . hereby imposed on the 
 amount of principal indebtedness so advanced, which tax shall be payable at the 
 same time and in the same manner as taxes imposed by section two hundred 
 and fifty-nine of this article, and all the provisions of section two hundred and 
 fifty-nine in relation to the time and manner of paying such tax, the filing of 
 statements in relation to the time and amount of such advances, and penalties 
 for failure to file the same shall apply to advances made under this section 
 and the payment of a tax thereon, except that if the mortgagor is not a corpora- 
 tion, such statements shall be filed by the owner of the mortgage, who, for 
 failure to do so, shall be subject to the penalties prescribed by such section. In 
 case said mortgage was given tq secure the payment of a series of bonds, the 
 mortgagor may, at the time of paying such tax, present to the recording officer, 
 the bonds representing the portion of the principal indebtedness secured by said 
 mortgage upon which the tax is to be paid, and also file with said recording 
 officer a statement verified by the mortgagor or an officer or duly authorized 
 agent or attorney of the mortgagor specifying that said bonds, so presented, are 
 the bonds representing that portion of the principal indebtedness secured by 
 said mortgage upon which the tax is to be paid and that said bonds are secured 
 by a mortgage recorded in said office stating the date of said mortgage and the 
 liber and page of the record of the same. It shall be the duty of such recording 
 officer to indorse upon each of said bonds, so presented to him, a statement 
 signed by him to the effect that the tax imposed by this article on that portion 
 of the principal indebtedness secured by said mortgage represented by said bonds 
 has been paid, and said statement shall be conclusive proof of such payment. 
 Notwithstanding the exception contained in section two hundred and fifty-four, 
 the record owner of any mortgage recorded prior to July first, nineteen hundred 
 and six, other than a corporate trust mortgage, may file in the office of the 
 recording officer where such mortgage is first recorded a statement in form and 
 substance as required by section two hundred and fifty-four of this article, 
 except that it shall specify and state the amount of all advancements made 
 thereon prior to said date, giving the date and amount of each advancement 
 and the amount of such prior advancements remaining unpaid, and thereby 
 elect that the same be taxed under this article; and any mortgagor or mort- 
 gagee under a corporate trust mortgage gi^en to secure a series of bonds or the 
 owner of any such bond or bonds secured thereby may file in the office of the 
 recording officer where such mortgage is first recorded a statement in form and 
 substance as required by section two hundred and fifty-four of this article, 
 except that it shall specify the serial number, the date and amount of each bond 
 and otherwise sufficiently describe the same to identify it as being secured by 
 such mortgage, and thereby elect that such bond or bonds be taxed under this 
 article, and such bond or bonds shall be taxed upon the whole amount thereof 
 notwithstanding the provisions of section two hundred and sixty of this article. 
 
112G BUSINESS CORPOEATIONS IN NEW YORK §§ 264, 265 
 
 A Uix shall tliereupon, in the case of mortgages other than corporate trust mort- 
 gages, be computed, levied and collected upon the amount of the principal debt 
 <ir obligation represented by said unpaid prior advancements at the time of 
 filing such statement, or, in the case of a corporate trust mortgage, upon the • 
 amount of the bond or bonds specified in the statement filed, at the rate pre- 
 scribed by section two hundred and fifty-three of this article. Said bonds repre- 
 senting prior advancements under corporate trust mortgages and taxed as 
 herein provided may be presented to the recording officer, whose duty it is to 
 collect said tax, for indorsement and he shall thereupon indorse upon each of 
 said bonds a statement, attested by his signature, of the payment of the tax 
 as provided in this section in respect to bonds representing subsequent advance- 
 ments, and the record owner of any other mortgage taxed upon prior advance- 
 ments as herein provided may present said mortgage to the recording officer and 
 thereupon such officer shall note upon the same the filing of the statement and 
 the amount of the tax paid, attested by his signature. In all such cases the 
 recording officer shall note on the margin of the record of such mortgage the 
 filing of such statement and the amount of the tax paid, and, in case of bonds 
 secured by corporate trust mortgages, the serial number of each such bond. The 
 word " bond " and " bonds " as used in this section shall be deemed to embrace 
 all notes or other evidences of indebtedness secured by mortgages taxable under 
 this section. In case of any mortgage taxable under this section, the portion 
 of the indebtedness secured thereby upon which the tax imposed by this section 
 is paid, and such portion only, shall be exempt from taxation under the provi- 
 sions of section two hundred and fifty-one of this article. Whenever the tax 
 imposed by section two hundred and sixty-four of this article as said section 
 existed prior to May thirteenth, nineteenth hundred and seven, ha's been paid 
 with respect to any mortgage, no additional tax shall accrue on such mortgage 
 under this section as hereby enacted and such mortgage and the debt or 
 oltligation secured thereby, shall continue to be entitled to the exemptions and 
 immunities conferred by this article and all of the provisions of this article 
 shall remain applicable to such mortgage. All taxes imposed by or which 
 became due, payable or collectible on or before the thirtieth day of June, nine- 
 teen hundred and six, pursuant to chapter seven hundred and twenty-nine of 
 the laws of nineteen hundred and five, and all taxes which under section two 
 hundred and fifty-eight of this chapter became due and payable on the thirtieth 
 day of July, nineteen hundred and six, and all other taxes, if any, which were 
 imposed by chapter seven hundred and twenty-nine of the laws of nineteen hun- 
 dred and five on any mortgage recorded prior to the first day of July, nineteen 
 hundred and six, in respect to any period ending on or before the first day of 
 Jul}', nineteen hundred and six, shall be imposed, become due, be payable and 
 collectible and shall be paid over and distributed in the same manner, and 
 with the same force and effect as if this article had not been enacted; and for 
 the purpose of collecting, paying over, distributing and enforcing any such taxes, 
 chapter seven hundred and twenty-nine of the laws of nineteen hundred and five 
 shall be deemed to be in force, and the lien for such taxes shall attach and such 
 taxes shall be levied and collected as provided in chapter seven hundred and 
 twenty-nine of the laws of nineteen hundred and five, anything herein contained 
 to the contrary notwithstanding. 
 
 § 265. Tax a lien; exceptions. The tax in this article imposed shall be 
 deemed and is hereby declared to be a lien upon the mortgage upon which such 
 tax is imposed and upon the debt or obligation secured thereby, except that 
 upon mortgages recorded prior to July first, nineteen hundred and six, such 
 lien shall extend only to that portion thereof represented by the amount advanced 
 subsequently to such date and to the debt or obligation secured by such advance- 
 
§§ 265-270 TAX LAW 1127 
 
 ment, and for the purpose of enforcing the payment of the tax in this article 
 imposed, such mortgage and the debt thereby secured shall be deemed to be 
 property within this state notwithstanding that such mortgage may be owned 
 by or be in the possession of a person or corporation outside the state, and a 
 copy thereof duly certified by the recording officer of any county in which such 
 mortgage is recorded shall, for the purpose of enforcing the payment of such 
 tax, be deemed to be, and shall have the same force and effect as the original 
 mortgage and may be sold to satisfy such tax and upon a sale of the whole 
 or any part thereof, shall carry with it and transfer to the purchaser all the 
 rights, interests and obligations of the mortgagee therein named or his assignee 
 or successor in interest in and to such mortgage and the debt secured thereby, or 
 the part thereof to which such lien attaches, together with interest and costs. 
 
 § 266. Enforcement; procedure. _In case the tax imposed by this article is, 
 not paid as in this article provided, the tax commission may notify the attorney- 
 general of such failure or refusal to pay and it shall then be the duty of the 
 attorney-general to enforce the payment of such tax, and for that purpose he 
 may maintain an action in the name of the people of the state of New York, in 
 any court of competent jurisdiction, either to sell such mortgage; or, he may 
 maintain an action against the mortgagee or his assignee or successor in interest 
 personally; or, where by stipulations contained in such mortgage it is made 
 the duty of the mortgagor to pay such tax, then against the mortgagor or his 
 successor in interest personally; or, in the case of a trust mortgage against the 
 trust mortgagee, personally; or, he may pursue either, any or all such remedies. 
 All actions instituted by the attorney-general, as herein provided, shall, if the 
 amount involved is fifty dollars or more, be brought in the county of Albany. 
 Where, in any action, a recovery is had there shall be added to the amount of 
 such tax and included in the judgment, interest at the rate of one per centum 
 per month on the amount of such tax, to be computed from the date on which 
 such tax became due and payable, except that in the case of taxable mortgages 
 heretofore recorded and upon which the tax imposed by this article has not 
 been paid, and where, in such case, no penalty is prescribed by law for the 
 nonpayment of such tax, interest shall be added at the rate of six per centum 
 per annum. In any action brought as herein provided, where the judgment pro- 
 vides for the sale of the mortgage, such judgment shall also prescribe the time, 
 place and manner of such sale and of the notice thereof to be given,, and, in the 
 discretion of the court, may direct that such sale be made by or under the direc- 
 tion of the comptroller or the recording officer of the county in which such 
 mortgage was first recorded, and all money recovered in such actiom shall be paid 
 by the attorney-general to the proper recording officer in satisfaction of such 
 tax, and all costs recovered therein shall be paid into the state treasury. 
 
 § 267. Idem.; where recovery is had against trust mortgagee. In every case 
 where recovery is had personally against a trust mortgagee as herein provided, 
 and payment of the amount recovered has been made by such trust mortgagee, 
 or where such trust mortgagee has voluntarily paid such tax, he shall be deemed 
 to have and possess and to have become subrogated to all the rights and interests 
 in and to the tax lien imposed by section two hundred and sixty-five hereof, 
 and may enforce the repayment of any such sum so paid by him with interest 
 at the rate of six per centum per annum and for that purpose may maintain an 
 action in his own name in any court in the state having jurisdiction, against 
 any person, association or corporation liable to pay such tax, or for the sale of 
 such mortgage and the debt secured thereby to which such lien attaches. 
 
 § 270. Amount of tax. There is hereby imposed and shall immediately accrue 
 and be collected a tax, as herein provided, on all sales, or agreements to sell, 
 or memoranda of sales of stock, and upon any and all deliveries or transfers 
 
1128 BUSINESS CORPORATIONS IN NEW YORK §§ 270, 271 
 
 of shares or certificates of stock, in any domestic or foreign association, com- 
 pany or corporation, made after the first day of June, nineteen hundred and 
 five, whether made upon or shown by tlie books of the association, company or 
 corporation, or by any assignment in blank, or by any delivery, or by any paper 
 or agreement or memorandum or other evidence of sale or transfer, whether 
 intermediate or final, and whether investing the holder with the beneficial inter- 
 est in or legal title to said stock, or merely with the possession or use thereof 
 for any purpose, or to secure the future payment of money, or the future transfer 
 of any stock, on each hundred dollars of face value or fraction thereof, two 
 cents, except in cases where the shares or certificates of stock are issued with- 
 out designated monetary value, in which cases the tax shall be at the rate of 
 two cents for each and every share of such stock. It shall be the duty of the 
 person or persons making or effectuating the sale or transfer to procure, affix 
 and cancel the stamps and pay the tax provided by this article. It is not 
 intended by this act to impose a tax upon an agreement evidencing the deposit 
 of stock certificates as collateral security for money loaned thereon, which stock 
 certificates are not actually sold, nor upon such stock certificates so deposited, 
 nor upon mere loans of stock or the return thereof. The payment of such tax 
 shall be denoted by an adhesive stamp or stamps affixed as follows: In the 
 case of a sale or transfer, where the evidence of the transaction is shown only 
 by the books of the association, company or corporation, the stamp shall be 
 placed upon such books, and it shall be the duty of the person making or 
 effectuating such sale or transfer to procure and furnish to the association, 
 company or corporation the requisite stamps, and of such association, company 
 or corporation to affix and cancel the same. Where the transaction is effected 
 by the delivery or transfer of a certificate, the stamp shall be placed upon the 
 surrendered certificate and canceled; and in cases of an agieement to sell, or 
 where the sale is effected 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 canceled. Every such bill or memorandum of sale or agreement to sell 
 shall show the date of the transaction which it evidences, the name of the seller, 
 the stock to which it relates, and the number of shares thereof. All such bills 
 or memoranda of sale shall bear a number upon the face thereof and no more 
 than one such bill or memorandum of sale made by the seller on any given day 
 shall bear the same number. The aforesaid identification number of the bill 
 or memorandum of sale shall in all cases be entered and recorded in the book 
 of account required to be kept by section two hundred and seventy-six of this 
 chapter; and no further tax is hereby imposed upon the delivery of the certificate 
 of stock, or upon the actual issue of a new certificate when the original certifi- 
 cate of stock is accompanied by the duly stamped memorandum of sale as 
 herein provided. 
 
 § 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 denominations and in such quanti- 
 ties 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 by such persons, in such places and at such times as in 
 his judgment he may deem necessary. 
 
 He may from time to time and as often as he deems advisable provide for 
 the issuance and exclusive use of stamps of a new design and forbid the use of 
 stamps of any other design. In order to effect such a change and to discon- 
 tinue the use of stamps of a former design he shall publish or cause to be 
 published once in each week for each of three months immediately preceding 
 the time for taking effect of such change, in one or more daily newspapers 
 
§§ 271, 272 TAX LAW 1129 
 
 published in each of the first and second class cities of the state, a notice to the 
 effect that after-a certain day, which shall be at least three months after tHe 
 first publication of said notice, none other than the new issue or design of 
 stamps shall be accepted or made use of in payment of the tax provided for by 
 this article. After such date it shall be unlawful for any person to make use 
 of any other than the new issue or design of stamps in payment of such tax. 
 Any person violating any of the provisions of this section shall be guilty of a 
 misdemeanor. 
 
 Any person lawfully in possession of unused stamps of an old or superseded 
 issue or design may, within ninety days from the time when such change 
 becomes effective as aforesaid, surrender the same to the comptroller together 
 with a sworn statement setting forth the name and address of the owner and 
 party surrendering said stamps, how, when and from whom the same were 
 acquired and such other pertinent information as the comptroller may require; 
 whereupon the comptroller shall redeem such unused and surrendered stamp's 
 by exchanging therefor stamps of a like denomination of the new issue or 
 design. Failure or refusal of the comptroller to redeem the same by such an 
 exchange may be enforced by mandamus. 
 
 § 271-a. Sale of stamps. No person, firm, company, association or corpora- 
 tion other than a corporation organized under the banking law of this state or 
 under the national bank act of the United States, or a duly authorized agent of 
 the comptroller, shall sell or expose for sale,, traffic in, trade, barter or exchange 
 any stamp issued pursuant to this article, and purchased oi; acquired by him 
 after the time when this section as hereby amended takes effect, without first 
 obtaining from the comptroller his written consent to sell, traffic in, trade, barter 
 or exchange such stamps, except that in connection with a sale of or agreement 
 to sell stock a broker or agent of the principal making such sale or agreement 
 to sell may supply and aflBx the stamp or stamps required by this article. No 
 person shall sell or expose for sale any stamp so purchased or acquired for a sum 
 less than the face value thereof without the written consent of the comptroller. 
 Any person lawfully in possession of unused stamps may request the comptroller 
 for his consent to sell or dispose of the same. He shall present to the comp- 
 troller, if so required, a sworn statement setting forth the name and address 
 of the owner and the party desiring to sell or dispose of said stamps, how, when 
 and from whom the same were acquired and the name and address of the person 
 or persons to whom it is ;proposed to sell or dispose of the same, and such other 
 pertinent and relevant inform^ation as the comptroller may require. Thereupon 
 the comptroller may give his written consent to sell the same. Upon the failure 
 or refusal of the comptroller to give such consent the same may be enforced by 
 mandamus. Any person violating any of the provisions of this section shall be 
 guilty of a misdemeanor, and upon conviction thereof shall be punishable by a 
 fine of not less than five hundred nor more than one thousand dollars, or by 
 imprisonment for not more than six months, or by both such fine and imprison- 
 ment, in the discretion of the court. 
 
 § 272. Penalty for failure to pay tax. Any person or persons liable to pay 
 the tax by this article imposed, and any one who acts in the matter as agent or 
 broker for such person or persons, who shall make any sale, transfer or delivery 
 of shares or certificates of stock, without paying the tax by this article imposed, 
 and any person who shall in pursuance of any sale, transfer or agreement, deliver 
 any stock or evidence of the sale or transfer of or agreement to sell any stock, 
 or bill or memorandum thereof, or who shall transfer or cause the same to be 
 transferred upon the books or records of the association, company or corporation, 
 and any association, company or corporation whose stock is sold or transferred, 
 which shall transfer or cause the same to be transferred upon its books, without 
 
1130 BUSINESS CORPORATIONS IN NEW YORK §§ 272-275-a 
 
 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 for not 
 more than six months or by both such fine and imprisonment, in 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 tax provided by this article, 
 the person using or affixing the same shairwrite or stamp thereupon the initials 
 of his name and the date upon which the same shall be attached or used, and shall 
 cut or perforate the stamp in a substantial manner, so that such stamp cannot 
 be again used; and if any person makes use of an adhesive stamp to denote the 
 payment of the tax imposed by this article, without so effectually canceling the 
 same, 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 or be imprisoned for not less than six months, or both, in the discretion 
 of the court. 
 
 § 274. Contracts for dies; expenses how paid. The state comptroller is hereby 
 directed to make, enter into and execute for and in behalf of the state such con- 
 tract or contracts for dies, plates and printing necessary for the manufacture of 
 the stamps provided for by this article, and provide such stationery and clerk 
 hire together with such books and blanks as in his discretion may be necessary 
 for putting into operation the provisions of this article; he shall be the custodian 
 of all stamps, dies, plates or other material or thing furnished by him and used 
 in the manufacture of such state tax stamps, and all expenses incurred by him 
 and under his direction in carrying out the provisions of this article shall be 
 paid to him by the state treasurer from any moneys appropriated for such 
 purpose. 
 
 § 275. Illegal use of stamps; penalty. Any person who shall willfully remove 
 or alter or knowingly permit to be removed or altered the canceling or defacing 
 marks of any stamp provided for by this article with intent to use such stamp, 
 or who shall knowingly or willfully buy, prepare for use, use, have in his pos- 
 session nr suffer to be used any washed, restored or counterfeit stamp, and any 
 person who shall intentionally remove or cause to be removed or knowingly 
 permit to be removed any stamp, affixed pursuant to the requirements of this 
 article, shall l.e 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 mure than one year, or by both such fine and imprison- 
 ment, at the discretion of the court. 
 
 § 275-a. Registration; penalty for failure, Every person, firm, company, 
 association or corporation engaged in whole or in part in the making or negotiat- 
 ing of sales, agreements to sell, deliveries or transfers of shares or certificates 
 of stock, or condiicting or transacting a stock brokerage business, and every stock 
 a.ssociation, company or corporation which shall maintain a principal office oT 
 place of business within the state or which shall keep or cause to be kept within 
 the state of New York a place for the sale, transfer or delivery of its stock, shall 
 within ten days after the amendment to tliis section shall take effect if such a 
 certificate shall not have been theretofore filed, or if at the time this act shall 
 take eHeet, not engaged in such business or maintaining such principal office or 
 place of business or such a place for the sale or transfer of its stock, within ten 
 clays after engaging in such business or after establishing such principal office 
 or place of business or such a place for the sale or transfer of its stock, as the 
 case may be, file in the office of the comptroller a certificate setting forth the 
 name under which such business is, or is to be conducted or transacted, and the 
 true or real full name or names of the person or j>ersons conducting or transacting 
 
§§ 275-a, 276 TAX LAW 1131 
 
 the same, with the postoflHce address or addresses of said person or persons, 
 unless the party so certifying be a corporation, in which event it shall set forth 
 its said principal office or place of business and when and where incorporated. 
 Said certificate shall be executed and duly acknowledged by the person or per- 
 sons so conducting or intending to conduct said business or by the president or 
 secretary of the corporation as the case may be. 
 
 In the event of a change in the persons composing such firm, company or asso- 
 ciation or of the address of any such person, firm, company, association or cor- 
 poration, or termination of such business or relationship, a like certificate setting 
 forth the facts with respiect to such change or termination shall within ten days 
 thereafter be filed in the office of the eoniptroUer. 
 
 Any such person, firm, company, association or corporation who shall fail to 
 comply with the provisions of this section shall be guilty of a misdemeanor, and 
 upon conviction thereof shall pay a fine of not less than one hundred dollars nor 
 more than five hundred dollars or be imprisoned for not more than six months 
 or by both such fine and imprisonment, in the discrection of the court. 
 
 § 276. Power of state comptroller. Every person, firm, company, association 
 or corporation, engaged in whole or in part in the making or negotiating of sales, 
 agreements to sell, deliveries or transfers of shares or certificates of stock, or 
 conducting or transacting a brokerage business, shall keep or cause to be kept at 
 some accessible place within the state of New York, a just and true book of 
 account, in such form as may be prescribed by the comptroller, wherein shall be 
 plainly and legibly recorded in separate columns, the date of making every sale, 
 agreement to sell, delivery or transfer of shares or certificates of stock, the name 
 of the stock and the number of shares thereof, the face value of the stodk, the 
 name of the seller or transferer, the name of the purchaser or transferee and 
 the number and face value of the adhesive stamps affixed and the identifying 
 number of- the bill or memorandum of sale used as provided for by section two 
 hundred and seventy of this chapter. 
 
 Every association, company Or corporation shall keep or cause to be kept 
 at some accessible place within the state of New York, a stock certificate book 
 and a just and true book of account, transfer ledger or register, in such form 
 as may be prescribed by the comptroller, wherein shall be plainly and legibly 
 recorded in separate columns the date of making <every transfer of stock, the 
 name of the stock and the number of shares thereof, the serial number of each 
 surrendered certificate, the name of the party surrendering such certificate, the 
 serial number of the certificate issued in exchange therefor, the number of 
 shares covered by said certificate, the name of the party to whom said certificate 
 was issued and evidence of the payment of the tax provided for by section two 
 hundred and seventy of this chapter, which evidence, however, shall be provided 
 in one of the following manners and not otherwise, to wit: 
 
 (a) By attaching to the stock certificate surrendered for transfer, the stamps 
 required for such transfer, or 
 
 (b) If the stamps are not attached to the certificate, but are attached to the 
 hill or memorandum of sale effecting or evidencing the transfer of such certifi- 
 cate, by attaching to said certificate the said bill or memorandum of sale with 
 stamps attached, or 
 
 (c) If the stamps covering the transfer are attached to a bill or memorandum 
 effecting a transfer of one or more certificates or to one or more certificates 
 included in said transfer, a notation must be made upon such certificates, bill 
 or memorandum, as the case may be, clearly specifying and identifying the 
 certificate or certificates of stock to the sale or transfer of which the said 
 stamps apply, or 
 
 (d) If the bill or memorandum bearing such stamps is not attached to the 
 surrendered certificate or certificates to which it applies, a notation must be 
 
1132 BUSINESS CORPORATIONS IN NEW YORK §§ 276- -^77 
 
 made upon such bill or memorandum stating the serial number or numbers of 
 the certificates to which said bill or memorandum applies, as provided by section 
 two hundred and seventy of this chapter. It shall also retain and keep all. 
 surrendered or canceled shares or certificates of its stock and all memoranda 
 relating to the sale or transfer of any thereof. All such books of accovint, 
 transfer, ledgers, registers and stock certificate books, shall be retained and 
 kept as aforesaid for a period of at least two years subsequent to the date of 
 the last entry made therein as herein required; and all such surrendered or 
 canceled shares or certificates of stock and memoranda relating to the sale or 
 transfer of stock, shall be retained and kept for a jferiod of at least two years 
 from the date of the delivery thereof. For the purpose of ascertaining whether 
 the tax imposed by this article has been paid, all such books of account, transfer 
 ledgers, registers, stock certificate books, surrendered or canceled shares or 
 certificates of stock and memoranda relating to the sale or transfer thereof, 
 shall at all times between the hours of ten o'clock in the forenoon and three 
 o'clock in the afternoon, except Saturdays, Sundays and legal holidays, be open 
 to examination by the comptroller or his duly authorized representative. 
 
 The comptroller may enforce his right to examine suc^ books of account and 
 bills or memoranda of sale or transfer; and such transfer ledger, register and 
 stock certificate books and surrendered or canceled shares or certificates of 
 stock by mandamus. If the comptroller ascertains that the tax provided for in 
 this article has not been paid, he shall bring an action 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 fail to keep 
 such book of account or bills or memoranda of sale or transfer, or transfer 
 ledger, register or stock certificate book or surrendered or canceled shares or 
 certificates of stock as herein required, or who alters, cancels, obliterates or 
 destroys any part of said records, or makes any false entry therein, or who 
 shall refuse to permit the comptroller or any of his authorized representatives 
 freely to examine any of said books, records or papers at any of the times herein 
 provided, or who shall in any other respect violate any of the provisions of this 
 section shall be deemed guilty of a misdemeanor and on conviction thereof shall 
 for each and every such oft'enSe pay a fine of not less than five hundred dollars 
 nor more than five thousand dollars, or be imprisoned not less than three months 
 nor more than two years, or both in the discretion of the court. 
 
 § 277. Civil penalties; how recovered. Any person, firm, company, associa- 
 tion or corporation who shall violate any of the provisions of section two hun- 
 dred and seventy or section two hundred and seventy-two of this chapter shall 
 in addition to the penalty herein provided forfeit to the people of the state a 
 civil penalty of ten dollars for each and every share of stock so sold or trans- 
 ferred, or transferred or entered upon the books of the corporation, as the case 
 may be, without the payment of the tax by this article imposed thereon. Any 
 person who shall violate any of the other provisions of this article shall in 
 addition to the penalties hereinbefore provided forfeit to the people of the state 
 a civil penalty of five hundred dollars for each and every such 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 collected by him shall be paid into the state treasury. In an 
 action against a corporation or its transfer agent to recover a, penalty because 
 of its transfer of stock upon, the books or records of the corporation without 
 requiring the payment of the tax by this article imposed, the failure of the cor- 
 poration or its transfer agent, on the demand of the comptroller or his duly 
 authorized representative, to produce the surrendered certificate or memoranda 
 
§§ 277-291 TAX LAW 1133 
 
 of sale with the required stamps attached, shall constitute prima facie proof of 
 the nonpayment of the tax imposed by section two hundred and seventy of this 
 chapter. 
 
 § 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 payment of all claims and 
 demands which are a lawful charge thereon. 
 
 § 280. Refund of tax erroneously paid. If any stamp or stamps shall have 
 been erroneously affixed to any book, certificate of stock, or bill or memorandum 
 of sale, the comptroller may, upon presentation of a claim for the amount of 
 such stamp or stamps and upon the production of evidence satisfactory to him 
 that such stamp or stamps was or were so erroneously affixed so as to cause 
 loss to the person or persons making such claim, pay such amount, or such part 
 thereof as he may allow, to such claimant out of any moneys appropriated for 
 that purpose. Such claims shall be presented to the comptroller in writing, 
 duly verified, and shall state the full name and address of the claimant, the 
 date of such erroneous affixing, the face value of such stamp or stamps and shall 
 describe the instrument to which the stamp or stamps were affixed and contain 
 such evidence as may be available upon which the demand for such refund is 
 based. Such claims shall be preseiited within ninety days after such erroneous 
 affixing unless such affixing shall have taken place prior to the date on which 
 this act shall take eflTect, in which case such claim shall be presented within 
 ninety days after the date on which this act shall take effect. If the comp- 
 troller rejects a claim or any part thereof, the claimant may file a claim for 
 the recovery of such sum as the comptroller shall have refused to allow, with 
 the court of claims, which shall constitute a private claim against the state and 
 shall be subject to all the provisions of law governing such claims, except that 
 all claims so presented shall be filed with the court of claims within ninety 
 days from the date on which such claim shall be rejected by the comptroller. 
 For the purposes of this section, the comptroller's decision shall be deemed to 
 have been made at the time of the depositing of a copy of such decision in the 
 post-office inclosed in a duly post-paid wrapper and directed to the person making 
 such claim at the address contained in the verified claim presented to the 
 comptroller as hereinbefore provided. 
 
 § 290. Contents of petition. Any person . assessed upon any assessment-roll, 
 claiming to be aggrieved by any assessment for property therein, may present to 
 the supreme court a petition duly verified setting forth that the assessment is 
 illegal, specifying the grounds of the alleged illegality, or if erroneous by reason 
 of overvaluation, stating the extent of such overvaluation, or if unequal in that 
 the assessment has been made at a higher proportionate valuation than the 
 assessment of other property on the same roll by the same officers, specifying 
 the instances in which such inequality exists, and the extent thereof, and stating 
 that he is or will be injured thereby. Such petition must show that the applica- 
 tion has been made in due time to the proper officers to correct such assessment. 
 Two or more persons assessed upon the same roll who are affected in the same 
 manner by the alleged illegality, . error or inequality, may unite in the same 
 petition. 
 
 § 291. Allowance of writ of certiorari. Such petition must be presented to a 
 justice of the supreme court or at a special term of the supreme court in the 
 
1134 BUSINESS CORPORATIONS IN NEW YORK §§ 291-293-a 
 
 judicial district in which the assessment complained of was made, within 
 fifteen days after the completion and filing of the assessment-roll and the first 
 posting or publication of the notice thereof as required by this chapter. Upon 
 the presentation of such petition, the justice or court may allow a writ of 
 certiorari to the officers making the assessment, to review such assessment, and 
 shall prescribe therein the time within which a return thereto must be made and 
 served upon the relator's attorney, which shall not be less than ten days, and 
 may be extended by the court or a, justice thereof. Such writ shall be return- 
 able to a special term of the supreme court of the judicial district in which 
 the assessment complained of was made. The allowance of the writ shall not 
 stay the proceedings of the assessors or other persona to whom it is directed 
 or to whom the assessment is delivered, to be acted upon according to law. 
 
 § 292. Keturn to writ. The officers making a return to such writ shall not 
 be required to return the original assessment-roll or other original papers acted 
 upon by them, but it shall be sufficient to return certified or sworn copies of such 
 roll or papers, or of such portions thereof as may be called for by such writ. 
 The return must concisely set forth such other facts as may be pertinent and 
 material to show the value of the property assessed on the roll and the grounds 
 for the valuation made by the assessing officers and the return must be verified. 
 § 293. Proceedings upon return. If it shall appear upon the return to any 
 such writ that the assessment complained of is illegal or erroneous or unequal 
 for any of the reasons alleged in the petition, the court may order such assess- 
 ment, if illegal, to be stricken from the roll, or if erroneous or unequal, it may 
 order a reassessment of the property of the petitioner, or the correction of his 
 assessment upon the roll, in whole or in part, in such manner as shall be in 
 accordance with law, or as shall make it conform to the valuations and assess- 
 ments of other property upon the same roll and secure equality of assessment. 
 If upon the hearing it shall appear to the court that testimony is necessary for 
 the proper disposition of the matter, it may take evidence or may appoint a 
 referee to take such evidence as it may direct, and report the same to the court, ' 
 with his findings of fact and conclusions of law, which shall constitute a part 
 of the proceedings upon which the determination of the court shall be made. 
 Upon such hearing the parties to the proceeding may mutually agree upon the 
 number of pieces of property to be valued and the number of witnesses to be 
 sworn on the subject of the value of such properties. But in case the parties 
 fail to so agree, then upon application of either party the court shall determine 
 the number of witnesses to be sworn and the number of pieces of property to be 
 valued and shall limit the same to such number as the court shall deem 
 reasonable. 
 
 § 293-a. Special proceedings concerning special franchise tax assessments. 
 When the writ is obtained to review a special franchise assessment made pur- 
 suant to the provisions of article two of this chapter, upon the filing of the 
 return to the writ the court may take such evidence as it may deem necessary, 
 or may appoint a referee to take evidence and to hear, try and determine all 
 questions raised by the petition and the return thereto and to make his findings 
 and determination therein, or, on motion of either party, the court may direct 
 the place of trial changed to the county in which the special franchise under 
 review is situated, and on an order duly entered granting such motion, the place 
 of trial shall be deemed changed to the county designated and the papers and 
 proceedings shall be certified to that county in the manner now pfovided by 
 law in the case of a change in the place of trial of an action and all subsequent 
 proceedings shall be had in the county so designated, as if the special pro- 
 ceedings had been originally instituted in that county, and the court may, upon 
 the application of the attorney-general, upon cause shown, vacate any reference 
 
§§ 293-a-296 TAX LAW 1135 
 
 lieretofore made in any proceeding instituted to review a special franchise 
 assessment, made pursuant to the provisions of article two of this chapter. 
 The governor may, upon the application of the attorney-general, upon cause 
 shown, appoint extraordinary terms of the supreme court to be held in any 
 judicial district and designate a justice to preside thereat, to try such special 
 franchise cases. Such extraordinary term shall have jurisdiction over all 
 special franchise cases arising in any fax district within the judicial district 
 for which the term is appointed, without regard to the county in which the 
 term is being held, and either party to a proceeding to review a special franchise 
 assessment may at any time bring the proceeding on for a hearing or trial before 
 said extraordinary term by serving upon the other party sixteen days' notice 
 thereof by mail or fourteen days' notice personally. A new assessment or 
 correction of an assessment made by order of the court shall have the same 
 force and effect as if it had been so made by the proper officers within the time 
 prescribed by law for making such assessment. 
 
 § 294. Costs. Costs shall not be allowed against the officers whose proceed- 
 ings may be reviewed under any such writ unless it shall appear to the court 
 that they acted with gross negligence or in bad faith or with malice in making 
 the assessment complained of. If the writ shall be quashed or the assessment 
 confirmed, or if ' the assessment complained of shall be reduced by an amount 
 less than half the reduction claimed before the assessing officers, costs and 
 disbursements shall be awarded against the petitioner. If the assessment shall 
 be reduced by an amount greater than half the reduction claimed before the 
 assessing officers, costs and disbursements shall be awarded against the tax 
 district represented by the officers whose 'proceedings may be reviewed. The 
 costs and disbursements shall not exceed those taxable in an action upon the 
 trial of an issue of fact in the supreme court, except that if evidence shall be 
 taken there shall be included in the taxable costs and disbursements the expense 
 of furnishing to the court or to the referee a copy of the stenographer's minutes 
 bf the evidence taken. 
 
 § 295. Appeals. An appeal may be taken by either party from an order, 
 judgment or determination under this article as from an order, and it shall be 
 heard and determined in like manner as appeals in the supreme court from 
 orders. All issues and appeals in any proceeding under this article shall have 
 preference over all other civil actions and proceedings in all courts. 
 
 § 296. Refund of tax paid upon illegal, erroneous or unequal assessment. If 
 in a final order in any such proceeding it has been or shall be ordered or 
 adjudged or determined that the assessment complained of was illegal, erroneous 
 or unequal, and correcting or directing correction thereof, and such order shall 
 not be made in time to jsnable the assessors or other officers to make a new or 
 corrected assessment for the use of the board of supervisors or for the use of 
 the town, village, city, school or special district officers levying any tax upon 
 such property, the assessment of which has been or shall be so ordered or 
 adjudged or determined to be illegal, erroneous or unequal, then any tax col- 
 lected or to be collected upon such illegal, erroneous or unequal assessment 
 shall be refunded as follows : 
 
 1. When such tax upon such illegal, erroneous or unequal assessment shall 
 have been levied by the board of supervisors, then at an annual session of the 
 board of supervisors held after the order for such correction has been granted 
 and entered there shall be audited and allowed to the petitioner or other person 
 who shall have paid such tax, and included in the tax levy of the town, village, 
 city or special district in which the property is situated, made next after the 
 entry of such order, and paid to the petitioner, or other person paying the tax, 
 the amount paid by him, in excess of what the tax would have been if the 
 
1136 BUSINESS CORPORATIONS IN NEW YORK §§ 296, 297 
 
 assessment had been made as ordered, adjudged or determined by such order of 
 the court, together with the interest thereon from the date of payment. In 
 ease the amount deducted from such assessment by. such order exceeds ten 
 thousand dollars, so much of the tax as shall be refunded by reason of such 
 corrected assessment, other than the proportion or percentage thereof collected 
 for such town, village, city or special district purposes, shall be levied upon the 
 county at large and paid with interest, to the petitioner or other person paying 
 the tax without further audit; and the board of supervisors shall audit and 
 levy upon such town, village, city or special district, the proportion or per- 
 centage of such excess of tax collected for such town, village, city or special 
 district purposes, which shall be collected and paid with interest to the peti- 
 tioner. Of other person paying the tax, without other or further audit. 
 
 2. When a tax, or any part thereof upon such illegal, erroneous or unequal 
 assessment shall have been levied by the proper oflScers of any city or village, 
 solely for the benefit and purposes of such city or village, then the common 
 council or other auditing officer or officers of such city or village shall imme- 
 diately after such correction audit and allow, to the petitioner or other person 
 who shall have paid such tax, or the part thereof levied solely for the benefit 
 and purposes of such city or village, and .include in the tax levy of such city or 
 village in which the property is situated made next after the entry of such 
 order and cause to be paid to such petitioner or other person paying such tax, 
 or the part thereof levied solely for the benefit and purposes of such city or 
 village, the amount paid by him in excess of what the tax or the part thereof 
 levied solely for the benefit and purposes of such city or village, would have 
 been if the assessment had been as ordered, adjudged or determined by such 
 order of the court, together with interest thereon from the date of the payment. 
 3. When a tax shall have been levied and collected in any school district of 
 this state upon any property within such district on any assessment value 
 thereof which shall have been ascertained from a town assessment-roll and which 
 assessment upon such town roll shall have been ordered, adjudged or deter- 
 mined by order of the court as aforesaid to have been illegal, erroneous or 
 unequal and which assessment though made by town assessors was adopted and 
 was used in such district for the purpose of taxation for school purposes, then 
 and in such case the trustees of sucli school district shall audit and allow and 
 cause to be paid to the petitioner, or other person who shall have paid such 
 tax, the amount paid by him in excess of what the school tax would have been 
 in such case if the assessment had been made as ordered, adjudged or deter- 
 mined by such order of the court together with interest thereon from the date 
 of the payment. 
 
 Application to the proper officer for the audit and allowance of such moneys 
 must be made by the petitioner or other person paying such tax within three 
 years after the entry of the final order ordering or adjudging or determining 
 such assessment to have been illegal, erroneous or unequal; provided that the 
 time of the pendency of any appeal in any such proceeding or from any such 
 order shall not be deemed any part of such three years. 
 
 § 297. When county court may apportion tax. When the premises of one 
 person shall have been wrongfully assessed and taxed in with the premises of 
 another, the person aggrieved thereby may, upon application to the county court 
 of the county in which the property is situated, on petition duly verified, and 
 on eight days' notice to the assessors of the town in which the premises are 
 situated, and to the party whose premises are included in such wrongful assess- 
 ment, have such assessment and tax apportioned by such county court. The county 
 court shall take such evidence as may be necessary to determine the facts, and 
 shall fix and specify the amount of the assessment and tax properly chargeable 
 
§§ 297-301 TAX LAW 1137 
 
 to the petitioner's property, and to the other party chargeable therewith. The 
 collector of the town, upon receiving a copy of the order of the county court, 
 shall forthwith change the assessment-roll and tax to conform to such order, 
 and shall receive the amount apportioned upon the premises of the petitioner in 
 full for the tax upon such property. 
 
 § 298. Application to county court where taxpayer has removed from the 
 county. If it shall satisfactorily appear by affidavit to the county court of 
 any county that a tax legally levied therein can not be collected because of the 
 removal of the person taxed to any other county of the state, such court shall, 
 upon application of the collector of any tax district or of the county treasurer 
 of the county, grant an order, directed to the sheriff of the county where such 
 person may be, to collect the same out of his personal property, with interest 
 at the rate of eight per centum per annum from the date of said order. Such 
 order shall be filed in the office of the clerk of the county in which it is 
 granted, and a certified copy thereof delivered to the constable or sherifl' of the 
 county where the person liable for the tax may be, and such constable or sheriff, 
 on receiving the same shall execute it, and make a like return, and be entitled 
 to the same fees and subject to the same liabilities and penalties for neglect as 
 upon execution from any court of record. The sheriff receiving such moneys 
 shall pay the same to the county treasurer of the county where it was levied, 
 to the credit of the town in which it was assessed. 
 
 § 299. Supplementary proceedings to collect tax. If a tax exceeding ten dol- 
 lars in amount levied agsMnst a person or corporation is returned by the proper 
 collector uncollected for want of personal property out of which to collect the 
 same, the supervisor of the town or ward, or the county treasurer or the presi- 
 dent of the village, if it is a village tax, may, within one year thereafter, apply 
 to the court for the institution of proceedings supplementary to execution, as 
 upon a judgment docketed in such county, for the purpose of collecting such 
 tax and fees, with interest thereon from the fifteenth day of February after the 
 levy thereof. Such proceedings may be taken against a corporation, and the 
 same proceedings may thereupon be had in all respects for the collection of such 
 tax as for the collection of a judgment by proceedings supplementary to execu- 
 tion thereon against a natural person, and the same costs and disbursements 
 may be allowed against the person or corporation examined as in such supple- 
 mentary proceedings but none shall be allowed in his or its favor. The tax, 
 if collected in such proceeding, shall be paid to the county treasurer or to the 
 supervisor of the town, and if a village tax, to the treasurer of the village. 
 The costs and disbursements collected shall belong to the party instituting the 
 proceedings, and shall be applied to the payment of the expense of such pro- 
 ceeding. The president of a village and a county treasurer shall have no com- 
 pensation for any such proceeding. A supervisor shall have no other compensa- 
 tion except his per diem pay for time necessarily spent in the proceeding. 
 
 § 300. No fine or imprisonment for nonpayment of tax. Neglect or refusal 
 to pay any tax shall not be punishable as a contempt or as misconduct; and no 
 fine shall be imposed for such nonpayment, nor shall any person be imprisoned 
 or otherwise punishable on account of nonpayment of any tax, or of any fine 
 imposed for refusal or neglect to pay such tax. This section shall not apply 
 to proceedings supplementary to execution upon judgments recovered for taxes. 
 
 § 301. Dismissal of suits or proceedings. Where the person or corporation 
 against whom a proceeding or suit is brought to collect a personal tax in arrears 
 is unable for want of property to pay the tax in whole or in part, or where for 
 other reasons upon the facts as they existed either before or after the assess- 
 ment was made it appears to the court just that said tax should not be paid, 
 the court may dismiss such suit or proceeding absolutely, without costs, or on 
 
1138 BUSINESS CORPORATIONS IN NEW YORK §§ 301-306 
 
 payment of such part of the tax as may be just or on payment of costs, and 
 may direct the cancellation or reduction of the tax. 
 
 § 302. Cancellation of personal tax where it is void for want of jurisdiction. 
 If a personal tax, levied against a person or corporation, or the property of a, 
 person or corporation, is void for want of jurisdiction of such person or cor- 
 poration and has been returned by the proper collector uncollectible for want 
 of personal property out of which to collect the same, the person or corporation 
 against whom or against whose property the said tax was levied may then 
 apply to the supreme or county court in the county in which is located the tax 
 district where said tax was levied, for an order cancelling the said tax, and 
 upon notice to the president of the village, county treasurer, supervisor of the 
 town or, in the case of a city, upon notice to its attorney or to the corporation 
 counsel, and upon satisfactory proof by affidavit, the court shall make an order 
 directing the cancellation of said tax from the assessment roll by the county 
 treasurer, comptroller, or other officer in whose custody and control the said 
 roll may be. [L. 1918, c. 530.] 
 
 § 303. Power of county court when collector fails to pay over. If any col- 
 lector shall neglect or refuse to pay over the moneys collected by him, to any 
 of the persons to whom he is required to pay the same by his warrant, or to 
 account for the same as unpaid, the county court, on proof of such fact by 
 affidavit, on application of the county treasurer, shall make an order directed to 
 the sheriff of the county, commanding him to levy such sum as shall remain 
 unpaid by such collector out of his property, personal and real, and pay the 
 same to the county treasurer, within sixty days from the date of such order. 
 The sheriff shall cause the same to be executed, and pay to the county treasurer 
 the money levied by virtue thereof, deducting for his fees the same compensation 
 that the collector would have been entitled to retain. If the whole sum due 
 from the collector, or if a part only, or if no part thereof, shall be collected, 
 the sheriff shall state the fact in his return, which shall be made as in the case 
 of an execution, and the county treasurer shall give notice to the supervisor 
 of the town, city or division thereof, of any amount which may remain due from 
 such collector. If the sheriff shall neglect to execute the order, or to pay over 
 the money collected thereon, within the time limited thereby, he shall be liable 
 therefor as in case of an execution, and the county treasurer shall immediately 
 prosecute such sheriff and his sureties for the sum due from him, which sum 
 when collected shall be paid into the county treasury. 
 
 § 304. Payment of moneys collected. The county treasurer shall pay over 
 the moneys received from the sheriff upon such order in the manner directed 
 by the warrant to the collector. If the whole amount of moneys due from the 
 collector shall not be collected on such warrant, or otherwise, the county treas- 
 urer shall first retain the amoujit which ought to have been paid to him before 
 making any payment to the town officers. 
 
 § 305. Collection of deficiency from collector's bondsmen. If it appears that 
 the whole or any part of the moneys due from the collector has not been thus 
 collected, the county treasurer shall forthwith give notice to the supervisor of 
 the town or ward of the amount still due from such collector. The supervisor 
 shall forthwith cause the undertaking of the collector to be prosecuted, and 
 shall be entitled to recover thereon the sum due from the collector with cost.s 
 of the action. The moneys received shall be applied and paid by the supervisor 
 in the same manner as they should have been by the collector. 
 
 § 306. Attorney-general to bring action for sequestration. It shall be the 
 duty of the attorney-general, on being informed by the comptroller, tax com- 
 mission or by the county treasurer of any county that any incorporated company 
 refuses or neglects to pay the taxes imposed upon it, pursuant to articles one 
 
§§ 306-331 TAX LAW 1139 
 
 and two of this chapter, to bring an action in the supreme court for the seques- 
 tration of the property of such corporation and the court may so sequestrate 
 the property of such corporation for the purpose of satisfying taxes in arrears, 
 with the cost of prosecution, and may, also, in its discretion, enjoin such cor- 
 poration and further proceedings under its charter until such tax and the costs 
 incurred in the action shall be paid. The attorney-general may recover such 
 tax with costs from such delinquent corporation by action in any court of record. 
 
 § 307. Settlement of conflicting claims to surplus of tax sale. Whenever a. 
 surplus from the sale of any property for unpaid taxes in the hands of tlie 
 supervisor of a town shall be claimed by any person other than the person for ■ 
 whose tax such property was sold, and such claim shall not be settled by a 
 stipulation filed with the supervisor, as provided by this chapter, such claimant 
 may maintain an action against such person, or such person may maintain an 
 action against such claimant, to recover such money and, for the purposes of 
 such action, the defendant shall be deemed to be in possession of, the surplus 
 in the hands of the supervisor. Upon the production of a certified copy of a 
 final judgment, rendered in favor of either party, the supervisor shall pay such 
 surplus to the party recovering the same. No other cause of action shall 
 be joined, nor any set-off or counterclaim be allowed in an action brought pur- 
 suant to this section, and if an execution issue on a judgment rendered in such 
 action, it shall direct that the costs only of such judgment be levied thereon. 
 
 § 330. Definitions. The word " investments," as used in this article, shall 
 include : 
 
 Any bond, note, debt, debenture, equipment bond or note, or written or 
 printed obligation, forming part of a series of similar bonds, notes, debts, 
 debentures, written or printed obligations, which by their terms are payable one 
 year or more from their date of issue and which are either secured by a mort- 
 gage, pledge, deposit, or deed of trust, of real or personal property, or both, or 
 which are not secured at all; excepting bonds of this state or any civil division 
 thereof and such bonds, notes, debts, debentures, written or printed obligations, 
 which are secured by a deed of trust or mortgage' recorded in the state of New 
 Yorlc on real property situated wholly within the state of New York; excepting 
 also such bonds, notes, debts, debentures, written or printed obligations held as 
 collateral to secure the payment of investments taxable under this article or 
 of bonds taxable under article eleven of this chapter; and excepting also suoli 
 proportion of a bond, note, debt, debenture or written or printed obligation, 
 secured by deed of trust or mortgage recorded in the state of New Yorlc of 
 property or properties situated partly within- and partly without the state of 
 New York as the value of that part of the mortgaged property or properties 
 situated within the state of New York shall bear to the value of the entire 
 mortgaged property or properties. 
 
 § 331. Payment of tax on investments. After this article takes effect, any 
 person may take or send to the oflSce of the comptroller of this state any invest- 
 ment, and may pay to the state a tax at the rate of twenty cents per year on 
 each one hundred dollars or fraction thereof of the face value of such invest- 
 ment for one or more years not exceeding five, under such regulations as the 
 comptroller may prescribe, and the comptroller shall thereupon afBx stamps 
 hereinafter provided for, to such investment, which stamps shall be duly signed 
 by the comptroller or his duly authorized representative and dated as of the 
 date of the payment of such tax. The comptroller shall keep a record of such 
 investment together with the name and address of the person presenting the 
 same and the date of payment of the tax. 
 
 All such investments shall thereafter be eixempt from all taxation in the 
 state or any of the municipalities or local divisions of the state except as pro- 
 
1140 BUSINESS CORPORATIONS IN NEW YORK §§ 331-336 
 
 vided in sections twenty-four to twenty-four-g, both inclusive, one hundred and 
 eighty-seven, one hundred and eighty-eight and one hundred and eighty-nine of 
 this chapter, and in articles ten and twelve of this chapter, for the period of 
 years from the payment of such tax for which such tax shall have been paid 
 and such stamps affixed. 
 
 § 332. Stamps; how prepared and used. Adhesive stamps for the purpose of 
 indicating the payment of the tax provided for by this article shall be prepared 
 by the comptroller, in such form, and of such denominations and in such quanti- 
 ties as he may from time to time prescribe. Upon the payment of the tax 
 . provided by this article upon any investment the comptroller shall afiix stamps 
 of the proper denominations, equal in face value to the amount of tax paid, to 
 the investment, and shall cancel the same by the seal of his office or by such 
 other canceling device as he may prescribe. 
 
 § 333. No exemption unless stamps are affixed and canceled. The payment 
 of the tax upon any investment, as provided in this article, shall not exempt 
 such investment from taxation, as provided in section three hundred and thirty- 
 one, unless stamps to the proper amount are affixed and canceled, as provided 
 in the preceding section. 
 
 § 334. Contract for dies; New York city office; expenses, how paid. The state 
 comptroller is hereby directed to make, enter into and execute for and in behalf 
 of the state such contract or contracts for dies, plates and printing 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 dis- 
 cretion 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. In 
 addition to the receipt of taxes payable as provided in this article at his office 
 in the city of Albany, the comptroller shall maintain an office for the receipt of 
 such taxes in the city of New York. He shall appoint, and may at pleasure 
 remove, such assistants,, clerks and other persons as may be necessary to carry 
 out the provisions of this article and shall fix and determine their salaries. 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. 
 
 § 335. Illegal use of stamps; penalty. Any person who shall wilfully 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 vise 
 the same, or to cause tlie use of the same after it shall have been 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 
 tlie 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 discretion of the court. 
 
 § 336. No deduction of debts against taxable investment. The owner of any 
 investment, on which the tax provided for in this article has not been paid, 
 shall be assessed upon such investment in the taxing district in which he 
 resides, upon the fair market value of such investment and no deduction for 
 the just debts owing by him shall be allowed against the assessed value of such 
 investment, as provided in section six of this chapter or elsewhere in this chap- 
 ter or in any other law of this state except that the deduction from the taxable 
 property permitted by section six of this chapter shall be allowed to any cersoD. 
 
§§ 336-340 TAX LAW 1141 
 
 in respect of any investment which for the purpose of his business, as herein- 
 after described and not for or as an investment, shall be temporarily owned and 
 held for sale by such person then actually engaged in the bona fide purchase 
 and sale of such investments as a business, and who then shall have and main- 
 tain an office or place of business in this state for the carrying on of the actual 
 bona fide business of purchasing and selling such investments as distinguished 
 from the purchase thereof for investment, but such deduction shall not be 
 allowed in respect. of investments owned and held for a longer period than eight 
 months. 
 
 § 337. 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 payment of all claims and 
 demands which are a lawful charge thereon. 
 
 § 338. Exemption where tax has been paid on secured debts before May first, 
 nineteen hundred and fifteen. If a tax shall have been paid upon a secured debt 
 pursuant to former article fifteen of the tax law prior to May first, nineteen 
 hundred and fifteen, or prior to April first, nineteen hundred and seventeen, 
 under article eleven of this chapter, such debt shall be exempt from taxation 
 hereunder and from all taxation in the state or any of the municipalities or 
 local divisions of the state, except as provided in sections twenty-four to 
 twenty-four-g, both inclusive, one hundred and eighty-seven, one hundred and 
 eighty-eight and one hundred and eighty-nine of this chapter and in articles 
 ten and twelve of this chapter. 
 
 § 339. Exemption where tax has been paid on secured debts between May 
 first, nineteen hundred and fifteen and December thirty-first, nineteen hundred 
 and sixteen. If a tax shall have been paid upon a secured debt pursuant to 
 former article fifteen of the tax law, between May first, nineteen hundred and 
 fifteen, and December thirty-first, nineteen hundred and sixteen, such secured 
 debt shall be exempt from taxation hereunder, and from all taxation in the 
 state or any of the municipalities or local divisions of the state, for the period 
 of five years from the date of the payment of such tax, except as provided in 
 sections twenty-four to twenty-four-g, both inclusive, one hundred and eighty- 
 seven, one hundred and eighty-eight and one hundred and eighty-nine, of this 
 chapter, and in articles ten and twelve of this chapter. 
 
 § 340. Apportionment of value of investment secured by mortgage of property 
 situated partly within and partly without the state. If a bond, note, debt, 
 debenture, equipment bond or note, or written or printed , obligation be secured 
 by mortgage or deed of trust recorded in the state of New York of property or 
 properties, situated partly within and partly without the state of New York, 
 and a proportion of such bond, note, debt, debenture, equipment bond or note, 
 written or printed obligation constitutes an investment as provided by section 
 three hundred and thirty, the holder of such investment may apply to the 
 comptroller for a determination of the proportion of such bond,, note, debt, 
 debenture, equipment bond or note, or written or printed obligation which is 
 taxable as an investment under this article, and the comptroller shall, as soon 
 as practicable thereafter, furnish to such applicant a determination upon which 
 the tax imposed by this article on such investment shall be based, which deter- 
 mination shall be in the manner provided for in section two hundred and sixty 
 of this chapter made in respect of the apportionment of the value of such mort- 
 gaged property in connection with the recording within the state of New York 
 of the mortgage or other indenture by which such investment may be secured; 
 or may waive such determination and pay the tax upon the full amount of such 
 investment, and thereafter the whole amount of such investment shall be 
 
1142 BUSINESS CORPORATIONS IN NEW YORK §§ 340, C-18 
 
 exempt from taxation under the provisions of section three hundred and 
 thirty-one of this chapter. 
 
 Session Law, 191S, c. 240. 
 
 Section 1. That during the continuance of the war any corporation organized 
 under the laws of this state may co-operate with other corporations and with 
 natural persons in the creation and maintenance of instrumentalities conducive 
 to the winning of the war, and its directors or trustees may appropriate and 
 expend for such purposes such sum or sums as they may deem expedient and as, 
 in their judgment, will contribute to the protection of the corporate interests, 
 provided that whenever the expenditures for such purposes in any calendar year 
 shall in the aggregate amount to one per centum on the capital stock out- 
 standing, then, before any further expenditure is made during such year for 
 such purposes by the corporation, ten days' notice shall be given to the stock- 
 liolders in such manner as the directors or trustees may direct of the intention 
 to make such further expenditure, specifying the amount thereof, and if written 
 objection be made by stockholders holding twenty-five per centum or more of the 
 stock of the corporation, such further expenditure shall not be made until it 
 shall have been authorized at a stockholders' meeting. 
 
 CONSTITUTIONS AND FEDERAL STATUTES 
 
 NEW YORK CONSTITUTION 
 Abticlb III. 
 
 § 6. Compensation of members of legislature. Each member of the legis- 
 lature sliall receive for his services an annual salary of one thousand five hun- 
 dred dollars. The members of either house shall also receive the sum of one 
 dollar for every ten miles they shall travel in going to and returning from 
 tlieir place of meeting, once in eacli sessfon on the most usual route. Senators, 
 when the Senate alone is convened in extraordinary session, or when serving 
 as members of the Court for the Trial of Impeachments, and such members of 
 the Assembly, not exceeding nine in number, as shall be appointed managers 
 of an impeachment, shall receive an additional allowance of ten dollars a day. 
 
 § 15. Manner of passing bills. No bill shall be passed or become a law 
 unless it shall have been printed and vipon the desks of the members, in its 
 final form, at least three calendar legislative days prior to its final passage, 
 unless the Governor, or the acting Governor, shall have certified to the necessity 
 of its immediate passage, under his hand and the seal of the State; nor shall 
 any bill be passed or become a. law, except by the assent of the majority of 
 the members elected to eacli branch of the Legislature; and upon the last read- 
 ing of a bill, no amendment thereof shall be allowed, and the question upon its 
 final passage shall be taken immediately thereafter, and the yeas and nava 
 entered on the journal. 
 
 § 16. Private or local bills limited to one subject to be expressed in title. No 
 private or local bill, which may be passed by the Legislature, shall embrace 
 more than one subject, and that shall he expressed in the title. 
 
 § 18. Cases in which private or local bills shall not be passed; general law» 
 to provide for enumerated cases; restrictions on laws governing s,treet railroads. 
 The Legislature shall not pass a private or local bill in any of the following 
 cases : 
 
 Changing the names of persons. 
 
 Laying out, opening, altering, working or discontinuing roads, highways or 
 alleys, or for draining swamps or other low lands. 
 
 Locating or changing county seats. 
 
§§ 18-20, 1-2 NEW YORK CONSTITUTION 1143 
 
 Providing for changes of venue in civil or criminal cases. 
 Incorporating villages. 
 
 Providing for election of members of boards of supervisors. 
 Selecting, drawing, summoning or impaneling grand or petit jurors. 
 Regulating the rate of interest, on money. 
 
 The opening and conducting of elections or designating places of voting. 
 Creating, increasing or decreasing fees, percentages or allowances of public 
 ofEcers, during the term for which said officers are elected or appointed. 
 
 Granting to any corporation, association or individual the right to lay down 
 railroad tracks. 
 
 Granting to any private corporation, association or individual any exclusive 
 privilege, immunity or franchise whatever. 
 
 Granting to any person, association, firm or corporation, an exemption from 
 taxation on real or personal property. 
 
 Providing for building bridges, and chartering companies for such purposes, 
 except on the Hudson river below Waterford, and on the East river, or over 
 the waters forming a part of the boundaries of the State. 
 
 The Legislature shall pass general laws providing for the cases enumerated 
 in this -section, and for all other cases which in its judgment, may be provided 
 for by general laws. But no law shall authorize the construction or operation 
 of a street railroad except upon the condition that the consent of the owners 
 of one-half in value of the property bounded on, and the consent also of the 
 local authorities having the control of, that portion of a street or highway 
 upon which it is proposed to construct or operate such railroad be first 
 obtained, or in case the consent of such property owners cannot be obtained, 
 the Appellate Division of the Supreme Court, in the department in which it is 
 proposed to be constructed, may, iipon application, appoint three commissioners 
 who shall determine, after a hearing of all parties interested, whether, such 
 railroad oiight to be constructed or operated, and their determination, confirmed 
 by the court, may be taken in lieu of the consent of the property owners. 
 
 § 20. Appropriation of public property for local or private purposes; two- 
 thirds vote required. The assent of two-thirds of the members elected to each 
 branch of the Legislature shall be requisite to every bill appropriating the public 
 moneys or property for local or private purposes. 
 
 § 1. Corporations, how formed. Corporations may be formed under general 
 laws ; but shall not be created by special act, except for municipal purposes, and 
 in cases where, in the judgment of the Legislature, the objects of the corporation 
 cannot be attained under general laws. All general laws and special acts passed 
 pursuant to this section may be altered from time to time or repealed. 
 
 § 2. Dues from corporatioiis. Dues from corporations shall be secured by 
 such individual liability of the corporators and other means as may be prescribed 
 by law. 
 
 § 3. Corporation; term defined; actions by and against corporations. The term 
 corporations as used in this article shall be construed to include all associations 
 and joint-stock companies having any of the powers or privileges of corporations 
 not possessed by individuals or partnerships. And all corporations shall have the 
 right to sue and shall be subject to be sued in air courts in like cases as natural 
 persons. 
 
 § 2. Election or appointment of officers when not provided for by constitu- 
 tion. All county officers"" whose election or appointment is not provided for by 
 this Constitution, shall be elected by the electors of the respective counties or 
 appointed by the boards of supervisors, or other county authorities, as the Legis- 
 lature shall direct. All city, town and village officers, whose election or appoint- 
 ment is not provided for by this Constitution, shall be elected by the electors of 
 
1144 BUSINESS CORPORATIONS IN NEW YORK §§ 2, 10, 2, 1-2 
 
 Bucli cities, towns and villages, or of some division thereof, or appointed by such 
 authorities thereof, as the Legislature shall designate for that purpose. All other 
 officers, whose election or appointment is not provided for by this Constitution, 
 and all officers, whose offices may hereafter be created by law, shall be elected by 
 the people, or appointed as the Legislature may direct. 
 
 UNITED STATES CONSTITUTIOIT 
 
 Article I. 
 
 Section 10. No State shall enter into any Treaty, Alliance, or Confederation; 
 grant letters of ilarque and Reprisal; coin Money; emit Bills of Credit; make 
 any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill 
 of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or 
 grant any Title of Nobility. 
 
 Xo State shall, without the Consent of the Congress, lay any Imposts or Duties 
 on Imports or Exports, except what may be absolutely necessary for executing its 
 inspection Laws; and the net Produce of all Duties and Imposts, laid by any 
 State on Imports or Exports, shall be for the Use of the Treasury of the United 
 States; and all such Laws shall be subject to the Revision and Control of the 
 Congress. 
 
 Xo State shall, without the Consent of Congress, lay any Duty of Tonnage, 
 keep Troops, or Ships of War in time of Peace, enter into any Agreement or 
 Compact with another State, or with a foreign Power, or engage in War, unless 
 actually invaded, or in such imminent Danger as will not admit of delay. 
 
 Article IV. 
 
 Section 2. The Citizens of each State shall be entitled to all Privileges and 
 Immunities of 'Citizens in the several States. 
 
 A Person charged in any State with Treason, Felony, or other Crime, who shall 
 flee from Justice, and be found in another State, shall on Demand of the executive 
 Authority of the State from which he fled, be delivered up, to be removed to the 
 State having Jurisdiction of the crime. 
 
 No Person held to Service or Labour in one State, under the Laws thereof, 
 escaping into another, shall, in Consequence of any Law or Regulation therein, be 
 discharged from such Service or Labour, but shall be delivered up on Claim of the 
 Party to whom such Service or Labour may be due. 
 
 FEDERAL STATUTES AGAINST MONOPOLIES 
 
 § 1. Every contract, combination in the form of a trust or otherwise, or con- 
 spiracy, in restraint of trade or commerce among the several States, or with 
 foreign nations, is hereby declared to be illegal. Every person who shall make 
 any such contract or engage in any such combination or conspiracy, shall be 
 deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished 
 by fine not exceeding five thousand dollars, or by imprisonment not exceeding 
 one year, or by both said punishments, in the discretion of the court. (Act of 
 July 2, 1890, c. 647; 26 Stat. L. 209.) 
 
 § 2. Every person who shall monopolize, or attempt to monopolize, or com- 
 bine or conspire with any other person or persons, to monopolize any part of 
 the trade or commerce among the several States, or with foreign nations, shall 
 be deemed guilty of a misdemeanor, and, on conviction thereof, shall be pun- 
 ished by a fine not exceeding five thousand dollars, or by imprisonment not 
 exceeding one year, or by both said punishments, in the discretion of the court. 
 {Id.) 
 
§§ 3-73 FEDERAL STATUTES 1145 
 
 § 3. Every contract, combination in form of trust or otherwise, or conspiracy, 
 in restraint of trade or commerce in any Territory of the United States or of 
 the District of Columbia, or in restraint of trade or commerce between any 
 such Territory and another, or between any such Territory or Territories and 
 any State or States or the District of Columbia, or with foreign nations, is 
 hereby declared illegal. Every person who shall make any such contract or 
 engage in any such combination or conspiracy, shall be deemed guilty of a mis- 
 demeanor, and, on conviction thereof, shall be punished by fine not exceeding 
 five thousand dollars, or by imprisonment not exceeding one year, or by both 
 said punishments, in the discretion of the court. [Id.) 
 
 § 4. The several circuit courts of the United States are hereby invested with 
 jurisdiction to prevent and restrain violations of this act; and it shall be the 
 duty of the several district attorneys of the United States, in their respective 
 districts, under the direction of the Attorney-General, to institute proceedings 
 in equity to prevent and restrain such violations. Such proceedings may be by 
 way of petition setting forth the case and praying that such violation shall be 
 enjoined or otherwise prohibited. When the parties complained of shall have 
 been duly notified of such petition the court shall proceed, as soon as may be, 
 to the hearing and determination of the case; and pending such petition and 
 before final decree, the court may at any time make such temporary restraining 
 order or prohibition as shall be deemed just in the premises. {Id.) 
 
 § 5. Whenever it shall appear to the court before which any proceeding 
 under section four of this act may be pending, that the ends of justice require 
 that other parties should be brought before the court, the court may cause them 
 to be summoned, whether they reside in the district in which the court is held 
 or not; and subpoenas to that end may be served in any district by the marshal 
 thereof. (Id.) 
 
 § 6. Any property owned under any contract or by any combination, or pur- 
 suant to any conspiracy (and being the subject thereof) mentioned in section 
 one of this act, and being in the course of transportation from one state to 
 another, or to a foreign country, shall be forfeited to the United States, and 
 liiay be seized and condemned by like proceedings as those provided by law for 
 the forfeiture, seizure, and condemnation of property imported into the United 
 States contrary to law. {Id.) 
 
 § 7. Any person who shall be injured in his business or property by any 
 other person or corporation by reason of anything forbidden or declared to be 
 unlawful by this act, may sue therefor in any circuit court of the United 
 States in the district in which the defendant resides or is found, without respect 
 to the amount in controversy, and shall recover three fold the damages by him 
 sustained, and the costs of suit, including a reasonable attorney's fee. {Id.) 
 
 § 8. That the word " person," or " persons," wherever used in this act shall 
 be deemed to include corporations and associations existing under or authorized 
 by the laws of either the United States, the laws of any of the Territories, the 
 laws of any State,, or the laws of any foreign country. {Id.) 
 
 § 73. That every combination, conspiracy, trust, agreement, or contract is 
 hereby declared to be contrary to public policy, illegal, and void when the same 
 is made by or between two or more persons or corporations either of whom, 
 as agent or principal, is engaged in importing any article from any foreign 
 country into the United States, and when such combination, conspiracy, trust, 
 agreement, or contract is intended to operate in restraint of lawful trade, or 
 free competition in lawful trade or commerce, or to increase the market urice 
 in any part of the United States of any article or articles imported or intended 
 to be imported into the United States, or of any manufacture into which such 
 imported article enters or is intended to enter. Every person who is or here- 
 
1146 BUSINESS , CORPORATIONS IN NEW YORK §§ 73-77 
 
 after shall be engaged in the importation of goods or of any commodity from 
 any foreign country in violation of this section of this Act, or who shall com- 
 bine or conspire with another to violate the same, is guilty of a misdemeanor, 
 and on conviction thereof in any court of the United States such person shall 
 be fined in a sum not less than one hundred dollars and not exceeding five 
 thousand dollars, and shall be further punished by imprisonment, in the dis- 
 cretion of the court, for a term not less than three months nor exceeding twelve 
 months. (Act of Feb. 12, 1913, e. 40, 402; 37 Stat. L. 667.) 
 
 § 74. That the several circuit courts of the United States are hereby invested 
 with jurisdiction to prevent and restrain violations of section seventy-three of 
 this Act; and it shall be the duty of the several district attorneys of the United 
 States in their respective districts, under the direction of the Attorney-General, 
 to institute proceedings in equity to prevent and restrain such violations. Such 
 proceedings may be by way of petitions setting forth the case and prajung that 
 such violations shall be enjoined or otherwise prohibited. Wliere the parties 
 complained of shall have been duly notified of such petition the court shall 
 proceed, as soon as may be, to the hearing and determination of the case; anil 
 pending such petition and before final decree, the court may at any time make 
 such temporary restraining order or prohibition as shall be deemed just in the 
 premises. (Act of Aug. 27, 1894, c. 349; 28 Stat. L. 570.) 
 
 § 75. That whenever it shall appear to the court before which any proceedin'; 
 under the seventy-fourth section of this act may be pending that the ends of 
 justice require that other parties should be brought before the court, the court 
 may cause them to be summoned, whether they reside in the district in whicli 
 the court is held or not; and subpoenas to tliat end may be served in any district 
 by the marshal thereof. {Id.) 
 
 § 76. That any property owned under any contract or by any combination, 
 or pursuant to any conspiracy, and being the subject thereof, mentioned in sec- 
 tion seventy-three of this Act, imported into and being within the United States 
 or being in the course of transportation from one State to another, or to or 
 from a Territory or the District of Columbia, shall be forfeited to the United 
 States, and may be seized and condemned by like proceedings as those provided 
 by law for the forfeiture, seizure and condemnation of property imported into 
 the United States contrary to law. (Act of Feb. 12, 1913, c. 40; 37 Stat. L. 667.) 
 
 § 77. That any person who shall be injured in his business or property by 
 any other person or corporation by reason of anything forbidden or declared to 
 be unlawful by this Act may sue therefor in any circuit court of the United 
 States in the district in which the defendant resides or is found, without respect 
 to the amount in controversy, and sliall recover threefold the damages by him 
 sustained, and the costs of the suit, including a reasonable attorney's fee. (Act 
 of Aug. 27, 1894, c. 349; 28 Stat. L. 570.) 
 
CYCLOPEDIC ANALYSIS OF FORMS 
 
 I. Acknowledgments, Aifidavits and Verifications : FOBM No. 
 
 A. Acknowledgmeht by Corporation 2 
 
 B. Affidavits 1 
 
 1. Beginning of Affidavit 2 
 
 2. Ending of Affidavit on Jurat '. 3 
 
 3. To Obtain Judgment by Default under U. S. " Soldiers' 
 
 and Saiiors' Civil Relief Act," see Forms 20 and 21. 
 
 4. Affidavits of Service: 
 
 a. Personally on Domestic Corporation 4 
 
 b. Personally on Foreign Corporation 5 
 
 c. By Mailing Pursuant to Order for Service by Pub- 
 
 lication and Mailing 6 
 
 d. By Personal Service Outside tbe State 7 
 
 C. Verifications: 
 
 1. Domestic Corporations: 
 
 a. By Officer of 8 
 
 b. By Resident Attorney When Neither Corporation 
 
 nor Officer Within County Where Attorney Resides. 9 
 
 c. By Resident Attorney When Neither Corporation 
 
 Nor Officers Within County Where Attorney 
 Resides and Cajpable of Making Verification 10 
 
 d. By Non-resident Attorney When Officer Not Within 
 
 County Where Attorney Has Office and Capable 
 
 of Making Verification 11 
 
 2. Foreign Corporations : 
 
 a. By Officer of 12 
 
 b. By Attorney 13 
 
 II. Process, Pleadings and Practice: 
 
 A Summons Served by Publication, Mailing and Outside State. 
 
 1. Summons With Notice 14 
 
 2. Order for Service by Publication, Mailing or Outside 
 
 the State 15 
 
 3. Affidavits of Mailing, Service Outside State, see Forms 
 
 6 and 7. 
 
 B. Complaint for Goods Sold and Delivered by Foreign Corpo- 
 
 ration 16 
 
 C. Order for Security for Costs by Plaintiff — Foreign Corpora- 
 
 tion 17 
 
 D. Action Against Corporation on Note: 
 
 1. Order Directing Issues to be Tried. . . . ., 18 
 
 2. Affidavit to Obtain Order for Trial 19 
 
 E. Judgment by Default: 
 
 1. Affidavit of Plaintiff's Attorney to Obtain Judgment by 
 
 Default Under U. S. " Soldiers' and Sailors' Civil Relief 
 
 Act " 20 
 
 2. Affidavit of Investigation to Obtain Judgment by Default 
 
 Under U. S. " Soldiers' and Sailors' Civil Relief Act." 21 
 1147 
 
1148 FORMS 
 
 III. Certificate of Incorporation : Form No. 
 
 A. The Certificate -^ 
 
 B. Special Clauses in Certificate: 
 
 1. Giving Preferences to Holders of Preferred Stock 23 
 
 2. For Retiring Preferred Stock 24 
 
 C Object or Purpose Clauses in Certificate: 
 
 1. Brokerage Business 25 
 
 2. Chemicals, Dyes, Oils, Paints 26 
 
 3. Combustibles -7 
 
 4. Jewelry • 28 
 
 5. Leather and Lumber 29 
 
 6. Motors, Engines, Boilers 30 
 
 7. Motors, Air-ships, Automobiles 31 
 
 8. Moving Pictures 32 
 
 9. Real Estate 33 
 
 10. Shades, Shade-roUers, Shade-cloth 34 
 
 11. Ships 35 
 
 IV. Amended Certificate of Incorporation: 
 
 A. To Correct Informality, Inclusion of Unauthorized Matter, 
 
 or Defective Proof or Acknowledgment 39 
 
 B. By Supreme Court to Make it Truly Set Forth Corporation's 
 
 Object and Purpose: 
 
 1. Petition or Affidavit 40 
 
 2. Notice of Motion 41 
 
 3. Order 42 
 
 4. Amended Certificate 43 
 
 C. To Alter Original Certificate to Include Powers Enjoyed by 
 
 Like Corporations: 
 
 1. Minutes of Directors Authorizing Alteration 44 
 
 2. Notice of Meeting of Stockholders to Authorize Altera- 
 
 tion 45 
 
 3. Minutes of Stockholders Axithorizing Alteration 46 
 
 4. Verification by Director of Proceedings for Alteration . . 47 
 
 5. The Amended Certificate 48 
 
 V. By-laws 49 
 
 VI. Minutes and Waiver of Notice of Meeting of Incorporators 50 
 
 VII. Minutes of First Meeting of Directors 51 
 
 VIII. Certificate of Secretary of Corporation of Adoption of Directors' 
 
 Resolution and Transcript from By-laws Re Bank Account 52 
 
 IX. Stock Subscription Agreement 53 
 
 X. Certificate of Payment of Half Capital Stock 54 
 
 XI. Stock Certificates: 
 
 A. Certificate of Common Stock Without Par Value 55 
 
 B. Certificate of Preferred Stock With Par value 56 
 
 C. Temporary Receipt for 56-a 
 
 XII. Lost or Destroyed Stock Certificate: 
 
 A. Petition to Court for New to Replace Lost or Destroyed 
 
 Stock Certificate 57 
 
 B. Order to Show Cause Why New Stock Certificate Should Not 
 
 Issue r,R 
 
FORMS 1149 
 
 XII. Ixiat or Destroyed Stock Certificate — Continued. Fob:m No. 
 
 C. Order for Issue of New Certificate of Stock in Place of One 
 
 Lost or Destroyed ^^ 
 
 D. Bond of Indemnity on Issue of New Stock Certificate for 
 
 One Lost, etc 00 
 
 XIII. Assignment of Stock and Power of Attorney to Transfer on Boolcs. 61 
 
 XIV. Proxy 62 
 
 XV. Voting Trust Agreement 63 
 
 XVI. Minutes of Stockholders' Meetings: 
 
 A. Minutes of Stockholders' Annual Meeting 64 
 
 B. Minutes of Stockholders' Special Meeting 65 
 
 XVII. Certificate of Office and Incorporation on Registration of Corpu- 
 
 ration Under Section 275-a, Tax Law 66 
 
 XVIII. Change in Amount, Classification, Number of Shares, from Par 
 to Non-par Value, of Cajiital Stock: 
 
 A. Certificate of Increase or Decrease of Capital Stock: 
 
 1. On Unanimous Consent of Stockholders 67 
 
 2. AfSdavit that Reduced Capital Exceeds Liabilities 68 
 
 3. On Stockholders' Minutes: 
 
 a. Notice to Stockholders of Meeting 69 
 
 b. Minutes of Stockholders' Meeting 70 
 
 c. Certificate on Stockholders' Minutes 71 
 
 B. Certificate of Change in Classification of Capital Stock: 
 
 1. On Stockholders' Minutes: 
 
 a. Notice of Stockholders' Meeting • • • • 7- 
 
 b. Minutes of Stockholders' Meetings 73 
 
 u. Certificate on Stockholders' Minutes 74 
 
 2. On Request of Preferred Stockholders and Directors' 
 
 Meeting : 
 
 a. Request of Holders of Preferred Stock for Exchange 
 
 Thereof for Common Stock 75 
 
 b. Minutes of Directors' Meeting 76 
 
 3. On Stockholders' Consent 77 
 
 0. Certificate of Change of Number of Shares Without Changing 
 
 Capital Stock: 
 
 1. Notice of Stockholders' Meeting 78 
 
 2. Minutes of Stockholders' Meeting 79 
 
 3. Certificate on Stockholders' Minutes '. 80 
 
 D. Change from Par to Non-par Value Stock: 
 
 1. Certificate of Reorganization to Permit Issuance of 
 
 Shares Without Nominal or Par Value r 81 
 
 2. Affidavit of Custodian of Stock Book Annexed to Stock- 
 
 holders' Consent of Reorganization to Permit Shares 
 Without Par Value 82 
 
 3. Affidavit of Corporate Officers Annexed to Certificate of 
 
 Reorganization to Permit Issuance of Shares Without 
 Par Value When Capital of Reorganized Corporation 
 to be Less Than the Par Value of the Previously 
 Issued Stock 83 
 
1150 FORMS 
 
 XVIII. Change in Amount, Classification, etc. — Continued. FoBM No. 
 
 D. Change from Par to Non-par Value Stock — Continued. 
 
 4. Affidavit by Corporate Officers Annexed to Their Certifi- 
 
 cate to Permit Issuance of Stock Without Par Value. . 84 
 
 5. Notice of Stockholders' Meeting to Reorganize Corpora- 
 
 tion so as to Permit Issuance of Stock Without Par 
 Value 85 
 
 6. Minutes of Stockholders' Meeting to Reorganize Corpora- 
 
 tion so as to Permit Issuance of Stock Without Par 
 
 Value 86 
 
 XIX. Certificate of Payment of Half of Capital Stock. 
 
 A. The Certificate 87 
 
 B. Affidavit of Truth of Statements in Certificate 88 
 
 XX. Election of Directors. 
 
 A. Notice of Annual Meeting of Stockholders for Election of 
 
 Directors, etc '. 80 
 
 B. Notice of Meeting to Elect Directors on Failure to Elect on 
 
 Day Designated by By-laws or Law 90 
 
 C. Notice of Meeting to Elect Directors on Failure of Directors 
 
 to Call Meeting to so Elect After Failure to Elect on Day 
 Designated by By-laws or Law or Failure to so Elect at 
 Such Meeting Called by Directors 91 
 
 D. Oath of Inspectors of Directors' Election 92 
 
 E. Report of Inspectors of Election 93 
 
 F. Notice of Application for Court Inquiry Into Election of 
 
 Directors ■ 94 
 
 G. Affidavits on Application for Court Inquiry Into Election of 
 
 Directors 95 
 
 H. Order on Court Inquiry Into Election of Directors 96 
 
 XXI. Change in Number of Directors: 
 
 A. Unanimous Stockholders' Consent to Increi.se or Decrease of 
 
 Number of Directors '. 97 
 
 B. Affidavit of Custodian of Stock Book Annexed to Stockholders' 
 
 Consent for Increase or Decrease in Directors 97-A 
 
 C. Minutes of Meeting of Stockholders to Increase or Reduce 
 
 Number of Directors 98 
 
 D. Notice of Special Meeting of Stockholders to Increase or 
 
 Reduce Number of Directors 99 
 
 E. Proof of Service of Notice of Meeting of Stockholders to 
 
 Increase or Reduce Directors 100 
 
 P. Certificate of Verification of Stockholders' Minutes to In- 
 crease or Reduce Number of Directors 101 
 
 XXII. Change of Corporate Name: 
 
 A. Petition to Supreme Court for Change of Corporate Name. . . 102 
 
 B. Secretary of State's Certificate of Availability of New Name 
 
 on Change of Corporate Name 103 
 
 C. Notice of Presentation of Petition and Motion for Change of 
 
 Corporate Name 104 
 
 D. Order Allowing Change of Corporate Name 105 
 
FORMS 1151 
 
 XXIII. Change of Corporate Office : Form No. 
 
 A. Unanimous Consent of Stockholders to Change of Corporate 
 
 Principal Office 106 
 
 B. Notice of Special Meeting of Stockholders to Change Corpo- 
 
 ration's Principal Office 107 
 
 C. Minutes of Special Meeting of Stockholders to Change Cor- 
 
 poration's Principal Office 108 
 
 D. Certificate of Officers and Directors of Change of Corpora- 
 
 tion's Principal Office 109 
 
 MXTV. Corporate Annual Report 110 
 
 XXV. Corporate Bond and Mortgage: 
 
 A. Corporate Bond ■ Ill 
 
 B. Corporate Mortgage and Trust Indenture 112 
 
 C. Stockholders' Consent to Mortgage: 
 
 1. Minutes of Stockholders' Meeting With Notice... 113 
 
 2. Stockholders' Consent 114 
 
 3. Certificate of Consent or Resolution of Stockholders.... 115 
 XXVI. Certificate of Corporate Merger With Resolution of Board of 
 
 Directors 116 
 
 XXVII. Corporate Consolidation: 
 
 A. Agreement of Consolidation 117 
 
 1. Another Form 117-a 
 
 B. Minutes and Notice of Stockholders' Meeting 118 
 
 C. Notice by Stockholder of Objection to Corporate Consolida- 
 
 tion 119 
 
 D. Notice by Stockholder of Consolidated Corporation of Ap- 
 
 plication to Court for Appointment of Appraisers to Value 
 
 His Stock 120 
 
 E. Petition by Stockholder Dissenting from Consolidation for 
 
 Appointment of Appraisers to Value his Stock 121 
 
 F. Order Appointing Appraisers to Value Stock of Stockholder 
 
 Dissenting from Consolidation 122 
 
 G. Oath of Appraisers of Stock of Stockholder Dissenting from 
 
 Consolidation 123 
 
 H. Certificate by Appraisers of Value of Stock of Stockholder 
 
 Dissenting from Consolidation 124 
 
 XXVIII. Corporate Reorganization Agreement 125 
 
 XXIX. Certificate of Surrender of Franchise or of Voluntary Dissolu- 
 tion by Incorporators 126 
 
 XXX. Voluntary Dissolution: 
 
 A. By Stockholders' Consent: 
 
 1. Notice of Directors' Meeting to Dissolve Voluntarily... 127 
 
 2. "Minutes of Directors' Meeting 128 
 
 3. Notice of Stockholders' Meeting 129 
 
 4. Minutes of Stockholders' Meeting 130 
 
 5. Consent of Stockholders 131 
 
 B. By Court Proceedings: 
 
 1. Petition of Directors for Order Dissolving 132 
 
 2. Order to Show Cause 133 
 
 3. Final Order of Dissolution 134 
 
1152 FORMS 
 
 XXXI. Voluntary Sale of Prgperty and Franchise: Form Ko. 
 
 A. X^otice of Meeting of Stockholders to Consent to Sale of Cor- 
 
 porate Property and Franchise 135 
 
 B. Minutes of Meeting of Stockholders to Consent to Sale of 
 
 Corporate Property and Franchises 136 
 
 C. X'otice by Stockholder of Objection to Voluntary Sale of Cor- 
 
 poration's Franchise and Property 137 
 
 D. Xotice by Stockholder, Objecting to Sale of Corporate Fran- 
 
 chise and Property, to Corporation, of Application to Court 
 
 for Appointment of Appraisers to Value His Stock 138 
 
 E. Petition by Stockholder Dissenting from Sale of Corporate 
 
 Franchise and Property for Appointment of Appraisers to 
 Value His Stock 139 
 
 F. Order Appointing Appraisers to Value Stock of Stockholder 
 
 Dissenting from Sale of Corporate Fi-anchise and Property. 140 
 
 G. Oath of Appraisers Appointed to Value Stock of Stockholder 
 
 Dissenting from Sale of Corporate Franchise and Property. 141 
 H. Certificate by Appraisers of Value of Stock of Stockholder 
 
 Dissenting from Sale of Corporate Franchise and Property. . 142 
 XXXII. R.ceivers: 
 
 A. Appointment: 
 
 1. Notice of Motion for 143 
 
 2. Consent to 144 
 
 3. Complaint for 14;> 
 
 4. Answer to Complaint for 145-A 
 
 5. Order Appointing Receiver 145-]) 
 
 6. Order Discharging Receiver and Cancelling Bond 145-c 
 
 B. Receivers' Certificates: 
 
 1. Order for 146 
 
 2. Form of Certificate 147 
 
 3. Petition for 148 
 
 XXXIII. Taxation: 
 
 A. State-Income-Franchise Tax Report of Domestic or Foreign 
 
 Mercantile or Manufacturing Corporation 149 
 
 B. State Capital Stock Report, Domestic Corporation 150 
 
 C. State — Capital Stock (License Fee) Report, Foreign Cor- 
 
 poration 151 
 
 D. Statement and AflSdavit Claiming Exemption from Making 
 
 Tax Reports and Paying Taxes 151-A 
 
 C. Certiorari to Review Special Franchise Tax: 
 
 1. Petition for Writ of 152 
 
 2. Order for Writ of 153 
 
 3. The Writ 154 
 
 4. The Return 155 
 
 XXXIV. Foreign Corporations: 
 
 A. Taxation, see form H9 et seq. 
 
 B. Licensing to Do Business and Designation of Agent: 
 
 1. Statement and Designation Under Section 16 of the Gen- 
 eral Corporation Law , 156 
 
Nos. 1-3 FORMS 1153 
 
 XXXIV. Foreign Corporations — Continued. 
 
 B. Licensing to Do Business, etc. — Oontmued. FoBM No. 
 
 2. Consent of Person Designated as Agent 157 
 
 3. Resolution of Board of Directors 158 
 
 4. Oath to Sworn Copy of Certificate of Incorporation of 
 
 Foreign Corporation Seeking New York License 159 
 
 6. Certificate of Surrender of Certificate of Authority to Do 
 
 Business 161 
 
 7. Affidavit Attached to Certificate of Foreign Corporation 
 
 of Surrender of Authority to Do Business 162 
 
 FORM NO. 1. 
 
 Acknowledgment hy Corporation. 
 
 (§ 309, Real Prop. L.) 
 
 State of 
 
 County of 
 
 On the day of ' , in the year , before me 
 
 personally came , to me known, who, being by me duly 
 
 sworn, did depose and say that he resides in ; that he is 
 
 the (president, or other officer) of the 
 
 ( name of corporation ) , 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 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. 
 
 {Signatv/re wnd office of officer talcing achnowledgment.) 
 
 [If such corporation ha/ve no seal, that fact mtist be stated in place of the 
 statements required respecting the seal.] 
 
 FORM NO. 2. 
 Beginning of Affidavit. 
 
 State of ) 
 
 !■ ss. .• 
 
 County of 
 
 , being duly sworn, deposes and says ; 
 
 (or, if two or more affiants), 
 
 and , being severally' and duly sworn, 
 
 each for himself [or, herself], says: 
 
 FORM NO. 3. 
 Ending of Affidavit, or Jurat. , 
 
 Sworn to before me this day of , 191 . . 
 
 (Signature amd official character of official before whom oath is taken.) 
 B. C. N. Y.— 73 
 
1154 FORMS Nos. 4, 5 
 
 FORM NO. 4. 
 Affidavit of Personal Service on Domestic Corporation. 
 COURT, COUNTY. 
 
 Title of Action. 
 
 State op New York, ] 
 County of j**"' 
 
 . , being duly sworn, says that he is a clerk in the office of 
 
 , the attorneys for the plaintiff, and that on the day of 
 
 , 191 . ., at , deponent being then more than 21 years of 
 
 age, he served the annexed summons and complaint, "personally, on the above- 
 named Company, the defendant herein, by delivering copies 
 
 thereof to , personally, and leaving the same with him, and that 
 
 he knew said to be at that time the (president ) 
 
 of the said Company, and knew the corporation so served to be 
 
 the company mentioned and described in the said summons as the defendant in 
 this action. 
 
 Sworn to before me this . . 
 day of , 191.. 
 
 FORM NO. .5. 
 Affidavit of Personal Service on Foreign Corporation, 
 COURT, COUNTY. 
 
 Title of Action. 
 
 State of New Yobk, 1 
 County of ( 
 
 , being duly sworn, says that he is a clerk in the office of 
 
 , the attorneys for the plaintiffs, and that on the day of 
 
 , 191 . ., at , deponent being then more than 21 years 
 
 of age, he served the annexed summons and complaint, personally, on the 
 
 above-named Company, the defendant herein, by delivering copies 
 
 thereof to ..■ , personally, and leaving the same with him, and that 
 
 he knew said , to be at that time the ( treasurer) of 
 
 the said Company, and knew the corporation so served to be the 
 
 company mentioned and described in the said summons as the defendant in this 
 action. 
 
 Sworn to before me this . 
 day of , 191. 
 
Nos. 6, 7 FORMS 1155 
 
 FOEM NO. 6. 
 Affidavit of Service hy Mailing Pursuant to Order for Service hy Publication and 
 
 Mailing. 
 
 Supreme Codet, County. 
 
 against 
 
 ., Plaintiff, 
 ., Defendant. 
 
 State of . . 
 County of 
 
 , being duly sworn, says: 
 
 I am plaintiff's attorney and over twenty-one years of age. On the .... day 
 
 of , 191 . . , at o'clock in the noon, I deposited in 
 
 the General Office of the United States Post Office for the City of New York, 
 which backs on the City Hall Park in the Borough of Manhattan, two sets of 
 
 the summons and complaint and order for service thereof dated , 
 
 J herein, each set contained in a securely closed post-paid wrapper and 
 
 directed to , and one set to , and 
 
 the other set to 
 
 Sworn to before me this day of April, 191 . . 
 
 FORM NO. 7. 
 Affiida/vit of Service Outside State Personally, 
 (Title and caption as in Form No. 6, contvimmg: — ) 
 
 State of 1 
 
 r 
 
 County of 
 
 being duly sworn, says: 
 
 I am and at the time of service herein mentioned was an attorney and coun- 
 sellor at law duly qualified to practice in the State of , where 
 
 said service was made. I am over 21 years of age and reside at 
 
 On the day of , 1918, at o'clock in the noon, 
 
 I served the summons and complaint herein, together with a copy of the order 
 
 of the Court herein dated the day of , 191 .. , and of 
 
 the statutory notice signed by plaintiff's attorney annexed to said summons, 
 
 upon , the defendant herein, by delivering a true copy of 
 
 said summons with notice, complaint and order to said defendant, personally, 
 
 at No , State of , and leaving the 
 
 same with him. I knew said '. . so served to be the defendant 
 
 herein, and the person named and described in said summons and complaint as 
 said defendant. 
 
 Sworn to before me this day of , 191 . 
 
1156 FORMS Nos. 8, 9 
 
 FORM NO. 8. 
 
 Verification by Domestic Corporation. 
 
 {name of officer of corporation) , being duly sworn, says : 
 
 That he is the ( e. jr., president, treasurer, etc. ) of 
 
 {name of corporation) , the corporation which exe- 
 cuted the foregoing instrument ; that he has read the foregoing 
 
 (e. jr., petition, complaint, instrument, etc.) and knows the contents thereof; 
 and that the same is true to the knowledge of deponent, except as to the matters 
 therein stated to be alleged upon information and belief, and that as to these 
 matters deponent believes it to be true. 
 
 {Signature of person signing instrument.) 
 Sworn to before me this day of , 191 . . 
 
 {Signat-ure and offioe of official before whom, oath is taken.) 
 
 FORM NO. 9. 
 
 Verification by Resident Attorney When Neither the Corporate Client Nor an 
 Officer Thereof is in the County Where the Attorney Resides. 
 
 State op New York, 1 
 County of C 
 
 , being duly sworn, says : That he is one of the attorneys for 
 
 the plaintiff in the above-entitled action, and resides at , State 
 
 of New York. That he has read the foregoing complaint and knows the contents 
 thereof; that the same is true to the knowledge of deponent, except as to 
 matters therein stated to be alleged upon information and belief, and that as 
 to those matters he believes it to be true. 
 
 Deponent further says that the grounds of his belief as to all matters therein 
 not stated upon his knowledge, are as follows: {Correspondence with the plain-. 
 tiff and boohs and documents im his possession together with letters, likevnse in 
 his possession from the defendant to the plaintiff, wherein the defendant acknowl- 
 edges his liability and statements made by the employees of plaintiff to deponent.) 
 
 Deponent further, says that the reason why this verification is not made by 
 the said plaintiff is that the said plaintiff is a domestic corporation, having 
 
 its principal place of business located at , and that the plaintiff and 
 
 each of the officers of the plaintiff is not within the said County of ., 
 
 the county where deponent resides. 
 
 Sworn to before me this . 
 day of , 191. 
 
Nos. 10, 11 FORMS 1157 
 
 FORM NO. 10. 
 
 Verification hy Resident Attorney When Neither Corporate Client Nor Officer 
 Thereof is in County Where the Attorney Resides and Capable of Making the 
 affidavit. 
 
 State of New York, 1 . . 
 
 County of f 
 
 , being duly sworn, says : That he is one of the attorneys for the 
 
 plain tifT in the above-entitled action and resides at '., State of New 
 
 York. That he has read the foregoing complaint and knows the contents thereof ; 
 and that the same is true to deponent's knowledge except as to matters therein 
 stated to be alleged upon information and belief, and that as to those matters 
 he believes it to be true. 
 
 Deponent further says that the grounds of his belief as to all matters therein ' 
 not stated upon his knowledge, are as follows: (Correspondence between depo- 
 nent a/nd the plaintiff; books a/nd documents of the plaintiff, letters from the 
 defendant to the plaintiff, wherein the defendant acknowledges his liability, now 
 in deponent's possession, and statements made by the employees of plaintiff to 
 deponent. ) 
 
 Deponent further says that the reason why this verification is not made by 
 the said plaintiff is that the said plaintiff is a, domestic corporation, having its 
 
 principal place of business located at , and that the plaintiff and 
 
 each of the officers of the plaintiff is not within the said county of , 
 
 the county where deponent resides. 
 
 Sworn to before me this . . . 
 day of , 191... 
 
 FORM NO. 11. 
 
 Verification by N on-resident Attorney When Officer Not in County Where Attor- 
 ney Has Office and Capable of Making Affida/oit. 
 
 State op New York, 
 County of 
 
 C ss. : 
 
 , being duly sworn, deposes and says : 
 
 That he is one of the attorneys for the plaintiff in the above-entitled action, 
 
 and resides at , State of , and has his office at , 
 
 State of New York; that he has read the foregoing complaint and knows the 
 contents thereof; that the same is true to the knowledge of deponent, except as 
 to matters therein stated to be alleged upon information and belief, and that as 
 to those matters he believes it to be true. 
 
 Deponent further says that the grounds of his belief as to all matters therein 
 not stated upon his own knowledge are as follows: (Correspondence with the 
 plaintiff; books and documents of the plaintiff; letters from the defendant to the 
 ploMitiff wherein the defendant acknowledges his liability, now in deponent's 
 possession, a/nd statements made by the employees of plamtiff to deponent.) 
 
1158 FORMS Nos. 12, 13 
 
 Deponent further says that the reason why this verification is not made by 
 the said plaintiff is that the said plaintiff is a domestic corporation having its 
 
 principal place of business located at , State of New York, and 
 
 that the plaintiff, and each of the oflBeers of the plaintiff, is not within the 
 County of , the county where deponent has his office. 
 
 Sworn to before me this . 
 day of , 191. 
 
 FORM NO. 12. 
 Verification by Officer of Foreign Corporation. 
 
 State of New York, 
 County of 
 
 y «s. . 
 
 , being duly sworn, deposes and says : 
 
 That he is the Secretary of the Company, the defendant in the 
 
 above-entitled action, that he read the foregoing answer and knows the contents 
 thereof, and that the same is true to his own knowledge, except as to the 
 matters therein stated to be alleged on information and belief, and that as to 
 those matters he believes it to be true. Deponent further says that the reason 
 why this verification is not made by the party and is made by hiin is that the 
 defendant is a foreign corporation; and the sources of deponent's information 
 and the grounds of his belief as to all matters not therein stated upon his 
 knowledge are as follows: {statements and reports of other officers and 
 employees of the defendant company, and documents and correspondence in the 
 possession of deponent.) 
 
 Sworn to before me this . 
 day of , 191. 
 
 FORM NO. 13. 
 Verification hy Attorney for Foreign Corporation. 
 
 State of New York, ) 
 County of f 
 
 , being duly sworn, says: 
 
 That he is one of the attorneys for the Company, the plaintiff 
 
 above-named, and that he has read the foregoing complaint and knows the con- 
 tents thereof, and that the same is true to his own knowledge, except as to the 
 matters therein stated to be alleged upon information and belief, and that as to 
 those matters he believes it to be true; and the reason that this verification is 
 not made by the plaintiff and is made by deponent, is that the plaintiff is a for- 
 eign corporation. Deponent further says, that the sources of his information and 
 the grounds of his belief as to all matters therein not stated upon his knowledge 
 
I^os. 14, 11 FORMS 1159 
 
 are as follows: (Letters received from plaintijf and defenda/nt and personal 
 interviews had with officers of the plaintiff company.) 
 
 Sworn to before me this . 
 day of , 191. 
 
 FORM NO. 14. 
 Summons with Notice When Service Had by Publication, etc. 
 {Caption and Title as in Form No. 6, continuing: — ) 
 
 You ARE HEEEBY SUMMONED to answer the complaint in this action and to 
 serve a copy of your answer on th« Plaintiff's Attorney within twenty days 
 after the service of this summons, exclusive of the day of service, and in case 
 of your failure to appear or answer, Judgment will be taken against you by 
 default, for the relief demanded in the complaint. 
 Dated, , 191.. 
 
 Plaintiff's Attorney, Office & P. O. Address, , .* 
 
 To , defendant : 
 
 The foregoing summons is served upon you by publication (or, without the 
 
 State of New York) pursuant to an order of the Hon , 
 
 Justice of the Supreme Court, County of , dated the 
 
 day of , 191. ., and filed with the complaint in the office of 
 
 the Clerk of the County of , at the County Court House, 
 
 Plaintiff's Attorney. 
 Office and P. 0. Address, etc. 
 
 FORM NO. 15. 
 Order for Service by Publication, Mailing or Outside the State. 
 
 (Title and caption as in Form No. 6, continuing: — ) 
 
 Upon the summons filed herein ,. 191 . ., the complaint herein 
 
 duly verified , 191 .. , now presented to me, showing a sufficient 
 
 cause of action against the defendant, and upon the affidavit of , 
 
 verified herein , 191 .. , and the affiadvit of 
 
 verified herein , 191 . . , by which plaintiff has made proof to my 
 
 satisfaction that defendant is not a resident of this State, and is of full age, 
 (or, that defendant is foreign corporation, etc.) and that plaintiff has- been and 
 will be unable with due diligence to make personal service of the summons on 
 defendant within this State, 
 
 Now ON Motion of , attorney for plaintiff. 
 
 Ordered that service of the summons herein upon the defendant be made by 
 
 publication thereof in two newspapers, to wit, , and , 
 
 published in the county of , and hereby designated as most likely 
 
 to give notice to defendant, for not less than once a week for six successive 
 
1160 FORMS No. 16 
 
 weeks, which is the time deemed by me reasonable, and by deposit by plaintifT 
 on or before the day of the first publication in a post office, branch post office 
 or post office station of one or more sets of the said summons and said com- 
 plaint and this order, each contained in a securely closed post-paid wrapper, 
 directed to said defendant as follows: 
 
 One set to and another set to , 
 
 or by personal service of a copy of said summons and complaint with the notice 
 subscribed by plaintifT's attorney in the form required by statute annexed to • 
 said summons. 
 
 Dated, , 191... 
 
 Justice of the Supreme Court. 
 
 FORM NO. 16. 
 Complaint for Ooods Sold and Delivered by Foreign Corporation, 
 .. .. COURT, COUNTY. 
 
 Title of Action. i. 
 
 The plaintiff a'bove-named, by "....., its attorney, complaining of the 
 
 above-named defendants, alleges: 
 
 First. — Upon information and belief, that at all the times hereinafter men- 
 tioned the plaintiflf was and still is a foreign corporation, duly organized by 
 
 and under the laws of the State of , and doing business in the 
 
 State of New Yorli, having its principal place of business at ; 
 
 that prior to the making of the contract hereinafter alleged and prior to the 
 day of 191 . . , the plaintiff duly complied with all the pro- 
 visions of section 15 of the General Corporation Law and obtained a Certificate 
 in the State of New York of authority to do business within said State, and 
 
 had, prior to said day of , 191 . ., duly complied with all the 
 
 provisions of section 181 of the Tax Law and duly paid the license tax imposed 
 by said section on foreign corporations doing business in the State of New 
 York, and duly obtained » receipt therefor and had and has in all respects com- 
 plied with all the laws of the State of New York permitting a foreign corpora- 
 tion to make contracts in this State and to maintain actions in the courts of 
 this State. 
 
 Second. — Upon information and belief, that said defendants were at all times 
 hereinafter mentioned engaged in business as copartners under the firm name 
 and style of and 
 
 Third. — Upon information and belief, that at , between the 
 
 day of , 191. ., and the : day of , 191, the plaintiff, 
 
 at the special instance and request of said defendants, sold and delivered to the 
 
 said defendants goods, wares and merchandise of the reasonable value of 
 
 dollars, which sum defendants agreed to pay therefor. 
 
 Fourth. — Upon information and belief, that the said sum has not been paid 
 
 nor any part thereof except the sum of dollars, although payment of 
 
 the balance was duly demanded, on or about the day of , 
 
 191... 
 
No. 17 FORMS 1161 
 
 Wherefore, plaintiff demands judgment against the defendants for the sum 
 
 of dollars, with interest thereon from the day of > 
 
 191.., with the costs and disbursements of this action. 
 
 Plaintiff's Attorney. 
 Office and P. 0. Address, etc. 
 ( Verification. ) 
 
 FORM NO. 17. 
 
 Order for Security for Costs by Plaintiff Foreign Corporation. 
 
 At a Special Term (Part ) of the (Supreme) 
 
 Court held in and for the County of , 
 
 at the Court House thereof in , on 
 
 the day of ,191... 
 
 Present; 
 
 Hon , 
 
 Justice. 
 
 Title of Action. C 
 
 On reading and filing the affidavit of , verified the day 
 
 of , 191 . ., whereby it appears that the plaintiff is and was at the 
 
 commencement of this action a, foreign corporation created by and under the 
 laws of the State of , it is 
 
 Ordered, That the plaintiff within ten (10) days after the service upon its 
 attorney of a copy of this order, either pay into this court the sum of Two 
 Hundred and Fifty Dollars ($250) to be applied to the payment of costs, if 
 any, awarded against it, or at its election, file with the Clerk of this Court, an 
 undertaking to be executed to the defendant with s.ufficient sureties, to be 
 approved by the Court, to the effect that they will pay upon demand to the 
 defendant all costs which may be awarded to it in this action, not exceeding Two 
 Hundred Fifty Dollars ($250) and shall also within the time aforesaid serve a 
 written notice .of such payment or filing upon the" defendant's attorney; and it 
 is further > 
 
 Ordered, That all proceedings on the part of the plaintiff herein be and they 
 hereby are stayed except to review or vacate this order until the payment of 
 said money, or filing of such undertaking and notice thereof and also if an 
 undertaking shall be given, until the allowance of the same. 
 
 Enter 
 
 J. S. C. 
 
1162 FORMS Nos. 18. 19 
 
 FORM NO. 18. 
 Order Directing Trial in Action Against Corporation on a -Yofe. 
 COURT, COUNTY. 
 
 Title of Action. 
 
 Upon the complaint herein, and upon the annexed answer {or demurrer) of 
 
 the defendant corporation and the aflSdavit of , verified the 
 
 day of , 191 .. , and upon motion of , attorney for 
 
 said defendant, it is 
 
 Ordered, That the issues presented by said pleadings be tried. 
 
 Dated, ,191... 
 
 Justice of the Court. 
 
 FORM NO. 19. 
 
 Affidavit to Obtain Order Directing Trial in Action Against Corporation on a 
 
 Note. 
 
 COURT, COUNTY. 
 
 Title of Action. 
 
 State of New Yojsk, ) 
 County of ( 
 
 , being duly sworn, deposes and says: 
 
 He is the attorney for the defendant herein, and has entire charge of this 
 action. That he has been retained to defend this action for the defendant 
 
 herein and has an office at , in That 
 
 is the { presiden t) of the said defendant and is entirely 
 
 acquainted with the facts of the ease ; that said has fully and 
 
 fairly stated the facts of the case to deponent, and after such statement so made, 
 deponent verily believes, and has so advised said that the defend- 
 ant has a good and substantial defense upon the merits to the cause of action 
 set forth in the complaint; and that defendant intends to defend this action in 
 good faith and thereupon and to that end deponent prepared the amended 
 ( answer ) . 
 
 That the summons and complaint were served upon the defendant on the 
 
 day of , 191 . ., and the same are now on file, and that the time 
 
 for defendant to answer or demur will expire on the day of , 
 
 191... 
 
 [Add any other facts not shovm on face of answer why defendant has a right 
 to defend.] 
 
Nos. 20, 21 FORMS 1163 
 
 That the answer (or demurrer) hereto annexed is intended to be served herein 
 and aa order is asked for as provided in section 177S of the Code of Civil Pro- 
 cedure to accompany said pleading. 
 
 That no previous application for an order has been made. , 
 
 Sworn to before me this .... 
 day of ,191... 
 
 FORM NO. 20. 
 
 Affidavit of Plaintiff's Attorney to Obtain Judgment by Default Under V. S. 
 " Soldiers' and Sailors' Civil Relief Act." 
 
 (Title and caption as in Form No. 6, continmng: — ) 
 
 State of ] 
 
 County of ,(**■-■ 
 
 , being duly sworn, says: 
 
 I am an attorney and represent the plaintiff in the above entitled action, and 
 1 am making this affidavit pursuant to the provisions of section 200 of an Act 
 of Congress approved March 8, 1918, and entitled the " Soldiers' and Sailors' 
 Civil Relief Act." 
 
 I have made an investigation as fully set forth in the affidavit of , 
 
 which is hereto attached and made part hereof, to ascertain if the defendant in 
 the above entitled action is in the military service of the United States, as 
 defined in section 101 of said act. From said investigation and from the accom- 
 panying affidavit made a part of this affidavit, I am convinced that the defend- 
 ant in this action is not in the military service of the United States. I further 
 state that I have read and am familiar with the Act of Congress known as the 
 " Soldiers' and Sailors' Civil Relief Act," approved by the President on March 8, 
 1918, and am particularly familiar with section 101 of said act which defines 
 persons in the military service of the United States. 
 Sworn to before me this day of , 191 .. . 
 
 FORM NO. 21. 
 
 Affidavit of Investigation to Obtain Judgment by Default Vnder U. 8. " Soldiers' 
 and Sailors' Civil Relief Act." 
 
 [Title and caption as in Form Isio. 6, continuing: — ) 
 
 State of \ 
 
 County of , f 
 
 I ^ , being duly sworn, depose and say : 
 
 that I reside at Street, in the County of 
 
 and State of California. 
 
1164 FORMS No. 22 
 
 That on .' . day of at hour I called on 
 
 , the defendant in the above entitled action at 
 
 Street, and from the following information gained, I state the following facts: 
 
 From the facts as above set forth, I am convinced that the above named 
 defendant is not in the military service of the United States. 
 
 I further state that I have read what is known as the " Soldiers' and Sailors^ 
 Civil Relief Act " passed by the Congress of the United States and approved by 
 the President on March 8, 1918, and am particularly familiar with section 101 
 of said act and fully understand what is known by the term " Persons in 
 Military Service," as defined in the aforementioned section of said act. 
 Sworn to before me this day of , 191 . . . 
 
 FORM XO. 22. 
 
 Certificate of Incorporation. 
 
 We, .'..., three (or more) natural persons of full age, at 
 
 least two-thirds citizens of the United States, and at least one a resident of the 
 State of New York, do become a stock corporation (for lawful business 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 education law), and do make, sign, acknowledge and file this certificate 
 of incorporation. 
 
 1. The name of the proposed corporation is 
 
 2. The purposes for which it is to be formed are: 
 
 {Here insert specific purposes of corporation.) 
 
 3. The amount of the capital stock is dollars 
 
 ( ). 
 
 4. The number of shares of which the capital stock shall consist is 
 
 , of which shares shall be of the par value of one hun- 
 dred dollars ($100) each and shall be preferred stock, and of which 
 
 shares shall be without nominal or par value and shall be common stock. [The 
 preference accorded to holders of preferred stock should be statfed. Examples 
 are given in forms 23 and 24.] 
 
No. 23 FORMS 1165 
 
 5. The amount of capital with which the corporation will begin business is 
 [not less than 500] dollars. 
 
 6. The city [village or toiim) in which its principal business oflSce is to be 
 
 located is ■ and {if it is to be located in the city of New York) 
 
 the borough therein in which it is to be located is 
 
 7. Its duration is to be years (or perpetual). 
 
 8. The number of its directorsi is to be three (or more) [and directors need 
 not be stockholders] [and meetings of the board of directors are to be held 
 only within this State]. 
 
 9. The names and post-office addresses of the directors for the first year are: 
 
 Names. Post Office Addresses. 
 
 10. The names and post-office a;ddresses of the subscribers to this certificate, 
 and a, statement of the number of shares of stock which each agrees to take in 
 the corporation, are: 
 
 Names. Post Office Addresses. Number of Shares. 
 
 Witness our execution of this certificate as aforesaid in duplicate [if not in 
 duplicate, a copy of the only original must be certified by the Secretary of State 
 for filing loith the proper County Clerk], the day of , 191 .. . 
 
 [Add acknowledgments by subscribers.^ 
 
 FORM NO. 23. 
 
 Clames in Certificates of Incorporation Giving Preferences to Holders of Pre- 
 ferred Stock. 
 
 The holders of the preferred stock sihall be entitled to receive or to have set 
 apart, out of the surplus or net profits of the corporation, as and when declared 
 
1166 FORMS Nos. 24, 25 
 
 by the board of directors, a dividend at tlie rate of, but never exceeding, seven 
 per centum per annum, cumulative, on all such preferred stock outstanding at 
 the time, which dividend shall be payable yearly, half-yearly or quarterly as the 
 board of directors may, from time to time fix and determine, and before any 
 dividend shall be set apart for or paid on the common stock. Provided, how- 
 ever, that if the preferred stock shall hereafter be increased, the rate of divi- 
 dend upon such increase shall be at such rate, not exceeding seven per centum 
 per annum, as shall be fixed by the resolution of the stockliolders of the corpora- 
 tion authorizing such increase. Whenever a dividend is declared or paid on the 
 preferred stock and all prior dividends on the outstanding sliares of such stock 
 shall have been paid or set apart, the board of directors may, if in its judg- 
 ment the surplus or net profits, after deducting tlie amount of dividends to 
 accrue on the said outstanding preferred stock during the current year, shall be 
 sufficient for such purposes, then or thereafter declare and pay dividends on the 
 common stock payable yearly, half-yearly or quarterly, and payable then or 
 thereafter out of any remaining surplus or net profits of the year then current 
 or last past and of any previous year in which full dividends shall have been 
 paid on the preferred stock. 
 
 In case of a liquidation or dissolution or winding up (whether voluntJury or 
 involuntarily) of tlie corporation, the holders of the preferred stock shall receive 
 cash to the amount of the par value of such preferred stock, together with all 
 accrued and unpaid dividends thereon (but no more) before any payment is 
 made to the holders of the common stock, and the holders of tlie common stock 
 shall be solely entitled to the entire assets of the Company, or the proceeds 
 thereof, remaining after the payment in full, at its par value, of the preferred 
 stock then outstanding, together with all dividends thereon accrued and unpaid. 
 
 FORM NO. 24. 
 
 Clause in f'rrtificate of Iniorporalion for Retiring Preferred Stocl'. 
 
 The company may retire the preferred stock at any time by paying to the 
 holders of record thereof the sura of one hundred and five dollars in cash per 
 share, in addition to dividends accrued thereon, but only out of surplus profits 
 applicable to dividends; and such retirement may only be elTected on thirty 
 days' notice mailed to each liolder of record of preferred slock at his, her or its 
 address as the same shall appear on the hcioks of the corporation. 
 
 FORM NO. 25. 
 
 Brolccrarjc Business. 
 
 To manufacture, purchase or otlierwise acquire, hold, own, pledge, sell or 
 otherwise deal in, for its own account or as agent, goods, warcf, merchandise 
 and personal property of any kind and description. 
 
No. 25 FORMS 1167 
 
 To act as mill agents, factors and brokers, and to do all things necessary or 
 incidental to the carrying out of a general trading and commission business and 
 to conduct the business of warehousemen. 
 
 To loan and advance moneys, securities and credit upon mortgages of real 
 property and pledges of personal property, including merchandise and ware- 
 house receipts for the same. 
 
 To purchase or otherwise acquire, hold, own, exchange, pledge, assign, sell or 
 otherwise deal in and dispose of contracts, claims, accounts receivable, bills 
 receivable, promissory notes and other securities, choses in action, obligations 
 or evidences of indebtedness of any person, firm or corporation; make advances 
 upon such securities; receive, hold and collect moneys for goods sold, labor 
 performed or services rendered. 
 
 To loan and advance its moneys, securities and credit upon contracts, claims, 
 accounts and bills receivable, promissory notes, stocks, bopds, debentures, choses 
 in action, obligations or other securities of any person, .firm or corporation, 
 domestic or foreign. Provided, however, that nothing in this paragraph contained 
 shall be construed to empower it to guarantee the bonds of any other corpora- 
 tion otherwise than in conformity with section 8 of the Stock Corporation Law. 
 
 To purchase or otherwise acquire, hold, own, sell, exchange, pledge or other- 
 wise dispose of and deal in government, municipal, railroad, industrial and other 
 bonds, stocks, debentures, obligations or securities of corporations, firms or 
 individuals, and generally to carry on the business of stock and bond brokers. 
 
 To borrow upon its corporate bonds and debentures secured by mortgage or 
 unsecured, upon notes, outstanding accounts or otherwise, from time to time, 
 such moneys, securities or credits as may be required for the purposes of its 
 business. 
 
 To purchase or otherwise acquire, hold, own, sell, and otherwise dispose of 
 stocks, bonds and other evidences of indebtedness of any other corporation, 
 domestic or foreign, and pay for the same in cash or otherwise; Including issuing 
 in exchange therefor its stocks, bonds and other obligations; and while owner 
 of such stocks, bonds and other obligations, to possess and exercise in respect 
 thereto all the rights, powers and privileges of individual holders or owners 
 thereof. 
 
 To acquire the good will, rights and property of any person, firm or corpora- 
 tion, and to pay for the same in cash, in stock or bonds of this corporation or 
 otherwise, and to hold, own, manage and in any manner dispose of the whole or 
 any part of the property so acquired. 
 
 To apply for, purchase, lease, or otherwise acquire, register, hold, own, use, 
 sell, assign, grant licenses concerning or otherwise acquire, deal in and dispose 
 of, inventions, -patent rights, letters patent, secret processes, formulae, trade 
 marks and trade names, useful or thought to be useful in connection with any 
 of the articles which may lawfully be manufactured, purchased or dealt in by 
 this corporation. 
 
 To receive, ovm and operate under licenses covering the rights secured by 
 letters patent, secret processes, formulae and trade marks; to grant sub-licenses 
 concerning the same and to pay and receive royalties and other emoluments 
 therefor. 
 
 To do any and all other acts and things necessary, proper or incident to and 
 relating to or convenient in connection with the carrying on of its business as 
 
1168 FORMS Nos. 26-29 
 
 aforesaid, or for the attainment of any one or more of the purposes herein 
 enumerated. 
 
 Nothing herein contained, however, shall be construed to authorize this corpora- 
 tion to discount bills, notes or other evidences of indebtedness, or to buy or 
 sell bills of exchange or to carry on a banking business, either within or without 
 the State of New York, or to do any act or thing forbidden by law to a corpora- 
 tion organized under the Business Corporations Law of the State of New York. 
 
 FORM NO. 26. 
 
 Chemicals, Dyes, Oils, Paints. 
 
 To manufacture, produce, purchase or otherwise acquire, own, deal in, sell, 
 pledge or otherwise dispose of, chemicals of every description and combinations 
 and manufactures thereof, dyes and dye-stuffs, acids, alkalis and salts, paints, 
 oils, varnishes, colors and pigments, drugs and pharmaceutical preparations 
 and all articles or materials necessary or useful in connection therewith; and, 
 in general, goods, wares and merchandise of every description. 
 
 FORM NO. 27. 
 
 Combustiile*. 
 
 To manufacture, produce, purchase or otherwise acquire, hold, own, deal in, 
 sell, pledge or otherwise dispose of fireworks and firecrackers of every description, 
 chemicals and any combustions thereof, and all goods, articles or materials 
 used in the manufacture thereof, candies, gums, toys, novelties and goods, wares, 
 merchandise and property of every kind and description. 
 
 FORM NO. 28. 
 
 Jewelry. 
 
 To manufacture,, produce, purchase or otherwise acquire; to hold, own, market 
 or otherwise deal in; to sell, pledge or otherwise dispose of, jewelry, gold and 
 silverware, clocks and watches (both movements and cases), opera glasses, canes, 
 umbrellas, novelties of all kinds, and goods, wares and merchandise of every 
 class and description. 
 
 FORM NO. 29. 
 
 Leather and Lumber. 
 
 (a) To manufacture, produce and otherwise prepare, and to buy and other- 
 wise acquire, sell, store, transport, distribute, dispose of and deal in and with 
 ( 1 ) leather, lumber, belting, and any and all other merchandise and commodities 
 of whatsoever nature and character, and (2) any and all materials, machinery, 
 appliances, products and supplies proper or adapted to be used in or in connec- 
 tion with or incidental to the manufacture, production or preparation of any 
 of the articles, merchandise and commodities aforesaid, and, also (3) any and 
 all commodities and things which result from or are by-products of the manu- 
 facture, production or preparation of leather, lumber, belting or other mer- 
 chandise or article, or in manufacture, production or preparation of which 
 
Nos. 30-32 POEMS 1169 
 
 any of the said articles may be a factor or an ingredient or of which the same 
 may he a component part; 
 
 (6) To engage in any other manufacturing, warehousing, trading or selling 
 business of any kind or character whatsoever; 
 
 (c) To acquire, dispose of, lease and utilize, in the manner and to the extent 
 permitted by law, lands, timber, bark, tanneries, mills, warehouses, plants, 
 and other buildings and structures, machinery, supplies, and any and all articles 
 and property, including good-will, which the corporation may deem to be neces- 
 sary or convenient to the attainment or furtherance of any of its objects. 
 
 FORM NO. 30. 
 
 Motors, Engines, Boilers. 
 
 To purchase, manufacture, produce, hire or otherwise acquire, hold, own, use, 
 sell, pledge, rent, license the use of or otherwise deal in and dispose of motors, 
 engines, boilers and other instruments for generation, production and utilization 
 of power, articles intended to promote the efficiency of such instruments, auto- 
 mobiles and vessels self-propellant in air and water, and parts thereof and appli- 
 ances and supplies therefor, and in general, machinery, tools, apparatus, metals, 
 woods and articles composed in whole or in part of meta,l or wood, and goods, 
 wares and merchandise of every kind and description; to conduct such business 
 either for its own account or as agent, factor, broker, middleman, commission 
 man or representative of others. 
 
 FORM NO. 31. 
 
 Motors, Airships, Automohiles. 
 
 To manufacture, purchase, import or otherwise acquire, sell, rent, repair, take 
 upon storage, exchange, export and otherwise deal in and dispose of any or all 
 of the following: Motors, engines, or other machinery or contrivances for the 
 generation of steam, electricity, gasolene or other forms of power now known 
 or which may be hereafter discovered; automobiles, cars, trucks, carriages, 
 wagons, boats, airplanes and airships, and vehicles of every kind and . description 
 for the transportation of passengers or goods ; machinery, machine supplies and 
 engineering appliances, hardware, tools, parts, batteries, self-starters, magnetos, 
 igniters, tires, rims, wagon and carriage bodies and all other accessories, appa- 
 ratus and appliances; and fuel, oils and other materials useful in connection 
 with the ownership, use or enjoyment of any of the above. 
 
 FORM NO. 32. 
 
 Moving Pictures. 
 
 To purchase, hire, lease, manufacture, produce or otherwise acquire, hold, 
 own, use, import, export, exhibit, sell, exchange, pledge, rent, license the use of 
 and otherwise deal in and dispose of moving picture and other films, photo- 
 graphic negatives, positives and prints, pictures by whatever process produced, 
 and chemicals, materials, appliances, apparatus, cameras, stereoscopes, projecting 
 machines, lenses, and any and every other article useful, or believed to be useful 
 
1170 FORMS No. 33 
 
 in the production, exhibition, use or disposition of films, pictures, whether 
 moving or otherwise, photographs and kindred articles; 
 
 To apply for, register, take by assignment or otherwise acquire, receive, hold 
 and operate under licenses to use, and grant licenses and sub-licenses concerning, 
 pay and receive royalties and emoluments for the use of, sell, assign, lease or 
 otherwise dispose of, applications for patents, patent rights, letters patent, 
 trade marks, trade names, processes and formulae, secret or otherwise. In- 
 cluding improvements on any of the same, useful or thought to be useful in 
 the manufacture or use of any kind and all of the articles to be acquired, 
 manufactured, dealt in, utilized or disposed of by this corporation. 
 
 To purchase, lease or otherwise acquire, erect, construct, improve, hold, own, 
 occupy, use, manage, rent, sell, mortgage or otherwise dispose of lands, studios, 
 plants, mills, factories, stores, warehouses, machine shops, motion picture and 
 other theatres, dwellings and other real property, structures and buildings 
 wheresoever situate. 
 
 FORM NO. 33. 
 Real Estate. 
 
 To take, buy, purchase, exchange, hire, lease or otherwise acquire, real estate 
 and property, either improved or unimproved, and any interest or right therein, 
 and to own, hold, control, maintain, manage and develop the same in any State 
 of the United States. 
 
 To purchase, exchange, hire or otherwise acquire such personal property, 
 chattels, rights, easements, permits, privileges and franchises as may. lawfully 
 be purchased, exchanged, hired or acquired under the Business Corporations 
 Law of the State of New York. 
 
 To erect, construct, maintain, improve, re-build, enlarge, alter, manage and 
 control, directly or through ownership of stock in any corporation, any and all 
 kinds of buildings, houses, hotels, breweries, stores, offices, warehouses, mills, 
 shops, factories, machinery and plants, and any and all other structures and 
 erections which may at any time be necessary, useful or advantageous in the 
 judgment of the Board of Directors for the purposes of the corporation and 
 which can lawfully be done under the Business Corporations Law. 
 
 To sell, manage, improve, develop, assign, transfer, convey, lease, sub-lease, 
 pledge or otherwise alienate or dispose of, and to mortgage or otherwise 
 encumber the lands, buildings, real property, chattels real, and other property 
 of the company, real and personal, and wheresoever situate, and any and all 
 legal and equitable rights therein. 
 
 To transact the business of buying and selling, dealing in, leasing, renting 
 and managing real estate and any interests therein for its own account, as 
 agent or broker, or upon commission. 
 
 To purchase, sell and manufacture, and deal in building materials and goods, 
 wares and merchandise, and to carry on any other lawful trade or business inci- 
 dent to or proper or useful in connection with the purchase, sale, ownership, 
 construction, maintenance and management of real property. 
 
 To borrow money, with or without pledge of or mortgage upon all or any of 
 its property, real or personal, as security, and to loan and advance money 
 upon mortgages on personal and real property, or on either of them. 
 
 To buy, sell and deal in, with or without guaranty of payment thereof, bonds 
 and mortgages and other like securities and other kinds of properties, whether 
 
Nos. 34, 35 POEMS 1171 
 
 real or personal, not prohibited or specially excepted by any law, and to do and 
 prosecute any acts and things incident to or proper in connection with the 
 carrying on of the' business of this company. 
 
 To purchase, acquire, hold, sell, assign and transfer, mortgage, pledge and 
 otherwise dispose of the shares of the capital stock, bonds, debentures or other 
 evidences of indebtedness of any corporation, domestic or foreign, and, while the 
 holder thereof, to exercise all the rights and privileges of ownership, including 
 the right to vote thereon, and to issue in exchange therefor its own stock, bonds 
 and other obligations. 
 
 To purchase or otherwise acquire, undertake, carry on, improve or develop 
 all or any of the business, good will, rights, assets or liabilities of any person, 
 firm, association or corporation carrying on any kind of business the same as 
 or of a similar nature to that which this corporation is authorized to carry 
 on pursuant to the provisions of this certificate. 
 
 To do all such acts and things as are incident or conducive to the premises. 
 And this corporation shall, have the power to conduct its business in all its 
 branches in the State of New York and any other State or States of the United 
 States, and ultimately to hold, purchase, mortgage, lease, convey, manage and 
 control real and personal property therein as above provided, and generally to 
 do all acts and things, and to exercise all the powers now or hereafter author- 
 ized by law necessary to carry on the business of the said corporation, or to 
 promote any of the objects for which the company is formed. 
 
 The foregoing enumeration of specific powers shall not be held to limit or 
 restrict in any manner the general powers of the company and the enjoyment 
 thereof as conferred by the laws of the Stcte of New York upon corporations 
 organized under the provisions of the Business Corporations Law. 
 
 FORM NO. 34. 
 Shades, Shade-Rollers, Shade-Cloth. 
 To carry on the trade or business of manufacturing, producing, adapting, 
 importing, exporting, buying, selling or otherwise dealing in, whether as prin- 
 cipal or agent, shade-rollers, rollers, shade-cloth, cloth, paper-boxes, boxes, paper, 
 matches, bark, lumber, timber, wood-pulp, wooden-work, metal, metal-work, 
 stamped-steel, steel, tin, copper, tools, hardware, hardware-supplies, machinery, 
 and any and all fibres, ingredients, articles, products, compounds and materials 
 that now or hereafter may be used in or in connection with such trade or business. 
 
 FORM NO. 35. 
 . Ships. 
 
 To construct, build, purchase or otherwise acquire, equip, hold, own, sell, 
 mortgage, pledge and otherwise deal in and dispose of ships, vessels, boats 
 and water craft of every kind and description, together with engines, boilers, 
 motors, tools, machinery and all materials, articles, apparatus, gear and appli- 
 ances entering into or suitable or convenient for or in connection with the con- 
 struction or equipment thereof. 
 
 To erect, construct, purchase, lease or otherwise acquire. Improve, hold, own, 
 occupy, use, operate, manage, rent, sell, mortgage or otherwise dispose of lands, 
 yards, plants, wharves, docks, drydoeks, marine railways, piers, mills, factories, 
 machine shops, stores, warehouses, dwellings and other real property, structures 
 and buildings wheresoever situate. 
 
1172 FORMS Nos. 39, 40 
 
 FORM NO. 39. 
 
 Amended Certificate of Incorporation to Correct Informality, Inclusion of Unau- 
 thorized Matter, or Defective Proof or Acknowledgment. 
 
 We, the undersigned, being the corporators ( or, directors ) of , 
 
 a domestic corporation the original [or, amended, or supplemental) certificate 
 of incorporation of which was filed in the office of the Secretary of State and of 
 
 the Clerk of the County of , on the day of , 
 
 and day of , respectively, do hereby make and file this 
 
 amended certificate of incorporation to correct an informality in {or, to strike 
 out matter not authorized by law to be stated therein and contained in ; or, to 
 correct the defective proof or acknowledgment of) said original (or, amended; 
 or, supplemental) certificate of incorporation. 
 
 The said informality is that 
 
 [or. The said matter not authorized by law to be stated is ]. 
 
 [or. The said defective proof or acknowledgment is ]. 
 
 We do make, sign, acknowledge and file this amended certificate in duplicate 
 to correct said informality [or, to strike out said matter not authorized by 
 law; or, to correct said defective proof or acknowledgment], as follows: 
 
 [Insert correct formal requirement or add correct proof or acknowledgment.] 
 
 Witness our signatures and acknowledgments this da_y of , 
 
 191... 
 
 [Add individual acknowledgments.] 
 
 FORM NO. 40. 
 
 Petition or Affidavit for Obtaining A mendment hy Supreme Court of Certificate 
 of Incorporation to Set Forth True Corporate Object. 
 
 SUPREME COXJRT, COUNTY. 
 
 In the Matter of the Amendment 
 
 of the Certificate of Incorporation of 
 
 , a corporation, to have 
 
 it truly set forth the true object and pur- 
 pose of said Corporation. 
 
 The petition of , a corporation, respectfully shows : 
 
 [Or, State of '. ..... county of , ss , being duly 
 
 sworn, deposes and says:] 
 
 That petitioner is a corporation incorporated under the laws of the State of 
 New York; and that its certificate of incorporation was duly filed in the office 
 
 of the Secretary of State and the Clerk of the county of , both of 
 
 the State of New York, on the day of , and the day 
 
 of , 191 .. , respectively. 
 
 That said certificate expressed the object and purpose of petitioner as follows: 
 
 [Quote object clause of certificate of incorporation]. 
 
 That the true object and purpose of petitioner is as follows: 
 
 [Quote object clause as desired in certificate of incorporation]. 
 
Kos. 41, 42 FORMS 1173 
 
 f 
 
 Wherefore petitioner prays this Court, upon notice to the Attorney-General 
 and to such other persons as this Court may direct, and upon such terms and 
 conditions as this Court may impose, to amend petitioner's said certificate of 
 incorporation without prejudice to any action or proceeding pending or to any 
 rights accrued previously to such amendment, so as to have said certificate, 
 when so amended, truly set forth petitioner's said true object and purpose; and 
 that this Court order that on filing by petitioner and record by the said Secretary 
 of State and County Clerk of an amended certificate identical with said original 
 certificate save for said change in the expression of petitioner's object and pur- 
 pose, said original certificate be deemed amended accordingly; and that this 
 Court give petitioner such other and further relief as may be just. 
 
 ( Corporate Seal ) . By 
 
 It' President. 
 
 (Add corporate verification.) 
 
 FORM NO. 41. 
 
 Notice of Motion to Supreme Court for Amendment of Certificate of Incorpora- 
 tion to Have It Truly Set Forth Corporate Purpose. 
 
 Caption and Title as in Form No. 40. 
 
 Take notice that upon the annexed petition of , verified 
 
 herein the day of ■•■■■■> 191 • ■, the undersigned will make a 
 
 motion at a Special Term of the Supreme Court, county, to be 
 
 held at , on the day of , 191 .. , at .... o'clock 
 
 in the noon, or as soon thereafter as counsel can be heard, for an order 
 
 amending the original certificate of incorporation of said , filed as 
 
 stated in said petition, so as truly to set forth said corporation's object and 
 
 purpose as set forth in said petition; and for the other relief prayed in said 
 
 petition. 
 
 Dated the day of 
 
 , 191... 
 
 Yours, etc.. 
 
 Petitioner's Attorney, 
 Office and P. 0. Address, 
 
 To 
 
 The Attorney-General of the State of New York. 
 
 FORM NO. 42. 
 
 Order Amending Certificate of Incorporation to State Corporation's True Ohject. 
 
 [Title as in Form No. 40] [Cou/rt Order Caption] 
 
 Upon reading and filing the petition of , herein, verified 
 
 the day of , 191 . ., from which it appears to the satisfaction 
 
 of the Court that due proof has been made that the certificate of incorporation 
 
1174 FORMS Nos. 43-45 
 
 of said corporation fails to express its true object and purpose and due cause 
 has been shown for amending said certificate to set forth said corporation's true 
 object and purpose; and upon reading and filing the notice of motion, herein, 
 
 dated the day of , 191 .. , and the affidavit of , 
 
 herein, verified the day of , 191. ., from which it appears to 
 
 the satisfaction of the Court that due and timely service of said petition 
 and notice of motion upon the Attorney -General has been made; and the Court 
 
 not having directed notice to any other person, now, after hearing , 
 
 Esq., of counsel for petitioner, in support of said motion, and the Hon. The Attor- 
 ney-General of the State of New York, by , in opposition 
 
 thereto, it is, On Motion of counsel for the petitioner, 
 
 Ordered, that said motion be and the same hereby is in all respects granted; 
 and, further, 
 
 Ordered, that the certificate of incorporation of , be and it is hereby 
 
 amended but without prejudice to any action or proceeding pending or to any 
 rights accrued previously to such amendment; so as to set forth its true object 
 aad purpose as follows: 
 
 [Take in new object clause] ; and, further. 
 
 Ordered, that on filing by petitioner and record by the Secretary of State of 
 an amended certificate as herein directed petitioner's original certificate of incor- 
 poration be deemed amended accordingly. 
 
 FORM NO. 43. 
 
 Certificate of Incorporation Amended by Hupreme Court to Set Forth True Cor- 
 porate Object. 
 
 (This will be the same as Form No. 22, except for the object or purpose clause.) 
 
 FORM NO. 44. 
 
 Minutes of Directors Authorizing Alteration of Certificate of Incorporation to 
 Include Powers Enjoyed by Like Corporations. 
 
 [Note, — The Minutes are those of a Special Meeting of Directors.; and a 
 majority of the directors must vote for the alteration]. 
 
 FORM NO. 45. 
 
 Notice of Meeting of Stockholders to Authorize Alteration of Certificate of 
 Incorporation to Include Powers Enjoyed by Like Corporations. 
 
 To the stockholders of : 
 
 Take notice that a special meeting of the stockholders of 
 
 is hereby called to be held on the day of , 191 ... at . . o'clock 
 
 i° the noon, at , for the purpose of voting upon a prop- 
 osition to alter said corporation's certificate of incorporation so as to include 
 therein certain purposes, powers or provisions which now apply to corporations 
 
Nos. 46-48 FORMS 1175 
 
 ^'^gaged 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 New York State for a business of the same general character, viz. : 
 
 [Here state the alteration proposed.] 
 Secretary. President or Vice-President. 
 
 [Note. — The meeting must be called in the mHiiner provided in the by-laws. 
 The notice must be published once a week for at .least two successive weeks in a 
 newspaper in the county where the corporation's principal business office is 
 located. A copy of the notice must be duly mailed each stockholder at his last 
 known post office address at least two weeks before the meeting or be personally 
 served on him at least five days before the meeting.] 
 
 FORM NO. 46. 
 
 Minutes of Stockholders Authorizing Alteration of Certificate of Incorporation to 
 Include Poioers Enjoyed by Like Corporations. j 
 
 [Note. — The minutes are those of a special meeting of stockholders, and 
 stockholders representing at least three-fifths of the caipital stock must vote 
 for the alteration.] 
 
 POEM NO. 47. 
 
 Verification by Director of Proceedings of Stockholders' Meeting to Alter Certifi- 
 cate of Incorporation to Include Powers Enjoyed by Like Corporations. 
 
 State of New York, 
 County of , 
 
 , being duly sworn, says : I am a director of 
 
 I was present at a meeting of stockholders of said corporation of which the fore- 
 going are the minutes. Said minutes are a true copy of the proceedings of such 
 meeting. 
 
 Sworn to before me this 
 
 day of , 191.. 
 
 FORM NO. 48. 
 
 Amended Certificate of Incorporation to Altei- Original to Include Powers 
 Enjoyed by Like Corporations. 
 
 We, the President and Secretary of , do hereby execute and 
 
 file this Amended Certificate of Incorporation, pursuant to the eighteenth section 
 of the Stock Corporation Law, to alter said corporation's certMoate of incor- 
 poration as follows: [State the alteration proposed.] 
 
1176 FOEMS No. 49 
 
 We hereby slate that said alteration has been duly authorized liy a vote of a 
 majority of the directors and also by vote of stockholders of said corporation 
 representing at least three-flftlis of the capital stock of said corporation at a 
 meeting of said stockholders called for the purpose in the manner provided in the 
 sixlylliird section of the Stock Corporation Law, and that a copy of the pro- 
 coediiijTH of hueh meeting, verified by the affidavit of one of the directors present 
 tliereat. is filed herewith. 
 
 \^ itne.~^ our hands and seals and the corporate seal of said corporation to 
 duplicate copies hereof, this day of , 191 .. . 
 
 President. 
 (Corporate Seal) 
 
 Secretary. 
 [Add individual aclnoivlcdyments.] 
 
 FORM NO. 49. 
 
 By-Laics. 
 
 By-Laws of , Inc. 
 
 Article I. Capital Stock 
 
 § 1. Sioal: Certificates. Stock in the Company shall be evidenced by certifi- 
 cates therefur, issued to owners of stock which has been fully paid for and 
 
 signed by the {slale officer of the company) and by 
 
 (state other officm- of the company) with the corporate seal impressed thereon. 
 
 § 2. Stocl; Transfers. Stock in the Company shall not be transferred on its 
 books fr(jm the name of the owner of record thereof save by the holder thereof 
 or liy his attorney thereunto duly authorized by written, duly executed and 
 witnessed power of attorney. Before making such transfer the proper officer 
 of the company shall require to be delivered to and left with him the certificates 
 representing the stock to be transferred, duly endorsed for transfer; and also 
 
 the power of attorney, if any, of the attorney endorsing the same. For 
 
 days prior to the annual meeting of the corporation the books of the Company 
 shall be closed for transfer of its stock. 
 
 § 3. Stock Subscriptions. The directors may call for payment of subscrip- 
 tions to the capital stock in such amounts and at such times as they deem fit. 
 
 § 4. Loss of Certificate. Any person claiming a certificate of sitock to be lost 
 iir deiitroyed, shall make an affidavit or affirmation of that fact and advertise 
 
No. 49 FORMS 1177 
 
 the same in such majiner as the Board may require, and shall give the company 
 a bond of indemnity in form and with one or more sureties satisfactory to the 
 Board, in at least double the pai- value of such certificate, whereupon the Presi- 
 dent and Secretary or Treasurer may issue a new certificate of the same tenor 
 with the one alleged to have been lost or destroyed; but always subject to the 
 approval of the board. 
 
 AUTICLK II. MEIETINGS OP STOCKHOLDERS. 
 
 § 1. Quorum at Meetings.- The presence at any stockholders' meeting of 
 holders of a majority of the company's outstanding capital stock, or their 
 proxies, constitute a quorum. 
 
 § 2. Annual Meetings. The day of in every year, or, if 
 
 it be a Sunday or holiday, the next succeeding business day, shall be the day, 
 'iH'l o'clock in the noon shall be the hour for the annual stock- 
 holders' meeting, which shall be held at ; and notice thereof shall 
 
 be given as follows: [State h'ow.'i 
 
 § 3. Special Meetings. Special stockholders' meetings shall be held 
 
 [state u-Uen and at whose call] upon the following notice: [State notice 
 desired. ] 
 
 § 4. Proxies. Stockholders may vote at all meetings, eitlier in person or by ' 
 proxy in writing. All proxies shall be filed with the Secretary of the meeting 
 before being voted upon. 
 
 § 5. The election of directors shall be held at the annual meeting of the stock- 
 holders, and shall, after the first election, be conducted by two Inspectors of 
 Election, appointed by the President for that purpose, and sworn as prescribed 
 by law. The election shall be by ballot and each stockholder of record shall be 
 entitled to cast one vote for each share of stock held by him. 
 
 § 6. The order of business at the annual meetings and, as far as possible, at 
 all other meetings shall be: 
 
 a. Calling of the roll; 
 
 b. Proof of due notice of meeting; 
 
 c. Reading and disposal of unapproved minutes; 
 
 d. Election of directors; 
 
 e. Reports of officers and committees; 
 
 f. Unfinished business; 
 
 g. New business. 
 
 Article HI. Dieectors. 
 
 § 1. The board shall consist of {e. g., five) directors unless and 
 
 until said number shall be increased in manner prescribed by law. They shall 
 be elected by the stockholders for the term of one year, and shall serve until the 
 
1178 FORMS No. 49 
 
 election suid acceptance of their duly qualified successors. A director may resign 
 at any time and his office shall be vacant on the delivery of his written resigna- 
 tion to the Secretary. Any vacancies may be filled for the unexpired terms by a 
 vote of the board. If a majority of the board shall not agree upon an election or 
 in ease the entire board of directors shall die or resign, a special meeting of the 
 stockholders to elect a director or directors for the unexpired term shall be 
 called. Directors, as such, shall not receive any stated salary for their services, 
 but by resolution of the board a fixed' sum and expenses of attendance, if any, 
 may be allowed for attendance at any regular or special meeting of the board; 
 provided that nothing herein contained shall be considered to preclude any direc- 
 tor from serving the company in any other capacity and receiving any compensa- 
 tion therefor. 
 
 § 2. Regular meetings of the Board of Directors shall be held at the principal 
 
 office of the company in on the ( e. ff., fourth) 
 
 (e. g., Monday) of each month, at o'clock in the noon, if not a 
 
 legal holiday; if a legal holiday, then the day following. 
 
 § 3. Special meetings of the Board of Di/rectors, to be held in the principal 
 
 oflice in , may be called at any time by the President or by any 
 
 (Of any stated nv/mher of the members) member of the board, or such meetings 
 may be held at any time and place within or without the state of New York 
 without notice by unanimous written consent of all the members, or if all the 
 members be present at such meeting. 
 
 § 4. "Notices of special m.eetings of the hoard shall be given to each director 
 three days before such meeting, either personally, in writing or by wire. No 
 notice of regular meetings shall be required. 
 
 § 5. Powers of the board. Without prejudice to the general powers con- 
 ferred upon the board of directors by the charter and by these by-laws, it is 
 hereby expressly declared that the board shall have the following powers, that 
 is to say: 
 
 (a) From time to time to make and change rules and regulations not 
 inconsistent with these by-laws, for the management of the company's 
 business and affairs. 
 
 (b) To purchase and otherwise acquire for the company any property, 
 rights or privileges which the company is authorized to acquire at such 
 price or consideration, and upon such terms and conditions as they may 
 see fit. 
 
 (c) At their discretion to pay for any property or rights acquired by the 
 company, either wholly or partly in money, stocks, bonds or other securities 
 of thg corporation. 
 
 (d) To create, make or issue mortgages, bonds, deeds of trust, trust 
 agreements and negotiable and transferable instruments or securities secured 
 by mortgage or otherwise, and to do every act and thing necessary to 
 effectuate the same. 
 
 (e) To appoint, and at their discretion, to remove or suspend such sub- 
 ordinate officers, agents or servants permanently or temporarily as they 
 
Nq. 49 FORMS 1179 
 
 think fit, and to determine their duties and fix 'and from time to time change 
 their salaries or emoluments, and to require security in such instances and 
 in such amounts as they think fit. 
 
 (f) To confer by resolution upon any appointed officer of the company 
 the power to choose, remove and suspend such subordinate officers, agents 
 or servants. 
 
 (g) To appoint any person or corporation to accept and hold in trust 
 for the company any property belonging to the company or in which it is 
 interested, or for any other purpose, and to execute and do all such deeds 
 and things as may be requisite in relation to any such trusts. 
 
 (h) To determine from time to time who shall be authorized on the com- 
 pany's behalf to sign endorsements, cheques, releases, contracts, receipts and 
 similar documents. 
 
 (i) To delegate any of the powers of the board in the course of the 
 current business of the company to any officer or agent, and to appoint 
 any persons to be the agents of the company with such powers and upon 
 such terms as they think fit. 
 
 § 6. Quorum. At all meetings of the board the presence of 
 
 [state number] directors shall constitute a quorum. 
 
 § 7. The order of business at any regular or special meeting of the board of 
 directors shall be: 
 
 a. Reading and disposal of unapproved minutes; 
 
 b. Reports of officers and committees; 
 u. Unfinished business; 
 
 d. New business. 
 
 Abticlks IV. OrncERS. 
 
 § 1. Election of Officers of the Company. The officers of the company shall 
 be elected by the board of directors at their first meeting after the election of the 
 directors in each year. If any office becomes vacant during the term, the board 
 of directors shall fill the same for the unexpired term. 
 
 § 2. The officers of the company shall be a President, a Vice-President, a 
 Secretary and a Treasurer, who shall be elected to serve until their respective 
 successors be elected by the board, and if no successors shall be sooner elected, 
 for one year, and shall hold office until their successors are elected and qualify. 
 The offices of (e. g.) President and Treasurer may be united in one person. The 
 officers shall [need not] be directors. 
 
 § 3. The President shall preside at all meetings, shall have general super- 
 vision of the affairs of the company, shall sign or countersign all certificates, 
 contracts and other instruments of the company as authorized by the board of 
 directors, shall make monthly reports to the directors and annual reports to 
 the stockholders, and perform all such other duties as are incident tc his office 
 or are properly required of him by the board of directors. He shall be ete-officio 
 a member of all committees. In the absence or diability of the President, 
 the Vice-President shall exercise all his functions. 
 
 § 4. The Treasurer shall have the custody of all moneys and securities of the 
 company and shall keep full and accurate accounts of receipts and disburse- 
 ments in books belonging to the company, and shall balance the same each 
 month. He shall disburse the funds of the company as may be ordered by the 
 board, taking proper vouchers for such disbursements, and shall render to the 
 
1180 FOKMS No. 49 
 
 president and directors at the regular meetings of the board, whenever they 
 may require, an account of his transactions as treasurer and of the financial 
 condition of the company. He shall render a report to the stockholders at each 
 annual meeting. He shall sign or countersign such instruments as require his 
 signature. He shall, when required, give to the company a bond for the faithful 
 performance of his duty in such sum and with such sureties as may be required 
 by the board of directors. All drafts, notes, acceptances and other obligations 
 of the company for the payment of money must be signed by the treasurer. 
 
 § 5. The Secretary shall issue notices for all meetings; and shall attend 
 the same and act as clerk thereof. He shall have charge of the seal and the 
 corporate books; shall sign, with the president, such instruments as require his 
 signature; and shall make such reports and perform such- other duties as are 
 incident to his office or are properly required of him by the board of directors. 
 
 § 6. JL General Manager may at any time be appointed by the board of direct- 
 ors who shall perform such duties as shall be delegated to him by the board. 
 
 § 7. An Assistant Treasurer and Assistant Secretary may at any time be 
 appointed and, at pleasure, removed by the board of directors, and may or may 
 not be the same person, and shall perform respectively such duties as may from 
 time to time be delegated to each of them by the board. 
 
 § 8. Resignations. Any officer may resign his office at any time by notice in 
 writing to that effect delivered to the secretary or to the president. Such 
 resignation shall take effect from the time of its receipt unless some other time 
 be fixed in said resignation, and acceptance of the resignation shall not be 
 required to make it effective. 
 
 Article V. Fiscal Yeak, Dividends and Finance. 
 
 § 1. The fiscal year shall begin on the first day of and end 
 
 on the last day of in each year. 
 
 § 2. Dividends shall be declared only from the surplus profits at such times 
 as the board of directors shall direct, and no dividend shall be declared that 
 will impair the capital of the company. 
 
 § 3. Moneys of the company shall be deposited in the name of the' company 
 in such banks or trust companies as the board of directors shall designate and 
 shall be drawn out only by cheques signed by such officer or officers or other 
 person as the board shall by resolution from time to time direct. 
 
 Article VI. Seal. 
 
 § 1. The corporate seal of the company shall be circular and shall have 
 inscribed thereon the name of the company and the year of its incorporation; 
 and such seal as is 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 of the stockholders or at any special meeting where such amend- 
 ment has been proposed in the call and notice of such meeting. 
 
No. 50 FORMS 1181 
 
 FORM NO. 50. 
 
 Minutes and Waiver of Notice of Meeting of Incorporators. 
 
 The first meeting of the incorporators of , Inc., 
 
 was held at . ; , on the day of , 
 
 191 . ., at _. o'clock in the noon. All the incorporators were present 
 
 in person, viz., , , and 
 
 On motion Mr. was chosen chairman and Mr 
 
 secretary of the meeting. 
 
 The following original waiver of notice and consent to the holding of this 
 meeting, signed by all the incorporators, was presented by the secretary and 
 ordered recorded at this point in the minutes: 
 
 We, ■..,..., the incorporators and subscribers to the capital 
 
 stock of , Inc., waive notice of the time and place of the first 
 
 meeting of its incorporators and subscribers, and appoint the day of 
 
 , 191. ., at o'clock in the noon to be the time, 
 
 and , to be the place of such meeting. 
 
 Dated 
 
 The secretary presented a certified copy of the certificate of incorporation and 
 stated that one of two, duplicate, duly executed and acknowledged originals 
 tliereof, [with sufficient cancelled revenue stamps affixed] had been duly filed 
 and recorded in the ofiice of the Secretary of State of New York, at Albany, 
 
 X. Y., on the day of , 191 .. , and the other of such 
 
 duplicate originals had been filed and recorded in the office of the Clerk of the 
 
 County of on the day of , 191..; and 
 
 that the organization tax had been duly paid to the Treasurer of the State of 
 Xew York, and all filing and recording fees had been paid. It was thereupon 
 
 Ordered, that the certified copy of the company's certificate of incorporation 
 be filed in its archives and that a copy be entered at length in the first pages 
 of its minute book. 
 
 There were then submitted to the meeting by the chairman and read, dis- 
 cussed and approved, article by article and section by section, proposed by-laws, 
 after which, on motion, duly seconded, the following resolution was adopted 
 without dissent: 
 
 Resolved, that the by-laws just laid before this meeting, be and are adopted 
 
 as a whole as and for the by-laws of , Inc., and that they be 
 
 entered at length immediately following the certificate of incorporation in the 
 corporate book of minutes. 
 
 There being no further business, the qieeting then adjourned. 
 
 Secretary of the Meeting. 
 
1182 FORMS No. 51 
 
 FORM NO. 51. 
 Minutes of First Meeting of Directors. 
 
 The first meeting of the Board of Directors of , 
 
 Inc., was held at , on the day of . . . .' , 
 
 191. .. immediately upon the adjournment of the meeting of the incorporators. 
 
 Present: , and , 
 
 the full board. On motion Mr was chosen temporary 
 
 chairman and Mr secretary pro tern. ^ 
 
 It was moved that the Board proceed to the election of a president, a vice- 
 president, a treasurer and a secretary. The motion, being seconded and put to 
 vote, was unanimously adopted. The Board then proceeded to an election. The 
 ballots having been collected and counted, it was found that the following 
 officers were unanimously elected: 
 
 President, 
 
 Vice-President, 
 
 Secretary, 
 
 Treasurer, 
 
 The President thereupon took the chair. The Secretary then presented a seal 
 prepared in accordance with the provisions of the by-laws and the same was, on 
 motion, unanimously adopted as the corporate seal of this corporation, and the 
 Secretary was directed to affix an impression thereof in the minute book opposite 
 Article of the By-laws, containing provision therefor. 
 
 The Secretary then presented a proposed form of stock certificate. Such 
 form having been read and approved it was, on motion duly seconded, 
 unanimously 
 
 Resolved, that the form of certificate this day presented to the meeting be 
 adopted as the form of stock certificate of the company, and that the Secretary 
 be and he hereby is authorized and instructed to procure a book of stock certifi- 
 cates in such form, duly printed and bound, and a stock transfer book and 
 ledger 
 
 The following resolution was then moved, seconded and unanimously adopted: 
 
 Resolved, that this Board do hereby call for payment by the subscribers to 
 
 the capital stock of their subscriptions to the same at the rate of $ 
 
 per share. 
 
 Mr reported that he had assigned his subscription 
 
 to shares of the company's stock to Mr 
 
 A brief recess having been taken, the Treasurer reported that the subscribers 
 
 to shares of the capital stock, and their respective assigns, had 
 
 paid their subscriptions in full at the rate of $ per share. 
 
 On motion duly made and seconded the President and Secretary were author- 
 ized and instructed to issue full paid certificates for the shares thus paid for to 
 the persons entitled thereto. 
 
 Counsel for the company was then instructed to prepare and file the statutory 
 certificate of payment of one-half of the authorized capital stock. 
 
 On motion duly made and seconded the principal ofSce of the company was, 
 until further action of the Board, established at 
 
No. 52 FORMS 1183 
 
 The following resolution was offered: 
 
 Resolved, That until further action of the Board moneys of this corporation 
 
 be deposited to its credit with the Bank, at ; 
 
 and that cheques thereupon he valid only when signed in the name of this cor- 
 poration by two of the following named officers, viz.: [e. g.: President, Vice- 
 President and Treasurer]. 
 
 The above resolution being duly seconded and put to vote was unanimously 
 adopted. 
 
 The Secretary was, by resolution, duly adopted, instructed to procure, fill out 
 and keep in the archives of the company, in addition to a book of stock certifi- 
 cates, a, book of .account, transfer ledger or register in form prescribed by the 
 Comptroller of the State of New York for the record of every transfer of stock, 
 as prescribed by Section 276 of the Tax Law; and to file with such Comptroller 
 the certificate of the place for sale, transfer or delivery of its stock as required 
 by Section ZJS-a of the Tax Law. 
 
 There being no further business, the meeting then adjourned. 
 
 Secretary. 
 
 FOEM NO. 52. 
 
 Certificate of Secretary of Corporation of Adoption of Directors' Resolution and 
 of Transcript from By-laws Re Bank Account. 
 
 "Resolved: That until further action of the Board, the funds of this corpo- 
 ration be deposited to the credit of the corporation with the 
 
 Bank, subject to cheque signed in the name of this eorpoi-ation by the Treasurer 
 or Assistant Treasurer, when countersigned by the President or the Secretary. 
 
 Resolved: That until further action of the Board, Mr 
 
 be appointed Assistant Treasurer with authority to perform all of the duties 
 of the oflice of Treasurer during the absence or inability to serve of that officer." 
 
 {Here comes original signature.) (Here comes original signature.) 
 
 President. Treasurer. 
 
 (Here comes original signature.) (Here comes original signature.) 
 
 Secretary. ' Assistant Treasurer. 
 
 I, , Secretary of , 
 
 Inc., do certify that Resolutions of which the above are copies, were duly 
 adopted at a regularly called meeting of the Board of Directors of said corpora- 
 tion, held on the day of . . , , 191..; that 
 
 is Treasurer, and , Assistant Treasurer, and that 
 
 is President and is 
 
 Secretary of said corporation, and that the signatures above set forth, of the 
 officers authorized to sign and countersign checks, are the genuine signatures 
 of such officeri. 
 
1184 FORMS No. 53 
 
 I do further certify that the following is a true copy of Article . . , Section . . , 
 of the By-laws of said Corporation: 
 
 [Bere insert provisions of By-laws having to do vnth Corporate Funds.'[ 
 Given under the seal of said corporation, this day of , 191 . .. 
 
 ( Corporate Seal. ) 
 
 . Secretary. 
 
 FORM NO. 53. 
 
 Stock Subscription Agreement. 
 
 Whebeas, represents that he has heen oflFered 
 
 an agency to sell, in , from and after the day of 
 
 , 191 . ., the following goods, wares and merchandise, viz.: 
 
 and proposes to organize under the Business Corporations Law of the State of 
 
 New York, a corporation under the name of , 
 
 Inc., with authorized capital to consist of Shares of seven per. 
 
 cent (7%) cumulative preferred stock, par value One Hundred Dollars ($100) 
 
 each, and Shares of common stock having no par value, and no 
 
 dividends are to be payable upon any common stock until all said preferred 
 stock has been redeemed in full ; 
 
 Now, Thebefore, the subscribers hereto, in consideration of their mutual 
 subscriptions, do hereby, and each for himself does, subscribe to the number of 
 
 shares of preferred stock in said '. , Inc., when 
 
 organized, set opposite their respective signatures hereunder, and each sub- 
 scriber agrees to pay, at the rate of One Hundred Dollars ($100) per share, 
 the total amount set opposite his said signature, in manner following: 
 
 per cent ( 50% ) of each subscription on the day of 
 
 , 191..; the balance on the day of < 
 
 191... 
 
 This agreement 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. 
 
 No. Shares 
 No. Shares Common Stock 
 Prefd. Stock Subscribed. 
 
 Name. Address. Subscribed. Amount. 
 
Nos. 54, 55 FORMS 1185 
 
 FORM NO. 54. 
 Certificate of Payment of One-Half of Capital Stock. 
 
 Whekeas, , Inc., less than one year from the execution 
 
 hereof, was incorporated as provided in section two of the Business Corpora- 
 tions Law, and one-half of ita capital stock has been paid in within thirty days 
 of the execution hereof. 
 
 Now, therefore, we, a majority of the directors of said corporation, do sign 
 and acknowledge, and we, the president {or vice-president) and secretary {or 
 treasurer) of said corporation, do verify; and do file in the offices where the 
 certificate of incorporation of said corporation were filed, this certificate; that 
 
 the capital stock of said corporation is shares, having no par 
 
 or nominal value [or is shares of the par value of 
 
 dollars each] and that one-half of said capital stock has been paid in {state 
 how, whether in cash, property or bothl. 
 
 [Add acknowledgments for directors and verifications for officers.} 
 
 FORM NO. 55. 
 Certificate of Common Stock Without Pair Value. 
 
 Incorporated under the The 
 
 Laws of New York. Corporation. • 
 Ctf . No. : No. of Shares : 
 
 Preferred Stock Shares Par Value $ Each. 
 
 Common Stock Shares Without Par Value. 
 
 This is to certify that is the owner of 
 
 full paid and non-assessable shares without nominal or par value of the common 
 
 stock of , Inc., transferable only on the books 
 
 of the corporation by the holder hereof in person or by duly authorized attorney 
 upon surrender of this certificate properly endorsed. 
 
 The common stock is subject in all respects to the prior rights of holders of 
 preferred stock as provided in the Certificate of Incorporation. 
 
 Witness the seal of the corporation and the signatures of its duly authorized 
 officers, affixed this day of , 191 .. . 
 
 President. 
 
 Secretary. 
 B. C. N. Y.— 75 
 
1186 FORMS Nos. 56, 56A 
 
 FORM NO. 56. 
 
 Certificate of Preferred Stock With Par Value. 
 
 Incorporated under the The 
 
 Laws of New York. Corporation. 
 
 Ctf . No. : No. of Shares : : . . . . 
 
 Preferred Stock Shares Par Value $ Eadi. 
 
 Common Stock Shares Without Par Value. 
 
 This is to certify that is the owner of 
 
 full paid and non-assessable shares of the par value of $ each 
 
 of the preferred stock of , Inc., transferable 
 
 only on the books of the corporation by the holder hereof in person or by duly 
 authorized attorney upon surrender of this certificate properly endorsed. 
 
 Holders of the preferred stock are entitled [here state preferences, e. g.: — 
 to receive cumulative dividends at the rate of seven per centum per annum, and 
 all earnings applicable to dividends shall be applied to payment thereof and to 
 the accumulation of a fund suflicient to retire all outstanding preferred stock, 
 before any dividends shall be paid on the common stock. The preferred stock 
 may be retired at any time at Dollars per share and accumu- 
 lated dividends, in manner provided in the Certificate of Incorporation and 
 the By-laws. The preferred stock shall, in the event of dissolution of the 
 corporation, be paid in full, with accumulated dividends, before any payment of 
 assets shall be made to the holders of common stock]. 
 
 Witness the seal of the corporation and the signatures of its duly authorized 
 officers, affixed this day of , 191 .. . 
 
 President. 
 
 Secretary. 
 
 FORM NO. 56-A. 
 Temporary Receipt for Stock Cerlificate. 
 
 Received of 
 
 Certificate No 
 
 in the name of , 
 
 for shares of capital stock of undersigned corpora- 
 tion, for which new certificate is issuable on or after , 191 . ., 
 
 pursuant to lettei' dated , 191 . ., to stockholders of undersigned 
 
 corporation and agreement marked " Exhibit A" annexed thereto. 
 
 By 
 Dated , 191... 
 
 Company. 
 
 Treasurer. 
 
Nos. 57, 58 FORMS 1187 
 
 FORM NO 57. 
 Petition to Court for New to Replace Lost or Dettroyed Stock Certificate. 
 Supreme Coubt, , County. 
 
 In the Matter of the Application of 
 
 , a stockholder in 
 
 , Inc., "for an i-Petition. 
 
 order requiring said corporation to 
 issue a new certificate of stock. 
 
 The petition of respectfully alleges: 
 
 I. That petitioner is the owner of ; shares of stock in 
 
 , Inc., a domestic corporation, represented 
 
 by certificate number , dated , 19 . . , in petitioner's 
 
 name, for said number of shares of said corporation's stock, issued to petitioner 
 Lor however the fact may be}. 
 
 II. That said certificate was lost [or destroyed] under the circumstances here- 
 inafter particularly stated, viz. : 
 
 III. That petitioner has duly demanded of said corporation that it issue to 
 
 petitioner a new certificate in place of said certificate number 
 
 [e. g., upon petitioner giving said corporation a bond, etc., etc.] ; and that said 
 corporation has refused said request. 
 
 IV. That petitioner resides at , and that the 
 
 principal business office of said corporation is located at 
 
 Wherefore, petitioner prays an order requiring said corporation to show 
 cause why it should not be required to issue a new certificate in place of the 
 one lost or destroyed. 
 
 [Verification by petitioner.] 
 
 FORM NO. 58. 
 
 Order to Show Cause Why New Stock Certificate Should Not Issue. 
 
 ( Title as in Form No. 57. ) ( Caption of Cou/rt Order at Special Term. ) 
 
 Upon presentation, reading and filing the petition herein of , 
 
 verified the ...... day of , 191.., from which it appears to 
 
 the court's satisfaction that , Inc., a domestic 
 
 corporation, should show cause why a new certificate of its stock should not be 
 issued to said petitioner in. lieu of one lost or destroyed ; 
 
 Let said , Inc., show cause before this court 
 
 at a Special Term, Part .... thereof, to be held at the County Court House 
 
 (in Borough, New York City) on the day of , 
 
 191 . ., at o'clock in the noon, or as soon thereafter as counsel 
 
 can be heard, why an order should not be made requiring said 
 
 Inc., to issue a new certificate to said , in place of 
 
 one lost or destroyed; and, further, 
 
1188 FORMS Nos. 59, 60 
 
 Let a copy of said petition and of this order be served on the president or 
 
 treasurer of said , Inc., personally, at least ten days 
 
 before the time herein set for showing cause. 
 
 Dated , 191... 
 
 Enter. 
 
 J. S. C. 
 FORM NO. 59. 
 Order for Issue of New Certificate of Stock in Place of One Lost or Destroyed. 
 
 {Title as in Form No. 57.) (Caption of Court Order.) 
 
 Upon the petition of , verified the day of 
 
 ,191.., and heretofore filed herein; and upon the order to show 
 
 cause dated the day of , 191 . ., heretofore filed herein; 
 
 and upon reading and filing the affidavit of , sworn 
 
 to herein the day of , 191 . . , by which it has been proven 
 
 to the satisfaction of the court that due and timely service has been made of a 
 
 copy of said petition and order upon president [or, 
 
 treasurer] of , Inc. ; and the court having in a 
 
 summary manner inquired into the truth of the facts stated in said petition, 
 and heard the proofs and allegations of the parties in regard thereto, and being 
 
 satisfied that the petitioner is the lawful owner of shares of 
 
 stock in said corporation, described in said petition and represented by certificate 
 
 dated the day of , 191 .. , and numbered , 
 
 and that said certificate has been lost lor destroyed] and cannot after due dili- 
 gence be found, and that no suflScient cause has been shown why a new certificate 
 
 in place thereof should not be issued, now, after hearing , 
 
 Esq., of counsel for petitioner in support of said order, and , 
 
 Esq., of counsel for said corporation, in opposition, it is, on motion of 
 
 , Esq.", attorney for petitioner, 
 
 Ordered, that said corporation be and it hereby is required, on or before the 
 
 day of , 191 . ., to issue and deliver to petitioner a new 
 
 certificate for shares of its stock, upon petitioner depositing 
 
 [state certain security, (or, filing a bond in 
 
 state form and penalty of 6ond)], which said security [or, bond] appears to the 
 court sufficient to indemnify any person other than petitioner who shall here- 
 after be found to be the lawful owner of said lost [or, destroyed] certificate. 
 
 [An order may also he made for publication, eitJier before or after this order, 
 of suvh notice of the transaction as the court deems proper.] 
 
 FORM NO. 60. 
 Bond of Indemnity on Issue of Xew Stock Certificate for One Lost, etc. 
 
 KXOW ALL MEN BY THESE PRESENTS, That we, of , 
 
 as principal, and , as surety, are held and firmly 
 
 bound unto , Inc., in the penal sum of .', lawful 
 
 money of the United States, for the payment of which, well and truly to be 
 made, the said principal and surety bind themselves, their heirs, executors, an(J 
 administrators, jointly and severally, firmly by these presents. 
 
Nos. 61, 62 FORMS 1189 
 
 Sealed with our seals and dated this day of , 1917. 
 
 Whereas, On the day of November, 191.., the above named 
 
 obligee issued to the said principal, a temporary certificate, representing 
 
 shares of capital stock of the said , Inc., being certificate No , 
 
 and 
 
 Whekeias, The said certificate above described has been inadvertently mislaid 
 
 or destroyed, and the said obligee will issue a permanent certificate for 
 
 shares of capital stock of the said , Inc., upon being properly 
 
 indemnified by so doing. 
 
 Now, thebepoee, the condition of this obligation is such that if the above 
 
 bounden , shall well and truly indemnify and save harmless the above 
 
 obligee from all loss, cost, damage or expense, by reason of executing a perman- 
 ent certificate of stock as above described, then this obligation to be null ajid 
 void, otherwise to remain in full force and eflfect. 
 
 (L. S.) 
 (L. S.) 
 
 iAdd achnowledgments.'i 
 
 FORM NO. 61. 
 Assignment of Stock and Power of Attorney to Transfer on Books. 
 
 For value received, I (we) hereby sell, assign, and transfer unto 
 
 the shares of the capital stock represented by the within certificate [or, of the 
 
 corporation], and do hereby irrevocably -constitute and appoint 
 
 attorney to transfer the said stock on the books of the 
 
 within-named [or, the said] company, with full power of substitution in the 
 premises. 
 
 Bated, 
 
 In presence of 
 
 FORM NO. 62. 
 
 Proxy 
 
 Know all men by these presents, That I, the undersigned, do hereby consti- 
 tute and appoint , and , or any one or 
 
 more of them, the action of the majority of them to be in any event controlling, 
 for me and in my name, place and stead, to vote as my proxies or proxy at the 
 
 annual meeting of the stockholders of the , Inc., to be held on 
 
 the day of , 191 . . , at or at any adjournment 
 
 thereof, for the election of directors to be chosen at said meeting, and on any 
 resolution or proposition that may be submitted to a vote of the stockholders 
 thereat, according to the number of votes that I should be entitled to cast if 
 then personally present, with full power of substitution and revocation, hereby 
 ratifying and confirming all that my said proxies or proxy, or substitutes or 
 substitute may do in my place, name and stead, as fully as I could do if per- 
 sonally present. 
 
1190 FORMS Nos. 63, 6i 
 
 ]n VV^T^•ESS Whekeof, I have hereunto set my hand and seal this 
 
 day of ,191... 
 
 (L. s.) 
 
 Witness : 
 
 FORM NO. 63. 
 
 Voting Trust Agreement. 
 
 Agreement made this day of 191.., hy and between each of 
 
 such of the stockholders of , Inc., a domestic corporation, as may 
 
 sign this agreement, hereafter called the stockholders, and , 
 
 hereinafter called the voting trustee, and every other stockholder signing this 
 agreement, Witnesseth, that in consideration of one dollar by each party hereto 
 to every other party hereto paid, and of the premises, and of other good and 
 valuable consideration, it is mutually' agreed : 
 
 ( 1 ) That each stockholder signing this agreement transfers his stock in said 
 corporation to the voting trustee for the purpose of vesting in the latter the 
 
 right to vote thereon for a time not exceeding the day of , 191 . . 
 
 [not more than five years] upon the following stated terms and conditions, pur- 
 suant to which said voting trustee shall act: 
 
 (a) 
 
 (b) , etc., [stating terms and conditions]. 
 
 ( 2 ) That each stockholder of said corporation upon his or her request therefor, 
 may transfer his or her stock in said corporation to said voting trustee and 
 participate in the terms, conditions and privileges hereof by signing a like 
 agr»ement in writing as these presents in duplicate. 
 
 (3) That the certificates of stock of said corporation ao transferred shall be 
 surrendered and cancelled and certificates therefor issued to such transferee in 
 which it shall appear that they are issued pursuant to this agreement; and in the 
 entry of such transferee as owners of such stock in the proper books of said 
 corporation that fact shall also be noted and thereupon said transferee may vote 
 upon the stock so transferred during the time herein specified. 
 
 (4) That a duplicate of this agreement and of every agreement like it exe- 
 cuted by any of the stockholders of said corporation shall be filed in the office of 
 said corporation where its principal business is transacted and be open to the 
 inspection of any stockholder daily during business hours. 
 
 Witnes.s our hands and seals to duplicate copies hereof this day 
 
 of 19'1... 
 
 Undividual acknowledgments may be added."] 
 
 (L. s.) 
 (L. s.) 
 
 FORM NO. 64. 
 Minutes of Stockholders' Annual Meeting. 
 
 The annual meeting of the stockholders of , Inc., was held at 
 
 the principal office of the corporation, at o'clock in the 
 
 noon of the day of , 191 . . . 
 
 The President in the Chair. The Secretary presented notice of the meeting, 
 proof by affidavit verified the day of , 191 . ., of , of publi- 
 
No. 65 FORMS 1191 
 
 cation of said notice in at least once a week for two successive weelcs 
 
 immediately preceding the meeting, and proof by affidavit verified the 
 
 day of , 191 .. , of , of mailing of a copy of said notice to each 
 
 stockholder as required by the by-laws. On motion duly seconded and unani- 
 mously carried, said notice and affidavits were ordered filed in the company's 
 archives. 
 
 The Secretary reported that of the total outstanding shares of stock of the 
 company, numbering , the following were present: 
 
 In person, By proxy, ; and that he had examined 
 
 all said proxies and that they were on file and correct. 
 
 The minutes of the last annual meeting of the stockholders were read, and, 
 on motion duly seconded and unanimously carried, approved. 
 
 The President presented his annual report as follows: 
 
 [Take in]. 
 
 On motion, duly seconded and unanimously carried, said report was. approved. 
 
 The Treasurer presented his annual report as follows : 
 
 [Take in]. 
 
 On motion, duly seconded and unanimously carried, said report was approved. 
 
 The election of directors by ballot for the ensuing year was then held. 
 Messrs and , as inspectors of election, having duly quali- 
 fied by taking the statutory oath of office, and counted the votes cast, reported 
 as follows: 
 
 That the total votes cast numbered , distributed thus : 
 
 Mr. votes. 
 
 Mr votes. 
 
 Mr votes. 
 
 The President declared Messrs , and duly 
 
 elected directors for the coming year. 
 
 [Then add any further minutes concerning other action taken by stockholders]. 
 There being no further business to come before the meeting it was adjourned. 
 
 Secretary. 
 FORM NO. 65. 
 Minutes of Stockholders' Special Meeting. 
 
 A special meeting of the stockholders of , Inc., was held at 
 
 , at . . o'clock in the noon of the day of , 
 
 191. ., pursuant to the following call and waiver: 
 
 We, the undersigned, being the holders of all the stock outstanding of 
 , Inc., do hereby waive any notice required by law, by-laws or other- 
 wise of a special meeting of stockholders of said corporation, and do appoint 
 
 as the place, and . . o'clock in the noon of the day 
 
 of , 191 . ., as the time, for holding said meeting, and do consent to the 
 
 transaction thereat of any business which may come before the meeting. 
 
1192 FORMS Nos. 66, 67 
 
 The President in the Chair and the Secretary recording. Present: Messrs. 
 
 , , and , being all the stockholders. 
 
 \Insert minutes of action taken for which meeting was called.] 
 There being no further business to come before the meeting it was adjourned. 
 
 Secretary. 
 
 FORM NO. 66. 
 
 Certificate of Office and Incorporation on Registration of Corporation under 
 
 § 2~5-a, Tax Law. 
 
 Name 
 
 Address '. 
 
 I, ( President or Secretary ) of the 
 
 , ( name of corporation ) 
 
 do hereby certify that the said corporation keeps or maintains its office [for 
 
 tlie sale, transfer or delivery of its stock] at No , 
 
 in the city of , Xe\v York. 
 
 Incorporated , Laws of the State of 
 
 ( President or Secretary ) . 
 
 State of Xew York, ] 
 County of j**"' 
 
 On this day of , 191 .. , before me the subsoriber, 
 
 personally came , to me known, and who being by me duly 
 
 sworn, did depose and say that he is the (President or Secretary) of the corpo- 
 ration above named and that he executed the foregoing certificate on behalf of 
 said corporation pursuant to authority vested in him by a vote of the board of 
 directors of said corporation. 
 
 Notary Public. 
 
 FORM NO. 67. 
 
 Certificate of Increase or Decrease of Capital Stock on Unanimous Consent of 
 
 Stockholders. 
 
 We, being all the stockholders of , Inc., a, domestic cor- 
 poration, do hereby unanimously consent in writing to the increase [or reduc- 
 tion] of the capital stock of said corporation, and do personally or by our 
 duly authorized proxies, execute this certificate, for filing in the offices of tlie 
 Secretary of State and Clerk of the Covmty in which said corporation's prin- 
 cipal business office is located, as follows: 
 
 pirst — The amount of capital of said corporation authorized prior to the 
 change therein hereby accomplished was 
 
 Second — Th& proportion of said authorized capital actually issued was 
 
Nos. 68, 69 FORMS 1193 
 
 Third — The amount of the increased [or reduced] capital stock is 
 
 Fou/rth — [In case of the rediiotion of capital stock.] The whole amount of 
 the ascertained debts and liabilities of the corporation is 
 
 Fifth — [// the capital stock is reduced and it is so desired.] The amount 
 of capital over and above the amount of the reduced capital shall be returned 
 to the stockholders pro rata at siuch times and in such manner as the directors 
 shall determine. 
 
 In witness whereof we have hereunto subscribed our names personally pr by 
 duly authorized proxies in duplicate, this day of 191 .. . 
 
 Names of Stockholders. ' Names of Proxies. 
 
 [Add individual acknowledgments.] 
 
 FORM NO. 68. 
 
 Affidavit That Reduced Capital Exceeds Liabilities. 
 
 State of New York, ] 
 County of f **• • 
 
 Whbbeias, , Inc., has reduced its capital stock from 
 
 to . , and it is required that the certificate for consent to such reduc- 
 tion shall have indorsed thereon the approval of the Comptroller, now there- 
 fore, and , each having been duly sworn, 
 
 does say: Said is {Assistant) Secretary and said 
 
 {Assistant) Treasurer of said corporation, wliioh is a domestic corporation 
 other than a, railroad or moneyed corporation, and that its said reduced capital 
 is sufficient for its proper purposes and is in excess of its ascertained debts 
 and liabilities. 
 
 Sworn to before me this 
 
 day of ,191... 
 
 {AssistOMt) Secretary. 
 {Assistant) Treasurer. 
 
 FORM NO, 69. 
 
 Notice to Stockholders of Meeting to Increase or Reduce Corporation's Capital 
 I Stock. 
 
 To the Stockholders of , Inc. : 
 
 Notice is hereby given that a special meeting of the stockholders of 
 
 , Inc., will be held at , at o'clock in the 
 
 noon of the day of , 191 . ., with the object 
 
1194 FORMS No. 70 
 
 of authorizing, by a vote of the stockholders owning at least a majority of the 
 stock of said corporation, an increase [or, reduction] of said corporation's capital 
 
 stock from $ , consisting of shares of preferred stock of the 
 
 par value of $ each, and shares of common stock without 
 
 nominal or par value, to $ , consisting of shares of preferred 
 
 stock of the par value of $ each, and shares of common 
 
 stock without nominal or par value. 
 
 President, 
 Secretary. 
 
 FORM NO. 70. 
 
 Minutes of Stocl;liolders' Meeting to Increase or Reduce Corporation's Capital 
 
 Stock. 
 
 A special meeting of the stockholders of , Inc., was 
 
 held at , at o'clock in the noon of the 
 
 day of , 191.., pursuant to the following notice : 
 
 [Take in notice as in Form Xo. 69.] 
 The meeting organized l)y choosing the president of the corporation, a stock- 
 holder therein, chairman, and its secretary, also a stockholder, secretary of the 
 meeting. 
 
 The secretary of tlie meeting presented the foregoing notice and the affidavits 
 
 of and ., verified respectively the and 
 
 days of , 191 . ., and showing respectively the publica- 
 tion and mailing (or personal service] of said notice as required by statute and 
 the by-laws. On motion, duly seconded and unanimously carried, said affidavits 
 were ordered filed in the archives of the corporation. 
 
 The secretary of the meeting reported the total number of shares of the corpo- 
 ration's stock authorized as , of which were out- 
 standing, and were present at tliis meeting in person, and 
 
 by proxy, and that the proxies of tlie latter were on file and correct. 
 
 [// capital stock is to be reduced: — The secretary of the meeting presented 
 tlie report of the treasurer of the corporation that the whole amount of its 
 
 ascertained debts and liabilities was $ On motion, duly seconded 
 
 and unanimously carried, such report was ordered filed with the archives of the 
 corporation.] 
 
 The following resolutions were then moved: 
 
 Resolved, that the capital stock of this corporation as authorized at 
 
 shares of preferred stock of the par value of $ each and 
 
 shares of common stock without nominal or par value, be and it 
 
 ■ hereby is increased [or reduced] to shares of preferred stock of 
 
 the par value of $ each and shares of common stock 
 
 without nominal or par value. 
 
 [If the capital stock is reduced: Further resolved, that the amount of 
 the corporation's capital over and above the amount of its capital as reduced 
 at this meeting be returned to the stockholders pro rata [or according aa 
 their preferences entitle them], at such time! and in such manner as the 
 directors shall determine]. 
 
^0. 71 FORMS 1195 
 
 Further Resolved, that the chairman and secretary of this meeting and the 
 proper officers of the corporation be and they hereby are directed and author- 
 ized to make, sign, certify, acknowledge and file a certificate of the increase 
 [or reduction] of this corporation's capital stock as required by law and to 
 do all things necessary to effectuate such increase [or reduction]. 
 
 The foregoing resolutions were duly seconded and unanimously carried. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretaiy of the Meeting. 
 
 FORM NO. 71. 
 Certificate of Increase or Decrease of Capital Stock on Stod-holders' Mceling. 
 
 This certificate of the proceedings at a meeting of the stockholders of 
 ) Inc., a domestic corporation, WITNESSETH : 
 
 First — That said meeting was held at , on the day 
 
 °^ ' 191 • •, at o'clock in the noon, specially called 
 
 in the manner provided by law or the by-laws for the purpose of authorizing 
 the increase [or reduction] of the capital stock of said corporation from 
 to 
 
 Second — Notice of the meeting, stating the time, place and object, and the 
 amount of the increase [or reduction] proposed, signed by the president [or 
 a vice-president] and the secretary, was published once a week for at least two 
 
 successive weeks in a newspaper, viz., , in the county where 
 
 said corporation's principal business ofiice is located, and a, copy of such notice 
 was duly mailed to each stockholder [or member] at his last-known post-offiice 
 address at least two weeks before the meeting [or was personally served on him 
 at least five days before the meeting.] 
 
 Third — At the time and place specified in said notice, as aforesaid, the stock- 
 holders appeared in person or by proxy in numbers representing at least a 
 majority of all the shares of stock, and organized by choosing the undersigned 
 from their number as chairman and secretary, respectively. 
 
 Fourth — A suifficient number of votes of said stockholders, viz., the votes 
 of stockholdeirs owning at least a majority of the stock of said corporation, 
 was given in favor oi such increase [or reduction]. 
 
 Fifth — -The amount of capital of said corporation authorized prior to said 
 
 meeting was ; the proportion thereof actually issued was ; 
 
 and the amount of the increased [or reduced] capital stock is 
 
 Sixth — [In case of the reduction of capital stock only.} The whole amount 
 of the ascertained debts and liabilities of the corporation is . i 
 
 Seventh — The proceedings of said meeting were entered upon the minutes of 
 the corporation. 
 
 Witness our signatures, verifications and acknowledgments, as chairman and 
 secretary, respectively, of said meeting, to this certificate of the proceedings. 
 
1196 FORMS Nos. 72, 73 
 
 showing a compliance with the provisions of chapter 61, Laws of 1909, and its 
 amendments. 
 
 Dated 
 
 [Add rerifications and acknowledgments.^ 
 FORM NO. 72. 
 
 Chairman. 
 
 Secretary. 
 
 Notice to Stoclclwlders of Meeting to Issue Preferred and Common Stock and 
 Different Classes of Preferred Stock. 
 
 To the stockholders of , Inc. : 
 
 Xotice is liereby given that a meeting of the stockholders of , 
 
 Inc., is hereby called to be held at , at o'clock in the 
 
 noon of the day of , 191 .. , for the purpose of 
 
 obtaining the consent of the holders of record of two-thirds of the capital stock 
 
 of said corporation to the issue of preferred stock in the amount of 
 
 shares of the par value of $ a share [or of different classes of preferred 
 
 stock as follows: ; or as the ca^e may be]. 
 
 President. 
 
 Secretary. 
 
 FORM NO. 73. 
 
 Minutes of Meeting of Stockholders to Issue Preferred and Common Stock and 
 Different Classes of Preferred Stock. 
 
 A special meeting of the stockholders of , Inc., was held at 
 
 , at o'clock in the noon of the day of 
 
 , 191 .. , pursuant to the following notice : 
 
 [Take in notice as in Form Xo. 72.] 
 
 The president in the chair and the secretary recording. 
 
 The secretary presented the foregoing notice and the affidavit 'of 
 
 verified the day of , 191 .. , showing [such 
 
 notice Tis is required by statute and by-la us of the arvnual meeting of the corpora- 
 tion]. On motion, duly seconded and unanimously carried, such affidavit was 
 ordered filed in the archives of the corporation. 
 
 Th&k^ecretary reported the total authorized capital stock as , 
 
 divided as follows: ; of which was outstanding, 
 
 divided as follows : ; and of which were present at this 
 
 meeting in person and by proxy, and that the proxies of the latter 
 
 were correct and on file. 
 
 The following resolution was then moved: 
 
 Where-^s. the present authorized capital stock of this corporation is 
 divided, as follows: ; of which is outstand- 
 ing, divided as follows: ; and it is the stockholders' desire to 
 
No. 74 FORMS 1197 
 
 {e. g., issxje preferred stock as follows: i issue 
 
 different classes of preferred stock as follows : i or as the case 
 
 may be ) . 
 
 Resolved, that the stockholders of this corporation in meeting duly 
 assembled consent to {e. g., as in parenthesis in preamble above ) . 
 
 Further Resolved, that the president or a vice-president and the secretary 
 or an assistant-secretary of the corporation he and they hereby are directed 
 to sign, swear, file and record, as required by law, a certificate of the pro- 
 ceedings of this meeting. 
 
 Said resolutions were duly seconded and carried by the vote of shares, 
 
 being more than the holders of record of two-thirds of the corporation's capital 
 stock. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 
 FORM NO. 74. 
 
 Certificate of Proceedings of Stockholders' Meeting Consenting to Issue of 
 Preferred and Common Stock and Different Classes of Preferred Stock. 
 
 We, , president (or vice-president) , and , secretary 
 
 (or assistant secretary), of , , Inc., a domestic corporation, do in 
 
 duplicate sign, swear to, file and record this certificate of the proceedings of a 
 
 stockholders' meeting of said corporation consenting to the issue 
 
 ( e. g., of preferred stock, or as the case may be) , as follows : 
 
 Said meeting was held pursuant to the following notice: 
 
 [Take in notice as in Form No. 72.] 
 
 Due notice, as required for the annual , meeting of the corporation, was given 
 of said meeting. 
 
 The undersigned president and secretary respectively presided over and 
 recorded the proceedings of said meeting. 
 
 The authorized capital stock of said corporation prior to said meeting was 
 
 divided as follows : ; of which was outstanding, 
 
 divided as follows : ; of which were present at said meeting 
 
 in person and by proxy; and the proxies of the latter were correct and 
 
 on file. 
 
 The following resolutions were carried by vote of of said corporation's 
 
 capital stock, being more than two-thirds of the holders of record of said 
 capital stock: — 
 
 [Take in resolutions from Form No. 73.] 
 
 That the authorized capital stock of said corporation, pursuant to the consent 
 of stockholders given at said meeting, is as follows: 
 [State as the case may 5e]. 
 Witness our hands this day of , 191 . . 
 
 (Vice) President, 
 
 Secretary. 
 [Add jv/rats of president and secretaryl. 
 
1198 FOKMS Nos. 75, 76 
 
 FORM NO. 75. 
 
 Request of HolderS'Of Preferred Stock for Exchange Thereof for Common Stock. 
 
 We, the undersigned, holding separately the number of shares of stock in 
 
 , Inc., set opposite our signatures hei-eto, and in the aggregate 
 
 all [or however the case may 6e] of the preferred stock in said corporation, do 
 hereby in writing request said corporation to exchange our said holdings of 
 preferred stock for common stock and to issue certificates of common stock there- 
 for as [e. g. agreed in the certificate of organization of 
 
 said corporation; or, in the issue of said preferred stock; or, share for share]. 
 
 Name. No. of shares. 
 
 FORM NO. 76. 
 Minutes of Directors' Meeting to ExclMnge Preferred for Qommon Stock. 
 
 A s,pecial meeting of the board of directors of , Inc., was neld 
 
 ut , at . . o'clock in the noon of the day of 
 
 ...,...., 191, ., pursuant to the following call and waiver: 
 
 We do hereby waive all notice required by statute, by-laws or otherwise of a 
 
 •special meeting of the board of directors of , Inc., and do appoint 
 
 as the place and . . o'clock in the noon of the 
 
 day of , 191 . ., as the time, for holding said meeting, and do consent 
 
 to the transaction thereat of any business which may properly come before the 
 meeting, and particularly of the business of exchanging preferred stock of said 
 corporation for common stock thereof. 
 
 Dated, 
 
 The President in the Chair, and the Secretary recording. Present: Messrs. 
 , , and , the full board. 
 
 The Secretary presented the original of the following copy of request: 
 [Take in Form No. 75.] 
 
 Resolved, That pursuant to the written request now submitted to this board 
 
 of holders of shares of preferred stock of this corporation, said 
 
 corporation, two-thirds at least of its directors voting " aye ", hereby exchanges 
 its preferred stock held by said stockholders for its common stock, share for 
 share [or as the case may 6e] ; and 
 
 Further Resolved, That the proper officers of this corporation be and they 
 hereby are authorized and directed to issue certifiicates for its common stock 
 as hereby resolved. 
 
 The foregoing resolution was duly seconded and carried by the vote of two- 
 thirds of the directors. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 
Nos. 77, 78 FORMS 1199 
 
 FORM NO. 77. 
 Consent of Stockholders to Change m Classification Of Capital\8to6k.. 
 
 We, the undersigned, being stockholders of Inc., a stock 
 
 corporation organized and existing under the laws of the State of New York, 
 do hereby consent that the authorized increased capital stock of the company, 
 amounting to one hundred twenty thousand dollars ($120,000), be classified 
 into common and preferred stock, so tVat twenty thousand dollars ($20,000) 
 thereof, consisting of two hundred (200) shares of the par value of one hundred 
 dollars ($100) each, shall be common stock, and so that one hundred thousand 
 dollars ($100,000) thereof, consisting of one thousand (1,000) shares of the 
 par value of one hundred dollars ($100) each, shall be preferred stock. Said 
 preferred stock to be entitled to preference and priority over the common stock 
 and subject to restriction as follows: 
 
 The preferred stock of said company shall be entitled to a dividend of not 
 exceeding six per cent. (6%) in any one year, which dividend shall be cumulative 
 and payable out of the net earnings before any dividend is paid upon the common 
 stock. And upon dissolution, after all the debts of the corporation shall have 
 been paid, the assets, property and effects shall first be applied to the payment, 
 of the said preferred stock at par, with any unpaid accumulations thereon, and 
 before any payment is made to the holders of the common; and the balance to the 
 payment of said common stock. The common stock shall be entitled to all net 
 earnings and profits in excess of the cumulative dividends of six per cent. (6%) 
 per annum payable on the preferred stock. And the holders of preferred stock 
 shall have the same rights and privileges to vote as the holders of the common 
 stock. 
 
 In Witness Whereof, we have signed this instrument in duplicate this ..... . 
 
 day of. ;: , 191.. 
 
 [Add individual acknowledgments,^ 
 
 State of I 
 
 County of (**•' 
 
 .'."., being duly sworn, deposes and says that he is the 
 
 secretary and treasurer of '. . . . . . .'. .."..'.'.'.', Inc., the corpofat"i<3n men- 
 tioned in the foregoing instrument; that he is the custodian of the stock book 
 
 containing the names of the stockholders of said corporation ; that 
 
 and , the persons who have signed the fore- 
 going instrument, are all the stockholders of said corporation, and that they are 
 the holders of record of the entire capital stock of said corporation issued and 
 outstanding. 
 
 Sworn to before me, this . . . . 
 day of , 191. 
 
 FORM NO. 78. 
 
 Notice of Meeting of Stockholders to Change Numher of Shares Without Changing 
 
 Capital Stock. 
 
 [Adapt from Form No. 69. See St. Corp. L. § 65.] 
 
1200 FORMS Nos. 79-81 
 
 FORM NO. 79. 
 
 Minutes of Stoeklwlders' Meeting to Change Number of Shares Without Changing 
 
 Capital Stock. 
 
 [Adapt from Form Xo. 70. See Stock Corp. L. § 65.] 
 
 FORM .NO. 80. 
 
 Certificate of Change of Number of Shares Without Changing Capital Stock. 
 
 [Adapt from Form No. 71. See Stock Corp. L. § 65.] 
 
 FORM NO. 81. 
 
 Certificate of Reorganization to Permit Issua/nce of Shares Without Nominal or 
 
 Par Value. 
 
 Certificate of reorganization of , Inc., pursuant to section 
 
 twenty-four of the Stock Corporation Law. 
 
 We, the undersigned, being every stockholder of record of , 
 
 Inc., do hereby ourselves or by our duly authorized proxies, [or, being the 
 
 president ( or a vice-president ) and the secretary ( or treasurer ) of , 
 
 Inc.] sign and acknowledge this certificate of reorganization .of said corporation 
 pursuant to section twenty-four of the Stock Corporation Law, as follows: 
 
 1. The name under which said, corporation was originally organized was 
 
 ; and said name not been changed [or if it has been 
 
 changed, state fa^ts] ; and the present corporate title is 
 
 2. The law under which said corporation was organized is l.awB of , 
 
 cliapter , article 
 
 3. The date on which and the public office or offices in which said corporation's 
 certificate of incorporation was filed, are as follows: 
 
 Date. Office of Secretary of State. Office of Clerk of County of 
 
 4. The amount of capital stock authorized by the certificate of incorporation 
 
 (if said corporation is , and said amount has not been changed 
 
 [or, and said amount was changed by certificate or consent authorizing said 
 
 change filed the day of , 191. ., and the amount to which 
 
 said capital stock was increased (or, reduced) by said certificate or consent was 
 ]. 
 
 5. The amount of each payment of taxes for the privilege of organizing or of 
 increasing the capital stock of said corporation is as follows : 
 
 6. The number of shares into which the capital stock of said corporation has 
 been divided [and, if classified, and the number and par value of the shares 
 included in each class together with the preferences or distinctive features of the 
 shares of each class] are as follows : 
 
 7. The number and shares of each class issued and outstanding are as 
 follows : 
 
 8. The number of shares that may henceforth be issued by the corporation 
 are as follows : 
 
No. 82 FORMS " 1201 
 
 9. [If any of such shares he preferred stock: The preferences of said shares 
 
 of preferred stock are as follows : ; and, if such preferred 
 
 stock have a preference as to principal the certificate must state the, amount of 
 such preferred stock having such preference, the particular character of such 
 preferences and the amount of each share thereof, which must 6e five dollars 
 or some multiple of five dollars, but not more thorn one hundred dollars.] 
 
 10. The amount of capital with which the corporation will carry on business 
 is 
 
 11. The terms upon which the new shares of the reorganized corporation are to 
 be issued in place of the outstanding shares of stock are as follows : 
 
 [12. The considera,tion for which the reorganized corporation may issue and 
 
 sell its authorized shares is as follows : ; or. The board of 
 
 directors of the reorganized corporation is hereby authorized to issue and sell 
 the corporation's authorized shares from time to time for such consideration as 
 shall be the fair market value of said shares.] 
 
 Name of stockholder. Name of proxy, if any. No. of shares. 
 
 [Add acknowledgment for each stockholder'] [or, witness our hands as presi- 
 dent {or vice-president) and secretary (or treasurer) of said corporation, this 
 day of , 191..]. 
 
 (Vice) President, 
 
 Secretary 
 
 or 
 Treasurer. 
 FOEM NO. 82. 
 
 Affidavit of Custodia/n of Stock Book Annexed to Stockholders' Certificate of 
 Reorganization to Permit Shares Without Par Value. 
 
 State of New York, i 
 County of ..... P®"' 
 
 , being duly sworn, says : I am [e. g., 
 
 secretary] of , Inc., and custodian of its stock book. The 
 
 persons who have executed the foregoing certificate of reorganization of said 
 corporation to permit issuance of shares without nominal or par value in person 
 or by proxy constitute the holders of record of all of the shares of stock of said 
 corporation^ irrespective of class, issued and outstanding. 
 
 Sworn to before me this . . . 
 day of , 191. 
 
1202 ' FORMS Nos. 83, 84 
 
 FORM NO. 83. 
 
 Affidavit of Corporate Officers Annexed to Certificate of Reorganization to 
 Permit' Issiumce of Shares Without Par Value When Capital of Reorganized 
 Corporation to be Less Than the Par Value of the Previously Issued Stock. 
 
 State of New York, ) 
 County of f**"' 
 
 and , being duly and severally sworn, 
 
 each for himself says : that he, the said , is the pi-esi- 
 
 dcnt, and he, the said , is the secretary of , Inc. ; 
 
 and that the whole amount of the ascertained debts and liabilities of said 
 corporation is $ 
 
 Sworn to before me this . . . , 
 day of , 191.. 
 
 FORM NO. 84'. 
 
 Affidavit ly Corporate Officers Annexed to Their Certificate to Permit Issuance 
 
 of Stock Without Par Value. 
 State of New York, 
 
 I' 
 
 County of ... 
 
 and being 
 
 duly and severally sworn, each for himself says : That he, the said 
 
 , is president and he, the said , is secretarj 
 
 of , Inc. ; that they have been authorized and directed to execute 
 
 and file the foregoing certificate of reorganization to permit issuance of shares 
 without nominal or par value by the votes, cast in person or by proxy, of the 
 holders of record of two-thirds or more of each class of the outstanding shares 
 of stock, irrespective of any provision of the certificate of incorporation pur- 
 porting to deny voting powers to the holders of any class of stock, at a meeting 
 called and held upon written notice mailed to each stockholder at least two 
 weeks before the date set for the meeting and published once a week for at least 
 two successive weeks in a newspaper published and circulating in the county 
 wherein the principal office of the corporation is located, and that such notice 
 did expressly state the purpose of the meeting to be that of reorganizing the 
 corporation pursuant to section twenty-four of the Stock Corporation Law, so as 
 to permit the issuance of shares without par value, And did state the terms upon 
 which the outstanding shares of stock were to be exchanged for the new shares. 
 [// the amount of capital of the reorganized corporation is to be less than the 
 par value of the previously outstanding stock, add: That the whole amount 
 of the ascertained debts and liabilities of the corporation is ]. 
 
 Sworn to before me this . . . 
 day of , 191. 
 
Nos. 85, 86 FORMS 1203 
 
 FORM NO. 85. 
 
 Notice of Stockholders' Meeting to Reorganize Corporation to Permit Issuance 
 of Shares Without Par Value. 
 
 Notice i,s hereby given that a meeting of the stockholders of 
 
 Inc., will be held at , at o'clock in the noon of the 
 
 day of , 191 .. , for the purpose of voting upon a proposi- 
 tion to reorganize said corporation pursuant to section 24 of the Stock Corpora- 
 tion Law, so as to permit the issuance of shares without par value upon the 
 following terms upon which the outstanding shares of stock are to be exchanged 
 for the new shares, viz.: {state terms.) .' 
 
 President, 
 Secretary. 
 
 FORM NO. 86. 
 
 Minutes of Stockholders' Meeting to Reorganize Corporation to Permit Issuance 
 of Shares Without Par Value. 
 
 A meeting of tlie stockholders of , Inc., was held at , 
 
 at o'clock in the noon of the .... day of , 191 . ., 
 
 pursuant to the following notice: 
 
 [Take in Form No. 85.] 
 
 The President in the chair; the Secretary recording. 
 
 The Secretary presented the affidavits of and 
 
 , verified respectively the and days ol 
 
 , 191 . ., showing respectively that the foregoing notice had been 
 
 mailed to each stockholder at least two weeks before the date set for the meeting 
 and that said notice had been published, once a week for at least two successive 
 weeks in a newspaper published and circulating in the county wherein the 
 principal office of the corporation is located. The Secretary further reported 
 
 the total authorized capital stock of the corporation to be , 
 
 irrespective of any provision of the certificate of incorporation purporting to 
 deny voting powers to the holders of any class of stock; the issued and out- 
 standing stock to be ; the stock present at this meeting 
 
 in person to be and by proxy ; ; 
 
 and that the proxies of the stock present by proxy were correct and on file. On 
 motion duly seconded and unanimously carried, said affidavits were ordered on 
 file. 
 
 The following preamble and resolutions were thereupon moved: 
 
 Whereas, this corporation is a stock corporation, other than a moneyed cor- 
 poration and other than a corporation under the jurisdiction of any public 
 service commission, organized under the Stock Corporation Law, and desires to 
 reorganize so as to permit the issuance of shares without par value. 
 
 Resolved, that this corporation reorganize so that it, its officers, directors and 
 stockholders, shall acquire and enjoy all the I'iglits, privileges, powers and 
 exemptions, and be subject to all the liabilities and obligations imposed by 
 
1204 FORMS Nos. 87, 88 
 
 sections nineteen to twenty-three, inclusive, of the Stock Corporation Law; and 
 further 
 
 Resolved, that the Fresident ( or Vice-president ) and Secretary (or Treasurer) 
 of this corporation be and they hereby are authorized and directed to execute 
 and file the certificate of such reorganization required by law in form as follows : 
 [Take in from Form Ao. 22.] 
 
 Said motion was duly seconded and carried by vote by ballot of the holders 
 
 of record of shares of stock of said corporation, being more than 
 
 two-thirds of each class of the outstanding shares of stock, irrespective of any 
 provision of the certificate of incorporation purporting to deny voting powers to 
 tlie holders of any class of stock. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 FORM XO. 87. 
 Certificate of Payment of Half of Capital Stock. 
 
 Whereas, , Inc., less than one year from the execution hereof, 
 
 was incorporated as provided in section two of the Business Corporations Law, 
 and one-half of its capital stock has been paid in within thirty days of the 
 execution hereof, 
 
 Now, therefore, we, a majority of the directors of said corporation, do sign 
 and acknowledge, and we, the president (or vice-president) and secretary (or 
 treasurer) of said corporation, do verify; and do file in the offices where the 
 certificate of incorporation of said corporation were filed, this certificate that 
 
 the capital stock of said corporation is shares, having no par or 
 
 nominal value [or is shares of the par value of dollars 
 
 each] ; and that one-half of said capital stock has been paid in [state how, 
 whether in cash, property, or both]. 
 
 [Add acknon-ledgments for directors and verifications for officers]. 
 
 FORM XO. 88. 
 
 Affidavit of Truth of Statements in Certificate of Payment of Half of Capital 
 
 Stock. 
 State of Xew York, ) 
 County of , f**-' 
 
 and , being severally duly 
 
 sworn, each for himself deposes and says: That he, the said , 
 
 is the (Vice) President of , Inc., and that he, the 
 
 said , is the Secretary thereof ; and that the statements 
 
 contained in the Certificate of Payment of Half the Capital Stock of said 
 
 corporation, executed and acknowledged by , 
 
 and , on the day of , 191 .. , are true. 
 
 Sworn to before me this day of , 191... 
 
Nos. 89-92 FORMS 1205 
 
 FORM NO. 89. 
 tfotice of Annual Meeting of Stockholders for Election of Directors, etc. 
 Notice is hereby given that the annual meeting of the stockholders of 
 
 , Inc., will be held at , at 
 
 o'clock in the noon of the day of , 191. ., 
 
 to elect directors and to transact other business properly coming before such 
 meeting. 
 
 P.reaident. 
 Secretary. 
 
 FORM NO. 90. 
 
 yotice of Meeting to Elect Directors an Faihi/re to Elect on Day Designated in 
 
 By-Laws or Law. 
 
 Notice is hereby given that a meeting of the members of 
 
 Inc., is called to be held at , at o'clock in the 
 
 noon of the day of , 191.., for the purpose of 
 
 electing directors by reason of the fact that the election thereof has not been 
 held on the day desitrnated in the by-laws or by law. 
 
 Directors. 
 FORM NO. 91. 
 
 JfoHce of Meeting to Elect Directors on Failure of Directors to Gall Meeting to 
 8o Elect After Failure to Elect on Day Designated by By-Laws or Law or 
 Failure to So Elect at Such Meeting Called by Directors. 
 
 Notice is hereby given that a meeting of the members of 
 
 Inc., is hereby called for o'clock in the noon of the day 
 
 of , 191 .. , to be held at , for the 
 
 purpose of electing directors of said corporation, by reason of the failure to hold 
 such election on the day designated in the by-laws or by law and the subsequent 
 failure of the directors to call a meeting of the members of said corporation for 
 such election within one month thereafter ior, the failure to elect directors of 
 said corporation at a meeting of the members of said corporation called by the 
 directors thereof on failure to hold such election on the day designated in the 
 by-laws or by law]. 
 
 Member of , Inc. 
 
 FORM No. 92. 
 
 Oath of Inspectors of Directors' Election, 
 State of New York, 1 
 County of ,j"-- 
 
 and being duly and severally 
 
 Bworn each for himself says: I will faithfully execute the duties of inspector 
 
1206 FORMS No. 93 
 
 of election at the mteting of Inc., to be held at 
 
 at o'clock in the noon of the day of , I'Jl • 
 
 with strict impartiality and according to the best of my ability. 
 Sworn to before me this day of , 191 . .. 
 
 FORil NO. 93. 
 
 Report of Inspectors of Election, 
 
 State of New York, ) 
 _ ^ , ( ss.: 
 
 County of ,1 
 
 We, and the undersigned. 
 
 lispectors of Election of Directors of , Inc-, at a 
 
 m'eeting of the stockholders, held at its office, 
 
 between the hours of 10 A. M. and 11 A. M., da hereby certify and report that 
 we attended at the time and place so appointed for such election, and before 
 entering upon the performance of our duties, we, each of us, took and subscribed 
 the oath herein before set forth, that we would execute and discharge our duties 
 at the election then to be held, with strict impartiality and according to the 
 
 best of our ability. Thereupon we opened the polls at That 
 
 votes were cast upon shares of the capital stock of said company 
 
 in person or by proxy and no more; that of said votes the following named 
 persons received the number of votes set opposite their names, respectively, 
 to wit: 
 
 We thereupon declared the following named persons, to wit: 
 
 Directors of this Company until the next Annual Meeting and until their suc- 
 cessors are elected. 
 
 Inspectors of Election. 
 Dated 191... 
 
Nos. 94-96 FORMS 1207 
 
 FORM NO. 94. 
 Notice of Application for Court Inquiry Into Election of Director*. 
 
 SUPREME COURT, COUNTY. 
 
 In the Matter of the Application of 
 
 , a stockholder of , 
 
 Inc., Into the Election, of Its Directors held 
 
 the day of ,191... 
 
 Take Notice that upon the annexed affidavits of and 
 
 , verified respectively the and day of 
 
 , 191 . . , the undersigned will apply to the Supreme Court, 
 
 County, at Special Term, Part thereof, at o'clock 
 
 in the noon of the day of , 191 . ., or as soon 
 
 thereafter as counsel can be heard, for a summary hearing and inquiry into the 
 
 matters or causes of complaint and particularly the election of 
 
 ( e g., the directors of , Inc., held on the day of 
 
 , 191. . ), and for the establishment of said election (or, for an 
 
 order directing a new election), and for such order and such relief as right and 
 justice may require. 
 
 FORM NO. 95. 
 
 Affidavits on Application for Court Inquiry Into Election of Directors. 
 
 ( Title as in Form No. 94. ) 
 
 [The affidavits on a court inquiry into a corporate election must depend upon 
 the facts of each particular' cose.] 
 
 FORM NO. 96. 
 
 Order on Court Inquiry Into Election of Directors. 
 
 (Title as in Form No. 94.) (Court Order Caption.) 
 
 On reading and filing the notice dated the day of , 191 .. , 
 
 of application by for a hearing and inquiry into and the 
 
 establishment of the election of directors of , Inc., 
 
 held on the day of , 191 . . , lor as the case may be] and 
 
 on reading and filing the affidavit of , verified herein 
 
 the day of , 191 .. , from which it appears to my satisfaction 
 
 that said notice was duly served upon and 
 
 , being the adverse party and those to be affected 
 
 thereby ; and on reading and filing the affidavits of and 
 
 verified herein respectively by and 
 
 the and days of 191 . . , 
 
 they being the persons aggrieved by or complaining of said election; and after 
 hearing in a summary way the proofs and the allegations of the parties and 
 
 inquiring into the matters or causes of complaint; and after hearing 
 
 , Esq., of counsel for the persons aggrieved in support 
 
1208 I-ORMS Nos. 97-98 
 
 of their application, and , Esq., of counsel for the 
 
 'parties adverse to said application and for those to be afTectcd thereby, now on 
 
 motion of , Esq., attorney for said persons aggrieved, 
 
 it is 
 
 Ordered, that new election of direulurs of , Inc., 
 
 be held in lieu of the election thereof held, etc. [or as they may be]. 
 
 Enter 
 
 J. S. C. 
 
 JFORM NO. 97. 
 Unanimous Btoclclt aiders' Confient to Increase or Decrease of Niimber of Directors. 
 
 We, the undersigned, being the holders of all the stock issued and outstanding 
 
 of , Inc., a domestic stock corporation, . do hereby 
 
 consent to an increase [or, decrease] of the number of directors of said corpora- 
 tion from the number of to the number of 
 
 Witness the signature of ourselves or our duly authorized proxies, this 
 
 day of , 191. .. 
 
 ^[(inaiiire or Barnes of 
 
 filocl.hoUlcrs. iiignataie of Proxies. Xo. of Shares. 
 
 FORM No. 97-A. 
 
 Affidavit of Custodian of Stock Book Annexed to Stockholders' Consent for 
 Tncieasr or Decrease in Directors. 
 
 State of New York, ) 
 County of , I 
 
 , being duly sworn, says: I am custodian of the stock 
 
 book of , Inc., a domestic stock corporation. The 
 
 persons who have signed the annexed foregoing consent to increase [or reduc- 
 tion] of the number of directors of said corporation, in person or by proxy, are 
 the holders of record of the entire capital stock of said corporation issued and 
 outstanding. The proxies of such as voted by proxy are hereto annexed. 
 
 Sworn to before me this day of , 191 .. . 
 
 FORM NO. 98. 
 
 Minutes of Meeting of Stockholders to Increase or Reduce Xumber of Directors. 
 
 A meeting of the stockholders of , Inc., a, stock corporation, was 
 
 held at , at o'clock in the noon of the day 
 
 of , 191... 
 
No. 99 FORMS 1209 
 
 The President in the chair, and the Secretary recording. 
 
 The Secretary presented the affidavit of , verified the ....-...•- day 
 
 of , 191. ., proving service at least two weeks before this meeting of 
 
 a notice in writing on each stockholder of record personally or by mail, which 
 notice was directed to each stockholder at his last known post-office address; 
 and stated that said proof of service of such notice was .filed in the office of the 
 corporation at (or before) the time of this meeting. 
 
 The Secretary stated that the capital stock of the company was 
 
 shares, all outstanding and that the holders of more than a majority of its stbck 
 were present in person or by proxy, and that the proxies of the latter were 
 regular and on file. 
 
 On motion made and duly seconded and carried by vote and determination of 
 stockholders owning a majority of the stock of the corporation, it was 
 
 Itesolved, That the number of directors be increased [or reduced, but not below 
 
 the minimum number prescribed by law] from to ; and 
 
 further 
 
 Resolved, That the proceedings of this meeting be entered in the minutes 
 of the corporation and a transcript thereof verified by the president and secretary 
 of the meeting be filed in the offices where the original certificate of incorporation 
 were filed. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary of the Meeting. 
 
 FORM NO. 99 
 
 Notice of Special Meeting of Stockholders to Increase or 'Reduce Number of 
 
 Directors. 
 
 A special meeting of the stockholders of , Inc., 
 
 will be held at No Street, Borough of , City 
 
 of New York, N. Y., on' Friday, tlie day of , 191 . . , at 
 
 o\;lock . . M., for the purpose of determining whether the number of its directors 
 shall be increased from seven to nine; and of transacting such other business as 
 may be brought before the meeting. A list of stockholders entitled to vote at 
 
 said meeting will be taken as of the close of business on Thursday 
 
 , 191... 
 
 If you do not expect to be present at the meeting, kindly sign the enclosed 
 proxy, in the presence of a witness who should also sign, and return said proxy 
 in the enclosed stamped addressed envelope. 
 
 Dated New York, , 101. .. 
 
 Secretary. 
 
1210 FORMS Nos. 100, 101 
 
 FORMS NO. 100. 
 
 Proof of Service of Notice of Meeting of Stockholders to Increase or Reduce 
 
 Directors. 
 
 State of New York, ) 
 County of , , ( 
 
 , being duly sworn, says: At all times herein men- 
 tioned I was [over 18) years old. On the day of , 
 
 191.., 1 served a notice in writing, of which a true copy is hereto annexed, 
 
 upon every stockholders of record of , Inc., by 
 
 depositing in a United States mail-box at the New York post oflSce, New York 
 City, a copy of said notice enclosed in a sealed post-paid envelope addressed 
 to each stockholder of record at his last known post-office address. 
 
 Sworn to before me this day 
 
 of , 191... 
 
 FORM NO. 101. 
 
 Certificate or Verification of Stockholders' Minutes to Increase or Reduce Numler 
 
 of Directors. 
 
 The following transcript of the proceedings of a meeting of the stockholders 
 
 of , Inc., to determine on the increase [or reduction] of said 
 
 corporation's directors, is hereby verified by the president and secretary of said 
 meeting for filing in tlie offices where the original certificates of incorporation of 
 said corporation were filed: 
 
 \Take in Form Xo. 98.] 
 
 Witness our vertiflcations, this day of , 191 . . 
 
 President of Meeting. 
 Secretary of Meeting. 
 
 lAdd Verifications.} 
 
Nos. 102, 103 FORMS 1211 
 
 FORM NO. 1.02. 
 Petition to Supreme Cowrt for Change of Corporate Name. 
 STATE OF NEW YORK, COUNTY OF 
 
 In the Matter of the Petition of 
 
 , Inc., 
 
 a domestic corporation to assume an- 
 other name. 
 
 ; Petition, 
 
 To the Supreme Court of the State of New York: 
 
 The petition of , Inc., respectfully shows : 
 
 First: That it is a domestic stock corporation incorporated under a general 
 law, 1/is. .• [or, a special law, viz.: ]. 
 
 Second: That its principal business ofiBce is situated at , in 
 
 the Judicial District wherein this petition is made. 
 
 Third: That it is not an insurance or railroad corporation or a corporation 
 having banking powers or the power to make loans or deposits or to make 
 insurances. 
 
 Fourth: That its present name is and it desires to assume 
 
 another corporate mame, viz. : 
 
 Fifth: That annexed hereto is a certificate of the Secretary of State that the 
 name which it proposes to assume is not the name of any other domestic cor- 
 poration or a name which he deems so nearly resembling it as to be calculated 
 to deceive. 
 
 Sixth: That the grounds of this application are 
 
 Wherefore the petitioner applies for an order authorizing it to assume the 
 name proposed on a day specified therein, not less than thirty days after the 
 entry of the order. 
 
 ( Corporate Seal ) , Inc., 
 
 Attest : by President. 
 
 Secretary. 
 
 [Add vertification as to a pleading vn a cowrt of record; and annex certificate of 
 
 Secretary of State.l 
 
 FORM NO. 103. 
 
 Secretary of State's Certificate of AvailaUlity of New Name on Change of 
 
 Corporate Name. 
 
 e, }''■■■ 
 
 State of New York, 
 Ofiice of the Secretary of State, 
 
 This ia to certify that I have examined the indices to the names of domestic 
 corporations, the certificates of incorporation of which are filed or recorded in 
 
1212 FORMS Nos. 104, 105 
 
 this office, and find that the name is not the name of any 
 
 other domestic corporation, the certificate of incorporation of which is filed or 
 recorded in this office, or a name so nearly resembling the name of any other 
 
 such domestic corporation as to be calculated to deceive, except 
 
 which filed a certificate of incorporation , , and , 
 
 which filed a certificate of incorporation , 
 
 Witness my hand and the seal of office of the Secretary of State, at the city 
 
 [seal] of Albany, this day of , one thousand nine 
 
 hundred and 
 
 Deputy Secretary of State. 
 
 FOEM NO. 104. 
 
 Notice of Presentation of Petition and Afotion for Change of Corportae Xame. 
 
 Take notice that a petition by , Inc., for permission to assume 
 
 another corporate name, viz. : will be presented to the Supreme 
 
 Court, at a Special Term (Part thereof) to be held at 
 
 at .... o'clock in the noon of the day of , 191 . ., 
 
 or as soon thereafter as counsel can be heard; and a motion then made fur per- 
 mission to assume said new name. 
 
 FORM NO. 105. 
 
 Order Allotting Change of Corporate Name. 
 
 [Title as in Form No. 102.) [Caption of Court Order.) 
 
 On reading and filing the petition herein of , Inc., verified the 
 
 day of , 191. ., and the certificate herein of the Secretary 
 
 of State, dated the day of , 191 .. , and the affidavit of 
 
 , herein, verified the day of , 191 .. , and 
 
 the court being satisfied that said petition i.'* true and that there is no reason- 
 able objection to the change of name proposed and that said pietition has been 
 duly authorized and that notice of the presentation thereof as required by law 
 
 has been made; and after hearing , Esq., of counsel for the 
 
 petitioner in support of the application, and no one appearing in opposition 
 
 thereto, it is, on motion of Messrs , attorneys for tlie 
 
 petitioner. 
 
 Ordered, That , Inc., be and it hereby is authorized to assume 
 
 the name of , on the day of , 191 .. , 
 
 not less than thirty days after tlie entry of this order; and it is further 
 
 Ordered and directed. That this order be entered and the papers on which 
 it was granted filed within ten days thereafter in the office of the clerk of tlie 
 county in which petitioner's certifioate of incorporation is filed, and that a 
 certified copy hereof be filed within ten days after the entry thereof in the 
 office of the Secretary of State; and it is fiirther 
 
No.106 FORMS 1213 
 
 Ordered and directed, That a copy hereof be published within ten days after 
 
 its entry in , a newspaper in the county in which this order is 
 
 directed to be entered, once in each week for four successive weeks. 
 
 Enter 
 
 J. S. C. 
 FORM NO. 106. 
 
 Unanimous Consent of Stockholders to Change of Corporate Principal Office. 
 
 We, being all the stockholders of , Inc., do hereby express in 
 
 writing and duly acknowledge and file in the office of the Secretary of State, our 
 unanimous consent to the change of said corporation's principal office and place 
 of business, as follows: 
 
 First. Said corporation is a stock corporation existing under the laws of New 
 York State, and is not a moneyed corporation. 
 
 Second. We consent to the change of its principal office and place of business 
 from the city [town or county] named in its certificate of incorporation, viz. 
 
 [or, to which it has been changed under the provisions of 
 
 Stock Corporation Law, § 13], to the city [town or county] of , 
 
 State of New York. 
 
 Third. Said corporation desires to actually transact and carry on its regular 
 business from day to day in said (new place of business) . 
 
 Witness our hands as aforesaid, this day of , 191 . . 
 
 [Add individual acknoidedgments.l 
 
 State of New York, ) 
 County of f ' ' 
 
 , being duly sworn, deposes and says that he is the Siecre- 
 
 tary of , Inc., the corporation mentioned in the foregoing instru- 
 
 meflt; that he is the custodian of the stock book containing the names of the 
 stockholders in said corporation; that the persons who have attached their 
 signatures to the foregoing instrument and acknowledged the execution thereof 
 are all the stockholders of said corporation, and that they are the holders of the 
 entire capital stock thereof issued and outstanding. 
 Sworn to befor^ me this 
 day of , 191.. 
 
1214 FORMS Nos. 107-109 
 
 FORM NO. 107. 
 
 Notice of Special Meeting of Stockholders to Change Corppration's Principal 
 
 Office. 
 
 [Adapt from Form 99.] 
 
 FORM NO. 108. 
 
 Minutes of Special Meeting of Stockholders to Change Corporation's Principal 
 
 Office. 
 
 [Adapt from Form yo. 98.] 
 
 FORM NO. 109. 
 Certificate of Officers and Directors of Change of Corporation's Principal Office. 
 
 The following certificate of a change of the principal office and place of busi- 
 ness of , Inc., a, domestic stock corporation, by authorization 
 
 of its stockholders, uilnesselli : 
 
 First. The signers hereof are the president, secretary, and a majority of the 
 directors of said corporation, respectively. 
 
 Second. Said change was autliorized by the stockholders of said corporation 
 by unanimous consent expressed in writing (or, by a vote of the stockholders 
 of said corporation; or, effected by the creation of a new county wholly lyithin 
 the limits and boundaries of an existing county). 
 
 Third. The name of said corporation is 
 
 Fourth.. The city (town) and county where its principal office and place 
 
 of business was originally located is ; ( and the city and 
 
 county to which it was subsequently changed is ) . 
 
 Fifth. The city [town) and county to which it is desired to change its said 
 principal office and place of business is 
 
 Sixth. It is the purpose of said corporation to actually transact and carry 
 on its regular business from day to day at such last-named place. 
 
 Seventh. The names of the directors of said corporation and tlieir respective 
 places of residence are : 
 
 Namf>i. ■ Residences. 
 
No. 110 FORMS 1215 
 
 Witness our signatures and verifications, this day of 
 
 191.. 
 
 President. 
 
 Secretary. 
 
 Directors. 
 lAdd vcrifications.l 
 
 FORM NO. 110. 
 Corporate Annual Report. 
 
 We, the (vice-) president, and , the treasurer [or, sec- 
 retary], of , Inc., a domestic [or foreign] stock corporation doing 
 
 business -n-ithin the State of New York [or, -without the United States] do make 
 the folloTTing annual report as of the first day of January, 19. . : 
 
 First. The amount of said corporation's capital stock is , of 
 
 which is actually issued. 
 
 Second. Ihe amount of said corporation's debts is $ [or, is not in 
 
 excess of $ ] . 
 
 Third. The amount of said corporation's assets is $ [or, is at least 
 
 equal to $ ] . 
 
 Fourth. The names and addresses of all the directors and officers of said cor- 
 poration [and, in the case of u foreign corporation, the name of the person desig- 
 nated in thQ manner prescribed by the statutes of this State, as a person on 
 whom process against said corporation may be served within the State of New 
 York] are: • 
 
 Names. Character of Offices. Addresses. 
 
 Witness our hands and said corporation's seal this .... day of , 191 . 
 
 {Corporate Seal) ( Vice- ) President. 
 
 Attest: 
 
 Secretary [of Treasurer.1 
 
 J 
 
 Secretary. 
 
1216 FORMS Nos. Ill, 112 
 
 FORM NO. 111. 
 
 Corporate Bond. 
 
 [Forms of Corporate Bonds are found in the text of Form No. 112, immediately 
 following, which is a corporate mortgage and trust indenture.^ 
 
 FORM NO. 112. 
 Corporate Mortgage and Trust Indenture. 
 
 TABLE OF CONTENTS. 
 
 PAGES 
 
 Recitals 1219 
 
 Coupon Bonds, Form of 1220 
 
 Interest Coupons, Form of 1222 
 
 Registered Bonds Without Coupons, Form of 1222 
 
 Trustee's Certificate, Form of 1224 
 
 Bonds of Different Series or Refimding may be issued 1224 
 
 Provision of Certificate of Incorporation authorizing Indenture 1224 
 
 Resolution of Directors 1225 
 
 Granting and Pledging Clauses 1225 
 
 Shares Preferred Stock of The Co 1225 
 
 Shares Common Stock of The Co 1225 
 
 Interest in Real and Fixed Property of The Co 1226 
 
 Covenants for Mortgage and Pledge of Additional Property, Stock, Notes, etc. 1226 
 
 Habendum Clause 1227 
 
 Trust Recital 1227 
 
 Article One. 
 
 Issue and Appropriation of Bonds: 
 
 Sec. 1. Total Issue Limited to $ 1227 
 
 All bonds equally secured 1227 
 
 Authentication by Trustee 1228 
 
 2. First Issue, $ 1228 
 
 3. Issue and Use of Remaining $ 1229 
 
 Proceedings for Issue and Appropriation of Reserved Bonds 1229 
 
 Purchase Additional Property 1230 
 
 Construction, Enlargements, Extensions, Betterments, Loans, etc. . . 1231 
 
 4. $-^ of bonds may be used to provide for The Co. 
 
 Debentures 1232 
 
 5. Trustees may rely on Certificates of Certain Officers of the 
 
 Company 1233 
 
 6. Exchange of Coupon Bonds for Registered Bonds without Coupons, 
 
 and vice versa 1233 
 
 7. Surrender of Bonds and Issue of Substitutes therefor 1234 
 
 8. May Issue Bonds at Lower Rate and Maturing Later Date 1234 
 
 9. Replacement of Bonds mutilated or destroyed 1235 
 
 10. Temporary Bonds 1235 
 
 11. Rights Limited to Parties and Bondholders 1235 
 
No. 112 FORMS 1217 
 
 Article Two 
 
 PAGES 
 pOVENANTS OF THE CoMPANT: 
 
 Sec. 1. To pay Interest and Principal free from Tax 1236 
 
 To maintain Agency in city of New York 1236 
 
 Not to extend Time for paying Interest 1236 
 
 2. To. provide for Registration of Bonds 1236 
 
 3. To. pay Taxes and Assessments 1237 
 
 4. Co.venants of Title and Warranty. . . , 1238 
 
 To execute Further Assurances 1238 
 
 . 5. To pledge certain After-Acquired Shares, Bonds, Claims, etc 1239 
 
 6. To mortgage certain After-Acquired Property .' 1239 
 
 7. Indebtedness and Dividends of Controlled Companies Regulated 1239 
 
 8. To Maintain Cash Items and Quick Assets equal to par of Outstand- 
 
 ing Bonds 1.239 
 
 Article Three. 
 Concerning Pledged Securities: 
 
 Sec. 1. Transfer of Pledged Stocks to Trustee 1240 
 
 Trustee may transfer Shares to qualify Directors '....'!'.'.' 1241 
 
 Dbposition of Registered Bonds coming into hands of Tustees 1241 
 
 2. Dividends and Interest on Pledged Stocks and Bonds, payable to 
 
 whom , , 1242 
 
 Payinents of or on account of Principal of Pledged Securities 1242 
 
 3. Voting of Pledged Stock 1243 
 
 Trustee to execute Proxies 1243 
 
 Liens on Property of Controlled Companies Regulated 1244 
 
 Consolidation or Dissolution of Controlled Companies 1244 
 
 Increase or Reduction of Stock of Controlled Companies 1244 
 
 Sale or Lease of Property of Controlled Companies 1245 
 
 4. Renewal, Extension, and Cancellation of Pledged Bonds, etc 1246 
 
 6. Proceedings in case of Liquidation or Judicial Sale of Property of 
 
 Controlled Companies : 1246 
 
 6. Trustee may take steps to protect Bondholders, and join in Reorgani- 
 zation Plan 1247 
 
 Advance of Funds to Protect Security hereof 1247 
 
 Disposition of Cash proceeds of Judicial Sales apportioned to Pledged 
 
 Securities 1248 
 
 Article Four. 
 
 * 
 Remedies of Trustees and Bondholders: 
 
 Sec. 1.' Detached Coupons, lien subordinated 1248 
 
 2. Principal of Bonds may be declared payable upon Default 1248 
 
 Waiver of Default ^. . . 1248 
 
 3. Power of Sale or Proceedings to Foreclose 1249 
 
 4. Notice of Sale by Trustee .' 1250 
 
 Bondholders may direct Trustee 1250 
 
 Adjournments of Sale 1250 
 
 B. C. N. Y.— 77 
 
1218 FORMS No. 112 
 
 PAGES 
 
 5. Delivery of Pledged Securities and Execution of Deed of Mort- 
 
 gaged Property to Purchaser 1250 
 
 Receipt of Trustee to Purchaser a Discharge 1251 
 
 6. Maturity of Principal in Case of Sale 1251 
 
 7. Distribution of Proceeds of Sale 1251 
 
 8. Purchaser may use Bonds to make Payment 1251 
 
 9. Trustee may sue and recover Judgment on Default 1252 
 
 10. Waiver of Redemption, Stay Laws, etc 1253 
 
 11. Limitations on Right of Bondholders to Institute Suits 1253 
 
 12. Remedies Cumulative 1254 
 
 13. No Waiver by Delay 1254 
 
 Article Five. 
 
 Individual Liability ox Part of Stockholders, Officers or Dirsctors 
 Released 1254 
 
 Article Six. 
 Release Clauses 1255 
 
 Article Seven. 
 Defeasance: 
 
 Sec. 1. Until default. Possession of Mortgaged Property to remain in the 
 
 Leather Company 1256 
 
 2. Satisfaction hereof on Payment 1256 
 
 Disposition Pledged Securities on Satisfaction 1256 
 
 3. Provisions in case of Change of Name ^ 1257 
 
 • Article Eight. 
 
 Sec. 1. Authentication of Bondholders' instruments 1257 
 
 2. Apparent Title to Bonds 1258 
 
 Article Nine. 
 Concerning the Trustee : 
 
 Conditions of Accepting Trusts 1258 
 
 Immunities and Compensation of Trustee 1258 
 
 Trustee may Resign 1259 
 
 Article Ten. 
 Fuethek Concerning the Trustee: 
 
 Removal of Trustee 1259 
 
 Appointment in case of Vacancy in Trustee 1260 
 
 Proceedings in case of such Appointment 1260 
 
 Conditions of Appointment of Co-trustee or additional Trustee 1261 
 
 Trustee may rely on Certificates of certain officers of the Company 1262 
 
••^o- 112 FORMS 1219 
 
 Article Eleven. 
 
 PAGES 
 
 Definition of Certain Terms 1262 
 
 Signatures of Parties 1263 
 
 Acknowledgments 1263 
 
 Note.— Neither the foregoing Table of Contents nor the Marginal Notes con- 
 stitute any part of the Indenture or have a bearing on the meaning or construction of any 
 of its provisions. 
 
 Parties. 
 
 An Indenttibe, dated the day of , A. D. One Thousand, Nine 
 
 Hundred and , between , a, corporation created and 
 
 existing under the laws of the State of (hereinafter termed 
 
 ^^^ Company) , party of the first part, and Trust Company 
 
 ) a corporation created and existing under the laws of the State 
 
 "^ (hereinafter termed the Trustee) , party of the second part: 
 
 Recitals. 
 
 Whereas, the Company, in the exercise of its corporate powers and 
 
 for the purpose of furthering and accomplishing its corporate objects and pur- 
 poses, has acquirecl, and is about and contemplates hereafter to acquire and to 
 become interested in, certain properties, assets, bonds, debentures, and other obli- 
 gations, and, also, shares of the respective eapital stocks of other corporations 
 hereinafter referred to; and desires to provide for the custody and preservation, 
 of the certificates representing and evidencing such shares of stock and of any 
 bonds, debentures and other obligations that may become subject to the provi- 
 sions hereof, now owned or which may hereafter be acquired by it; 'and 
 
 Purposes of Indenture. 
 
 Whereas, for the purpose of making payment, in part, for the properties, 
 assets, bonds, debentures, obligations and shares of capital stock so acquired, or 
 about or hereafter to be acquired, and of providing funds (a) to acquire out- 
 standing obligations of corporations a majority in amount of whose then out- 
 standing capital stock shall have been acquired or be controlled by the 
 
 Company; (b) to make loans and advances to enable said corporations, and to 
 otherwise aid them, to discharge their outstanding indebtedness, in whatever form 
 the same may be evidenced, and to construct, equip, enlarge, better, extend and add 
 to their properties, and to otherwise promote their corporate purpose; (c) to 
 make additions to and betterments, extensions and enlargements of the prop- 
 erties now owned or hereafter acquired by the Company; (d) to otherwise 
 
 further and accomplish its several and respective corporate powers and objects; 
 
 and (e) for other lawful purposes, the Company has resolved to maKe 
 
 and to issue its bonds, of the several denominations hereinafter specified, payable 
 
 on the day of , , or on a day or date subsequent 
 
 thereto, in gbld coin of the United States of America of or equal to the present 
 standard of weight anit fineness, and bearing interest at a rate not exceeding 
 
1220 FORMS No. 112 
 
 five per cent, per annum, payable semi-annually, in like gold coin, on such days as 
 may be specified and provided in the bonds to be issued hereunder from time to 
 time; and 
 
 Description of First Series of Bonds. 
 
 Whereas, the first series of the bonds authorized hereby, aggregating the 
 
 principal sum of Dollars ($ ) , and as well any 
 
 otlier bonds which the Board of Directors of the Company may resolve 
 
 and direct to be issued hereunder by such description and designation, shall be 
 
 known as the Company's First Lien Twenty- Year Five Per Cent. Gold 
 
 Bonds, and each of said bonds shall be payable on the day of 
 
 , and shall bear interest at the rate of five per cent, per annum until 
 
 paid, payable in semi-annual instalments on the first days of and 
 
 of each year; and 
 
 Denominations of Bonds. 
 
 Whereas, all the bonds authorized hereby shall be issued either as coupon 
 bonds of the denomination of One Thousand Dollars ($1,000) each, or as regis- 
 tered bonds without coupons of the denomination of One Hundred Dollars 
 ($100) or of One Thousand Dollars ($1,000) or of Ten Thousand Dollars 
 ($10,000) each, or partly as. such coupon bonds and partly as such registered 
 bonds without coupons of any such denominations, as the Board of pirectors 
 
 of the Company may from time to time fix and determine; and the 
 
 several coupon bonds may be registered as to principal, and may also, to the 
 extent hereinafter mentioned, be exchanged for registered bonds without coupons 
 of the same series; and each bond is to bear a distinctive number or designation; 
 and 
 
 Whereas, the said coupon bonds are to be numbered in consecutive order, and 
 each of then* is to be substantially of the following form, the number of the bond 
 being inserted in the blank therefor, viz. : 
 
 UNITED .STATES OF AMERICA. 
 
 State op 
 
 COMPANY. 
 
 Form of Coupon Bond. 
 First Lien Twenty-Year Five Per Cent. Gold Bond. 
 $1,000 $1,000 
 No No 
 
 Company, a corporation created under the laws of the State of 
 
 , and hereinafter termed the Company, for value received, 
 
 hereby promises to pay, on the first day of , A. D., , at the 
 
 ofifice or agency of the Company in the city of , to bearer, 
 
 or, if registered, to the registered holder of this bond, One Thousand Dollars in 
 gold coin of the United States of or equal to the present standard of weight and 
 fineness, and to pay interest thereon from the date hereof at the rate of five 
 per cent, per annum until paid, such interest to be payable at such office or 
 
 agency in like gold coin, semi-annually, on the first days of and 
 
 in each year, but only upon presentation and surrender of the respective coupons 
 for such interest hereto attached, as they severally mature. All payments upon 
 this bond, both of principal and interest, shall be made without deduction of any 
 
No. 112 FORMS 1221 
 
 tax or taxes which the Company may lawfully be requii'ed to pay 
 
 thereon or to retain therefrom, under any present or future law of the United 
 States, or of any State, county or municipality therein. 
 
 This bond is one of a duly authorized issue of coupon bonds and registered 
 
 bonds of the Company, the aggregate amount whereof is limited to the 
 
 principal sum of Dollars, all of which bonds have been issued, or are 
 
 to be issued, pursuant to and are to be secured ratably by, and are subject to, an 
 indenture dated , , duly executed by the Com- 
 pany to the Trust Company , as Trustee, to which inden- 
 ture reference is hereby made with the same effect, in all respects, as if the 
 provisions of said indenture were herein fully set forth. All rights of action 
 and otherwise of the holder hereof under or by reason of this bond are agreed 
 by said holder to be expressly subject to the provisions of said indenture. 
 
 No recourse shall he had for the payment of any part of the principal or 
 interest of this bond against any incorporator, or any present or future stock- 
 holder, officer, or director of the Company, either directly or through 
 
 the Company, by virtue of any statute, or by enforcement of any 
 
 assessment, or otherwise; any and all liability of the said incorporators and of 
 
 the present and any future stockholders, directors and officers of the 
 
 Company being, by the acceptance hereof and as a part of the consideration for 
 the issue hereof, expressly released. 
 
 This bond sha,ll pass by delivery unless registered in the owner's name on the 
 
 books of the Company at its office or agency in the city of New York, 
 
 such registry being noted on the bond by the bond registrar of the 
 
 Company, after which no transfer shall be valid unless made on said books in 
 the manner prescribed in said indenture and similarly noted on the bond; but 
 the same may be discharged from registry by being transferred in like manner 
 to bearer, after which transferability by delivery shall be restored,; but again, 
 from time to time, this bond may be registered or transferred to bearer as above. 
 Such registration, however, shall not affect the transferability of the coupons for 
 the interest hereon, by delivery merely, and payment to bearer thereof shall 
 
 discharge the Company in respect of the interest therein mentioned, 
 
 whether or not the bond shall have been registered 
 
 This bond, with the coupons for all interest instalments which shall not have 
 matured, may also, as provided in said indenture, be exchanged for a registered 
 bond without coupons on payment of the charges provided in said indenture. 
 
 Neither this bond nor any coupon for interest thereon shall become or be 
 valid or obligatory for any purpose until and unless the certificate indorsed 
 hereon shall have been duly signed by the Trustee under said indenture. 
 
 In witness whereof, said Company has caused these presents to be 
 
 signed by its President or one of its Vice-Presidents, and its corporate seal to be 
 hereunto affixed and attested by its Secretary or one of its Assistant Secretaries, 
 arid coupons for such interest bearing the engraved fac-simile signature of its 
 
 Treasurer to be attached hereto, this day of , A. D , 
 
 Company, 
 
 by 
 
 President. 
 Attest: 
 
1222 FORMS No. 112 
 
 And wiiebeas, at the time of the issue thereof, there are to be attached to each 
 of said coupon bonds hereby secured coupons representing the instalments of 
 interest which may, from time to time, become due thereon; and every such 
 coupon is to be substantially of the following form, the number thereof, the date 
 of payment, the number of the bond, and the engraved fac-simile signature 
 of the Treasurer of the Company being appropriately inserted, viz. : 
 
 Form of Coupon. 
 
 Xo $25. 
 
 Coupon for Twenty-Five Dollars gold coin o^ the United States of America, 
 
 payable to bearer on , 19 . . at the office or agency of 
 
 Company in the city of Xew York, without deduction for taxes, for six months' 
 interest due on that day, on $1,000 First Lien Twenty- Year Five Per Cent. Gold 
 
 Bond of said company. No , subject to the terms of said bond and of the 
 
 indenture therein mentioned. 
 
 Treasurer. 
 
 And whereas, each of the said registered bonds without coupons is to be 
 substantially of the following form, the number, principal sum and date of the 
 bond and the name of tlie payee thereof being appropriately inserted, viz. : 
 
 Form of Registered Bond Without Coupons. 
 UNITED STATES OF AMERICA. 
 
 State of 
 
 COMPANY. 
 
 Registered First Lien Twenty- Year Five Per Cent. Gold Bond. 
 No No 
 
 Company, a corporation created under the laws of the State of 
 
 , and hereinafter termed the Company, for value received, 
 
 hereby promises to pay to or registered assigns, on the 
 
 first day of , A. D , at the office or agency of the 
 
 Company in the city of New York, the sum of Dollars 
 
 in gold coin of the United States of or equal to the present standard of weight 
 
 and fineness, and to pay interest thereon, from the first day of , or 
 
 the first day of , next preceding the date hereof, at the rate of five per 
 
 cent, per annum until paid, such interest to be payable to the registered holder 
 hereof at such office or agency, in like gold coin, semi-annually, on the first 
 
 days of and in each year. All payments upon this 
 
 bond, both of principal and interest, shall be made without deduction of any tax 
 
 or taxes which the Company may lawfully be required to pay thereon 
 
 or U> retain therefrom under any present or future law of the United States, or 
 of any State, county, or municipality therein. 
 
 This bond is one of a duly authorized issue of coupon bonds and registered 
 
 bonds of the Company, the aggregate amount whereof is limited to the 
 
 principal sum of Dollars, all of which bonds have been 
 
 issued, or are to be issued, pursuant to, and are to be secured ratably by, and 
 
 are svibject to, an indenture dated first, , duly executed by the 
 
 Company to the Trust Company , as Trustee, 
 
 to which indenture reference is hereby made with the same eflFect, in all respects, 
 
No. 112 FORMS 1223 
 
 as if the provisions of said indenture were herein fully, set forth. All rights of 
 action and otherwise of the holder hereof under or by reason of this bond are 
 agreed by said holder to be expressly subject to the provisions of said indenture. 
 
 No recourse shall be had for the payment of any part of the principal or inter- 
 est of this bond against any incorporator, or any present or future stockholder, 
 
 officer or director of the CompHny, either directly or through the 
 
 Company, by virtue of any statute or by enforcement, of any assess- 
 ment, or otherwise; any and all liability of the said incorporators, and of the 
 present and any future stockholders, directors and officers of the Com- 
 pany being, by the acceptance hereof and as a part of the consideration for the 
 issue hereof, expressly released. 
 
 This bond is transferable, but only in the manner prescribed in said inden- 
 ture, on the books of the Company, at its office or agency in the city 
 
 of New York, upon surrender and cancellation of this bond, and thereupon a 
 new registered bond or new registered bonds without coupons or, at the election 
 of the transferee, — provided, always, that the registered bond or bonds without 
 coupons desired to be exchanged shall be for or aggregate the principal sum of 
 One Thousand Dollars, or some multiple thereof, — a new coupon bond or new 
 coupon bonds, in each case of the same series and for an equivalent principal 
 sum, will be issued to the transferee in exchange therefor, on payment of the 
 charges provided in said indenture. But no registered bond without coupons 
 of or exceeding One Thousand Dollars shall be exchangeable for registered 
 bonds without coupons of a less denomination than One Thousand Dollars each. 
 
 This bond shall not become or be valid or obligatory for any purpose until and 
 unless the certificate indorsed hereon shall have been duly signed by the Trustee 
 under said indenture. 
 
 In witness WHEREOr, said Company has caused these presents to 
 
 be signed by its President or one of its Vice-Presidents, and its corporate seal 
 to be hereunto affixed and to be attested by its Secretary or one of its Assistant 
 Secretaries, this day of , 191 . . 
 
 Company, 
 
 by 
 
 President. 
 
 Attest: 
 
 Secretaiy. 
 
 And whebeas, on each of said coupon bonds and on each of said registered 
 bonds without coupons there is to be indorsed a certificate of said Trustee, or its 
 successor appointed hereunder, that such bond is one of the bonds issued under 
 this Indenture; which certificate shall be the only and conclusive evidence that 
 such bond is entitled to the security and benefits of this indenture; and no such 
 bond shall be secured by this indenture, or shall be valid or obligatory for any 
 purpose, unless and until such certificate shall have been executed by said 
 Trustee, or by its successor appointed hereunder; which said certificates shall be 
 substantially of the following form, viz.: 
 
1224 FORMS No. 112 
 
 Form of Trustee's Certificate. 
 This is to cebtift that this bond is one of series of bonds of Com- 
 pany mentioned in the indenture within referred to. 
 
 . . . '. COMPANT, 
 
 Trustee, 
 by 
 
 And Whereas, each of the coupons for interest to be attached to said coupon 
 bonds is to bear the fac-simile signature of the present Treasurer or of any 
 
 future Treasurer of the Company, and for that purpose the 
 
 Company may adopt and may use the engraved fac-simile signature of any person 
 who shall have been such Treasurer, notwithstanding the fact that he may 
 have ceased to be such Treasurer at the time the bonds to which such coupons 
 belong shall actually be authenticated or be delivered; and 
 
 Substitution and Refunding of Bonds. 
 Whereas, all bonds of any subsequent series which may be issued under this 
 indenture, or in substitution for or in lieu of or in succession to any of the bonds 
 authorized hereby, shall bear such date or dates, shall be payable at such time 
 
 or times, not earlier than , . . , , and shall bear interest at such 
 
 rate or rates, not exceeding five per cent, per annum, as the Board of Directors 
 of the Company may hereafter determine ; and said bonds of any sub- 
 sequent series, whether coupon bonds or registered bonds without coupons, and 
 the coupons to be attached to the coupon bonds, shall all, as nearly as the said 
 Board of Directors shall deem to be practicable, be substantially of the same 
 tenor and purport as the aforesaid respective forms of said coupon bonds and 
 coupons and registered bonds without coupons, except as to the dates, time or 
 times of payment, the numbers thereof, and the rate or rates of interest 
 therein specified; but in no event shall the aggregate amount of any and all bonds 
 which may at any time be issued and outstanding under and in pursuance of this 
 
 indenture, exceed the principal sum of Dollars ; and any and all bonds 
 
 which may at any time be oustanding and which have been issued under and in 
 pursuance of this indenture, are to be secured ratably thereby; and 
 
 Provisions of Certificate of Incorporation. 
 
 Whereas, it is provided . in the certificate of incorporation of the 
 
 Company, "that, among its other powers, and without the assent or other action 
 of the stockholders, the Board of Directors shall have power, by resolution of said 
 board and for any lawful purpose, to authorize the execution of the bonds of 
 
 the corporation not to exceed the principal sum of Dollars ( $ ) , 
 
 par value, at any one time outstanding, which bonds shall be in such form and 
 issued and delivered at such times and for such purposes and under such terms 
 and conditions as said board may determine, and said Board of Directors shall 
 also have power, by resolution of said board, to authorize the execution of an 
 indenture, mortgaging and pledging all or any part of the property or assets 
 of the corporation, then owned or which may thereafter be acquired by it, to 
 secure the payment of said bonds and the interest thereon and the performance 
 of the covenants in said indenture contained, which indenture shall be in such 
 form and embody such provisions, covenants, agreements and conditions as said 
 board may determine," and 
 
No. 112 FORMS 1225 
 
 Resolution of Bowrd of Directors. 
 
 Whereas, at a meeting of the Board of Directors of the Company, 
 
 duly called and regularly held on the day of , , a draft 
 
 indenture of the form and effect of these presents was submitted and read, and 
 thereupon said Board of Directors duly and unanimously did resolve that, in 
 
 behalf of the Company, this indenture be executed by the President or 
 
 one of the Vice-Presidents of the Company, and its corpoirate seal be 
 
 affixed thereto and attested by its Secretary, and that this indenture be acknowl- 
 edged and thereupon delivered to the Trust Company, as Trustee ; that 
 
 the bonds of the Company, substantially of the form and effect set forth 
 
 in this indenture, be executed from time to time, in the name and in behalf of 
 
 the Company, by its President or one of its Vice-Presidents, and that 
 
 the coi-porate seal of said Company be thereto affixed and attested by 
 
 the Secretary or one of the Assistant Secretaries of the Company ; 
 
 and that, from time to time, bonds of said Company be issued, authenti- 
 cated and delivered in the manner and upon the terms and conditions and for 
 the purposes set forth in this indenture, — 
 
 Xow, Therefore, this Indenture Witnesseth: 
 
 That, in order to secure the payment of the principal and interest of all the 
 Company's bonds at any time issued and outstanding under this inden- 
 ture, according to their tenor, purport and effect, and the performance and 
 
 observance of each and every the covenants and agreements of the 
 
 Company herein contacined, and to declare the terms and conditions upon which 
 said bonds are issued, received and held, and for and in consideration of 
 the premises and of the purchase and acceptance of such bonds by the holders 
 thereof, and of the sum of One Hundred Dollars to it duly paid by the Trustee 
 at or upon the ensealing and delivery of these presents, the receipt whereof 
 is hereby acknowXedged; 
 
 Granting Clause. 
 
 Company, party of the first part hereto, has granted, sold, bar- 
 gained, aliened, released, enfeoffed, conveyed, confirmed, pledged, assigned and 
 transferred, and by these presents does grant, sell, bargain, alien, release, enfeoff, 
 
 convey, confirm, pledge, assign and transfer, unto Trust Company, as 
 
 Trustee, party of the second part, and its several successors in the trust hereby 
 created : 
 
 FiEST. — The following shares of capital stock, the certificates for which, duly 
 indorsed for transfer in blank, have been delivered to the said Trustee, namely: 
 
 Description Shares of Stock of The Company. 
 
 ( ) shares, of the aggregate par value, of $ of the preferred 
 
 stock of The Company, a corporation organized and existing under the 
 
 laws of the State of (hereinafter termed The Company), 
 
 out of the total outstanding preferred capital stock of said company consisting 
 
 of ( ) shares of the par value of One Hundred Dollars 
 
 ($100) each. 
 
 ( ) shares, of the aggregate par value of $ 
 
 of the common stock of The Company, a corporation organized and 
 
1226 FORMS No. 112 
 
 existing under the laws of the State of out of the total outstanding 
 
 common stock of said company consisting of ( ) s'lares 
 
 of the par value of One Hundred Dollars ($100) each. 
 
 The certificates aforesaid have been stamped, and the certificates for any and 
 all additional or further shares of stock and any bonds, debentures, or other 
 obligations, as and when the same shall, under provisions hereof, become subject 
 to the lien and charge of this indenture, shall likewise be stamped, with sub- 
 stantially the following words (hereinafter sometimes termed the Indenture 
 Stamp ) , to wit : 
 
 Indenture Stamp. 
 
 " This instrument is held under an Indenture made by the 
 
 Company to the Trust Company, as Trustee, dated 
 
 , and is subject to be disposed of only as in said Indenture provided." 
 
 I'nterest id Real and Fixed Property of The Company. 
 
 Second.— All the rigiit, title and interest of the Company in and to 
 
 the real and other fixed property of every kind and nature of The 
 
 Company; and, if, as and when the legal title to the said property shall be 
 
 acquired by the Company, in whole or in part, the lien of this indenture 
 
 shall attach to all the veal an* other fixed property so acquired. 
 
 After-acquired Hecurities and Property. 
 
 Thikd. — The Company further covenants and agrees that, from time 
 
 to time hereafter (a) any and all additional shares of the capital stock of The 
 
 Company which may, in any manner, be acquired by the 
 
 Company; and (6) if, as and when the Company, or any one for it, 
 
 shall out of the proceeds of or in any way representing any of the bonds issued 
 and to be issued hereunder, or of or iji any way representing the shares of stock 
 or other securities, or any of them, hereby pledged or agreed to be, acquire 
 
 any shares of stock of any corporation other than The Company, or any 
 
 bonds, debentures or other obligations of The Company or of any other 
 
 corporation, or any other securities, or any real or fixed property of any nature 
 whatsoever, the shares of stock, bonds, debentures, obligations or other securities, 
 or the real or fixed property, as the case may be, so acquired, shall, immediately 
 upon the acquisition or receipt thereof, be and be deemed to be mortgaged or 
 pledged, assigned and transferred to the Trustee hereunder; and all such stocks, 
 bonds, debentures, evidences of indebtedness, obligations and other claims and 
 securities, and the evidences thereof, shall be delivered (duly indorsed in blank 
 wherever necessary) to the Trustee, and be thereupon stamped with the Indenture 
 Stamp. And all such addition&l property shall be held and applied under and in 
 
 accordance with this indenture as if owned by the Company and by it 
 
 hereby mortgaged or pledged and transferred at the delivery hereof. 
 
 All the property, real and personal, in any way mortgaged, pledged, assigned 
 or transferred to the Trustee for the purposes of or subject to this indenture, 
 or agreed or intended to be, is hereinafter sometimes termed " the property hereby 
 mortgaged and pledged." 
 
No. 112 FORMS 1227 
 
 Hahendum, 
 
 To have and to hold all and singular, the said premises, properties and 
 shares of stock, and also any and all additional shares of stock and all bonds, 
 debentures, evidences of indebtedness, obligations and other property, of any 
 kind and of every nature, that, by virtue of any provision hereof, shall hereafter 
 become subject to this indenture, to the Trustee, its successors and assigns, 
 forever : 
 
 Trusts Declared. 
 
 But in trust, nevertheless, under and subject to the conditions and provisions 
 hereinafter set forth, and for the equal and proportionate benefit and security 
 of all present and future holders of the bonds and interest obligations issued and 
 to be issued hereunder and secured by this indenture, and to secure the payment 
 of such bonds and interest obligations, when payable in accordance with the 
 provisions of such bonds and interest obligations, and the performance of, and 
 
 compliance with, the covenants and agreements of the Company in this 
 
 indenture i<et forth, without preference, priority, or distinction, as to lien or 
 otherwise, of any one bond over any other bond, by reason of priority in the 
 issue, sale or negotiation thereof, or by reason of the purpose of its issue, or 
 by reason of any other cause; and after payment of the principal and interest 
 of such bonds and interest obligations, or after provision for the satisfaction 
 thereof as hereinafter authorized, then upon the further trusts hereinafter set 
 forth. 
 
 And it is hereby covenanted and agreed that all such bonds, with the coupons 
 for interest on any coupon bonds, are to be issued, authenticated and delivered, 
 and that all property, shares of stock, bonds and other securities subject or to 
 become subject to the lien of this indenture, are to be held subject to the 
 further covenants, conditions, uses and trusts hereinafter set forth; and the 
 
 Company covenants and agrees with the Trustee hereto and with the 
 
 respective holders from time to time of said bonds and coupons or any part 
 thereof, as follows, namely: 
 
 ARTICLE ONE. 
 Description of Bond Issue. 
 All Bonds Ratably Secured, 
 
 Section 1. This indenture is to be a continuing lien to secure the full and 
 final payment of the principal and interest of all bonds which may, from time 
 to time, be created, issued and authenticated under the same, to an amount not 
 exceeding, in the aggregate of the principal thereof at any one time outstanding 
 and secured hereby, the sum of Dollars ; but upon the payment, pur- 
 chase, or other acquisition and cancellation an'd deposit with the Trustee of any 
 of the bonds issued or to be at any time hereafter issued under this indenture, 
 an equal amount of bonds, face value, maturing at such time or times, not 
 
 earlier than , . . , , and bearing interest at such rate or rates, not 
 
 exceeding five per cent, per annum, as the Board of Directors of the 
 
 Company, shall, from time to time, determine, may, except as otherwise herein- 
 after provided, be made and issued by the Company and be authen- 
 ticated and delivered hereunder as hereinafter provided, in lieu of and in sub- 
 stitution for or in succession to, the bonds so paid, purchased, or otherwise 
 acquired and canceled and deposited. All bonds issued under and in pursuance 
 
1228 FORMS No. 112 
 
 of this indenture and at any time outstanding, shall in all respects be equally 
 and ratably secured thereby, without preference, priority or distinction on account 
 of the actual time or times of the issue of the said bonds or the date or dates of 
 the maturity thereof, or of any of them, so that all of such bonds at any time out- 
 standing shall have the same right, lien and preference under and by virtue of 
 this indenture, and shall all be equally secured thereby, with like effect as if 
 they Lad all been made, executed and authenticated simultaneously on the date 
 heieof, whether the same, or any of them, shall actually be sold or disposed of 
 at such date, or whether they, or any of them, shall be sold or disposed of at 
 some future date, or whether they, or any of them, shall have been authorized 
 to be issued under the foregoing resolution of the Board of Directors of the 
 
 Company, or may be authorized to be issued by a resolution 
 
 hereafter adopted by the said Board of Directors. 
 
 Proceedings for Issue of Bonds.- 
 
 From time to time the bonds to be secured hereby shall be executed by the 
 
 Company and by it shall be delivered for authentication to the 
 
 Trustee, and thereupon, as provided in this Article and not otherwise, the 
 
 Trustee shall authenticate and deliver the same. At the option of the 
 
 Company, from time to time, any of such bonds may be executed, authenticated 
 aind delivered either as coupon bonds or as registered bonds without coupons, 
 and such bonds may be of any of the denominations authorized by this indenture 
 
 Atitlientication hy Trustee. 
 
 Before authenticating or delivering any coupon bonds hereby secured, the 
 Trustee shall detach and shall cancel all coupons thereof then matured, anc^ 
 every registered bond without coupons shall be dated on the day of the actual 
 authentication thereof. Only such of said bonds as shall bear thereon a certifi- 
 cate substantially in the form hereinbefore recited, duly executed by the Trustee, 
 shall be secured by this indenture, or shall be entitled to any lien or benefit 
 hereunder. No such bond, nor any coupon thereunto attached, shall be obliga- 
 tory or valid for any purpose until and unless such certificate shall be duly 
 indorsed on such bond. Every such certificate of the Trustee, upon any bond 
 executed by the Company, shall be conclusive and the only evi- 
 dence that the bond so authenticated was duly issued and that the same is 
 entitled to the benefit of any part of the security and trusts herein created. 
 
 First Series; Disposition. 
 
 Section 2. Of the said first series of First Lien TwentyrYear Five Per Cent. 
 Oold Bonds authorized to be issued' under and to be secured by this indenture, 
 
 bonds for the aggregate principal sum of Dollars 
 
 ( $ ) par value, shall forthwith be executed by the 
 
 Company, and, as soon as may be after the execution of this indenture, shall, 
 be delivered to the Trustee for authentication, and, without any further action 
 on the part of the Company, shall by the said Trustee be authenti- 
 cated and delivered to the Trust Company of New York, as Deposi- 
 tary, or upon its written order; and said Depositary shall not by virtue hereof 
 be accountable to the Company, or to the Trustee, or to any other 
 
No. 112 POEMS 1229 
 
 person, for or in respect of the bonds so delivered, or the disposition or the use 
 thereof, or of the proceeds of the same 
 
 Purposes for Which Remaining Bonds May he Issued. 
 
 Section 3. The remaining Dollars, ($ ) , 
 
 par value, of the said first series of $ , par value, of bonds 
 
 authorized under and secured by this indenture, and any or all of the remaining 
 Dollars ( $ ) , par value, of the bonds author- 
 ized under and secured by this indenture, except only to the extent that any 
 of said bonds may be applied and authenticated as in section 4 of this Article 
 specified and provided,! shall be authenticated and delivered solely as in this 
 section provided. 
 
 All of said remaining bonds shall be subject to be and shall be authenticated 
 
 and delivered by the Trustee to the Company, or upon its order ; 
 
 and the same, or the proceeds thereof, may be used or applied by the 
 
 Company for or to any or all of the following purposes : 
 
 ( 1 ) To acquire and pay for any and all additional shares of the preferred 
 stock of The Company ; and 
 
 (2) To acquire and pay for property purchased or caused to be purchased, or 
 for any shares of stock, bonds, debentures or other obligations of any other 
 
 corporation, which the Company is or may be, by its certificate of 
 
 incorporation or any amendment thereof or by law, authorized to acquire or to 
 be interested in; and 
 
 ( 3 ) To make loans to The Company, or any other corporation 
 
 a majority in amount of whose then outstanding capital stock may be held or 
 controlled by the Company at the time ; and 
 
 (4) To make payment for any enlargements, extensions or betterments of or 
 additions to any of the properties of the Company; and 
 
 (5) To otherwise promote and accomplish the several and respective corporate 
 powers, purposes and objects set forth in the certificate of incorporation of the 
 Company or any amendment thereof. 
 
 From time to time, when authorized by a resolution of the. Board of Directors 
 
 or Executive Committee of the Company, the said bonds shall, 
 
 by the Trustee, be authenticated and delivered as follows, to wit: 
 
 Authentication of Bonds for Securities or Property Purchased or for Loans to 
 
 Other Corporations. 
 
 ( a ) Whenever the Board of Directors or Executive Committee of the 
 
 Company shall pass a resolution finding and declaring ,.( 1 ) that the 
 
 Company has purchased or arranged to purchase or acquire any additional shares 
 
 of the preferred stock of The Company, or any or all of the 
 
 property or assets of The Company, or of any other person, firn:» 
 
 or corporation, or any real estate or plants, or any shares of stock, bonds, or 
 other obligations of any other corporation, or any other property whatsoever, 
 provided always that the said property, assets, shares of stock, bonds, and other 
 obligations are such as the Company is or may be lawfully author- 
 ized to purchase, or acquire, or finding and declaring (^) that it has loaned the 
 sum stated in said resolution to The Company, or to any other 
 
1230 FORMS No. 112 
 
 eoiporation a majority in amount of whose then outstanding capital stock may 
 
 be held or controlled by the Company at the time, and shall 
 
 deliver to the Trustee a copy of such resolution, certified as such by the Presi- 
 dent or one of the Vice-Presidents and by the Secretary or one of the Assistant 
 
 Secretaries of the Company, accompanied by a certificate, signed 
 
 by the President or one of the Vice-Presidents and by the Treasurer or one of 
 
 the Assistant Treasurers of the Company, stating the amount, in 
 
 par \'alue, of the said bonds agreed or necessary to be issued on account of such 
 purchase or to provide the funds to enable the same to be made, or so loaned or 
 agreed to be loaned, and, in each case, that the amount paid for or the value 
 of the real estate, plants, shares, bonds or other property or securities so pur- 
 chased or acquired, or arranged to be, was or is not less than the par value of 
 the bonds so to be issued on account thereof, the Trustee shall authenticate an 
 amount of the bonds which are then subject to the provisions of this section, 
 not to exceed, in par value, the amount thereof stated in such copy of such 
 resolution and in said certificate to have been agreed or to be necessary to be 
 
 issued by the Company, for said property, or for such shares of 
 
 stock, bonds, or other obligations, or so loaned or agreed to be loaned, and shall 
 deliver such an amount of the bonds, so authenticated, as may be directed in 
 writing by the President or one of the Vice-Presidents and the Treasurer or one 
 
 of the Assistant Treasurers of the Company, upon there being 
 
 ( 1 ) deposited with the Trustee an amount in cash equal to the par value of 
 the bonds so authenticated and delivered; or (2) mortgaged or pledged to the 
 Trustee hereunder, the property so acquired, or arranged to be acquired, in each 
 case subject to all the terms and conditions of this indenture; or (3) delivered 
 to the Trustee, certificates for the shares of stock, or the bonds, notes or other 
 obligations of the other corporation or corporations thus purchased or acquired 
 or given to evidence the loan thus made, and which may be mentioned in the 
 copy of such resolution of said Board of Directors or Executive Committee, and 
 in the certificate in this section last above referred to, properly indorsed or 
 assigned for transfer in blank (if the same be not in terms payable to bearer). 
 The Trustee shall pay and disburse any cash deposits so made with it upon the 
 order of the President or one of the Vice-Presidents and of the Treasurer or 
 
 one of the Assistant Treasurers of the Company that the amount 
 
 the said Trustee of a mortgage or pledge of the property, or of certificates for 
 said shares of stock, or of the bonds, notes or other obligations mentioned in 
 the copy of such resolution above referred to, properly assigned or indorsed in 
 blank (if the same be not in terms payable to bearer), and also of a certificate 
 signed by the President or one of the Vice-Presidents and by the Treasurer or 
 
 one of the Assistant Treasurers of the Company that the amount 
 
 paid for or tke value of such property, or shares of stock, bonds, notes or obliga- 
 tions so mortgaged or so pledged or delivered was or is not less than the sum 
 in cash so directed to be paid and disbursed. And the Trustee shall thereupon 
 stamp or cause to be stamped on each such stock certificate, bond, note, or other 
 obligation, the aforesaid Indenture Stamp. All such property so mortgaged or 
 pledged to the Trustee, and any and all such shares of stock, bonds, notes, or 
 other obligations, so delivered to the Trustee, shall be held subject to and for 
 the purposes of the mortgage, pledge, security, trusts and conditions in and by 
 tliis indenture made, created and declared, with the same force and effect as if 
 
No. 112 FORMS 1231 
 
 the said property, shares of stock, bonds, notes, and other obligations had been 
 and were speeiflcally included and described in the granting and pledging 
 clauses of this indenture. The Trustee may rely upon the certificate of the 
 President or one of the Vice-Presidents and of the Treasurer or one of the 
 Assistant Treasurers of the Company, and the same shall be con- 
 clusive evidence in favor of the Trustee, as to the amount of hereby secured 
 bonds agreed or necessary to be issued for or on account of the said property, 
 or said shares of stock, bonds, or other obligations, and as to the amount loaned 
 to any such other corporation, and as to any other matter in this section 
 referred to, all as mentioned in said certificate delivered to the said Trustee, and 
 
 in respect of the right and power of the Company to acquire and 
 
 hold the same, but may, in its discretion and at the expense of the 
 
 Company, require further proof as to such amount and as to such right and 
 power, and shall be entitled to rely upon the report of any expert or counsel it 
 , may select in the premises. Said Trustee shall not, however, be under a duty to 
 require such additional proof, or liable for not requiring the same. 
 
 Authentication of Bonds for Construction, Enlargements, Betterments, etc. 
 
 ( 6 ) Whenever the Board of Directors or Executive Committee of the 
 
 Company shall pass a resolution finding and declaring that, to its satisfaction 
 and approval, the properties, plants, and appliances of the Com- 
 pany, or of The Company, or of any corporation a majority 
 
 in amount of whose then outstanding capital stock shall be held or controlled 
 
 by the Company at the time, have been constructed, acquired, 
 
 enlarged, extended, bettered, or added to, and also finding and declaring the 
 
 amoimt in cash which has been expended, applied or loaned by the 
 
 Company for or on account of such construction, acquisition, enlargements, 
 extensions, betterments, or additions, in addition to the proceeds of any other 
 bonds theretofore issued for that purpose under this indenture, and if sucli 
 enlargements, extensions, betterments, or additions shall, in the judgmeiit of 
 said Board of Directors or Executive Committee, consist of fixed property, then 
 further finding and declaring that the same have been constructed, erected or 
 made upon premises the title to which is then subject to this indenture, or if 
 such new property, enlargements, extensions, betterments, or additions shall 
 have been constructed, acquired, erected or made by The Com- 
 pany, or any such other corporation, then so finding and declaring, and further 
 finding and declaring that The Company or such other corpora- 
 tion has executed bonds or other obligations for the amount loaned or agreed 
 to be loaned for the purpose of constructing, acquiring, erecting, or making such 
 new property, enlargements, extensions, betterments, or additions, and that the 
 said bonds or other obligations have been delivered to the Trustee to further 
 secure the bonds issued and to be issued hereunder, then, in any such case, upon 
 delivery to it of a copy of such resolution, certified as such by the President or 
 one of the Vice-Presidents and the Secretary or one of the Assistant Secretaries 
 
 of the Company, the Trustee shall authenticate and deliver to the 
 
 Company, or upon its order, an amount of the bonds then subject 
 
 to the provisions of this section, not to exceed in par value, as tiie case may be, 
 either the sum in cash which is so stated to have been expended, applied or 
 loaned by the Company in and about the making and acqu isition 
 
1232 FORMS No. 112 
 
 of the new property, enlargements, betterments or additions mentioned in said 
 copy of said resolution, or the sum paid or disbursed for or on account of the 
 
 bonds or other obligations of The Company, or of such other 
 
 corporation, so delivered to the Trustee; and the Trustee may thereupon place 
 on the bonds or other obligations so received by it, the said Indenture Stamp. 
 The said Trustee may rely upon the findings, declarations, statements and 
 requests contained in such copy of such resolution, and shall be under no lia- 
 bility for so relying and acting on the faith thereof. The Trustee may, how- 
 ever, at the expense of the Company, require further proof of 
 
 such expenditure or cost, or of the amount thereof, and may cause the state- 
 ments in said resolution contained to be verified in such manner as it may 
 determine, and shall be entitled to rely upon the report of any expert or counsel 
 it may select for the purpose of making such verification; but it shall not be 
 bound to verify such statements, or liable for not doing so 
 
 Provisions Concerning The Company Debentures. 
 
 Section 4. Not to exceed an aggregate of i , , Dollars 
 
 ($ ) , par value, of the said remaining $ , par 
 
 value, of the bonds authorized under and secured by this indenture, may at the 
 
 discretion of the Board of Directors or Executive Committee of the 
 
 Company, be issued, authenticated and delivered in exchange for or to provide 
 funds necessary to pay, redeem, discharge or otherwise acquire any of the then 
 
 outstanding Sinking Fund Gold Debentures of The Company, 
 
 dated May first, 1893. 
 
 For any and all of said debentures that shall be acquired by the 
 
 Company by purchase, exchange or otherwise, and deposited with the Trustee 
 hereunder, together with all coupons not matured at the time of such deposit, 
 the Trustee shall, upon request of the Company, evidenced by a reso- 
 lution of its Board of Directors or Executive Committee, authenticate, and 
 
 deliver to the Company, or upon its order, bonds secured hereby and 
 
 mentioned in this section, at such rate as said Board of Directors may from 
 time to time designate. Whenever any of the said debentures are acquired by 
 
 the Company, by purchase, exchange or otherwise, the same, shall be 
 
 canceled and satisfied, unless the Company, by resolution of its Board 
 
 of Directors or Executive Committee, shall request that the said debentures 
 shall be kept in full force and efi^ect. The Trustee may rely upon the recitals, 
 requests and statements contained in a copy of any such resolution, certified 
 as hereinafter provided, and shall be fully protected in acting upon the faith 
 thereof. 
 
 When all of the said debentures have been exchanged, purchased, redeemed, 
 
 paid, or otherwise acquired by the Company and deposited with the 
 
 said Trustee, or shall be so declared and certified to be, in or by resolution of 
 
 the Board of Directors or Executive Committee of the Company, or 
 
 whenever the Board of Directors or Executive Committee of the Com- 
 pany sUall pass a resolution declaring that it is not the purpose or intention 
 
 of said Company to use the amount of bonds subject to this section 
 
 which is meirtioued in said resolution, for or on account of the said debentures, 
 then, and in any such event, such amount of the bonds secured by this indenture 
 and which have by this section been authorized to be used or applied in respeot 
 
No. 112 FORMS 1233 
 
 of such debentures and which shall then remain unissued, all as may be stated 
 in such resolution, shall thereupon be, in all respects, a part of the issue of 
 bonds secured hereby, which is mentioned in section 3 of this Article, and shall 
 be held and subject to be authenticated, delivered and disposed of as is in said 
 section provided. 
 
 Trustee May Rely on Certificates, Etc., of Officers. 
 
 Section 5. Except as and when in this indenture otherwise expressly pro- 
 vided, the Trustee shall be entitled to act and rely upon any copy of resolution, 
 certificate, order, request, direction or other' instrument, by any provision of this 
 
 indenture required or provided to be delivered by the Company to the 
 
 Trustee, when the same is certified or executed by the President or one of the 
 Vice-Presidents and by the Secretary or one of the Assistant Secretaries, or by 
 the President or one of the Vice-Presidents and by the Treasurer or one of the 
 
 Assistant Treasurers, of the Company, and shall be fully protected 
 
 in respect of any and all acts done or action taken or suifered by it, or on its 
 behalf, in reliance thereon; and every such copy of resolution, certificate, order, 
 request, direction or other instrument, thus certified or executed, shall be, at all 
 times, and in all places, conclusively taken and held to be the act and deed of 
 and binding upon the Company. 
 
 Conversion and Reconversion of Coupon Bonds and Registered Bonds Without 
 
 Coupons. 
 
 Section 6. Whenever any coupon "bond or bonds, issued under this indenture, 
 together with all unmatured coupons thereto belonging, shall be surrendered to 
 the Trustee for exchange for a registered bond or for registered bonds without 
 
 coupons, the Company shall execute, and the Trustee shall authenticate, 
 
 and, in exchange for such coupon bond or bonds, shall deliver, registered bonds 
 or one registered bond without coupons, of the same series as the surrencfered 
 bond or bonds and for the like aggregate principal sura, but in no event of a less 
 denomination than $1,000. Every registered bond without coupons so delivered 
 in exchange for a coupon bond or for coupon bonds, shall bear interest from the 
 date for payment of the last matured coupon of the surrendered bond or bonds. 
 
 Whenever any registered bond without coupons shall be . surrendered to the 
 
 Trustee, duly indorsed or transferred, the Company, upon request 
 
 therefor, shall issue to the transferee, and the said Trustee shall authenticate 
 and deliver, registered bonds or one registered bond without coupons, of the 
 same series and for a like aggregate principal sum; provided, always, that no 
 registered bond without coupons shall be issued under this section of a smaller 
 denomination than $1,000, except that a registered bond or bonds without 
 coupons of the denomination of $100 shall, upon request therefor, be issued in 
 exchange for a bond or bonds of the same denomination. 
 
 Whenever any registered bond or bonds without coupons of the denomination 
 of or aggregating $1,000, or some mutliple thereof, shall be surrendered to the 
 Trustee, duly indorsed or transferred, for exchange for a coupon bond or for 
 coupon bonds, the Company shall issue, and the Trustee shall authenti- 
 cate and deliver, in exchange therefor, coupon bonds or one coupon bond of the 
 same series, and bearing interest at the same rate as the surrendered registered 
 
1234 FORMS No. 112 
 
 bond or bonds without coupons, and for the like aggregate principal sum, which 
 bond or bonds shall have attached thereto the coupons maturing on and after 
 the date when the next semi-annual instalment of interest would have matured 
 on such surrendered bond or bonds without coupons. 
 
 Whenever any of the registered bonds without coupons of the denomination of 
 $100, provided to be issued hereunder, to the number of ten or some multiple 
 
 of ten, shall be surrendered to the- Trustee, the Company shall execute, 
 
 and the Trustee shall authenticate, and, in exchange for said surrendered bonds, 
 shall deliver coupon bond or bonds, or, at the election of the transferee, a regis- 
 tered bond or bonds without coupons, in either case, of the same series and of 
 the denomination of $1,000 each, at the rate of one of said $1,000 bonds for each 
 ten of said $100 bonds. 
 
 In every case of such exchange or transfer, the Trustee forthwith shall cancel 
 the surrendered bond or bonds and coupons, and shall, upon written request 
 therefor, deliver the same to the Company. 
 
 For any such exchange of bonds, and for any transfer of registered bonds with- 
 out coupons, the Company, at its option, may require the payment of 
 
 a sum sufficient to reimburse it for any stamp tax or other governmental charge 
 or other expense connected therewith, and also of a further sum not exceeding 
 one dollar for each new bond issued upon such exchange or transfer. 
 
 Surrender of Bonds and Issue of Other Bonds in Lieu Thereof. 
 
 Section 7. In case the Company shall at any time surrender or 
 
 cause to be surrendered to the Trustee any of the bonds which shall have been 
 authenticated and delivered hereunder, and, if a coupon bond or coupon bonds, 
 then also the unmatured coupons for interest thereon which shall then remain 
 uncanceled, accompanied by a copy of a resolution of the Board of Directors 
 of the Company, certified as such by the President or one of the Vice- 
 Presidents and by the Secretary or one of the Assistant Secretaries of the 
 
 Company, requesting the Trustee to authenticate and deliver new 
 
 bonds in exchange for the bonds so surrendered to the Trustee, the Trustee 
 shall authenticate and deliver, in lieu of the bonds so surrendered, bonds of a, 
 new or other series for the aggregate principal sum thereof, which new bonds 
 
 shall be payable at such time or times, not before 1, , and 
 
 shall bear interest at such rate or rates, not exceeding five per cent, per annum, 
 and which new bonds and the coupons to be attached thereto, shall, so far as 
 may be appropriate, be otherwise substantially in the form or forms herein- 
 before set forth, all as the Board of Directors of the Company shall 
 
 determine and designate in such resolution ; and a copy of any form of new 
 bond so determined upon or designated which may differ from the forms herein- 
 before set out, shall be delivered to the Trustee. All bonds and coupons so 
 surrendered to the Trustee shall forthwith be canceled by the Trustee, and, 
 upon written request therefor, delivered to the Company. 
 
 Bonds Bearing Lower Rate and With Different Matturity May Be Issued. 
 
 Section 8. The Company, instead of issuing the whole of the 
 
 $45,000,000 in bonds authorized hereby in the form of Twenty-Year Five Per 
 Cert. Gold Bonds, may at any time issue another series or other series of 
 
No. 112 FORMS 1235 
 
 bonds secured hereby, payable at such time or times on or subsequent to 
 
 • • • • , , and bearing interest at such rate or rates not exceeding five 
 
 per cent, per annum, as its Board of Directors may from time to time determine 
 by resolution; and the Trustee shall authenticate such other bonds upon due 
 authority therefor as herein prescribed; provided, always, that the aggregate 
 principal sum of all bonds of all series hereby secured, shall never exceed the 
 sum of $45,000,000 at any one time outstanding. 
 
 Mutilation and Destruction of Bonds. 
 SECTloif 9. In case any coupon bond issued hereunder, with the coupons 
 thereto appertaining, or any registered bond without coupons, shall become 
 
 mutilated or be destroyed, the Company, in its discretion, may execute, 
 
 and thereupon the Trustee shall authenticate and deliver, a. new bond of like 
 tenor and date (including coupons in case of a coupon bond), in exchange and 
 substitution for and upon cancellation of the mutilated coupon bond and its 
 coupons or the mutilated registered bond without coupons, or in lieu of and in 
 substitution for the coupon bond and its coupons or the registered bond without 
 coupons, so destroyed. In case of destruction, the applicant for a substituted 
 
 bond shall furnish to the Company and to the Trustee evidence of the 
 
 destruction of such bond or coupons so destroyed,' which evidence shall be satis- 
 factory to the Company and the Trustee ; and said applicant shall also 
 
 furnish indemnity _ satisfactory to both of them. The ■ Trustee shall not be 
 liable for any act done by it, in good faith, under this section. 
 
 Temporary Bonds. 
 Sbxjtion 10. Until the bonds to be issued under and secured by this inden- 
 ture can be engraved and prepared, the Company may execute, and, 
 
 upon its request, the Trustee shall authenticate and deliver, in lieu of such 
 engraved bonds and subject to the same provisions, limitations and conditions, 
 temporary printed or lithographed registered bonds without coupons, of any 
 denomination, substantially of the purport of the bonds to be issued as herein- 
 before provided. Upon surrender to the Trustee of such temporary bonds for 
 
 exchange, the Company shall issue, and, upon cancellation of such 
 
 surrendered bonds, the Trustee shall authenticate and, in exchange therefor, 
 deliver engraved coupon bonds or registered bonds without coupons, of the 
 denominations hereinbefore provided, for the amount of the temporary bonds 
 surrendered; and, until so exchanged, each of such temporary bonds shall be 
 entitled to the same security and rights as an engraved bond issued hereunder. 
 
 Benefits Thereof Limited to Parties. 
 Section 11. Nothing in this Article expressed or mentioned, or in any other 
 Article of this indenture, or in the bonds issued hereunder, or to be implied 
 therefrom, is intended or shall be construed to give to any person or corporation 
 other than the parties hereto, and the holders of bonds issued under and secured 
 by this indenture, any legal or equitable right, remedy or claim under or in 
 respect of this indenture, or any covenant, condition or provision therein con- 
 tained ; all its covenants, provisions and conditions- being intended to be, and 
 being, for the sole and exclusive benefit of the parties hereto, and of the holders 
 of the bonds hereby secured 
 
1236 FORMS No. 112 
 
 ARTICLE TWO. 
 
 The Company covenants as follows : 
 
 Will Pay Principal and Interest Without Deduction for Taxes. 
 Section 1. Duly and punctually it will pay or cause to be paid to every holder 
 of any bond issued hereunder and secured hereby, the principal thereof and the 
 interest accruing thereon, at the dates and the place and in the manner mentioned 
 in such bonds, or in the coupons thereto belonging, according to the true intent 
 and meaning thereof, without deduction from either principal or interest for 
 any tax or taxes imposed by the United States, or by any State, county, or 
 
 municipality therein, which the Company may be required to pay 
 
 thereon, or to retain therefrom, under or by reason of any present or future 
 laws. 
 
 Will Keep Place for Payment of Principal and Interest and for Serving Notices. 
 
 The interest on the coupon bonds shall be payable only upon presentation and 
 surrender of the several coupons for such interest, as they respectively mature, 
 and, when paid, such coupons shall forthwith be canceled. The interest on the 
 registered bonds without coupons shall be payable only to the registered holders 
 thereof, or upon their order duly authenticated. 
 
 At all times until the payment of the principal of the bonds secured by this 
 
 indenture, the Company will keep an oflSee or agency in the city 
 
 of New York where bonds and interest coupons may be presented for payment, 
 and where notices or demands in respect of such bonds or interest coupons may be 
 
 served, and, from time to time, the Company will give notice to the 
 
 Trustee of the place of such office or agency. In case the Company 
 
 shall fail to keep such office or agency or to give to the Trustee notice of the place 
 thereof, such presentation and demand may be made and such notices may be 
 served at the office of the Trustee in the city of New York. 
 
 No Eattension for Payment of Interest. 
 
 The Company agrees and covenants that it will not, directly or 
 
 indirectly, extend or assent to the extension of the time for the payment of 
 any of the interest upon any of said bonds ; and that it will not, directly or indi- 
 rectly, be a party to or approve any arrangement for any such extension, by a 
 purchase or keeping alive of any of said interest or (in case of a bond with 
 coupons) of the coupons therefor, or in any other manner. In case the time for 
 payment of any such interest shall be so extended, otherwise than as pro- 
 vided in section 2 of Article 4 hereof, and whether or not such extension be by 
 
 or with the consent of the Company, such interest shall not be 
 
 entitled, in case of default hereunder, to the benefit or security of this indenture, 
 except subject to the prior payment in full of the principal of all bonds issued 
 hereunder then outstanding and of all matured interest on such bonds the pay- 
 ment of which has not been so extended 
 
 Registration of Bonds. 
 
 Sectiott 2. The Company, at an office or agency in the city of 
 
 New York, will keep a register or registers for the registration and transfer of 
 
No. 112 FORMS 1237 
 
 bonds issued hereunder, in and at which it wiU register, or cause to be registered, 
 subject to such reasonable regulations as it may, from time to time, prescribe, 
 all such bonds without coupons, and upon presentation thereof for such purpose, 
 any such coupon bond ; and such register or registers shall, at all reasonable 
 times, be open to the inspection of the Trustee. 
 
 Every registered bond without coupons shall be dated on the day of the 
 actual authentication thereof, and the Trustee is hereby authorized, upon 
 authentication, to fill in such date. 
 
 Transfer of Registered Bonds. 
 
 Upon presentation to the bond registrar of the Company, at the 
 
 place where such register shall be kept, of any such registered coupon bond, 
 accompanied by the delivery of a written instrument of transfer, in a form 
 
 approved by the Company, executed by the registered holder, such 
 
 bond may be transferred upon the register by the registered holder in person or 
 by attorney, and such transfer shall be noted by such bond registrar upon the 
 bond. The registered holder of any. such registered coupon bond shall also have 
 the right to cause the same to be registered as payable to bearer, in which case 
 transferability by delivery shall be restored, and thereafter the principal of such 
 bond when due shall be payable to the person presenting the bond; but any such 
 coupon bond registered as payable to bearer may be registered again in the name 
 of the holder with the same effect as a first registration thereof. Successive 
 registrations and transfers, as aforesaid, may be made from time to time as 
 desired; and each registration of a coupon bond shall be noted "by the bond 
 registrar on the bond. 
 
 Registration of any coupon bond, however, shall not affect the transferability, 
 by delivery merely, of any coupons thereto belonging, and payment to the 
 
 bearer of any such coupon shall discharge the .• . . . Company in respect 
 
 of the interest therein mentioned, whether or not the bond shall have been 
 registered. 
 
 Any registered bond or bonds without coupons may be transferred upon such 
 register at such office or agency by the registered holder in person or by attorney, 
 upon ( 1 ) surrender of such bond to such bond registrar for cancellation ; ( 2 ) 
 
 delivery of a written instrument of transfer, in form approved by the 
 
 Company, duly executed by the registered holder of the bond; and (3) payment 
 of any charges imposed under section 6 of Article One hereof. But no regis- 
 tered bond without coupons of the denomination of $1,000 or $10,000 shall be 
 exchangeable for bonds of a less jlenomination than $1,000 each, nor shall any 
 coupon bond be issued under any provision of this indenture of a less denomina- 
 tion than $1,000. 
 
 Will Pay Taxes, Assessments,- etc. 
 
 Section 3. The Company, from time to time, will pay and dis- 
 charge all taxes, assessments, imposts and governmental charges lawfully imposed 
 upon the shares of stock, bonds and other securities, and all other property, 
 at any time subject to this indenture, or upon any part thereof, or upon the 
 income or profits thereof, or upon the lien or interest of the Trustee in respect 
 of any part of the property hereby mortgaged and pledged; provided, however, 
 that the Company shall have the right to contest by legal pro- 
 
1238 FORMS No. 112 
 
 ceedings any such tax, assessment, 'impost or governmental charge, and, pending 
 such contest, may delay or defer the payment thereof, unless thereby, in the 
 opinion of the Trustee, any such shares of stock, bonds or other property shall 
 be lost or forfeited or materially endangered. 
 
 Covenants of Title and for Further Assurance. 
 
 Section 4. The Company is lawfully seized and possessed of 
 
 the property hercWjy mortgaged and pledged and will warrant and defend the 
 title thereto, to the Trustee, its successors and assigns, for the benefit of the 
 holders for the time being of the bonds issued and to be issued hereunder, against 
 the lawful claims and demands of all persons whomsoever. 
 
 The Company, its successors and assigns, and each and every 
 
 person having or holding any estate, right, title or interest in and to the prop- 
 erty hereby mortgaged and pledged, from time to time, on written demand of the 
 Trustee, or its sucessor or successors, will make, do, execute, acknowledge and 
 deliver all such further acts, deeds, conveyances, and assurances in the law as 
 may be reasonably advised, devised and required for effectuating the intention of 
 these presents and for the better assuring or confirming unto the Trustee, and 
 its successor or successors in the trust hereby created, upon the trusts and for 
 the purposes herein expressed, all and singular the property hereby mortgaged 
 and pledged, or intended or Agreed so to be. 
 
 To Pledge After-acquired Securities. 
 
 Section 5. The Company, from time to time, will pledge and 
 
 assign or transfer and deliver to the Trustee, to be held subject to the trusts 
 of this indenture as fully and completely as though expressly and specifically 
 pledged, assigned and transferred thereunder at the time of the execution 
 thereof : 
 
 { ) Any and all additional shares of the capital stock of The 
 
 Company which may be acquired by the Company ; 
 
 (6) Any and all bonds, debentures, and other obligations and securities which 
 
 may hereafter be acquired by or accrue in favor of the Company, 
 
 and which, in whole or in part, shall have been purchased with, or otherwise 
 result from, any of the bonds issued or to be issued hereunder, or the proceeds 
 thereof; and 
 
 (r) Any and all shares of the capital stock of any other corporation, now or 
 
 liereafter created, which may be acquired by the Company and 
 
 which shall have been paid for or acquired, in whole or in part, with or out of 
 any of the bonds issued or to be issued hereunder, or the proceeds thereof, or 
 with or out of any of the property, stocks, bonds, or other evidences of indebted- 
 ness or securities which are at the time subject to this indenture, or the pro- 
 ceeds thereof. 
 
 All such bonds, debentures, obligations and securities and the certificates for 
 such shares shall be assigned, transferred and pledged hereunder, subject to the 
 
 terms and conditions of the acquisition thereof by the Company ; 
 
 and as and when the same shall be received by the Company, it 
 
 shall deliver them to the Trustee, duly indorsed for transfer in blank (if not 
 already in bearer form), and the Trustee shall thereupon stamp or cause to be 
 stamped thereon the Indenture Stamp hereinbefore set out 
 
No. 112 FORMS 1239 
 
 To Mortgage After-acquired Property. 
 
 Section 6. When and as, from time to time, the Company 
 
 shall acquire by purchase or otherwise, any real or other fixed property which 
 may be paid for, in whole or in part, with or out of any of the bonds issued or 
 to be issued hereunder, or the proceeds thereof, or with or out of any of the 
 property, stocks, bonds or other evidences of indebtedness or securities which 
 
 are at the time subject to this indenture, or the proceeds thereof, the 
 
 Company either ( 1 ) will convey or transfer the same, subject to the lien hereof, 
 to some other corporation all the shares of -whose capital stock, except so many 
 of said shares as may be necessary to qualify persons to act as directors or 
 officers of such corporation, shall then be held by the Trustee hereunder, or (2) 
 will mortgage the same to the Trustee, or cause the same to be so mortgaged, 
 as additional security for the bonds issued and to be issued hereunder. Every 
 such conveyance or transfer or mortgage may be subject to any liens, rentals, or 
 other charges affecting the property conveyed or transferred or mortgaged, at the 
 time of the acquisition thereof by the Company. 
 
 The Trustee may, at any time, accept any conveyance, assignment or transfer 
 of any property, real or personal, which any person or corporation may make 
 and deliver to said Trustee; and the property so conveyed, assigned or trans- 
 ferred, if and when the conveyance, assignment or transfer thereof shall be 
 accepted by the Trustee, shall thereupon become a part of the property hereby 
 mortgaged and pledged. 
 
 Indebtedness and Dividends of Controlled Companies Regulated. 
 
 Section 7. The Company will not, so long as any of the bonds 
 
 secured hereby are outstanding, cause, permit, or suffer the Com- 
 pany, or any other corporation a majority in amount of whose then outstanding 
 capital stock may hereafter be acquired by it, in whole or in part, with or out 
 of any bonds issued hereunder, or the proceeds thereof, and the majority of 
 
 whose directors may have been elected by or under the direction of the , 
 
 Company (o) to become indebted, except in the ordinary course of business, or 
 for the acquisition of additional property, shares of stock or other securities, or 
 
 to the Company as and to the extent authorized and contemplated 
 
 by this indenture, or (6) to declare or pay a dividend upon any of the stock of 
 §uch corporation, or to the holders thereof, or otherwise to distribute or pay 
 any of its assets or funds to its stockholders, except only, in either case ( 1 ) out 
 of the undivided and undistributed net profits of such corporation then on hand, 
 and to the extent that the funds so divided or distributed and paid over, shall 
 represent and consist of such net profits then on hand, or (2) as authorized or 
 permitted by the terms and provisions of this indenture. 
 
 Cash Items and Quick Assets Equal to Par of Outstanding Bonds to he Kept on 
 
 Hand. 
 
 Section 8. The Company will at all times, so long as any of 
 
 the bonds secured hereby are outstanding, keep on hand, or cause The 
 
 Company or other corporations a majority in amount of whose capital stock is 
 
 at the time held or controlled by the Company or The 
 
 Company, to keep on hand, (a) bills and accounts receivable and cash and cash 
 
1240 FORMS • No. 112 
 
 items, and (B) merchantable and movable assets consisting of and including 
 mercliandise, manufactured, produced or prepared, and in process of manufacture, 
 production or preparation, raw material, including hides and bark, supplies and 
 other articles generally constituting and Icnown as " quick assets," to an amount 
 so that the aggregate net value and amount, scheduled, verified, fixed or ascer- 
 tained as hereinafter provided, 
 
 ( 1 ) of such items and assets of the Company, and 
 
 (2) of a proportion of such items and assets of The Com- 
 pany and of any corporation any of whose shares of stock may be held by 
 
 The Company, equal to the proportion which the number of 
 
 shares of the capital stock of The Company then held by the 
 
 Company and at the time pledged and deposited hereunder, 
 
 shall bear to the total number of the then outstanding shares of the capital 
 stock of The Company, and 
 
 (3) of a proportion of such items and assets of any other corporation 
 any of the shares of whose capital stock shall be at the time subject to this 
 indenture, equal to the proportion which the number of such shares then 
 subject hereto shall bear to the total number of the then outstanding shares 
 of the capital stock of such corporation, 
 
 shall, on the thirty-first day of December of each year, be equal to at least the 
 par value of the principal of the bonds authorized and secured hereby then out- 
 standing. On or before the first day of April of each year, the 
 
 Company shall deliver to the Trustee a schedule, sworn to by its President or 
 one of its Vice-Presidents and by its Treasurer or one of its Assistant Treasurers, 
 showing, in general and summarized form, the nature, description, location and 
 value of such items and " quick assets " on hand at the close of the last preced- 
 ing calendar year by the said several corporations, and if such items and assets 
 
 are not absolutely owned by the Company, the value of its interest 
 
 therein, computed as above provided. In case, in the opinion of the Trustee, any 
 of such articles of merchandise mentioned in said schedule shall not at the time 
 have or possess a market or reasonably known value, the Trustee may cause the 
 value thereof to be verified or fixed by a competent appraiser or expert, to be 
 selected by the Trustee; and the Trustee may, in its discretion, cause the books 
 
 and records of any or all of said companies, so far as the Company 
 
 may have lawful power to grant or permit access to such books or records, to be 
 examined in order to verify the correctness of any such schedule. ■ The cost and 
 
 expense of any such appraisal or examination shall be borne by the 
 
 Company. The Trustee shall be entitled to accept and rely on any schedule 
 thus delivered to it, and upon the report of any appraiser or expert which it 
 may select under the provisions hereof. The Trustee shall not be bound to 
 cause such appraisal, verification or examination to be made, or liable for not 
 doing so. 
 
 ARTICLE THREE. 
 
 Transfer of Pledged Stocks to Trustee. 
 
 Section I. From time to time, the Trustee may, but shall not be obliged to, 
 
 cause to be transferred into the name of the Trustee, or its nominee, any or all 
 
 shares of stock which shall have been assigned to or pledged with the Trustee 
 
 hereunder; but in each nase the corporation which issued such shares shall be 
 
No. 112 FORMS 1241 
 
 notified that such shares are held subject to this indenture; and the Trustee 
 3hall, in case any such shares are so transferred, indicate or cause such cor- 
 poration to indicate upon the face of the certificate for such shares the fact that 
 such shares are hoiii subject to this indenture. 
 
 Any provision of this indenture to the contrary notwithstanding, the Trustee 
 shall not be obliged, at any time, to accept a certificate for any shares of stock 
 in any corporation, or to cause or permit a transfer thereof to be made to it, if, 
 in the opinion of the Trustee, such acceptance will involve, or render it liable 
 to be subjected to, the risk of any liability or expense. 
 
 Trustee May Transfer Shares to Qualify Directors. 
 
 The Trustee, at any time, may do whatever in its discretion and judgment may 
 be necessary for the purpose of maintaining, preserving, renewing or extending 
 the corporate existence of any company a majority in amount of whose shares 
 shall then be held hereunder, and for such purpose, from time to time, the 
 Trustee may sell, or assign, and transfer and deliver so many shares of the stock 
 of the said several companies as may be necessary to qualify persons to act as 
 directors of, or in any other official relation to, said companies, respectively. 
 Whenever requested in writing by the President or one of the Vice-Presidents of 
 
 the . : Company, the Trustee shall assign and transfer to the persons 
 
 designated by such officer of the Company, a suificient number of 
 
 such shares held hereunder, to qualify such persons to act as directors of, or in 
 any official relation to, the several companies, respectively, which issued such 
 shares; provided, however, that no transfer shall be made which shall reduce the 
 amount of stock in any company held hereunder, so as to render it less than a 
 majority in amount of such stock; and in every such case the Trustee may make 
 such arrangement as it shall deem necessary for the protection of the trust 
 hereunder. 
 
 The Trustee may, but shall not be obliged to, cause to be transferred into the 
 name of the Trustee, any or all registered bonds or other obligations which 
 shall be received by it hereunder. The Trustee shall be authorized, but shall not 
 be obliged, ( 1 ) to cause any or all coupon bonds or debentures received by it 
 hereunder to be exchanged for registered bonds or debentures without coupons 
 of any denomination, or (2) to cause any or all such coupon bonds or debentures 
 to be registered in the name of the Trustee, as Trustee hereunder; and (3) to 
 cause any such coupon bonds or debentures, or any stock certificates or other 
 securities which may be received by it pursuant hereto, to be stamped with the 
 said Indenture Stamp. 
 
 Disposition of Dividends and Interest on Pledged Securities. 
 
 Section 2. Unless there shall be some continuing default in respect of any 
 of the matters mentioned in section 3 of Article Four of this indenture, the 
 
 Company, from time to time, shall be entitled to receive and to collect 
 
 all dividends that may be declared on any shares of the capital stock of other 
 corporations that shall at the time be subject to this indenture, and, as well, all 
 sums that shall become due and payable for interest upon any bonds, debentures, 
 or other obligations or claims that may at the time be held hereunder; and 
 the Trustee, on request of the Company, from time to time, shall 
 
1242 FORMS No. 112 
 
 deliver to it suitable assignments and orders for the payment to its Treasurer, 
 or other officer or agent designated by its President or one of its Viee-Presidentsi 
 of all dividends that, from time to time, may be declared or may become pay- 
 able on such shares of capital stock of other corporations, and, upon like 
 request, shall deliver to it, or such officer or agent, the coupons for interest on 
 any such coupon bonds or debentures and suitable assignments and orders for 
 the payment of the interest on any such registered bonds or debentures, and 
 on any other bonds, debentures, or other obligations that shall be held here- 
 under, and the Trustee, from time to time, upon request of the 
 
 Company, shall pay over to its Treasurer, or other officer or agent designated 
 by its President or one of its Vice-Presidents, any and all sums which shall be 
 received or collected by the Trustee for interest upon any such bonds, deben- 
 tures or other obligations, or for dividends upon any such shares of stock! 
 
 In case there shall be a continuing default in respect of any of the matters 
 mentioned in section 3 of Article Four hereof, then, during the continuance of 
 such default, in addition to the other remedies herein provided, the Trustee 
 may revoke any such assignments or orders, and collect or receive all such 
 dividends on such stock, and all such sums payable for interest upon any 
 such bonds, debentures, or other obligations held hereunder; and all sums so 
 collected or received, prior to any such sale hereunder as is mentioned in section 
 7 of Article Four hereof, shall be applicable to the payment of interest that 
 shall become due on bonds hereby secured; but after any such default shall 
 have been made good, or shall have been waived, the right of the Com- 
 pany to receive and collect such dividends on such stocks and such interest on 
 such bonds, debentures, or other obligations, and the duty of the Trustee to 
 execute such assignments and standing orders, shall revive and continue as 
 though such default had not taken place. 
 
 Disposition of Payments of or on Account of Principal of Pledged Secimties. 
 
 In case there shall at any time or times be paid to the Trustee any sum on 
 account or in payment of the principal of any bond, debenture or other obliga- 
 tion held hereunder or on account of the principal of any shares of stock or 
 other securities subject to the lien hereof, the Trustee shall, on receiving the 
 said amount, subject to, and except as otherwise provided in, section 5 of this 
 
 Article, dispose of and disburse the same as follows: If the Company, 
 
 by a resolution of its Board of Directors or Executive Committee, shall request 
 Article, dispose of and disburse the same as follows : If the Com- 
 pany, by a resolution of its Board of Directors or Executive Committee, shall 
 request that said amount, or the portion thereof stated in said resolution, shall be 
 used and applied for and to any of the purposes specified in sub-paragraphs (a) 
 and ( 6 ) of section 3 of Article One of this indenture, the Trustee shall "disburse 
 said amount, or said portion thereof, upon the order of the President or one of 
 the Vice-Presidents and the Treasurer or one of the Assistant Treasurers of the 
 
 Company upon compliance with the conditions and provisions in 
 
 said sub-paragraphs, or one of them, set forth and specified, in the same maniver 
 and to the same extent in all substantial .respects as if said Com- 
 pany were requesting the authentication of an equal amount, par value, of the 
 
 bonds provided to be subject to said section 3. If the Company 
 
 shall fail to deliver a copy of such resolution, certified as such by the President 
 
No. 112 FORMS 124.3 
 
 or one of the Vice-Presidents and by the Secretary or one of the Assistant Secre- 
 taries of the Company, to the Trustee within sixty days after written 
 
 notice from the Trustee to the Company of the receipt of such sum 
 
 or sums, or within such other period as may be allowed by the Trustee, the 
 Trustee shall, without further action on the part of, or request from, the 
 Company, purchase so many of the bonds then outstanding here- 
 under as the amount so received will enable it to do at the lowest price prac- 
 ticable, either on the New York Stock Exchange or otherwise at private sale 
 or by public advertisement, as the Trustee in its sole and absolute discretion may 
 see fit; and its expenses in respect of any such purchases or advertising or pub- 
 lishing any notice in relation thereto shall be payable out of said fund. In case 
 the Trustee shall not be able to expend the whole of said amount in the pur- 
 chase of bonds at a less price than par and accrued interest and a premium of 
 five per cent. (5%) on the principal thereof, the Trustee shall invest or dispose 
 of such unexpended amount as may be directed by a resolution of the Board 
 
 of Directors or Executive Committee of the Company ; provided, 
 
 however, that such investment or other disposition be made in such manner that 
 the same will, in the opinion of the Trustee, inure to and become a part of the 
 security for the bonds issued or to be issued hereunder. 
 
 In case any such payment shall be made to the Trustee at a time when there 
 is, to the knowledge of the Trustee, a continuing default in respect of any of 
 the matters mentioned in section 3 of Article Four hereof, then, during the con- 
 tinuance of such default, the Trustee, instead of disposing of the same as above 
 provided, may, if in its judgment it is advisable to do so, hold the said amount 
 as part of the security for the bonds and coupons issued and to be issued here- 
 under; but after such default shall have been made good or shall have been 
 waived, the said amount, or the unexpended portion thereof then in the hands 
 of the Trustee, shall be subject to be disposed of, disbursed, applied or invested 
 as above provided. 
 
 The Trustee shall not be liable for or because of any action taken or sviffered 
 on its part under or in pursuance to this section or by it believed to be author- 
 ized thereby, which is done, taken or suffered by it in good faith. 
 
 Voting Power of Pledged Stoelcs; Promies, etc. 
 
 Section 3. Unless there shall be some continuing default in respect of any of 
 the matters mentioned in section 3 of Article Four of this indenture, the 
 
 Company shall have the right, except only as hereinafter limited, 
 
 to vote upon all shares of stock that shall have become subject to this indenture, 
 with the same force and effect as though «uch shares were not subject to this 
 indenture, including the right to vote any or all of said shares in favor of 
 changing the name of any such corporation or of amending its certificate of 
 
 incorporation or its by-laws ; and the Trustee, on demand of the 
 
 Company, from time to time, shall execute and deliver to the Com- 
 
 • pany, or to such person or persons as shall be designated by resolution of its 
 Board of Directors or Executive Committee, such proxies or powers of attorney, 
 
 in general form, as may be necessary to enable the Company, or the 
 
 person or persons so designated, or its or their substitute or substitutes, to vote 
 upon all shares of stock of other corporations that shall have been transferred 
 to the Trustee hereunder, at all meetings, whether general or special, of the 
 
1244 FORMS No. 112 
 
 shareholders of any such corporation, to the same extent and with the same 
 effect as though such shares were absolutely owned by the Com- 
 pany and were not subject to this indenture. 
 
 In case there shall be a continuing default in respect of any of the matters 
 mentioned in section 3 of Article Four hereof, then during the continuance of 
 such default, in addition- to the other remedies hereinafter provided, the Trustee 
 may revoke any such proxies or powers of attorney, and vote upon any such 
 shares of the capital stock of other corporations; but after any such default 
 
 shall have been made good, or shall have been waived, the right of the 
 
 Company to vote upon any such shares, and the obligation of the Trustee to 
 execute such proxies and powers of attorney, shall revive, and shall continue as 
 though no such default had taken place. 
 
 Liens on Property of Controlled Companies Regulated. 
 
 Nevertheless, such voting power shall not, in any case or at any time, be 
 used or exercised for the purpose of authorizing the creation of any lien or 
 charge upon the properties or franchises of any such corporation, except to secure 
 the unpaid purchase-money of additional property acquired by such corporation 
 
 or advances or loans made by the Company to or for any of such 
 
 corporation as and to the extent authorized by this indenture; and all such 
 proxies shall by proper limitations provide against such use or exercise of such 
 voting power. 
 
 Any provision to the contrary notwithstanding, the Trustee shall not be under 
 a duty to vote, or to execute its proxy or power of attorney to vote, in 
 
 accordance or compliance with any request of the Company, in 
 
 case there shall be at the time a continuing default in respect of any of the 
 matters mentioned in section 3 of Article Four hereof. 
 
 Consolidation or Dissolution of Controlled Companies. 
 
 Whenever requested by resolution of the Board of Directors or Executive 
 
 Committee of the Company, the Trustee shall vote, or shall execute 
 
 its proxy or power of attorney to vote upon, the shares of stock of other corpo- 
 rations held by the Trustee under this indenture, in favor of consolidating or 
 merging such corporations, or any of them, with each other, or of dissolving, 
 or of selling, transferring, or liquidating any or all the assets of any such cor- 
 poration; provided, that upon such consolidation or merger, all of the stock of 
 the consolidated company applicable to, and all other proceeds received in 
 exchange for or on account of the shares of stock theretofore held hereunder, 
 shall become subject hereto, and provided, further, that no such consolidation or 
 
 merger shall take place unless the Company shall own a majority 
 
 in amount of the shares of stock of the corporation resulting from such consolida- 
 tion or merger and that such majority of shares shall be made subject to this 
 indenture; and provided, further, that every such dissolution, sale, transfer or 
 liquidation, other than a sale or transfer made pursuant to Article 6 of this- 
 indenture, shall be subject to the provisions of section 5 of this Article in that 
 behalf. 
 
 Increase or Reduction of Capital Stock of Controlled Companies. 
 
 Whenever requested by resolution of the Board of Directors or Executive Com- 
 mittee of the Compaijy, the Trustee shall vote, or shall execute its 
 
No. 112 FORMS ' 1245 
 
 proxy or power of attorney, to vote upon, the shares of stock of other companies 
 held under this indenture, in favor of the increase or reduction, from time to 
 time, of the capital stock of any of such companies. 
 
 In case of an increase of the capital stock of any such company, the - .. . 
 
 Company covenants and agrees forthwith to assign, transfer and deliver to the 
 Trustee, to be held upon the terms of this indenture, in the same manner and 
 with the same effect as though assigned, transferred and delivered at the date 
 of the execution hereof, certificates for the additional shares 'of the capital 
 stock of such company, or such part thereof as shall be proportionate to the 
 part of the entire capital stock of such company previously held hereunder. 
 
 In case of the decrease of the capital stock of any such company, the Trustee 
 may surrender such part of the shares thereof held hereunder as shall be pro- 
 portionate to the amount of such decrease. 
 
 Sale or Lease of Property of Controlled Companies. 
 
 Anything in this indenture to the contrary notwithstanding, any company 
 any of whose shares of capital stock shall be held hereunder may sell or lease 
 its property and franchises, or any part of its property and franchises, to any 
 other company, whether or not the shares of such last-mentioned company be 
 held hereunder, or may purchase or lease the property and franchises, or any 
 part of the property and franchises, of any other company, whether or not the 
 shares of such last-mentioned company be held hereunder, and, in either event, 
 any company, any part of whose capital stock shall be held under this inden- 
 ture, may execute any such conveyance or lease of or to such property and 
 franchises, or any part thereof; and whenever requested by resolution of the 
 
 Board of Directors or Executive Committee of the Company, the 
 
 Trustee, vinless such conveyance or lease shall appear to the Trustee to be 
 detrimental to the interests of the bondholders hereunder, shall vote, or execute 
 its proxy or power of attorney to vote upon, the shares of stock held hereunder, 
 in favor of the execution of any such conveyance or lease. 
 
 Anything in this indenture to the contrary notwithstanding, any company any 
 of whose shares of capital stock are subject to this indenture, may be merged 
 or consolidated with, or all or any part of its property may be sold or conveyed 
 
 to, the Company ; but all real property, and all leaseholds or other 
 
 qualified interests in real property, and all shares of stock, bonds, and other 
 obligations, belonging to the company or companies so consolidated or merged 
 with the Company, or whose property as an entirety may be pur- 
 chased by the Company, shall become and be subject to the lien and 
 
 operation of this indenture, with the same effect as though mortgaged, assigned 
 and transferred to the Trustee at the time of the execution hereof, but subject 
 to any prior lien upon any of the property of any such corporation which may 
 
 be so consolidated or merged with the Company or upon any propei^ty 
 
 so purchased by the Company; and the Company, and any 
 
 such consolidated company, shall execute all such further instruments of mort- 
 gage, pledge, assignment or transfer, as the Trustee may reasonably require 
 for that purpose. 
 
 The Trustee shall not be liable for any action taken or suffered by it in good 
 faith and believed by it to be authorized under the provisions of this section. 
 It may rely upon the statements contained in a certificate signed by the Presi- 
 
1246 FORMS No. 112 
 
 dent or one of the Vice-Presidents of the Company in determining 
 
 whether a proposed lease or conveyance of all or any part of the property or 
 franchises of any company, any of whose shares of capital stock shall be held 
 hereunder, will or will not be detrimental to the interests of the holders of 
 bonds issued hereunder. 
 
 Renewal, Extension, and Cancellation of Pledged Bonds, Etc. 
 
 Section 4. At any time, if requested by resolution of the Board of Directors 
 
 or Executive Committee of the Company, the Trustee shall consent to 
 
 the extension or renewal of any bonds, debentures, or other obligations w^hich 
 may, from time to time, be held hereunder, and to the extension or renewal of 
 any mortgage or lien or agreement securing or concerning such bonds, deben- 
 tures, or other obligations ; provided, that the Company shall not at 
 
 the time be in default hereunder, and that the maker of such bonds, debentures, 
 or other obligations shall not at the time be in default thereunder; and at any 
 time, if the Trustee shsill not deem it inadvisable, the Trustee shall so consent 
 notwithstanding there be such a default. 
 
 Whenever all the bonds, debentures, or other obligations of any other corpora- 
 tion deposited with the Trustee hereunder, or entitled to be, shall be paid or 
 satisfied, then, if thereunto requested by resolution adopted by the Board of 
 
 Directors or Executive Committee of the Company, the Trustee, at 
 
 the expense of the Company, shall cause to be canceled all such bonds, 
 
 debentures, or other obligations held hereunder, and shall take such steps as 
 may be necessary to procure the release or the satisfaction of any deed of trust 
 or other instrument securing the same. 
 
 The Trustee may receive the opinion of any counsel as conclusive evidence of 
 the existence of any facts authorizing any such extension or renewal of bonds, 
 debentures, or other obligations, or any such cancellation of said bonds, deben- 
 tures, or other obligations, and the release or satisfaction of such deed of trust 
 or other instrument, in pursuance of the provisions of this section. 
 
 Liquidation or Judicial Sale of Property of Controlled Compcmies. 
 
 Section 5. In case ( 1 ) at any time The Company or any other 
 
 company a majority in amount of whose capital stock shall be held hereunder, 
 shall be dissolved, or its property or assets, or any part thereof, shall be 
 liquidated, sold or transferred; or in case (2) all or any of the property of any 
 company any of the shares of the stock of which shall then be held hereunder, 
 shall be sold upon the insolvency of such company, or under proceedings for the 
 collection or enforcement of any notes or other obligations held hereunder, or 
 otherwise at any judicial or other sale; or in case (3) any property covered 
 hy. a. mortgage or pledge securing any bonds or notes held hereunder, or subject 
 to any charge or trust for the payment of any obligations held hereunder, shall 
 be sold upon the foreclosure of such mortgage or by enforcement of such charge 
 or trust, then, in any such event, the Trustee, at the request of the Board of 
 Directors or Executive Committee of the Company, evidenced by reso- 
 lution of said board or of said committee, either shall purchase or cause to be 
 
 purchased, or shall permit the Company to purchase, such property, 
 
 either in the name or in behalf uf the Company, or by purchasing 
 
No. 112 FORMS 1247 
 
 agents or trustees, and shall use, or permit the Company or such pur- 
 chasing agents or trustees to use, such shares of stock, honds, debentures, or 
 other obligations, and any interests therein, so far as may be, to make payment 
 for such property. In case of any such -purchase the Trustee shall take sucli 
 steps as the Trustee may deem advisable, to cause such property to be vested 
 
 either in the Company, subject to the lien of this indenture, or in 
 
 some other corporation, organized or to be organized, with power to acquire 
 
 and to maoiage such property, or partly in the Company and partly 
 
 in such other corporation, as the Trustee may deem advisable, provided ( 1 ) that 
 a, mortgage or pledge securing a bond or bonds or a note or notes, equal to at 
 least the amount of the securities subject hereto which are used to pay there- 
 for, shall be made to the Trustee hereunder; or (2) that any bonds and other 
 mdebtedness and all the capital stock of such newly organized corporation 
 (except the number of shares required to qualify directors), shall be assigned, 
 transferred, and d«>Uvered to the Trustee; and the same shall thereupon be held 
 subject to the lieii ut this indenture as if originally pledged hereunder. 
 
 Trustee May Join Reorgomization Plan or Take Other Steps to Protect 
 
 Bondholders. 
 
 Section 6. With the written consent of the Company, evidenced 
 
 by resolution of the Board of Directors or Executive Committee of the 
 
 Company, the Trustee, upon being furnished with the funds deemed by the 
 Trustee necessary in the premises or upon being indemnified to its satisfaction, 
 shall, at any time, take such steps as the Trustee, in its discretion, may deem 
 advisable, to protect its interests and the interests of the bondholders here- 
 under, in respect of any bonds, debentures, or other obligations or shares of 
 stock, which may be subject to the lien hereof; and, with such consent of the 
 
 Company, so evidenced, the Trustee, if the Trustee shall deem it 
 
 advisable, may join in any plan of reorganization in respect of any such bonds, 
 debentures, or cither obligations, or Shares of stock, and may accept the new 
 securities issued in exchange therefor under the provisions of such plan. 
 
 In case there shall be at the time a continuing default in respect of any of 
 the matters mentioned in section 3 of Article Four hereof, the Trustee shall, if 
 the Trustee deem it advisable, take such steps or join in such plan, without 
 the consent of the Company. 
 
 Advance of Fwnds to Protect Security Hereof. 
 
 The Company covenants that, on demand of the Trustee, it, the 
 
 Company, forthwith will pay, or will satisfactorily provide 
 
 for, all expenditures incurred by the Trustee under any provision of this 
 Article, including all sums required to obtain and perfect the ownership and 
 title to any property which the Trustee shall cause or permit to be purchased 
 
 pursuant to the provisions of this Article; and in case the Company 
 
 shall fail to do so, then, without impairment of or prejudice to any of its 
 
 rights hereunder by reason of the default of the Company, the 
 
 Trustee, in its discretion, may advance all such expenses and other moneys 
 required, or may procure such advances to be made by others; and for such 
 advances made by the Trustee, or by others at its request, with interest thereon 
 
1248 FORMS No. 112 
 
 at the rate of six per cen,t. per annum, or other agreed rate, the Trustee sliall 
 have a lien prior to these presents, upon all the property, shares of stock, bonds, 
 debentures, notes, obligations, claims and indebtedness in respect of which such 
 advances shall have been made, and the proceeds thereof, and upon any property 
 acquired by means thereof. 
 
 Disposition of Cash Proceeds of Judicial Sales Apportioned to Pledged Securities. 
 
 In case the Trustee shall not cause or permit to be purchased the property 
 sold at any such sale, or shall not join in a plan of reorganization, as aforesaid, 
 in respect of such bonds, debentures, obligations, claims or shares of stock, then 
 the Trustee shall receive any portion of the proceeds of the same accruing on 
 and apportioned to the securities then held hereunder, and such proceeds so 
 received, from time to time, shall be applied by the Trustee, as is provided in 
 section 2 of this Article in respect of sums received by the Trustee for or on 
 account of the principal of any bond, debenture, note or other obligation or 
 claim held hereunder or of any shares of stock subject hereto. 
 
 ARTICLE FOUR. 
 
 Lien of Detached Coupons Subordinated. 
 
 Section 1. No coupon belonging to any bond hereby secured, which in any 
 way at or after maturity shall have been transferred or pledged separate or 
 apart from the bond to which it relates, shall, unless accompanied by such bond, 
 be entitled, in case of a default hereunder, to any benefit of or from this 
 indenture, except after the prior payment in full of the principal of the bonds 
 issued hereunder, and of all coupons and interest obligations not so transferred 
 or pledged. 
 
 Principal of Bonds May Be Declared Due on Default. 
 
 Section 2. In case default shall be made in the payment of any interest on 
 any of the bonds hereby secured and outstanding, and such default shall have 
 continued for the period of ninety days, then, and in every case of such con- 
 tinued default, upon the written request of the holders of twenty-five per cent, 
 in amount of the bonds hereby secured and then outstanding, the Trustee, by 
 notice in writing delivered to the then acting President of the Com- 
 pany, or to any officer or representative of the Company at its oflSce 
 
 in the city of New York or in Jersey City, or if it shall have no such office, or 
 
 officer or representative thereat, then mailed to the Company at 
 
 , shall declare the principal of all bonds hereby secured and then 
 
 outstanding to be due and payable immediately; and upon any such declaration 
 the same shall become and be due and payable immediately, anything in this 
 indenture, or in said bonds, to the contrary' notwithstanding. 
 
 Waiver of Default. 
 
 This provision, however, is subject to the condition that if, at any time after 
 the principal of said bonds shall have been so declared to be due and payable, 
 all arrears of interest upon such bonds, with interest at the rate of five per 
 cent, per annum on such overdue instalments of interest from their respective 
 
No. 112. FORMS 1249 
 
 due dates,. together with all expenses and the reasonable charges of the Trustee, 
 
 shall either be paid by the Company, or be collected out of the property 
 
 hereby mortgaged and pledged, before any sale of the said property hereby mort- 
 gaged and pledged shall have been made, then, and in every such case, the 
 holders of twenty-flve per cent, in amount of the bonds hereby secured and then 
 
 outstanding, by written notice to the Company and to the Trustee 
 
 may waive such default and its consequences; but no such waiver shall extend 
 to or affect any subsequent default or impair any right consequent thereupon. 
 
 Power of Sale and Forecloswre Proceedings. 
 
 Sectton 3. In case ( 1 ) default shall be made in the payment of any interest 
 on any bond hereby secured, and if such default shall continue for the period of 
 ninety days; or in ease (2) default shall be made in the due and punctual 
 payment of the principal of any bond hereby secured; or in case (3) default 
 shall be made in the due observance or performance of any other covenant or 
 
 • condition herein required to be kept or performed by the Company, 
 
 and any such last-mentioned default shall continue for a period of ninety days 
 
 after written notice thereof to the Company from the Trustee or from 
 
 the holders of twenty-five per cent, in amount of the bonds hereby secured and 
 then outstanding, then, and in every such case, the Trustee, personally or by 
 attorney, if the Trustee shall deem it advisable, (1) shall sell to the highest 
 bidder, all and singlar, the property, shares of capital stock, bonds, debentures, 
 and other obligations and claims and the evidences thereof held under this 
 indenture, and all right, title, interest, claim and demand therein, and the 
 right of redemption thereof, in one lot and as an entirety, unless prior to the 
 said sale the owners or holders of at least fifty per cent, in amount of the 
 bonds then outstanding hereunder shall in writing request the Trustee to sell 
 said property in separate lots; and in that event the same shalbbe sold in the 
 separate lots designated in such request and in the order therein specified; which 
 said sale or sales shall be made at public auction, at such place in the city of 
 New York, in the State of New York, or at such other place or places, and at 
 such time or times, and upon such terms as the Trustee may fix and briefly 
 specify in the notice of sale to be given as herein provided, or as may be 
 required by law; or (2) shall proceed to protect and enforce its rights and 
 the rights of the bondholders under this indenture, by suit or suits in equity 
 or at law, whether for specific performance of any covenant or agreement con- 
 tained herein, or in aid of the execution, of any power herein granted, or for 
 any foreclosure hereunder, or for the enforcement of any other appropriate 
 legal or equitable remedy, as the Trustee, being advised by counsel learned in 
 the law, shall deem most effectual^to protect and enforce the rights aforesaid; 
 or (3) shall, in its discretion, proceed both by sale and by such suit or suits. 
 
 In case the Trustee shall have proceeded tp enforce any right under this 
 
 indenture, by foreclosure or otherwise, and such proceedings shall have been 
 
 discontinued or abandoned because of a waiver of the default, as hereinbefore 
 
 ' provided, in respect or because of which such proceedings shall have been 
 
 instituted, or for any other reason, or shall have been determined adversely to 
 
 the Trustee, then, and in every such case, the Company and the Trustee 
 
 shall be restored to their respective former positions and rights hereunder in 
 respect of the property hereby mortgaged and pledged or intended or agreed to 
 B. C. N. Y.— 79 
 
1250 FORMS No. 112 
 
 be, and all rights, remedies and powers of the Trustee shall continue as though 
 no such proceeding had been taken. 
 
 Notice of Bale hy Trustee. 
 Section 4. Notice of any such sale pursuant to any provision of this indenture 
 shall state the time and place when and where same is to be made, and shall 
 contain a brief, general description of the property to be sold, and shall be suffi- 
 ciently given if published twice in each week for six successive weeks prior to 
 such sale in a daily newspaper of general circulation published in the city of 
 New York, unless another and different notice or another and different publica- 
 tion thereof shall be required by law, in which event the notice or publication, 
 or both, thus required shall be given and made. 
 
 Bondholders May Direct Trustee. 
 Anything in this indenture contained to the contrary notwithstanding, the 
 holders of a majority in amount of the bonds hereby secured and then out- 
 standing, from time to time, shall have the right to direct and control the 
 method and place of conducting any and all proceedings for any sale of the 
 property hereby mortgaged or pledged, or for the foreclosure of this indenture, 
 cr for the appointment of a receiver, or for any other purpose hereunder 
 
 Adjournments of Sale. 
 
 The Trustee, from time to time, may adjourn any sale to be made under the 
 provisions of this indenture, by announcement at the time and place appointed 
 for such sale, or for such adjourned sale or sales ; and, without further notice or 
 publication, such sale may be made at the time and place to which the same shall 
 be so adjourned. 
 
 Constimmation of Sale. 
 
 Section .">. Upon the completion of any such sale or sales under this indenture, 
 the Trustee shall make and deliver to the accepted purchaser or purchasers of 
 the property so sold, a good and sufficient deed or deeds for the same, and shall 
 assicrn, transfer and deliver to the accepted purchaser or purchasers thereof, 
 the certificates for the shares of stock and the bonds and other like property 
 so sold. 
 
 The Trustee and its successor or successors hereunder hereby are made and 
 
 appointed the true and lawful attorney or attorneys irrevocable of the 
 
 Company and of its successors or assigns, in its or their name and stead, to 
 make all necessary deeds and other instruments of transfer aforesaid, including 
 therein any and all recitals and stipulations deemed by the Trustee, or such suc- 
 cessor or successors, respectively, to be proper ; and for that purpose the Trustee, 
 or its successor or successors, may execute all necessary or convenient deeds or 
 acts of assignment and transfer, the Company for itself, its suc- 
 cessors and assigns, hereby ratifying and confirming all that said attorney or 
 attorneys shall lawfully do by virtue hereof. 
 
 Nevertheless, the Company shall, if so requested by the Trustee, 
 
 ratify and confirm such sale or sales by executing and delivering to the Trustee, 
 or to such purchaser or purchasers, all proper deeds, conveyances, transfers and 
 releases which may be designated in such request. 
 
No. 112 FORMS 1251 
 
 Operation and Effect of Sale — Receipt of Trustee to Protect Purchaser. 
 Every such sale made under or by virtue of this indenture, whether under the 
 power of sale hereby granted and conferred, or under and by virtue of judicial 
 proceedings, shall operate to divest all right, title, interest, claim and demand 
 
 whatsoever, either at law or in equity, of the Company, or any 
 
 person claiming or to claim by, through or under it, of, in and to the property 
 so sold, and shall be a perpetual bar, both in law and in equity, against the 
 Company, its successors and assigns, and against all persons claim- 
 ing or to claim the property sold, or any part thereof, either through or under 
 
 the Company, its successors or assigns ; and the receipt of the 
 
 Trustee for the purchase money paid on such sale shall be a sufficient discharge 
 to the purchaser without any liability upon the part of the purchaser to see to 
 the application of the purchase money or to be bound to inquire as to the 
 authorization, necessity, expediency or regularity of any such sale. 
 
 Maturity of Principal as Result of Sale. 
 Section 6. In case of such sale, whether under the power of sale hereby 
 granted or pursuant to judicial proceedings, the principal sums of all the bonds 
 hereby secured and then outstanding, if not previously due, shall become due 
 and payable immediately, anything in said bonds or in this indenture contained 
 to the contrary notwithstanding. 
 
 Distribution of Proceeds of Sale. 
 
 Section 7. The purchase money, proceeds and avails of any such sale, wliether 
 under the power of sale hereby granted or pursuant to judicial proceedings, 
 together with any other sums which then may be held by the Trustee under any 
 of the provisions of this indenture as part of the trust estate, or the proceeds 
 thereof, shall be applied as follows: 
 
 First. To the payment of the costs and expenses of such sale, including a 
 reasonable compensation to the Trustee, its agents, attorneys and counsel, and 
 of all other expenses, liabilities and advancements made or incurred by the 
 Trustee in the premises; 
 
 Second. To the payment of the whole amount then owing or unpaid upon the , 
 bonds hereby secured and then outstanding for principal and interest, with 
 interest at the rate of five per cent, per annum on the overdue instalments of 
 interest from their respective due dates; and in case such proceeds shall be 
 insufficient to pay in full the whole amount so due and unpaid, then to the 
 payment of such principal and interest, without preference or priority of prin- 
 cipal over interest, or of interest over principal, or of any instalment of interest 
 over any other instalment of interest, ratably, to the aggregate of such principal 
 and the accrued and unpaid interest, subject, however, to the provisions of section 
 1 of this Article; and 
 
 Third. The surplus, if any, shall be paid to the Company, its 
 
 successors or assigns, or to whomsoever may be lawfully entitled to receive the 
 same. 
 
 Bonds and Coupons May Be Used to Make Payment. 
 
 Section 8. In case of any sale hereunder, whether under the power of sale 
 hereby granted or pursuant to judicial proceedings, any purchaser, for the pur- 
 pose of making settlement or payment for the property purchased, shall, sub- 
 
1252 FORMS No. 112 
 
 jeet to the provisions of section 1 of this Article, be entitled to use and apply 
 any bonds and any matured and unpaid coupons hereby secured, by presenting 
 such bonds and coupons, in order that there may be credited thereon the sum 
 apportionable and applicable to the payment thereof out of the net proceeds of 
 such sale to the owner of such bonds and coupons as his ratable share of^ such 
 net proceeds, after making any deductions which made be made from the pro- 
 ceeds of such sale for costs, expenses, compensation and other charges; and 
 thereupon such purchaser shall be credited on account of such purchase price 
 payable by him, with the sum apportionable and applicable out of such net pro- 
 ceeds to the payment of or as a credit on the bonds and coupons so presented; 
 and, at any such sale, any bondholder, or the Trustee, may bid for and may 
 purchase such property, and may make payment therefor as aforesaid, and, 
 upon compliance with the terms of sale, may hold, retain and possess and dispose 
 of such property in his or its own absolute right, without further accountability. 
 
 ' Trustee May Sue and Recover Judgment on Default. 
 
 Section 9. The Company covenants that in case ( 1 ) default 
 
 shall be made in the payment of any interest on any bond hereby sertired, and if 
 such default shall have continued for a period of ninety days; or in case (2) 
 default shall be made in the payment of the principal of any such bonds when 
 the same shall become payable, whether by the maturity of said bonds, or by 
 declaration as authorized by this indenture, or, by a sale, as provided in section 
 
 6 of this Article, then, upon demand of the Trustee, the Company 
 
 will pay to the Trustee for the benefit of the holders of the bonds and coupons 
 hereby secured then outstanding, the whole amount due and payable on all such 
 bonds and coupons then outstanding, for principal or interest, or both, as the 
 case may be, with interest (so far as such interest shall not be represented by 
 overdue coupons) at the rate of five per cent, per annum upon the overdue 
 principal and instalments of interest from their respective due dates; and in 
 
 case the Company shall fail to pay the same forthwith upon such 
 
 demand, the Trustee, in its own name and as trustee of an express trust, shall 
 be entitled to sue for and to recover judgment for the whole amount so due and 
 unpaid. 
 
 The Trustee shall be entitled to sue and recover judgment as aforesaid, either 
 before or after or during the pendency of any proceedings for the enforcement 
 of the lien of this indenture, upon the property hereby mortgaged and pledged, 
 and the right of the Trustee to sue and to recover such judgment shall not be 
 affected by any sale hereunder, or by the exercise of any other right, power or 
 remedy for the enforcement of the provisions of this indenture, or for the fore- 
 closure of the lien thereof; and, in case of a sale of the property hereby mort- 
 gaged and pledged, the Trustee, in its own name and as trustee of an express 
 trust, shall be entitled to enforce payment of and to receive all amounts then 
 remaining due and unpaid upon any and all of the bonds and coupons issued 
 hereunder and then outstanding, for the benefit of the holders thereof, and shall 
 be entitled to sue for and to recover judgment for any portion of the said debt 
 remaining unpaid, with interest. No recovery of any such judgment by the 
 Trustee, and no lien of any execution upon property subject to the lien of this 
 indenture, or upon any other property, shall in any manner, or to any extent, 
 affect the lien of the Trustee upon the property hereby mortgaged and pledged, 
 
No. 112 POEMS 1253 
 
 or any part thereof, or any rights, powers or remedies of the Trustee hereunder, 
 or any rights, powers or remedies of the holders of the bonds hereby secured, 
 but such liens, rights, powers and remedies shall continue unimpaired as before, 
 and also as security for and for the enforcement of any and every such judgment 
 as fully as for and for the enforcement of the payment of such bonds and the 
 interest thereon. 
 
 Any moneys thus collected by the Trustee under this section, after paying 
 the expenses incurred in the premises of the character described in the first sub- 
 paragraph of section 7 of this Article, shall be applied by the Trustee receiving 
 the same towards the payment of the amount then due and unpaid upon such 
 bonds and coupons, in respect or for the benefit of which, such moneys shall 
 have been collected, ratably, and without any preference or priority of any kind, 
 except as provided in section 1 of this Article, according to the amounts due 
 and payable upon such bonds and coupons, respectively, at the date fixed by 
 such Trustee for the distribution of such moneys, upon presentation of the several 
 bonds and coupons or of said several registered bonds without coupons, and 
 stamping thereon such payment, if only partially paid, and upon surrender 
 thereof, if fully paid. 
 
 Waiver of Stay Laws, Redemption, etc. 
 
 Section 10. The Company will not at any time insist upon or 
 
 plead, or in any manner whatever claim, or take the benefit or advantage of, 
 any stay or extension law now or at any time hereafter in force, nor will it 
 claim, take or insist upon any benefit or advantage from any law now or here- 
 after in force, providing for the valuation or appraisement of the property hereby 
 mortgaged and pledged, or any part thereof, prior to any sale or sales thereof to 
 be made pursuant to any prpvision herein contained, or to the decree, judgment 
 or order of any court of competent jurisdiction; nor, after any such sale or 
 sales, will it claim or exercise any right under any statute now or hereafter 
 made or enacted by any State or otherwise, to redeem the property so sold, or 
 any part thereof; and it hereby expressly waives all benefit and advantage of 
 any such law or laws, and it covenants that it will not invoke or utilize any 
 such law or laws in order to hinder, delay or impede the execution of any 
 power herein granted and delegated to the Trustee, but that it will suffer and 
 permit the execution of every such power as though no such law or laws had 
 been made or enacted. 
 
 Limitations on Right of Bondholders to Institute Smts. 
 
 Section 11. No holder of any bond or coupon hereby secured shall have the 
 right to institute any suit, action or proceeding, in equity or at law, for the 
 foreclosure of this indenture or for the execution of any trust thereof, or for the 
 appointment of a receiver, or for any other remedy hereunder, or by reason 
 hereof, unless such holder previously shall have given to the Trustee written 
 notice of such default and of the continuance thereof, as hereinbefore provided; 
 nor unless, also, the holders of twenty-five per cent, in amount of the bonds 
 hereby secured and then outstanding, after the right of action upon the default 
 complained of shall have accrued to the Trustee, shall have made written request 
 upon the Trustee and shall have afforded to it a reasonable opportunity either 
 
1254 FORMS No. 112 
 
 to proceed to exercise the powers hereinbefore granted, or to institute such 
 action, suit or proceeding in the name of the Trustee; nor unless, also, they 
 shall have offered to the Trustee adequate security and indemnity against the 
 costs, expenses and liabilities to be incurred therein or hereby; and such notifi- 
 cation, request and offer of indemnity are hereby declared, in every such case, 
 at the option of the Trustee, to be conditions precedent to the execution of the 
 powers and trusts of this indenture, for the benefit of the bondholders, and to 
 any action or cause of action for foreclosure or for the appointment of a 
 receiver, or for any other remedy hereunder; it being understood, intended and 
 hereby provided that no one or more holders of bonds or coupons secured hereby 
 shall have the right in any manner whatever, by his or their action, to enforce, 
 affect, disturb or prejudice the lien of this indenture, or to enforce any right 
 under this indenture, except in the manner herein provided, and that all pro- 
 ceedings at law or in equity under this indenture shall be instituted, had and 
 maintained only in the manner herein provided, and for the equal benefit of aJl 
 holders of such outstanding bonds and coupons. 
 
 Remedies Cumulative. 
 
 Section 12. Except as herein expressly provided to the contrary, no remedy 
 lierein conferred upon or reserved to the Trustee, or to the holders of bonds 
 hereby secured, is intended to be exclusive of any other remedy or remedies; 
 but each and every such remedy shall be cumulative, and shall be in addition 
 to every other remedy given hereunder, or now or hereafter existing at law or 
 in equity or by statute. 
 
 No Waiver hy Delay. 
 
 Section 13. No delay or omission of the Trustee, or of any holders of bonds 
 hereby secured, to exercise any right or power accruing upon any default con- 
 tinuing, as aforesaid, shall impair any such right or power, or shall be con- 
 strued to be a waiver of any such default, or acquiescence therein; and every 
 power and remedy given by this Article to the Trustee, or to the bondholders, 
 may be exercised, from time to time, and as often as may be deemed expedient, 
 by the Trustee invested therewith, or by the bondholders, respectively. 
 
 ARTICLE FIVE. 
 
 Individual Liahility Negatived and Released. 
 
 No recourse under or upon any obligation, covenant, or agreement contained 
 in this indenture, or in any bond or coupon hereby secured, or because of the 
 creation of any indebtedness herein mentioned, shall be had against any incor- 
 porator, or against any present or future stockholder, officer or director, of the 
 
 Company, or of any successor corporation, either directly or through 
 
 the Company, by the enforcement of any assessment, or through a 
 
 receiver, assignee or trustee in bankruptcy, or by any other legal or equitable 
 proceeding, or by virtue of any statute, or otherw^ise; it being expressly agreed 
 and understood that this indenture and the obligations hereby secured, are 
 solely corporate obligations, and that no personal liability whatever shall attach 
 to, or be incurred by, the incorporators, or to or by any present or future stock- 
 holder, officer or director of the Company, or of any successor corpora- 
 
No. 112 FORMS 1255 
 
 tion, or any of them, because of the incurring of the indehtedness hereby author- 
 ized, or under or by reason of any of the obligations, covenants, or agreements 
 contained in this indenture or in any of the bonds or coupons hereby secured, 
 or to be implied therefrom; and that any arid all personal liability of every 
 name and nature, and any and all rights and claims against every such incor- 
 porator, and against every such present and future stockholder, officer or 
 director, whether arising at common law or equity, or created or to be created 
 by statute or constitution, are hereby expressly released and waived as a con- 
 dition of, and as a part of the consideration for, the execution of this indenture 
 and the issue of the bonds and interest obligations secured hereby. 
 
 ARTICLE SIX. 
 Release Clauses. 
 
 If at any time any property, or any shares of stock, bonds, debentures, obliga- 
 tions, or other securities subject to this indenture, other than shares of stock 
 
 of Ihe Company, cannot, in the judgment of the Board of Directors 
 
 or Executive Committee of the Company, be advantageously used in 
 
 the proper and judicious operation of the business of the Company, 
 
 or if the sale and disposition thereof has, in the opinion of such Board of 
 Directors or Executive Committee, become necessary or expedient for any 
 cause, the same, or any interest therein, may be sold or exchanged for other 
 property, or for bonds, shares of stock or other securities; and, upon the 
 
 request of the Company, evidenced by a resolution of its Board of 
 
 Directors or Executive Committee, the Trustee shall release the same from the 
 lien and eflfect of this indenture, but subject to the following provisions and 
 conditions : 
 
 (a) Before any such property, shares of stock, bonds or other securities, or 
 any interest therein, shall be released, the same shall be appraised by an 
 appraiser, or by more than one appraiser, who shall be selected by the Trustee; 
 
 ( 6 ) In case of any such sale of any such property, shares of stock, bonds, or 
 other securities, or of any interest therein, the price or proceeds of such sale, not 
 less than the value of such property, or of such interest, as appraised by such 
 appraiser or appraisers, or a sum equivalent to such price or proceeds, shall 
 be deposited with the Trustee, to be held for the further security of the bonds 
 hereby secured until paid over or applied as hereinafter provided; and 
 
 (c) In case of an exchange, other property, shares of stock, bonds, or other 
 securities, appraised by an appraiser or appraisers selected by the Trustee, to 
 be of the value at least equal to the appraised value of the_ property given in 
 exchange, shall be subjected to the lien and operation of this indenture. 
 
 The moneys received by the Trustee upon any such sale or exchange shall, 
 
 upon the request of the Company, evidenced by a resolution of its 
 
 Board of Directors or Executive Committee, be applied, as follows: 
 
 ( 1 ) The Trustee shall pay over to the , . Company, out of any such 
 
 proceeds, sums equal to any expenditures that shall have been made by the 
 
 Company, after such sale, for the acquisition of additional property, 
 
 or for the acquisition of additional bonds or other obligations, or shares of the 
 capital stock of other corporations, upon such property being subjected to the 
 lien and operation of this indenture or upon the assignment and delivery of 
 
1256 FORMS No. 112 
 
 Buch bonds, other obligations, and certificates for such shares of stock to the 
 Trustee; or 
 
 (2) At the option of the Board of Directors or Executive Committee of the 
 
 Company, the Trustee shall apply such proceeds, or any part thereof, 
 
 to purchasing, in the manner and under the conditions provided in res,pect of 
 payments of or on account of principal in section 2 of Article Three of this 
 indenture, bonds hereby secured; and all bonds so purchased shall be canceled; 
 and anything herein to the contrary notwithstanding, no bonds shall be authen- 
 ticated or delivered in place of the bonds so purchased and canceled. 
 
 The Trustee may receive and shall be entitled to act and rely upon a certificate 
 signed by the President or one of the Vice-Presidents and the Treasurer or one 
 
 of the Assistant Treasurers of the Company, as conclusive evidence 
 
 of any fact mentioned in this Article. 
 
 ARTICLE SEVEN. 
 
 Possession of Mortgaged Property Until Default. 
 
 Section 1. Until some default shall have been made in the due and punctual 
 payment of the interest or of the principal of the bonds hereby secured, or of 
 some part of such interest or principal, or in the due and punctual performance 
 and observance of some covenant or condition hereof obligatory upon the 
 
 Company, and until such default shall have been continued beyond 
 
 the period of grace, if any, hereinbefore provided in respect thereof, the 
 
 Company, its successors and assigns, shall be suffered and permitted to retain 
 actual possession of all the property that may be conveyed and mortgaged or 
 assigned and pledged to the Trustee (but not of bonds, evidences of indebted- 
 ness, certificates of stock, cash and other property hereby provided to be delivered 
 or paid to the Trustee), and to manage, operate and use the same and every 
 part thereof, with the rights and franchises appertaining thereto, and to col- 
 lect, receive, take, use and enjoy the earnings, income, rents, issues, and profits 
 thereof, and to manufacture, transform and otherwise utilize and to sell and 
 dispose of any of the products thereof. 
 
 Satisfaction on Payment — Disposition of Pledged Securities on Satisfaction. 
 
 Section 2. If and when the bonds hereby secured shall have become due and 
 
 payable, the Company shall well and truly pay, or cause to be paid, 
 
 the whole amount of the principal moneys and interest due upon all the bonds 
 hereby secured and then outstanding, or shall provide for such payment by 
 depositing with the Trustee hereunder, for the payment of such bonds and the 
 accrued interest thereon, the entire amount then due thereon for principal and 
 interest, and also shall pay or cause to be paid, all other sums then accrued and 
 
 to be paid to the Trustee hereunder by the Company, and shall well 
 
 and truly keep and perform all the things herein required to be kept and per- 
 formed by it, according to the true intent and meaning of this indenture, then 
 and in that case, all property, shares of stock, bonds, obligations and other rights 
 and interests hereunder conveyed, assigned, mortgaged or pledged, or then subject 
 
 hereto, shall revert to the Company, its sucessors or assigns ; and the 
 
 estate, rights, title and interest of the Trustee, in respect thereof shall there- 
 
No. 112 FORMS 1257 
 
 upon cease, determine and become void; and the Trustee, in such case, on demand 
 
 of the Company, its successors or assigns, and at its or their cost and 
 
 expense, shall execute proper instruments acknowledging satisfaction of this 
 indenture; but the Trustee, in such case, shall continue to hold, as depositary 
 
 for the . . Company, its successors or assigns, the certificates for all 
 
 shares of stock and all bonds, or other obligations and claims and the evidences 
 thereof, which are then on deposit with it hereunder, until the Board of Directors 
 
 of the Company, its successors or assigns, by resolution, shall have 
 
 authorized some disposition thereof; whereupon, the Trustee shall dispose of 
 such shares of stock, bonds or other securities, as authorized by such resolution. 
 
 Provisions in Case of Change of Name hy the Company. 
 
 Section 3. In case the Company shall at any time change its cor- 
 porate name, it may nevertheless adopt and use the name of Company 
 
 in issuing and causing to be authenticated and delivered, bonds secured hereby, 
 
 or, at the election of the Company, by whatever corporate name it may 
 
 be known at the time, any bonds thereafter issued hereunder may, if so specified 
 and provided in a resolution of the Board of Directors of said Company, be issued 
 in the name to which said corporate name shall have been thus changed, and 
 shall be authenticated and delivered by the Trustee in that form; and any and 
 all bonds issued hereunder after such change of corporate name, whether in the 
 
 name of the Company or in the name to which the name of said 
 
 Company has been changed, shall, in all respects, be entitled to each 
 
 and every the benefits and security of this indenture and be subject to the terms 
 and provisions thereof; and in case of such change of corporate name, any 
 resolution, certificate, request, direction, order or other instrument or action 
 herein provided or contemplated hereby to be passed executed, made or done by 
 
 the , Company, or its Board of Directors or Executive Committee, or 
 
 any of its officers or representatives thereunto authorized, may be passed, exe- 
 cuted, made or done in the name to which that of the Company shall 
 
 have been so changed. 
 
 ARTICLE EIGHT. 
 
 Authentication of Bondholders' Instrument!. 
 
 Section 1. Any request, direction or other instrument required by this inden- 
 ture to be signed and executed by bondholders, may be in any number of con- 
 current writings of similar tenor, and may be signed or executed by such bond- 
 holders in person or by attorney appointed in writing. Proof of the execution 
 of such request, direction or other instrument, or of the writing appointing 
 any such agent, and of the ownership of coupon bonds transferable by delivery, 
 if made in the following manner, shall be sufficient for' any purpose of this 
 indenture, and shall be conclusive • in favor of the Trustee with regard to action 
 by it taken, or suffered under such request, to wit: 
 
 (a) The fact and date of the execution by any person of any such writing 
 may be proved by the certificate of any officer in any jurisdiction who, by the 
 laws thereof, has power to talje acknowledgments within said jurisdiction, that 
 
1258 FOEMS No. 112 
 
 the person signing such writing did acknowledge before him the execution thereof, 
 or by an affidavit of a witness of such execution. 
 
 ( 6 ) The fact of the holding of coupon bonds hereunder by any bondholder, and 
 the amount and numbers of any such bonds, and the date of his holding the 
 same, may be proved by a certificate executed by any trust company, bank, 
 bankers or other depositary (wherever situated), if such certificate shall be 
 deemed by the Trustee to be satisfactory, showing that at the date therein men- 
 tioned such person had on deposit with such trust company, bank, bankers. or 
 other depositary the bonds described in such certificate. The ownership of regis- 
 tered coupon bonds or of registered bonds without coupons, shall be proved 
 by the register of said bonds. 
 
 Right to Act on Apparent Ownership of Bonds. 
 
 Section 2. The Company and the Trustee may deem and treat the 
 
 bearer of any coupon bond hereby secured which shall not at the time be regis- 
 tered in the name of the owner thereof, as hereinbefore authorized, and the holder 
 of any coupon for interest on any such bond, whether such bond shall be regis- 
 tered or not, as the absolute owner of such bond or coupon, as the case may be, 
 for the purpose of receiving payment thereof, and for all other purpdfees, and 
 
 neither the Company nor the Trustee shall be affected by any notice 
 
 to the contrary. 
 
 The Company and the Trustee may deem and treat the person in 
 
 whose name any registered bond without coupons, issued hereunder shall be regis- 
 tered upon the books of the "Company, as hereinbefore provided, as the 
 
 absolute owner of such bond, for the purpose of receiving payment of, or on 
 account of, the principal and interest of such bond, and for all other purposes, 
 and may deem and treat the person in whose name any coupon bond shall be so 
 registered as the absolute owner thereof for the purpose of receiving payment 
 of, or on account of, the principal thereof, and for all other purposes, except 
 to receive paj'ment of interest represented by outstanding coupons; and all such 
 payments so made to any such registered holder, or upon his order, shall be 
 valid and effectual to satisfy and discharge the liability upon such bond to the 
 extent of the sum or sums so paid. 
 
 ARTICLE NINE. 
 Conditions of Accepting Trusts Thereof. 
 
 The Trustee, for itself and its several successors, hereby accepts the trusts 
 and assumes the duties herein created and imposed upon it, but only upon the 
 following terms and conditions, to-wit: 
 
 (a) The Trustee shall be protected in acting upon any notice, request, consent, 
 certificate, bond, promissory note, or other paper or document believed by it, or 
 by the one acting thereon, to be genuine and to have been signed by the proper 
 party or parties. 
 
 Immunities and Compensation of Trustee. 
 
 (6) The Trustee may select and employ in and about the execution of this 
 trust, suitable agents and attorneys, whose reasonable compensation shall he 
 paid to the Trustee by the Company, or, in default of such payment. 
 
No. 112 FORMS 1259 
 
 shall be a charge upon the property hereby mortgaged and pledged, and the 
 proceeds thereof, paramount to said bonds. The Trustee shall not be responsible 
 for the recording or filing or for the re-recording or re-filing of any instrument 
 transferring or mortgaging to it upon the trusts herein contained, any property 
 or securities other than or in addition to those specified in the granting clauses 
 hereof. The Trustee shall not be under any responsibility or duty with respect 
 to the disposition of the proceeds ,of the bonds hereby secure'd. The Trustee shall 
 not be liable for failure to insure or renew insurance or for responsibilities of 
 insurers. The Trustee shall not be personally liable for any loss or damage, save 
 for its own wilful default. 
 
 (c) The Trustee shall have a first lien upon the property hereby mortgaged 
 and pledged for reasonable expenses, counsel fees and compensation incurred in 
 and about the execution of the trusts hereby created and the exercise and per- 
 formance of its powers and duties hereunder, and also to indemnify and hold 
 it harmless against any liability, charge, cost or expense based upon or resulting 
 from the fact that said Trustee shall have taken or had transferred into its 
 name, the certificate for any shares of stock or the title to any property, bond, 
 or other obligation subject to this indenture, or entitled to be, and against 
 the cost and expense of defending against any alleged liability in the premises 
 of any character whatsoever. 
 
 {d) The Trustee shall be under no obligation or duty to perform any act 
 hereunder, or to institute or defend any suit in respect hereof, unless reasonably 
 indemnified. It shall not be required to take notice or be deemed to have 
 notice of any default hereunder and may conclusively assume that there has been 
 no default hereunder or on the part of the maker of or under any bonds, deben- 
 tures or other obligations at any time held by the Trustee or to which it may be 
 entitled under the terms hereof, unless it shall have been specifically notified 
 in writisg of such default. Except as herein expressly otherwise provided, the 
 Trustee shall not be bound to recognize any person as a, bondholder unless and 
 until his bonds are submitted to the Trustee for inspection, if required, and his 
 title satisfactorily established, if disputed. 
 
 (e) The recitals of fact herein and in said bonds contained shall be taken as 
 
 statements by the Company, and shall not be construed as made by the 
 
 Trustee. The Trustee makes no representation as to the value or title of the 
 property transferred hereunder. 
 
 Trustee May Resign. 
 
 (f) The Trustee, or any successor or successors hereafter appointed, may 
 resign and be discharged of the trusts hereby created, by written notice thereof 
 
 to the Company and by publication at least once in each week for two 
 
 consecutive weeks in a daily newspaper published in the city of New York. 
 
 ig) The Trustee may consult with counsel, and shall be protected in any 
 action taken or suffered by it in good faith and in accordance with the opinion 
 of its counsel. 
 
 ARTICLE TEN. 
 
 Removal of Trustee. 
 
 The Trustee, or any Trustee or Trustees hereafter appointed, may be removed 
 at any time by an instrument or concurrent instruments in writing, signed by the 
 
1260 
 
 FORMS No. 112 
 
 holders of two-thirds in amount of the bonds hereby aecured and then out- 
 standing. 
 
 Appointment of Successor-Trustee. 
 
 In case at any time the Trustee, or any Trustee or Trustees hereafter ap- 
 pointed, shall resign, or shall be removed, or be dissolved, or otherwise shall 
 become incapable of stcting, a successor may b? appointed by the holders of a 
 majority in amount of the bonds hereby secured and then outstanding, by an 
 instrument or concurrent instruments in writing signed by such bondholders or 
 by their attorneys in fact duly authorized; provided, nevertheless, and it is 
 hereby agreed and declared, that in case at any time there shall be a, vacancy 
 
 in the office of Trustee hereunder, the Company, by instrument executed 
 
 by order of its Board of Directors or Executive Committee, may appoint a 
 Trustee to fill such vacancy until a, new Trustee shall be appointed by the bond- 
 holders as herein authorized. The Company shall publish notice of 
 
 any such appointment by it made, once in each week for four consecutive weeks, 
 in two daily newspapers of general circulation published in the city of New 
 York; and any new Trustee appointed by the Company shall, imme- 
 diately and without further act, be superseded by a Trustee appointed by the 
 bondholders in the manner above provided, provided that such appointment be 
 made prior to the expiration of one year from the date of such publication of 
 
 notice. Every such Trustee appointed by the bondholders, or by the 
 
 Company, shall always be a trust company in good standing' in the city of 
 New York, having a capital, surplus and undivided profits aggregating not less 
 
 than Dollars ($ ) , if there be such a trust company willing and 
 
 able to accept the trust upon reasonable or customary terms. 
 
 Proceedings in Case of Appointment of New Trustee. 
 
 Any new Trustee appointed hereunder shall execute, acknowledge and deliver 
 to the Trustee last in office, and to its or his co-trustee, if any, and also to 
 
 the Company, an instrument acepting such appointment hereunder ; 
 
 and thereupon such new Trustee, without any further act, deed or conveyance, 
 shall become fully vested with all the estates, properties, rights, powers, trusts, 
 duties and obligations, of its predecessor in trust hereunder, with like effect as if 
 originally named as Trustee herein; but the Trustee ceasing to act, shall never- 
 theless, on the written request of the Company, or of the new Trustee, 
 
 and at the cost and expense of the Company, execute and deliver any 
 
 and every instrument necessary or convenient to transfer to such new Trustee, 
 upon the trusts herein expressed, all the estates, properties, rights, powers and 
 trusts of the Trustee so ceasing to act, and shall duly assign, transfer and 
 deliver all property and moneys held by such Trustee to the new Trustee. 
 Should any deed, conveyance or instrument in writing from the Com- 
 pany be required by the new Trustee for more fully and certainly vesting in 
 and confirming to such new Trustee such estates, rights, powers and duties, any 
 and all such deeds, conveyances and instruments in writing shall, on request, 
 be executed, acknowledged and delivered by the Company. 
 
No. 112 FORMS 1261 
 
 Appointment of Co-Trustee or of Additional Trustee. 
 
 If, at any time or times, in order to conform to any legal requirement, the 
 
 ■ ■ ■ Company shall so request, the Company and the Trustee shall 
 
 unite in the execution, delivery and performance of any and all instruments and 
 agreements necessary or proper to appoint another trust company, or one or 
 more persons approved by the Trustee, either to act as Co-trustee or Co-trustees 
 of all or. any of the property subject to the lien hereof, jointly with the Trustee 
 originally named herein, or its successor or successors, or to act as separate 
 Trustee or Trustees of any such property. 
 
 Every successor Trustee and every additional Trustee hereunder, other than 
 
 any trust company which may be appointed as successor to the Trust 
 
 Company, shall, to the extent permitted by law, be appointed subject to the 
 following provisions and conditions, namely: 
 
 (1) The bonds secured hereby shall be certified and delivered, and all 
 powers, duties, obligations and rights conferred upon the said Trustee in 
 respect of the custody of all stocks, bonds, securities, and cash, shall be 
 
 exercised, solely by said Trust Company, or a trust company 
 
 aj>pointed and acting as its successor in the trust hereunder; 
 
 ( 2 ) No power shall be exercised hereunder by such successor or additional 
 Trustee or Trustees, except jointly with the consent in writing of said 
 
 Trust Company, or any trust 'company which may have been 
 
 appointed and be acting as its successor in the trust; and 
 
 ( 3 ) the Company and the Trust Company, or its 
 
 successor in the trust, at any time, by an instrument -in writing, executed 
 by them jointly, may remove any such other Trustee or Trustees, and by an 
 instrument in writing, executed by them jointly, may appoint a successor 
 or successors to such other Trustee or Trustees, anything herein contained 
 to the contrary notwithstanding. 
 
 Any notice, request or other writing by or on behalf of the bondliolders 
 
 delivered sol^y to the Trust Company, or its successor in the trust, 
 
 shall be deemed to have been delivered to all such Trustees as effectually as if 
 delivered to each of them. 
 
 Every instrument appointing a successor or additional Trustee or Trustees 
 shall refer to this indenture and the conditions in this Article expressed, and 
 upon the acceptance in writing by such successor or additional Trustee or 
 Trustees, he, they or it shall be vested with the estates and property specified in 
 
 such instrument, either jointly with the Trust Company, or its 
 
 successor, or separately, as may be provided, subject to all the trusts, conditions, 
 covenants and provisions of this indenture. Every such instrument shall be filed 
 Avith the Trust Company, or its successor in the trust. 
 
 Any additional Trustee or Trustees may, at any time, by an instrument in 
 
 writing, constitute said Trusit Company, and its successor in the trust 
 
 hereunder, his, their or its agents and attorney in fact, with full power and 
 authority, to the extent which may be permitted by law, to do all acts and 
 things and exercise all discretions authorized or permitted by him, them or it, 
 for and in behalf and in the name of the Trustee or Trustees executing such 
 
 instrument. 
 
 I 
 
1262 FORMS No. 112 
 
 In case any additional Trustee or Trustees, or a, successor to either of them, 
 shall die, become incapable of acting, resign, or be removed, all the estates, 
 properties, rights, powers, trusts, duties and obligations of the said Trustee, so 
 
 far as permitted by law, shall vest in and be exercised by said Trust 
 
 Company, or its successor in the trust, without the appointment of a new 
 Trustee as successor to such additional Trustee. 
 
 No successor to any additional Trustee shall be appointed unless such appoint- 
 ment shall be necessary for the full protection of the bondholders hereunder, nor 
 
 unless the Trust Company, or its successor, or the holders of a majority 
 
 in amount of the bonds hereby secured, shall deem such appointment expedient 
 for any cause. 
 
 Trustee May Rely on Certificates of Mortgagor's Officers. 
 
 Whenever the existence or non-existence of any faot or other matter shall be 
 material, the Trustee shall, unless herein elsewhere provided to the contrary, be 
 protected in acting or refraining from acting under any provision of this 
 instrument, in relying upon a certificate as to the existence or non-existence 
 of any such fact, or matter signed by the President or one of the Vice-Presidents 
 and the Secretary or one of the Assistant Secretaries, or the Treasurer or one of 
 the Assistant Treasurers of the Company. 
 
 In case of the appointment of any new Trustee under the provisions of this 
 article, a copy of the instrument making such appointment, duly authenticated 
 
 by the President and Secretary of the CKJmpany ( they having inspected 
 
 and compared said copy with the original) as a true copy, shall be filed with 
 each of the corporations of whose capital stock shares shall then be subjexvt to 
 this indenture. 
 
 ARTICLE ELEVEN. 
 
 Successors amd Assigns Bond. 
 
 Section 1. All the covenants, stipulations, promises, undertakings, and agree- 
 ments herein contained, by or on behalf of the Company, shall bind 
 
 its successors and assigns, whether so expressed or not. For every purpose of 
 this indenture, including the execution, issue- and use of any and all bonds 
 
 hereby secured, the term " Company " includes and means, not only 
 
 the party of the first part hereto, but also its successors and assigns. 
 
 Definition of Terms. 
 
 Sectiok 2. The word " Trustee " means the Trustee for the time being, 
 whether original or successor. The words " Trustee," " bond " and " bondholder " 
 shall include the plural as well as the singular number, unless otherwise expressly 
 indicated. The word " coupons " refers to the interest coupons attached to the 
 bonds secured hereby. The word " person " used with reference to a bondholder, 
 shall include associations or corporations owning any of said bonds. 
 
No. 113 FORMS 1263 
 
 Signatures, 
 
 In witness wheebop, the said Company and the said Trust 
 
 Company of New York have each caused its corporate seal, duly attested by its 
 Secretary, to be affixed to an original and duplicate hereof, and these presents 
 to be subscribed by its President or one of its Vice-Presidents. 
 
 Company, 
 
 (CoKPORATE Seal.) By 
 
 President. 
 
 Attest: 
 
 Secretary. 
 
 Signed, sealed and delivered by said 
 
 Company in the 
 
 presence of 
 
 Trust Compant, 
 
 t Corporate Seal) By 
 
 Vice-President. 
 Attest: 
 
 Secretary. 
 
 Signed, sealed and delivered by said 
 
 Trust Company 
 
 in the presence of 
 
 FORM NO. 113. 
 Minutes of Stockholders' Meeting, With Notice, Consenting to Mortgage. 
 
 A special meeting of the stockholders of , Inc., was held at 
 
 , at o'clock in the noon of the day of 
 
 , 191.., pursuant to the following notice, given as required 
 
 for a notice t>f an annual meeting of said corporation: 
 
 Notice is hereby given that a special meeting of the stockholders ot 
 
 , Inc., will be held at , at 
 
 o'clock in the noon of the day of , 191 . ., for 
 
 the purpose of obtaining the consent of holders of not less than two-thirds 
 of its capital stock to the mortgage of its property and franchises to secure 
 payment of obligations or debts necessarily incurred or contracted in the 
 transaction of its business. 
 
 Secretary. President. 
 
1264 FORMS Nos. 114, 115 
 
 The President in the chair, the Secretary recording. 
 
 The Secretary presented the affidavit of .* , verified the 
 
 day of , 191 . ., showing proof of due notice of this meeting as 
 
 required in the case of an annual meeting of the stockholders of this company, 
 which was, on motion ' duly seconded ajid unanimously carried, ordered filed 
 in the archives of the corporation. 
 
 The Secretary reported the total capital stock of the company as , 
 
 of which were present in person and by proxy, the 
 
 proxies of the latter being correct and on file with him. 
 
 The President reported [state facts showing need of mortgage]. 
 
 On motion, duly seconded and unanimously carried, the following ressolution 
 
 was adopted by the vote of shares, being more than two-thirds of the 
 
 capital stock of the company: 
 
 Whereas, this company needs $ to cover its obligations and debts 
 
 necessarily incurred or to be incurred in the transaction of its business or the 
 
 exercise of its corporate rights, privileges or franchises, viz 
 
 [state particular need]. 
 
 Resolved, that the stockholders of this corporation in special meeting for the 
 purpose duly assembled consent and they hereby do consent to a mortgage or 
 mortgages of the property and franchises of the corporation to secure an 
 
 amount of $ , and payment of its obligations and debts up to 
 
 that amount; and that the proper oflBcers and directors of this company be 
 and they hereby are authorized to do all things necessary to consummate said 
 mortgage. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 FORM NO. 114. 
 Stockholders Consent to Mortgage. 
 We, the undersigned, being holders of not less than two-thirds of the capital 
 
 stock of , Inc., a stock corporation, do hereby in writing consent 
 
 to a mortgage of the property and franchises of said corporation, to secure the 
 payment of its obligations and any debt contracted in borrowing money neces- 
 sary for the transaction of its business or the exercise of its corporate rights, 
 privileges or franchises or necessary for any other lawful purpose of its incorpo- 
 ration, in an amount of $ - 
 
 Names of Stockholders. No. of Shares. 
 
 FORM NO. 115. 
 Certificate of Consent or Resolution of Stockholders to Corporate Mortgage. 
 
 We, , the president [or, a vice-president] and , the 
 
 seretary [or, an assistant-secretary] of , Inc., do hereby, under the 
 
 seal of said corporation, subscribe, acknowledge, file and record this certificate 
 as follows: 
 
 First. — At a special meeting of the stockholders of , Inc., a stock 
 
 corporation, held at , at o'clock in the noon of the 
 
No. 116 FORMS 1265 
 
 "^y of 191 . ., pursuant to notice of a meeting called for the 
 
 purpose duly given as required for the annual meetings of said corporation, the 
 
 holders of ^ being not less than two-thirds of the capital stock of 
 
 said corporation, voted in favor of the following resolution [or, signed the follow- 
 ing consent] : 
 
 [Take in resolution from Form No. 113 or consent as in Form No. 114.] 
 Witness our subscriptions and acknowledgments and said corporation's seal, 
 this day of , 191 . . 
 
 ( Vice- ) President. 
 (CoEPOBATE Seal.) 
 
 Attest : 
 
 (Assistant) Secretary. 
 
 [Add acknowledgments.} 
 
 FORM NO. 116. 
 Certificate of Corporate Merger with Resolution of Board of Directors. 
 
 This certificate under the common seal of , Inc., is hereby filed 
 
 by it in the oifice of the Secretary of State to merge , Inc., as 
 
 follows : , 
 
 First , Inc., the corporation executing this certificate 
 
 and hereinafter called the possessor corporation, is a domestic stock corporatipn 
 (or, is a foreign stock corporation authorized to do business in this state) ; and 
 lawfully owns all the stock of , Inc., another stock corpora- 
 tion organized for or engaged' in business similar or incidental to that of the 
 posse'sor corporation. 
 
 Second. At a special meeting of tlie board of directors of the possessor corpo- 
 ration duly held on the day of , 191.., the following 
 
 resolution was duly adopted: 
 
1266 FORMS No. 117 
 
 Whereas, , Inc., is a domestic stock corporation [or, 
 
 is a foreign stock eorporatiom authorized to do business in the State of 
 
 Xew York] and lawfully owns all the stock of , Inc., 
 
 another stock corporation organized for or engaged in business similar 
 or incidental to that of this corporation, 
 
 Resolved, That this corporation merges said , Inc. 
 
 Witness the execution hereof by , Inc., under its common 
 
 seal, attested by its secretary, this day of , 191 . . 
 
 , Inc., 
 
 Uy , 
 
 President. 
 {Corporate Seal.) 
 Attest: 
 
 Secretary. 
 [Add corporate acknowledgment.} 
 
 FORM XO. 117. 
 Agrrcment of Consolidation. 
 
 Agreement made this day of , 191 ... by and between , 
 
 Inc., and , Inc.. by a majority of said corporations' respective boards 
 
 of directors and under said corporations' respective corporate seals. 
 
 Whereas, Both said corporations are organized under the Jaws of Xew York 
 State for the purpose of carrying on business of the same or similar nature 
 which a corporation organized under the Business Corporations Law of. said 
 State might carry on, and desire to consolidate into a single corporation, 
 
 Now this agreement witne^seth, Tliat in consideration of tlie premises, it is 
 
 Mutually agreed: 
 
 First. That said two corporations consolidate into a single corporation. 
 
 Second. That the terms and conditions of said consolidation are as follows: 
 
 Third. That the mode of carrying said consolidation into effect is as follows: 
 
 Fourth. That the name of the new corporation is 
 
No. 117-a FORMS 1267 
 
 Fifth. That the number of directors who shall manage said new corporation's 
 affairs shall be (not less than three). 
 
 Sixth. That the names and post-office addresses of said directors for the first 
 year are as follows: 
 
 Names. Post-offipe Addresses. 
 
 Seventh. That the term of said corporation's existence shall be • ■ ■ 
 
 years {not exceeding 50). 
 
 Eighth. That the name of the town {or towns) arid county {or counties) in 
 which said corporation's operations are to be carried on is . . . ., 
 
 Nimth. That the name of the to^n {or city) and county in New York State 
 in which said corporation's principal place of business is to be situated is 
 
 Tenth. That the amount of said corporation's capital stock is 
 
 {not larger than the fair aggregate value of the property, franchises and rights 
 of both corporations) , and the number of shares into which the same is to be 
 divided is 
 
 Eleventh. That the manner of distributing such capital stock among the 
 holders thereof is as follows: 
 
 Twelfth. [If either corporation was orgamimed to carry on any part of its busi- 
 ness in any place outside New York State} . That said , Inc., was 
 
 organized to carry on its business in to this extent : 
 
 [state]. 
 
 [Add such other particulars as the directors deem necessary]. 
 
 Witness the execution of this agreement of consolidation entered into by said 
 corporations under their respective corporate seals and signed by a majority of 
 their respective boards of directors. 
 
 ..Inc., 
 
 (COBPOBATE Seai..) by 
 
 (COBPOBATE Seal.) by 
 
 Directors. 
 . . ., Inc., 
 
 Directors. 
 
 ADDITIONAL FORM NO. 117-a. 
 Agreement of Consolidation { of N. J. Corporations ) . 
 
 Agreement, made and entered into this .... day of , , by and 
 
 between Company, a corporation of the State of New Jersey, and 
 
 the Directors thereof, parties of the first part, and Company, a corpora- 
 tion of the State of New Jersey, and the Directors thereof, parties of the 
 second part: 
 
 Whereas, the principal and registered office of each of said corporations in 
 the State of New Jersey is at , in the city of ". . . , county 
 
1268 FORMS No. 117-a 
 
 of , and the Company is the agent therein in charge 
 
 thereof upon whom process against each of said corporations may be served 
 within said State; and 
 
 Whereas, Company was heretofore incorporated under the laws 
 
 of the State of New Jersey, and whereas under the amended certificate of incor- 
 poration of the said Company, filed in the oflSce of the Secretary of State of 
 
 New Jersey on or about the . . day of , and under a certain certificate 
 
 of increase of the capital stock of said corporation, filed in the said office on 
 
 the . . day of , , said company has an authorized capital stock 
 
 of $ divided into shares of the par value of $100 each, 
 
 of which shares are . , . . per cent. ( . . %) cumulative Preferred Stock 
 
 and shares are Common Stock; and there have been duly issued and 
 
 are now outstanding certificates for shares of said Preferred Stock and 
 
 for shares of said Common Stock; "and 
 
 Whereas, the Company was heretofore incorporated under the laws 
 
 of the State of New Jersey, and whereas under the certificate of incorporation of 
 
 the said Company, filed in the said office of said Secretary of State on 
 
 .., 191.., said Company has an authorized capital stock of $ , 
 
 divided into shares of the par value of $100 each, of which 
 
 shares are . . per cent. ( . . % ) ciunulative Preferred Stock and shares 
 
 are Common Stock, and there have been duly issued and are now outstanding 
 
 certificates for shares of said Preferred Stock, and for shares 
 
 of said Common Stock ; and said Company has also executed its 
 
 certain Indenture dated ' , to the Company of 
 
 , as Trustee, providing for an authorized issue of its First Lien 
 
 Twenty-Year Five Per Cent. Gold Bonds, the aggregate amount whereof is limited 
 
 to $ par value, at any one time outstanding, of which bonds there have 
 
 been issued and are now outstanding $ par value ; and 
 
 WHEREiiS, said Company was organized pursuant to the provisions 
 
 of an Agreement dated , between , constituting 
 
 it Committee of certain stockholders of Company (therein called 
 
 the " CoBjmittee " ) , parties of the first part, James R. Plum and all other 
 holders of the stock of said Company who should, by signature to said Agree- 
 ment or by deposit of stock thereunder, become parties thereto (therein called the 
 
 " Depositing Stockholders " ) , parties of the second part, and the 
 
 Company of (therein called the "Depositary"), party of the third 
 
 part, and also pursuant to a Plan set forth in a Circular Letter mentioned in 
 said Agreement and of even date therewith, copies of said Agreement and of 
 said Circular Letter being hereto annexed and marked, respectively. Exhibits 
 "A" and "B"; and 
 
 Whereas, pursuant to the Agreement and Plan aforesaid, said 
 
 Company thereafter issued its securities in payment for shares of the stock 
 
 of Company acquired by it thereunder and otherwise, and did 
 
 acquire and now owns shares of stock of Company as follows : 
 
 $ , par value, of shares of its Preferred Stock, and $ , par 
 
 value, of shares of its Common Stock, leaving outstanding shares of stock of said 
 
 Company not owned by the Company, as follows : $ , 
 
 par value, of shares of Preferred Stock, and $ , par value, of shares of 
 
 Common Stock; and 
 
 Whereas, dividends at the rate of . . per cent, per annum have regularly 
 
No. 117-a FORMS 1269 
 
 been paid upon the preferred stock of Company in quarterly install- 
 ments of per cent, from a date prior to the 1st day of , 19. ., 
 
 such quarterly payments having been made on the 1st day of , 19.., 
 
 the 1st day of , the 1st day of , the 1st day of and the 1st 
 
 day of ,19. ., and the 1st day of , the 1st day of , the 1st 
 
 day of and the 1st day of , 19. ., and the 1st day of , the 
 
 1st day of , the 1st day of and the 1st day of ; , 19 . . , the last 
 
 mentioned date being the date of the last such payment; and, whereas, dividends 
 dt the rate of . . per cent, per annum have been regularly paid in quarterly 
 installments of per cent, upon the preferred stock of the Com- 
 pany, such quarterly payments having been made on the 1st day of , 19. ., 
 
 and the 1st day of , the 1st day of , the 1st day of and the 
 
 1st day of 19. ., and the 1st day of ....... the 1st day of , the 
 
 1st day of and the 1st day of , 19. ., the last mentioned date being 
 
 the date of the last such quarterly payment; and, whereas, no dividends have 
 
 at any time been paid upon the common stock of either Company or the 
 
 Company; and 
 
 Wheeeas, both the Company and Company are organized 
 
 for the purpose of carrying on business of a, similar nature; and 
 
 Whereas, the respective boards of directors of said corporations deem it 
 advisable, to the end that greater efficiency and economy of management may be 
 accomplished, and otherwise and generally to the advantage and welfare of said 
 corporations and their several and respective stockholders, to merge and consoli- 
 date said • corporations under and pursuant to the provisions of an Act of the 
 Legislature of the State of New Jersey entitled "An Act Concerning Corpora- 
 tions (Revision of 1896)": 
 
 Now, THEREFORE, In Consideration of the premises and the mutual agreements, 
 provisions, covenants and grants herein contained, it is hereby agreed by and 
 between the said parties hereto, and in accordance with said Act of the Legis- 
 lature of the State of New Jersey, that said Company shall be and the 
 
 same hereby is, merged and consolidated into and with said Company, 
 
 and the Company does hereby merge and consolidate into ^nd with 
 
 itself said Company ; 
 
 And the parties hereto do, by these presents, agree to and prescribe the terms 
 and conditions of said merger and consolidation, and the mode of carrying the 
 same into eflfect, which terms and conditions and mode of carrying the same 
 into effect the said parties hereto do mutually and severally agree and covenant 
 to observe, keep and perform, that is to say: 
 
 Article I. — The name of the consolidated corporation is and shall be and 
 remain Company. 
 
 Article II. — The number, names and places of residence of the first 
 
 directors of the said Company, as consolidated, who shall hold 
 
 their offices until their successors be chosen according to the by-laws of the said 
 Company, are as follows : 
 
 The number of the first board of directors is seventeen (17) and their names 
 and places of residence are as follows: 
 
 Names op Directors. . . Eesidences. 
 
1270 
 
 FOEMS No. 117-a 
 
 The first officers of the Company are a President, four Vice-Presidents, a Secre- 
 tary, a Treasurer, and two assistant Treasurers and their names and places of 
 residence are as follows: 
 
 Officer. Names. Residence. 
 
 President, ' 
 
 First Vice-President, > 
 
 Second Vice-President, > 
 
 Third Vice-President, > 
 
 Fourth Vice-President, > 
 
 Secretary, > 
 
 Treasurer, > 
 
 Assistant Treasurer, 
 
 Assistant Treasurer, > 
 
 Article III.— The capital stock of the said Company, as con- 
 solidated, shall be Dollars, divided into 
 
 ( ) shares of the par value of $100 each, of which 
 
 ( ) shares shall he per cent, cumulative Preferred Stock 
 
 and ( ) shares shall be Common Stock. 
 
 The rights, terms and conditions of the shares of said preferred and common 
 stock issued and to be issued shall be respectively the same as those of the 
 
 shares of the preferred and common stocjc of the present Company 
 
 now outstanding as set forth in the certificate of incorporation of said 
 
 Company, a copy of which marked Exhibit " C," is hereto annexed and made a 
 part hereof. 
 
 Article IV. — The manner of converting the capital stock of 
 
 Company into the capital stock of the Company shall be aa 
 
 follows : Each and every of the outstanding shares of stock of 
 
 Company shall be forthwith exchangeable for and convertible into the securities 
 
 of the Company in the same proportion and manner as was 
 
 accorded to the holders of the stock of Company under the 
 
 provisions of the Agreement dated , 191 .. , and of the Plan set 
 
 forth in the Circular Letter therein mentioned, copies of which Agreement and 
 Circular Letter are hereto annexed, as aforesaid, marked Exhibits "A" and " B," 
 respectively, namely: 
 
 Each holder of one share of the Preferred Stock of Company, 
 
 upon the surrender of the certificate thereof to the Company, 
 
 duly indorsed in blank for transfer, shall receive the following securities of the 
 Company : 
 
 $50.00 in par value of First Lien Twenty-Year Five Per Cent Gold Bonds, 
 
 and 
 $50.00 in par value of Seven Per Cent. Cumulative Preferred Stock, in 
 
 exchange for and in full of the principal of such share; and 
 $23.50 in par value of Common Stock, in exchange for and in full of the 
 
 accrued and unpaid dividends on such stock. 
 
 Provided, however, and it is hereby agreed, that the holder of any share or 
 
 shares of said Preferred Stock of Company may, at his option, produce 
 
 to the Company the certificate for said share or shares with a proper 
 
 memorandum thereon signed by such holder, showing his receipt, on account of 
 
No. 117-a FORMS 1271 
 
 said share or shares, of $50 in par value of said gold bonds oi the 
 
 Company, and $50 in said Preferred Stock of the Company for 
 
 each such share, and upon such production and the delivery to said 
 
 Company of a duplicate of such memorandum and receipt likewise signed by 
 such holder and reciting that the same is given pursuant and subject to the 
 provisions of this proviso, the said holder shall have the right, without surrender 
 or endorsement for transfer of said certificate, to demand and receive the said 
 $50 in par value of said gold bonds and $50 in said Preferred Stock of the 
 
 Company for each share, which shall be in exchange for and in 
 
 full of the principal of each said share of Preferred Stock of 
 
 Company: but the owner of such share or shares shall retain and be deemed to 
 retain, and the said certificate shall continue thereafter to represent and shall be 
 deemed to represent, the said share or shares so far as concerns any lawful 
 right, whether past, present or future, of the holder thereof to demand or receive 
 
 from Company or the Company any money, value 
 
 or thing by reason of dividends accrued and unpaid upon the said share, and 
 so far as concerns any lawful right whether past, present or future, of said 
 
 holder in or by reason of the surplus or surplus earnings of 
 
 Company accumulated at the said time when this Agreement shall so take 
 effect, or at any time theretofore, or in or by reason of the money or property 
 of which such surplus or earnings shall then consist, or shall at any time there- 
 tofore have consisted, or which such surplus or earnings shall then represent, 
 or shall theretofore have represented; and thereafter the holder of such certifi- 
 cate shall, with respect to such accrued and unpaid dividends, surplus and 
 surplus earnings, and the money or property of which such surplus or surplus 
 earnings shall consist, or by which they shall be represented, be and be deemed 
 to be the holder of such share and not to have waived any lawful right whether 
 
 past, present or future, whether against Company or the 
 
 Company or otherwise, with respect to such dividends, surplus earnings, money 
 or property, but shall be and be deemed to be entitled with respect thereto to 
 enforce and exercise such right without prejudice by reason of such receipt of 
 
 securities of the Company in satisfaction of the principal or par 
 
 of said share or shares. No holder of a share or shares of the preferred stock of 
 
 Company on a certificate for which shall have been signed the 
 
 memorandum in the foregoing proviso mentioned, and on which bonds and 
 
 shares of preferred stock of the Company shall have been delivered 
 
 as therein mentioned, shall be entitled to receive the said $23.50 per share in 
 par value of Common Stock of the Company ( receivable as afore- 
 said upon surrender, duly endorsed in blank for transfer of a. share of said 
 
 Preferred Stock of Company) or any part of said $23.50 or to 
 
 receive anything further by reason of said principal or par of such share or 
 shares of Company. 
 
 Each holder of one share of the Common Stock of Company, upon 
 
 the surrender thereof to tKe . , Company, duly indorsed in blank for 
 
 transfer, shall receive three-tenths of one share of the Common Stock of the 
 Company. 
 
 In making such exchanges as aforesaid, an adjustment shall be made of the 
 dividends ajid interest upon the Preferred Stock of said corporations and upon 
 the bonds of the Company, to the end that the accrued and unpaid 
 
1272 FORMS No. 117-a 
 
 interest and dividends upon the bonds and Preferred Stock of the 
 
 Company issued in exchange for the Preferred Stock of Company, or a 
 
 sum in cash paid in lieu thereof, shall equal an amount equal to six per cent. 
 
 per annum on the par value of the sliares of said Preferred Stock of 
 
 Company, computed from the immediately next preceding day on which a. 
 
 dividend of on each of said shares shall have been paid by the said 
 
 Company. 
 
 In all cases where the proportion of securities to be received shall consist of or 
 
 include fractions of bonds or of shares of stock of the Company, scrip 
 
 or certificates duly executed by the Company shall be issued by that 
 
 Company to the holders of stock in Company exchanging the same in 
 
 accordance herewith. Said scrip or certificates shall be in favor of the bearers 
 
 thereof and the Company shall in and by each such scrip or certificate 
 
 certify, in substance, that it holds for the holder of such scrip or certificate the 
 fractional amount of bond or share of stock, as the case may be, specified in 
 
 such scrip or certificate, and that upon presentation at one time to the 
 
 Company of such scrip or certificate together representing one bond or one 
 share of stock, or any whole number of bonds, or any whole number of shares ' 
 
 of stock, the Company will deliver to the person so presenting such 
 
 scrip or certificates the bond or bonds or a paper and regular certificate for the 
 
 share or shares of stock so represented as the ease may be; and the 
 
 Company shall thereby further certify that whenever any interest, dividend or 
 
 other sum of money shall be payable by the Company upon any such 
 
 bond or share of stock for a fractional interest in which any such scrip or 
 
 certificate is outstanding, the Company shall pay the proportionate 
 
 part of the same to the holder of such scrip or certificates upon presentation 
 
 thereof to the Company with a receipt for such interest or diviaend 
 
 duly indorsed thereon; and the Company shall for all such scrip or 
 
 certificates at any. time outstanding hold and keep the bond or bonds and the 
 certificate or certificates for the share or shares of stock represented thereby. 
 
 Provided further, however, and it is hereby Agreed, that, for all the purposes 
 of this agreement, and for all other purposes ( 1 ) the stock of Com- 
 pany heretofore acquired by the Company upon the terms and con- 
 ditions set forth ih the Plan and Agreement dated , 19. . , herein 
 
 before mentioned, or otherwise, shall be deemed to have been exchanged for and 
 
 converted into the securities of the Company in accordance herewith; 
 
 and (2) that no present holder of bonds or shares of stock of the 
 
 Company shall receive any other or additional bond, share of stock or fraction 
 thereof or other allotment by reason of this agreement. 
 
 Article V. — Except in so far as herein otherwise specifically set forth or oa 
 provided by statute, the corporate name, franchise, fights and organization of 
 
 the said ........ Company shall remain intact, and said Company 
 
 shall possess the powers, privileges and rights granted by and shall be governed 
 
 by and be subject to the Certificate of Incorporation of the Company, 
 
 a copy of which is hereunto annexed and made a part hereof as aforesaid, with 
 the same force and eflfect as if the same were here again fully set forth at 
 length. 
 
 The corporate name and organization of , Company, except in so 
 
 far as the same are continued by statute or may be requisite for carrying out 
 
No. 117-a FORMS 1273 
 
 the purposes of this agreement, shall cease upon the filing in the office of the 
 Secretary of State of New Jersey, of this agreement when adopted by the stock- 
 holders as hereinafter provided. 
 
 Article VI. — Upon the consummation of the act of merger or consolidation 
 hereby provided for, all and singular the rights, privileges, powers and fran- 
 chises of each of said corporations, and all property, real, personal and mixed, 
 and all debts due on whatever account, as well for stock subscriptions as all 
 other things in action or belonging to each of such corporations, shall be vested 
 
 in the consolidated corporation, the : . . . Company ; and all property, rights, 
 
 privileges, powers ajid franchises, and all and every other interest, of the two 
 companies parties hereto, shall be thereafter as effectually the property of the 
 said consolidated corporation as they were of the several and respective corpo- 
 rations parties hereto, and the title to any real estate, whether by deed or 
 otherwise vested in either of such corporations, shall not revert Or be in any 
 way impaired by reason of the said merger and consolidation; provided, that 
 all rights of creditors and all liens upon the property of either of said corpora- 
 tions parties hereto shall be preserved unimpaired, and the respective corpo- 
 rations parties hereto shall be deemed to continue in existence in order to pre- 
 serve the same; and all debts, liabilities and duties of either of said corpora- 
 tions parties hereto shall thenceforth attach to said consolidated corporation 
 and may be enforced against it to the same extent as if said debts, liabilities 
 and duties had been incurred or contracted by it. If at any time said con- 
 solidated company shall deem or be advised that any further assignments, 
 assurances in the law or things are necessary or desirable to vest in the said 
 
 consolidated company, the title to any property of the (Company or of 
 
 ......... Company, the said Company or the said ." Company 
 
 (as the case may be) and its proper officers and directors shall and will exe- 
 cute and do all such proper assignments, assurances in the law and things 
 necessary or proper to vest title to such property in the said consolidated com- 
 pany and otherwise to carry out the purposes of this agreement. 
 
 It is expressly declared that said Company, as consolidated, 
 
 shall be, and said Company hereby covenants that, as consolidated, 
 
 it shall be, subject to the remedies and liabilities in such case prescribed in the 
 said act entitled "An Act concerning Corporations (Revision of 1896)" and the 
 said several supplements thereto and amendments thereof, including chapter 241 
 of the Laws of 1902. 
 
 Article VII. — The said Company, as consolidated, shall pay 
 
 all expenses of merger and consolidation, including proper legal expenses. 
 
 Article VIII. — The principal and registered office of said Com- 
 pany in the State of New Jersey is at , in the city of 
 
 , county of , and Company is the agent 
 
 therein in charge thereof upon whom process against the said Company in the 
 State of New Jersey may be served. 
 
 Article IX. — This agreement shall be submitted to the stockholders of each 
 of said corporations as provided by law, and shall take effect and be deemed 
 and taken to be the agreement, and act of merger and consolidation of the said 
 corporations upon the adoption thereof by the votes of the holders of two- 
 thirds of all the shares of the capital stock of each of the said corporations and 
 upon the doing of such other acts and things as are required by said act con- 
 cerning corporations. 
 
1274 
 
 FORMS No. 118 
 
 In wi'iTJESS WHEKEOF, the said parties to this agreement have, pursuant to a 
 resolution passed by the respective Boards of Directors of each of said corpora- 
 tions, at meetings thereof, duly and regularly held, at which a quorum was 
 present, caused the respective corporate seals of said corporations to be hereto 
 affixed and these presents to be signed by their respective Presidents or ^^ce- 
 Presidents and attested by their respective Secretaries or Assistant Secretaries, 
 all thereunto duly authorized, the day and year first above mentioned. 
 
 Company, 
 
 by 
 
 its President. 
 
 [COBPOEATE SEAL.] 
 
 Attest : 
 
 Secretary. 
 
 Company, 
 
 by 
 
 its President. 
 
 [CORPOBATE SBIAL.] 
 
 Attest : 
 
 Secretary. 
 Signed, sealed and delivered 
 in the presence of 
 
 FORM NO. 118. 
 
 Minutes and Notice of Stockholders' Meeting to Approve Corporate Consolida- 
 tion. 
 
 A special meeting of the stockholders of , Inc., was held at 
 
 , at o'clock in the noon of the day 
 
 of , 191 .. , pursuant to the following notice: 
 
 Notice is hereby given of a special meeting of stockholders of 
 
 Inc., to be held at , at o'clock in the noon of the 
 
 day of , 191 . . , to secure the approval, by vote of holders 
 
 of at least two-thirds of the stock of said corporation, of an agreement for the 
 
 consolidation of this corporation and , Inc.,, submitted by 
 
 the boards of directors of said corporations to the stockholders of their respective 
 corporations. 
 
 President. 
 
 Secretary. 
 
 The President in the chair and the Secretary recording. 
 
 The Secretary presented the affidavit of , verified the 
 
 day of , 191 . ., showing deposit in the post office, postage 
 
 pre-paid, addressed to each stockholder at his last known post-office address, of 
 
No. 119 POEMS 1275 
 
 a copy of said notice, at least two weeks before the date set in said notice for 
 this meeting, and publication thereof for at least two successive weeks in one of 
 the newspapers in each of the counties in New York State in which either of 
 said corporations has its place of business. Such affidavit, on motion made, duly 
 seconded and unanimously carried, was ordered filed with the archives of the 
 company. 
 
 The Secretary stated that the capital stock of the company was 
 
 The said agreement of consolidation was presented to and discussed by the 
 meeting, paragraph by paragraph. On motion made, duly seconded and carried 
 
 by the vote by ballot of stockholders of the corporation owning 
 
 shares, being at least two-thirds of its stock, it was 
 
 Resolved, that the agreement of consolidation of this corporation and 
 
 , Inc., into a new corporation named , 
 
 dated the day of , 191 . ., and submitted at this meeting 
 
 for the approval of the stockholders of this company, be and it hereby is in 
 all respects ratified and approved; and further 
 
 Resolved, that duplicate verified copies of the proceedings of this meeting, 
 made by the Secretary of the company, together with said agreement of con- 
 solidation, be filed in the offices of the Secretary of State and of the clerk of 
 
 the County of , where the office of said new corporation is to be 
 
 situated in New York State, and that thereupon this corporation be merged 
 into said new corporation and be known by said new corporation's corporate 
 name. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 State of New Yobk, 1 
 County of ,j**-' 
 
 , being duly sworn, says : I am the Secretary of 
 
 , Inc., and acted as such at a special meeting of its stock- 
 holders held the day of , 19'1 . . , to vote upon its proposed 
 
 consolidation with , Inc., into a new corporation named 
 
 The foregoing is a true copy of the proceedings of 
 
 said meeting and of the whole thereof. Annexed hereto is an original copy of 
 the agreement of consolidation in said proceedings referred to. 
 
 Sworn to before me this day of , 191 . . 
 
 FORM NO. 119. 
 
 Notice hy Stockholder of Objection to Corporate Consolidation. 
 
 To , Inc. . 
 
 Take notice that the undersigned, a stockholder in , Inc., 
 
 owning shares of stock represented by certificate number , who 
 
 did not vote in favor of an agreement for the consolidation of said corporation 
 
 and , Inc., into a new corporation named , 
 
 at a meeting of stockholders of , Inc., held the day 
 
 of , 191 . ., do hereby object to such consolidation and demand 
 
 payment for my stock. 
 
1276 FORMS Nos. 120, 121 
 
 FORM NO. 120. 
 
 Notice hy Stockholder of Consolidated Corporation of Application to Court for 
 Appointment of Appraisers to Value His Stock. 
 
 Stjpkeme Cotjet, County. 
 
 In the Matter of the Applicatioii of 
 
 ) 
 
 a Stockholder in the Consolidated Cor- 
 poration of , Inc., 
 
 for the Appointment of Appraisers 
 to Value His Stocki 
 
 Take notice that the undersigned, a stockholder in Inc., 
 
 will apply on the annexed petition to the Supreme Court, 
 
 County, at a Special Term, Part thereof, at o'clock of the 
 
 noon of the day of , 191 .. , or as soon thereafter as 
 
 counsel can be heard, for the appointment of three persons to appraise the value 
 of his stock in said corporation which was not voted in favor of the proposition, 
 
 submitted at a meeting of the stockholders of said corporation held the 
 
 day of , 191 . . , to consolidate said corporation and , 
 
 Inc., into a new corporation named 
 
 FORM NO. 121. 
 
 Petition by Stockholder Dissertting From Consolidation for Appointment of 
 Appraisers to Value Bis Stock. 
 
 {Title and caption as in Form No. 120.) 
 To the Supreme Court, County : 
 
 The petition of respectfully shows: 
 
 First : That petitioner owns shares of the stock of , 
 
 Inc. 
 
 Second : That on the day of , 191 .. , a meeting of the 
 
 stockholders of said , Inc., was held to approve an agree- 
 ment fpr its consolidation with , Inc., into a new corpora- 
 tion named , Inc. 
 
 Third: That petitioner did not vote in favor of said agreement. 
 
 Fourth: That at said meeting [^or, within twenty days after said meeting, 
 viz., on the day of , 191 .. ] petitioner objected to said con- 
 solidation and demanded payment for hi's stock in said , 
 
 Inc.; and that said agreement of consolidation was approved; that no payment 
 has been made petitioner for his said stock; and that a copy of petitioner's 
 said objection and demand is hereto annexed and made part hereof. 
 
 Fifth : That said consolidation took effect on the day of , 
 
 191 • ., by [state how became ef}ective'\. 
 
 Simth: That in the district in which this Court is being held, viz., the county 
 of , said new corporation has its place of business. 
 
Nos, 122, 123 FORMS 1277 
 
 Wherefore, petitioner prays for tlie appointment of three persons to appraise 
 
 the value of his said stock in said , Inc., and for such 
 
 other, further and different relief as may be just and proper. 
 
 Petitioner. 
 [Add verification.] 
 
 FORM NO. 122. 
 
 Order Appointing Appraisers to Value Stock of Stockholder Dissenting From 
 ^ Consolidation. 
 
 {Title as in Form No. 120.) {Caption of Court Order.) 
 
 On reading and filing the petition of verified herein 
 
 the .... day of , 191 .. , and the notice of application dated herein 
 
 the day of ,191.., and the affidavit of , 
 
 verified herein the day of , 191 .. , from which it appears to 
 
 the court's satisfaction that said petition and notice were duly served upon 
 
 '■ , the new corporation therein referred to, at least eight 
 
 days before the time set in said notice of application to this Court, and after 
 
 hearing , Esq., of counsel for said applicant, in support of 
 
 the application, and no one appearing in opposition thereto; now, on motion of 
 , Esq., attorney for said applicant. 
 
 Ordered, that Messrs , and 
 
 be and they hereby are designated and appointed as three appraisers to appraise 
 
 the value of the stock of said applicant, being shaxes, in , 
 
 Inc., and further 
 
 Ordered, that said appraisers hold their first meeting at o'clock in the 
 
 noon of the day of , 191. ., at ; and 
 
 further 
 
 Ordered, [such directions in regard to the appraisers' proceedings as are 
 deemed proper] ; and further 
 
 Ordered, [direct manner in which payment for the stock shall be made to the 
 stockholder applying for the appraisal}. 
 
 Enter : 
 
 J. S. C. 
 FORM NO. 123. 
 
 Oath of Appraisers of Stock of Stockholder Dissenting From Consolidation. 
 
 State of New Yoek, ] 
 County of C 
 
 We, , and , being the 
 
 three persons appointed by order herein entered the day of , 
 
 191 . . , to appraise the value of the stock of in , 
 
 Inc., do severally and duly swear honestly and faithfully to discharge our 
 duties as such appraisers. 
 
 Sworn to before me this day of 191 . 
 
1278 FORMS Nos. 124, 125 
 
 FORM NO. 124. 
 
 Certificate hy Appraisers of Value of Stock of Stockholder Dissenting From 
 
 Consolidation. 
 
 We, , and , the persons 
 
 appointed by order entered herein the day of , 191.., to 
 
 appraise the value of the stock of in , Inc., 
 
 do hereby certify: 
 
 First: That we duly took our oath of office, hereto annexed, as prescribed by 
 law. 
 
 Second: That we met at the time and place designated in said order and 
 estimated the value of said stock at the time of the dissent of the liolder thereof 
 
 to the consolidation of said , Inc., and , 
 
 Inc., into , Inc., as follows: 
 
 Witness our hands this day of , 191 , . 
 
 FORM NO. 125. 
 Corporate Reorganization Agreement. 
 Agreement made this day of , 191 . ., between 
 
 n Committee representing stockholders of Company 
 
 (and liereinafter called the Committee) parties of the first part; , 
 
 and all other holders of stock of the said Company who shall by signature 
 hereto or by deposit of stock hereunder, become parties hereto (hereinafter 
 
 called Depositing Stockholders) parties of the second part; and the 
 
 (hereinafter called the Depositary) party of the third 
 
 part: 
 
 Whereas, The Committee has, upon the request of stockholders of the 
 
 Company, prepared a Plan designed to promote the interest 
 
 of all the stockholders of the Company, the same being 
 
 a corporation of New Jersey and hereinafter called the 
 
 Company " and has addressed to the stockholders of that Company a circular 
 letter bearing even date herewith, which sets forth the principal features of the 
 Plan, of which circular letter a copy is hereto annexed entitled " Copy of the 
 Circular Letter and Plan; " and 
 
 Whereas, The parties of the second part have approved of the Plan and 
 agreed, and do agree, each with the other parties of the second part, as well 
 as with the parties of the first and third parts, to promote the success thereof 
 and of the new Company mentioned in the Plan, — 
 
 Now, Therefore, in consideration of the premises, the parties hereto agree 
 each with all of the others, as follows: 
 
No. 125 FORMS 1279 
 
 ^- — Deposit of Shares and Issue of Trust Company Certificates. 
 
 This agreement shall be signed by the parties of the first and third parts 
 
 ^"■1 ^7 ' , one of the parties of the second part and 
 
 when so signed shall be deposited with the party of the third part at its office 
 in the City of New York. 
 
 Every holder of shares, whether preferred or common, of the stock of the 
 
 Company may become a party hereto either by signing and sealing 
 
 this instrument or by depositing the certificates of his stock with the Depositary 
 m the manner and within the time herein prescribed, provided, however, that 
 and such stockholder signing this agreement who shall not deposit his stock 
 hereunder with the Depositary before the lapse of ten days after such signature 
 by him, shall, at the option of the Committee and upon notice by the Committee 
 to the Depositary, cease to be a party hereto. The deposit of any certificate of 
 stock with the Depositary in such manner and within such time shall constitute 
 the depositor a party to this agreement with the same effect as if he had sub- 
 scribed this agreement and affixed his seal hereto. The depositor must in every 
 case indorse in blank the certificate or certificates for his stock and deposit 
 therewith, or thereafter on demand of the Committee, every transfer, assign- 
 ment, power of attorney or proxy which the Committee shall deem necessary 
 or proper. 
 
 The time for such deposits is hereby limited to the close of business hours of 
 
 the Depositary on , the day of , 191 . ., 
 
 provided, however, that the Committee may by a notice of not less than five 
 days published not less than twice in not less than two newspapers published 
 at the City of New York, prescribe a limit of such time for deposit, earlier 
 
 than said day of , 191 . ., and provided, further, that the 
 
 Stockholders' Committee may, from time to time, extend the time for such 
 deposit to any date not later than the day of , 191 . . 
 
 The Depositary shall, upon the receipt from any depositor of his certificate 
 or certificates of stock, issue to him its~cer'tificate, substantially in the form 
 following, — each certificate being either exclusively for preferred stock or 
 exclusively for common stock, the certificates for preferred stock \jeing printed 
 in black ink and the certificates for common stock being printed in blue ink. 
 
 [Form of Trust Company Certificate.^ 
 
 PREFEKKED 
 No. SHAKES or 
 
 COMMON 
 
 CENTRAL TRUST COMPANY OF NEW YORK. 
 
 Preferred 
 Certificate of Deposit for shares of the or Stock 
 
 Common 
 of 
 The Company. 
 
 The undersigned Trust Company hereby certifies that has 
 
 deposited with this Company a certificate or certificates for 
 
 preferred 
 shares of the or capital stock of the Company under and in 
 
 common 
 
1280 FORMS No. 125 
 
 pursuance and acceptance of an agreement dated the day of > 
 
 191.., made between this Company, certain holders of the stock of the said 
 
 Company and the Stockholders' Committee, consisting of 
 
 and others. Such depositor or aay sabsequcnt holder of this 
 
 certificate is entitled, with respect to the said shares for which certificates have 
 been so deposited, to the rights prescribed by the said agreement and is subject 
 to all the provisions thereof. 
 
 This certificate is transferable, but only upon the registration books of this 
 Company, by the holder or holders hereof in person or by attorney upon sur- 
 render of this certificate properly endorsed. 
 
 Company of New Yoek, 
 
 By 
 
 Vice-President. 
 
 Secretary. 
 
 The said certificates shall be duly engraved in manijer required for listing by 
 the New York Stock Exchange and there shall be engraved upon the back of each 
 such certificate a blank form of transfer substantially as follows: 
 
 [Form of Transfer.'] 
 
 For value received the undersigned hereby assign to 
 
 preferred 
 
 shares of the shares of or 
 
 common 
 
 stock of the Company therein mentioned, and also so much of the 
 
 within certificate and of the rights of the undersigned thereunder as rejates to 
 the said shares. 
 
 hereby appoint attorney irrevocable 
 
 for to make such transfer upon the registration books of the 
 
 Company of New York. 
 
 Pbovided, Jiowever, and it is hereby agreed that, during the delay incident to 
 the engraving of such certificates, temporarily printed certificates shall in like 
 form be issued by the Depositary; but for such printed certificates engraved 
 certificates shall be substituted as soon as may be; and provided, further, that 
 no such certificate shall be valid until the same shall have been registered upon 
 
 the books of the Company of New York, which is hereby 
 
 appointed Registrar for that purpose, subject to the right of the Committee 
 in case of its refusal or disability or otherwise, to substitute some other Trust 
 Company in the City of New York for such registrar. 
 
 The Depositary shall from time to time make transfers as mentioned in such 
 certificates and forms of transfer thereon indorsed, and upon each transfer issue 
 duly registered a new certificate or certificates according to the transfer. 
 
 The transfer books of the Depositary for preferred stock shall be closed for 
 the payment of dividends upon such preferred stock for such period or periods 
 as shall, from time to time, be determined by the Depositary or the Committee. 
 Notice of such closing shall be published twice a week for two weeks prior to 
 such closing in the manner prescribed by Article VII hereof. During such 
 period no transfer of such certificates representing preferred stock shall be made 
 
No. 125 FORMS 1281 
 
 upon the books of the Depositary; and the amount of any dividend received by 
 the Depositary upon the shares of preferred stock represented by any such 
 certificate, shall be payable to the holder of record of such certificate at the 
 date of such closing, or if not then received, then immediately after such receipt 
 thereof by the Depositary. 
 
 The Committee shall, as soon as it deems desirable, apply to the New York 
 Stock Exchange for the listing of such certificates; and the Depositary shall 
 give to such application such support as may be proper. 
 
 The Depositary shall, during the period or periods limited therefor as herein 
 prescribed, received for deposit all certificates for such shares which shall be 
 tendered to it hereunder and, for the same, issue' such Trust Company certificate 
 or certificates; but this requirement is subject to the said provision for closing 
 the books for the transfer of certificates for preferred stock. 
 
 //. — The Plan. 
 
 Section 1. The Depositing Stockholders hereby severally assent to and accept 
 all the provisions of the said. Plan and of this Agreement and all of the parties 
 hereto agree, with all other parties hereto, to promote the success of the Plan. 
 
 Section 2. The New Company shall not distribute to its common stock divi- 
 dends representing, directly or indirectly, the surplus or property of the 
 
 Company actually accumulated on , 191 . ., or its proceeds, or 
 
 any part thereof; nor shall the new company declare any dividends to such 
 
 common stock from income, business or property of the Company 
 
 or proceeds thereof except such as shall represent profits earned by the 
 
 Company or such new Company from and after , 191 . . : Pro- 
 vided, however, that the prohibitions of this section shall be absolute for the 
 period of three years from and after the acquisition by the new Company of 
 
 two-thirds of the capital stock of the Company, but that after the 
 
 expiration of such three years, such prohibitions shall be subject to modification 
 or repeal upon the consent of the holders 66% per cent, in pa,r value of -the 
 outstanding preferred stock of the new Company. The by-laws of the new Com- 
 pany shall include a by-law, containing the provision hereinbefore in this section 
 'contained, and further providing that such by-law shall not be repealed or 
 amended within such three years or thereafter without the consent of 66% per 
 cent, in value of the outstanding stock of the new Company. 
 
 III.— The Depositary. 
 The Depositary shall transfer into its own name upon the books of the 
 
 Company the shares of such preferred stock for which certificates are 
 
 deposited thereunder. The Depositary shall, if and after any meeting of the 
 
 stockholders of the Company shall be called and upon the request of 
 
 the record holder of any certificate of deposit, deliver to such record holder a 
 proxy in his name in proper form to entitle him to vote at such meeting for 
 the Depositary as the holder of the shares represented by such certificate of 
 deposit; ajid the Depositary shall not vote as owner or holder of any of the 
 said shares exx^pt through and by such proxies. If and when notice in advance 
 shall be given by the Company that its books are to be closed in con- 
 templation either of the payment of a dividend upon shares of preferred stock 
 or of a meeting of the stockholders, and the Depositary is in time advised 
 of such notice, the Depositary shall close its registration books for the transfer 
 B. C. N. Y.— 81 
 
1282 FORMS No. 125 
 
 of such certificates, for the same time. The Depositary shall require the pay- 
 ment to it by the , (Company of all dividends declared and payable 
 
 upon such preferred shares for which the Depositary shall have issued its 
 certificates; and, upon the receipt of such, dividends, the Depositary shall 
 forthwith mail to the registered holder of any and every such Trust Company 
 Certificate at the address registered with the Depositary and without charge 
 or deduction for expense or otherwise, a cheque representing the amount of the 
 dividend or dividends received upon the shares of preferred stock for which such 
 Trust Company Certificate shall have been issued. 
 
 The Depositary shall, upon the requirement of the Committee, have trans- 
 ferred into its name upon the books of the Company any of the 
 
 shares of such common stock so deposited with it; but in such case the Deposi- 
 tary shall, if and after any meeting of the stockholders of the Com- 
 pany shall be called and upon the request of the record holder of any certificate 
 of deposit, deliver to such record holder a proxy in his name in proper form to 
 entitle him to vote at such meeting for the Depositary as the holder of tlie 
 sliares represented by such certificate; and the Depositary shall not vote as 
 owner or holder of any of the said shares except through and by such proxies. 
 
 The Depositary shall have the right with the approval of the Committee 
 to adjust any claim of or dispute with any Depositing Stockholder; and, if 
 such adjustment shall so provide, to surrender to such Depositing Stockholder 
 or to the holder of the Trust Company Certificate issued to him, a certificate 
 or certificates for the shares represented by such Ti-ust Company Certificate 
 upon his surrender thereof to the Depositary. 
 
 The Depositary shall have no power to in any way encumber the shares of 
 stock represented by the Trust Company certificates; nor shall it have any 
 power to transfer the siame except as herein specifically provided. 
 
 Tlic Depositary shall not be deemed to assume any liability under or by 
 reason of tliis agreement or any proceeding hereunder, except for the exercise 
 of good faith. Every Depositing Stockholder and every holder of any such 
 Trust Company Certificate shall be conclusively deemed to have assented to 
 every act and deed of the Depositary to which the Committee shall have 
 .issented. 
 
 A" charges and expenses of the Depositary under or by reason of this agree- 
 ment or the matters herein provided for, have been arranged for by the Com- 
 mittee; and in no event is any charge to be made against any Depositing 
 Stockholder or holder of any Trust Company Certificate or enforced by way of 
 lien or otherwise against any of the shares of stock for which such certificate 
 shall have been so deposited. If in the execution of this agreement the Deposi- 
 tary shall incur any liability for any loss or damage or otherwise not caused 
 by lack of good faith or by gross negligence, the amount of such liability shsJl 
 be deemed a part of the Depositary's expense as herein provided. 
 
 \Yherever, as in this instrument provided, the Depositary shall pay to the 
 holder of any certificate any dividend, the Committee shall have power and 
 it shall be its duty in behalf of all holders of such certificates, and of every 
 holder of any such certificate, to adjust and, when adjusted, to approve the 
 account or accounts of the Depositary with respect to any such payment; and 
 any such approval of the Committee shall be conclusive in favor of th8 
 Depositary. 
 
 Thf opinion or judgment of the Committee expressed in writing, shall, any- 
 
No. 125 FORMS 1283 
 
 ^ thmg in this agreement to the contrary notwithstanding, he full and complete 
 protection and justification to the Depositaiy for any and every action taken 
 or omitted to be taken according to such opinion or judgment. The Depositary 
 shall not incur or be deemed to incur any liability by acting upon any certificate 
 of s-tock or other certificate, signature, document or paper believed by it to be 
 genuine. 
 
 The Depositary may treat any money received by it under the provisions of 
 this agreement as a general deposit until it is required to pay out the same in 
 conformity herewith. 
 
 lY. — The Stockholders Committee 
 The Committee undertakes in good faith to carry out the Plan and this 
 agreement; but it is expressly understood that neither it nor any member of 
 it assumes any responsibility for its success in such undertaking or any other 
 responsibility except for the exercise of good faith. The Committee shall, in 
 every case, act by a majority of its number; and any act of such majority shall 
 be deemed the act of the entire Committee. Xo member of the Committe shall 
 be held or iti any way deemed responsible for the acts or omissions of any other 
 member. 
 
 The Committee shall have power 
 
 (a) To prescribe any rules or regulations for its government, and, among 
 them, to provide that any member of the Committee may at any meeting 
 of the Committee and with the assent of a majority of the members of the 
 Committee, act and vote by proxy, provided, however, that no act of the 
 Committee shall be valid without the personal approval of a majority of 
 the persons who are members of the Committee at the time; 
 (6) To fill any vacancies in the Committee whicli may result from death, 
 
 resignation, disability or otherwise; 
 (c) To form or promote the formation of the new Company mentioned in the 
 Plan, to prepare its charter or certificate of incorporation, to prepare for 
 it proper by-laws, and to arrange for the advance of the expense of the 
 incorporation of such Company, and, — subject to the written directions of 
 a majority in amount of the then outstanding Trust Company Certificates, 
 issued hereunder, to designate its incorporators, and first directors and 
 oflScers ; 
 id) To require the assignment and transfer by the Depositary to the new 
 
 Company of lany shares of stock of the Company for which Trust 
 
 Company Certificates shall have been issued hereunder; and upon such 
 requirement the Depositary shall make such transfer, provided, however, 
 that the right to require such transfer shall be subject to the limitations 
 prescribed by Article V of this agreement; 
 (e) To prescribe the form and terms of the new securities to be issued upon 
 the assignment to the new Company of such shares of stock and the manner 
 and time of their issue, Peovided, however, that such securities shall in 
 amount, character ajid otherwise, substantially conform to the provisions 
 of the Plan and that the same shall be distributable to the holders of the 
 Trust Company ' Certificates through the Depositary and that there shall 
 be no preference of any one or more holders of Trust Company Certificates 
 over other holders of such certificates of the same class, that is to say, 
 certificates for preferred stock or for common stock as the case may be; 
 if) To provide for the issuance of scrip or other adjustment of the rights of 
 
1284 FORMS No. 125 
 
 holders of the Trust Company Certificates in cases where the proportion 
 of new certiflt-ates to be recedved would include fractions of bonds or shares 
 of the new Company; 
 (g) To declare the Plan operative, provided that such declaration shall be 
 
 subject to the provisions of Article V of this agreement; 
 {h) To provide, if and when the Committee sees fit, and upon such terms 
 as it shall prescribe, for admission to the Plan of stockholders of the 
 
 Company assenting to the Plan after it shall have been declared 
 
 by the Committee to be operative, and for the issue to such stockholders 
 when so admitted, of the securities of the new Company to which they 
 shall be entitled without the deposit of the corresponding certificates of 
 
 stock of the Company with the Depositary or the issue by it of a 
 
 certificate of deposit therefor, pbovided, however, that the Coirmiittee shall 
 in no case prescribe for any such stockholder not so depositing any better 
 or additional provision over that conceded to the Depositing Stockholders; 
 
 (t) Witliin the general scope of the Plan to carry out and effectuate the 
 same and this agreement in whatever manner the Committee shall at the 
 time deem moat expedient, and generally to make and determine all arrange- 
 ments and things which in its judgment are necessary or expedient to carry 
 out such Plan or with respect to the new Company or its securities; 
 
 [j] To construe this agreement including the Plan. Any such construction 
 by the Committee or any action under any such construction in good faith 
 shall be final and conclusive. Further to supply any defect or omission 
 of or in the Plan or to reconcile inconsistencies in it in such manner and to 
 such extent as shall be necessary or expedient to carry out the same prop- 
 erly and eflFectively; and the Committee shall be the sole judge of sudi 
 necessity or expediency; 
 
 (fc) To act for and represent the Depositing Stockholders in all respects with 
 reference to tlieir shares of stock while deposited hereunder, and to authorize 
 legal and other proper appearances for them in suits at law or other pro- 
 ceedings ; 
 
 (l) From time to time to make such modification of the Plan of this agree- 
 ment as it may consider necessary or expedient; provided, however, that 
 such modification shall be within the general purview of the Flan; and 
 PROVIDED, further, that a written copy of any such change or modification 
 shall be filed with the Depositary and notice of such filing given by advertise- 
 ment not less than once >■ week for three consecutive weeks, in a newspaper 
 published in tlie City of New York. Every holder of any such Trust Com- 
 pany Certificate who shall not within ten days after the last publication 
 of such notic-e, .file with the Depositary a written objection to the change 
 or modification, shall be conclusively deemed to have personally and directly 
 assented thereto; and 
 
 (m) To act by any committee or agents and to delegate any avithority as well 
 as- discretion to any such committee or agent. 
 
 Tlie Committee shall be entitled to compensation payable as in the Plan 
 mentioned. 
 
 V. — Execution of the Plan. 
 The Plan shall become operative only by the written declaration to that 
 effect subscribed by not less tlian a majority of the Committee, and the filing 
 thereof with the Depositary. The Committee may make and file such declara- 
 
No. 125 FORMS 1285 
 
 tion if and when there shall have been deposited hereunder with the Deposi- 
 tary, certificates representing a majority of the total capital stock of the 
 
 Company, provided, however, that in such majority is included at lease twenty- 
 five per cent, in amount of the preferred stock of the ....'.... Company. 
 The Committee shall be boimd to make and file such declaration if and when 
 there shall have been so deposited with the Depositary on or prior to the date, 
 therefor prescribed by the Committee pursuant to Article I hereof, certificates 
 
 representing two-thirds in amount of the total capital stock of the 
 
 Company, without distinction between the preferred stock and common stock. 
 In case there shall have been any error in the computation of the proportions 
 or amounts of such capital stock deposited or deraned deposited hereunder, or any 
 error or informality in deposit, the Committee shall, after any such declaratioii 
 and prior to the actual transfer of shares of stock of the new company, have the 
 power to withdraw such declaration. 
 
 If and when the Committee shall, as aforesaid, declare the Plan to be opera- 
 tive, it shall forthwith proceed as herein provided to the incorporation of the 
 new Company and to procure the transfer to it of the shares of stock deposited 
 hereunder. 
 
 The Committee shall, with respect to such transfer of such stock of the new 
 Company and in all matters concerned with the execution of the Plan and 
 within the purview of this agreement, have every right and power which any 
 Depositing Stockholder would or could have or exercise if personally present and 
 acting with respect to the stock represented by the Trust Company Certificates 
 held by such Depositing Stockholder. And each and every Depositing Stock- 
 holder hereby constitutes and appoints the Committee or its nominee or nominees 
 his true and lawful attorney or attorneys irrevocable with full power of substi- 
 tution, for him and in his name, place and stead to do any and all acts of 
 every nature within the general purview of the Plan or of this agreement 
 which the Committee or any such nominee or substitute in its or his discretion 
 may deem necessary or expedient in order fully to effectuate and aceojaplish 
 the purposes of the Plan and of this agreement, — hereby ratifying and con- 
 firming all and any acts or things which such Committee or any nominee or 
 substitute may do by virtue hereof. 
 
 If the Plan shall be declared operative, and the new Company formed there- 
 under, the Committee shall thereafter continue in existence until liquidation of 
 the ........ Company, if such liquidation shall be had as in the Plan contem- 
 plated, and thereupon until the acquisition of its assets by the new Company 
 so far as the new Company shall acquire such assets, and until the Committee 
 shall be dissolved with the consent of the Board of Directors of the new Com- 
 pany, approved by a. majority of the stock of the new Company, including not 
 less than two-thirds of its outstanding preferred stock. The Committee shall 
 be dissolved only by its own action. It shall promote such liquidation and the 
 acquisition of suc-h assets by the new Company, when, in its judgment, sjhall 
 be consistent with the interests of the Depositing Stockholders and the new 
 Company, and with respect to such liquidation or acquisition of assets the 
 Committee shall, so far as it may, and sujjject, to the provisions of this agree- 
 ment, protect the interests of the Depositing Stockholders. 
 
 In computing the percentage of the shares of stock, either preferred or com^ 
 
 mon, of the Company which shall be deposited to make up the fractions 
 
 required as aforesaid as a condition for declaring the Plan to be operative, there 
 
1286 FORMS No. 125 
 
 shall be reckoned and included the shajes of such preferred stock as to which 
 an obligation to deposit them hereunder shall be made in form satisfactory i' 
 the Committee by a person or persons whose responsibility shall be satisfactory 
 to the Committee; and the deposit with the Trust Company of such an obliga- 
 tion approved by the Committee shall, for the purposes of this agreement.— 
 but subject to any conditions or terms to be prescribed by the Committee,- - bt 
 cquiyalent to the deposit hereunder of the certificates for shares of such pre- 
 ferred stock called for by the obligation; but shall not entitle the depositor 
 of any such obligation to the issuance of a certifical^e of deposit for such stock. 
 
 Any determination by the Oommittee that certitioates for any given amount 
 
 of shares of the Company have been deposited hereunder, shall be 
 
 conclusive upon all parties. 
 
 The Committee may from time to time make or adopt contracts with syndi- 
 cates, bankers or others, to carry out the provisions of the Plan and of this 
 agreement, provided, however, and it is expressly agreed, that in no case shall 
 there be any power on the part of the Commiittee or Depositary or of any party 
 or parties to this agreement, to create any charge or lien upon the shares of 
 
 stock of the Company, certificates for which shall be deposited, or to 
 
 aflfect the same except as in this agreement provided. 
 
 The members of the Committee and the Depositary or any of them shall have 
 the right to form or procure the formation of any syndicate or syndicates which 
 they shall deem necessary or convenient for carrying out the purposes of the 
 Plan or this agreement and may act as members or managers of any such 
 syndicate or syndicates and may themselves be pecuniarily interested in any such 
 syndicate or syndicates. 
 
 In ease of the resignation of the Depositary or if for any reason, the Com- 
 mittee shall deem that any change of Depositary is necessary, the Committee 
 shall have the power to arrange therefor as it may deem expedient. 
 
 The Committee may, in behalf of the Depositing Stockholders, consent to, or 
 provide for the issue of interim receipts or certificates representing and entitling 
 liolders to receive securities of the new Company when issued. 
 
 The acceptance by any Depositing Stockholder of the securities of the New 
 Company shall estop such Depositing Stockholder from questioning the con- 
 formity of such securities in any particular with the Plan or this agreement or 
 the propriety or expediency of any act done or arrangement made by or on behalf 
 of the Committee or the new Company in carrying the Plan into effect. Nor 
 ■shall any depositor or holder of any Trust Company certificate have any interest 
 in tlie disposition of any of the bonds or shares of stock of the new Company 
 to be by it issued and delivered under or in consummation of the Plan to any 
 other person, or the proc-eeds thereof. 
 
 VI. — Termination of the Deposit. 
 
 If the Plan shall not be declared operative as aforesaid within the time herein- 
 before prescribed, or the extension of such time as hereinbefore prescribed, then 
 the Committee may declare the Plan abandoned and thereupon the Depositary 
 shall, upon demand by the holder of any Trust Company certificate and upon 
 surrender of the same, deliver to him a certificate or certificates for the shares 
 of stock represented by such Trust Company certificate; and such delivery shall 
 be without any charge whatever against such Depositing Stockholder or his 
 
No. 125 . FORMS 1287 
 
 shares of stock for the services of the Depositary or otherwise under or by reason 
 of this agreement. 
 
 VII. — Miscellaneous. 
 
 1. The benefits of this agreement shall be confined strictly to the parties 
 hereto. The same shall not be construed to create any trust or obligation to or 
 in favor of any person or corporation other tthan the Committee, the Nev? 
 Company, the Depository and the holders, from time to time, of the Trust 
 Company certificates. 
 
 2. Every holder of a certificate of deposit shall, for all the purposes of this 
 agreement, be deemed to be the sole Depositing Stockholder with respect to 1;he 
 
 shares of stock of the Company represented by such Trust Company 
 
 certificate and as such a party to this agreement entitled to all of its benefits 
 and subject .to all of its limitations and provisions. 
 
 3. Whenever the " Plan " is referred to in this agreement, it shall be deemed 
 to include every modification of the same. 
 
 4. Any and every reference of this agreement to a Depositing Stockholder 
 shall be deemed to refer to every Depositing Stockholder whether a natural 
 person or a corporation. 
 
 5. Every notice in this agreement required to be published shall, unless herein 
 otherwise prescribed, be published twice a week for two -weeks in Ijwo daily 
 newspapers reputed to be of good circulation among financial persons and corpo- 
 rations and published in the City of New York. 
 
 6. This agreement shall be deemed, according to its termSj to bind and benefit 
 the several parties hereto, their and each of their survivors, executors, adminis- 
 trators and assigns. 
 
 In witness WHBaiEOF the parties of the first part have hereto set their hands 
 and seals, the party of the third part has hereto caused its corporate seal to 
 be afiixed and attested by its Secretary, and these presents to be signed by its 
 President or Vice-president, and the parties of the second part have become 
 parties hereto either by subscription of their names hereto or by deposit of 
 certificates of stock as aforesaid, — all the day and year first above written. 
 
 Stockholders Committee: 
 
 [l. s. 
 
 [L. S. 
 [L. S. 
 
 [L. S. 
 [L. S. 
 [L. S. 
 [L. S. 
 [L. S. 
 [L. S. 
 [L. S. 
 
 Vice-President. 
 [Corporate Seal] 
 
 Attest : 
 
 • 
 
 Secretary. 
 
 *»«iiii«« L^' ^'1 
 
1288 FORMS No. 125 
 
 EXHIBIT " B." 
 
 THE COMPANY. 
 
 Office of Stockholdeks Committee: 
 
 No Street, New York City. 
 
 , 191... 
 
 To the Stockholders of the Company : 
 
 The undersigned, upon the request of large holders of the capital stock of the 
 
 Company, as well as upon their own initiative, have undertaken 
 
 to act as a committee in presenting a Plan for a readjustment of the affairs of 
 the Company, which, it is believed, will materially promote the interests of the 
 holders of its stock, both preferred and common. The Committee includes the 
 President of the Company and the other four members of its Executive Com- 
 mittee; and to a large extent the reasons for the Plan now proposed have been 
 suggested to them by their experience in practical and responsible administra- 
 tion of the Company. 
 
 Messrs and , the President and 
 
 Vice-President, respectively, of of , who have 
 
 acquired a substantial holding of the shares of this Company, recently asked the 
 
 members of the Executive Committee of the Company to consider 
 
 the question of their co-operation with the other stockholders to promote the 
 interests of its business. This plan has been prepared in conference with Messrs. 
 and , and has their approval and support. 
 
 The stockholders of the Company are well aware that practical experience 
 under its present charter has demonstrated that some readjustment of tlie rights 
 of its stock, and especially of its administrative regulations, is necessary to full 
 realization of the earning power of its business and the successful consummation 
 of its purposes. The provision of the charter according to the preferred stock 
 
 an per cent, cumulative dividend has, by reason of the limited although 
 
 very substantial earnings of the Company, resulted in an accumulation of divi- 
 dends to the holders of such stock which will, on , 191.., 
 
 aggregate per cent, of its par value. Dividends have for a 
 
 considerable time been paid and are now being paid on such stock at the rate of 
 
 per cent, per annum, thus involving an annual increase of per 
 
 cent, in the arrears. The charter contains no provision authorizing an increase 
 of the preferred stock; and the statute applicable requires for its issue the 
 assents of two-thirds of each class of stock, preferred and common. And the 
 charter contains a provision forbidding the Company, — without the consent of 
 
 per cent, of its outstanding preferred stock, — to incur any bonded 
 
 or funded indebtedness other than the $ of the present series of 
 
 debentures of the Company ; and they must be retired at the rate of $ 
 
 a year. These features of the charter are serious obstacles to the wholesome 
 and necessary extension of the Company's business and to the acquisition of 
 additional property; and they thus obstruct the development of the Company's 
 full earning capacity. 
 
 The officers and other large stockholders of the Company have, besides, been 
 convinced that the establishment of closer relations with interests with which 
 this Company necessarily has large dealings and the vesting in them of sub- 
 stantial amounts of the securities of the Company, and especially of its common 
 stock, will be a material benefit to the Company anid to both classes of its 
 stockholders. 
 
No. 125 FORMS 1289 
 
 The Plan. 
 
 1. A company to be formed to acquire not less than a majority of the entire 
 capital stock of this Company, such acquisition not to take place until there 
 shall be ready for transfer to the new company such amount of the outstanding 
 shares of the preferred stock of the present company as shall be approved by 
 this Committee, provided that such approval shall not be given until at least a 
 majority of the entire stock of the present Company shall be so ready for trans- 
 fer, including not less than one-quarter of its preferred stock, and provided 
 further that such approval shall be given when two-thirds of the entire stock 
 of the present Company shall be so ready for transfer. 
 
 2. The new company, it is expected, will, as soon as the support of the Plan 
 
 by stockholders of the Company shall be sufficient, in such 
 
 lawful and suitable manner as shall be determined upon, acquire the physical 
 assets of the present Company and thereupon directly take over and conduct 
 its business. Pending the realization of this expectation, the new company will 
 exercise such control in the operation and administration of the present Coin- 
 pany as will lawfully and properly belong to the holders of a majority of its 
 stock. 
 
 3. The new Company to have the following 
 
 Authorized Capitalization'. 
 
 Twenty Year, Five Per cent. First Lien Gold Bonds, to stand se- 
 cured, if and when the landis and assets now belonging to the 
 
 Company shall have been acquired by the new company,' 
 
 by a first lien upon the said assets, including a first mortgage of 
 
 all lands owned by the Company and a pledge of all the 
 
 stocks and securities of lesser companies owned by the 
 
 Company. Pending the acquisition of such assets and lands by 
 the new company, the bonds will be secured by a pledge of all the 
 shares and. securities of the Company, or of its sub- 
 sidiary companies, which m^ay be acquired by the new company 
 
 Seven per cent, cumulative preferred stock 
 
 Common stock 
 
 4. The net and final distribution of securities of the new Company is intended 
 to be as follows. The figures here given are on the basis of the assent of all 
 outstanding shares of the present Company. On the assent of less than all the 
 total amount of actual distribution to holders of such shares will, of course, 
 be correspondingly reduced. 
 
 To holders of the Preferred stock of 
 
 . . '. Company ( $ now 
 
 outstanding) for each share thereof 
 
 with all its accumulated dividends: 
 New Company bonds $ 
 
 New Company Preferred stock 
 
 New Company Common stock 
 
1290 FORMS No. 125 
 
 To holders of the Common stock of the 
 
 Company ( $ now 
 
 outstanding) for eax>h ten shares of 
 said stock three shares of the Common 
 stock of the new Company • 
 
 To new interests for their co-operation 
 and for all services and expenses, 
 whether legal, of committees, bankers 
 or otherwise in consummating this pro- 
 posed plan 
 
 Reserved (a) to provide for the retire- 
 ment and redemption of the outstand- 
 ing debentures of the Com- 
 pany; (6) to acquire additional prop- 
 erties; (c) to provide additional 
 working capital; and {d) for the gen- 
 eral purposes of the new Company .... 
 
 Total . 
 
 5. Those desiring to accept the above plan may do so by depositing the certifi- 
 cates for the shares of stock of the Company held by them respectively, 
 
 duly endorsed for transfer in blank, in and with the . Company of New 
 
 York, on or before the .... day of , 19. .. The Committee reserves 
 
 the privilege of fixing a day prior to said , after which no 
 
 further deposits will be received and also of extending the time for making 
 such deposits for what may seem to them good cause. In exchange for such 
 
 deposits the Company will issue negotiable certificates. The 
 
 terms of such deposit, the respective powers and functions of said Committee and 
 
 of said Company, and generally the details of said trust arrangements, 
 
 are more fully set forth in a certain agreement between said Committee and 
 
 Company and the depositing stockholders thereunder, bearing even date 
 
 with this circular, to which agreement reference is hereby made. Dividends 
 received upon shares while on deposit will be forthwith paid to holders of the 
 corresponding Company certificates. 
 
 In submitting this Plan we are authorized by Messrs and 
 
 to say that they intend to remain substantial holders of the securities of the 
 Company, to give the Company the benefit of such representation in the direc- 
 tion of the affairs of the Company as may be mutually agreed on, and to actively 
 promote its interests. 
 
 The members of this Committee unhesitatingly recommend to both classes of 
 
 stockholders of the Company that they promptly deposit 
 
 their holdings with the Company of New York and thus become 
 
 parties to the Agreement. The Committee believe that the successful consum- 
 mation of the Plan will greatly tend to the advantage of all assenting stock- 
 holders. Upon an informal presentation of the Flan to a number of holders of 
 
No»126 FORMS 1291 
 
 large amounts of both the Preferred and Common stock of the Company, it 
 has met with their unqualified approval and acceptance. 
 
 , Chairman. 
 
 Committee. 
 Bankers to the Committee: 
 
 Depositary : 
 
 Counsel : 
 
 FORM NO. 126. 
 
 Certificate of Surrender of Franchise or of Tollmtary Dissolution ty Incorpora- 
 tors, 
 
 We, the incorporators named in the certificate of incorporation of , 
 
 Inc., filed for the purpose of creating a domestic stock corporation other than a 
 moneyed or transportation corporation, do hereby, before the payment of any 
 part of the capital and before beginning business, surrender all corporate rights 
 and franchises, by signing, vertifying and filing in the office of the Secretary of 
 State and the clerk of the county where said certificate of incorporation is 
 filed, this certificate as follows : 
 
 First: The names of the incorporators are 
 
 Second: No part of the capital of said corporation has been paidi 
 
 Third: There are no liabilities of said corporation. 
 
 Fourth: The business of said corporation has not begun. 
 
 Fifth: We do surrender all rights and franchises. 
 
1292 FORilS Nos. 127, 1«8 
 
 Witness our hands this day of , 191.., to this certificate in 
 
 duplicate. 
 
 [Add verifications.'} 
 
 FORM NO. 127 
 
 Jfoflce of Directors' Meeting to Dissolve Voluntarihi on StockhoUers' Consent. 
 
 Notice is hereby given that a special meeting of the board of directors of 
 
 , Inc., will be held at , at o'clock in the 
 
 noon of the day of , 191. ., for the purpose of 
 
 voting upon a propositio^ to dissolve said corporation and submit tTie same to 
 said corporation's stockholders. 
 
 Secretary. 
 
 FORM NO. 128. 
 
 Minutes of Directors' Special Meeting to Dissolve Voluntarily on Stockholders' 
 
 Consent. 
 
 A special meeting of the board of directors of , Inc., was held 
 
 at , at o'clock in the noon of the day 
 
 of , 191. ., pursuant to the following notice: 
 
 [Take in Form Xo. 127.] 
 
 The President in the chair, the Secretary recording. 
 
 Present. — The full board. 
 
 The Secretary presented the affidavit of , verified the day 
 
 of , 191. ., of the service upon each of the directors of the corpora- 
 tion of the foregoing notice at least three days before this meeting, viz., on 
 
 the day of , 191 .. , which, on motion duly seconded and 
 
 unanimously carried, was ordered placed on file. The following preamble and 
 resolutions were thereupon moved: 
 
 tt'hereas, [state reasons why dissolution advisable'}. 
 
 Resolved, that in the opinion of the directors of this corporation it is advisable 
 to dissolve said corporation forthwith, and further 
 
 Resolved, that a meeting of the stockholders of this corporation be called 
 for the purpose of voting upon the proposition that this corporation be forth- 
 with dissolved; and further 
 
 Resolved, that the directors and officers of this corporation be and they 
 hereby are authorized and directed to do any and all things necessary or proper 
 
Nos. 129, 130 FORMS 1293 
 
 to call said meeting of stockholders and to dissolve this corporation if the 
 required number of shares of stock of said corporation vote for such dissolution. 
 
 Said resolutions being duly seconded and put to vote were adopted and 
 
 carried by the vote of out of votes, being a majority of the 
 
 whole board. 
 
 There being no further business to come before the meeting, it was atljouriied. 
 
 FORM NO. 129. 
 
 Notice of Stockholders' Meeting to Consent to Voluntary Dissolution. 
 
 Notice is hereby given that a meeting of the stockholders of , 
 
 Inc., will be held at , at o'clock in the noon of the 
 
 day of , 191 .. , far the purpose of voting upon a proposi- 
 tion that such corporation be forthwith dissolved. 
 
 Directors. 
 
 FORM NO. 130. 
 Minutes of StoeJcliolders' Meeting to Consent to Voluntary Dissolution. 
 
 A meeting of the stockholders of , Inc., was held at , 
 
 at o'clock in the noon of the day of , 191 . . , 
 
 pursuant to the following notice: 
 
 [Take in Form No. 129.'\ 
 
 The President in the chair; the Secretary recording. 
 
 The Secretary presented the affidavit of , verified the ...... day 
 
 of , 191 . . , showing that the foregoing notice was published in 
 
 one or more newspapers published and circulating in the county wherein this 
 
 corporation has^ its principal office, viz., in and , in the 
 
 county of , at least once a week for three weeks successively next 
 
 preceding the time appointed for holding this meecang, and that on or before 
 the day of the first publication of such notice a copy thereof was served per- 
 sonally on each stockholder or mailed to him at his last-known post-office address^ 
 
 The Secretary stated that the outstanding stock of the corporation was 
 
 shares ; that shares were present at this meeting in person, 
 
 and shares by attorney and proxy. 
 
 On motion, duly seconded and unanimously carried, the foregoing affidavit of 
 sfervice of notice of this meeting was ordered placed on file. 
 
 The President stated that on the day of .'...., 191 . . , being not 
 
 less than thirty nor more than sixty days before this meeting is held, the follow- 
 ing preamble and resolutions were duly adopted by the directors of the corpo- 
 ration, and thiat this meeting was held pursuant thereto and pursuant to the 
 foregoing notice given thereunder: 
 
 [Take in Resolutions from Form No. 128.] 
 
1294 FORMS No. 131 
 
 The President further stated that the last preceding annual meeting of this 
 corporation was held in the city [town or village] wherein this meeting is being 
 held. 
 
 After discussion the following consent was presented to the meeting: 
 [Take in from Form No. 131.] 
 
 On motion it was 
 
 Resolved, that the foregoing consent be and it hereby is signed by the holders 
 of two-thirds or more in amount of the stock of the , Inc., now out- 
 standing, in person or by attorney; and that this corporation file it, attested by 
 its Secretary or Treasurer, and its President or Vice-President, together with the 
 powers of attorney signed by such stockholders executing such consent by attor- 
 ney, with the statement of the names and residences required by law with the 
 Secretary of State; and that the directors and officers of this corporation be and 
 they hereby are directed and authorized to do all things necessary and proper to 
 consummate such dissolution. 
 
 Such motion was duly seconded, and on being put to vote was adopted and 
 
 carried by shares, being more than two-thirds in amount of the stock 
 
 of the corporation outstanding. 
 
 Said consent was then executed by all those voting for the foregoing resolution, 
 and in the manner therein prescribed. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 Secretary. 
 
 FORM NO. 131. 
 
 Consent of Stockholders to Dissolve With Officers' Attest. 
 
 We, the undersigned, being the holders of two-thirds and more in amount of the 
 
 stock of , Inc., now outstanding, do hereby in person or by 
 
 attorney consent to its dissolution before the expiration of the time limited in 
 its ccrtiiicate of incorporation, and hereby signify such consent in writing. 
 
 Name. No. of Shares. By Attorney. 
 
 And we, the undersigned, as Secretary (or Treasurer) and President {or 
 Vice-President) of said corporatdou do hereby file the forgoing consent, 
 attested by us as such officers, 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 now existing board of directors of said corporation 
 and the names and residences of its officers duly verified by us, and do certify 
 
 that the said consent was duly adopted and signed by out of a total 
 
 outstanding shares of the stock oi said corporation at a stock- 
 holders' meeting held pursuant to law. 
 
 Names of Existing 
 
 Board of Directors. Residences of Same. 
 
No. 132 FORMS 1295 
 
 Names of Officers. Residences of Same. 
 
 Inc. 
 
 (CoRPOBATE Seal.) Attested by ... 
 
 {Vice) President. 
 
 Attested by , 
 
 Secretary {or Treasurer). 
 
 [Annex powers of attorney.'] 
 
 [Add verification for two officers signing.1 
 
 FORM NO. 132 
 Petition ty Directors for Orde'r Dissolving Corporation. 
 SUPREME COURT COUNTY, 
 
 In the Matter of the Petition of a ' 
 Majority of the Directors of 
 
 , Inc., for 
 
 its Dissolution. 
 
 To the Supreme Court: 
 
 The petition of and , respectfully shows: 
 
 First. That , Inc., is and at all times herein mentioned was a cor- 
 poration created by or under the laws of New York State. 
 
 Second. That the directors of said corporation are and 
 
 and , of whom the two last named are the petitioners herein ; and 
 
 that said directors have the management of the concerns of said corporation. 
 
 Third. That the stocks, effects and other property of said corporation are not 
 suflScient to pay all just demands for which it is liable [or, to afford a reason- 
 able security to those who may deal with it; or, that the undersigned deem it 
 beneficial to the interests of the stockholders of said corporation that it be dis- 
 solved] for the following reasons : 
 
 Fourth. That annexed hereto and made part hereof is a schedule marked "A" 
 containing the following matters as far as petitioners know or have the means 
 of knowing the same: 
 
 A-1. A full and true account of all the creditors of said corporation and of all 
 unsatisfied engagements entered into by and subsisting against it. 
 
 A-2. A statement of the name and place of residence of each creditor 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. 
 
 A-3. A statement of the sum. owing to each creditor or other person specified 
 in subHivision A-2, and the nature of each debt, demand or other engagement 
 
 A-4. A statement of the true cause and consideration of the indebtedness to 
 each creditor. 
 
 A-5. A full, just and true inventory of all the property of the corporation', and 
 of all the books, vouchers and securities relating thereto. 
 
1296 FORMS No. 133 
 
 A-6. A statement of each incumbrance upon the property of the corporation 
 by judgment, mortgage, pledge or otherwise. 
 
 A-7. A full, ju^t and true account of the capital stock of the corporation, 
 specifying the name of each stockholder; his residen'ce, 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. 
 
 Fifth. Tliat the county wherein the principal ofiSce of said corporation is 
 located is 
 
 Wherefore, petitioners pray for a final order dissolving said corporation as 
 prescribed in the Ninth Article of the General Corporation Law of New York 
 State. 
 
 Dated, , 
 
 State or New York, T 
 County of f 
 
 and , being duly and severally sworn, each for himself 
 
 says: The matters of fact stated in the foregoing petition and schedule are 
 just and true so far as I know or have the means of knowing the same. 
 
 Sworn to before me, this . . 
 day of , 191. 
 
 FOEM NO. 133. 
 
 Order to Show Cause Why Corporation Should Not Be Dissolved on Directors' 
 
 Petition, 
 [Title as in Form No. 132.'] [Special Term Court Caption.] 
 
 On reading and filing the petition of and , and the 
 
 schedule thereto annexed, verified by their affidavit herein the day 
 
 of , 191 . ., from which it appears to the Court's satisfaction that 
 
 tills Court should entertain said petition and that cause should be shown why 
 
 , Inc., a domestic corporation, should not be dissolved, it is, 
 
 on motion of , Esq.. attorney for petitioners, 
 
 .Ordered, that all persons interested in said corporation show cause before this 
 
 Court, at tt Special Term, Part thereof, [or before . ) , Esq., 
 
 Referee, if a referee is appointed] to be held on the day of , 
 
 191 . ., at o'clock in the noon of that day, or as soon thereafter 
 
 as counsel can be heard, why said corporation should not be dissolved; aind 
 further 
 
 Ordered, that a copy of this order be published at least once in each of the 
 three weeks immediately preceding the time fixed herein for showing cause in the 
 following newspapers published in the county [or city) wherein this order 
 
 is entered, viz., the and the , in the county (or city) of 
 
 ; and further 
 
No. 134 FORMS 1297 
 
 Ordered, that a copy of this order be served upon each of the persons specified 
 in the schedule annexed to said petiti<yn as a creditor or stockholder of said 
 corporation or as a person to whom an engagement of said corporation is to be 
 performed, other tlian a person whose residence is stated to be unknown or to be 
 without the United States, either personally at least ten days before the time 
 herein appointed for the hearing, or by depositing a copy of this order at least 
 twenty days before the time so appointed in the post-office, inclosed in a post- 
 paid wrapper, addressed to the person to be served at his residence as stated 
 in said schedule. 
 
 Enter 
 
 > 
 
 J. S. C. 
 
 FORM NO. 134. 
 
 Final Order Dissolving Corporation on Directors' Petition. 
 
 [Title as im Form No. 132.] [Caption of Cov/rt Order.] 
 
 On the petition and annexed schedule of and , verified 
 
 by their affidavit herein the day of , 191 .. ; and the order 
 
 to show cause entered herein the day of , 191 .. , and the 
 
 affidavits of and , verified herein respectively the' 
 
 day of ■■■ ., 191 . . , from which it appears to the satisfaction of the court 
 
 that due publication and service of said order to show cause has been made as 
 required by law, said order to show cause having been entered and said papers 
 filed within ten days after said order was made with the clerk of the county 
 where the principal office of said corporation is located; and the court having, 
 at the time and place in said order specified, heard the allegations and proofs 
 of the parties and determined the facts and made and filed its decision; and 
 upon reading and filing the notice of motion for final order herein and the 
 
 affidavit of , verified herein the day of , 
 
 191.., from which it appears to the Qonrt's satisfaction that notice of said 
 motion has been duly and timely served upon each person who has made him- 
 self a party to the proceedings herein by filing with the clerk before the close 
 of the hearing herein a, notice of his appearance in person or by attorney, 
 specifying a post-office within the state where such notice might be served, now, 
 after hearing , Esq., of counsel for said petitioners, in sup- 
 port of said petitiOTi, and , Esq., of counsel for , 
 
 in opposition, and it appearing to the court that said corporation is insolvent, 
 
 it is, on motion of , Esq., attorney for petitioners. 
 
 Ordered, that said corporation be and it hereby is dissolved, and further 
 
 Ordered, that . . . /. , and , be and they hereby are appointed 
 
 receivers of its property, with all the powers, duties and liabilities of receivers 
 under the eleventh article of the General Corporation Law of the State of 
 Xew York. • 
 
 Enter 
 
 J. S. C. 
 
1298 FORMS Nos. 135, 136 
 
 FORM iVO. 135. 
 
 Notice of Meeting of Stoclholders to Consent to Sale of Corporate Property 
 
 and Franchises. 
 
 Notice is hereby given that a special meeting of the stockholders at 
 
 , Inc., will lie held at at o'clock in 
 
 the noon of the day of , 191 . . , for tlie purpose 
 
 of voting upon a proposition to sell and convey all said corporation's property, 
 rights, privileges and franchises to , Inc., a domestic corporation. 
 
 Dated, 
 
 Secretary. 
 
 FORM NO. 136. 
 
 Minutes of Meeting of Stoclholders to Consent to Sale of Corporate Property 
 
 and Franchises. 
 
 A special meeting of the stockholders of , Inc., was held 
 
 at , at o'clock in the noon of the 
 
 day of , 191 .. , pursuant to the following notice: 
 
 [Take in from Form -\'o. 135.] 
 
 The President in the chair and the Secretary recording. 
 
 The Secretary reported the stock of the corporation to be shares, 
 
 of which were present in person and by proxies on file with 
 
 him and correct. 
 
 The Secretary presented the affidavit of , verified the 
 
 day of , 191 . . , showing the calling of this meeting upon like 
 
 notice as that required for an annual meeting; and on motion duly seconded 
 and unanimously carried said affidavit was ordered on file. 
 
 The following proposition for the purchase of this corporation's property, 
 rights, privileges and franchises was submitted: 
 
 [Take in.] 
 
 After discussion the following resolutions and preambles were moved: 
 
 Whereas, , Inc., a domestic corporation engaged in a business 
 
 of the same general character as this corporation has offered to buy and accept 
 
 all tJiis corporation's property, rights, privileges and franchises for $ , 
 
 and the stockholders of this corporation in meeting duly called for the purpose 
 of considering said offer believe it to be to the interest of this corporation to 
 accept said offer, / 
 
 Resolved, that said offer be and it hereby is accepted and that this corporation 
 
 sell and convey its property, rights, privileges and franchises to , 
 
 Inc., for $ ; and further 
 
 Resolved, that the proper officers of this corporation be and they hereby are 
 authorized and directed to do any and all things necessary to consummate said 
 sale. 
 
 )Said preambles and resolutions being duly seconded were carried by the vote 
 of shares, being two-thirds and over of said corporation's stock. 
 
 There being no further business to come before the meeting, it was adjourned. 
 
 ■ •■■•■«• , 
 
 Secretary. 
 
Nos. 137-143 FOEMS 1299 
 
 FORM NO. 137. 
 ^'otice by Stockholder of Oljection to Tohmtary Sale of Corporation's Franchise 
 
 and Property. 
 {Adapt from Form No. 119.) 
 
 FORM NO. 138. 
 Notice ty Stockholder, Objecting to Sale of Corporate Franchise and Property, 
 to Corporation, of Application to Court for Appointment of Appraisers to 
 Value His Stock. 
 {Adapt from Form No. 120.) 
 
 FORM NO. 139. 
 Petition iy Stockholder Dissenting from Sale of Corporate Franchise and 
 
 Property for Appointment of Appraisers to Value His Stock. 
 {Adapt from Form No. 121.) 
 
 FORM NO. 140. 
 Order Appointing Appraisers to Value Stock of Stocklwlder Dissenting from 
 Sale of Corporate Franchise and Property. 
 {Adapt from Form No. 122.) 
 
 FORM NO. 141. 
 
 Oath, of Appraisers Appointed to Value Stock of Stockholder Dissenting from 
 
 Sale of Corporate Franchise and Property. 
 
 {Adapt from Form No. 123.) 
 
 FORM NO. 142. 
 
 Certificate hy Appraisers of Value of Stock of Stockholder Dissenting from Sale 
 
 of Corporate Franchise and Property. 
 
 {Adapt from Form No. 124.) 
 
 FORM NO. 143. 
 
 Notice of Motion for Appointment of Receiver, 
 SUPREME COURT, COUNTY. 
 
 , suing on his own behalf and on 
 
 behalf of any and all other creditors of 
 Company who may elect to be- 
 come parties to this action, 
 
 PlaintiflP, 
 against 
 
 Company, 
 Defendant. 
 
 Notice op Moitow foe Appointment of Receiveb. • 
 
 To the Above-named Defendant : 
 
 Please Take Notice that upon the annexed summons and complaint herewith 
 served upon you, the undersigned will apply to this Court at a Special Term, 
 
1300 FORMS Nos. 144, 145 
 
 [Part I thereof] held at in on the 
 
 day of , 191 . ., at o'clock in the forenoon or as soon thereafter as 
 
 counsel can be heard, for an order appointing a receiver of the property of the 
 defendant, and for such other and further relief as to the Court may seem 
 proper. 
 
 Dated, , 191... 
 
 Yours, etc., 
 
 Attorneys for Plaintiff, 
 Office and Post-office Address etc. 
 
 FORM NO. 144. 
 
 Consent to Appointment of Receiver, 
 
 [Title as in Form No. 143.] 
 
 The defendant, Company, hereby appears by its attorneys 
 
 and hereby accepts the short notice of motion for the appointment of a receiver 
 of its property and consents to the hearing of said motion at the time and place 
 stated in said notice of motion ; and further consents to the appointment of a 
 receiver of the property of the defendant. 
 
 Attorneys for Defendant, 
 Office and Post-ofEce Address, etc. 
 
 FORM NO. 145. 
 Complaint for Appointment of Receiver, 
 
 [Title as in Form No. 143.] 
 
 Plaintiff, by , his attorneys, complaining of the 
 
 defendant, alleges: 
 
 First: That the defendant is a domestic corporation conducting a general 
 contracting business, with its principal office and place of business at No. 
 in 
 
 Second: That this action is brought by the plaintiff on his own behalf as one 
 of the creditors of the defendant, and on behalf of any and all other creditors 
 of the defendant who may elect to become parties to this action. 
 
 Third: That on the day of , 191 . ., plaintiff loaned to the 
 
 defendant at its request the sum of ($ ) , 
 
 which said sum the defendant promised to repay to the plaintiff on demand; 
 that on the day of , 191 . . , plaintiff duly demanded the repay- 
 ment of said loan from the defendant and said demand was refused, and no part 
 of said loan has been paid by the defendant to the plaintiff, and the defendant 
 is justly indebted to the plaintiff, by reason of the premises, in the sum of 
 
 dollars ( $ ) with interest thereon from the 
 
 day of ,191... 
 
 Fourth: Upon information and belief, that the defendant is the owner of the 
 
 entire cajfital stock of a domestic corporation known as , 
 
 Incorporated, and the defendant has done and is doing part of its business vmder 
 its own name and part under the name of , Incorporated. 
 
No. 145 FORMS 1301 
 
 Fifth: Upon information and belief, that the business affairs of the defendant 
 have become greatly complicated and involved, and the defendant is indebted 
 to sub-contractors in large sums of money; that the defendant's pay-rolls amount 
 to about dollars ($ ) per week; that the defend- 
 ant has undertaken the performance of, and is now engaged in executing many 
 important construction contracts in different parts of the United States which 
 require the expenditure of large sums of money Weekly in order to prevent 
 default by the defendant thereunder; that the greater part of the assets of the 
 defendant have been hypothecated or pledged in order to obtain working capital, 
 and that the rights and interests therein of aaid pledgees are conflicting and 
 uncertain; and that the working capital of the defendant has been so depleted 
 that it is unable to meet its obligations at maturity and to pay its debts in the 
 ordinary and usual course of business, due regard being had for the rights and 
 interests of its creditors. 
 
 Sixth: Upon information and belief, that it is of the utmost importance to 
 the creditors of the defendant, including the plaintiff, and to its stockholders, 
 that the necessary pecuniary arrangements should be made to prevent a default 
 by the defendant on its existing profitable construction contracts, and that such 
 arrangements cannot be made unless a receiver of the assets and property of the 
 defendant is appointed by this Court. 
 
 Seventh: Upon information and belief, that for many months past the defend- 
 ant has been making unreasonable sacrifices and paying unreasonable commis- 
 sions in order to obtain the money needed to meet its pay-rolls and other neces- 
 sary expenses, and that the situation has now become so grave that unless this 
 Court, through a receiver appointed by it, will take possession of the defendant's 
 property and business, and control, manage and conduct the same for the general 
 interest of its creditors, numerous litigations will be begun against the defendant 
 ill different States of the United States and in different courts of the State of 
 New York; that the property of the defendant will be attached and a race of 
 diligence will be begun by said creditors, each trying to collect his own debts in 
 his own way; that the defendant will be forced to suspend work on its existing 
 profitable construction contracts, and a, large part of its assets and property 
 will be lost or destroyed, and such part of said assets and property as is not so 
 lost or destroyed will be appropriated for unjust priorities or preferences as 
 between the defendant's creditors. 
 
 Eighth: Upon information and belief, that by reason of the aforesaid facts 
 the defendant is insolvent. 
 
 Ninth: Upon information and belief, that the continuance of the business of 
 the defendant under existing conditions would be a waste of its working capital 
 and assets and of the fund to which the creditors must look for the payment of 
 their respective claims against it. 
 
 Tenth: Upon information and belief, that in order to preserve and save the 
 assets and property of the defendant from waste, and to preserve and protect 
 the rights of its creditors and stockholders, it is necessary that its assets and 
 property should be placed in the hands of a receiver in order that the same may 
 be marshalled and that the several respective liens and priorities thereon may 
 be ascertained, and the rights, liens and equities of the creditors of the defend- 
 ant may be decreed and enforced. 
 
 Eleventh : That the plaintiff has no adequate remedy at law for the protection 
 of his rights in the premises. 
 
1302 FORMS N0.145-A 
 
 Whebefobe, plaintiff demands judgment, as follows: 
 
 1. That the rights of the plaintiff and of all other creditors of the defendant 
 may be ascertained and decreed, and that this Court shall fully administer all 
 the assets and property of the defendant, and for such purpose shall marshal all 
 the assets of the defendant and ascertain the several respective liens and priori- 
 ties existing thereon and decree and enforce the respective rights, liens and 
 equities of the creditors of the defendant as the same may be finally ascertained 
 and decreed upon the respective intervention or application of each and every 
 creditor or lienor in and to each and every portion of the assets and property 
 of the defendant. 
 
 2. That for the purpose of preserving the assets and property of the defendant, 
 to prevent unjust priorities or preferences, and to prevent default by the defend- 
 ant on its existing profitable construction contracts, a receiver may be appointed 
 of all the property, real, personal and mixed, of the defendant, of whatsoever 
 kind or description and wheresoever situated, with full power to sue for, collect 
 and receive and take into his possession the goods, chattels, rights, credits, 
 moneys, effects, lands, tenements, hereditaments, books, papers, property and 
 assets of every description whatsoever of the defendant, and with all the inci- 
 dental powers ordinarily vested in receivers of the property of corporations in 
 like cases. 
 
 3. That temporarily and pending this suit, an injunction may issue against 
 the defendant and all persons claiming and acting by, through or under it, and 
 against all other persons enjoining and restraining them from interfering in 
 any way with said receiver or with said property or with the property which 
 shall at any time come and be in his hands. 
 
 4. That the plaintiff may have such other and further relief in the premises 
 as to the Ciourt may seem proper and equitable. 
 
 Attorneys for Plaintiff, 
 Office and Post-office Address, etc. 
 {Add verification.) 
 
 FORM NO. 145-A. 
 
 Answer to Complaint for Receiver, 
 
 [Title as in Form Xo. 143.] 
 
 The defendant, Company, appearing by , 
 
 its attorney, and answering the bill of complaint herein, alleges: 
 
 I. That at a, meeting of the board of directors of the defendant corporation, 
 
 held pursuant to call, on the day of , 191 . ., there being present 
 
 at said meeting a quorum of said board of directors, a resolution was duly 
 adopted and passed by the unanimous vote of the members of said board of 
 directors present at said meeting, as follows: 
 
 " Whereas, the working capital of this Company has been so depleted 
 that it is unable to meet its obligations at maturity and to pay its debts 
 in the ordinary and usual course of business, due regard being had to the 
 rights and interests of its creditors; and 
 
 " Whereas, the business affairs of this Company have become so com- 
 plicated and involved that it is for the interest of all its creditors ami 
 
N0.145-A FORMS 1303 
 
 stockholders that its assets should be marshalled, that the respective liens 
 and priorities thereon should he ascertained, and that the rights, liens and 
 equities of the creditors of this Company should be decreed and enforced ; 
 and 
 
 " Whereas, it is of the utmost importance to said creditors and stock- 
 holders that the necessary pecuniary arrangements should be made to pre- 
 vent a default by this Company on its existing profitable construction 
 contracts; 
 
 "Now, Resolved, that the officers of this Company be and they hereby 
 are authorized and directed to take all such proceedings as in their opinion 
 may be necessary or proper for the following purposes; to wit: to preserve 
 the property and assets of this corporation; to prevent unjust priorities 
 and preferences; to complete all existing favorable construction contracts; 
 and to secure the appointment of a receiver of all the property — real, 
 personal and mixed — of this corporation, with all the powers ordinarily 
 vested in receivers of the property of corporations in like cases, including 
 the right to complete all existing construction contracts, the completion 
 of which will be profitable to this corporation." 
 
 II. The defendant admits all the allegations of said complaint. 
 Wherefore defendant demands judgment, as follows: 
 
 1. That the rights of the plaintiff and of all other creditors of the defendant 
 may be ascertained and decreed, and that this Court shall fully administer all 
 the assets and property of the defendant, and for such purpose shall marshal 
 all the assets of the defendant and ascertain the several respective liens and 
 priorities existing thereon and decree and enforce the respective rights, liens 
 and equities of the creditors of the defendant as the same may be finally ascer- 
 tained and decreed upon the respective intervention or application of each and 
 every creditor or lienor in and to each and every portion of the assets and 
 property of the defendant. 
 
 2. That for the purpose of preserving the assets and property of the 
 defendant, to prevent unjust priorities or preferences, and to prevent default 
 by the defendant on its existing profitable construction contracts, a receiver 
 may be appointed of all the property, real, personal and mixed, of the defendant, 
 of whatsoever kind or description and wheresoever situated, with full power 
 to sue for, collect and receive and take into his possession the goods, chattels, 
 rights, credits, moneys, effects, lands, tenements, hereditaments, books, papers, 
 property and assets of every description whatsoever of the defendant, and with 
 all the incidental powers ordinarily vested in receivers of the property of 
 corporations in like cases. 
 
 3. That temporarily and pending this suit, an injunction may issue against 
 the defendant and all persons claiming and acting by, through or under it, and 
 against all other persons, enjoining and restraining them from interfering in 
 any way with said receiver or with said property or with the property which 
 shall at any time come and be in his hands. 
 
 4. That the plaintiff may have such other and further relief in the premises 
 as to the Court may seem proper and equitable. 
 
 Attorney for Defendant, 
 Office and Post-Office Address, etc. 
 
1304 FORMS No. 145-B 
 
 FORM XO. 145-B. 
 Order Appointing Receiver. 
 
 [Title of Form .A'o. 143, Caption of Court Order. 1 
 
 On reading and filing the summons and complaint in the above-entitled action, 
 the notice of motion for the appointment of a receiver herein, the affidavit of 
 service of the aforesaid papers on the defendant, the consent of the defendant 
 to the appointment of a receiver of the assets and property of the defendant, and 
 the answer of the defendant herein, in which the defendant unites in the prayer 
 
 of the plaintiff for the appointment of a receiver; and after hearing 
 
 , Esq., for the plaintiff and , Esq., for the 
 
 defendant, and due deliberation having been had, it is 
 
 Ordered, adjudged and decreed, that be, and he 
 
 hereby is, appointed receiver of all the property of the defendant 
 
 Company, real, personal and mixed, of whatsoever kind or character and 
 wheresoever situated, including its real estate, buildings, plant, machinery, 
 tools, merchandise, contracts, bills and accounts receivable, cash on hand and 
 in bank, and all its rights, privileges, franchises, good- will, patents, and trade 
 marks, and all assets and property of every kind whatsoever, with all the 
 incidental powers ordinarily vested in receivers of the property of corporations 
 in Ijke cases; 
 
 Further ordered, that the said Receiver be, and he hereby is, authorized to 
 immediately take possession of all the assets and property of the defendant, 
 and to run, manage and operate the same, and to continue to prosecute all 
 work being done and contracts being performed by the defendant until the 
 further order of this Court, and to make and enter into a contract or contracts 
 to sublet any and all parts of work and contracts remaining to be done; and 
 said Receiver is authorized in his discretion to employ, discharge and fix the 
 compensation of all officers, attorneys, managers, superintendents, agents and 
 employees, and to make such payments and disbursements as may be needful 
 and proper in so doing, and to collect and receive all rents, income and profits 
 from said work and contracts and to make appropriate payments therefrom 
 on account of accruing rents and other necessary and proper charges; and 
 the said Receiver is hereby fully authorized and empowered to Institute and 
 prosecute all such suits as may be necessary in his judgment for the proper 
 protection of the property and trust hereby reposed in him, and likewise to 
 defend all actions instituted against him as Receiver, and to appear in and 
 conduct the prosecution or defense of any suit or suits now pending in any 
 court against the defendant, the prosecution or defense of which will, in the 
 judgment of said Receiver, be necessary for the proper protection of the 
 property placed in his hands, or the interests and rights of the creditors con- 
 nected therewith; and the said Receiver is hereby authorized in his discretion 
 ■from time to time out of the funds coming into his hands, to pay the expense 
 of conducting the business of the defendant and operating its plants and con- 
 tinuing its said work and contracts, and all taxes and assessments upon the 
 property of the defendant or any part thereof; and it is 
 
 Further ordered, that the said Receiver before entering upon the discharge 
 of his duties as Receiver shall file with the clerk of this Court a bond, with 
 
 good and sufficient sureties, in the sum of dollars 
 
 ($ ) ; conditioned that he will well and truly perform the duties of 
 
No. 145-C FORMS 1305 
 
 his office and duly account for all moneys or property which may come into 
 his hands, abide by all orders of this Court to do and perform such things 
 as he shall be directed to do; said bond to be approved by a Justice of this 
 Court; an it is 
 
 Further ordered, that each and every of the officers, directors, agents and 
 
 employees of the defendant, Company, and all other persons 
 
 whatsoever, be, and they hereby are, required and commanded forthwith upon 
 demand of said Receiver or his duly authorized agent, to turn over and deliver 
 to the said Receiver or his duly authorized representative any and all bocUs 
 of accounts, vouchers, papers, leases, deeds, contracts, bills, notes oh hand, moneys 
 or other assets or property in his hands or under his control; and each of 
 the said directors, officers, agents and employees is hereby commanded and 
 required to obey such orders as may be given from time to time by the said 
 Receiver or his duly authorized representative, in conducting the operations 
 of the said business and in the discharge of his duties as Receiver; 
 
 And it is further ordered, that the defendant and its officers, directors, 
 agents and employees, and all other persons claiming by, through or under the 
 
 defendant, Company, and all other persons whomsoever, 
 
 are hereby enjoined from interfering in any way whatever with the possession 
 or management of any part of the property over which the Receiver is hereby 
 appointed, or interfering in any way to prevent the discharge of his duties. 
 
 Enter, 
 
 Justice Supreme Court. 
 
 FORM NO. 145-C. 
 
 Order Discharging Receiver and Cancelling Bond. 
 
 [Title in Form A'o. 143, Caption of Court Order.} 
 
 On reading and filing the annexed affidavit of , verified 
 
 the day of , 191 . ., and all the vouchers and evidences of payment 
 
 annexed thereto, and on reading and filing the annexed consent duly executed 
 
 by the Company, which shows that all the property, 
 
 assets and cash in the said Receiver's hands after the payment of the suins 
 
 directed to be paid by the order of the Supreme Court dated , 191 . ., 
 
 have been turned over to the said Company, and on reading 
 
 and filing the annexed consent of the Company, the 
 
 surety on the bond of , as Receiver of the property of the 
 
 Company, to the entry of this order, 
 
 Now, on motion of , attorney for , as 
 
 Receiver as aforesaid, it is 
 
 Ordered, adjudged and decreed, that the said he and he 
 
 hereby is discharged and released of and from all further liability as Receiver, 
 
 etc., of the said Company, and the said receivership be 
 
 and hereby is terminated, and that the bond of the said Receiver be and it 
 hereby is cancelled. 
 
 Enter, 
 
 Justice Supreme Court. 
 
1306 FOEMS No. 146 
 
 FORM NO. 146. 
 Order for Receiver's Certificates, 
 
 {Title and caption of action, continuing:) 
 
 Upon reading and filing the petition of , Receiver herein 
 
 of the property of the defendant company, praying that he be authorized to issue 
 
 his Receiver's Certificates of indebtedness in the sum of $ ; and 
 
 and , plaintiffs in the action entitled 
 
 , plaintiffs, against , defendant, 
 
 which action was duly consolidated under the title of and with the action above 
 
 entitled by order herein bearing even date herewith ; and , 
 
 as Trustee under the first mortgage of said defendant company, plaintiff in tlie 
 
 action above entitled; and , defendant in both of said 
 
 actions ; and the Bondholders' Protective Committee, consisting of 
 
 and , severally appearing by their respective counsel and consenting 
 
 in open court to the entry of this order ; and it appearing by the orders appoint- 
 ing the Receiver entered on , 191.., and on , 191 .. , that 
 
 the said Receiver was authorized and directed to take possession of all the 
 assets and property of the defendant company and to run, manage and operate 
 its business and property in such manner as would, in his judgment, produce 
 the most satisfactory results so that the operation of the business should be 
 continued in substantially the same manner as theretofore, and preserved and 
 protected in proper condition; and it further appearing to the satisfaction of 
 the Court that to enable the Receiver to carry on said business, and otherwise 
 to preserve and protect the value of the property and assets of the defendant, 
 
 both mortgaged and unmortgaged, and to redeem an original issue of $ 
 
 of Receiver's Certificates authorized in the action entitled , Plain- 
 tiff, against , Defendant, on , 191 .. , it is 
 
 necessary to authorize said Receiver to borrow additional funds, and for that 
 purpose to issue his Receiver's Certificates of Indebtedness, subject to the con- 
 ditions hereinafter stated; and it further appearing that the said Committee of 
 
 Bondholders holding $ out of $ of first mortgage bonds 
 
 issued and outstanding have authorized this application by the Receiver and 
 consented to the making of this order; and the Court being satisfied that it is 
 for the best interests of the receivership estate that the prayer of said petition 
 be granted, and due deliberation having been had, it is 
 
 On motion of , attorneys for the Receiver, 
 
 Okdeked, Adjudged and Decreed: 
 
 That , as Receiver of all the property and assets of the 
 
 defendant , or his successor as such Receiver, for the purpose of 
 
 enabling him to borrow the funds required to carry on the business of the 
 defendant company, and otherwise to preserve and protect the value of its 
 property and assets, and to redeem his original issue of Receiver's Certificates, 
 
 amounting to $ , be and he hereby is authorized and empowered to 
 
 execute, issue and sell, as Receiver, his Certificates of Indebtedness up to the 
 
 principal amount of $ That said Certificates shall be dated 
 
 , 191 . ., and shall be payable not later than , 191. ., and 
 
 shall bear interest at the rate of six per centum per annum from the date of 
 issuance thereof, payable each year upon the days of and 
 
No. 146 FORMS . 1307 
 
 , or upon redemption ; and that all of said Certificates shall ba 
 
 redeemable at the option of said Eeceiver at any time before maturity at par 
 and accrued interest upon thirty days' notice. Notice of redemption shall be 
 published once a week for two successive weeks in two daily newspapers, pub- 
 lished in the City of New York, the first publication being at least thirty days 
 prior to the date fixed for redemption. On the date so fixed for redemption the 
 principal of said Certificates shall become due and payable, and interest thereon 
 shall cease to accrue after said date. 
 
 The said certificates shall be negotiable in form, and shall be issued and sold 
 by the Receiver for not less than 98% of their par value. 
 
 All said certificates shall be of equal standing and priority and shall be 
 secured by and are hereby declared to be a lien in the first instance upon all 
 free assets now or hereafter in the hands of the Eeceiver, and also upon all the 
 net earnings and income derived from the conduct of the business in charge of 
 said Receiver; and, secondly, upon any and all property of the defendant sub- 
 ject to the first mortgage of the defendant, which lien shall be prior to the 
 said first mortgage. In case of default upon the said certificates, the free assets 
 in tlie hands of the Eeceiver shall first be applied to the payment of the said 
 certificates, with interest, before any mortgaged assets shall be sold or otherwise t 
 used to satisfy the same. The Receiver, however, shall himself specifically set 
 
 aside in a separate account and/or may pledge specifically with the , 
 
 as Trustee, as security for the payment of the said $ of certificates, 
 
 cash equal in amount to 100 per cent, of all or any part of the principal amount, 
 with accrued interest, of the said Receiver's Certificates from time to time out- 
 standing, and/ or notes, bills and accounts receivable at least equal to 150 per 
 cent, of any balance not so secured by cash, with power from time to time to 
 withdraw any or all of such collateral upon substitution therefor of collateral 
 of a value equal' to or greater than the value of the collateral withdrawn. In 
 case of default the cash, bills, notes and' accounts receivable so set aside or 
 pledged shall first be applied to the payment of the Receiver's Certificates and 
 interest before any other property is sold or disposed of to satisfy the same. 
 
 Said certificates shall be subject to the issue of $ of certificates issued 
 
 by the Receiver under said order dated , 191.., until the same 
 
 shall be paid or redeemed as provided therein and herein, and also to the right 
 of the Receiver to utilize and dispose of the personal property and assets, includ- 
 ing cash, bills, notes and accounts receivable (except in so far as the sam« may 
 be specifically set aside or pledged) now in his hands or which may hereafter 
 come into his hands in the conduct of the business in his charge, and to his 
 right to apply the cash now in his hands, or which may hereafter come into 
 his hands, to the payment of the expenses, payrolls, salaries, merchandise debts 
 and other indebtedness incurred by him in the conduct of said business and in 
 the administration of the estate, provided, however, that the fair value of the 
 cash, notes, bills and accounts receivable, specifically set aside by the Receiver 
 or pledged with the Trustee, as above provided, as security for the payment of 
 these certificates, shall always be of the percentages above provided of the total 
 par value of certificates issued and outstanding; and the said Receiver is hereby 
 
 authorized to enter into such agreement with the said as 
 
 Trustee for the pledge of bills, notes and accounts receivable as may be neces- 
 sary or desirable in order to carry out the foregoing provisions. 
 
1308 _ FORMS No. 147 
 
 That the certificate to be issued hereunder shall be substantially in the form 
 attached to this order, with or without coupons at the option of the Receiver, 
 
 and shall be valid only when countersigned by under the seal of 
 
 Temporary certificates of such form, not inconsistent with the 
 
 terms of this order, and denomination, as the Receiver may determine, to be 
 
 executed by the Receiver and countersigned by in like manner 
 
 as permanent certificates, may be issued by the Receiver at his option and deliv- 
 ered in lieu of a like amoimt of the permanent certificates in this order author- 
 ized, provided that the said temporary certificates shall have printed or written 
 upon the face thereof the words " Temporary Certificate,'' and such temporary 
 certificates shall be surrendered and exchanged for a like amount of permanent 
 certificates as soon as the permanent certificates shall be ready for issue. 
 
 That the purchaser or purchasers of said certificates shall not be vmder any 
 obligation to inquire into the application of the proceeds derived from the sale 
 thereof 
 
 That the Receiver shall use the funds derived from the sale of such certificates 
 of indebtedness for the purposes aforesaid, including the payment and redemption, 
 
 on or before , 191 . ., of the present outstanding $ 
 
 » of Receiver's Certificates, issued under order of this Court dated , 
 
 191. ., and shall make report to this Court from time to time of the action taken 
 by him under this order. 
 
 Dated, New York, , 191. .. 
 
 FORM NO. 147. 
 
 Form of J'cccivcr's Certificate. 
 
 No. 
 Inc. 
 
 Eccciicr's Ccrtificale. 
 
 Authorized by order of the Court of the State of New York 
 
 entered , 191 .. . 
 
 For Value Received, , Receiver of' the assets and property of 
 
 Inc.. and his successor, if any, as such Receiver promises to pay 
 
 the bearer hereof dollars, at , on the day of 
 
 191 . ., with interest at per centum yearly from the dale of 
 
 issuance hereof until paid. All, but not a part, of the certificates of this issue 
 may be redeemed at any time before maturity at par and accrued interest on 
 thirty days' notice. Notice of redemption shall be published once a week for two 
 successive weeks in two daily newspapers published in the City of New York, 
 the first publication being at least thirty days prior to the date fixed for the 
 redemption. On the date so fixed for redemption the principal of this certificate 
 of indebtedness shall become due and payable, and interest thereon shall cease 
 to accrue after said date. 
 
No. 147 FORMS 1309 
 
 The bearer hereof is the holder of the proportionate part first above noted of a 
 
 total issue of certificates of not more than dollars under said order in 
 
 two certain actions pending in said Court entitled " and 
 
 Plantiiffs, against , Defendant," and 
 
 , as Trustee, Plaintiff, against , Defendant," 
 
 which actions were duly consolidated on the day of , 191. ., 
 
 under the title of '. , as Trustee, i'laintiflf, against 
 
 Defendant. 
 
 This certificate shall be of equal standing and priority and is secured by and 
 declared to be a lien in the first instance upon all free assets now or hereafter 
 • in the hands of the Receiver, and also upon all the net earnings and income 
 derived from the conduct of the business in charge of said Receiver; and, sec- 
 ondly, upon any and all property of the defendant subject to the first mortgage 
 of the defendant, which lien shall be prior to the said first mortgage. In case 
 of default upon the said certificates, the free assets in the hands of the Receiver 
 shall first be applied to the payment of the said certificates, with interest, 
 before any mortgaged assets shall be sold or otherwise used to satisfy the same. 
 As provided in said order, the Receiver, however, shall himself specifically set 
 
 aside in a separate account, and/or may pledge specifically with the , 
 
 as Trustee, as security for the payment of the said $ of certificates 
 
 cash equal in amount to 100 per cent, of all or any part of the principal amount, 
 with accrued interest, of the said Receiver's Certificates from time to time out- 
 standing, and/or notes, bills and accounts receivable at least equal to 150 per 
 cent, of any balance not so secured by cash, with power from time to time to 
 withdraw any or all of such collateral upon substitution therefor of collateral 
 of a value equal to or greater than the value of the collateral withdrawn. In 
 case of default the cash, bills, notes and accounts receivable so set aside or 
 pledged shall first be applied to the payment of the Receiver's Certificates and 
 interest before any other property is sold or disposed of to satisfy the same, and 
 the holder of this certificate shall have a pro rata benefit with all other holders 
 of certificates issued and outstanding of any security so pledged in accordance 
 with the terms of any agreement of pledge made or to be made by the said 
 
 Receiver with the as Trustee. Said certificates shall be subject 
 
 to the issue of $ and interest of certificates issued by the Receiver 
 
 under order dated , 191.., and issued in the cause first above 
 
 recited until the same shall be paid or redeemed as provided therein and herein, 
 and also to the right of the Receiver to utilize and dispose of the personal prop- 
 erty and assets, including cash, bills, notes and accounts receivable (except in 
 so far as the same may be specifically set aside or pledged) now in his hands 
 or which may hereafter come into his hands in the conduct of the business in 
 his charge, and to his right to apply the cash now in his hands or which may 
 hereafter come into his hands, to the payment of the expenses, payrojls, salaries, 
 merchandise debts and other indebtedness incurred by him in the conduct of 
 said business and in the administration of the estate, provided, however, that 
 the fair value of the casti, notes, bills and accounts receivable specifically set 
 aside by the Receiver or pledged with the Trustee as above provided as security 
 for the payment of these certificates shall always be of the percentage above 
 provided of the total par value of certificates issued and outstanding. 
 
1310 FOEMS No. 148 
 
 This certificate is negotiable but sliall be valid only when signed by the Receiver 
 
 and countersigned by , under the seal of B.nd. 
 
 holders hereof shall not be bound to inquire into the application of the proceeds 
 derived from the sale of this certificate. 
 
 In witness whereof, the said Receiver has, pursuant to said order, signed this 
 certificate as of the day of . , 191 .. . 
 
 Date of issuance of this Certificate, , 191.. 
 
 As Receiver of the Property and Assets of ' Company, 
 
 but not individually. 
 Countersigned : 
 
 FORM NO. 148. 
 Petition for Receiver's Certificates, 
 
 {Title and caption of action, continuing :) 
 To the Supreme Court of the State of New York: 
 
 The petition of , as Receiver of the property of the 
 
 defendant herein respectfully shows to the Court as 
 
 follows: 
 
 First: That on the day of , 191. ., 
 
 ■ind , as plaintiffs, creditors of the defendant corporation, 
 
 filed their complaint, upon which and upon the consent of the defendant com- 
 pany your petitioner was apointed Receiver of all the property and assets of 
 the company by order duly filed and entered on said date. That in said action 
 
 the defendant duly file its answer on , 191... That said action is 
 
 now at issue. 
 
 Second: That by said order of appointment your petitioner was directed to 
 take possession of all the property of the defendant, and to run, manage and 
 operate its business and property in such manner as would in his judgment 
 produce the most satisfactory results, so that the operation of the said business 
 .-.hould be continued in substantially the same manner as theretofore, and pre- 
 served and protected in proper condition. Your petitioner was also authorized, 
 if needfill in his judgment, to borrow money in order to comply with such 
 
 direction, but in no event above the sum of $ , and also to pay for 
 
 current necessities, and for labor, material and supplies. 
 
 Third: That pursuant to said order, your petitioner borrowed $ 
 
 from the Company of New York, on the collateral of outstanding 
 
 accounts of the defendant corporation. 
 
 Fourth: Your petitioner found upon taking possession of the offices and 
 
 factory of the defendant company that it owed substantially $ for 
 
 unpaid payrolls, $ for salaries in arrears, $. for three 
 
 months' rent in arrears, and $ for the purchase of electric power and 
 
 light in arrears. 
 
 FraxH: The above referred to creditors and wage-earners of the corporation 
 threatened at that time to throw the company into bankruptcy unless they were 
 
No. 148 FORMS 1311 
 
 paid, and in order to pay these obligations, and in order to operate the business 
 of the company in accordance with the said order of appointment of this Court, 
 the Receiver applied for an issuance of Receiver's Certificates in the sum of 
 
 $ to be used for these purposes, and to take up the original loan of 
 
 $ , by a petition in said cause, verified the day of , 
 
 191 . .. At the time of filing that petition, the Receiver stated to the Court that 
 there vpould probably be an actual loss from operation (not including deprecia- 
 tion and interest on the bonds and gold notes ) , and that there would be a tie-up 
 
 of new money of approximately $ a week. Instead of there being an 
 
 actual loss from operation there has been a profit of about $ to date. 
 
 Tills, too, with the limited amount of capital at the Receiver's disposal, which 
 permitted of the business to be run on only a minimum of capital and the 
 organization maintained with a full overhead while in its nature it must be 
 run to full normal capacity to show large profits. Furthermore, the Receiver, 
 
 on the sale of said certificates, was supplied with $ cash, and of this 
 
 amount there was applied, pursuant to the orders of the Court, to the payment 
 of previously incurred indebtedness in the form of past due wages, salaries, etc., 
 
 the sum of $ , and for any such legal expenses incident to the patent 
 
 litigation in which the Company is engaged $ , making a total "of 
 
 . $ , and leaving the sum of only about $ available for the 
 
 purposes of running the business. At the time of the Receiver entering upon his 
 
 duties there was a cash balance in the banks of $ , and practically 
 
 no quick assets. At the present time there is a cash balance and assets avail- 
 able within thirty days. of about $ It thus appears that the tie-up 
 
 of new money has been approximately $ per week, the same being 
 
 represented by accounts, bills receivable, etc., in greater sum. During this 
 period the Company's obligations, on which it was paying excessive interest 
 charges, running in some cases as high as 30%, have been reduced by at least 
 
 $ , and the unhypothecated cash, bills and accounts receivable have 
 
 been increased by about $ Including the above items, the Company 
 
 has at this time free assets to a total of over $ This tie-up of new 
 
 money will be materially increased each week as the business is run at fuller 
 capacity and profits augmented thereby. 
 
 Sixth: Also, under his original petition in said, cause, the Receiver stated 
 that he was informed that a plan would probably be devised for the reorganiza- 
 tion of the company and capital provided to continue its business, provided the 
 company could meanwhile be kept as a going concern, and that your petitioner 
 was convinced that to protect and preserve the value of the property of the 
 company pending its ultimate sale or reorganization, it was essential that the 
 company's business and organization should be carried on without interruption. 
 That the value of the plant was dependent in a large measure upon the organi- 
 zation and the maintenance of the good will which had been built up during the 
 period of its operation, and that your petitioner believed that this would be 
 largely, if not entirely destroyed if the plant should cease to be operated as a 
 going concern. Also that by stopping the operation of the plant the corporation 
 would suffer greatly through the loss of its skilled employees and mechanics. 
 For these reasons the application for the first issut! E Receiver's Certificates 
 
 was made, and this Court authorized the issuance ui $ of Receiver's 
 
 Certificates, which have all been subscribed for and issued. 
 
1312 FORMS No. 148 
 
 Seventh : The order authorizing said original issue of $ of Receiver's 
 
 Certificates bears date , 191 . . and the Certificates of said original 
 
 issue bear date the day of , 191 .. , and are made payable on 
 
 the day of , 191. ., but provide that all, but not a part, of 
 
 the Certificates of this issue may be redeemed at any time before maturity at 
 par and accrued interest on thirty days' notice, by publication. 
 
 Eighth : On the day of , 191 .. , the Com- 
 pany of New York, as Trustee under a first mortgage dated , 191.., 
 
 filed its bill of complaint to foreclose the mortgage covering the property of the 
 defendant, upon which and upon the answer of the defendant company your 
 petitioner was, by an order duly filed and entered on said date, again appointed 
 Receiver of all the property of the defendant company covered by and embraced 
 in the aforesaid mortgage. 
 
 Ninth: That the two actions above referred to were duly consolidated under 
 the title herein by order of this Court bearing even date herewith. 
 
 Tenth: In order to continue the business of the corporation in such a manner 
 and with such results as it has been continued under the Receiver heretofore, 
 until the close of the current year, it is necessary that the Receiver have addi- 
 tional capital with which to work. 
 
 The normal annual output of machines is To manufacture, sell and 
 
 erect each of these machines costs (including overhead charges) $ ', . 
 
 Each of the more popular models sells for $ , giving a net profit per 
 
 machine of $ 
 
 These machines, however,' are sold on approximately the following terms: 25% 
 cash; 75% in equal monthly instalments, spread through a period of 36 months, 
 beginning 90 days after date of installation of the machine. 
 
 This plan of deferred payments is the most favorable on which, in general, 
 this machine can be sold to the trade. This method of carrying on the business, 
 while it involves a very considerable lock-up of capital, is free from any undue 
 bu.siness risk since by the terms of sale the title to the machine, either through 
 a conditional bill of sale or a chattel mortgage, remains in the vendor until the 
 completion of all deferred payments. Should the vendee under these conditions 
 default in his deferred payments the prior payments become unconditionally the 
 property of the vendor, and it has been conclusively demonstrated by past 
 experience that the machine, if repossessed by the vendor under these conditions, 
 can be readily resold to a new vendee for at least as much and generally more 
 than is suflicient to cover the remaining deferred payments, together with the 
 cost of removal, renovation and re-erection. 
 
 It follows, therefore, that during one year there has to be disbursed in cash 
 for the manufacture and sale of these miachines 
 
 about ( .... X .... ) 
 against which there is received as initial cash payments 
 
 about ( X ) $ 
 
 and deferred payments, .... (machines) x . . (months) 
 
 X $ ... . ( monthly payments) 
 
 or a total of about 
 
 leaving a first year lock-up of 
 
No. 148 FORMS 1313 
 
 This amount may be increased by there being accepted asi part payment for 
 new machines old machines, which, before realized, upon, must be rebuilt and 
 resold on tei-ms similar to the new machines. It may on the other hand be 
 decreased by a certain number of the new machines being sold for spot cash. 
 
 In addition to the manufacture and sale of machines the company also manu- 
 factures each month supplies and matrices costing from $ to $ , 
 
 and which are sold at a handsome profit on 60 days' time. This part of the 
 
 business necessarily absorbs a working capital of from $ to $ , 
 
 turning over about once in every two months. 
 
 -Until the payments received on the deferred payment plan equal the amount 
 of cash being absoi-bed by sales under that plan, the company necessarily locks 
 up working capital on a gradually diminishing and easily calculated scale. As 
 will have been seen from the above, the amount of such working capital required 
 under present conditions for its first year's operation, were it to operate at 
 
 normal volume, would be for machine manufacture and disposal $ 
 
 for supplies and matrices 
 
 or a total of $ 
 
 or say approximately $ per month. 
 
 It will, however, be manifestly impossible to jump the manufacture and sale 
 of machines at once from the present volume to the normal volume. 
 
 It is the Receiver's opinion, therefore, that in order to operate the factory 
 on a scale that will best preserve to those interested the value of the property 
 and meanwhile develop, manage and put the company's assets into more readily 
 realizable form, there should be supplied an average monthly working capital of 
 
 about $ ., or for the six months about $ After very careful 
 
 consideration, it is the opinion of the Receiver that, if the funds prayed for as 
 above be furnished, the projxerty will be, at the end of six months, by their use, 
 so materially enhanced in value that no further application for the issuance of 
 Receiver's certificates will be necessary. 
 
 It will be necessary, in order to raise such capital, that Receiver's Certificates 
 be issued for this amount of additional capital. These Certificates must be placed 
 upon an equal footing with the original Certificates issued pursuant to the 
 
 order of this Court dated , 191.., above referred to and as that 
 
 issue was made to cover all the assets of the corporation, both mortgaged and 
 unmortgaged, then or thereafter to come into the hands of the Receiver, it will 
 be impossible, without the consent of all the original Certificate holders, to give 
 the new issue a lien equal to that of the old issue. The new issue will be a 
 second issue, subject to the lien of the first issue. It is, therefore, necessary 
 that this first issue be paid off, in accordance with the provisions thereof, and 
 that the Receiver- be authorized to sell a sufiicient amount of certificates, so that 
 
 $ of the proceeds for the sale thereof may be used to pay off tlie 
 
 original issue. This issue must, therefore, be of the amount of $ par 
 
 value, all the Certificates under which shall be of equal standing and priority, 
 which from the results of the operation while under his control, your petitioner 
 believes will be amply secured by assets of the company in the form of cash, 
 customers' notes and accounts receivable, in the aggregate of more than 
 
 $ , at the expiration of the period during which your petitioner will 
 
 run the business on this new capital. In order to fully protect the interestsi of 
 the holders of the First Mortgage Bonds, to facilitate the sale of said certificates 
 B. C. N. Y.— 83 
 
1314. FOEMS No. 148 
 
 and to insure the purchasers thereof of the security of their investment, the 
 Receiver helieves it will be for the best interests of the company for him to be 
 directed himself to set aside specifically in a separate account and/or authorized 
 to pledge specifically, with a Trustee as security for the payment of these Cer- 
 tificates cash equal in amount to one hundred per cent, of all or any part of the 
 principal amount with accrued interest of the said Receiver's Certificates from 
 time to time outstanding and/or notes, bills and accounts receivable at least 
 equal to one hundred and fifty per cent, of any balance not so secured by cash. 
 This collateral so pledged shall be subject primarily to the lien of the certificates, 
 and before resort should be had to the other assets of the company this col- 
 lateral should be sold and uised to pay the Receiver's Certificates. The Reoeivei- 
 should also be authorized to withdraw any collateral so pledged with the Trustee 
 upon substitution therefor of other collateral of equal or greater value as fairly 
 appraised. 
 
 ELE'i'ENrH: That the original issue of Receiver's Certificates provided that 
 they should be sold at par only to the bondholders of the corporation, after 
 
 $ thereof had been actually subscribed for by bondholders. That yoiu' 
 
 petitioner believes that the bondholders will subscribe for some part of the new 
 certificates, but he is also informed and believes that, owing to the improved 
 condition of the property during the receivership, a large amount of a new 
 issue of Receiver's Certificates can be sold to outside persons and corporations 
 other than the holders of the first mortgage bonds, particulaily if your peti- 
 tioner IS allowed to sell said certificates at ninety-eight. As soon as the old 
 issue is pa/id off this new issue of certificates should be given a lien upon all the 
 assets of the company, and the Receiver should be authorized to pledge, in his 
 discretion, a certain amount of these assets, as set forth in paragraph Tenth, 
 supra, as security for the payment of these Receiver's Certificates, which pledged 
 security shall first be applicable to the payment of the Receiver's Certificates) in 
 case of default. 
 
 Twelfth : Enough has been set forth above to show in a general way the 
 
 uses which the Receiver has made of the original $ of cash advanced. 
 
 The new money will be used for purchasing necessary material and manufacturing 
 supplies, payment of salaries, wages, labor and overhead charges — such as rent, 
 insurance, light, heat, power, etc. — incident and necessary to the manufacture 
 and sale of the companjr's output. In your petitioner's opinion, judging from 
 the results of operation during the past six months on the proceeds of the 
 
 original issue of $ Receiver's' Certificates, on which tlie Receiver could 
 
 only operate the plant to about 35% of normal, by using these new funds as 
 above indicated there should result, after providing for all charges except interest 
 on the bonds and unsecured notes, readily salable merchandise and/or negotiable 
 accounts and secured interest-bearing bills receivable to a minimum amount of 
 120% of the new funds so placed at his disposal. 
 
 furthermore, in the event that the Receiver can obtain no additional funds, 
 
 it is his belief that he cannot continue to operate the business after , 
 
 191. ., for the reason that all of his present available working capital will have 
 been absorbed by that date. 
 
 \Vhebefore, your petitioner' prays: 
 
 (1) That for the purpose of enabling him to borrow the funds required to 
 carry on the business of the defendant company and otherwise to protect and 
 preserve the value of its property and assets, he be authorized to issue and sell 
 
No. 148 FORMS 1315 
 
 as Receiver his negotiable oertificates of indebtedness, in tite total principal 
 
 amount of $ , or any part thereof, at a price not leas than 98% of 
 
 the par value thereof, the said certificates to be dated , 191 .. , to 
 
 be payable , 191.., and to bear interest at the rate of 6% per 
 
 annum, payable on the days of and or upon redemp- 
 tion, and all of such oertificates to be redeemable at the option of your peti- 
 tioner, at any time before maturity, at par and accrued interest upon thirty 
 days' notice, duly published, and shall be secured by a lien in the first instance 
 upon all free assets now or hereafter in the hands of the Receiver, and also 
 upon all the net earnings and income derived from the conduct of the business 
 in charge of said Receiver; and, secondly, upon any and all property of the 
 defendant subject to the first mortgage of the defendant, which lien shall be 
 prior to the said first mortgage. In case of default upoh the said certificates, 
 the free assets in the hands of the Receiver should first be applied to the pay- 
 ment of the said certificates, with interest, before any mortgaged assets should 
 be sold or otherwise used to satisfy the same. The Receiver, however, should be 
 directed to specifically set aside in a separate accoimt or be authorized to pledge 
 
 specifically with a Trustee, as security for the payment of the said $ 
 
 of certificates cash equal in amount to 100 per cent, of all or any part of the 
 principal amount, with accrued interest, of the said Receiver's Certificates from 
 time to time outstanding, and notes, bills and accounts receivable at least equal 
 to 150 per cent, of any balance not so secured by cash, with power from time to 
 time to withdraw any or all of such collateral upon substitution therefor of 
 collateral of a value equal to or greater than the value of the collateral with- 
 drawn. In ease of default the cash, bills, notes and accounts receivable so set 
 aside or pledged should first be applied to the payment of the Receiver's Cer- 
 tificates and interest before any other property is sold or disposed of to satisfy 
 
 the same. Said certificates should be subject to the issue of $ of 
 
 certificates issued by the Receiver under order dated , 191 . ., and 
 
 issued in the action entitled and , 
 
 plaintiffs, a;gainst , defendant, until the same shall be paid 
 
 or redeemed aS provided therein and in any order issued pursuant to petition, 
 and also to the right of the Receiver to utilize and dispose of the personal 
 property and assets, including cash, bills, notes and accounts receivable ( except 
 in so far as the same may be specifically set aside or pledged) now in his hands 
 or which may hereafter come into his hands in the conduct of the business in 
 his charge, and to his right to apply the cash now in his hands or which may 
 hereafter com* into his hands, to the payment of the expenses, payrolls, salaries, 
 merchandise debts and other indebtedness incurred by him in the conduct of 
 said business and in the administration of the estate, provided, however, that 
 the fair value of cash, notes, bills and accounts receivable specifically set aside 
 by the Receiver or pledged with the Trustee as above provided as security for 
 the payment of these certificates shall always be of the percentages above pro- 
 vided of the total par value of certificates issued and outstanding. 
 
 ( 2 ) That your petitioner be authorized to apply $ of the proceeds 
 
 of the sale of this issue of Receiver's Certificates to the redemption of the 
 
 $ Receiver's Oertificates originally authorized and issued under and 
 
 pursuant to the order dated , 191 . ., hereinbefore referred to, in 
 
 accordance with the provisions thereof. 
 
 (3) That the petitioner be authorized and in his discretion to pledge with a 
 
1316 FORMS No. 149 
 
 trustee appointed by this Court, as security for the payment of this issue of 
 Receiver's Certificates, cash, notes, bills and accounts receivable in his hands 
 as stated in (1) above, and that he be authorized to withdraw any collateral 
 so pledged with the trustee upon substitution therefor of other collateral of 
 equal or greater value, as fairly appraised, and that he be authorized to make 
 such contract of pledge with said Trustee as may be necessary or desirable to 
 carry out the foregoing provisions. 
 Dated New York, , 191 . . 
 
 Petitioner. 
 [Verification.l 
 
 FORM NO. 149. 
 
 Stale-Income-Franchise Tax Report of Domestic or Foreign Corporation. 
 
 1918 
 
 STATE OF NEW YORK 
 
 Taxation of Corporate Franchises Under Article 9-a of the Tax Law for the Tax 
 
 Year Beginning November. 1, 1918. 
 
 This report is due July 1, 1918, or within thirty days after filing report with 
 the United States Treasury Department. 
 
 File with 
 
 State Tax Department 
 
 Albany, N. Y. 
 
 As of the Company 
 
 I make the following report of such company for the year ending* 
 
 , 191 .. , pursuant to Ai'ticle 9-a of the Tax Law. 
 
 ( 1 ) Organized , 19 . . , under the Laws of 
 
 ( 2 ) Began business in New York ". , 19 
 
 ( 3 ) Issued capital stock, $ ■. 
 
 (If organized with shares without par value, insert the amount of paid in capital.) 
 
 (4) Amount of indebtedness at end of year, $ 
 
 fiscal 
 calendar J " 
 
 191.., as determined by the United States Treasury Depart- 
 ment, $ 
 
 Corporations organized under the laws of foreign countries should return 
 their entire net income, $ - 
 
 ( 6 ) If the amount reported above is not correct, state the amount claimed to 
 be correct , $ 
 
 I 7 I Nature of business and how transacted 
 
 (5) Net income for the J , ^ J- year endingf. 
 
 ( .s I Place, street and number where such business is conducted . 
 ( IM Where will mail reach the company ? 
 
No. 149 
 
 FORMS 
 
 1317 
 
 (10) state the city or town, street number and state where this company 
 
 maintained and store, warehouse, factory or other place of business 
 outside the State of New York 
 
 ( 11 ) Any corporation taxable hereunder may omit from this report the segre- 
 
 gation of assets on this page only by signing the following consent: 
 I am authorized by the Board of Directors of this corporation to consent and 
 
 I do hereby consent that said corporation be taxed upon its entire net income. 
 Do not sign consent unless taxable by the 
 
 State of New York on entire income. 
 
 (Official title) 
 
 Total Segregated Assets Wherever Located. 
 
 Average montnly vaiue of bills and accounui receivaole tor — 
 
 (a) Personal property manufactured by it 
 
 (b) Personal property sold by the corporation from mer- 
 
 chandise owned by it at the time of acceptance of 
 order but not manufactured by it 
 
 (c) Services i)erfornied, based on orders received at offices 
 
 maintained by the corporation, excluding bills and 
 accounts receivable on orders filled from a stock of 
 merchandise or other property maintained by the 
 corporation .- 
 
 tAverage monthly value of all real property wherever located 
 (actual value) 
 
 ^Average monthly value of all its tangible personal property 
 wherever located (actual value) 
 
 Total 
 
 §Average total actual value of shares of stocks of other cor- 
 porations owned by this corporation 
 
 ASSETS SEGREGATED TO NEW YORK STATE 
 
 Average monthly value of bills and accounts receivable for — 
 
 (a) Personal property manufactured by it within this state 
 
 (b) Personal property sold by it from merchandise owne:{ 
 
 by it and located in this state at the time of accept- 
 ance of the order, but not manufactured by it within 
 this state 
 
 (c) Services i^erformed, based on orders received at office= 
 
 maintained by the corporation within this state, ex 
 eluding bills and accounts receivable arising from 
 sales made from a stock of merchandise or othei 
 property at a place of business maintained by the 
 
 corporation within this state 
 
 tAverage mpiithly value of its real property within this state 
 
 stB detailed in this report (actual value) 
 
 ^Average monthly value of its tangible personal property in 
 New York State as detailed in this report (actual value) . 
 
 Total 
 
 §Average total actual value of shares of stocks of other cor- 
 Dorations owned by it and allocated to this state by rule 
 below 
 
 Not to be filled. 
 
 Not to be filled. 
 
 S 
 
 * Insert the calendar year ending December 31, 1917, or the fiscal year as reported to the United 
 f!-tates treasury department. 
 
 t The amount of the annual net income must be identical with that reported to the United States 
 treasury department. 
 
 t Real property and tangible personal property shall be taken as its actual value where located. 
 
 § The value of share of stock of another corporation owned by a corporation liable hereunder shall 
 for purposes of allocation of assets be apportioned in and out of the State in accordance with the value 
 of the. physical property in and out of the State representing such share stock. 
 
 Note. — If the amount of the annual net income of any corporation taxable under this article as 
 returned to the United States treasury department is changed or corrected by a commissioner of 
 internal revenue or other officer of the United States, such corporation, within ten days after receipt 
 of such notification of change or correction, shall make return under oath or affirmation to the Tax 
 Commission of such changed or corrected net income upon which the tax is required to be paid to the 
 nite d States. 
 
1318 
 
 FORMS 
 
 No. 149 
 
 FORM 3 IT. 
 
 Penalty Notice 
 
 Any corporation which fails to make any report required by this article shall 
 be liable to a penalty of not more than five thousand dollars to be paid to the 
 State to be collected in a civil action, at the instance of the Commission; and 
 any ofiScer of any such corporation who makes a fraudulent return or statement 
 with intent to defeat or evade the payment of the taxes prescribed by this article 
 shall be liable to a penalty of not more than one thousand dollars, to be recov- 
 ered by the State. (Tax Law. § 216.) 
 
 .Co., 
 
 STATE TAX COMMISSION, 
 
 Receiving stamp 
 
 INSTRUCTION. 
 
 If the company has no real or tangible per- 
 sonal property in this State it should give the name 
 of the city, town, or incorporated village where its 
 principal financial concerns are transacted within 
 the State in panel 1 at the right and the word 
 " none " should be entered in panel 2. 
 
 If the company's entire real and tangible personal 
 property in this State is in one city, or in one town 
 outside a city or incorporated village, the schedules 
 below need not be made, but the name of the city or 
 town, and of the county where located must be 
 entered in panel 3. 
 
 If the company has real or tangible personal property in an incorporated vil- 
 lage (or villages) in this State the name of such village and the town and 
 county where such village is located must be entered below, together with the 
 value of such property. 
 
 Name of city, town or 
 incorporated village. 
 
 1 I 
 
 2 
 
 
 
 
 City 3 
 
 or ' 
 Town . . 
 
 
 
 
 
 Incorporated village of 
 
 In the town of 
 
 County of 
 
 Personal 
 
 Real 
 
 
 
 
 t 
 
 t 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (If more space is needed add a paster) 
 
 The values of real and tangible personal property in villages must be dis- 
 tributed to the proper TOWNS in the table below. Do not confuse the political 
 subdivisions " incorporated village " and " town." Names of hamlets or post- 
 offices other than incorporated villages are not wanted. 
 
No. 149 
 
 POEMS 
 
 1319 
 
 IN New York State by CrriEs and Towns ^^lyg ^lue value 
 
 City of. 
 
 
 $ '. 
 
 
 
 
 
 
 Street address 
 
 
 
 City of. 
 
 County of 
 
 » 
 
 
 
 
 
 
 Street address 
 
 
 - — 
 
 City of. 
 
 
 $ 
 
 
 
 
 
 ~ 
 
 Street address 
 
 
 City of 
 
 
 J 
 
 
 
 
 
 
 Street address 
 
 ........ 
 
 City of 
 
 
 S 
 
 
 
 
 
 
 Street address 
 
 -..— 
 
 City of 
 
 Street address. 
 
 County of. 
 
 $.. 
 
 
 
 
 
 
 Town of 
 
 
 S 
 
 
 
 
 
 
 
 
 
 
 
 
 Town of... 
 
 County of 
 
 
 
 
 
 
 
 Town of. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Town of 
 
 
 
 
 
 
 
 
 
 
 Town of. 
 
 County of. 
 
 
 
 
 
 
 
 
 Town of. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 I j 1 more space is needed add a paster) 
 
 }' 
 
 AFFIDAVIT OF PRESIDENT, VICE-PRESIDENT, SECRETARY OR 
 
 TREASURER. 
 State op New York, 
 
 County of 
 
 On this day of A. D. 191 . ., personally appeared 
 
 before me, a Notary Public in and for the County of , 
 
 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 
 a true statement of the annual net income of said company for the year. 
 
 (official title) 
 
 Sworn to before me the day and year aforesaid. 
 
 Notary Public. 
 
1320 FORMS No. 15U 
 
 FORM XO. 150. 
 State-Franchise-Capital-Stock Tax Report of Domestic Corporation. 
 
 Corporations liable to taxation under Article 9-a of the Tax Law should not 
 
 malce this report. 
 
 This report is NOT to be made before October 31, 1917. 
 
 When completed MAIL to State Tax Department, Albany, N. Y., to arrive not 
 later than December 15, 1917. 
 
 (See Penalty Notice) 
 
 As of the 
 
 Company 
 
 I make the following report of such company for the year ending October .31, 
 1917, pursuant to the provisions of Section 192, Chapter 60 of the Consolidated 
 Laws : 
 
 ( 1 ) The last preceding report made by this Company to the State of New 
 
 York under the provisions of the above acts was for the year ending 
 October 31, 191.. 
 
 ( 2 ) Organized , 19.., under the laws of 
 
 (3) This company began business in the State of New York on 
 
 19.. 
 
 (4) Authorized capital stock of Company $ 
 
 (5) Number of shares of stoclc authorised: Common , Preferred 
 
 (6) Number of shares of stock issued : Common , Preferred 
 
 (7) Par value of each share: Common, $ , Preferred, $ 
 
 (8) Amount paid into Treasury of Company on each share: Common, 
 
 $ , Preferred, $...,... 
 
 (9) Amount of Capital stock issued for cash or property except as in (10) 
 
 (10) Amount of Capital stock issued for good will, copyrights, brands, patents, 
 trade-marks, formulae, services, etc., other than gash or property as 
 
 in (9) ,$ 
 
 Amount of common stock on which dividends were declared 
 
 (11 
 (12 
 
 
 (13) i§ 
 
 (14).gg 
 (lo)i;»S 
 (16) ■?•§"- 
 
 t-TJM 
 
 Amount and date of each dividend on common stock 
 
 Rate per cent per annum of dividends on common stock .... 
 Amount of preferred stock on which dividends were declared 
 
 Amount and date of each dividend on preferred stock 
 
 Rate per cent pei- annum of dividends on preferred stock .... 
 
 (17) Nature of business in State of New York and how transacted . . 
 
 (18) (o) Place, street and number where such business is conducted 
 
 ( 6 ) Wliere will mail reach Company ? 
 
 (Place, street and number) 
 (19) Give the exact location where this corporation maintained any store, 
 
 warehouse, factory or place of business outside the State of New York 
 
No. 150 FOEMS 1321 
 
 { 20 ) Highest bona fide price at whicli 
 stock sold during the year 
 ending October 31, 1917 Preferred, $ , Common, $ 
 
 ( 21 ) Lowest bona fide price at which 
 
 stock sold during the year 
 
 ending October 31, 1917 Preferred, $ , Common, $ 
 
 All amounts inserted below should 6e for the year ending October 31, 1917. 
 Foreign and Domestic corporations must answer all paragraphs 24-37 
 
 inclusive. Property classified under paragraph 10, page 1, should not 
 
 appear below. 
 
 IN NEW YORK STATE. 
 
 ( 22 ) Average value of stock in trade carried during the year . . $ 
 
 (23) Average monthly bank and cash balance employed dur- 
 
 ing the year $ 
 
 ( 24 )t Average value of bills and accounts receivable during 
 
 the year $ 
 
 (25)* Average cash value of shares of stock of other corpora- 
 tions doing business in the State of New York and 
 owned by this Company during the year $ 
 
 ( 26 ) t Average value of bonds, loans on call and other financial 
 
 securities held, used or employed in New York during 
 
 the year $ 
 
 ( 27 ) Average value of all personal' property other than here- 
 
 tofore mentioned during the year $ 
 
 (28) Average gross actual value of real estate located in the 
 
 State of New York and owned by this Company during 
 
 the year $ 
 
 ( 28a ) Average assessed value of above real estate $ 
 
 Location 
 
 Location 
 
 Location .^ 
 
 OUTSIDE NEW YORK STATE. 
 
 ( 29 ) Average value of stock in trade carried during the year . . $ 
 
 (30) Average monthly bank and cash balance employed during 
 
 the year $ 
 
 (31 )t Average value of bills and accounts receivable during 
 
 the year $ 
 
 ( 32 ) * Average cash value of shares of stocks of other corpo- 
 rations owned by this corporation where such corpora- 
 tions are doing business wholly without the State of 
 New York $ 
 
 ( 33 )t Average value of bonds, loans on call and other financial 
 securities held, used or employed outside the State of 
 New York during the year $ 
 
 (34) Average value of personal property, other than hereto- 
 fore mentioned during the year $ 
 
1322 FORMS No. 150 
 
 (35) Average gross actual value of real estate located outside 
 the State of New York and owned by this Company 
 during the year, and where situated $ 
 
 ( S.la ) Average assessed value of above real estate $ 
 
 (In stating location, city or village or town must be given, with street and 
 number. ) 
 Total of assets above enumerated located in the State of New 
 
 York during the year ending October 31, 1917 $ 
 
 Total of assets above enumerated located outside the State of New 
 
 York durihg the year ending October 31, 1917 $ 
 
 The word " average " wherever it appears in this report has its plain, ordi- 
 nary significance; neither the highest amount nor the lowest, but the mean. 
 The same method employed in determining average assets should be xised in 
 determining average liabilities. 
 
 t Bills and accounts receivable are generally located at the place from which 
 the goods are shipped, provided the corporation there maintains at its own 
 expense a place of business, including a store or warehouse. The residence of 
 the debtor is of no importance. 
 
 * In answering Nos. 25 and 32, if the assets of the company whose stock is 
 owned by your corporation are employed both "In" and "Outside" New York, 
 an apportionment of your holdings may be made on the basis of employment. 
 
 t Assets in Nos. 26 and 33 should be considered as located where the same 
 are held. 
 
 (36) AVERAGE LIABILITIES: 
 
 Bonds not secured by mortgage, average $ 
 
 mortgages, average $ 
 
 bills payable, average $ 
 
 Accounts payable, average $ 
 
 Other liabilities, not including capital stock, average 
 
 as explained below $ 
 
 Total average liabilities $ 
 
 (37) Percentage of total assets of the Company employed in manufacturing 
 
 by the Company in the State of New York during the year ending 
 October 31, 1917, and in the sale of the products so manufactured 
 
 (38) Are goods handled by you manufactured for you by others or bought 
 
 for sale ? 
 
 ( 39 ) Do you operate a factory ? If so, where ? 
 
 REMARKS. 
 
 Officers Names; 
 
 Presiden t, Secretary, 
 
 Vice-President, Treasurer. 
 
No. 151 FORMS 1323 
 
 The undersigned, being the of the above 
 
 Company, estimates and appraises the Capital Stock of said Company 
 as follows: 
 
 shares at dollars 
 
 cents per share, amounting in the whole to 
 
 100 dollars 
 
 In Witness Wheeeoi", I have set my hand this day of , 
 
 191.. 
 
 {Official title) 
 Note. — Corporations paying six or more than six per centum on their Entire 
 issued capital stock need not appraise their capital stock; all others must 
 appraise. 
 
 State of New Yobk, ) 
 County of j**'' 
 
 on this day of , A. D. 191 . ., personally appeared before 
 
 me, a Notary Public in and for the County of 
 
 , 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, 1917, 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 liabilities, exclusive of capital 
 stock. 
 
 Sworn to before me the day and year aforesaid. 
 
 Notary Public. 
 
 PENALTY NOTICE. 
 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 commission, within any reasonable time to be 
 specified by the commission 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. (Tax Law, section 19'7.) 
 
 FORM NO. 151. 
 State Capital Stock Foreign Corporation License Fee Report. 
 Each statement must be full and explicit. 
 To the State Tax Department : 
 
 As of the Company 
 
 I make the following report of such Company for the year ending , 
 
 19. ., pursuant to the provisions of Section 181, Chapter 908, Laws of 1896, and 
 acts amendatory thereof: 
 
 (1) Organized ,191.. 
 
 (2 ) Under the laws of 
 
1324 
 
 FORMS 
 
 No. 151 
 
 (3; 
 
 (4: 
 
 (5) 
 
 (G) 
 
 (7 
 (8 
 
 (9; 
 
 (10, 
 
 (ii: 
 (12: 
 
 Tiis Company began business in the State of New York on. 
 
 191.. 
 
 Authorized capital stock of Company 
 
 (Common 
 
 Number of shares of stock authorhed - 
 
 ' ) Preferred . 
 
 Number of shares of stock issued 
 
 (Common. . 
 ) Preferred . 
 
 (Common ^ . 
 
 Par value of each share j preferred $ . 
 
 Amount paid into Treasury of Company (Common $. 
 
 on each share ) Preferred $ . 
 
 Amount of Capital stock issued for oash or property $ . 
 
 Amount of Capital stock issued for good will, copyrights, 
 brands, patents, trade-marks, formulae, services, etc., 
 
 other than cash or property $ . 
 
 Amount of common stock on which dividends were de- 
 clared $ . 
 
 Amount and date of each dividend on common stock 
 
 (13) Rate per cent, per annum of dividends on common stock 
 
 (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 trans- 
 
 acted 
 
 (18) 
 
 a Place, street and number where such business was conducted 
 
 6 OflSce of the Company 
 
 (19) Average value of stock in trade carried in the State of New 
 
 York during the year ending , 191 
 
 (20) Average monthly bank balance employed in the State of 
 
 New York during the year ending , 191 . . 
 
 (21) Average value of bills and accounts receivable in State 
 
 of New York during the year ending , 191 ... . 
 
 (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 , 191 . . . 
 
 (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 , 191 
 
 (24) Capital invested in real estate located in the State of New 
 
 York during the year ending , 191 . ., and 
 
 where situated 
 
No. 151 FORMS 1325 
 
 (25) Total of assets above enumerated located 
 
 in the State of New York during the 
 
 year ending , 191 $. .• 
 
 (26) Average value of stock in trade carried outside the State 
 
 of New York during the year ending , 191 ... . $ 
 
 <27) Average monthly bank balance employed outside the State 
 
 of New York during the year ending , 191.... $ 
 
 (28) Average value of bills and accounts receivable outside the 
 
 State of New York during the year ending , 191 . . $ '. 
 
 (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 . . $ 
 
 (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 men- 
 tioned, during the year ending , 191 . . $ 
 
 (31) Capital invested in real estate located outside the State 
 
 of New York, during the year ending . . , 
 
 191.., and where situated $ 
 
 (32) Total of assets located outside the State 
 
 of New York during the year ending 
 
 , 191 $ 
 
 LIABILITIES: 
 
 Bonds $ 
 
 Mortgages not secured by bonds $ 
 
 Bills payable $ 
 
 Accounts payable $ 
 
 Other liabilities, excluding capital stock $ 
 
 Total liabilities $ 
 
 (33) Highest bona fide price at which stock sold (Preferred. ... $ 
 
 during year ending , 191 ... . | Common $ 
 
 (34) Lowest bona fide price at which stock sold (Preferred. ... $ 
 
 tluring year ending , 191.... | Common $ 
 
 (35) Percentage of capital stock of the company employed in the State of New 
 
 York during the year ending , 191 . ., in manufacturing and 
 
 in the sale of the product of such manufacture 
 
 (36) Are your goods manufactured for you by others? 
 
 ( 37 ) Do you operate a factory ? 
 
 REMARKS. 
 
 The undersigned, being the of the above Company, 
 
 estimates and appraises the Capital Stock of said Company as follows: 
 
 shares at dollars 
 
 cents per share, amounting in the whole to 
 
 100 dollars. 
 
1326 FORMS No. 151-A 
 
 In Witness WHEBEOr, I have set my hand this day of 
 
 191.... 
 
 State of New Yobk, 
 
 County of 
 
 > ss. . 
 
 {Official Title) 
 
 On this day of , A. D. 191 . ., personally appeared before me, 
 
 a Notary Public in and for the County of 
 
 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 , 191 . ., 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 les* than 
 the difference between its assets and liabilities, exclusive of capital stocK. 
 
 Sworn to before me the day and year aforesaid. 
 
 Notary Puhlic. 
 
 FORM NO. 151-A. 
 
 Statement and Affidavit Claiming Exemption from Making Tax Reports wnd 
 
 Paying Taxes. 
 
 When Completed Mail to State Tax Department, Albany, N. Y. 
 
 REPLIES TO QUESTIONS SHOULD BE EXPLICIT. 
 
 Statement and affidavit of , 
 
 of Company claiming exemption from making 
 
 reports, and the payment of tax as levied and assessed under chapter 62, Laws 
 of New York, 1909, and acts amendatory thereof. 
 
 1. Full name of the corporation, joint-stock company or association. 
 
 2. Name and title of officer making this statement. 
 
 3. Under what law of what state or county was the corporation, joint-stock 
 company or association incorporated, organized or formed? 
 
 4. Date of organization. 
 
 5. For what purpose? (To be stated as shown in charter.) 
 
 6. Nature of business transacted. (A statement in detail is required showing 
 in what manner the company now carries on its manufacturing business in 
 New York State.) 
 
 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 in New York 
 State. 
 
 10. Does the company maintain and operate through its own employees the 
 plant or factory? 
 
 11. Does the company sell any goods, wares or merchandise which it does not 
 manufacture ? 
 
No. 152 FOEMS 1327 
 
 12. What percentage of the company's business in New York consists of the 
 sale of goods not made by it in New York State? 
 
 13. Does the company lease to other parties the right to manufacture goods 
 sold by it? 
 
 14. Does the company cause any of the products that it uses or sells in this 
 state to be manufactured by others ? 
 
 15. Location of main business office of the company. 
 
 16. Exclusive of intangible property what percentage of the company's entire 
 assets is actually employed in manufacturing in New York State? 
 
 17. In answer to paragraph 16 have you included any good will, patents or 
 patent rights, copyrights, trade-marks, formulae, services, or any other than 
 actual physical property, and if so at what value? 
 
 REMARKS. 
 
 State of New Yobk, 1 
 County of j **■ •' 
 
 , of the 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. 
 Sworn and subscribed before me this 
 ...... day of 
 
 Notary Public. 
 FORM NO. 152. 
 
 Petition for Writ of Certiorari. 
 
 SUPREME. COURT, COUNTY. 
 
 The People of the State of New York on the 
 
 relation of the Company, 
 
 against 
 
 } Petition. 
 
 and , Constituting the I 
 
 State Board of Tax Commissioners of the 
 State of New York. 
 
 To the Supreme Court of the State of New York: 
 
 The petition of the Company respectfully shows to the Court : 
 
 That petitioner is a corporation duly incorporated and existing under the 
 laws of the State of New York and located and doing business and having its 
 principal place of business in the City of New York. 
 
 That at all the times hereinafter mentioned petitioner was and still is the 
 owner of certain cables and wires laid or placed in certain streets, highways or 
 public places in the Boroughs of Brooklyn, Manhattan and the Bronx in the 
 City of New York, together with franchises, rights, permissions and consents to 
 
1328 FORMS No. 152 
 
 maintain and operate in the streets, highways and public places of said borouglis 
 cables and wires for conducting and transmitting electricity; each of said fran- 
 chises, rights, permissions and consents, with the said tangible property in con- 
 nection therewith, being denominated in the Tax Law of the State a special 
 franchise. 
 
 That at all times hereinafter mentioned the respondents, , 
 
 and , constituted and still constitute the 
 
 State Board of Tax Commissioners. 
 
 That pursuant to section 43 of the Tax Law, and within the time limited 
 thereby, petitioner duly made a written report to said State Board of Tax Com- 
 missioners, as to each of said special franchises owned by it as aforesaid, and 
 as to all matters required by said section to be reported to said Board, and 
 has in the manner required by law made all reports and supplemental reports 
 required by law or by said State Board to be made to it. 
 
 That said State Board, claiming to act under and pursuant to the provisions 
 of the Tax Law of this State relating to taxation of public franchises as real 
 property, did on or about the day of , 191 . ., fix and deter- 
 mine the valuation of the special franchises owned and operated by your peti- 
 tioner as aforesaid for purposes of taxation, in the Borough of Manhattan at 
 
 the sum of dollars, in the Borough of Brooklyn at the sum of 
 
 dollars, and in the Borough of the Bronx at the sum of 
 
 , aggregating dollars. 
 
 That immediately thereafter said board gave notice in writing to yoiir peti- 
 tioner that said valuation had been made at the aforesaid sum, and that the 
 
 said State Board would meet at its office in the City of Albany on the 
 
 day of , 191 . ., to hear and determine any complaint concerning 
 
 said assessment. That pursuant to such notice your petitioner attended before 
 said Board and complained of said assessment, specifying as the grounds of its 
 complaint all of the grounds hereinafter set forth in this petition as tlie 
 grounds for reducing said assessment as herein prayed for, and said Board at 
 said hearing waived the filing of a written statement vmder oath specifying the 
 grounds qf petitioner's complaint. 
 
 That thereafter the said Board, claiming to act pursuant to the Tax Law, 
 finally determined the valuation of said special franchise of petitioner in the 
 
 Borough of Manhattan to be the sum of dollars, in the Borough 
 
 of Brooklyn to be the sum of dollars, and in the Borough' of 
 
 the Bronx to be the sum of dollars, aggregating 
 
 dollars, and on or about the day of , 191 . ., said Board 
 
 filed with the Department of Taxes and Assessments in the City of New York 
 a written statement of such valuation as finally fixed and determined by said 
 State Board, and at or about the same time gave notice in writing to your 
 petitioner that such written statement had been filed with the Department of 
 Taxes and Assessments of the City of New York. 
 
 That by the provisions of the charter of the City of New York the Board of 
 Taxes and Assessments of the City of New York is the head of the Department 
 of Taxes and Assessments of said city and is required by law, beginning with 
 
 the day of in each year, to prepare assessments rolls for the 
 
 various boroughs of said city, containing valuations of real and personal prop- 
 erty subject to taxation, and to certify and deliver said assessment rolls to the 
 Board of Aldermen of said city on the day of , in each year. 
 
No. 152 FORMS 1329 
 
 That said Board of Taxes and Assessments, since the ..;... day of , 
 
 191.., prepared the assessment rolls of said real and personal property of the 
 several boroughs of said city for the year 191 . ., and entered thereon, before the 
 final revision on certification of such rolls by them, the valuation of said special 
 franchises of your petitioner at the amount fixed by the said State Board as afore- 
 said, and duly verified and delivered the said assessment rolls to the Board of 
 Aldermen of said city on the Monday of , 191 .. . 
 
 That said assessment of petitioner's special franchise is erroneous by reason 
 of over-valuation. The aforesaid assessment and valuation made by the said 
 State Board greatly exceeds the actual and true value of petitioner's special 
 franchises and the amount for which the same would sell under ordinary cir- 
 cumstances. The actual and true valuation of petitioner's special franchises, in 
 the Borough of Manhattan, in the City of New York, and the amount for which 
 the same would sell under ordinary circumstances, does not exceed the sum of 
 
 dollars. The actual and true • value of petitioner's said special 
 
 franchises in the Borough of Broolclyn, in the City of New York, and the 
 amount for which the same would sell under ordinary circumstances, does not 
 exceed the sum of dollars. The actual and true value of peti- 
 tioner's said special franchises in the Borough of the Bronx, in the City of New 
 Fork, and the amount for which the same would sell under ordinary circum- 
 stances, does not exceed the sum of dollars. And the actual and 
 
 true value of petitioner's said special franchises in the three Boroughs hereto- 
 fore mentioned of the City of New York and the amount for which the same 
 would sell under ordinary circumstances does not exceed in the aggregate the 
 
 sum of dollars. The extent of the said over -valuation is 
 
 dollars. 
 
 That said assessment of petitioner's special franchise is unequal in that the 
 same has been made at a higher proportionate valuation then the assessment 
 of all other land, real estate and real property in the City of New York upon 
 the same assessment rolls made by the same officers, to writ, by the said State 
 Board of Tax Commissioners and by the said Board of Taxes and Assessments 
 of the City of New York; and your petitioner specifies the assessment of all 
 the land, real estate and real property in the City of New York and of each 
 and every parcel thereof upon the assessment rolls of said city as instances 
 in which the said inequality exists and of the extent thereof. That said State 
 Board, in making the aforesaid assessment of petitioner's special franchises, 
 fixed and determined said valuation at a sum in excess of -the full and true . 
 value of said special franchises. Upon information and belief, that in the City 
 of New York other real property is not assessed at its full and true value, but 
 the assessment of all other land, real estate and real property in said city for 
 the year 101 . . has been made at an amount equal to only seventy-five per centum 
 of the full and true value of the land, real estate and real property so assessed. 
 That the said assessment of petitioner's special franchises, to the extent that the 
 same exceeds seventy-five per centum of the full and true value of said special 
 franchises, as hereinbefore set forth, is unequal, disproportionate and erroneous. 
 That it is the official duty of the said State Board to investigate and examine 
 the methods of assessment throughout the State and to furnish local assessors 
 information to aid them in malcing assessments of real and personal property, 
 and, upon information and belief, said State Board and each of its members 
 
1330 FORMS No. 152 
 
 well knew, in making "the assessments of said special franchises as aforesaid, 
 that other land, real estate and real property within the State, and especially 
 within the City of New York, was assessed at less than its full value. 
 
 Your petitioner further shows that the said assessment is unequal in that it 
 has been made at a, higher proportionate valuation than the assessments placed 
 on all similar real property in said State of New York by said Board, and 
 petitioner cites a's instances of said inequality and of the extent thereof, each 
 and every assessment upon special franchises in said State of New York, as 
 fixed and determined by said State Board. 
 
 That the said assessment of petitioner's special franchise is illegal and void 
 in that the same is in conflict with and violates those provisions of the Con- 
 stitution of the United States of America and of the Constitution of the State 
 of New York which prohibit the taking of property without due process of law, 
 for the reason that the said State Board, in fixing the amount of the aforesaid 
 assessment as the basis upon which taxes will be levied and collected from peti- 
 tioner upon its special franchises, did not follow or apply any rule, method or 
 principal of valuation, and did not determine and ascertain the value of said 
 special franchises, but fixed the aforesaid amount arbitrarily and without refer- 
 ence to the value of said special franchises, and that the said assessment is the 
 result of mere guess work and conjecture on the part of the said State Board 
 of Tax Commissioners. 
 
 That said assessment of petitioner's special franchise is illegal and void in 
 that the same is in conflict with and violates the provisions of the Constitu- 
 tion of the United States, which prohibit the denial to any person of the equal 
 protection of the laws, for the reason that the assessment for the taxation of 
 real property generally throughout the State is made upon and in accordance 
 with the value thereof, while the assessment fixed as the basis of taxation of 
 petitioner's special franchises has been fixed at an arbitrary amount, without 
 reference to the value thereof; and for the further reason that the said assess- 
 ment of petitioner's special franchises has been fixed on the basis of an arbi- 
 trary rate or percentage of the earnings of said petitioner higher than the rate 
 of percentage employed in fixing 'the assessment of other special franchises 
 throughout the State. 
 
 That said assessment of petitioner's special franchises is illegal and void in 
 that said State Board has included in said assessment not only the value of all 
 petitioner's franchises, rights, authority and permissions to maintain or operate 
 cables and wires in, under, above, upon or through the streets, highways and 
 public places of the City of New York, and the value of the cables and wires 
 of petitioner, with their appurtenances for conducting and transmitting elec- 
 tricity; but has included also therein the value of the franchise of petitioner for 
 conducting and transmitting electricity, the value of the good will of the 
 business of petitioner, and the value of petitioner's contracts with its patrons, 
 over none of which the said State Board has jurisdiction. 
 
 That said assessment of petitioner's special franchises is illegal and void in 
 
 that chapter of the Laws of , as amended, under which said 
 
 State Board assumed to and did make said assessment, is unconstitutional and 
 void, for the reason that it violates Article X, section 2, of the Constitution 
 of the State of New York; that it attempts to confer jurisdiction, powers and 
 functions upon the State Board of Tax Commissioners which, uinder the Con- 
 
No. 153 FORMS 1331 
 
 stitution of the State of New York, can be exercised only by local assessors 
 selected by the locality in which the property assessed is situated. 
 
 That by reason of the aforesaid over-valuation, inequality and illegality in 
 the said assessment, your petitioner is aggrieved and will be injured. 
 
 Your petitioner further alleges that fifteen days have not elapsed since the 
 final completion and filing of said assessment rolls in said City of New York. 
 
 That no previous application has been made for a writ of certiorari to review 
 the assessment aforesaid. 
 
 Wherefore, your petitioner prays that a writ of certiorari may be allowed 
 
 and issue out of this Court, directed to the said ' , and 
 
 , constituting the State Board of Tax Commissioners, commanding 
 
 them to specify to a Special Term of this Court in and for the County of 
 of Albany: 
 
 ( 1 ) All and singular the proceedings herein referred to and had by the said 
 State Board of Tax Commissioners relating to said assessment, with the dates 
 thereof respectively, together with that part of the record relating to the 
 same. 
 
 (2) All and singular the papers submitted by your petitioner and filed with 
 the said State Board of Tax Commissioners. 
 
 (3) All other evidence or information, if any, before said State Board of Tax 
 Commissioners, or considered by it in arriving at the decision aforesaid, and 
 if there was no such evidence or information, a statement to that effect. 
 
 (4) A concise statement of such other facts as may be pertinent and inaterial 
 to show the value of the property assessed and the grounds of the valuation 
 made by said State Board. 
 
 (5) Any and all documents, records and papers, if any such there be, not 
 embraced in the above specifications, relating to and concerning the assessment 
 aforesaid, and a statement of any other matters material to the determination 
 of the application of petitioner. 
 
 To the end that such determination and proceedings of the said State Board 
 of Tax Commissioners may be reviewed and corrected as shall be in accordance 
 with the law and facts in this matter; and further that your petitioner may 
 have herein such other and further relief as to this Court may seem just. 
 
 Dated , 
 
 by 
 
 President. 
 
 Attorneys for Petitioner, 
 
 Office and P. 0. Address, etc. 
 [Verification.] 
 
 FORM NO. 153. 
 
 Order for Writ of Certiorari. 
 
 [Title as to Form No. 152] [Caption- of Court Order'i 
 
 Upon reading and filing the petition of the Company, 
 
 verified the day of , 191 . ., and it appearing therefrom 
 
 that there are proper grounds for the granting of a writ of certiorari as therein 
 
1332 FORMS No. 154 
 
 prayed addressed to the State Board of Tax Commissioners to review the assess- 
 ment of the special franchises of said petitioner made for the purpose of taxation 
 
 for the year 191 . . ; and upon motion of , attorneys for 
 
 said petitioner, it is 
 
 Ordered, that the prayer of said petitioner be granted, and that a writ of 
 
 certiorari issue out of and under the seal of this Court directed to , 
 
 and , constituting the State Board of Tax Commissioners 
 
 of the State of New York, commanding said Board to certify and return to 
 this court, at a Special Term thereof, to be held in and for the County of 
 Albany, at the City Hall in the City of Albany, State of New York, on the 
 
 day of , 191 . ., at the opening of the Court on that day 
 
 or as soon thereafter as counsel can be heard: 
 
 [Take in paragraphs numbered 1, 2, 3, 4 and 5 from prayer of petition, Form 
 No. 152.] 
 
 Ordered, that said writ be allowed and signed and sealed by the Clerk of this 
 Court. 
 
 Ordered, that a copy of said return be served on , the 
 
 ■petitioner's attorneys, at their office, , on or before the 
 
 day of , 191. .. 
 
 The Court in its discretion hereby dispenses with the giving of any notiie of 
 the application for a writ of certiorari in this matter. 
 
 Enter in 
 
 Albany Countv 
 
 Justice of the Supreme Court 
 of the State of New York. 
 
 "* FORM NO. 154. 
 
 Writ of Crrtiorari. 
 
 The People of the State of New York to , and , 
 
 constituting the State Board of Tax Commissioners of the State of New 
 York, 
 
 Greeting : 
 
 Whereas, we have been informed by the petition of the 
 
 Company that it is a corporation duly created and existing by and under the 
 
 laws of the State of New York, and having its principal office in ; 
 
 that the State Board of Tax Commissioners heretofore fixed and determined the 
 valuation of the special franchises of the said petitioner in and for the City 
 
 of New York, for the year , at the sum of dollars ; that a 
 
 written statement of said valuation has been filed with the Department of 
 Taxes and Assessments of the City of New York as required by law; that such 
 valuation has been entered by the board of taxes and assessments of the City of 
 Xew York in the assessment-rolls for said city, and has become a part thereof; 
 that said assessment is erroneous; and that fifteen days have not elapsed since 
 the completion and filing of said assessment-rolls by the Department of Taxes 
 and Assessments in said city. 
 
 And we being willing for certain causes to be certified of the proceedings, 
 decisions and actions had by and before your said Board in the said matter of 
 
No. 155 FORMS 1333 
 
 the valuation and assessment of said special franchises of the petitioner in the 
 City of New York, as aforesaid ; 
 
 Uo hereby command you that you certify and return to the Special Term of 
 our Supreme Court of the State of New York, to be held in and for the County 
 of Albany, at the City Hall in the City of Albany, State of New York, on the 
 
 day of , 191 .. , at the opening of the Court on that day, 
 
 or as soon thereafter as counsel can be heard, together with this writ, the follow- 
 ing matters and facts: 
 
 [Take in paragraphs numbered 1, 2, 3, 4 and 5 in prayer of petition, Form 
 No. 152.] 
 
 To the end that the proceedings, decisions and actions had by said State 
 Board of Tax Commissioners in the matter of the valuation and assessment of 
 said special franchises of the petitioner may be reviewed and corrected on the 
 merits by our said Court, and that we may further cause to be done thereupon 
 what of right ought to be done. 
 
 Let a copy of said return be served upon , the relator's 
 
 attorneys, at their office, , on or before the day of 
 
 ,191... 
 
 Witness the Hon , one of the Justices of our said Supreme Court 
 
 in and for the County of New York, at the County Court Housein said County, on 
 the '. . day of , 191 . . . 
 
 [l. s.] By the Court. 
 
 Clerk. 
 Allowed this dav of , 191 .. . 
 
 Justice of the Supreme Court. 
 
 Attorneys for Relator, 
 
 Office and P. O. Address, etc. 
 
 FORM NO. 155. 
 Retu/m to Writ of Certiorari. 
 [Caption and Title as in Form No. 152.] 
 To the Supreme Court of the State of New York: 
 
 , and , constituting the State Board of Tax 
 
 Commissioners of the State of New York, respectfully return to writ of certiorari 
 issued out of this Court on the day of , 191 . ., as follows: 
 
 I. 
 
 This return, except insofar as it is otherwise stated, or where the matters 
 herein returned are matters of record, on statements of fact as such, is made 
 upon information and belief. 
 
 II. 
 
 All of the proceedings required by statute for the purpose of making and 
 certifying the valuation aforesaid were had before said State Board of Tax 
 Commissioners, and done and performed in compliance with the statute in such 
 
 case made and provided, namely, the provisions of chapter of the Laws 
 
 of , and the amendments thereto. 
 
1334 FORMS No. 155 
 
 III. 
 The State Board of Tax Commissioners was and is authorized by law to make 
 tlie valuation and assessment complained of, and in the manner and form as 
 made by it and the statute imder which the said valuations were made is in 
 accordance with the Constitution and valid and binding upon the relator, and 
 all of the acts done and performed by said State Board of Tax Commissioners, 
 as set forth in the petition herein, were in accordance with law and valid under 
 the Constitution and Laws of the State of New York and of the United States. 
 
 IV. 
 
 That at the time the assessment complained of was made, your respondents 
 
 had before them the report of the relator for the year , filed with them 
 
 by the relator at the request of your respondents ; and all the papers and docu- 
 ments filed with them by the relator, and the statements made and all the 
 papers and documents with them by the relator, and the statements made and 
 evidence submitted to them on behalf of the relator, upon the hearing hereinafter 
 referred to. All of which reports, papers, documents, etc., are on file in the 
 ofiice of your respondents and are hereby made a part of this return as if herein 
 set out at length. 
 
 V. 
 
 A notice in writing was duly given to the relator that said State Board of 
 Tax Commissioners would meet at its office in the City of Albany, on the 
 day of , 191 . ., to hear and determine any complaint con- 
 cerning said assessment. At the time fixed in said or to which the matter 
 was adjourned, the relator appeared and filed certain papers and was heard by 
 counsel, said papers being made a part of this return as aforesaid. 
 
 VI. 
 
 That the petitioner is in nowise aggrieved by the action of the State Board 
 of Tax Commissioners in the premises and that the sum fixed by it as the 
 valuation of its special franchise in the City of New York is neither erroneous 
 nor illegal, nor is the same an overvaluation of such special franchise in said 
 city. 
 
 That the rights, permission and franchises set out in the petition of the 
 relator constitute a special franchise as the same is defined by the Tax Law, 
 upon which the relator is subject to a special franchise tax, and do not constitute 
 separate and distinct special franchises so that the valuation is required to 
 be fixed separate and apart from each other. 
 
 VII. 
 
 That your respondents have not knowledge or information sufficient to form 
 a belief as to the exact percentage of the assessment by the local authorities 
 of the said city of other real property in said city for the year 1907, and 
 
 that your respondents have decided the sum of $ to be the value of 
 
 the special franchise of the relator in the said city and valued the same for 
 assessment at that sum. 
 
 VIIL 
 
 Your respondents further allege and return that at and previous to the time 
 of making such assessment they had before them certain facts and information 
 other than those communicated to them on behalf of the relator. That at 
 
No. 155 FORMS 1335 
 
 and previous to the time when the assessment and valuation of the special 
 franchise of the relator was made by your respondents, they had made inquiry, 
 examination and investigation as to the value of the special franchises of the 
 relator in said city. 
 
 That such inquiry, examination and investigation was made by and on behalf 
 of this Board and through its agents and employees, who had obtained knowl- 
 edge and information and formed opinion as to the value of the special franchise 
 of the relator assessed and in connection therewith of the value of the property 
 of the relator, real and personal, 'in said city; and from such inquiry, examina- 
 tion and investigation, together with the papers and documents produced before 
 it, it decided the value of the special franchise of the relator to be the sum of 
 
 $ , and it fixed the value of such special franchise for the purpose 
 
 of assessment at the said sum of $ ; . . , which your respondents believe 
 
 to be a just and true valuation and which they decided to be the sura at which 
 the said special franchise of the relator was properly assessed for the .year 
 , after hearing the relator and after consideration of the matter pre- 
 sented by it as grounds for reduction. 
 
 IX. 
 
 That your respondents allege and return that the petitioner was allowed in 
 
 all respects the hearing provided for and contemplated by Section of 
 
 Article of the Tax Law and allege that the said relator had a full and 
 
 fair hearing by its counsel orally and submitted and presented to the Board 
 all documents and papers desired to be submitted by it. 
 
 X. 
 
 That the facts pertinent and material to show the value of the property 
 assessed on the roll which were considered by your respondents and the grounds, 
 for the valuation of such special franchise by them, included the value of the 
 real estate of such corporation situated in the streets, highways and public 
 places in said city, aside from and irrespective of the use and right to use 
 such streets, highways and public places, together with the value of the use and 
 the right to use said streets, highways and public places of said city by the 
 relator, as such value has been fixed and determined upon the evidence, papers 
 and documents before said Board; which papers and documents give among 
 other things the cost of the property, the income therefrom and other facts 
 going to show the value thereof; and from examination, investigation and 
 inquiry made by and on behalf of the said Board as to the value of said property. 
 That in so assessing such special franchise and in arriving at the valuation 
 thereof, your respondents have not included in such assessment and valuation 
 any property except such as is situate in, under, above, upon or running through 
 the public streets and public places of said city including the franchises, rights, 
 authority, or permission ■ to construct, operate and maintain its foundations, 
 roadbed, substructures and superstructures, wires, pipes, mains and conduits, 
 with their appliances in, under, above, upon or through said streets and public 
 places; nor have they included the value of the right to be or the franchise 
 to be a corporation; nor have they included the value of the good will of the 
 business carried on by it; nor have they included the value of any property 
 
 other than that defined as a special franchise by subdivision of section 
 
 of the Tax Law. That such assessment as made of such special fran- 
 
1336 FORMS No. 156 
 
 chies includes the value of the tangible and intangible property in said streets, 
 and has been arrived at upon consideration of all the facts and circumstances 
 affecting the value of said property, including the use or right to use said 
 streets and public places, which your respondents have been able to ascertain. 
 
 Vour respondents further return that they deny the allegations in the petition 
 except so far as the same are shown to be true by this return and the papers 
 thereto annexed and referred to and forming «, part thereof, and deny each 
 and every allegation to the effeot that the relator is not properly and legally 
 assessed at the fair value of its special franchise. 
 
 In witnesses whereof, the undersigned, Chairman of the State Board of Tax 
 
 Commissioners, has hereunto set his hand this day of , 
 
 191... 
 
 lYerification.J 
 
 FORM NO. 156. 
 Foreign Corporation's Slatement to Obtain License to Do> Business in New York 
 
 , Inc., a foreign stock corporation other than a moneyed cor- 
 poration, does hereby, pursuant to section 16 of the General Corporation Law, 
 file in the office of the Secietary of State of the State of Xew Yorlc a sworn 
 copy in the English language of its charter or certificate of incorporation and 
 the following statment under its corporate seal and the signature of its presi- 
 dent (vice-president or other acting head) : 
 
 First: The business or objects of the corporation which it is engaged in carry- 
 ing on [or which it proposes to carry on] within the State of New York is 
 
 Second: A place within the State of New York which is to be its principal 
 place of business is 
 
 Third: is designated as a person upon whom process against 
 
 the corporation may be served within the State of New York. 
 
 Fourth: Said person has an office or place of business at the place aforesaid 
 where said corporation is to have its principal place of business within the State 
 of New Y'ork. 
 
 Fifth: Accompanying this statement is the written consent of said person to 
 such designation. 
 
 In witness whereof said corporation has caused these presents to be executed 
 by its President and its corporate seal to be hereto affixed, attested by its Secre- 
 tary, this day of , 191 ... 
 
 (Corporate Seal) 
 
 President 
 Attest : 
 
 Secretary. 
 [Add' corporate achnowledgment.'] 
 
Nos. 157-159 FORMS 1337 
 
 FORM NO. 157. 
 
 Consent of Person Designated as Agent. 
 
 I) , the person named in the acoompanying statement of 
 
 , Inc., as the person upon whom process against said corporation 
 
 may be served within the State of New York, do hereby state that I have an 
 office or place of business at the place where said corporation is to have its 
 principal place of business within New York State, and do liereby consent in 
 writing to such designation as a person to be so served. 
 
 [Add acknowledgment.} 
 
 FORM NO. 158. 
 Resolution hy Foreign Corporation to Be Licensed in 'New York. 
 
 Resolved, that this company file in tlie oflfice of the Secretary of State of the 
 State of New York a sworn copy in the English language of its charter or cer- 
 tificate of incorporation and a statement under its corporate seal, and the 
 signature of its president or vice-president, particularly setting forth the 
 business or objects of the corporation wllicli it is engaged in carrying on (or 
 proposes to carry on) within the State of New York, and a place within said 
 
 State which is to be its principal place of buiness, viz., ; 
 
 and designating a person, viz., , upon whom process 
 
 against the corporation may be served witliin said State, who shall have an 
 office or place of business at said principal place of business of the corporation 
 in said State; and further 
 
 Resolved, that the proper officers of this company be and they hereby are 
 authorized and directed to do any and all things necessary to license tliis 
 company to do business in the State of New York and to fulfill the foregoing 
 resolution and to comply in general with section 16 of the General Corporation 
 Law of said State. 
 
 FORM NO. 159. 
 
 ♦ 
 
 Oath to Sworn Copy of Certificate of Incorporation of Foreign Corporation 
 Seeking Neio York License. 
 
 State of ] 
 
 County of 'I 
 
 , being duly sworn, says : I am Secretary of , 
 
 Inc., a corporation organized and existing under the laws of 
 
 I have compared the annexed copy of its charter or certificate of incorporation 
 with the original thereof, and do swear that said copy is a true copy of said 
 original and of the whole thereof. 
 Sworn to before me, this 
 
 day of ,191... 
 
1338 FOEMS Nos. 16l, 162 
 
 FORM NO. 161. 
 
 Certificate of Foreign Corporation of Surrender of Certificate of Authority to Do 
 
 Business. 
 
 , Inc., by this certificate under its corporate seal and the 
 
 signature of its president [or, vice-president, or other acting head^ sets forth: 
 
 ( 1 ) Its name is 
 
 ( 2 ) It was formed under the Laws of the State of 
 
 ( 3 ) It received authority to do business in New York State on the day 
 
 of , 191... 
 
 (4) It hereby revokes its designation Of as the persorf 
 
 upon whom process agadnst it may be served in the State of New York. 
 
 (5) It hereby surrenders its authority to do business in the State of New 
 York, and, as evidence of such surrender {either) returns, hereto attached, to 
 the Secretary of State of the State of New York, for cancellation, its certificate 
 of authority to do business in the State of New York; {or) states that said 
 certificate of authority has been lost {or, destroyed), and attaches hereto an 
 affidavit of its president {or, vice-president, or, secretary, or, other officer) to 
 the effect that such certificate has been lost {or, destroyed). 
 
 Witness the name of said corporation to this certificate under its corporate- 
 seal and the signature _of its president {or, vice-president, etc.), hereunto affixed 
 this day of , li)l . . 
 
 Inc., 
 
 f Corporate Seal.] By , 
 
 Attest: — President. 
 
 Secretary. 
 (For Form of Acknowledgment, see Form No. 1.) 
 
 FOEil NO. 162. 
 
 Affidavit Attached to Ce%fifica1r of Foreign Corporation of Surrender of 
 Authoritij to Do Business. 
 
 State of ] 
 
 County of C 
 
 , being duly sworn, says: 
 
 I reside at I am president {or as the case may lie) of 
 
 , Inc., a corporation, to certificate of which of surrender 
 
 of authority to do business in New York State this affidavit is attached. The 
 certificate of authority of said corporation to do busiiness in said State of New 
 York, referred to in said certificate of surrender, has been lost {or, destroyed) 
 luider the following circumstances: {state cireumstamces shoirincj loss or destruc- 
 tion and/or showing diligent search and inability to find). 
 
 Sworn to before me this day of , 101 . . 
 
INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ACCOUNTINGS 
 
 by receivers, see " Receivers," subheading " aocountinga." 
 
 ACg.NOWLEDGMENT , 
 
 to corporate bond aiid mortgage, form, 251. 
 to charter 
 
 correcting defective, by corporators or directors, 28. 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
 ACQUIRING AND DISPOSING OF SECURITIES AND PAPER OF ANOTHER 
 
 CORPORATION . 
 burden of one alleging illegality of, 494. 
 
 controlling company cannot ruin business of controlled company, 494. 
 controlling corporation must operate controlled corporation to give highest 
 
 value to its stock, 494. 
 of corporation operating franchise ruinous to buying corporation, 494. 
 disaffirmance of act of, conditioned on return of stock, 495. 
 governing statutes, 493. 
 in general, 492, 493. 
 no limit to, 494. 
 one corporation cannot create another, give it capital and take all its 
 
 stock, 494. 
 in payment of debt, 493. 
 prohibition not against doing whatever necessary to exercise of franchise, 
 
 493. 
 rights of stockholder of holding corporation to recover secret profits from 
 
 co-stockholders, 495. 
 statute permitting consolidation to be construed with this statute, 493. 
 intent to get stock control no objection to, 494. 
 
 ACTIONS BY AND AGAINST CORPORATIONS 
 appearance permissible as if natural person, 527. 
 attachment, see "Attachment." 
 for determination of claim to real property, 524. 
 governing statutes, 524. 
 
 on injunction against officer of, damages to corporation compensated, 525. 
 inspection of corporate books, see " Corporate Books," subheading " inspec- 
 tion of." 
 mandamus — practice, 525. 
 may sue and be sued like individuals, 524. 
 service of process in, see " Service of Process." 
 stockholder may defend action •pro corporation in which judgment had col- 
 
 lusively, 175. 
 testimony, see subheading, " pleading, practice and evidence." 
 for tort revived against directors on expiration of charter life-limit, 554. 
 witnesses, see subheading, " pleading, practice and evidence." 
 examination before trial 
 
 moving affidavit to give names, etc., of officers, etc., and books, etc., 
 necessary, 541. 
 
 1339 
 
1310 INDEX 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ACTIONS BY AN© AGAINST COiRiPOEATIONS — continued 
 examination before trial — continued 
 
 not condition precedent that request be made of corporation for copy 
 
 of papers desired, 541. 
 order may direct production of books, etc., for use of witness without 
 
 subpoena duces tecum, but not for inspection by adverse party, 541. 
 applicant for must show person described as " managing agent," to be 
 
 examined, is such, 542. 
 copy of moving affidavit and order to be served on corporation's attorney 
 
 if it has appeared, 542. 
 after receivers appointed for corporation, 542. 
 of persons later becoming officers, 542. 
 order should authorize examination of corporation hy an officer — not 
 
 of officer directly, 542. 
 when question is authority of employee to contract for corporation, 543. 
 granted though matter to be proven might be proven by testimony of 
 
 others, 543. 
 " necessary " in statute permitting means " needful," 543. 
 when order for vacated, 543. 
 order should require books only to refresh witness' recollection, not for 
 
 adverse party's inspection, 543. 
 to find if contract is signed by corporation or copartnership, 543. 
 examination of officer when corporation has defaulted in pleading, 'AS. 
 granted though officers will be present at trial, 543. 
 not stayed by dissolution of corporation, 544. 
 to executor to enable him to give bill of particulars in action on behalf 
 
 of testator, 544. 
 because of using unfairly name of another corporation, confined to these 
 
 officers likely to know, 544. 
 jurisdiction 
 
 of city court, 533. 
 of county court 
 
 when corporation deemed resident of county, 533. • 
 
 when principal place of business in another county, 534. 
 of justice of the peace, 533. 
 of city court of Yonkers, 533, 534. 
 
 are citizens of states of incorporation irrespective of residence of cor- 
 porators, 534. 
 when corporation controlled by aliens with country of which U. S. is at 
 
 war, 534. 
 in what district application relating to should be made, 534. 
 county given in charter as that of principal place of business deter- 
 mines venue, 534. 
 objection to by answer good if complaint's allegations sufficient, 534. 
 between non-resident and corporation not determined on motion to sat 
 
 aside service of summons, 535. 
 of accounting to non-resident judgment-creditor, 535. 
 pleading, practice and evidence 
 
 when stockholders' testimony' is interested, 546. 
 admission of member, when admissible against corporation, 546. 
 supplementary proceedings 
 
 neither domestic nor foreign corporation subject to, 547. 
 
INDEX 1341 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ACTIONS BY AND AGAINST CORPORATIONS — continued 
 supplementary proceedings — continued 
 
 statute permitting inapplicable when judgment-debtor a domestic cor- 
 poration, 547. 
 against 
 
 same constitutional liabilities as natural persons, 15. 
 
 for personal injuries dies with dissolution, 539. 
 
 to enforce illegal agreement by domestic corporation to exchange its 
 
 stock for that of foreign corporation, 528. 
 to recover compensation for selling its stock during periods when cor- 
 poration not allowed to do business, 528. 
 by representative of decedent for negligence for which decedent could 
 
 have sued, 524, 525. 
 revivor of against predecessor partnership, 539. 
 service of process, on oflScers, see " Officers," subheading " service of 
 
 process on." 
 on note 
 
 statute permitting default judgment inapplicable if note admitted 
 
 but counterclaim set up, 539. 
 judgment by default on expiration time to plead unless order for 
 
 trial served with pleading, 539. 
 order extending time to plead only on notice to plaintiff's attor- 
 ney, 539. 
 entitled to preference, 539. 
 statute permitting default judgment applicable only when note 
 
 itself defended, 539. 
 statute permitting default judgment inapplicable when corporation 
 
 is endorser, 540. • 
 allegation of endorsement implies lawful endorsement, 540. 
 alleging authority of defendant's treasurer to accept drafts, 540. 
 statute permitting default judgment constitutional, 540. 
 statute permitting default judgment inapplicable to justice's court 
 
 action, 540. i 
 
 statute permitting default judgment applies to municipal court 
 
 action, 540. 
 statute permitting default judgment applicable to municipal cor- 
 poration, 540. 
 trial preference provision not applicable to corporation agreeing 
 with another corporation liable on note to be liable therefor, 540. 
 manner of pleading endorsement, 541. 
 pleading, practice and evidence 
 
 corporation deemed living person under C. C. P., § 829, 544. 
 
 plea of nul tiel corporation bad, 529. 
 
 secretary of state's certificate of consolidation prima facie evidence 
 
 thereof, 529. 
 filed papers presumptive proof of existence of facts therein 
 
 stated, 529. 
 no denial of corporate existence at time of commencement of action 
 
 unless affirmatively set up and verified, 529. 
 defendant deemed to have waived misnomer unless pleaded, 528. 
 particulars by bill of names of officers, etc., alleged to have taken 
 
 part in conspiracy for which sued, 527. 
 corporation may appeal from judgment against plaintiff if change 
 of officers pending trial led to its backing plaintiff therein, 527. 
 
1342 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ACTIOXS BY AND AGAINST (XHRIPOEATIONS — continued 
 against — continued 
 
 pleading, practice and evidence — continued 
 
 creditor's representative complaint to set aside judgments, mort- 
 gages, etc., may hold both corporation and directors, 527. 
 averment of corporate existence, 528. 
 corporate existence need be proved only if verified answer alleges 
 
 or denies it, 528. 
 certificate of incorporation presumptive evidence of incorpora- 
 tion, 528. 
 removal to another county for convenience, 535. 
 verification of pleadings 
 
 when by agent or attorney, 532. 
 when by oflicer, 532. 
 governing statute, 532. 
 by director, 532. 
 
 by officer, must set forth grounds of belief, 532, 533. 
 by officer, need not set forth why not made by corpora- 
 tion, 533. 
 
 ty 
 
 for condemnation of realty, petition, how executed and contents, 52,5. 
 
 same constitutional right as natural persons, 15. 
 
 directors must decide if to be brought, 525, ,526. 
 
 to make promoter account for secret profit, 3. 
 
 in county court, 541. 
 
 costs 
 
 in action by attorney-general on relation of corporation, 541. 
 attorney liable for if corporation non-existent, 526. 
 pleading, practice and evidence 
 
 in equity for accounting by officer when allegations indefinite, 526. 
 complaint stating but one cause, for conspiratous commissions and 
 
 salary, 526. 
 ibill of particulars of agreement, alleged by individual defendant 
 
 sued on guaranty, of unfulfilled conditions precedent, 526. 
 joinder with individual whom it bought out in suit for malicious 
 
 prosecution against him, 526, 
 complaint against ofiScer for recovery of illegal political contribu- 
 tions, one cause only alleged, 527. 
 complaint to foreclose mechanic's lien for plumbing must allege 
 
 registration as plumber, 527. 
 certificate of incorporation presumptive evidence of incorpora- 
 tion, 528. 
 plea of nul tiel corporation good, 528. 
 
 defendant deemed to have waived misnomer unless pleaded, 528. 
 corporate existence need be proved only if verified answer alleges 
 ' or denies it, 528. 
 
 1 secretary of state's certificate of consolidation prima facie evidence 
 
 I thereof, 529. 
 
 . filed papers presumptive proof of existence of facts therein stated, 
 529. 
 no denial of corporate existence at time of commencement of action 
 unless affirmatively -let up and verified, 529. 
 
INDEX - 1343 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ACTIONS BY ANT> AGAINBT OOKPOnATKMS — continued 
 by — continued 
 
 pleading, practice and evidence — continued 
 
 failure to state whether plaintiff foreign or domestic corporation 
 
 availed of by motion, not demurrer, 530. 
 averment of corporate existence in general, 528. 
 averment of corporate existence 
 
 by bringing action in name purporting to be that of corpora- 
 tion, 529. 
 admission by defendant of corporate existence of plaintiff pre- 
 cludes later denial thereof, 530. 
 motion to amend complaint to contain, 531. 
 in general, 529', 530. 
 
 what denial by answer puts plaintiff to proof, 530, 531. 
 when failure of availed of by demurrer and when by answer, 
 
 530. 
 failure of, how availed of by demurrer, 530. 
 answering on merits waiver of plaintiff's omission to allege 
 
 corporate character, 530. 
 by contracts between parties necessarily assuming plaintiff's 
 
 corporate character, 531. 
 proof of existence of corporation de facto, 532. 
 proof when put in issue is first step in trial, 532, 
 . verification 
 
 when by officer, 532. 
 
 when by agent or attorney, 532. 
 
 by director, 532. 
 
 governing statute, 532. 
 
 by officer, need not set forth why not made by corporation, 533. 
 
 by officer, must set forth grounds of belief, 532, 533. 
 
 ACTIONS AGAINST DIRECTORS 
 
 see '' Liabilities Common to Directors and Officers," subheading " actions 
 against." 
 
 ACTIONS AGAINST OFFICERS 
 
 see " Liabilities Common to Directors and Officers," subheading " actions 
 against." 
 
 ACTS OF CORPORATIONS 
 
 see " Corporate Powers, Duties and Liabilities." 
 
 ADDITIONAL ALLOWANCE 
 
 of receivers, see " Receivers," subheading " compensation." 
 
 AGENTS 
 
 Imited by by-laws, see " By-Laws." 
 
 penalty for refusing or neglecting to make entry in or permit inspection of 
 
 stock-book, see " Corporate Books." 
 compensation 
 
 review by court, due manager by contract by stockholders, 429. 
 dependent on profits, when corporation can increase capital and so 
 
 reduce, 429, 430. 
 when corporation accepts benefit of services, 430. 
 
1344 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 AGEXTS — continued 
 employment 
 
 what resolution employs for a year, 429. 
 liabilities _ „_.... 
 
 for fraud in procuring organization of corporation, see "Liabilities 
 
 Common to Officers and Agents." 
 for political contributions see "Liabilities Common to Directors, Offi- 
 cers and Agents." 
 for fraud in issue, reissue, sale, pledge or execution of corporate securi- 
 ties, see "Liabilities Common to Directors, Officers and Agents," 
 for omitting to disclose service on himself of injunction against cor- 
 poration, see " Liabilities Common to Directors, Officers and Agents. '" 
 for falsity of report or statement, see " Liabilities Common to Directors, 
 
 Officers and Agents." 
 for practicing law, see "Liabilities Common to Directors, Officers and 
 
 Agents." 
 in general, 437. 
 on contract 
 
 in general, 437. 
 transfer 
 
 for failure to deliver certificates to purchaser, 437. 
 for criminal libel, 438. 
 for refusal to make entry in or exhibit stock book, see " Liabilities 
 
 Common to Directors, Officers and Agents." 
 for omission of entry or false entry in corporate books of corporate 
 property acquired, see " Liabilities Common to Directors, Officers and 
 Agents." 
 for refusal or neglect to make report or statement, see " Liabilities 
 Common to Directors, Officers and Agents." 
 powers and duties 
 
 by-laws prescribe, 44. 
 
 by-laws may prescribe, 433. 
 
 not beyond those of corporation, 430. 
 
 like those of natural persons unless charter or by-laws differentiate, 433. 
 
 to sue as trustee of express trust, 433, 434. 
 
 dealing with corporation, in general, 434. 
 
 to profit from inventions while in -corporation's employ, 434, 435. 
 
 to bind corporation 
 
 proof by circumstances leading reasonable man to believe in, 431. 
 
 burden of proving, on whom, 431. 
 
 when found in charge of office, 431. 
 
 of general manager, of extended contract of employment, 432. 
 
 when appointed for future business, 433. 
 
 by declarations, 433. 
 
 when acting in distant land, 433. 
 
 to sell bonds to pay corporate debts, 434. 
 
 by settlement of action against corporation, 434. 
 
 by contract 
 
 in general, 433. 
 
 for advertising, by salesman, 434. 
 ratification by corporation by payment of expenses of Mntract 
 made by, 431. 
 
INDEX 1345 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 AGEXTS — continued 
 
 powers and duties — • continued 
 
 to bind corporation — continued 
 
 when corporation ratiiiea, expressly or impliedly, 431. 
 
 ratification by directors' silent acquiescence, 432. 
 
 ratification by board's resolution of ratification not communicated 
 
 to other party, 432. 
 ratification by corporate recognition of similar acts, 432. 
 process, service of, on, to bind corporation 
 
 on agent as individual cannot be made to stand for service on him as 
 
 agent, 435. 
 after appointment of receiver for corporation, 437. 
 when denies connection with company, 437. 
 when in jurisdiction on corporate business when served, 437. 
 on managing agent 
 
 governing statute, 435. 
 who is 
 
 " assistant superintendent," 435, 436. 
 
 general agent of one department, 435. 
 
 when introduced by officer or director as, 436. 
 
 superintendent of incompleted part of road, 436. 
 
 foreman of milk and cheese factory, 436. 
 
 railway division superintendent, 436. 
 
 railway general superintendent, 436. 
 
 held out as such by corporation, 436. 
 
 AGREEMEN'TS 
 
 by promoters for corporation, see " Promoters.'' 
 
 AGREEMENT TO FORM CORPORATION 
 assumed lawful, 1. 
 
 void if deprives directors of power, 1. 
 unenforcible if parties cannot agree, 1. 
 
 promoters stipulation for corporate management not binding on directors, 2. 
 promoters may agree on management of corporation, 2. 
 may fix price for street stock to be issued, 2. 
 cannot bind stockholder in advance to employ promoter as corporate agent, 2. 
 
 AGREEMENTS FOR SALE* OF STOCK 
 
 see " Stock and Capital Stock," subheading " purchase and sale." 
 
 ALTERATION OF CHARTERS 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
 AMENDMENT 
 
 of by-laws, see " By-Laws." 
 
 of certificate of incorporation, see " Certificate of Incorporation." 
 
 of charter, see " Certificate of Incorporation." 
 
 ANNUAL REPORT 
 
 when domestic and when foreign corporations must file, 512. 
 governing statute, 512. 
 
 B.C.N.Y.— 85 
 
1346 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1, 
 
 ANNUAL B.EFORT — continued 
 
 when corporation broken up, though not technically dissolved, 512. 
 
 time as of which made, statute fairly construed, 512. 
 
 where filed, 512. 
 
 contents, 512. 
 
 who must execute, 512. 
 
 decisions under former statutes, 513 n, 514 n. 
 
 ANNULMENT 
 
 see " Vacation, Annulment and Injunction." 
 
 ASSESSMENTS ON STOCK 
 
 see " Stock and Capital Stock,"' subheading " assessments." 
 
 ASSETS 
 
 see " Stock and Capital Stock." 
 
 ASSIGNEE OF STOCK 
 see " Stockholders." 
 
 ASSIGNING FOR BENEFIT OF CREDITORS 
 see " Dealing with Creditors and Debtors." 
 
 ASSIGNMENTS 
 
 by foreign corporation, see " Foreign Corporation," subheading " assign- 
 ments by." 
 directors may make general, 333. 
 name on, see " Name." 
 of stock, see " Stock and Capital Stock," subheading " transfer." 
 
 ATTACHMENT 
 
 against bond, note, etc., executed by corporation, 525. 
 
 see " Dealings with Creditors and Debtors," subheading " attachment." 
 
 ATTORNEY 
 
 evidence of promoter's agreement to pay, 2. 
 
 ATTORNEY'S FEES 
 
 in receivership, see " Receivers," subheading " Expenses." 
 
 ATTORNEY-GENERAL 
 
 may sue persons acting as corporation, 7. 
 
 BANK 
 
 authority to pass on sufficiency of signatures to corporate cheques, see 
 
 " Commercial Paper." 
 resolution for deposit of funds at passed at first directors' meeting, 44. 
 
 BONDS 
 
 see " Corporate Bonds and Mortgages." 
 
 acquisition and disposition by one corporation of another's, see "Acquiring 
 
 and Disposing of Securities and Paper of Another Corporation." 
 of officers, see " Officers," subheading " bond." 
 
INDEX 1347 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OOKS AND RECORDS OF CORPORATIONS 
 
 of foreign ,eorporations, see " Foreign Corporations," subheading " books.'' 
 transfer of stock on corporate books, see " Stock and Capital Stock," sub- 
 heading "transfer." 
 what ones corporation must keep, 49. 
 corporation must keep books of account, 49. 
 corporation must keep stock-book, 49. 
 mandamus to compel delivery by outgoing oflScer, 50. 
 mandamus to get from imposter — directors, 50. 
 discovery of 
 
 obtained on petition and notice, 56. 
 as evidence 
 
 good to prove corporate acts, 60. 
 
 kept by treasurer admissible, 60. 
 
 in handwriting of deceased treasurer admissible, 60. 
 
 accoimt-books not good to establish claim by corporation against 
 
 director or stockholder, 60. 
 account-books good as to own matters but not as to its indebtedness 
 
 in action against its directors, 60. 
 received by treasurer on accession to oflSce not admissible, 60. 
 to show one a director in action for statutory liability, 64. 
 stock-book 
 
 corporation justified in relying on to show stock ownership until 
 
 otherwise notified, 61. 
 not incontrovertible evidence of stock ownership, 61. 
 presumptive evidence of statutory contents in favor of plaintifl 
 against corporation, its officers, directors and stockholders, 61, 
 when none kept common-law evidence of stock-ownership admissi- 
 ble, 61, 62. 
 stock-transfer and not stock certificate book presumptive evidenct 
 
 of stock ownership, 62. 
 burden on one appearing thereby as stockholder to prove other- 
 wise, 62. 
 extracts from 
 stock-books 
 
 same right in case of foreign as of domestic corporation, 54. 
 stockholders entitled to make, 54. 
 persons entitled to inspect may make extracts, 54. 
 penalty on corporation when not allowed, 55. 
 penalty on oflScer or agent not allowing, 55. 
 
 defense against penalty for not allowing that plaintiff sells lis( 
 of stockholders, 55. 
 inspection of 
 
 common-law remedy not available to determine if company properly 
 
 conducted, 56. 
 in actions by and against corporations 
 
 production compelled by subpoena duces tecum or order, 544. 
 production by subordinate, under subpoena duces tecum or order 
 
 sufficient, 544. 
 production compellable as in case of individual, 544. 
 oath by officer sought for inspection is to devise defenses no' 
 defeat order for, 545. 
 
1348 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 BOOKS AND KECOEDS OF CORPOEATIONS — continued. 
 inspection of ■ — continued. 
 
 in actions by and against corporations — continued. 
 
 production of to refresh officer's memory denied if he does not 
 need them, 545. 
 
 one stating he intends to sue cannot have examination of, under 
 guise of examination corporate officer, 545. 
 
 litigant, as distinguished from stockholder, must show particular 
 books needed, 545. 
 
 by stockholder suing for waste, 545. 
 
 subpoena in addition to subpoena duces tecum necessary if personal 
 attendance desired, 545. 
 
 statute permitting order for production not replace statute per- 
 mitting discovery, 545. 
 
 by discharged employee suing for salary, 546. 
 by directors 
 
 matter of right, 51. 
 
 not solely through accountants, 51. 
 
 two cannot refuse to dummy third, 51. 
 by mandamus 
 
 who may have 
 director, 56. 
 stockholder, 56. 
 
 stock transfer book 
 
 discretionary with court, 57. 
 
 when peremptory and when alternative, 57. 
 
 not when inference that granting injurious, 57. 
 
 not for ulterior purpose, 58. 
 
 not for benefit undisclosed person for undisclosed purpose, 58. 
 
 not when purpose to aid rival, 58. 
 
 not to aid stockholder in action against directors for inducing his 
 subscription by false report, 58. 
 
 motive of stockholder important, 58. 
 
 not to one having power of attorney from stockholder, 59. 
 
 not for investigation as basis of suit against corporation, 59. 
 
 not to determine if directors' financial policy sound, 59. 
 
 pleading, practice and evidence, 59. 
 
 indefinite statements to obtain, worthless, 59. 
 
 demand, refusal and necessity of information conditions precedent 
 to granting, 59. 
 
 condition precedent that applicant show he is stockholder of 
 record, 59. 
 
 respondent's affidavits deemed true in determining application 
 for, 60. 
 
 only undisputed facts in petition considered in determining appli- 
 cation for, 60. 
 
 moving papers must state likely loss from transaction complained 
 of, 60. 
 
 to determine how corporate money being spent, 52. 
 
 denial that applicant stockholder has been refused inspection not 
 necessarily fatal to application, 60. 
 
INDEX 1349 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 BOOKS AND RECORDS OF CORPORATIOlSrS — ctwtmttedL 
 inspection of — continued. 
 
 by mandamus — continued. 
 
 by officers, president absolute right to, 51. 
 
 penalty on corporation when not allowed, 55. 
 
 stock-book 
 
 who may have, 53. 
 
 six-months' record stockholder entitled to, 53. 
 
 corporate judgment creditor entitled to, 53. 
 
 pledgor-stockholder entitled to, 53. 
 
 custodian of stock not entitled to, 53. 
 
 authorizee of holder of five per cent of . stock entitled to, 53. 
 
 holder of five per cent of stock entitled to, 53. 
 
 by stockholder, when corporation does not keep, may inspecl 
 
 such book as it does keep, 53. 
 personal representative of stockholder entitled to mandamus for 
 
 53, 54. 
 of whom demand for must be made, 54. 
 penalty for refusing or neglecting to keep open for, 55. 
 penalty on oflBcer or agent not allowing, 55. 
 one penalty only for information often demanded but sought ono( 
 
 for all, 55. 
 defense against penalty that offered at another oflSce near mail 
 
 office, 55. 
 defense against penalty that inspection merely deferred, 55. 
 defense against penalty that none kept and stock-certificate boo! 
 
 shown, 55. 
 defense against penalty for refusing that plaintiff sells list o: 
 
 stockholders, 55. 
 statutory remedies not impair mandamus powers of court, 56. 
 complaint for refusal of must allege defendant a stock corpora 
 tion, 56. 
 by stockholder 
 
 common-law right, 50. 
 
 a statutory right, 50. 
 
 courts should safeguard, 50. 
 
 mandamus when corporation redeems bonds at above marke' 
 
 value, 52. 
 distinction between right of, as to general business and stocl 
 
 books of corporation, 51. 
 of account-book 
 
 demand and refusal for statutory statement condition prece 
 dent to, 51, 52. 
 no mandamus to enable State to compel corporate repayment o 
 
 illegal loan, 52. 
 stock-book, when open to, 53. 
 stock-book 
 
 governing statutes, 52, 53. 
 
 transfer of stock invalid unless entered in, S3. 
 
 contents, 49. 
 
 contents required by statute, 53. 
 
1350 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 BOOKS AND EECX)RDS OF CORPORATIONS — co»<i™^d. 
 stock-book — continued. 
 entries in 
 
 penalty on corporation when not made, 55. 
 
 defense against penalty for not making, that plaintiff sella list 
 
 of stockholders, 55. 
 penalty on officer or agent not making, 55. 
 penalty for refusing or neglecting to keep, 54, 55. 
 
 BORROWING MONEY 
 
 see " Dealings witli Creditors and Debtors." 
 
 BUSINESS OFFICE 
 see " Office." 
 
 BY-LAWS 
 
 limiting sale of stock, see "Stock and Capital Stock," subheading "pur- 
 chase and sale." 
 
 election of directors, see " Directors," subheading " election." 
 
 regulating assessments on stock, see " Stock and Capital Stock," subhead- 
 ing " assessment." 
 
 governing statutes, 44. 
 
 must be reasonable, 45. 
 
 must not be inconsistent with law, 44. 
 
 bind members of corporation and parties having knowledge thereof, 45. 
 
 corporate liability for violation by employee who thereby unlawfully uses 
 stock certificates, 156. 
 
 preventing employee from recovering for work for corporation, invalid, 4(i. 
 
 appointment of inspectors of election, 44. 
 
 powers and duties of oifilcers, agents and employees, 44. 
 
 regulation of affairs, 44. 
 
 management of property, 44. 
 
 period of corporate succession, 44. 
 
 amendment cannot infringe right granted by corporation by contract, 46. 
 
 giving general manager exclusive charge, good, if subject to board, 46. 
 
 meetings of directors, quorum, 44. 
 
 directors make if stockholders do not, 44. 
 
 directors may make subject to those made by stockholders, 44. 
 
 control action of directors, 44. 
 
 refusal of holding-over directors to adopt, regulating directors' election, 
 avoids directors' acts while holding over, 44. 
 
 regulating election of directors and officers invalid if not published, 44. 
 
 election of directors, adopted by directors or officers, must be published, 
 297. 
 
 forbidding transfer on books of stock of debtor of corporation without 
 consent, invalid, 46. 
 
 cannot require over 50 per cent stocUiolders' vote to. change number of 
 directors, 47. 
 
 stockholders make, 44. 
 
 meetings of stockholders, quorum, 44. 
 
 meetings of stockholders called, 44. 
 
 may limit transfer of stock before stockholders' meetings, 177. 
 
 requiring proxy to be stockholder, 184. 
 
 transfer of stock, 44. 
 
INDEX 1351 
 
 Seferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 BY-LAWS — continued 
 inspection of 
 
 by stockholder practically matter of right, 46. 
 right in discretion of court, 46. 
 as to third parties 
 
 cannot limit verbal contract of agent authorized verbally by board 
 
 by requiring its resolution for such a contract, 45. 
 cannot limit authority within apparent scope of agent, 45. 
 cannot limit corporate agent's authority, 45. 
 
 requiring contracts of certain amounts to be signed in certain way, 
 not limit authority of general manager, 45. 
 
 CALLS 
 
 for payment for stock, see " Stock and Capital Stock," subheading " pay- 
 ment." 
 payment of, before transfer of stock, see " Stock and Capital Stock," sub- 
 heading "transfer." 
 for payment of subscriptions 
 
 made at first meeting of directors, 44. 
 
 CAPITAL 
 
 see " Stock and Capital Stock." 
 
 CAPITAL ISSUES COMMITTEE 
 
 under federal " War Finance Corporation Act " controls sale of issue of 
 over $100,000 of stock, 97. 
 
 CAPITAL STOCK 
 
 see " Stock and Capital Stock." 
 
 CAPITAL STOCK TAX 
 
 see " Taxation," subheading " capital-stock tax." 
 
 CERTIFICATES OF STOCK 
 
 lost or destroyed or stolen, see " Stock and Capital Stock," subheading 
 
 " certificates of." 
 see " Stock and Capital Stock." 
 issue of such make issuer " stock " corporation, 9. 
 see " Stock and Capital Stock," subheading " certificates of." 
 
 CERTIFICATE OF INCREASE OF STOCK 
 
 see " Stock and Capital Stock," subheading " increase." 
 
 CERTIFICATE OF ISSUE OF STOCK 
 see " Stock and Capital Stock." 
 
 CEfRTIFICATE OF PAYMENT OF HALF OF CAPITAL STOCK 
 see "Stock and Capital Stock," subheading "payment." 
 
 CERTIFICATE BY RECEIVERS 
 
 see "Receivers," subheading "certificates." 
 
1352 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CERTIFICATE WITH COMPTROLLER BY CORPORATION SELLING, 
 TRANSFERRING OR DELIVERING STOCK 
 what corporations must make, 123, 124. 
 
 CERTIFICATE OF INCORPORATION 
 
 defects in as affecting validity of incorporation, see " De Facto and He Jure 
 
 Corporations." 
 limiting sale of stock, see " Stock and Capital Stock," subheading " pur- 
 chase and sale." 
 defined, 13. 
 
 what may contain, in general, 14. 
 may regulate and limit corporation, 14. 
 must permit acquisition of securities of other corporations if this is 
 
 desired, 14. 
 repealable by legislature, 17. 
 gives corporation no exclusive privilege, 17. 
 must be in English, 19. 
 
 incomplete, not bind subscribers after blanks filled who subscribed before, 25. 
 amendments relative to issue of stock, see " Stock and Capital Stock." 
 amendment to change number of directors, see " Directors." 
 amendment of 
 
 by legislature 
 
 to take vote from stockholders, 18. 
 
 to repeal exemption therein from taxation, 18. 
 
 to take away money invested on faith of, 18. 
 
 to repeal tax exemption, when property transferred on faith 
 
 thereof, 19. 
 reserved constitutional power of in legislature, 26. 
 general statement of purposes for which permitted, 27. 
 to permit of non-par value stock, 27. 
 
 to permit reorganization under Business Corporations Law, 27. 
 to cure informality, strike out unauthorized matter or correct defective 
 proof or acknowledgment 
 old deemed amended from time of filing, 27. 
 by means of amended certificate by corporators or directors, 27. 
 in general, 27. 
 
 without prejudice to prior rights or pending litigation, 27. 
 marginal note of filing to be made, 27. 
 to truly set forth object and purpose 
 made by supreme court, 27. 
 marginal note on index and record, 28. 
 only when original does not, 28. 
 terms and conditions imposed, 28. 
 notice and proof necessary, 28. 
 
 without prejudice to prior rights and pending litigation, 28. 
 to include purposes, powers or provisions 
 
 what purposes, etc., may be included, 28. 
 
 only domestic corporation may make, 28. 
 
 accomplished by filing amended certificate of incorporation, 28. 
 
 must apply to corporations in same line or organized for same 
 
 kind of business, 28. 
 vote of majority of directors needed, 28. 
 
INDEX i;U-3 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1, 
 
 CERTIFICATE OF INCORPORATION — continued. 
 amendment of — continued. 
 
 to include purposes, powers or provisions — continued. 
 
 contents of amended certificate of incorporation, 28. 
 
 filing and execution of amended certificate of incorporation, 28. 
 
 copy of verified proceedings of stockholders' meeting filed with 
 amendment, 29'. 
 ' meeting of stockholders necessary, 29. 
 
 vote of three-fifths of capital stock needed, 29. 
 fee to Secretary of State for filing, $10, 32. 
 to increase number of shares or amount of capital 
 
 by corporation having non-par value stock, 106. 
 to reduce number of shares or amount of capital 
 
 by corporation having non-par value stock, 111, 112. 
 contents 
 
 in general, 19. ' 
 
 as to capital stock, whether with or without par value, 19. 
 
 cannot permit directors to dispose of all property on consent of part 
 
 of stockholders, 20. 
 may limit stockholders' voting powers, 23. 
 may make company a full-liability corporation, 23. 
 may limit vote to classes of stockholders, 23. 
 may provide for common and preferred stock, 23. 
 different classes of preferred stock, 23. 
 limitation of powers and obligations of stockholders, 23. 
 principal place of business must be given without qualification, 23. 
 principal place of business of corporation, 23. 
 
 may regulate business and affairs of corporation within legal limits, 20. 
 subscribers names, addresses and subscriptions, 20. 
 cannot relieve directors and stockholders from duties, 20. 
 as to stock, capitsfl and subscribers, in general, 22. 
 amount and character of stock, 22. 
 directors 
 
 names, 24. 
 
 post-office addresses, 24. 
 
 number, not more than three, 24. 
 
 powers, may limit, 24. 
 
 may divide into classes, 24. 
 
 may permit non-stockholder to be, 24. 
 duration • 
 
 may require more than two-thirds vote to extend, 24. 
 
 must state, 24. 
 
 in general, 20. 
 " name, 20. 
 office 
 
 sufficiency of statement that in certain district of certain terri- 
 tory, 21. 
 number and place of meeting of directors, 20. 
 subscribers, must give names, addresses and subscriptions, 25. 
 filing 
 
 in office of Secretary of State, 25. 
 in office of county clerk, 25. 
 
1354 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CERTIFICATE OF INCORPORATION — continued. 
 filing — continued. 
 
 in office of Secretary of State 
 may be refused, 25. 
 
 effects incorporation, 25. 
 indexing 
 
 in office of Secretary of State, 25. 
 lost or destroyed 
 
 certified copy of same force and effect, 26. 
 
 certified copy may be filed in place of, 26. 
 purposes 
 
 in general, 20. 
 
 for two, when statute permits one of two, 21. 
 
 " the mining of gold, silver and lead," a sufficient statement of, 21. 
 recording 
 
 in office of Secretary of State, 25. 
 signature 
 
 by incorporators, not subscribers, 25. 
 
 who may sign, in general, 14. 
 
 CERTIFICATION OF CHARTER 
 
 fees to Secretary of State, see " Organization Fees and Taxes.'' 
 
 CERTIORARI 
 common law 
 
 in general, 786. 
 
 returnable to Appellate Division under Code, Is, 787. 
 under charter of New York City. 
 
 common law or statutory writ may be used, 787. 
 ex parte, 787, 788. 
 
 failure to avail of prevents later action to recover back .taxes, 787. 
 parties, assessors of municipality, 692. 
 statutes 
 
 governing income and franchise taxes different from governing real 
 
 and personal property (including capital stock) taxes, 786. 
 Tax Law and Greater New York Charter, 786. 
 limit, right to, 785. 
 statutory writ 
 
 returnable at Special Term, is, 787. 
 special, 786, 787. 
 general, 786. 
 when lies 
 
 when dispute reviewable by appeal, 788. 
 to review assessment of stockholders as unequal, 788. 
 to review void assessment, 787. 
 to review action of Secretary of State in filing or refusing to file charter 
 granting corporation name similar to name of existing corporation, 26. 
 to review capital stock tax, see subheading infra, " to review real and per- 
 sonal property (including capital stock) and special franchise taxes." 
 to review franchise tax, see subheading infra, " to review income and 
 
 franchise taxes." 
 to review special franchise tax, see subheading infra, " to review real and 
 personal property (including capital stock) and special franchise taxes." 
 
INDEX 1355 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CERTIORARI — continued. 
 
 to review income and franchise taxes 
 in general, 802. 
 both on law and facts, 802. 
 mandamus substituted for, 809. 
 bringing in other parties interested, 809. 
 when officer certioraried has completed term of office, 809. 
 statute solely determines right to, 802. 
 petition or affidavit 
 
 who may make, 802. 
 
 to what court, 802. 
 
 when made, 802. 
 
 form and contents, 802. 
 
 grounds, 802. 
 
 notice of application for, 802. 
 
 deposit of tax and filing of undertaking condition precedent, 
 803, 804. 
 writ of 
 
 when allowed, 804. 
 
 to whom directed, 804. ^ 
 
 form and contents, 804. 
 
 effect, 804. 
 
 service of, 805. 
 return to writ 
 
 where returnable, 805. 
 
 when returnable, 805. 
 
 enlargement of time for, 805. 
 
 form and contents, 805, 806. 
 
 not conclusive as to facts if not definite denial, 806. 
 
 to contain accounts and evidence submitted to him, 806. 
 
 grounds of refusal to revise unnecessary, 806. 
 
 filing, 806. 
 
 defective or omitted, 809. 
 
 on death, absconding, insanity or removal from State of officer to 
 make, 809. 
 court hearing and order 
 
 where, 806. 
 
 noticing for, 806. 
 
 correction of accounts on, 806. 
 
 burden on relator to show error, 807. 
 
 on issues joined by pleadings only, as to assessability, 807. 
 
 what questions involving merits to be determined, 807. 
 
 affidavits, etc., as to jurisdiction of officer or body making deter- 
 mination, 807. 
 
 affidavits, etc., in opposition to application, 807. 
 
 return assumed true except as to conclusions, 807, 808. 
 
 final order 
 
 enrollment filed, 808. 
 entry, 808. 
 
 annulling, confirming, modifying, 808. 
 costs, 808. 
 appeals, 808. 
 
1356 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CKRTIORAEI — continued. 
 
 to review personal property tax, see subheading infra, " to review real and 
 
 personal property (including capital stock) and special franchise taxes." 
 to review real and personal property (including capital stock) and special 
 franchise taxes 
 when lies 
 
 when no application made to commission, 789. 
 
 when no capital stock report filed, 790. 
 cancellation of personal tax, 801. 
 collection 
 
 by supplementary proceedings, 801. 
 • , from one removed to another county, 801. 
 
 I failure of collector to pay over, 801. 
 
 I dismissal of proceeding for, 801. 
 
 in supplementary proceedings, order for, 802. 
 contempt for non-payment, 801. 
 fines for non-payment, 801. 
 imprisonment for non-payment, 801. 
 refund of taxes, 801. 
 
 interest on, 801, 802. 
 recovery of surplus from sale of property for non-payment, 801, 
 sequestration for non-payment, 801. 
 who may present petition 
 
 in general, 788. 
 
 governing statutes, 788. 
 
 when more than one person involved, 788. 
 
 corporation refusing to appear before tax board, 788. 
 
 corporation engaged in business of reducing assessments, 789. 
 
 in New York city, 788. 
 where petition presented 
 
 under New York Charter, 789. 
 
 under Ta.x Law, 789. 
 
 to Supreme Court, 789. 
 when petition must be presented 
 
 when notice of filing of roll given, 789. 
 
 when no notice of filing of roll given, 789. 
 
 in New York city, 789. 
 defects in petition 
 
 motion to quash for failure' to state extent of overvaluation, 791. 
 
 motion to strike out allegation of assessment of other property at 
 less proportionate value, 792. 
 grounds for 
 
 including uncompleted building is not " illegal " but " erroneous," 
 791. 
 
 lack of jurisdiction, 791. 
 
 inequality, what is, 791. 
 
 grounds of petition, 790, 791. 
 
 in New York city, 792. 
 form and contents of petition 
 
 governing statutes, 790. 
 
 in general, 790. 
 
 when ground is overvaluation, 791. 
 
INDEX 1357 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CERTIORARI — continued 
 
 to review real and personal property, etc. — continued 
 form and contents of petition — continued 
 
 under New York Charter and Tax Law, 791. 
 on ground other than illegality, 792. 
 when real estate only involved, 792. 
 when ground is assessed at market value, 792, 793. 
 writ of 
 
 against whom issued 
 in general, 793. 
 I in city of New York, 793. 
 
 form and contents, 793. 
 when allowed, 793. 
 effect of allowance, 79'3. 
 service of, 793. 
 return to writ 
 
 when returnable, 793. 
 
 where returnable, 793. 
 
 amendment where returnable at wrong place, 797, 798. 
 
 where returnable 
 
 amendment where returnable at wrong place, 798. 
 form and contents 
 in general, 794. 
 
 certified or sworn copies good, 794. 
 verification, 794. 
 " answer " not sufficient, 794. 
 must show how valuation gotten at, 794. 
 governing statutes, 794. 
 ' should include evidence, not conclusion menely, 794, 795. 
 
 only what statute requires, 795. 
 traversing petition is averment of denial of opportunity to 
 
 inspect books, 795. 
 filing, 795. 
 judgment awarded 
 
 when illegal, 791. 
 when erroneous, 791. 
 court hearing and adjudication 
 
 reassessment or correction of assessment, 79'5. 
 
 strike assessment from roll, 795. 
 
 governing statutes, 795, 796. 
 
 take evidence, 795, 796. 
 
 what court may do, 795, 796. 
 
 limitation of number of witnesses and parcels of property, 796. 
 
 reference 
 
 in general, 796. 
 
 proceedings are part of proceedings of court, 796. 
 new hearing under New York Charter, 796, 797. 
 taking further proof under Tax Law, 796, 797. 
 entire proof considered, 797. 
 facts showing erroneous assessment of real estate for overvaluation 
 
 and inequality, 797. 
 burden of proof, 797. 
 
1358 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CERTIORARI — continued 
 
 to review real and personal property, etc. — continued 
 court hearing and adjudication — continued. 
 
 reviews only total assessment against improved and unimproved 
 
 land, 797. 
 strilce assessment from rolls only when illegal, 797. 
 evidence taken 
 
 only when application tenders question of fact, 797. 
 testimony must be taken, 798. 
 appearance by municipal representatives, 798. 
 first decided on, then referee's report confirmed, 798. 
 estoppel by laches, 802. 
 in special franchise certioraries 
 taking evidence, 798. 
 reference, 798. 
 in general, 798, 799. 
 governing statutes, 798, 799. 
 
 changing place of trial to where special franchise is, 798, 799. 
 extraordinary term of court to try, 799. 
 new assessment or correction of assessment 
 eflfect, 799. 
 
 treated as if fixed by same officers as made other assess- 
 • ments on roll, 799. 
 
 assessors' assessment presumed correct, 799. 
 
 burden of proof that excessive, 799, 800. 
 
 to compell state board to make their valuation same as 
 
 that of local assessors, 800. 
 reduction to equalize, 800. 
 
 comparison of special franchises inter se — not with other 
 property, 800. 
 costs 
 
 governing statutes, 800. 
 
 relator reducing by more than half reduction claimed below, 800. 
 on appeal, 801. 
 appeals 
 
 who may take, 800. 
 preference in, 800. 
 
 presumption state board correct, 801. 
 treated as appeals from orders, 801. 
 costs on, 801. 
 apportionment 
 
 premises of one wrongfully taxed in with another, 801. 
 
 CHALLEyGE 
 
 of stockholders' vote, see " Stockholders," subheading " powers." 
 
 chax(;e in classification of issued stock 
 
 -see " Stock and Capital Stock." 
 
 CHANGE OF NAME 
 
 see " Name," subheading " change of." 
 
 CHANGE OF NUMBER OF DIRECTORS 
 see " Directors." 
 
INDEX 1359 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CHANGE OF OFFICE OR PLACE OF BUSINESS 
 see " OflBce," subheading "change of." 
 
 CHANGE OF STOCK 
 
 see " Stock and Capital Stock." 
 
 CHARTER 
 
 see " Certificq.te of Incorporation." 
 
 CHATTEL MORTGAGES 
 
 see " Corporate Bonds and Mortgages," subheading " chattel mortgages." 
 
 CHEQUES 
 
 to pay stock subscription, see " Stock and Capital Stock," subheading " sub- 
 scriptions." 
 
 method of signing directed at first meeting of directors, 44. 
 
 bank's authority to pass on sufficiency of corporate signature to, see 
 " Commercial Paper." 
 
 CLASSES OF STOCK 
 
 see " Stock and Capital Stock." 
 
 COMBINATIONS IN RESTRAINT OF TRADE 
 governing statutes 
 
 state, 495, 496. 
 
 federal, 496n, 497n, 498n. 
 in general 
 
 covenant in restraint of trade assignable, 499. 
 
 to prevent control of articles of common use is statute's aim, 499. 
 
 acquisition of all stock of another corporation not prohibited, 499. 
 
 statute is codification of common law, 499. 
 
 enjoining stockholders from selling out to another corporation' seeking 
 control of the corporation, 499. 
 
 vendor corporation delivering goods under agreement void under statute 
 cannot recover price, 499. 
 
 covenant in restraint of trade enforceable in equity though bond given, 
 499. 
 what is trade or commerce 
 
 production of opera, 499. 
 what constitutes restraint or combination 
 
 prohibition against engaging in same business, 499. 
 
 test to be applied, 500. 
 
 combination of corporations for more convenient operation is good, 500. 
 
 contract by corporation to buy stock of others to avoid competition, 500. 
 
 fixing price of commodity of which corporation controls market, 500. 
 
 getting competitor into own employ, 500. 
 
 covenant in partial restraint is good, 500. 
 
 limiting telephone company's activities within certain district, 501. 
 
 buying worthless note of competitor to injure latter by suit, 501. 
 
 joint purchase of equipment by railways, 501. 
 
 by-law preventing associates in newspaper combine from getting news 
 elsewhere, 501. 
 
 combine by telegraph companies, 501. 
 
 contracts to withhold supply of coal, 501. 
 
1360 INDEX 
 
 Keferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 COMMERCIAL PAPER 
 
 power of officers to sign and endorse, see " Officers," subheading " commercial 
 
 paper." 
 accommodation 
 
 ultra vires and void, 507, 508. 
 
 effect of board authorization to issue promissory notes, 508. 
 
 acceptor has burden of showing ignorance of, 508. 
 
 no incidental power to give, 508. 
 
 when discounted on faith of representations of corporate officers and in 
 hands of bona fide holder, 508. 
 
 knowledge of member of investment committee of trust company of, 
 when it discounts, 509. 
 
 when given for valuable consideration, 509. 
 note signed by one instead of two officers required by by-laws good in hands 
 
 of bona fide holder when corporation receives benefits, 505. 
 corporation may give as evidence of indebtedness, 505. 
 corporation may give notes or drafts and accept drafts, 505. 
 corporation cannot question note of which has received benefits, 505. 
 corporation cannot discount, buy, sell or engage in banking, 506. 
 note to smelt lead by corporation chartered to raise and smelt which has 
 
 only raised, good, 506. 
 mere writing of corporate name on back no endorsement, 506. 
 any name used on, adopted by corporation, binds it, 506. 
 seal, effect on negotiability, 506. 
 
 given to pay for its stock bought by individual, void, 506. 
 counterclaim on available to corporate successor to firm giving, 506. 
 bank of corporate deposits may determine if cheques properly signed, 507. 
 actual authorization to sign available to one making no inquiry, 507. 
 inquiry into when payable to president for salary, 507. 
 for discount of, made at request of its president, when it is last endorser, 507. 
 
 COitMISSIONS 
 
 of receivers, see " Receivers," subheading " compensation." 
 
 COiOION STOCK 
 
 see " Stock and Capital Stock." 
 
 COMPANY STORE 
 
 when corporation cannot run, 448. 
 
 COJIPENSATION 
 
 of directors, see " Directors," subheading " salaries." 
 
 of receivers, see " Receivers," subheading " compensation." 
 
 COMPTROLLER'S APPROVAL TO REDUCTION OF STOCK 
 see " Stock and Capital Stock," subheading " reduction." 
 
 COMPULSORY DISSOLUTION 
 
 see " Dissolution." subheading " compulsory." 
 
 COXRENT 
 
 of stockholders to corporate mortgage, see "Corporate Bonds and Mort- 
 gages." 
 
INDEX 1361 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CONSIDERATION FOR ISSUE OF STOCK 
 
 see " Stock and Capital Stock," subheading " issue," further subheading 
 " for what." 
 
 CONSOLIDATION 
 
 name on, see " Name." 
 
 in general, 605. 
 
 only by legislative authority, 605. 
 
 distinguished from merger, 603. 
 
 courts cannot legalize unauthorized, 605. 
 
 after statutory revision, 605. 
 
 what corporations may consolidate, 606. 
 
 like new incorporation, 611. 
 
 stockjiolders 
 
 of old corporations continue under individual liabilities,. 610. 
 agreement giving stockholder stated interest on stock not entitle to issue 
 
 of stock so preferred, 72. 
 actions 
 
 continue, 610. 
 
 begun after consolidation, 612. 
 agreement for 
 
 not pursuant to statute, void, 605. 
 
 contents, 606. 
 
 both corporations enter into, 606. 
 
 signed by majority of each corporation's board, 606. 
 
 under seal, 606. 
 
 to" be carried out after consolidation effectuated, 609. 
 certificate of 
 
 fee for, 609'. 
 creditors 
 
 transfer of all property, not, as to, 605. 
 
 rights against old corporations accrue against new corporation, 610. 
 effect 
 
 new corporation enjoys powers of old, 609. 
 
 in general, 609. 
 
 new corporation acquires all rights, property, credits, etc., of old, 609. 
 610. 
 
 on actions, 610. 
 
 on stockholders' individual liabilities, 610. 
 
 new corporation acquires stock subscriptions of old, 610. 
 
 on creditors, 610. 
 
 real estate vests by consolidation in new corporation, 610. 
 
 on new corporation, in general, 610, 611. 
 
 when new company formed from* constituents of old, 611. 
 
 on- contracts pf old companies, 611. 
 
 on obligation of old companies on bonds secured by mortgage, 611. 
 
 on liability of old company for passed dividends to preferred stock- 
 holders, 612. 
 
 on actions begun after consolidation, 612. 
 
 on subscription to stock in old company, 612. 
 
 new corporation acquires choses in action of old, 610. 
 
1362 INDEX 
 
 References aie to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CXXNTSOLIDATION — continiied 
 
 filing and evidentiary value of agreement and proceedings 
 
 verified copies filed with secretary of state and county clerk, 600. 
 effect of filing is to make new corporation, 609 
 
 sworn and attested copies presumptive evidence of holding of stock- 
 holders' meetings, 609. 
 fee for filing, 609. 
 stockholders' consent 
 
 meeting necessary, 606. 
 notice of meeting to obtain, 606. 
 
 each corporation's stockholders separate consent needed, 607. 
 two-thirds of holdings must consent, 607. 
 not per se accomplish, 607. 
 stockliolders' dissent 
 
 governing statutes, 607. 
 application for appraisal of holdings 
 when made, 607. 
 
 not unless objected within 20 days of meeting, 607. 
 vacancy among appraisers, 607. 
 not if voted for consolidation, 607. 
 manner of payment to dissenters, 607. 
 where made, 607. 
 notice of to corporation, 607. 
 procedure of appraisers, 607. 
 appointment of appraisers, 607. 
 in general, 607. 
 
 not unless consolidation effectuated after, 607. 
 effect of payment of appraised value, 607, 608. 
 how good-will appraised, 608. 
 how taxicabs appraised, 608. 
 by corporation 
 
 when may seek, 608. 
 
 governing statutes, 608. 
 
 notice to stockholder of, 608. 
 
 effect of payment of appraised value, 608. 
 
 CONSTITUTIONAL LIMITATIONS ON INCORPORATIONS 
 securing dues from corporation, 15. 
 liable to suit and right to sue, 15. 
 
 general laws to govern corporations except when not feasible, 15. 
 private bill cannot relieve from taxation, 15. 
 on bridge-building corporations, no private bill for, 15. 
 private bill cannot grant corporation exclusive privilege, 15, 
 subject of legislative bill must be /in title, 15. 
 title of act permitting incorporation to state objects 
 
 examples when it does not, 16. 
 title of act must express object 
 
 may be waived, 16. 
 not prevent legislature from giving different corporations different powers 
 
 17. 
 repealing exemption in charter from taxation, 18. 
 legislature taking vote from stockholders, 18. 
 control of internal management by legislature, 18. 
 
INDEX 1363 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CONSTITUTIONAL LIMITATIONS ON INCOEPOEATIONS — continued 
 
 legislature cannot amend charter to take away money invested on faith 
 
 thereof, 18. 
 repeal of charter tax exemption, when property transferred on faith 
 
 thereof, 19. 
 
 ■ CONTEMPT 
 
 refusing to pay receiver pursuant to judgment, 512. 
 corporation fined for civil, 512. 
 
 CONTENTS OF CERTIFICATE OF INCORPORATION 
 see " Certificate of Incorporation." 
 
 CONTRACTS 
 
 limited by by-laws, see " By-Laws." 
 
 by promoters for corporation, see " Promoters.'' 
 
 for corporation, by directors, see " Directors," subheading " contracts for 
 
 corporation." 
 when between corporations having interlocking directors, 492." 
 presumed within corporate powers and valid, 502, 503. 
 power to make incidental, 502. 
 
 may bind corporation in same way as individual, 503. 
 assents not declare illegal if corporation accepts benefits, 503. 
 malum in se, void, 503. 
 of lease, enforceable, 503. 
 to buy back stock from employee, 503. 
 to become surety or guarantor, 503. 
 
 proof necessary to make out case of assumpsit against corporation, 504. 
 ancient, presumed duly executed, 504. 
 
 signed " Louis Rosenberg, Inc.," by corporation "L. Rosenberg, Incorpo- 
 rated," 504. 
 signed by officers before adoption of resolution authorizing them to sign, 504. 
 to pay all taxes except " present income tax," 504. 
 to pay attorney percentage of net earnings, 504. 
 
 intra vires will be set aside only for fraudulently oppressive conduct, 504. 
 law of state where made governs contract of employment, 504. 
 one usurping corporate powers cannot hold corporation on his contract with 
 
 it, 505. 
 rescission of, of purchase, 505. 
 liability of corporation for others 
 
 test is whether corporation or agent was given the credit, 522. 
 
 agent not bound if known contract for corporation's benefit, 522. 
 
 bound when appears from contract or contract plus conduct of parties 
 that credit given corporation, 522. 
 
 for guaranty by individual of corporate stock, 522. 
 
 signed in individual name followed by words " Mgr." of corporation, 523. 
 
 by traveling salesman to give commissions, 523. 
 
 by general manager of corporate manufacturer to buy automobile, 523. 
 
 for contract to employ individual, 523. 
 
 by claim agent to employ for life person injured by corporation, 523. 
 
 CONVERSION 
 
 of stock, see " Stock and Capital Stock," subheading " conversion." 
 of stock certificate 
 
 by corporation issuing it, 68. 
 
1364 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE BONDS AND ilORTGAGES 
 
 what ma-y be mortgaged, see subheading " issue and making," " on what 
 
 security." 
 mortgages 
 
 definition, 255. 
 bonds 
 
 definition, 255. 
 
 distinguished from stock, 255. 
 situs at corporation's place of business for injunction proceeding to prevent 
 
 interest payment, 256. 
 acknowledgment to, 256. 
 form of, in general, 256, 257. 
 sale by president good, 257. 
 effective on delivery, 268. 
 interest from due date to date of trial, 270. 
 actions, remedies and liabilities 
 in general, 280. 
 
 for fraud in sale, not dependent on payment or default of interest, 280. 
 of bondholders 
 
 to sue at law for recovery of interest under particular contract, 281. 
 to hold guarantor directly instead of through suit by trustee, 281. 
 to postpone time of payment of coupons by majority vote, 281. 
 recovery on bond, sold at less than par, 281. 
 complaint good though seeks recovery of principal and interest on 
 
 same guaranty, 281. 
 no action if issued without consideration, 281. 
 to recover interest under particular contract, 281. 
 in general, 281. 
 to hold new corporation under agreement to assume all debts of old 
 
 except mortgage bonds, 282. 
 complaint to recover interest under particular contract, 282. 
 as against secured lender to corporation while insolvent, 282. 
 under agreement for sale of bonds on reorganization on foreclosure, 
 
 282. 
 to judgment-creditor if received bonds without consideration, 282. 
 of bondholders and mortgagees 
 
 , to set aside action of committee of majority of bondholders, 286. 
 to sue direct instead of through trustee, 286. 
 to dividend from receiver, 286. 
 damages from sale of property bought in on foreclosure without his 
 
 assent, 286. 
 in general, 286. 
 
 to invoke provision, that judgment not more favorable than com- 
 plaint demands, 287. 
 to sue when trustee away or insane, 287. 
 to sue when trustee on demand refuses to sue, 287. 
 holder of temporary certificate till bond delivered nevertheless has 
 interest in mortgage, 287. 
 of bondholders and stockholders inicr sesB 
 
 no advantage inter sese by judgment against property held by 
 
 trustee, 283. 
 of stockholders under reorganization by bondholders permitting 
 former to participate only as latter deemed well, 283. 
 
INDEX 1365 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DOEPORATE BONDS A^fD MORTGAGE — continued 
 actions, remedies and liabilities — continued 
 
 of bondholders and stockholders inter sese — continued 
 
 bondholders cannot directly question each other's right and 
 
 title, 283. 
 minority bondholders bound by bond-clause subjecting minority to 
 
 majority, 283. 
 of stockholders not paying assessments made condition precedent to 
 
 participation in bondholders' reorganization, 284. 
 of stockholders to come in under reorganization after undue delay, 
 
 284. 
 majority bondholder and stockholder may insist on rights as bond- 
 holder, 284. 
 of creditors 
 
 not interested as parties in action to foreclose property of their 
 
 debtor, 286. 
 of judgment creditor who has levied after proceedings for corpora- 
 tion-mortgagor's dissolution, 286. 
 on foreclosure. 
 
 sale not set aside because reorganization agreement violated, 284. 
 
 amount of cash payable by buyer, 284. 
 
 order appointing receiver of all corporation's property instead of 
 
 mortgaged property only, 285. 
 confirmation of sale by receiver dependent on proof corporate 
 
 mortgage consented to by stockholders, 285. 
 corporation buying in subject to liens, 285. 
 fraudulent foreclosure by corporation acquiring stock of insolvent 
 
 mortgagor-corporation, 285. 
 to set sale aside because director was purchaser, 290. 
 review by court of appeals of order below denying application to 
 
 set sale aside, 290. 
 to set sale aside, 290. 
 of purchaser to form new corporation 
 
 certificate to be executed and filed, 288. 
 
 rights of new corporation, 288. 
 
 fee for filing reorganization certificate, 288. 
 
 filing of certificate of incorporation of new corporation gives it only 
 
 rights, etc., of old, not property acquired on sale by buyer, 289. 
 when corporations aiTected are under public service commission's 
 
 jurisdiction, 289. 
 new corporation takes subject to duties imposed on like corporations 
 
 when incorporated, 289. 
 what rights pass to corporate purchaser on reorganization, 289. 
 governing statute, 287. 
 optional with stockholders to come into reorganization plan within 
 
 statutory limitation, 290. 
 what creditor of old company can reach of assets of new company 
 
 on reorganization, 290. 
 of stockholders 
 
 cut off by foreclosure, 285. 
 
 to be made party to foreclosure, 286. 
 
1366 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE BONDS AiND MORTGAGES — continued 
 actions, remedies and liabilities — continued 
 practice 
 
 joinder of causes for illegality of exchange of bonds for new securi- 
 ties because ultra vires and because of interest of directors, 291. 
 all holders as parties to adjudge void corporate securities they 
 
 hold, 291. 
 joining in complaint to set aside mortgage cause to set aside col- 
 lusive judgment and cause to enforce directors' liability, 291. 
 joining with injunction against issue of bonds an award of dam- 
 ages for such issue, 291. 
 judgment in action to annul arrangement to exchange debenture 
 
 bonds for new securities, 291. 
 cause of action in equity for fraudulent inducement to take bonds 
 for surrender of stock, 291. 
 agreements for 
 construction 
 
 to deliver "when, as and if issued," 272. 
 to give, when effort to perform suflScient, 273. 
 chattel mortgages 
 
 amount of stock issued and owned determines if two-thirds of stock 
 
 have consented to, 271. 
 stockholders' consent to one assumed by corporation, 271. 
 stockholders' consent to renewal of unnecessary, 271. 
 power to borrow on, 271. 
 also of realty and recorded as such, not to be filed as chattel mortgage, 
 
 272. 
 as to after acquired chattels, 272. 
 
 failure to comply with statutory requirements, defense to corpora- 
 tion, 272. 
 construction 
 
 favorable to bondholder, 272. 
 " choses in action," 272. 
 
 of contract to deliver " when, as and if issued," 272. 
 when lien on corporate earnings, 273. 
 
 delivery of " any " at choice of mortgagor by trustee, 273. 
 conversion into stock under specific time limitation, 273. 
 sinking fund provision by stated percentages, 273, 274. 
 purchaser of "consolidated first mortgage bonds," rights of, 274. 
 principal due on default in interest in general, 275. 
 principal due on default in interest under particular wordings. 275. 
 principal due on default in interest, liability of guarantor, 275. 
 principal due on default in interest, right to foreclose, 275. 
 conversion into stock 
 
 governing statutes, 268. 
 increase of stock to permit, 269. 
 
 procedure permitting directors to allow bondholders to become stock- 
 holders, 269. 
 coupons 
 
 detachment not deprive of security of mortgage, 269. 
 holder of as security for advance to corporation, rights on foreclosure 
 270. ' 
 
INDEX 1367 
 
 OORPOEATE BONDS AND UORTGAGTSS — continued 
 coupons — contimued 
 
 transferable by delivery if payable to bearer, 270. 
 not negotiable if not so on face, 270. 
 recovery must be based on rights given by bonds, 270. 
 holder of cannot receover on guaranty annexed to bond, 270. 
 corporation may show holder acquired in bad faith, 270. 
 interest from due date to date of trial, 270. 
 
 actions on barred by same statute as bars action on bond, 271, 
 in whom title vests on judgment for conversion of, 271; 
 surrender of as condition to redemption of bond, 271. 
 issue and making 
 in general, 256. 
 at less than par, 261. 
 power of limitable by legislature, 256. 
 exacting subscription to stock from borrower as inyalidating for usury, 
 
 257. 
 when corporation occupies mortgaged premises under contract for pur- 
 chase thereof, 257. 
 burden on one alleging invalidity to prove same, 257. 
 good though providing for sale in state of realty outside, 257. 
 invalid if to trustee to pay creditors, leaving without security creditors 
 
 not coming in, 257. 
 corporation holding on to property for which issued cannot question 
 
 validity, 258. 
 not after transfer of business by lease, 259, 260. 
 under special statute for road-building company, 260. 
 no limit, 261. 
 for what 
 
 in general, 258. 
 
 governing statute, 258. 
 
 to secure payment of debts, 258. 
 
 to secure past debts and debts incurred simultaneously with, 258. 
 for what purposes 
 
 to secure payment of bonds- issued to creditors, 258. 
 
 for illegal and legal, too, not invalid wholly, 258. 
 
 to raise money to carry on business, 259. 
 
 not to permit bondholders to share with stockholders, 259. 
 on what security 
 
 on franchises when statute not permit, 260. 
 
 on future as well as present real estate, 260. 
 
 governing statute, 260. 
 
 on property projected and later changed, 260. 
 
 after-acquired personal property, 260. 
 
 on necessary additions made under contract with vendor title 
 remain in him, 260. 
 stockholders' consent 
 
 governing statutes, 261, 262. 
 
 two-thirds needed, 261 
 
 purchase-money mortgage, does not require, 262. 
 
 under contract made before May 1, 1891, not needed, 262. 
 
 how given, 262. 
 
 certificate of, filed and recorded, 262. 
 
1368 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OORPOfRiA.TE BONTXS AND MORTGAGES — continued 
 issue and making — continued 
 
 stockholders' consent — continued 
 
 recital in mortgage of, presumptive and conclusive evidence of, 
 
 262, 263. 
 certificate of oflScers of, conclusive in favor of honu fide bond- 
 holder, 263. 
 action to adjudge invalid because of insufficiency of, 263. 
 purpose of statute requiring, 263. 
 
 two-thirds of capital stock issued and owned only required, 264. 
 corporation cannot raise question of lack of, 264. 
 in general, 264. 
 
 lack of not avoid mortgage per se, 264. 
 judgment of foreclosure presupposes due consent, 264. 
 if defective instrument , may be connected by parol with subject 
 
 matter, 265. 
 subsequent consent good, 265. 
 
 to mortgage of realty and personalty not permit mortgage of fran- 
 chises, 26S. 
 in writing or vote at special meeting, 265. 
 no particular form prescribed, 264. 
 by corporation having two shareholders, 266. 
 by corporation owning own stock transferred to creditor as security 
 
 cannot avail, 266. 
 agreement by directors and trustees for, good as consent to, 266. 
 motion on minutes of stockholders' special meeting authorizin<» 
 
 borrowing, not sufficient, 266. 
 implied from twelve-year stockholding without question, 266. 
 to instruments assigning to mortgagee rents of realty of which 
 
 corporation has equity, 267, 268. 
 to what mortgages necessary 
 
 not to purchase-money mortgage, 267. 
 not to one under contract made before May 1, 1891, 267. 
 governing statutes, 267. 
 filing and recording 
 
 governing statute, 267. 
 
 in wrong office not invalidate as against later mortgagee with 
 
 notice, 267. 
 filed after mortgage good if given before, 267. 
 filed simultaneously with mortgage, 267. 
 mortgage trustees 
 in general, 276. 
 
 how compelled to redeem bonds, 276. 
 mortgage to instead of to creditors direct, 276. 
 coupons detached from bonds before certified by, not within mortgage 
 
 lien, 276. 
 appointment 
 
 in general, 277. 
 
 not interfered with when neither mortgagor, mortgagee or bond- 
 holders raises question, 277. 
 successor, 277. 
 
 not of one holding some of bonds, validity of which is questioned, 
 277. 
 
INDEX 1369 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE BOXDS AND MORTGAGES — continued 
 mortgage trustees — continued 
 liabilities 
 
 to itself take proceedings needed to protect bondholders, 280. 
 as guarantor for endorsement on bond as to its character, 280. 
 for discharging duty same as would person toward own mortgage, 
 
 280. 
 on sealed instrument, 280. 
 
 to inquire into application of proceeds of bonds duly delivered 
 by it, 280. 
 powers 
 
 one of two may foreclose and make latter defendant if director 
 
 in mortgagor, 278. 
 to bid beyond sum to which authorized on foreclosure to bid, 278. 
 to buy on foreclosure without majority bondholders' consent, 278. 
 to invoke court order as to rights of one cestui, 277, 278. 
 secretary of corporate mortgage trustee may give notice principal 
 
 due without resolution of board, 279. 
 to sell bid in property when only authorized to convey to new 
 
 company authorized to form, 278. 
 to foreclose negotiable bonds, 278. 
 secret profit, 279. 
 to organize larger company to take over property on foreclosure 
 
 then authorized, 279. 
 injunction against for delivering bonds to holders of temporary 
 
 receipts, 278. 
 to maintain foreclosure proceeding on ground voluntarily begun 
 
 when begun on allegation bondholders so requested, 279. 
 to pay out proceeds of bonds on order of committee or officer, 279'. 
 removal 
 
 for refusal to convey pursuant to foreclosure judgment, 277. 
 not affected by inability of court to appoint another, 277. 
 at suit of some bondholders for benefit of all, 277. 
 for consenting to subordination of lien, 277. 
 when negotiable 
 in general, 274. 
 
 when certain words of negotiability, 274, 275. 
 not when conditioned and subject to contingencies, 274, 
 notice of irregularity in 
 
 by bona fide buyer when countersignature forged, 268. 
 from presence of due and unpaid coupons, 268. 
 by bank loaning corporate officer on security of, 268. 
 registrars 
 
 duty of company registering registered bonds, 275, 276. 
 as party to action to set aside securities, 276. 
 
 liability for transfer to individual order of officer of charitable, regis- 
 tering company, 276. 
 sale under 
 
 not for entire consideration with condition mortgagor abate amount 
 by delivery of stock, 256. 
 subscriptions 
 
 under syndicate arrangement, cancellation for lack of consideration, 256. 
 under syndicate arrangement, managers may sue for, 256. 
 
1370 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPOR.\TE BONTJS AXD MORTGAGEES — continued 
 transfer 
 
 when registered in name of executor, on forged rubber-stamp endorse- 
 ment, 276. 
 
 CORPORATE CREDITORS 
 
 see " Dealings with Creditors and Debtors.'' 
 
 CORPORATE DEBTS 
 
 see " Dealings with Creditors and Debtors." 
 
 CORPORATE DEED 
 
 as evidence, see " Resolutions." 
 
 CORPORATION 
 existence 
 
 see " Corporate Existence." 
 
 not questionable by one signing book reciting in corporation and filing 
 of papers, 183, 184. 
 
 COHPOEATE EXISTENOE 
 
 not lost through mere inaction or transfer of property, 550. 
 
 not questionable by one dealing with corporation and acting as director 
 thereof, 184. 
 
 continues, though practically ceases, until adjudged dissolved, 550. 
 
 not terminable by transfer by directors of all assets to foreign corpora- 
 tion, 550. 
 
 to be stated in charter, 550. 
 
 perpetual when charter says nothing, 550. 
 
 methods of terminating, 550. 
 
 not terminable by delivery of deed to mortgagee of corporate property, 550, 
 551. 
 
 of constituent, of association held not legally a corporation, continues, 551. 
 
 not to be disputed by organizer, 551. 
 
 costs in suit to distribute assets of defunct corporation, 551. 
 
 ceases at end of charter time limit without court adjudication, 552, 553. 
 
 restraining people from acting as corporation in action by People, 553. 
 
 agreement on cessation of, by stockholders to continue business, 553. 
 
 proper parties to action by People to restrain persons from acting as cor- 
 poration, 553. 
 
 expiration of charter no ground for dissolution by attorney-general, 554. 
 
 expiration of charter life-limit, revival of action against corporation for 
 tort against directors, 554. 
 
 when lost per se and when only by action by attorney-general, 556, 557. 
 
 not destroyed by subsequent abuse of powers legal when corporation 
 created, 559. 
 
 action for forfeiture for non-user only by People through attorney-general, 
 559. 
 
 extension 
 
 by vote of stockholders 
 
 fee of secretary of state for filing certificate of, 552. 
 
INDEX ■ 1371 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE EXISTENCE — ctrntmuefl! 
 extension — continiied 
 
 by consent of stockholders 
 
 charter may require more than two-thirds, 552. 
 in writing or by vote at special meeting, 562. 
 notice of meeting, 552. 
 form and filing of certificate of, 552. 
 certificate of, to be indexed when filed, 552. 
 governing statute, 552 
 certificate of, where filed, 552. 
 owning two-thirds in amount, 552. 
 filing of accomplishes extension, 552. 
 charter may require consent of more than two-thirds of stockholdings 
 
 to, 552 
 by reincorporation under Business Corporations Law, 553. 
 proof of 
 
 see " Actions By and Against Corporations." 
 
 by proving formal charter and exercise of corporate powers, 551. 
 de facto corporation, 551. 
 termination by failure for two years to organize or undertake duties ' 
 governing statutes, 554. 
 statute self-executory, 554. 
 
 statute governs all corporations not therein excepted, 554. 
 statute governs corporation incorporated under special act, 554. 
 doing unauthorized business not safe from efl'ect of statute, 554, 555. 
 attorney-general and not stockholder should Sue for, 555. 
 under special statute, 555. 
 vacating, annulling and enjoining, see " Vacation Annulment and Injuction." 
 
 CORPORATE NAME 
 see "Name." 
 
 CORPORATE POWERS, DUTIES AND LIABILITIES 
 
 in actions by and against corporation, see " Actions By and Against Cor- 
 porations." 
 
 acquiring and disposing of .securities and paper of another corporation, 
 see " Acquiring and Disposing of Securities and Paper of Another Cor- 
 poration." 
 
 annual report, see " Annual Report." 
 
 combinations in restraint of trade, see " Combinations in Restraint of 
 Trade." 
 
 concerning commercial paper, see "Commercial Paper." 
 
 contempt, see "Contempt." 
 
 concerning contracts, see " Contracts." 
 
 liability for crimes by others, see " Crimes." 
 
 crimes, see " Crimes." 
 
 interlocking directorates 
 
 see " Interlocking Directorates." 
 
 internal management, see " Internal Management." 
 
 political contributions, see " Political Contributions." 
 
 practising law and medicine, see "Law" and "Medicine." 
 
 for torts, nuisance, libel, slander, trespass, false-representation, malicious 
 prosecution, see these distinct titles. 
 
1372 • INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE POWERS, DUTIES AND LIABILITIES — continued 
 charter may define, 447, 448. 
 proven like acts of individuals, 448. 
 ultra vires, see " Ultra Vires." 
 
 acts presupposijig other necessary acts presumptive proof of latter, 448. 
 under charter 
 rights 
 
 to land under tide-water, 450. 
 under statute 
 
 General and Stock Corporation Law's provisions yield to other statutes 
 
 in conflict therewith, 451. 
 General and Stock Corporation Law's provisions additional to other 
 
 statutes if not in conflict, 451. 
 General Corporation Law's provisions not impair existing rights and 
 
 liabilities, 451. 
 words in singular and words in plural, 451. 
 " a corporation " or " any corporation " means domestic corporation, 
 
 453. 
 intention of legislature difiicult to find, 451. 
 when general statute follows specific statute, 452. 
 when statute amends former one " so as to read as follows,'' 4.52. 
 " person " or " persons " include corporations, 452. 
 withholding creditors' remedy, 453. 
 
 of stock corporation organized under Business Law to be cemetery, 453. 
 prohibiting exercise of power not necessary to 'exercise of charter 
 powers, 453. 
 dealing with other corporations 
 
 one corporation furnishing all capital for another and holding and 
 
 selling all the latter's stock, 491. 
 guaranteeing payment of bonds of another corporation, 491. 
 for notes of another corporation given prior to new corporation's 
 
 organization, 491. 
 contract between corporation controlled by individuals and another 
 
 corporation owned by them, 491. 
 injunction against one corporation at suit of individual in interest 
 
 of rival corporation, 491. 
 co-operation to win the war, 491. 
 liabilities 
 
 for acts of oflicers in using corporation property for personal profit, see 
 
 see " Officers," subheading " personal profit." 
 for contracts by others, see " Contracts." 
 for pledge and conversion of its stock see '• Stock and Capital Stock," 
 
 subheadings " conversion " and " pledge." 
 for stock certificates wrongfully issued, see " Stock and Capital Stock," 
 
 subheading " certificates of." 
 torts, see " Torts." 
 to be divested of property, 450. 
 under charter 
 
 can object to if existing when charter accepted, 451. 
 to pay earnings of employce-judgment-debtor to judgment-creditor of 
 employee; 525. 
 liabilities for others' acts 
 in general, 519. 
 
INDEX 1373 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE POWERS, DUTIES AND LIABILITIES — contMiited 
 liabilities for others' acts — continued 
 
 as master or principal for agents acts, 519. 
 
 as master for agent's acts in business of agency, 519. 
 
 lessee-corporation not bound by monopolistic lease engineered by its 
 president, 520. 
 
 hotel corporation bound by acts of hotel clerk, 5.20. 
 
 when party held out as entitled to act for corporation, 520. 
 
 when agent deals with corporate property for own benefit, 520. 
 
 estoppel to question agent's or officer's acts on which another has pro- 
 ceeded, 520. 
 
 for independent act causing injury to employee, 521. 
 
 for broker's loss in guarantaeing indorsement on stock certificate under 
 assurance from corporation, 521. 
 
 whenever parties dealing with corporation have no knowledge of agent's 
 want of authority, 522. 
 
 when corporation retains benefit of in general, 524. 
 
 for employment of which officers know, 524. 
 
 for oral lease by manager, 524. 
 
 though unenforceable if had not received benefits, 524. 
 powers 
 
 see also " Ultra Vires." 
 
 to hold banks for honoring corporate paper signed by officer and used for 
 personal profit, see "Officers," subheading "personal profit." 
 
 to buy stock of another corporation, see "Stock and Capital Stock," sub- 
 heading "purchase and sale." 
 
 to buy own stock, see "Stock and Capital Stock," subheading "purchase 
 and sale." 
 
 cannot hold others' securities unless charter permits, 14. 
 
 may be dififerently granted by legislature to different corporations, 17. 
 
 to mortgage property to creditor stockholder, 183. 
 
 ultra vires cannot be questioned by assenting stockholder, 183, 184. 
 
 ultra vires stockholder accepting benefits cannot question as, 206. 
 
 ultra vires to stockholder's knowledge cannot be questioned by him, 183. 
 184. 
 
 to vote another corporation's stock, 178. 
 
 limited by law and charter, 447. 
 
 of domestic corporation determined by New York law, 44S. 
 
 enjoined only on notice, 448. 
 
 to run company store, 448. 
 
 in general, 448, 449. 
 
 necessary to business, implied, 449. 
 
 when stockholders consent and creditors not injured, 449. 
 
 to guarantee purchase under trust by which vendor sells trustee which 
 leases to corporation, 449. 
 
 to lease property to individual with resulting suspension of business, 
 449. 
 
 to agree to arbitrate, 449. 
 
 to file a lien, 452. 
 
 to recover damages suffered by injunction against officer, 525. 
 
 under charter 
 
 " governing statutes, 450. 
 when knowledge of imputed to persons dealing with, 450. 
 
1374 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATE POWERS, DUTIES AND LIABILITIES — cowtinued 
 powers — continued 
 
 under charter — continued 
 may be defined by, 450. 
 implied if needed to carry out objects, 450. 
 construction of, 450. 
 
 CORPORATE PURPOSES 
 see "Corporations." 
 
 CORPORATE RECORDS 
 
 as evidence, see "Resolutions." 
 
 see " Books and Records of Corporations." 
 
 CORPORATIONS 
 
 actions by, see " Actions by and against corporations." 
 
 actions by, when for corporation and when for stockholder, see " Stockhold- 
 ers," subheading "actions by." 
 de facto and de jure, see "De Facto and De Jure Corporations." 
 foreign, see "Foreign Corporation." 
 
 how far bound by promoter's agreement, see " Promoters." 
 duty to transfer stock, see "Stock and Capital Stock," subheading ■trans- 
 fer." 
 defined, 8. 
 
 defined in constitution, 15. 
 classes of, 9. 
 
 is "person" who may be administrator, 9. 
 municipal, stock or non-stock, 9. 
 stock corporations, 
 
 moneyed, transportation or business, 9. 
 
 defined, 9. 
 
 not merely because issues "certificates of stock," 9. 
 non-stock, 
 
 religious, membership or non-stock, 9. 
 nature and qualities of in general, 9. 
 distinguished from partnership, 9. 
 distinguished from partnership, 10. 
 domestic, see "Domestic Corporation." 
 distinct entity though all stock held by one person, 10. 
 private, when, 14. 
 
 organized under general or special law on same footing, 14. 
 mercantile agency may incorporate under Business Corporations Law, 15. 
 internal management 
 
 controllable by legislature when affects public, 18. 
 office 
 
 see " Office." 
 
 to be stated in certificate of incorporation, 20. 
 purposes 
 
 in certificate of incorporation, see " Certificate of Incorporation." 
 
 to be stated in certificate of incorporation, 19. 
 
 CORPORATORS 
 
 distinguished from promoter, 1. 
 
 liable for corporate acts from ;rant of charter, 6. 
 
INDEX 1375 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 CORPORATORS — continued 
 
 distinguished from stockholders, 6. 
 
 persons acting as corporation suable by attorney-general, 7. 
 
 corporation determines who may be, 7. 
 
 competent witness in action to which corporation party, 7. 
 
 rights, duties, liabilities and immunities, 10. 
 
 liable as partners if corporation not such, 10. 
 
 first meeting to organize and procedure thereat, 43. 
 
 CORRECTION OF CERTIFICATE OF INCORPORATION 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
 COUNTERSIGNATURE 
 definition, 114. 
 
 COUNTY CLERK 
 
 fees in various matters, see specific headings and " Organization Fees and 
 Taxes." 
 
 COUPONS 
 
 see " Corporate Bonds and Mortgages," subheading " coupons." 
 
 COURT SUPERVISION OVER CORPORATE AFFAIRS 
 see " Internal Management." 
 
 CREDITORS OF CORPORATIONS 
 
 dealings with receivers, see " Receivers," subheadings " creditors " and 
 
 " powers, duties and liabilities." 
 see " Dealings with Creditors and Debtors." 
 
 CRIMES 
 
 liability of corporation for others 
 
 for punitive damage for libel by employee, 523. 
 
 for false imprisonment on affidavit of superintendent, 523, 524. 
 
 for agent's attempt to bribe witnesses, 524. 
 corporation not liable for manslaughter, 512. 
 
 DEALINGS OF CORPORATIONS INTER SESE 
 
 see " Corporate Powers, Duties and Liabilities," subheading " dealing with 
 other corporations." 
 
 DEALINGS WITH CREDITORS AND DEBTORS 
 
 transfer of property while insolvent or atfter failure to pay obligations, see 
 
 " Transfer While Insolvent or Obligations Due." 
 governing statutes, 462. 
 payment by corporation creditor of judgment-debtor of third party to 
 
 sheriff, 463. 
 examination of corporation as creditor of judgment-debtor to third party, 
 
 463. 
 service of orders on corporate creditor of judgment-debtor of third party, 
 
 464. 
 
1376 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DEALINGS WITH CREDITORS AND DEBTORS — co«tm«ed 
 attachment 
 
 to plaintiff in action before justice of peace, 472. 
 where had, against, 472. 
 affidavit to obtain, against, 472, 473. 
 evidence sufficient to obtain, against, 473. 
 affidavit to obtain, by, 473. 
 borrowing money 
 
 statutory power of, 466. 
 
 giving paper as evidence of loan, 466, 467. 
 
 what is " obligation " which may give for loan, 467. 
 
 from stockholders, 467. 
 
 fixed annual compensation to stockholder lending, 467. 
 
 liability for loan when corporation has but two instead of three required 
 
 by law, 467. 
 whether security is for loan, 468. 
 creditors 
 
 trustee of in bankruptcy setting aside alienation of property made 
 
 when no creditors, 466. 
 enjoined from enforcing claims in connection with proceeding for volun- 
 tary dissolution, 466. 
 assigning and distributing for benefit of 
 not while insolvent to defraud, 470. 
 must be without preference, 470. 
 
 no receiver in sequestration while assignee acting, 470. 
 by treasurer, 470. 
 general assignment good, 470. 
 assignment in trust good, 470. 
 at common law, 470. 
 
 when express contract between classes of stockholders for prefer- 
 ences, 471. 
 agreement to distribute assets equitably no consideration for for- 
 bearance by creditor, 471. 
 debts 
 
 not to be incurred till capital of non-par stock corporation specified in 
 
 charter paid, 462. 
 incurring by non-par stock corporation when capital increased, 462. 
 not to be incurred till capital of par stock corporation specified in 
 
 charter with which to begin business paid, 462. 
 incurring on reorganization of par-stock into non-par stock corpora- 
 tion, 463. 
 liability for reorganization of par-stock into non-par stock corporation. 
 
 463. 
 corporation alone generally liable for, 465. 
 liability to judgment-creditor of corporation of one receiving property 
 
 of corporate judgment -debtor, 465. 
 accounting for transfer by officers of indebted corporation of its prop- 
 erty to another company, 465. 
 following property bought in by creditors on foreclosure, 466. 
 debtors 
 
 in general, 471. 
 
INDEX 1377 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DEALINGS WITH CREDITORS AND DEBTORS — continued 
 debtors — continued 
 loaning money 
 
 to settle private stock dealings, 471. 
 limited as incident to conduct of business, 471. 
 to stockholder from surplus, 471. 
 
 to individual endorsing corporation's invalid notes, 471. 
 to stockholder, in general, 471, 472. 
 to stockholder, liability of ofiScers and directors, 472. 
 usury 
 
 corporate obligations good though discounted at unlawful rate of interest, 
 468. 
 cannot avoid contract for, 468. 
 
 statutes of, repealed as to contracts by corporations, 468. 
 * constitutionality of statute prohibiting interposition of defense of by 
 
 corporation, 468. 
 corporation cannot interpose defense of, 468. 
 what law governs, 468. 
 statute permitting any compensation for advance payable on demand, 
 
 made on stock certificates, 469. 
 indorsers or guarantors cannot plead when corporate maker cannot, 469. 
 agreement to pay 6 pej cent to date principal due and 17 per cent there- 
 after, 469. 
 corporation cannot recover excess paid on transaction tainted by, 469. 
 collateral contracts of sureties, etc., for corporation within statute pro- 
 hibiting defense of, 469. 
 statute retroactive which prohibits defense of by corporation, 469. 
 corporation and administrator and trustee subject to statute for- 
 bidding defense of, 469. 
 wages of employees 
 
 what corporations must pay in cash, 464. 
 
 miist be paid weekly, 464. 
 
 who are employees whose wages must be paid weekly, 465. 
 
 DEBENTURE 
 
 definition, 255. 
 
 DEBTS OF CORPORATIONS 
 
 ' see " Dealings with Creditors and Debtors." 
 
 liability for stockholder before and after entry on corporate books of transfer 
 of stock by or to him, see " Stock and Capital Stock," subheading 
 " transfer." 
 liability of stockholder for, see " Stockholders," subheading " liabilities." 
 
 DECEDENT 
 
 transfer of stock of, see " Stock and Capital Stock," subheading " transfer." 
 
 DECREASE OF CAPITAL STOCK 
 
 see " Stock and Capital Stock," subheading " decrease." 
 
 DECREASE IN DIRECTORS 
 
 see " Directors," subheading " change in number." 
 B. C. N. Y.— 87 
 
1378 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DECREASE OF NUMBER OF SHARES OF STOCK 
 
 see " Stock and Capital Stock," subheading " decrease." 
 
 DEED 
 
 of corporation as evidence, see " Resolutions." 
 
 DE FACTO AND DE JURE CORPORATIONS 
 
 when corporation one and when the other, 12. 
 
 full compliance with law makes de jure, 12. 
 
 law permitting incorporation and attempt to incorporate make de facto cor- 
 poration, 12. 
 
 de facto corporation assumed if possible, 12. 
 
 only State may question legality of de facto corporation, 13. 
 
 examples of acts making corporation a de facto one, 12, 13. 
 
 proceedings regular on face and recognition by State make de jure corpora- 
 tion, 13. 
 
 mere execution of certificate not make de facto corporation, 13. 
 
 DEFAULT IN SUBSCRIPTION TO STOCK 
 
 see " Stock and Capital Stock," subheading " subscriptions." 
 
 DEFECTS IN INCORPORATION 
 
 see " De Facto and De Jure Corporations." 
 
 DEFINITIONS 
 
 " annual " tax; 711. 
 
 certificate of incorporation, see " Certificate of Incorporation." 
 
 charter, see " Certificate of Incorporation." 
 
 corporation, see " Corporation." 
 
 corporations, constitutional, 15. 
 
 kinds of corporations, see " Corporations." 
 
 dividends, 160. 
 
 foreign corporation, 821, 822. 
 
 franchise, 709. 
 
 " insolvent," 484. 
 
 promoter, 1. 
 
 receivers 
 
 temporary, 622. 
 
 permanent, 622. 
 sequestration, 565, 566. 
 special franchise, 767. 
 
 special franchise, see " Special Franchise." 
 stock and capital stock, 73. 
 syndicate, see " Corporations." 
 ultra vires, 453, 454. 
 
 DEMAND FOR INSPECTION OF CORPORATE BOOKS 
 see " Corporate Books." 
 
 DESTROYED CHARTER 
 
 see " Certificate of Incorporation." 
 
 DESTROYED STOCK CERTIFICATES 
 
 see " Stock and Capital Stock," subheading " certificates of." 
 
INDEX 1379 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIRECTORS 
 
 declaration and distribution of dividends by, see " Dividends," subheading 
 
 " declsCration and distribution." 
 executive committee, see " Executive Committee." 
 of foreign corporation, see " Foreign Corporation," subheading " officers, 
 
 directors and stockholders." 
 interlocking, see " Interlocking Directorates." 
 may open subscription books, see " Stock and Capital Stock," subheading 
 
 " subscriptions." 
 right to inspect corporate books, etc., see " Books and Records," " By-Laws " 
 
 and " Stock-Book." 
 number to be stated in certificate of incorporation, 20. 
 duties, cannot be relieved from by certificate of incorporation, 20. 
 certificate may permit non-stockholder to be, 24. 
 
 names, addresses and number to be in certificate of incorporation, 24. 
 at least one must be citizen and resident, 24. 
 certificate of incorporation may divide into classes, 24. 
 powers, may be limited by certificate of incorporation, 24. 
 controlled by by-laws, 44. 
 
 by-laws made by if not made by stockholders, 44. 
 notes of corporation payable to him, 334. 
 demand upon as basis of action against corporation, 336. 
 actions against, see "Liabilities Common to Directors and Officers," sub- 
 heading " actions against." 
 actions against 
 
 at suit of corporate creditor, when liable by law in any event to cred- 
 itor, 338. 
 in equity or at law 
 
 for letting go corporate money and appointing incompetent officer, 
 338. 
 by corporate creditor also suing corporation, 338, 339. 
 by creditor, when delivered process against corporation to attorney for 
 
 one suing it, 339. 
 for charter liability to creditors of corporation, 339. 
 by another officer, 340. • 
 
 assenting to indebtedness 
 
 beyond capital of corporation, 343. 
 
 on reorganization to permit of stock without par value, 344, 345. 
 subrogation when liable for, 345. 
 change of number of 
 
 by-laws cannot require over 50 per cent of stockholders' vote to accom- 
 plish, 47. 
 by-law cannot require greater vote then statute requires, 314. 
 stockholders cannot bind successors not to make, 183. 
 when charter requires unanimous consent, 314. 
 by by-law passed by executive committee, 314. 
 doing of necessary acts out of order not affect, 315. 
 not effective till filing of transcript of minutes of meeting, 315. 
 by majority stockholders' vote 
 in general, 313. 
 procedure, 313. 
 meeting necessary, 313. 
 
1380 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIEF.CTORS — continued 
 
 eliange of number of — continued 
 
 by unanimous stockholders' consent 
 in general, 313. 
 
 must have affidavit of custodian of stock book annexed, .'113. 
 consent to be filed, 313. 
 fee for filing certificate of, 314. 
 decrease 
 
 resolution must be followed by filing trBnscrij't, 3ir>. 
 on formation of one corporation from sevc-al not impair vested 
 rights of stockholder of constituent comjiany, 315. 
 increase 
 
 new directors elected by directors, 313. 
 when charter divides into classes, 314. 
 contracts for corporation 
 
 without stockholders' authorization, 334. 
 with another corporation in which also interested, 334. 
 contracts with corporation 
 generally void, 323. 
 good if all in interest consent, 323. 
 voidable, not void, 323, 324. 
 corporation may defeat if profited by though vote did not determine 
 
 contract, 324. 
 not specifically enforced, 324. 
 
 may include compensation for personal services in connection with, 324. 
 between two corporations having common directors, 324. 
 not per se void, 324. 
 
 when members of firm which is party of other part, 325. 
 payment for cancellation, on corporate consolidation, 325. 
 entered into before such, not void because individual interest may be 
 
 against corporate, 325. 
 of employment, terminable when, 325. 
 not set aside if no one else do work, 325. 
 in which secretly interested, accountable for, 325. 
 of lease from corporation, 326. . 
 indemnifying for guaranty in its behalf, 326. 
 de facto 
 
 when holds stock from predecessor of transfer, 296. 
 when elected by votes of unqualified directors, 296. 
 reason for de facto doctrine, 296. 
 de jure 
 
 when named in certificate of incorporation, 296. 
 dissolution of corporation 
 
 trustees on expiration of charter, 346. 
 are trustees for creditors and stockholders, 346. 
 
 liability when says will pay creditors if will not bid against for cor- 
 porate assets, 347. 
 liability to one to whom corporation contingently liable, 347. 
 protect themselves from unknown creditors by getting court order, 347. 
 trust liability limited to property in directors' hands, 347. 
 who are " creditors," for whom trustees, 347. 
 
INDEX 1381 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIRECTORS — continued 
 
 dissolution of corporation — continued 
 
 not liable to attorney dissolving because voted for, 348. 
 by expiration of charter, transferee of deceased director not liable, 348. 
 trustees of real as well as personal property, 348. 
 dividends 
 
 liability for unauthorized, 340. 
 
 upon corporate dissolution, 340. 
 
 accepting corporation's stock in settlement of debt to corporation, 340. 
 
 misdemeanor to make except from surplus profits, 340. 
 
 deemed to have knowledge of corporate affairs sufficient to determine 
 
 if unauthorized, 340. 
 only from surplus profits, 340. 
 
 deemed to have concurred in unauthorized unless dissents, 340, 341. 
 liability for unauthorized confined to actual loss suffered by corporation 
 
 or creditors, 341. 
 liability for unauthorized not extend to costs of judgment by corporate 
 
 creditor, 341. 
 action against for unauthorized survives death, 342. 
 constrviction of statute penalizing for unauthorized, 342. 
 dividing, withdrawing, paying or reducing capital, 342. 
 
 deemed to have knowledge of corporate affairs sufficient to judge of, 342. 
 misdemeanor to vote for, 342. 
 
 accepting corporate stock in payment of bad debt, 342. 
 on dissolution permissible, 342. 
 liability unless dissent, 342. 
 governing statute, 342. 
 
 deemed to have concurred in unless dissents, 342. 
 election 
 
 governing statutes, 297. 
 
 by corporate stockholder,. 301, 302. 
 
 by plurality of votes, 301. 
 
 by plurality of votes, 298. 
 
 when charter requires majority vote of board, 297. 
 
 charter may permit cumulative voting, 301. 
 
 of increased number, by existing directors, 300. 
 
 acceptance of presumed, 305. 
 
 acceptance of necessary, 304. 
 
 avoided on ground of surprise and fraud upon part of electors, 297. 
 
 restraining corporation from permitting votes, stockholders must be 
 
 parties, 298. 
 not held on day designated by law or by-laws, directors call meeting for, 
 
 298. 
 when number increased under law, 30O. 
 
 establishment, statute regulating may be retroactive, 297, 298. 
 de facto when elected by unqualified directors, 296. 
 one present at first election of directors and then elected estopped to 
 
 raise point of lack of notice, 297. 
 hy-laws prescribe manner of, 300. 
 
 by-laws may require publication and personal delivery or mailing. 298. 
 by-law adopted by directors governing, to be published, 298. 
 by-law adopted by directors regulating, must be published, 44. 
 
1382 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page .1. 
 
 DIRECTORS — continued 
 election — continued 
 
 held though no by-law regulating, 301. 
 
 by-law regulating invalid if adopted by directors or oflBcers unless pub- 
 lished, 297. 
 inspectors of 
 
 oath, statute requiring filing, merely directory, 301. 
 
 oath to be taken and filed, 301. 
 
 appointed as prescribed by by-laws, 297. 
 
 appointment, 300. 
 
 keep open as long as necessary, 301. 
 
 for first election, appointed not elected, 30O. 
 when but one inspector and statute requires more, 297. 
 meeting for 
 
 called by directors if not held on day designated, 298. 
 
 called by member if meeting not called by directors or, if called, 
 fails to elect, when election not held on day set, 298. 
 notice 
 
 either published or delivered personally or mailed, 298. 
 
 if published, once for two weeks, 298. 
 
 if personally delivered, from 10 to 20 days before, 298. 
 
 if mailed, from 10 to 20 days before, to address on books, 298. 
 
 any stockholder may have new election, if required not given, 299. 
 special meeting for 
 
 how called, 298. 
 
 who may call, 298. 
 
 notice of, 298, 299. 
 
 in general, 298, 299. 
 
 where held, 299. 
 
 members attending are quorum, 299. 
 
 may elect inspectors and directors, 299. 
 
 may adopt by-laws providing for future meetings and election of 
 directors, 299. 
 time and pla^e 
 
 statute requiring annual means on recurrence each year of day on 
 which first election held, 299, 300. 
 
 statute requiring annual operative, though no by-law regulates 
 manner of holding election, 300. 
 
 statutory provisions directory merely, 299. 
 
 not held within statutory, not void, 299. 
 
 fixed by by-laws, 298. 
 who may be elected 
 
 one must be citizen and resident, 303'. 
 
 only stockholders unless charter or stockholders' by-law provides 
 otherwise, 303. 
 
 officers of corporation become stockholder in corporation for which 
 directors to be elected, 303. 
 
 for first year need not be stockholders, 303. 
 
 holder of bare legal title to stock, 303. 
 
 one ceasing to be stockholder when statute requires be such, 304. 
 
 transferee in good faith of stock, 304. 
 
 member of reorganization committee holding stock in trust, .304. 
 of unqualified person voidable not void, 297. 
 
INDEX 1383 
 
 References are to pages — See also Cyclopedic Analysis preceding page I. 
 
 DIRECTORS — continued 
 election — continued 
 who may vote 
 
 charter may permit cumulative voting, 301. 
 corporation holding stock, 301, 302. 
 at special meeting only stockholders taking oath, 302. 
 only stockholders of record, 302. 
 
 at special election only those stockholders whose regular election 
 should have been held, 302. 
 interlocking 
 
 agreement between two corporations voidable by majority stockholders, 
 
 333. 
 to cancel debt owing between corporations, 333. 
 liabilities 
 
 for assenting to indebtedness beyond capital, see subheading "assenting 
 
 to indebtedness," supra. 
 with regard to making certificates, reports, statements and notices 
 
 for falsity of or omission in statement of corporate affairs, see 
 
 "Liabilities Common to Directors, Officers and Agents." 
 for failure, or false certificate, of payment of capital stock, see 
 
 "Liabilities Common to Directors and Officers." 
 to one becoming stockholder or creditor on faith of false repreisenta- 
 
 tion in, see "Liabilities Common to Directors and Officers." 
 for misconduct and mismanagement, see "Misconduct and Misman- 
 agement." 
 for refusal or neglect to make report or statement, see "Liabilities 
 Common to Directors, Officers and Agents." 
 with regard to corporate books 
 
 for omission of entry or false entry, see "Liabilities Common to Di- 
 rectors, Officers and Agents." 
 for refusal or neglect to make entries in, see "Liabilities Common 
 
 to Directors, Officers and Agents," 
 for refusal to allow inspection of, see "Liabilities Common to Direc- 
 tors, Officers and Agents." 
 on corporate dissolution, see subheading "dissolution of corporation," 
 
 supra. 
 for dividing, withdrawing, paying or reducing capital, see subheading 
 
 "dividing, withdrawing, paying or reducing capital," infra. 
 for unauthorized dividends, see subheading "dividends," infra. 
 for increasing capital stock beyond amount authorized, see "Liabilities 
 
 Common to Directors and Officers." 
 for fraudulent issue of stocks and bonds, see "Liabilities Common to 
 
 Directors, Officers and Agents." 
 for loans to stockholders, see "Liabilities Common to Directors and 
 
 Officers." 
 for omitting to disclose. service on himself of injunction against corpora- 
 tion, see "Liabilities Common to Directors, Officers and Agents." ' 
 permitting payment for stock by unauthorized means, see subheading 
 
 "permitting payment for stock by paper," infra. 
 for sale of stock which he does not own, see " Liabilities Common to Di- 
 rectors and Officers." 
 for political contributions, see "Liabilities Common to Directors, Of- 
 ficers and Agents." 
 
1384 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIRECTORS — continued 
 liabilities — continued 
 
 for statements in prospectus, see '•'Stock and Capital Stock," subheading 
 
 "purchase and sale." 
 for transfer to oflSeers, directors or stockholders of property of corpora- 
 tion not paying due obligations, see "Liabilities Common to Directors 
 and Officers." 
 deemed to have knowledge of corporate acts for fraudulent organization, 
 or issue of securities, unlawfully acting for foreign corporation, mis- 
 conduct, unlawful name, 318. 
 for failure to dissent in writing on minutes from unlawful corporate 
 
 acts, 318. 
 for wasting assets, resolution authorizing action, 320. 
 for selling all corporate assets to another corporation without notice 
 
 to their corporation's creditors, 334. 
 for own acts or omissions only, 336. 
 not for errors of judgment, 336. 
 not per se chargeable with knowledge of business transactions and book 
 
 entries, 336. 
 determined by law of home state of corporation, 336. 
 determined by circumstances as existed when acts done, 336. 
 when irregularly elected, if accept office, 337. 
 for ads of president to whom released corporate control, 337. 
 for permitting continued course of conduct by officers, 337. 
 for preventing consummation of contract by corporation, 337. 
 personally, for abuse of trust or misapplication of funds, 337. 
 as trustees for creditors and stockholders, 337. 
 for voting salary to president, 338. 
 for depriving individual of subsidy by fraudulent vote in conspiracy, 
 
 338. 
 for buying with corporate funds valueless property from majority stock- 
 holders, 338. 
 meetings 
 
 held anywhere unless charter or by-laws limits to New York, 315. 
 within .state only if certificate of incorporation so says, 20. 
 need not proceed according to any particular form, ,316. 
 first, procedure at, 43. 
 cannot vote by proxy, 316. 
 
 not necessary to validate certificate of number required by statute, 318. 
 quorum regulated liy by-laws, 44. 
 not less than one-third, 44. 
 fixed by by-laws, 315. 
 not less than one-third of board, 315. 
 is majority unless otherwise provided, 316. 
 some of whom disqualified, bind corporation as to third persons, 
 
 316, 317. 
 majority of may bind board, 316. 
 b.y-law may require unanimity. 316. 
 by-laws concerning quorum, particular case, 317. 
 notice 
 
 of special meetings, 316. 
 unnecessary if all present. 316. 
 need not specify object, 317. 
 
INDEX 1^85 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIRECTORS — continued 
 meetings — continiied 
 
 special, when enjoined because not called according to by-laws, 317. 
 special may be held, though by-laws do not provide for, 317. 
 permitting payment for stock by unauthorized means misdemeanor, 345, 346. 
 
 deemed to have consented unless dissented, 346. 
 
 deemed to know corporate affairs to determine, if statute violated, 346. 
 
 by corporation except from surplus profits, 346. 
 
 misdemeanor to permit withdrawal of payment for stock, 346. 
 
 by discounting or receiving note or evidence of debt in payment, 346. 
 personal profits and advantage 
 
 by contract with corporation, see subheading "contracts with corpora- 
 tion," swpra. 
 
 in general, 3ai, 
 
 bonus of cash and stock for services in securing loan enjoined by stock- 
 holders, 168. 
 
 may take security for debt from corporation, 321. 
 
 not permitted in trust relationship, 321. 
 
 makes transaction voidable, 321. 
 
 avoids transaction whether fraudulent or not, 321. 
 
 permissible if all facts disclosed, 322. 
 
 not prohibit purchase of going corporation's obligations, 322. 
 
 transaction with corporation, in general, 322, 323. 
 
 engaging in business like corporation's, 323. 
 
 division inter sese of corporation's capital, 323. 
 
 through securing job for contractor with corporation, 324. 
 
 by judgment by confession allowed by board, 326. 
 
 obtaining security for debt owing director, who is also debtor of corpo- 
 ration, 326. 
 
 by attachment, 326. 
 
 through control of corporation by proxy, 326. 
 
 loaning to corporation on security to tide over difficulties, 387. 
 
 ordering bill to director paid for more than corporation owes, 327. 
 
 buying treasury stock they issue on secret knowledge of contract, 327. 
 
 stock voted controlling stockholder-director at meeting, notice of which 
 said nothing of proposed vote, 327. 
 
 purchase of corporate property on foreclosure, 327. 
 
 buying in stock, after resigning, held as trustee for creditors of owner 
 thereof, 327. 
 powers 
 
 to make contracts for corporation, see subheading supra, "contracts for 
 corporation." 
 
 to buy his corporation's stock, see "Stock and Capital Stock," subhead- 
 ing "purchase and sale." 
 
 cannot be deprived of by promoter's agreement, 1. 
 
 in general, 329. 
 
 charter may limit, 329. 
 
 stockholders' by-laws limit, 329. 
 
 may adopt new seal when former officer withholds old one, 48. 
 
 may adopt new stock-book, 49. 
 
 to make by-laws, 329. 
 
1386 INDEX 
 
 Seferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIKECTORS — continued 
 powers — continued 
 
 may make by-laws subject to those made by stockholders, 44. 
 
 when hold over after first year of corporate existence, refusing to adopt 
 
 by-laws needed for annual stockholders' meeting to elect directors, 330. 
 to act by majority of quorum, 330. 
 
 to co-operate with other persons and corporations to win world war, 330. 
 to transact business at meeting without notice when all present, 330. 
 on dissolution of corporation, 330. 
 must be exercised as such — ^not as stockholders, 331. 
 as to corporation and third person, distinguished, 331. 
 control business of corporation irrespective of majority stockholders' 
 
 wishes, 331, 332. 
 to bind corporation, in general, 332. 
 execution by corporation of judgment-note, 332. 
 to settle stock ownership dispute, 333. 
 to make general assignment, 333. 
 
 cannot be controlled by agreement between officers for salaries, 333. 
 to change corporate business against minority stockholders' protest, 333. 
 to make and sell corporate notes on market, 333, 334. 
 to transfer surrendered stock, 334. 
 to retire preferred stock, 334. 
 
 to give attorney retained to sue officer lien for services, 335. 
 to lease real estate when corporation formed to acquire real estate, 335. 
 to empower president to buy property payable by corporation's obliga- 
 tion, 335. 
 to reimbursement for defense of attack on corporation, 335. 
 resignation, see "Tenure of OflBce." 
 salaries 
 
 no presumption for, 319. 
 
 increase by own vote for services at already agreed compensation, 319. 
 
 not entitled to as such, 319. 
 
 entitled to, for work not as director, 319. 
 
 agreement for must exist, 319. 
 
 to themselves "as officers, voidable, 319, 320. 
 
 by-law permitting directors to fix officers' salaries not prevent court 
 
 inquiry, 320. 
 to themselves, how corrected, 320. 
 not for services of which no proof, by own vote and accepted by own 
 
 vote, 320. 
 to director as president by vote at meeting at which present, voidable, 
 
 320. 
 by director's own vote, not bind stockholders, 320. 
 accountable for, in excess of agreed amount, at instance of stockholder, 
 
 320. 
 surplus profits as salaries when own all stock, 341. 
 using all surplus profits for, when own all stock, 341. 
 tenure of office 
 
 division into classes by charter, 306. 
 expulsion by co-directors, 306. 
 holding over 
 
 if not elected on day set, incumbents continue; 305. 
 are de jure directors by statute, 305. 
 
INDEX 1387 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 )IRECTORS — continued 
 
 tenure of ofBce — continued 
 holding over — contimied 
 
 through failure to re-elect, 305. 
 
 refusal to adopt by-laws enabling stockholders to elect directors, 
 
 acts of void, 44. 
 obligation imposed by directors on corporation void if directors re- 
 fused to adopt by-laws enabling stockholders to elect directors, 44. 
 termination 
 
 by resignation or selling stock, 306. 
 by resignation 
 
 no notice save to co-directors needed, 306. 
 no acceptance on entry on minutes necessary, 306. 
 by selling stock after serving year, 306. 
 
 by resignation, ineffective if no successor chosen and by-laws pro- 
 vide continue till successor elected, 306. 
 trying out and proving title 
 
 when quo warranto and when mandamus the proper remedy, 311, 
 
 312. 
 quo warranto when person already in office, not mandamus, 312. 
 receipt , of illegal votes at election not make one receiving also 
 
 majority of legal votes any the less a director, 312. 
 proof by answer not denying, etc., 312. 
 proof of naming in certiiieate of incorporation over a year ago not 
 
 proof that director, 312. 
 proof of election not proof that director, 312. 
 proof of who elected by books and testimony of witnesses present, 
 
 312. 
 action by Attorney-General for usurping, intruding in or unlawfully 
 holding oflSce 
 
 officer as director, 311. 
 code provisions applicable to,. 311. 
 
 arrest of defendant for receiving emoluments of office, 311. 
 complaint may give name of person righ,tfully entitled, 311. 
 in general, 311. 
 annulment by Attorney-General, 307. 
 by action to suspend or remove 
 in general, 309. 
 grounds, 309. 
 order for jury trial, 30&. 
 
 to try rights of two bodies claiming each to be directors, 320'. 
 removal only by final judgment, 310. 
 only on notice to person affected, 310. 
 not impair visitorial power over corporation in corporate body 
 
 or public officer, 310. 
 by Attorney-General, 310. 
 de facto doctrine not apply, 311. 
 . injunction against acting as directors vacated, 310. 
 
 by summary court inquiry 
 governing statute, 307. 
 general rule of practice governing, 307. 
 order to show cause on petition for, 307. 
 
1388 INDEX 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DIRECTORS — continued 
 
 tenure of office — continued 
 
 trying out and proving title — continued 
 by summary court inquiry — continued 
 application to court, 307. 
 notice of hearing, 307. 
 establisliment of election or ordering new one, 307. 
 statute applies to elections by directors to fill vacancies, not ttt 
 elections for full terms by stockholders, 307. 
 to whom notice to be given, 308. 
 petitioner need not be injured if ground for application is that 
 
 corporation could legally have no director, 308. 
 petitioner or assignor must have been stockholder at time of 
 
 election, 308. 
 petitioner must be person justly entitled to complain, 308. 
 petition not invalidated by joining party without authority, 
 
 308. 
 summary court inquiry under statute not to be used to deter- 
 mine anything but title, 308 
 statute for not to be used to compel inspectors of election to 
 
 count votes, 308. 
 order appointing referee not appealable, 309. 
 determination of court not to extend to settle dispute as to 
 
 payment of subscription, 309. 
 determination by court, hinging on ownership of stock, not 
 
 conclusive in another action involving title to stock, 309. 
 not by court of equity, 309. 
 DISSOLUTION 
 
 directors on, see "Directors," subheading "dissolution of corporation.'' 
 by court proceedings begun by Attorney -General, see subheading infra, " com- 
 pulsory." 
 by court proceedings begun by- some one in corporation, see subheading infra, 
 
 " voluntary — by court proceedings." 
 name on, see "Name." 
 
 complaint sufficient to show public interest involved, 559. 
 State alone can accomplish for defective organization or abuse of powers 
 
 or defective law permitting incorporation, 559. 
 distinguished from sequestration, 565. 
 statute must be followed, 570. 
 
 proceeding to change from par to non-par stock not work dissolution, 571. 
 not by rediicing capital and turning over assets to new corporation because 
 
 necessary two-thirds consent unobtainable, 571. 
 equity will enjoin many suits to hold stockholders after dissolution and 
 
 itself pass on all claims, 571. 
 compulsory 
 
 by Attorney-General not precluded by statute permitting voluntary, 571-. 
 
 prevented when voluntary completed, 571. 
 
 governing statutes, 585. 
 
 Code provisions for sale of lands free from lien inapplicable, 586. 
 
 to supersede voluntary prior fraudulent dissolution, 587. 
 
 service of summons, 589. 
 
 service of all papers on Attorney-General, 589. 
 
INDEX 1389 
 
 Seferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DISSOLUTION — continued 
 compulsory — continued 
 
 testimony of stockholder, officer, alienee or agent not excused because 
 
 incriminating, 589. 
 defenses 
 
 purpose to put corporation out of business in which another of 
 same name engaged, 589. 
 creditor-plaintiflf may also sue directors and officers on individual lia- 
 bility, 590, 591. 
 individual liability of directors and officers to creditors, 591. 
 sale to effectuate distribution among stockholders, 593. 
 creditors 
 
 injunction against proceedings by, 590. 
 order to present and prove claims, 591. 
 rights when order made to present claims not heeded, 591. 
 how distribution among made, 592. 
 contingent, how they share, 59'2. 
 
 cannot prove both obligations and coupons as security therefor, 592. 
 becoming such after cause for forfeiture, 592. 
 who are creditors " before the court," 592. 
 grounds 
 
 governing statutes, 585. 
 
 insolvency for one year, 585. 
 
 suspension for one year of business, 585, 586. 
 
 neglect or refusal for one year to discharge obligations, 585, 586. 
 
 suspension of business 
 
 cumulative to common law grounds, 586. 
 must be for time specified, 586. 
 Attorney-General's action based on, 586. 
 business must have been once exercised, 586. 
 failure to do business for year 
 
 settling dispute as to patent with another corporation for some 
 of its stock, 587. 
 admission of non-conduct of business for over year, 587. 
 neglect or refusal to discharge obligations 
 bankruptcy discharge no defense, 587. 
 abuse of franchise, 588. 
 injunction 
 
 against creditors, 590. 
 
 against directors and officers from collecting, paying out or exer- 
 cising corporate powers, 590. 
 granted only by court, 590. 
 governed by Code, 590. 
 order or judgment 
 
 not unless served on Attorney-General, 589, 590. 
 for payment by receiver not good unless served on Attorney-Gen- 
 eral, 590. 
 to creditors to present claims, 591. 
 final must provide for fair distribution, 592. 
 when impose liability on stockholders individually, 593. 
 final, entry, 593. 
 final, filing, 593. 
 
1390 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DISSOLUTION — continued 
 
 order or judgment — ■ continued 
 
 defective, against stockholders, binds them, when, 593. 
 may not take away funds deposited by corporation with trustee 
 for specific purpose, 593. 
 leave of court 
 
 not necessary when Attorney-General brings, 585. 
 necessary when stockholder or creditor brings, 585. 
 necessary before creditor or stockholder can bring, 587. 
 receivers, see " Receivers." 
 
 pendente Ute in stockholder's suit, 588, 589. 
 
 no payment by until after service on Attorney-General of order, 
 590. 
 where brought 
 
 by Attorney-General, 589. 
 who may bring 
 
 Attorney-General, 585. 
 stockholder or creditor 
 
 when Attorney-General refuses, 585. 
 in general, 685. 
 leave of court had, 587. 
 
 failure for sixty days of Attorney-General to sue, 587. 
 submission of written statement to Attorney-G«neral, 587. 
 sufficient complaint, 588. 
 creditor at large, 589. 
 
 after refusal of Attorney-General on request, 587. 
 conditions precedent, 587. 
 Attorney-General unconditionally, 587. 
 Attorney-General, creditor or stockholder, 587. 
 when Attorney-General must bring, 588. 
 creditors 
 
 how lien of on assets maintained, 596. 
 assets trust fund for unmatured and accrued debts, 596. 
 distribution 
 
 fairly among all creditors, 570. 
 effect 
 
 of resolution by board to dissolve, 594. 
 of petition for, 594. 
 setting aside of order for, 594. 
 resuscitation by court order, 594. 
 real estate held by directors as trustees, 594. 
 
 of failure by appellants from order for dissolution to object to pro- 
 ceeding, 595. 
 on right of stockholders to examine books, 595. 
 on later entry of judgment against corporation, 597. 
 on liability to file annual report, 599. 
 
 on liabilities of stockholders and directors incurred previous to dissolu- 
 tion, 599. 
 on actions 
 
 for negligence injury, 595. 
 
 for death from negligence, 595. 
 
INDEX 1391 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DISSOLUTION — continued 
 effect — continued 
 
 on actions — continued 
 
 in general, on receiver, 595. 
 
 on suit by cerditor against corporation in corporate name, 595. 
 until judgment, 595, 596. 
 for admitted debt or contested claim, 596. 
 on contracts 
 
 permitting creditors to sell collateral, 598. 
 
 to guarantee dividends of corporation obtaining guarantor's disso- 
 lution, 598. 
 to guarantee dissolved corporation's dividends, 598. 
 creditors 
 
 lien on assets, 596. 
 on judgments 
 
 reduced after suit for dissolution begun, 597. 
 foreign, obtained after temporary receiver appointed here, 597. 
 gi'ounds 
 
 at common law, 570. 
 dependent on statute, 570. 
 dissention among stockholders, 570. 
 judgment or order 
 
 cannot affect a dissolved corporation, 597. 
 effect on right to of lienor to proceed to execution, 597. 
 voluntary 
 
 sale of corporate property to another corporation for its stocks and 
 bonds, see " Sale of Corporate Franchises and Property," subhead- 
 ing " on dissolution by directors." 
 when completed prevents compulsory, 571. 
 
 statute permitting not prevent compulsory by Attorney-General, 571. 
 by incorporators before payment of capital 
 governing statute, 574. 
 by filing certificate with charter, 574. 
 contents of certificate for, 574. 
 proof of facts set forth in certificate, 574. 
 by court proceedings 
 
 receivers, see " Receivers." 
 governing statutes, 577. 
 
 interest of minority stockholders considered, 583. 
 copy of all papers served on Attorney-General, 579. 
 service of papers on Attorney-General jurisdictional, 580. 
 Attorney-General may waive service, 580. 
 Attorney-General may accept short notice, 580. 
 Attorney-General may not admit service after entry, 580. 
 orders and judgment must conform to copies served on Attorney- 
 General, 580. 
 stockholders not served with papers to vacate order of dissolution 
 
 of Attorney-General served, 581. 
 payment by receiver only after service of order on Attorney-Gen- 
 eral, 580. 
 transfer or judgment after petition void, 585. 
 court cannot adjudge liability for maladministration, 584. 
 court cannot restrain foreclosure of corporate mortgage, 584. 
 
1392 INDEX 
 
 References are to pages — See also Cyclopedic Analysis pteceding page 1. 
 
 DISSOLUTION — continued 
 voluntary — continued 
 
 by court proceedings — continued 
 grounds 
 
 in general, 577. 
 
 demand by majority stockholders, 577. 
 
 deadlock of directors, 577. 
 
 deadlock of stockholders, 577. 
 
 even division of stockholders, 577. 
 
 benefit to stockholders, 577. 
 
 insufficient property to pay demands or afford security. 577. 
 
 opinion of half stockholders that present covirse of oi induct 
 will ruin company, 578. 
 
 by majority directors denied if creditors oppose and show 
 cause of action against officers. 58.'5. 
 
 opinion of three of seven directors wlien stockholders' obviat- 
 ing difficulties, 583, 584. 
 petition 
 
 court's discretion to entertain, 581. 
 
 where presented, .')H1. 
 
 contents, 577. 
 
 by whom. 577. 
 
 prayer, 577. 
 
 where presented, 577. 
 
 majority stockholders may require, .")77. 
 
 majority of reduced directors may sign. .'i78. 
 
 50 per cent of stockholders may present, 578. 
 
 portion of stockholders may not make, 578. 
 
 de facto directors may sign, 578. 
 
 accompanied by scliedule and aflBdavit, 577, 578. 
 affidavit annexed to petition and schedule 
 
 contents and form, 579. 
 
 who must make, 579. 
 
 governing statutes, 579. 
 schedule annexed to petition 
 
 governing statutes, •')78. 
 
 contents, 578, 579. 
 
 order amending, 579. 
 order to show cause why dissolution not be had 
 
 when granted, 581. 
 
 publication of, 581. 
 
 on whom served, 581. 
 
 how served, 581. 
 
 entry, and filing of papers, 581. 
 
 based on petition instead of affidavit, good, 581, 582. 
 
 sufficiency of, 582. 
 injunction against creditors 
 
 governing statute. 582. 
 
 when granted, 582. 
 
 effect, 582. 
 referee 
 
 governing statute. 582. 
 
 when appointed, :"82. 
 
INDEX 1393 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DISSOLUTION' — continued 
 Tohmtary — continued 
 
 by court proceedings — continued 
 referee — continued 
 
 not of course on consent unless Attorney-General plaintiff, 583. 
 
 in court's discretion, 583. 
 
 to hear conflicting claims of stockholders, 584. 
 decision or report 
 
 governing statute, 582. 
 
 in writing, 582. 
 
 contents and form, 582. , 
 
 statutory statement required, 584, 585. 
 hearing 
 
 petition and schedules may be used, 582. 
 
 by court or referee, 582. 
 
 where and when, 582. 
 
 governing statute, 582. 
 motion for final order 
 
 when no reference, 583. 
 
 when reference had, 583. 
 
 service, 583. 
 final order 
 
 application to be by petitioner, 584. 
 
 when petitioner may be directed to move for, 584. 
 
 when all parties asked for, 584. 
 
 void if- referee not give statutory statement, 584. 
 by unanimous consent 
 
 governing statute, 574. 
 
 written consent of stockholders, 574. 
 
 complete on filing of Secretary of State's certificate of dissolution, 
 
 575, 576. 
 corporate existence continues until fviUy wound up, 576. 
 liability of directors to stockholders, 577. 
 procedure, 574. 
 consent 
 
 by two-thirds of outstanding stock, 575. 
 
 in writing, 575. 
 
 contents, 575. 
 
 filed with powers of attorney, 575. 
 
 how attested, 575. , 
 
 certificate of, filing and publication, 574. 
 filing consent with Secretary of State, 574. 
 meeting of directors 
 
 in general, 574. 
 
 call for, 574. 
 
 majority vote necessary, 574. 
 
 notice of, 574. 
 
 must call stockholders' meeting, 575. 
 meeting of stockholders 
 
 in general, 574. 
 
 where held, 575. 
 
 personal service of notice of, 575. 
 
1394 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DISSOLUTION' — continued 
 voluntary — continued 
 
 by unanimous consent — continued 
 
 meeting of stockholders — continued 
 time for holding, 575. 
 publication of notice for, 575. 
 two-thirds of outstanding stock must consent to dissolution, 
 
 575. 
 publication of notice of adjournment, 575. 
 adjournment of, 575. 
 • certificate of dissolution of Secretary of State 
 in general, 574. 
 when issued, 575. 
 contents, 575. 
 filing of, 575. 
 publication, 576. 
 ■winding up by directors, 574, 576. 
 sale of assets to another corporation 
 
 buying out dissenting stockholder, 576. 
 dissenting stockholder's procedure, 576. 
 in general, 576. 
 
 DISTRIBUTING FOR BENEFIT OF CREDITORS 
 see " Dealings with Creditors and Debtors." 
 
 DIVIDENDS 
 
 liability of directors for, see " Directors," subheading " dividends." 
 directors' powers and liabilities as to, see " Directors," subheading " divi- 
 dends." 
 by receivers, see " Receivers,'' subheading " dividends." 
 definition, 158. 
 
 distribution of proceeds of sale of realty put in corporation pending litiga- 
 tion, is not, 158. 
 trustee of stock to pay, not only on stock originally constituting trust, 
 
 but on stock resulting from declaration of scrip dividend, 160. 
 division of profits without declaring, is, 158. 
 pass with transfer of stock without separate agreement, 166. 
 on decedent's stock 
 
 payable to personal representative without production of certificate of 
 stock, 167. 
 on wife's stock to husband, determinable by law of State in which contract 
 
 to pay made, 168. 
 when stockholder entitled to 
 
 not till declared, 170. 
 in bonds, 159. 
 in scrip 
 
 definitions, 168. 
 
 not one year with bond issue next to pay, 180. 
 in property, lawful, 159. 
 in stock 
 
 unlimited so long as all stock represented by property of equal value, 
 
 159, 160. 
 not necessarily from surplus, 159. 
 
INDEX 1395 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 Tf^VmrnmS — continued 
 agreements for 
 
 by persons interested in corporation to make up to purchaser of its 
 
 stock, his purchase is suiEcient consideration for, 169. 
 by one to pay if corporation in which another is stockholder does not 
 declare at certain rate and time, not within Statute of Frauds, 169. 
 declaration and distribution 
 
 in cash or property in directors' discretion, 159. 
 
 if profits made though borrowing necessary, 158. 
 
 as salaries but uniformly proportioned to stockholdings, illegal, 158, 159. 
 
 not of hope based on expectation of future delivery, 162. 
 
 in directors' discretion 
 
 stockholder cannot compel from surplus directors deem should be 
 
 kept in business, 161. 
 unless all stockholders agree to limit such discretion, 161. 
 unless court on clear showing requires, 161. 
 unless refuse in bad faith and without cause, when court will 
 
 require, 161. 
 
 in general, 161. , 
 
 only from surplus profits 
 
 not prevent acceptance of stock from debtor of corporation, 160. 
 
 not prevent distribution of assets on dissolution, 160. 
 
 in general, 160. 
 
 payments for stock beyond par distributable as, 162. 
 
 proceeds of sale of stock above par and purchase, and sale at 
 
 advance, of stocks, distributable as, 162. 
 reduction, withdrawal or payment of capital forbidden, 162. 
 salary to shareholder not working as substitute for dividends, 163. 
 accumulation in excess of capital distributable as, 163. 
 not from capital in excess of chartered capital resulting from 
 
 reduction of capital, 163. 
 definition of surplus or net profits, 163. 
 not from capital stock or when impaired 
 meaning of " dividends " in statute, 162. 
 not share stock, but corporate property, is meant, 162. 
 in general, 162. 
 
 when all stock issued for patents, transfer of territorial rights for- 
 bidden, 163. 
 accumulated capital above amount required by charter, 163. 
 surplus capital resulting from reduction of capital, 163. 
 purpose of prohibition to keep corporation solvent, 163. 
 recovery of 
 
 stockholder must prove declaration and demand as condition to, 161. 
 complaint for must allege ownership of stock when declared or subse- 
 quent assignment of dividends, 161, 162. 
 assignee of one holding stock to whom corporation had unlawfully 
 refused transfer of holdings need not himself make demand for such 
 transfer, 162. 
 actions, pleading and practice 
 
 sufficient to show holding of stock, non-payment of dividends, stock 
 
 to pay dividends and no other stock of same description, 164. 
 by preferred stockholders — parties and proof, 170. 
 allegation of purchase of and payment for stock in reliance on guaranty 
 of dividends sued for obviates allegation of ownership of stock, 201. 
 
1396 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DniDEXDS — continued 
 
 actions for and by stockholder's individual action 
 
 at law when undeclared and by representative action when declared 
 but undistributed, 205. 
 what stockholders entitled to and in what proportion 
 
 in general, 164. 
 
 those stockholders when declared unless directors limit, 164. 
 
 all stockholders at same time and to equal share, 164. 
 
 length of holdings immaterial, 164. 
 
 all treated alike, 164. 
 
 under agreement for sale of stock to be delivered on certain date before 
 which dividends accrue, 165. 
 
 owner when declared, though payable in future, entitled to as against 
 assignee, 165. 
 
 vendee, when declared after sale but before transfer, 165. 
 
 on transfer of stock, transferee gets dividends subsequently declared, 165. 
 
 on transfer of stock after declaration of dividend, transferror keeps 
 dividend, 165. 
 
 those such when declared, even though unpaid for period before came' 
 such, if not declared, 166. 
 
 holder when declared from past earnings, payable in future, in discre- 
 tion of agent, as against such agent who becomes transferee of stock 
 and then fixes date of payment, 166. 
 
 buyer on Stock Exchange, " dividend on," 166. 
 
 transferee in spite of agreement as to between corporation and trans- 
 feror, 166. 
 
 transferee, if declared after transfer, though guaranteed and earnings 
 sufficient to pay existed before transfer, 166, 167. 
 
 pledgee, 167. 
 
 holder when declared irrespective of corporate fiscal year, closing of 
 books, dates set for declaring, 167. 
 
 bondholder entitled to convert bonds into stock who has mailed bonds 
 and stock certificate before dividends declared, 167. 
 to preferred stockholders 
 
 cumulative 
 
 bind profits for all time, with accrued interest, 168. 
 
 on reduction of capital stock, 168. 
 
 so deemed if payable at stated times, with guaranty added, 168. 
 
 not beyond amount of preference though corporation earn money from 
 illegal business, 168. 
 
 action for need not join common stockholders and evidence must show 
 sufficient earnings to pay according to agreement, 170. 
 
 when payable under peculiar phraseology, 71. 
 
 under peculiar phraseology, 71. 
 
 by another corporation's guarantee if dependent on inter-corporate 
 agreement by directors modified by them, 71, 72. 
 under specific contracts 
 
 from net earnings at certain time not mean only if net earnings avail- 
 able at such time, 169. 
 
 that not to be cumulative but holder entitled whenever net earnings 
 sufficient, permits lump dividend for four years past, 169. 
 
 " payable at the pleasure of the company " means within reasonable 
 time, 169. 
 
INDEX , 1397 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 )TVIDENDS — continued 
 
 under specific contracts — continued 
 
 by one to pay if corporation does not declare at certain rate and time, 
 not within Statute of Frauds, 169. 
 
 )OMESTIC CORPORATION 
 defined, 9. 
 
 )URATION 
 
 to be stated in certificate of incorporation, 20. 
 
 certificate of incorporation of finite corporation may require more than two- 
 thirds vote to extend, 24. 
 must be stated in certificate of incorporation, 24. 
 
 )t'TIES OF CORPORATIONS 
 
 see " Corporate Powers, Duties and Liabilities." 
 
 ILECTION 
 
 of directors, see " Directors," subheading " election." 
 of officers, see " Officers," subheading " election." 
 inspectors of, see " Inspectors of Election." 
 of directors 
 
 inspectors of 
 
 when office vacant or refuse to serve or attend, 300. 
 compensation, 300, 301. 
 
 ;mployees 
 
 powers and duties 
 
 by-laws prescribe, '44. 
 
 ISCROW 
 
 holding stock in, see " Stock and Capital Stock," subheading " purchase and 
 sale." 
 
 :vidence 
 
 corporate books, resolutions, acts and deeds as, see " Corporate Books," 
 " Resolutions." 
 
 admissible to prove promoter's agreement to pay attorney, 2. 
 
 of acts of corporations 
 
 proven in general as are acts of individuals, 62. 
 
 of preference given stock, not confined to stock certificate, 70. 
 
 that preference stated in stock certificate only as to dividends is also on dis- 
 tribution, admissible, 72. 
 
 VIDENCE OF INDEBTEDNESS 
 
 acquisition and disposition by one corporation of another's, see " Acquiring 
 and Disposing of Securities and Paper of Another Corporation." 
 
 XAMINATION BEFORE TRIAL 
 
 see " Actions By and Against Corporations," subheading " examination 
 before trial." 
 
 XCHANGE OF PREFERRED FOR COMMON STOCK 
 see " Stock and Capital Stock," subheading " exchange." 
 
1398 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 EXECUTIVE COMMITTEE 
 in general, 328. 
 
 may be formed by directors, 328. 
 board may appoint if charter authorizes appointment of such subordinate 
 
 agents as business requires, 328. 
 powers, 328. 
 
 cannot delegate powers, 328. 
 
 delegation of power to indorse commercial paper, 329. 
 cannot bind corporation after directors' meeting has been called, 329. 
 authorized to conduct "ordinary business," may do what? 329. 
 power to secure stockholder lending corporation with its bonds, 329. 
 
 EXECUTORS 
 
 liabilities for corporate debts as stockholders, see " Stockholders," subhead- 
 ing " liabilities." 
 
 EXISTENCE OF CORPORATION 
 see " Corporate existence." 
 
 EXPENSES 
 
 of receivers, see " Receivers," subheading " expenses." 
 
 EXTENSION OF CORPORATE EXISTENCE 
 
 see " Corporate Existence," subheading " extension." 
 
 EXTRACTS FROM CORPORATE BOOKS 
 see " Corporate Books." 
 
 FALSE REPRESENTATION 
 
 in purchase and sale of stock, see " Stock," subheading " purchase and sale." 
 in prospectus, corporate liability, 511. 
 
 FEES 
 
 on corporate organization, see " Organization Fees and Taxes.'' 
 
 FILING 
 
 of certificate of incorporation 
 
 in office of Secretary of State 
 
 may be refused, 25. 
 eflfects incorporation, 25. 
 in office of Secretary of State, 25. 
 in office of county clerk, 25. 
 fees, see specific headings. 
 
 FILING OF AMENDED CHARTER 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
 FILING CERTIFICATE OF CHANGE OF PLACE OF BUSINESS 
 see " Office," subheading " change of." 
 
 FILING, INDEXING AND RECORDING 
 of certificate of incorporation 
 
 not preclude court relief if name similar to that of another corpora- 
 tion, 26. 
 
INDEX 1399 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FILIXG, INDEXING AND RECORDING — continued 
 of certificate of incorporation — continued 
 court proceedings to compel 
 
 in what county to be brought, 26. 
 certiorari to review when contains name similar to another corpora- 
 tion, 26. 
 of certified copy of certificate of incorporation lost' or destroyed, 26. 
 
 FINANCIAL STATEMENT OF CORPORATION'S CONDITION 
 stockholders' right to, see "Stockholders," subheading "rights." 
 
 FOREIGN CORPORATIONS 
 actions by and against 
 against 
 
 service of process in, see " Service of Process," subheading " on for- 
 eign corporations." 
 in general, 870. 
 
 debt owing by decedent to, where located for surrogate purposes, 871. 
 books as evidence in, 871. 
 permitted here, 870. 
 service of process 
 citation, 871. 
 venue of, 870, 871. 
 
 when all incorporators, directors, etc., residents of New York, 870. 
 while recognized as corporation in home state, 870. 
 by foreign corporations and non-residents inter sese. 
 when maintainable 
 
 in general, 871, 872. 
 
 governing statutes, 871, 872. 
 
 limited by statute, 872. 
 
 when cause of action arose here, 872. 
 
 statute permitting not retroactive, 872. 
 
 on ground of business done here, defendant must be doing 
 
 it, 872. 
 on ground defendant doing business here, constitutional? 872. 
 presence necessary to determination of claim to personalty 
 
 here, 873. 
 breach of contract made here, 873. 
 complaint's allegations determine if cause of action arose here, 
 
 873. 
 contract not naming place of performance, demand and refusal 
 
 here, 873. . 
 contract for services partly performable here, 873. 
 breach of contract outside state, 873. 
 by dummy resident, 874. 
 
 contract made here to deliver bonds to be used elsewhere, 874. 
 to restrain arbitration by residents, 874. 
 when all plaintiffs not residents and citizens, 874. 
 when no plaintiff is resident, 874. 
 under foreign statute, 875. 
 
 on contract accepted here by agent temporarily here, 875. 
 affecting, property elsewhere, 875. 
 relating to realty elsewhere, 875. 
 
1400 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIfJ-N* CORPORATIONS — continued 
 actions hy and against — continued 
 
 by foreign corporations and non-residents inter sese — continned 
 when maintainable — continued 
 
 by dummy resident assignee, 875. 
 in discretion of court to entertain, 875. 
 against 
 
 in general, 891. 
 
 statute permitting constitutional, 891. 
 
 on dissolution, 894. 
 
 when maintainable 
 
 stockbrokers selling and buying futures for foreign corpora- 
 tion, 893. 
 when defendant because refused to be plaintiff, 893. 
 who may bring 
 
 governing statutes, 894. 
 in general, 894. 
 attorney-general 
 
 governing statutes, 897. 
 in general, 897. 
 grounds, 897. 
 non-resident or foreign corporation 
 governing statutes, 894. 
 in general, 894. 
 for what causes, 894. 
 by resident or domestic corporation 
 for any cause of action, 894. 
 by executor of non-resident, 895. 
 to sell bonds collateral to notes, 896. 
 by administrator appointed here, 895, 896. 
 to enjoin issuing of bonds or execution of mortgage, 896. 
 proof of residence, 896. 
 for legal services, 896. 
 to compel transfer on books of stock, 896. 
 to enjoin issue of stock, 896. 
 judgment-creditor to reach assets of domestic company 
 
 formed to take over foreign one, 897. 
 to have home receiver appear and be examined here, 897. 
 where brought 
 
 municipal court suit, 897. 
 when non-resident plaintiff, 898. 
 court's jurisdiction 
 
 when has jurisdiction of subject-matter and personal service 
 
 made, 89'2. 
 action by resident on cause not related to business done here, 
 
 891. 
 after appearance, 892. 
 discretional over tort action by non-resident arising outside 
 
 state, 892. 
 discretional over action affecting internal management, arising 
 
 abroad, 892. 
 discretional over action by stockholder after merger, 892. 
 
INDEX 1401 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 3R J-:i( ;x ( 'ORPORATIONS — continued 
 actions by and against — continued 
 against — contimied 
 
 court's jurisdiction — continued • 
 
 no property here, not bound by judgment on cause arising else- 
 where, 892. 
 not by consent when not by statute, 893. 
 to enjoin in one district action in another, 893. 
 to modify injunction against, 894. 
 municipal court, 897. 
 doing business here and suable by resident 
 
 when maintains office here and agent also doing own business, 
 
 891. 
 cause of action need not relate to business done here, 891. 
 pleadings, practice and evidence 
 in general, 916. 
 what law governs, 916. 
 
 bill of particulars of persons employing plaintiff, 916. 
 counterclaim when has no license, 916. 
 failure to obtain license no defence, 893. 
 judgment on non-appearance, 920. 
 judgment by default, 920. 
 pleading statutes qf home state against issue of stock suing to 
 
 prevent, 916. 
 pleading usury, 919. 
 usury, not pleadable, 919. 
 verification of pleadings, 918. 
 attachment 
 
 in general, 920. 
 
 in what kinds of actions allowed, 920. 
 
 governing statutes, 920. 
 
 when allowed, 920. 
 
 when incorporated under laws of XJ. S., 920, 921. 
 
 before receivership had in home state — precedence, 921. 
 
 bond, on reversal, 921. 
 
 vacating by third person, 921. 
 
 what is attachable, 921, 922, 923. 
 
 who may attach, 923, 924. 
 
 moving papers, 924, 925. 
 
 levy — on what, 926. 
 
 levy — how made, 926. 
 alleging plaintiff's residence 
 
 in general, 917. 
 
 amendment of complaint at close of plaintiff's case, 917. 
 
 that does business here not equivalent to, 917. 
 
 in city court action, 917. 
 
 failure to demur, 917. 
 alleging corporate name 
 
 mistake waived unless plead, 917. 
 alleging 'corporate existence 
 
 in general, 917. 
 
 governing statutes, 917. 
 
 amendment of complaint on trial, 917. 
 
1402 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN CORPORATIONS — continued 
 actions by and against — continued 
 against — continued 
 
 court's jurisdiction — continued 
 proving corporate existence 
 in general, 918. 
 
 answer simply denying it is foreign corporation, 918. 
 by certified or exemplified copy of charter, 918. 
 denying corporate existence 
 
 answer not raising issue, 918. 
 to recover on evidence of debt 
 governing statute, 918. 
 when order extending time granted, 919. 
 order for trial of issues necessary to prevent judgment by 
 default, 919. 
 statute of limitations 
 
 available to when has designated agent here on whom process 
 
 to be served, 898. 
 not available to when debtor, 898. 
 of home state, when available, 899. 
 
 of statute of home state under which action brought, applica- 
 ble, 899. 
 examination before trial,. 822, 823, 916. 
 examination of books, 919. 
 proceedings supplementary to execution 
 in general, 825. 
 
 when has no place of business here, 825. 
 alternative remedy, 825. 
 
 when does no business and 'has no agency here, 825. 
 when authorized, 826. 
 service of process 
 
 after license to do business here surrendered, 833. 
 when designated agent dead, removed or renounced, 830. 
 
 by 
 
 in general, 875. 
 
 when not allowed to sue in home state, 875'. 
 
 on note, 875, 876. 
 
 municipal court's jurisdiction, 876. 
 
 city court's jurisdiction, 876. 
 
 discontinuance against defendant's objection, 87<5. 
 
 objection to legal capacity to sue, when waived, 87ff. • 
 
 where triable 
 
 railway, 876. 
 
 under C. C. P., §§ 982-3, 876. 
 when maintainable 
 
 like domestic corporation imless law provides otherwise, 876. 
 
 based on act forbidden by N. Y. laws, 876, 877. 
 
 stockholder's action for restitution of stock by directors, 877. 
 
 against director of domestic corporation indebted to it, 877. 
 
 unless barred by statute, 877. 
 
 on contract; see subheadings, infra, "when maintainable — when 
 has no license," 877. 
 
INDEX 1403 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 JREIGK CORPORATIONS — continued 
 ■actions by and against — continued 
 by — continued 
 
 when maintainable — continued 
 when has no license 
 
 governing statutes, 877. 
 in general, 877. 
 on contract made here, 877. 
 contract made before license gotten, 877. 
 payment of franchise tax not overcome, 878. 
 condition precedent, 878. 
 
 compliance with statute to be alleged and proven, 878. 
 on contract, by assignee, 878. 
 
 if does nothing here save in furtherance of interstate com- 
 merce, 878. 
 cannot enjoin domestic from using its name? 879. 
 if does no business here, O.K., 879. 
 on contract, in general, 879. 
 
 before entering into, not before suing on, contract, 880. 
 on contract, contract good, but unenforceable here, 880. 
 in tort, 8S0. 
 both doing of business here and making of contract here 
 
 needed, 881. 
 contract made before statute, 881. 
 contract to build elevators here, 881. 
 to foreclose mechanics' lien, 882. 
 unilateral contract by borrower here to repay, 882. 
 contract to ship goods, 882. 
 lease to resident signed outside U. S., but delivered here, 
 
 882. 
 on undertaking in . attachment, 882. 
 as assignee of individual on contract by him, 883. 
 license fee not paid 
 
 governing statute, 878. 
 in .general, 878. 
 condition subsequent, 878: 
 on any cause of action, 878. 
 
 non-compliance with statute to be alleged and proven, 878. 
 recovery on counterclaim, 883. 
 
 when corporation not authorized to do business under gen- 
 eral corporations law, 883. 
 for any cause of action, 883. 
 pleading, practice and evidence 
 in general, 883. 
 authority on which sustain's right to sue need not be plead, 
 
 883. 
 as to license and license fee 
 
 dismissal of complaint without proof doing business here, 
 
 885. 
 motion to dismiss for lack of, not for first time on 
 
 appeal, 885 
 assumed plaintiflf righfuUy in court, 885. 
 statements in bill of particulars not considered, 885. 
 
1404 INDEX 
 
 Seferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIG.X CORPORATIONS — continued 
 actions by and against — continued 
 by — continued 
 
 when maintainable — continued 
 
 when only office is in home state though employs agent 
 
 here, 886. 
 note made in other state sued on here, 886. 
 dismissal of complaint in general, 887. 
 nonsuit for failure to allege in complaint, 887. 
 answer based on failure to pay fee, averments needed, 887. 
 when demurrer proper, 887, 888, 889, 890. 
 demurrer when complaint not allege, 887, 888. 
 what allegation in complaint suflSce, 888. 
 when answer must plead defense, 888, 889. 
 when general denial prevents defense of, 889. 
 amendment of complaint as to, on trial, 890. 
 burden of proof, 890, 891. 
 inspection of books, 885. 
 
 production of attorney's authority to begin suit, 884. 
 statement and proof of incorporation 
 
 certified or exemplified copy of charter prima facie proof, 
 
 884. 
 ommission of, not demurrable, 884. 
 proof not necessary unless verified answer puts in issue, 
 
 884. 
 complaint to contain, 884. 
 proof of laws of home state necessary, 890. 
 statement and proof of corporate name 
 
 mistake waived unless plead, 884. 
 security for costs, 885. 
 as to being stock corporation 
 
 allegation that corporation, presumed stock corporation, 
 
 886. 
 verification of pleadings by agent or attorney, 884. 
 actions by assignee 
 
 subject to defense of failure to obtain license and pay fee, 887. 
 when license "fee not paid, 883. 
 on contract of corporation which has no license 
 forbidden, 882. 
 
 statute forbidding not retroactive, 882. 
 of receivers of, 883. 
 assignments by 
 
 in general, 825. 
 
 general without preference except to employees. 
 
 good here if good under home laws, 825. 
 general for benefit creditors 
 
 good here if good under home laws, 825. 
 ■ISrew York laws forbidding in contemplation insolvency not apply to, 
 825, 826. 
 
 for banking, 827. 
 books 
 
 in general, 847. 
 
INDEX 1405 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 )REIG.N" CORPORATIONS — continued 
 booka — continued 
 
 presumptive evidence of corporate acts; 847. 
 
 motion here under foreign statute to compel production of, 847. 
 
 deposit of with, or production of before commissioner appointed in 
 
 foreign state to take testimony here, 847. 
 examination 
 
 order for when not proven to be here, 847. 
 production of 
 
 by motion here under home statute, 847. 
 stock-book 
 
 in general, 847. ' 
 
 form and contents, 849. 
 what corporations must keep, 848. 
 in general, 848. 
 
 headquarters for salesmen not office necessitating, 848. 
 not if only has .transfer agent here, 848. 
 only these having office here, 848. 
 where kept 
 
 at office of corporation or its transfer, 849. 
 governing statute, 849. 
 inspection and extracts 
 
 in general, 849 et seq. 
 when in corporation's office, 849. 
 daily during business hours, 849. 
 to judgment-creditor, 849. 
 governing statutes, 849, 850. 
 to state officials, 849, 850. 
 
 when in office of transfer agent of corporation, 850. 
 arises solely from statute, 850. 
 to holder of 5 per cent of outstanding stock,- 850. 
 kind of demand, 850. 
 
 to appointee of holders of 5 per cent of outstanding stock, 8.'/0. 
 , demand as basis for suit made after beginning action for 
 earlier refusal, 850. 
 to six months stockholder of record, 850. ' 
 
 on whom demand for made, 850. 
 intent of stockholder seeking, 850. 
 by mandamus, 851. 
 to persons unknown to officers, 851. 
 statute applicable for foreign corporation, 851. 
 statute permitting not impair right to mandamus to compel, 
 
 851. 
 reference on mandamus proceedings, 852. 
 demand at transfer agent's office sufficient, 853. 
 penalty for refusing 
 
 governing statutes, 852. 
 
 defense that under subpoena by U. S. marshal, 852. 
 
 defense that in possession of U. S. marshal, 852. 
 
 not unconstitutional, 852. 
 
 to whom liable, 852. 
 
1406 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN' CORPORATIONS — continued 
 books — continued 
 
 stock book — continued 
 
 inspection and extracts — continued 
 
 defense that plaintiff has sold list of stockholders, 852. 
 in general, 852. 
 
 defense that law justifies, later reversed, 853. 
 demand at transfer agent's office suflScient basis for, 853. 
 defense that plaintiff is constitutional suer, 853. 
 when " unknown " written in book, 853. 
 when demand made shortly after statute passed, 854. 
 , against agent, must be transfer agent, 854. 
 
 by one to whom stock transferred for purpose, 854. 
 against agent not having book when demand made, 854. 
 complaint must allege stock corporation, 847. 
 intervention of bankruptcy-trustee of stockholder in action 
 for recovery of, 848. 
 penalty for not keeping 
 
 officer not liable, 849; 
 stock-transfer 
 
 trustee depository not chargeable with law of home state as to, 
 847. 
 certificate to do business here, see subheading infra " license to do business 
 
 here." 
 contracts 
 
 by appointee of agent authorized to receive insurance proposals, etc., 
 823. 
 definition, 821, 822. 
 
 doing business and employing capital here 
 governing statutes, 833, 834. 
 in general, 834. 
 
 policy not to restrict unreasonably, 834, 835. 
 what constitutes 
 in general, 835. 
 solitary transaction not, 835. 
 though no contracts made here, 853. 
 consigning goods to storekeeper here, paying his ovni rent, for sale 
 
 on salary and commission, 841. 
 example of shipping goods after pursuant to order before statute 
 
 effective, 836. 
 same kind of business as meant in statutes governing domestic cor- 
 poration, 836. 
 before getting license, not merely before being sued, 836. 
 obtaining license to do business here, 836. 
 
 ordinary business which corporation organized to do, 836, 837. 
 two distinct sales, 837. 
 test of, 837. 
 single sale, 837. 
 sporadic traisactions, 837. 
 contracts here through agent, 837. 
 single transaction, 837. 
 
INDEX 1407 
 
 I 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 iREIGX OORPORATIONiS — continued 
 doing business and employing capital here — continued 
 what constitutes — continued 
 
 deliveries under contract negotiated here, 838. 
 correspondence to and from this state, 838. 
 floating own stock and bonds on market here, 838. 
 When has office here 
 in general, 838. 
 
 office not necessary to violation of statute, 838. 
 if " home " office here, 838, 839. 
 
 selling office here of manufacturing corporation, 839. 
 numerous offices here with superintendents giving mathematical 
 
 instruction, 839. 
 for taking orders for advertisements elsewhere, 839. 
 for directors' meetings, 839. 
 
 plus bank account and selling goods from here, 839. 
 from which sells goods manufactured outside state, 839, 840. 
 for directors' meeting and from whifih sells bullion, 840. 
 from which transacts business though proceeds remitted to 
 
 home state, 840. 
 for sample goods and traveling salesmen's headquarters and 
 
 twenty employees, 840. 
 for salesroom, and six employees, 840. 
 making contract, 841. 
 
 deposit paid and to be repaid here on non-acceptance of con- 
 tract in home state, 841. 
 transactions here through agents or salesmen 
 in general, 841, 842. 
 
 occasional, by company manufacturing elsewhere, 841. 
 when no goods stored or office here, 841. 
 subject to approval at home office, 842. 
 when leases sample space and keeps bank account here, 842. 
 when agent resides here and is paid salary and rent of house 
 where goods stored, 842. 
 transactions through commission merchants here 
 
 in general, 843. 
 miscellaneous cases 
 in general, 844. 
 
 becoming special partner in partnership here, 844. 
 doing business through licenses, 844. 
 receiving dividends through constituent companies in which 
 
 holds stock, 844. 
 loaning money on bonds and mortgages and selling bonds, 844. 
 supervising here securities of foreign corporatious, 845. 
 license to do business here 
 in general, 827. 
 
 not unless name indicates it is corporation, 829. 
 filing of papers 
 
 charter, statement and agent's consent, 827, 828. 
 
 governing statutes, 827, 828. 
 
 to be sworn to or authenticated, 827, 828. 
 
 fee for, 828. 
 
1408 INDEX 
 
 Keferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN" CORPORATIONS — continued 
 license to do business here — continued 
 fee to secretary of state, 828. 
 the license 
 
 necessary before doing business, 828. 
 governing statutes, 828, 829. 
 form and contents, 828, 829. 
 ■what corporations entitled to 
 governing statutes, 829. 
 
 having same name as domestic corporation, 829. 
 having name resembling domestic corporation's, 829. 
 having as part of name word "bank," "trust," "guaranty,"' 
 " loan," etc., 829. 
 designation of agent 
 
 filing refused if not properly authenticated, 830» 
 penalty for not obtaining 
 in general, 829, 830. 
 governing statutes, 829, 830. 
 no action on contract by made here, 830. 
 revocation 
 
 failure to designate successor to dead, removed or renounced agent, 
 
 830. 
 for nuisance 
 
 governing statutes, 830, 831. 
 in general, 830, 831. 
 what constitutes, 830, 831. 
 procedure to accomplish, 830, 831. 
 penalty for exercising powers after, 831. 
 revival 
 
 after revocation for nuisance, 832. 
 surrender by corporation 
 
 governing statutes, 832, 833. 
 in general, 832, 833. 
 certificate of 
 
 form and contents, 832, 833. 
 filing, 832, 833. 
 effect of filing, 833. 
 manufacturing, what is and taxation, 845. 
 merger 
 
 governing statutes, 826. 
 procedure, 826. 
 
 must own all stock of other corporation. 826. 
 only if authorized to do business here, 826. 
 effect, 826. 
 monopoly and restraint of trade, 826. 
 its officers, directors and stockholders 
 actions by and against 
 
 when courts here will entertain 
 in general, 933. 
 
 representative stockholder's action to obtain payment of divi- 
 dends, 933. 
 by stockholder for benefit his corporation against another 
 foreign corporation, 933. 
 
INDEX 1409 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1.. 
 
 « 
 POREIGWST CORPORATIONS — coTCtimMed 
 
 its officers, directors and stockholders — continued 
 actions by and against — continued 
 
 when courts here will entertain — continued 
 
 to restrain transfer for unlawful purpose of foreign corpora- 
 tion's stock, 9'33. 
 by assignee for benefit of creditors against stocldiolders on 
 their liability, 934. 
 contracts with corporation governed by what law, 933. 
 liabilities 
 
 same in general as if of domestic corporation, 934. 
 governing statutes, 934, 935. 
 under various statutes, 934, 935. 
 by action of resident creditor, 935. 
 enforced same as if domestic corporation, 935. 
 of directors for unauthorized dividends 
 right of this state to impose, 935. 
 
 right of New York to permit corporation (instead of stock- 
 holders as under home law) to enforce, 935. 
 New York gives same right to enforce as statute of home state 
 
 gives, 936. 
 action here under statute of home state, 936. 
 of officers and directors for injury to or loss of corporate prop- 
 erty 
 no receivership in action to enforce, 936. 
 statute governs, 936. 
 
 by increase of stock and delivery thereof without considera- 
 tion, 936. 
 dissolved corporation not party to creditor's action to reach 
 
 assets in directors' hands, 936, 937. 
 judgment against corporation not condition to suit by resident 
 creditor, 9'37. 
 of stockholders for corporate debts 
 
 action here based on foreign statute, 937. 
 
 action against by bondholder when no judgment had in foreign 
 state, 937. 
 of stockholders for unpaid subscriptions 
 
 when foreign statute providing liability also provides remedy, 
 
 937. 
 under common law, 938. 
 tenure of office 
 
 annulling election of directors, 934. 
 setting aside election of officers, 934. 
 
 determining whether one elected director was eligible, 934. 
 political contributions by, 827. 
 real estate 
 
 holding and conveying here, 823. 
 governing statutes, 823. 
 purchasing on foreclosure, judgment or settlement, holding for five 
 
 years and conveying, 823, 824. 
 selling, without court leave, religious corporation, 824. 
 acquiring by eminent domain, 824. 
 
 B. C. N. Y.— 89 
 
1410 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN CORPORATIOXS — continued 
 real estate — continued 
 taking by devise, 824. 
 
 conveyance here by de facto foreign corporation, 824. 
 receivers 
 
 accounting 
 
 surcharge when as domiciliary receiver and ancillary receiver here 
 paid over funds without order here, 931, 932. 
 actions by and against 
 
 leave of court to citizen to sue, 932. 
 auxiliary, suit by to set aside fraudulent transfer, 032. 
 foreign, to recover proportionate liability from stockholder, 932. 
 appeal by from judgment against corporation, 932. 
 by citizen when receiver brings himself within jurisdiction, 932. 
 appointment here 
 
 of assets here when also appointed in home state, 926. 
 
 not to wind up corporation, 926, 927. 
 
 to preserve assets when officers prevented from administering them 
 
 in home state on dissolution, 927. 
 to protect domestic creditors, 927. 
 on judgment in action in which it appeared, 927. 
 of fund in possession of majority officers resident here and dissolu- 
 tion pending in home state, 927. 
 on judgment and fraudulent disposal of property, 927, 928. 
 of insolvent company, pendente lite for protection domestic 
 
 creditors, 928. 
 only to preserve assets, in stockholder's representative action, 928. 
 for resident judgment-creditor, 928. 
 for nonresident stockholder, 928. 
 in proceedings supplementary to execution, 928. 
 to protect domestic creditors of insolvent company having no offi- 
 cers here, 928. 
 kind appointed 
 
 in general, 928, 929. 
 
 of property here, not of corporation, in action to prevent 
 
 fraudulent disposal of assets, 929. 
 of assets, not of corporation, 929. 
 notice of to attorney-general, 929. 
 revocation, 929. 
 compensation 
 
 of ancillary receiver appointed here without authority, 932. 
 powers 
 
 in general, 929. 
 
 to give security to directors tiding corporation over difficulties 
 
 with own funds, 929. 
 when appointed elsewhere 
 upheld here, 929, 930. 
 to collect from stockholder, 930. 
 to sue here solely for ancillary receiver, 930. 
 to reduce to possession corporate assets provided domestic 
 
 creditors be protected, 930. 
 to continue business by making purchases, 930, 931. 
 
INDEX 1411 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN CORPORATIONS — contmued 
 receivers — continued 
 powers — continued 
 
 when appointed elsewhere — continued 
 
 as against attaching creditor here, 931. 
 to vote stock owned by corporation, 931. 
 of ancillary receiver appointed here 
 when no assets here, 931. 
 to settle claim arising under lease, 931. 
 service of process on 
 
 on managing agent of federal receivers, 932, 933. 
 reports 
 
 annual to secretary of state 
 governing statutes, 854. 
 when to be made, when doing business in or out of United States, 
 
 854. 
 stock corporation makes, 854. 
 who to make, 855. 
 filing 
 
 where, 855. 
 
 penalty for failure of, 855. 
 contents and form, 855. 
 penalty for not making and filing, 855. 
 rights, powers and liabilities, see specific subheadings under tit.le " Foreign 
 
 Corporation." 
 rights, powers and liabilities in New York 
 in general, 822. 
 
 of corporators as well as corporation under home laws recognized, 822, 
 when all its property located and business done here, 822. 
 to sell within merchandise manufactured outside state, 822. 
 as to business here transacted, treated as domestic corporation, 822. 
 to guarantee payment of another corporation's obligations, 822. 
 franchise from home state not revocable, 822. 
 annulment of license in action by people, 823. 
 to file lien under mechanic's lien law, 823. 
 for fraudulent disposal of property here, 826. 
 sequestration statutes not applicable to, 826. 
 taxation 
 
 right to impose, 855. 
 statutes imposing 
 
 constitutional, 855. 
 how determined 
 
 when officer refuses to testify, 855. 
 income tax on mercantile and manufacturing corporations, 860, 861. 
 franchise tax on non-mercantile and non-manufacturing corporations. 
 
 862. 
 collection 
 
 by supplementary proceedings, 856. 
 income tax 
 
 what corporations pay, 860, 861. 
 franchise tax 
 
 constitutional, 862. 
 
1412 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN CORPORATIONS — continued 
 taxation — continued 
 
 franchise tax — continued 
 
 not dependent on amount, or length of time of conduct, of 
 
 business, 862. 
 computed as in case of domestic corporation, 862. 
 on business means on business here, 863. 
 on privilege of doing business here, 863. 
 
 business done and capital employed here must coexist, 863, 864. 
 furnishings of rented oflSce, 864. 
 cannot exceed authorized capital, 864. 
 what corporations pay, 862. 
 on what based, 862, 863. 
 what is taxable 
 
 interstate or foreign commerce, 862, 863. 
 
 capital employed here only, 863. 
 
 capital not capital stock, 864. 
 
 value of property here, 864, 865. 
 
 actual value of property here, 864, 865. 
 
 in general, 864, 865. 
 
 stock -holdings in another foreign corporation, 865. 
 
 money invested in stock of constituents, 865. 
 
 dividends from domestic corporation, 865. 
 
 surplus, 865. 
 
 government bonds, 865. 
 
 surplus invested in rented realty here, 865. 
 
 claims by it against nonresidents, 866. 
 
 trade-mark, 866 
 
 copyrights, 866. 
 
 good will, 866. 
 
 see also discussion under subheading " license tax " infra. 
 deductions 
 
 debts, 867. 
 license tax 
 
 , when payable, 867. 
 to whom paid, 867. 
 what corporations pay, 867. 
 amount of, 868. 
 f(jr wha't paid, 868. 
 computation and basis of 
 
 by review by comptroller of own decision, 868. 
 
 capital invested in stock of another corporation, where deemed 
 located, 868. 
 
 in general, 868, 869. 
 
 governing statutes, 868, 869. 
 
 based on capital not capital stock employed here, 869. 
 
 tax commission fixes amount of capital on which based, 869. 
 
 not based on authorized capital stock, 869. 
 
 correction of own motion by comptroller of own computation, 
 869. 
 collection 
 
 by comptroller's warrant, 869. 
 penalty for failure to pay, 870. 
 
INDEX 1413 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FOREIGN CORPORATIONS — coTCiMiMed 
 taxation — continued 
 
 license tax — continued 
 what corporations pay 
 manufacturing, 870. 
 real and personal property 
 in general, 856. 
 governing statutes, 856. 
 as nonresident, 856. 
 on what, 856. 
 
 if doing business here, 856. 
 New York city annual record of, 856. 
 collection 
 
 as against individual, 856. 
 how determined 
 
 on all statements sworn to by it, 856 
 where taxed, 857. 
 
 foreign capital transmitted here, 857. 
 capital invested here and earnings not immediately remitted to 
 
 home state, 857. 
 ■what taxable 
 
 in general, 858 
 
 notes, 858. 
 
 goods in original, imported packages, 858. 
 
 deposits in bank, 858. 
 
 debts due it on open accounts for imported goods sold in 
 
 original packages, 858. 
 furniture and goods kept here for sale, 858. 
 gas tanks, pipes, etc., 858. 
 capital invested in business here, 859. 
 property bought, part cash only paid, 859. 
 see also subheading ';' deductions," supra. 
 what debts, 858. 
 
 money promised to be paid for property bought, 859, 860. 
 debts incurred in relation to investment in business here, 858. 
 debts in general, 859. 
 see also subheading " deductions," supra. 
 governing statute, 859. 
 in general, 859. 
 when corporation permanently located outside of New York, 
 
 859. 
 money, negotiable collateral deposited by or debts owing to it 
 
 859. 
 must be shown in statute, 859. 
 special franchise, 860. 
 
 FORFEITURE 
 
 must be by direct proceeding, 586. 
 for maintaining nuisance 
 governing statute, 571. 
 what constitutes nuisance, 571, 572'. 
 
 certificate by secretary of state of filing or charges and thirty-day 
 suspension, 572. 
 
1414 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 FORFEITUKE — continued 
 
 for maintaining nuisance — continued 
 
 findings on hearing iiled with secretary of state _and attorney-general, 
 
 572. 
 conlplaint to health commissioner, 572. 
 
 misderiieanor to exercise charter powers during suspension, 572. 
 copy of complaint served on corporation, 572. 
 notice, with complaint, to abate or answer, 572. 
 investigation of charges in complaint, 572. 
 hearing on charges in complaint, 572. 
 petition to revive charter, 573. 
 
 finding after thirty-day period of continuance of nuisance, 573. 
 investigation by health commissioner on petition for revival, 573. 
 forfeiture of charter after publication of determination of continuing 
 
 nuisance, 573. 
 charter reviewed on filing of health commissioner's findings therefor. 
 
 573. 
 misdemeanor to exercise powers of corporation after forfeiture, 573. 
 supplemental certificate of revival published by secretary of state, .")73. 
 revival not prevent subsequent forfeiture, 573. 
 receiver on forfeiture, 573. 
 
 revival of charter on guaranty of good conduct, 573. 
 powers etc., of receiver on forfeiture, 573. 
 statute inapplicable to corporation under jurisdiction of public service 
 
 commission, 573, 574. 
 
 FORFEITUEK FOR NOX-USER 
 
 ait inn for only by people through attorney-general, 559. 
 
 FR.'VXtlllSE 
 
 definition, 709. 
 
 exclusive cannot be granted by private bill, 15. 
 
 FR.WfHISE TAX 
 
 see '• Taxation," subheading " franchise tax." 
 
 FULL-LIABILITY CORPORATION 
 
 certificate of incorporation may make company such, 23. 
 
 FULL-PAID STOCK 
 
 see " Stock and Capital Stock." 
 
 GUARANTEED STOCK 
 
 see "Stock and Capital Stock," subheading '-'preferred." 
 
 GUARDI.ANS 
 
 liabilities for corporate debts as stockholders, see "Stockholders" sub- 
 heading "liabilities." 
 
 GOOD WILL 
 
 taxation, see "Taxation," subheadings "franchise tax" and "personal 
 
 property and capital stock tax." 
 how valued, 754. 
 
 nsrco:\iE tax 
 
 see " Taxation," subheading " i-i.-nr^p tax." 
 
INDEX 1415 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 INCORPORATION 
 
 fees and taxes on see " Organization Fees and Taxes." 
 
 only under laws stating objects in title, 15. 
 
 under general laws only except when not feasible, 15. 
 
 not under private bill granting -right to lay tracks, 15. 
 
 not under private bill granting exclusive privilege, 15. 
 
 not under private act granting exemption from taxation, 15. 
 
 not under private bill if for building bridges, 15. 
 
 to be under general laws, 15. , 
 
 acts permitting repealable, 15. 
 
 act of presumed constitutional if possible, 16. 
 
 INCORPORATORS 
 
 see " Corporations." 
 
 INCREASE OF DIRECTORS 
 
 see " Directors," subheading " change in number," 
 
 INCREASE OF NUMBER OR PAR VALUE OF STOCK 
 
 by amendment of charter or otherwise see " Stock and Capital Stock." 
 
 INCREASE OF NUMBER OF SHARES OF STOCK 
 
 see " Stock and Capital Stock," subheading " increase." 
 
 INCREASE OF STOCK 
 
 by amendment of charter or otherwise see " Stock and Capital Stock." 
 
 INDEXING 
 
 of certificate of incorporation 
 
 in office of secretary of state, 25. 
 
 INFORMALITY IN CERTIFICATE OF INCORPORATION 
 
 correction of by corporators or directors see "Certificate of Incorporation," 
 subheading " amendment." 
 
 INJUNCTION AG-AINST PERSONS ACTING AS CORPORATIOJT 
 see " Vacation, Annulment and Injunction." 
 
 INJUNCTION 
 
 of corporate business only on notice, 448. 
 
 INSPECTION OF BY-LAWS 
 see " By-Laws." 
 
 INISPECTI0N OF CORPORATE BOOKS AND RECORDS 
 
 see " Books and Records," " By-Laws " and " Stock-Book." 
 
 INSPECTION OF CORPORATE BOOKS 
 
 see " Stockholder " and " Books and Records." 
 
 INSPECTORS OF ELECTION 
 
 oath to stockholders at meeting, see " Stockholders," subheading " powers." 
 of directors, see " Directors," subheading " election " and '' inspectors of." 
 at stoek^or-bond-holders' meeting 
 
 a misdemeanor to violate oath, etc., 178. 
 by-laws provide manner of appointment of, 44. 
 
1416 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 IXSTALLMEXTS ON STOCK SUlBSCRIPTIONS 
 
 see " Stock and Capital Stock," subheading " subscriptions." 
 
 INTERLOCKING DIRECTORATES 
 
 see " XMrectors," subheading " interlocking." 
 
 oflBcers of corporation holding stock in another corporation eligible to 
 
 latter's board, 492. 
 make voidable lease between corporations, 492. 
 not prevent complaint as stockholders, 492. 
 make contracts between corporations voidable, 492. 
 
 INTERNAL MANAGEMENT 
 
 controllable by legislature when affects public, 18. 
 
 courts will supervise to keep within chartered powers, 501. 
 
 courts not interfere with unless for fraud or bad faith, 501. 
 
 by-laws may regulate, 501. 
 
 cost of publishing notice concerning stockholders' meeting, 502. 
 
 court cannot determine whether corporate mortgages shall be redeemed, 502. 
 
 attorney-general may maintain action for court supervision of, 502. 
 
 court supervision same as over individuals, 502. 
 
 ISSUE 
 
 of stock 
 
 see " Stock." 
 
 ISSUE OF STOCK 
 
 see " Stock and Capital Stock," subheading " issue." 
 
 JOINT VENTURE 
 
 distinguished from corporation and partnership, 11. 
 characteristics of, 11. 
 
 JURISDICTION 
 
 of actions by and against corporations, see " Actions By and Against 
 Corporations," subheading " jurisdiction." 
 
 LAW 
 
 corporation cannot be incorporated for practice of, 21. 
 forbidden, by corporation, 515. 
 practice of by corporations 
 
 furnishing to lawyers information and clerical help, 515. 
 
 statutory prohibitions not applicable to corporations authorized to do 
 business they are doing, 515. 
 
 statutory prohibitions not applicable to title examining and insuring 
 corporations, 515. 
 
 employing attorneys about corporation's immediate affairs, 515. 
 
 benevolent assistence to persons without means, 515. 
 
 when consist of acts attorney could not do, 516. 
 
 soliciting employment for lawyer, 516. 
 
 buying paper, book-debt, chose in action, to sue thereon, .)16. 
 
 inducing placing of demand in its hands for suit, 516. 
 
 cannot organize under Pusincss Corporations Law, 516, 517. 
 
 forbidden to advertise title of " attorney," etc., 517. 
 
INDEX 1417 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 LAW — continued 
 
 practice of, by corporations — continued 
 
 soliciting claim or demand for suit, 517. 
 
 fine for, 517. 
 
 forbidden to practice or hold itself out. as entitled to practice, 517. 
 
 any services rendered to anyone by attorney because employed by cor- 
 poration, constitutes, 518. 
 
 dual obligation by employee to corporation and corporation's client is 
 aimed at by statute, 518. 
 
 agreement of retainer of corporation illegal, 518. 
 
 illegality of contract by attorney employed by corporation for individual 
 no defense to attorney against accounting for proceeds, 518. 
 
 forbidden, though agent, employee, director, etc., a lawyer, 518. 
 
 preparation of incorporation papers constitutes, 518, 519. 
 
 forbidden, whether domestic or foreign, 518. 
 
 statute permitting three or more persons to become corporation, not 
 permit, 518. 
 
 statute forbids services other than in litigation, 518. 
 
 acting as conveyancer, 519. 
 
 representing creditor in bankruptcy constitutes, 519. 
 
 reducing real estate assessments constitutes, 519. 
 
 LIABILITY OF OORPORATION" FOR ACTS OF OFFICERS IN" USING COR- 
 PORATE PROPERTY FOR PERSONAL PROFIT OR ADVANTAGE 
 see " Officers," subheading " personal profit." 
 
 LIABILITIES OP CORPORATIONS 
 
 see " Corporate Powers, Duties and Liabilities." 
 commercial paper 
 accommodation 
 
 endorsed by secretary, 375. 
 
 endorsed by treasurer, 375. , 
 
 endorsement binds as against bona fide discounter, 375. 
 
 agreement by officer for, 375. 
 
 LIABILITIES COMMON TO DIRECTORS AND OFFICERS 
 
 to account for moneys coming to hands through illegal acts, 392, 393. 
 
 to account because, when action brought against him, corporate books 
 
 show credit balance in transaction between him and corporation, 392. 
 for appropriating intangible corporate assets, 392. 
 for increasing capital stock beyond amount authorized 
 
 misdemeanor, 393, 394. 
 
 deemed to have concurred in unless dissents, 394. 
 
 deemed to know corporate affairs sufficiently to determine if statute 
 violated, 394. 
 for loans to stockholders or permitting withdrawal of payments for stock 
 
 liable for all corporate debts to extent of loan, etc., 394. 
 
 in general, 394. 
 
 creditor may recover amount of loan, 394, 395. 
 misconduct and mismanagement 
 
 in general, 401. 
 
 governing statutes, 401. 
 
 equitable jurisdiction, 401. 
 
 action for accounting, reimbursement, remedying alienation of property, 
 401. 
 
1418 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. ' 
 
 LIABILITIES COMMON TO DIRECTOEiS AND OFFICERS — corefmued 
 misconduct and mismanagement — continued 
 
 trust relation is between corporation and diTectors, 402. 
 
 arrest of defendant for conversion or misapplication, 402. 
 
 for turning over corporation to rival, 402. 
 
 accountable to corporation, or stockholders, 402. 
 
 accountability to minority when approved by majority stockholders, 
 
 402. 
 under statute, does away with distinction in actions, 403. 
 in representative stockholder's action, should be in equity though same 
 
 issues triable by jury, 403. 
 after released by court order in sale of corporate property by receiver, 
 
 403. 
 action by attorney-general 
 
 for accounting, reimbursement, removal, remedying alienation of 
 
 property, 401. 
 is in right of corporation, 403. 
 who may sue 
 stockholder 
 
 not for ultra vires acts when retains benefit therefrom, 408. 
 for fraud in misappropriating assets, must sue representativel.v, 
 
 408. 
 representatively, refusal of directors to sue must be shown, 408. 
 when waits eight years, 409. 
 not dependent on extent of holdings, 409. 
 when and when not stockholder when action began, 409. 
 when and when not stockholder when wrong done, 409. 
 when corporation refuses to prosecute, 409. 
 when also asks suspension of officers, 410. 
 for paying officer salary for services not rendered, 410. 
 in equity only when corporation refuses, 410. 
 when directors refuse, 410. 
 under statute 
 
 attorney-general, 410, 411. 
 
 corporation, 411. 
 
 director, 412. 
 
 director, need not demand suit by corporation or make it 
 
 plaintiff, 413. 
 director, not after ceases to be, 413. 
 director, of foreign corporation, 413. 
 judgment-creditor, 411. 
 officer, 412. 
 receiver, 412. 
 
 for misfeasance, 413. 
 
 for buying out incorporators of another company with 
 corporation's money, 413. 
 grounds 
 
 in general, 403. 
 
 for combining to despoil stockholder, 404. 
 
 for paying hush-money to permit Sunday operation, 404. 
 
 for using stock surrendered by stockholder for corporation's benefit, 
 
 404. 
 must be specific, 403. 
 
INDEX 1419 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 LIABILITIES CX)MMON TO DIRECTORS AND OFFICERS — contm«ed 
 misconduct and mismanagement — continued 
 grounds — continued 
 
 for helping themselves to corporate property, 404. 
 
 for foreclosing as mortgage creditor of corporation, 404. 
 
 for nonfeasance, liable at law, 405. 
 
 for reducing value of stock by permitting, as director in subsidiaiy, 
 
 embezzlement, 405. 
 at law, for neglectful performance of duties, 405. 
 when warrant suit in equity and when action at law, 405, 406. 
 for negligence in not preventing loan to another corporation to 
 , directors, 406. 
 
 under statute' 
 
 in general, 406. 
 to account for ofScial conduct, 406. 
 
 malfeasance necessary if ground of action is official miscon- 
 duct, 406. 
 to account for injury to or losses of property of corporation, 
 
 406. 
 to reimburse corporation for money or property acquired or 
 
 transferred, 406. 
 to set aside illegal alienation of property, 406. 
 for disposing of corporate assets without protecting creditors, 
 
 407. 
 acquiescence of all stockholders m defense to action under 
 
 Gen. Corp. L. 590, 407. 
 mere neglect or misfeasance sufficient in action by attorney- 
 general, 407. 
 for failure to go through dissolution proceedings, 407. 
 for transferring inter sese corporate property in excess of 
 
 judgment, 408. 
 for accounting, not for fraud or misconduct, if latter not 
 shown, 408. 
 with regard to reports or statemeiits or certificates 
 
 failure to file certificate of payment of capital stock 
 
 governing statute, 397. , 
 
 falsity in 
 
 to one becoming creditor or stockholder on faith of, 397. 
 failure to file certificate of payment of capital stock no penalty, 397. 
 falsity in 
 under former statutes, 39.8n. 
 for sale of stock which do not own 
 
 deemed to know corporate aifairs sufficiently to determine if violates 
 
 law, 393. 
 deemed to have concurred in if does not dissent, 393. 
 misdemeanor, 393. 
 for transfer to directors, officers or stockholders of property of corporation 
 not paying due obligations, 
 in general, 395. 
 
 proof creditor of corporation must adduce, 3®5, 396. 
 municipal court has jurisdiction of action for, 395. 
 persons receiving money are ones to be held, 395. 
 to judgment-creditor of corporation, 395. 
 
1420 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 LIABILITIES COMMON TO DIRECTORS AND OFFICERS — continued 
 for transfer to directors, etc. — continued 
 
 complaint need not allege violation of statute in official capacity, 396, 
 
 trustee in bankruptcy may join all as defendants, 396. 
 
 liable to creditors and stockholders for their loss, 395. 
 
 judgment against corporation establishes creditor's status in holding, 
 
 396. 
 plaintiff need not allege corporate default in payment of obligations 
 within contemplation of statute, 396, 397. 
 actions against 
 practice 
 
 in general, 413. 
 
 equitable suit against various directors to account, though damages 
 
 asked and not equally culpable, 413. 
 stockholders not defendants save when liability on them by statute, 
 
 413, 414. 
 stockholder suing directors for waste must make corporation and 
 
 other stockholders parties, 414 
 joining directors wasting in different years assets of corporation, 
 
 414. 
 joining causes against vaxioas directors with varying liability in 
 
 stockholder's derivative action, 414. 
 suing directors individually of consolidated company not in exist- 
 ence when liability arose, 414. 
 stockholder suing directors respecting officer's misfeasance need 
 
 not join officer, 414. 
 corporation sale to wliich sought to be enjoined by stockholder ot 
 
 seller-corporation cannot intervene, 415. 
 when corporation suing officers at stockholder's request may make 
 
 him defendant, 415. 
 stockholder cannot intervene in representative stockholder's suit 
 
 against officers, 415. 
 uniting cause to set aside contract between corporation and director 
 
 with cause for account, 415. 
 uniting cause for account by director with cause for personal 
 
 damages for their acts, by stockholder, 415, 416. 
 directors need not verify answer to complaint for false report, 416. 
 stockholder suing directors not bound by stated objections, 416. 
 receiver's suit against many directors for breach of trust is at 
 
 law, not in equity, 416. 
 rules governing action for director's account as against action for 
 
 damages, 416. 
 raising question of validity of election of directors voting salary 
 
 to officer which suit seeks accounting for, 416. 
 stockholder's complaint for accounting must allege defendants 
 
 directors at time complained of, 417. 
 stockholder's action for waste, when in name of corporation and 
 
 when not, 417. 
 allegation in stockholder's action for waste as to corporation re- 
 fusing to sue, 417. 
 when corporation to be party to stockholder's suit, 417. 
 if prayer for relief is appropriate only to action at law, will be 
 held such, 417. 
 
INDEX 1421 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 LIABILITIES OOMIHON TO DIRECTORS ANTD OFFICmiS&~ continued 
 actions against — continued 
 practice — continued 
 
 striking out allegations of dealings with corporate property in 
 
 action in equity for accounting, 417. 
 stockholder's action for loss of corporate funds must be in behalf 
 
 of corporation, 418. 
 stockholder's representative action, need only allege demand and 
 
 refusal of corporation to sue, 418, 419. 
 stockholder's representative action, necessary allegations, 418, 419. 
 allegations essential to stockholder's complaint for loss to cor- 
 poration, 418, 419. 
 stockholder representatively suing, for waste, making corporation 
 
 party, 419, 420. 
 director need not demand suit by corporation as condition prece- 
 dent to suit by himself, 420. 
 stockholder suing need not demand directors to sue directors who 
 
 control it, 418, 419, 420. 
 creditor's suit against directors after dissolution, settlement, 421. 
 disclosure by directors of corporate affairs to plaintiff stockholder 
 
 only after demand made and reason shown, 421. ' 
 examination of, when deny plaintiff's allegation he is stockholder, 
 
 421. 
 allegations necessary to complaint by director, 421. 
 examination of, when corporation only is party, 421. 
 corporation suing treasurer for moneys received, when must prove 
 
 demand before suit, 421. 
 to hold directors accountable to creditor ignoi-ed on virtual disso- 
 lution, 425. 
 under statute 
 
 stockholder not excused from testifying, 423. 
 
 jury trial of issue of negligence, 423. 
 
 order enjoining creditors from suing, etc., 423. 
 
 when reference ordered, 424. 
 
 order requiring creditors to exhibit and prove claims, 424. 
 
 by Attorney-General, for accounting, 424. 
 
 subject to general rules of pleading, 424. 
 to hold stockholder and officer for claim against corporation, 
 
 action must be representative, 425. 
 when creditor may sue individually and when representatively 
 
 for account, 425. 
 when acts complained of cover period when diflferent directors 
 
 on board, 425, 426. 
 creditor may proceed against severally, 426. 
 by Attorney-General, for accounting 
 
 facts on which account required to be alleged, 425. 
 must be in equity, 425. 
 
 joining directors causing loss at different times, 426. 
 relief obtainable 
 
 accounting, like other trustees, in equity, 426, 427. 
 in equity, flexible, 427. 
 
 only legal, if for recovery of money through wrongful acts and 
 no account asked, 427. 
 
1422 INDEX 
 
 References are to pages — See also Cyclopedic Analysis precefling page 1. 
 
 LT ABILITIES CXDMMON TO DIRECTORS AND OFFIC^SS — continued 
 aotioiis against — continued 
 
 relief obtainable — continued 
 
 receivership or injunction when stockholder alleges fraud, 427. 
 receivership and injunction against prosecution of creditors' 
 
 claims in action for waste, 427. 
 under statute 
 
 setting aside alienation of property, 428. 
 
 for paying over property acquired, wasted or transferred, 
 
 428. 
 restraining alienation of property, 428. 
 suspension for removal only in action by Attorney-General, 
 
 428. 
 for account, 428. 
 appointing receiver, 428. 
 preventing collection by creditors from, if personally liable, 
 
 428. 
 enjoining threatened acts of mismanagement or waste, 428. 
 recovery of judgment-creditor proportioned to transfer of 
 property, 429. 
 statute of limitations 
 
 receiver's action for damages for waste, 422. 
 when there is concurrent remedy at law and in equity, 422. 
 governs, rather than laches, if action is for legal relief, 422. 
 to stockholder's action for accounting, as to other stockholder^ 
 
 becoming parties, 422. 
 to stockholder's representative action for accounting, 422. 
 
 T.IABILITIES COMMON TO DIRECTORS, OFFICERS AND AGENTS 
 for practising law, 430. 
 for political contributions, 438. 
 
 for omitting to disclose service on themselves of injunction against corpora- 
 tion 
 
 governing statute, 439. 
 
 deemed to have such knowledge as to know if statute violated, 439 
 for fraud in procuring organization of corporation, 438 
 for falsity of report or statement 
 
 deemed to have knowledge of violation of statute, 445 
 
 governing statute, 444. 
 
 to creditor or stockholder, 444. 
 
 statute of limitations, 445. 
 
 misdemeanor, 445. 
 Tor refusal or neglect to make report or statement, 444. 
 for omission of entry or false entry in corporate books of corporate prop- 
 erty acquired 
 
 governing statute, 443. 
 
 a misdemeanor, 443. 
 
 deemed to have knowledge of violation of statute, 443. 
 for refusal to make entry in or exhibit stock book 
 
 governing statute, 444. 
 
 misdemeanor, 444. 
 
 deemed to have knowledge of violation of statute, 444. 
 
INDEX • 1423 
 
 References are to pages — See also Cyclopedic Analysis preceding page, 1. 
 
 LIABILITIES COMMON TO DIRECTORS, OFFICERS AND AGENTS — cont'd 
 for fraud in issue, reissue, sale, pledge or execution of corporate securities 
 is forgery, 440. 
 
 governing statutes, 440. 
 
 to stock subscriber to whom gave statement of corporate indebted- 
 ness, 441. 
 
 to any bona fide buyer, 441. 
 
 when simply director without knowledge of, 441. 
 
 for becoming director with knowledge of insolvency to facilitate, 442. 
 
 for false representations as to corporation's solvency, 442. 
 
 for false pamphlet of agent employed by executive committee of which 
 not members, 442. 
 
 when director stands for false prospectus, 442. 
 
 individually, when acted as board, 443. 
 
 to stockholder, when names used without their knowledge, 443. 
 
 LIBEL AND SLANDER 
 
 corporation may sue for, 509'. 
 
 corpniation cannot sue for, if upon its officers, etc., 510. 
 corporation may be liable for slander as well as libel, 510. 
 liability of corporation for, by officer or agent, 510. 
 to be per se, must effect credit or property, 510. 
 
 corporation suing for, when must allege and prove special damage, 510. 
 corporate liability for dictation of, by general manager, 510. 
 corporate liability for, by attorney of its trustees, on its letter-head, 510. 
 manner of alleging in complaint against corporation, 510, 511. 
 verification of answer to verified complaint against corporation, 511. 
 
 LICENSE TO FOREIGN CORPORATION TO DO BUSINESS ' 
 
 see " Foreign Corporation," subheading " license to do business here." 
 
 LICENSE TAX 
 
 on foreign corporation, see " Foreign Corporations," subheadings " taxation 
 — license tax." 
 
 LOST CHARTER 
 
 see " Certificate of Incorporation." 
 
 LOST STOCK CERTIFICATE 
 
 see " Stock and Capital Stock," subheading " certificates of." 
 
 MALICIOUS PROSECUTION 
 
 president of corporation sued for may testify as to motive, 511. 
 corporation liable in damages for, 511. 
 
 MANAGEMENT 
 
 by-laws may provide for, 44. 
 
 MANAGING AGENT 
 
 service of process on, see " Agents," subheading " process, service of on to 
 bind corporation." 
 
 MANDAMUS 
 
 for legal directors to get corporate books from ones assuming to be 
 directors, 50. 
 
1424 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 MANDAMUS — continued 
 
 to compel delivery of corporate books by outgoing officer, 50. 
 
 by stockholder to obtain inspection of corporate books, see " Stockholder '' 
 
 and " Corporate Books." 
 to compel transfer of stock on books of corporation, see " Stock and Capital 
 
 Stock," subheading " transfer." 
 
 MAXSLAUGHTER 
 
 corporation not liable for, 512. 
 
 MANUFACTURING 
 foreign corporation 
 
 what is and taxation, 545. 
 
 MANUFACTURING CORPORATIONS 
 
 and the income-franchise tax. see " Taxation," subheading " income-franchise 
 tax." 
 
 MEDICINE 
 
 corporation a " person " under statute prohibiting any but registered doctor 
 from advertising to practice medicine, 519. 
 
 MERCANTILE AGENCY 
 
 may incorporate under Business Corporations Law, 15. 
 
 MERCANTILE CORPORATIONS 
 
 and the income-franchise tax, see " Taxation," subheading " income-franchise 
 tax." 
 
 MEETINGS 
 of directors 
 
 in state only if certificate of incorporatipn so says, 20. 
 
 see " Directors," subheading " meetings." 
 of stockholders, see " Stockholders," subheading " meetings." 
 
 MERGER 
 
 name on, see " Name." 
 
 by foreign corporation, 826. 
 
 when domestic corporation may merge, 603. 
 
 when foreign corporation may merge, 603. 
 
 governing statutes, 603, 604. 
 
 distinguished from consolidation, 603. 
 
 how merging corporation runs merged one, 604. 
 
 how accomplished, 604. 
 
 what corporations may be merged, 604. 
 
 certificate of 
 
 contents, 604. 
 
 which corporation makes, 604. 
 
 under seal, 604. 
 
 filing 
 
 where, 604. 
 fee, 604. 
 
 filed with secretary of state, 604. 
 
 effect of, 604. 
 
INDEX 1425 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 MERGER — continuea 
 creditors 
 
 hold merged corporation for debts, 604. 
 eflfect 
 
 on creditors, 604. 
 
 on actions, 604. 
 
 on guaranty, 605. 
 
 MINUTE BOOK 
 
 as evidence, see " Resolutions." 
 
 illNUTES 
 
 as evidence, see " Resolutions." 
 
 MISCONDUCT AND MISMANAGEMENT OF DIRECTORS AND OFFICERS 
 see " Liabilities Common to Directors and Officers," subheading " misconduct 
 and mismanagement." 
 
 MONOPLY 
 
 by foreign corporation, 826. 
 
 MORTGAGES 
 
 see " Corporate Bonds and Mortgages " and " Bonds and Mortgages." 
 
 NAME 
 
 of foreign corporation, see " Foreign Corporation," subheading " license to 
 
 do business here." 
 change of, as avoiding subscriptions to stock, see " Stock and Capital 
 
 Stock," subheading " subscriptions." 
 to be in certificate of incorporation, 19. 
 certificate of incorporation to give, 20. 
 use of one corporation's name by another 
 court relief 
 
 not prevented because secretary of state filed charter of offending 
 corporation, 26. 
 governing statutes, 33. 
 cannot be same or similar to name of corporation authorized to do business 
 
 in state, 33. 
 must indicate company is corporation, 33. 
 
 cannot include words " trust," " bank," " insurance," " indemnity," " guar- 
 antee," " surety," etc., 33. 
 misdemeanor to use words " trust," "bank," " insurance," etc., as part of, 33. 
 word " company " does not indicate corporation, 34. 
 transfer of goods bearing certain name, 38. 
 use of corporate by individual, who bound, 38. 
 
 on reincorporation, reorganization, consolidation, acquisition of property 
 and franchises, merger and dissolution 
 continuing company acquires, 41. 
 of corporation used by individual, 42. 
 goes with good, will on dissolution, 41. 
 individual conducting business in corporate name 
 
 rights of creditors of individual and corporation inter sese, 75. 
 change of 
 
 court not interfere if directors and majority stockholders authorize, 
 unless there be fraud, 38. 
 
1426 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 X'AHE — continued 
 
 cliange of — continued 
 
 petition in district where ofiBce is, 38. 
 
 petition to supreme court, 38. 
 
 contents of petition, 38, 39. 
 
 Secretary of State's certificate of availability of new name annexed to 
 
 petition, 38. 
 contents of Secretary of State's certificate of availability of new 
 
 name, 38. 
 order 
 
 contents, 39. 
 
 time limit of assumption of new name, 39. 
 
 entry, 40. 
 
 contents, 40. 
 
 must be fully complied with, 40. 
 copy of petition and notice of motion filed with Secretary of State, 39. 
 reservation of new name by Secretary of State pending court proceed- 
 ings for change, 39. 
 notice to Secretary of State of adjournment of motion for, to secure 
 
 reservation of new name, 39. 
 proof needed to satisfy court, 39. 
 notice of presentation of petition published, 39. 
 in discretion of court, 39. 
 corporation known by new name, when, 40. 
 court not interfere with if no fraud or illegality, 40. 
 copy of order published, 40. 
 affidavit of publication of order for, filed and recorded, where and 
 
 when, 40. 
 certified copy of order filed with Secretary of State, 40. 
 papers on which granted filed where, 40. 
 not afi'ect litigation, 41. 
 
 order for amendment of name in pending litigation, 41. 
 on dissolution 
 
 protected if another adopts for fraudulent purposes, 42. 
 passes with business, 42. 
 passes with good will, 42. 
 protection of 
 
 in general, 34. 
 
 confusion of business test of right to court, 34. 
 
 family name 
 
 when right to use sold with business, 35, 36. 
 " Henry Romeike, Inc." not infringed by "Albert Eomeike, Inc.," 3.5. 
 
 in general, 35. 
 " Merritt Burial and Cremation Co." and " Merritt Company," 35. 
 given as to trade — as well as corporate — name, 35. 
 " Chas. S. Higgins Co." and " Higgins' Soap Co.", 35. 
 when court will grant, in general, 35. 
 " Strand " and " Harlem Strand," 35. 
 court cannot change but only enjoin use of, 37. 
 to benevolent as well as business corporation, 36. 
 when no identity in businesses of corporations, 36. , 
 apprehension of future injury to business, 36. 
 
INDEX 1427 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 NAME — continued 
 
 protection of — continued 
 
 basis is fraud in confusing businesses, 36. 
 
 " B. P. 0. Elks " and " Improved B. P. 0. Elks," 36. • 
 
 in discretion of court when no fraud, 37. 
 
 granted though both names geographical, 37. 
 
 " The German-American Hand Crochet Button Works " and " German- 
 American Button Co.", 37. 
 
 " The Columbian Chemical Company " and " Columbia Chemical Com- 
 pany," 37. 
 
 on transfer by partnership, 42. 
 
 on dissolution, 42. 
 
 NEGOTIABLE PAPER 
 
 liability of third person relying on ofScers' use of corporate paper for per- 
 sonal profit, see " OflScers," subheading " personal profit." 
 
 NET EARNINGS RULE IN SPECIAL FRANCHISE TAXATION 
 
 see " Taxation," subheading " special franchise tax — valuation and equaliza- 
 tion." 
 
 NOMINAL VALUE OR NO NOMINAL VALUE TO STOCK 
 see " Stock and Capital Stock." 
 
 XON-PAR STOCK 
 
 reorganization to permit of, see " Reorganization," subheading " to proviilc 
 
 for non-par stock." 
 see " Stock and Capital Stock " and " Stockholder." 
 
 NOTE 
 
 as payment for stock, see " Stock and Capital Stock." 
 
 NUISANCE 
 
 ■ forfeiture of charter for, see " Forfeiture," subheading " for maintaining 
 nuisance." 
 
 revocation of foreign corporation's license to do business because of, sec 
 " Foreign Corporation," subheadings " license to do business here," " revo- 
 cation," " for nuisance." 
 
 railroad corporation liable same as individual for, 509. 
 
 franchise to manufacture not license to commit, 509. 
 
 stockholder and director may sue to abate nuisance by his corporation, 500. 
 
 statute permitting State action against persons acting as corporation, when 
 permits suit to abate, 509. 
 
 State cannot sue to abate public, by corporation, when local authorities may 
 sue, 509. 
 
 OATH 
 
 of stockholders at meeting, see " Stockholders," subheading " powers." 
 
 OBJECTS OF CORPORATION 
 
 amendment of charter to express true, see " Certificate of Incorporation/' 
 subheading " amendment." 
 
1428 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICE 
 
 to be stated in certificate of incorporation, 20. 
 
 statement of in certificate as in certain district of certain territory, 21. 
 
 to be given in certificate of incorporation, 23. 
 
 as given in certificate of incorporation cannot be qualified, 23. 
 
 designated at first meeting of directors, 44. 
 
 change of 
 
 by stockholders' vote at special meeting, 29. 
 by stockholders' unanimous written consent, 29. 
 certificate of 
 
 contents, 29'. 
 
 necessary however change effected, 29. 
 execution, verification and filing, 29. 
 
 filed with Secretary of State and clerk of old and new counties, 29. 
 to any city, town or county where to transact business, 29. 
 by legislature creating new county out of old county, 29. 
 accomplished when certificate of change filed, 29. 
 
 OFFICERS 
 
 actions against, see " Liabilities Common to Directors and Officers,'' sub- 
 heading " actions against." 
 of foreign corporation, see " Foreign Corporations,'' subheading " its officers, 
 
 directors and stockholders." 
 right to inspect corporate books, etc., see " Books and Records,' " By-Laws " 
 
 and " Stock-Book." 
 liabilities 
 
 for statements in prospectus, see " Stock and Capital Stock,'' subhead- 
 ing " purchase and sale." 
 for fraudulent issue of stock certificates, see " Stock and Capital 
 Stock," subheading " certificates of." 
 penalty for neglect or refusal to make entry in or permit inspection of 
 
 stock-book, see " Corporate Books." 
 bond 
 
 directors may require of any officer, 357. 
 
 unlimited as to time, effective only for term for which elected when 
 
 given, 357. 
 " during continuance in office " ineffective after expiration of term for 
 which elected, 358. 
 commercial paper 
 accommodation 
 
 power to bind corporation by indorsement, 375. 
 liability of person receiving in payment of officers' individual liability, 
 
 371. 
 when officer also director in corporation taking paper, 371. 
 accepting for officers' personal debt without inquiry which, if made, 
 would have disclosed corporation estopped by custom from disputing, 
 371. 
 signing and indorsing 
 
 banker indorsee need make no inquiry though payable to officers' 
 
 order unless circumstances put on notice, 371. 
 in general, 369. 
 when personally liable, 369. 
 when affix of official character relieves from personal liability, 369. 
 
INDEX 1429 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 DFTICERS — continued 
 
 commercial paper — contmued 
 
 signing and indorsing — continued 
 
 when affix of name of corporation after words descriptive of signers' 
 
 position as officers relieves from personal liability, 370. 
 proof that note signed individually with affixes of words designating 
 
 official position is corporate note, 370. 
 binding corporation without specific authority, 370. 
 signed contrary to by-laws but by officer who has signed other paper 
 
 not repudiated by corporation, 370. 
 liability of person or corporation taking when payable to- officer, 
 
 371. 
 by president 
 
 when by-laws require counter-signature, 372, 373. 
 when forges necessary counter-signature, 373. 
 
 in his name with addition of word " president " and initials of 
 
 corporation, when binds corporation, 373. 
 with name of corporation first, " by " himself, is warranty of 
 
 his authority, 373. 
 appearing to be individual obligation may be shown to be cor- 
 poration's, 373, 374. 
 authority presumed when nature of business justifies presump- 
 tion, 372. 
 authority presumed from customary exercise thereof, 372. 
 ty treasurer 
 
 when for loan for corporation by its authority, 374. 
 when by-law requires counter-signature, 374. 
 
 indorsement of note payable to " Treas.", 374. 
 
 to president for salary, 374. 
 no implied authority, promissory notes, 374. 
 ratification or course of dealing necessary to hold corporation. 
 .374. 
 by vice-president and secretary 
 
 without authority, corporation receiving no profit, 374, 375. 
 by secretary 
 
 with authority, prima, facie binds corporation, though ultra 
 vires, 375. 
 by manager 
 
 for individual brokerage account, 375. 
 contracts with corporation 
 
 accountable for secret personal profit from, 358. 
 to personal profit voidable, 358. 
 election or appointment 
 
 at first meeting of directors, 43. 
 
 by-law adopted by directors regulating, must be published, 44. 
 subject to control of directors appointing, 350. 
 directors may appoint, 350. 
 
 by-laws adopted by directors regulating invalid- unless published, 350. 
 corporation ipay appoint such as business requires, 350. 
 compelled by mandamus, 351. 
 
 when new nominee's name written on ballot and old not scratched out, 
 351. 
 
1430 , INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICERS — conimued 
 liabilities 
 
 on corporate dissolution, see " Lialjilities Common to Officers, Directors 
 
 and Agents." 
 for fraud in procuring corporate organization, see " Liabilities Common 
 
 to Officers and Agents." 
 for fraudulent issue of stock and bonds, see " Liabilities Common to 
 
 Directors, Officers and Agents." 
 for political contributions, see " Liabilities Common to Directors, 
 
 Officers and Agents." 
 in general, 379. 
 
 for pledging corporate bonds as security for individual loan, 359. 
 for converting chattels belonging to another in possession of corpora- 
 tion, 379. 
 for false statements to get credit for insolvent corporation, 379. 
 for criminal conspiracy inter sese, 379. 
 
 for contempt for refusing to produce corporate books, 379. 
 to testify here in foreign litigation, 379. 
 those of fiduciary, 379. 
 to be made defendants in action by creditor against corporation when 
 
 law makes them liable for debts, 380. 
 with regard to corporate books 
 
 for omission of entry in, see " Liabilities Common to Directors, 
 
 Officers and Agents." 
 for refusal or neglect to make entries in stock-book, 381. 
 for refusal to allow inspection of stock-book, 381. 
 with regard to corporate reports and statements 
 for failure to make and file annual report, 382. 
 imder former statutes, 382. 
 
 for falsity of, or omission in, statement of corporate affairs. 382. 
 for refusal or neglect to make report or statement, 381. 
 for omitting to disclose service on himself of injunction against corpo- 
 ration, see ." Liabilities Common to Directors, Officers and Agents." 
 personal profit 
 
 in general, 358. 
 from loan to corporation, 358. 
 
 contracts with corporation, see subheading " contracts with corpora- 
 tion," supra, 358. 
 by buying stock at discount and supplying subscribers at par with 
 
 same and charging corporation diflference, 358. 
 by holding corporation as for account stated on copy procuied from 
 
 bookkeeper, 358. 
 jury passes on whether corporation permitted, 358, 359. 
 using cheque of corporation signed by him, puts creditor of officer 
 
 taking on inquiry, 359. 
 from using corporate property to pay personal debt, 359. 
 from using corporate note for individual advantage, :;.')9. 
 of piesident 
 
 taking security for corporation's indebtedness td him, 360. 
 
 by continuing to deal with corporation, when president, as did 
 
 before, 360. 
 by giving corporate note for obligation he incurred before incorpo- 
 ration, 360. 
 
INDEX 1431 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICERS — continued 
 
 personal profit — continued 
 of president — continued 
 in general, 359. 
 
 through using corporate cheques, liability of banks honoring, 361. 
 by obtaining individual loan on warehouse receipt signed as presi- 
 dent, 361 
 innocent holder of note issued by, for individual benefit, may hold 
 
 corporation, 361. 
 through using corporate cheques, when authorized by course of con- 
 duct, 361. 
 of treasurer 
 
 liability of bank accepting corporation's stock as security for loan 
 to, 362. 
 powers and duties 
 
 to sign and indorse commercial paper, see suljheading " commercial 
 
 paper," supra. 
 of secretary and treasurer- 
 
 to contract for corporation, see subheading " to contract for corpo- 
 ration," supra. 
 to buy his corporation's stock, see " Stock and Capital Stock," sub- 
 heading " purchase and sale." 
 Ijy-laws prescribe, 44, 362, 363. 
 in general, 362. 
 
 assignment for purpose of suit, 378. 
 to assign for corporation 
 • when resolution directs " proper officers," 375. 
 
 to buy, sell, assign, mortgage, pledge and lease 
 in general, 375. 
 
 not without directors' authority, 376. 
 when in habit of making for corporation, 376. 
 injunction to restrain, 362. 
 
 are special and not general agents of corporation, 362. 
 to put in answer when corporation has no defense, 362. 
 usual acts presumed authorized by board, 362. 
 to contract for corporation 
 
 of guaranty of customer's lease, 365, 366. 
 
 as " building committee," 365. 
 
 how authority of one signing for corporation shown, 365. 
 
 general executive has apparent authority if within general scope 
 
 of corporate 'business, 365. 
 burden on corporation to prove outside scope of authority if 
 
 apparently within, 365. 
 estoppel to repudiate if directors hold out as having autliority, 365. 
 by-law limitations, 365. 
 
 burden on party of other part to prove authority. 364. 
 of president 
 
 prima facie good if corporation could authorize or ratify, 366. 
 if terms extraordinary or unusual, other party put on inquirv. 
 
 366. 
 for fabulous commissions, 366. 
 
 for buildings worth many times corporation's capitalization, 
 366. 
 
1432 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICERS — continued 
 
 powers and duties — continued 
 
 to coni raet for corporation — continued 
 of president — contimied 
 
 to build railway under directors' resolution, 367. 
 by-laws properly in evidence to disprove authority, 367. 
 acceptance by signature of, individually, to proposition to 
 
 president as such, 367. 
 acceptance by letter signed individually of proposition in letter 
 
 to corporation, 367. 
 to employ counsel, 368. 
 to retain attorney and pay in stock, 368. 
 
 to cause attorney to appear on application for receivers for 
 corporation, 368. 
 of secretary and treasurer 
 
 no implied authority, if contract ultra vires, 368. 
 of employment, corporation paying one week's wages, 368. 
 to issue treasury stock as commission for selling stock, 368. 
 parol evidence that one signing as such was such in fact, 360. 
 of president 
 
 to buy fittings, 376. 
 
 to sell corporate property without authority to buyer's knowledge, 
 
 376. 
 to deed realty without complying with director's resolution, 377. 
 to assign for creditors without board's authority, 377. 
 to take lease, 377. 
 
 to pledge corporate property, 377. • 
 
 to give lender to corporation lien on its property, 377. 
 to assign generally to himself pursuant to general resolution for 
 
 an assignment, 377. 
 to sell property he bought of corporation, 376. 
 to agree to buy stock in trade for twenty years, 376. 
 by-laws prescribe, 362. 
 
 prima facie to do anything directors could authorize or ratify, 363. 
 to direct one employed by directors, 363. 
 
 may be implied from customary exercise of without dissent, 363. 
 to execute instrument for corporation, 363. 
 to accept stockholder's cheque for assessment, 363. 
 to contract for corporation, see subheading " to contract for cor- 
 poration," supra. 
 to be director, 350. 
 secretary 
 
 to execute and deliver lease on behalf of corporation, 378. 
 treasurer, to sue former treasurer for accounting, 364. 
 salaries, 
 
 in general, 353. 
 
 not when no services rendered, 354. 
 court cannot fix, though may review, 355. 
 of secretary, when no agreement for, 354. 
 raise all around by each voting for other's, 355. 
 
 presumption of gratuitous acceptance of office from being stockholder 
 and doing company's bankins: business, 354. 
 
INDEX 1433 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICERS — continued 
 salaries — continued 
 
 for treasurer, not when acted without, stockholder and got company's 
 
 banking business, 355. 
 no recovery on quantum, meruit, 354. 
 
 for vice-president, not shown by proof of direction of president to ren- 
 der service, 355. 
 must prove services not rendered as officer, 354. 
 modification by parol of by-law fixing, 355. 
 on re-election to same office without anything said as to, 355. 
 judgment of sister-state invalidating director's resolution granting, 356. 
 entitled to for services when not rendered as officer, 354. 
 not entitled to without agreement, 353-. 
 secretary employed to do outside work, 355. 
 
 of president, under invalid directors' resolution, recoverable by corpora- 
 tion, 356. 
 in fraud of creditors or stockholders 
 In general, 356. 
 
 from surplus earnings applicable to dividends, 356. 
 restrained by court, 356. 
 when corporation insolvent, 356. 
 after corporation fails to pay rent, 356. 
 on resignation 
 
 for not engaging in competing business, 357. 
 for past services, perpetually, ultra vires, 357.. 
 on removal 
 
 when reelected "for ensuing year" entitled only for months served, 
 
 357 
 when by-laws say officers hold office at board's pleasure and 
 salary is annual, 357. 
 secretary 
 
 need not be director^ 350. 
 service on of process against corporation 
 
 when not elected at election before service, if officer prior to such 
 
 election and no proof of election of new officers, 378. 
 on nonresident officers in state to take parjt in bankruptcy proceedings 
 
 against corporation, 378. 
 on president de facto, 378. 
 
 on president after resignation and election of successor, 378. 
 after unaccepted resignation, 378. 
 tenure of office 
 
 if guilty of misconduct in one capacity cannot continue in another, 
 
 353. 
 holding over 
 
 till others elected, if elected annually or for definite term, 353. 
 resignation 
 
 not permissible by all at once to allow one to have receiver 
 
 appointed, 353. 
 permissible at any time, 353. 
 tender sufficient without acceptance, 353. 
 removal 
 
 at pleasure of directors, 353. 
 
1434 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OFFICERS — continued 
 
 tenure of office — continued 
 
 trying out and proving title 
 
 action by Attorney-General for usurping, intruding in or unlaw- 
 fully holding 
 only if corporation domestic, 351. 
 complaint may give person entitled, 3,")1. 
 arrest of defendant if receiving emoluments of office, .S.")!. 
 code provisions applicable, 351. 
 governing statute, 351. 
 action by Attorney-General to suspend, remove and have new 
 election 
 suspension or removal only by final judgment, 352-. 
 injunction suspending or restraining officer, 352. 
 governing statutes, 352. 
 treasurer 
 
 need not be director, 350. 
 
 ORGANIZATION 
 
 first meeting of incorporators and procedure thereat, 43. 
 first meeting of directors and procedure thereat, 43. 
 
 ORGANIZATION TAX 
 
 see '• Taxation," subheading " organization tax." 
 
 ORGANIZATION FEES AND TAXES 
 
 $25 for tiling original certificate of incorporation with Secretarv of Slate. 
 
 30. 
 25 cents per folio for recording certificate of incorporation with Secretary 
 
 of State, 30. 
 15 cents per folio (plus one dollar for seal) for copy certified by Secretary 
 
 of State of certificate of incorporation, 31. 
 10 cents per folio for instrument recorded with County Clerk, 31. 
 6 cents per folio for filing certificate of incorporation with County Clerk, 31. 
 organization tax based on authorized capital, 32. 
 minimum $10 organization tax to State Treasurer, 32. 
 taxes payable before charter filed or corporation acts, 32. 
 resumg of, to Secretary of State, State Treasurer and County Clerk, 32, 
 organization tax when stock has or has not par value, 33. 
 
 OWNERSHIP OF STOCK 
 
 see " Stock and Capital Stock," subheadings " ownership " and " certificates 
 of"; and title "stockholder." 
 
 PAR VAI.UE STOCK 
 
 see •■ Stock and Capital Stock." 
 
 PARTNERS 
 
 as promoters 
 
 liability for each others' misrepresentations, 2. 
 corporators of defective corporation liable as, 10. 
 
 PARTNERSHIP 
 
 distinguished from corporation. 9. 
 distinguished from syndicate. 11. 
 
INDEX 1435 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 PENALTY 
 
 on treasurer to stockholder for not giving financial statement, see "Stock- 
 holders" subheading "rights." 
 
 PEKALTY FOR REFUSING TO KEEP STOCK BOOK OR PERMIT INSPEC- 
 TION THEREOF 
 see " Books and Records." 
 
 PERSONAL PROFIT 
 
 see " Promoters," and like specific headings. 
 
 PERSONAL PROPERTY TAX 
 
 see " Taxation,' subheading " personal property." 
 
 PERSONAL PROPERTY TAXATION 
 
 see " Taxation," subheading " personal property." 
 
 PLACE OF BUSINESS 
 see " Office." 
 
 PLEDGE 
 of stock 
 
 see " Stock and Capital Stock," subheading " pledge." 
 
 PLBIXJE OF STOCK 
 
 voting, see " Stockholders," subheading " powers." 
 
 POLITICAL CONTRIBUTIONS 
 governing statute, 515. 
 testimony as to, by corporation, when incriminating, 515. 
 
 POWERS OP ATTORNEY 
 
 to transfer stock, see " Stock and Capital Stock," subheading " by power 
 of attorney." 
 
 POWERS OF CORPORATIONS 
 
 see " Corporate Powers, Duties and Liabilities." 
 
 inclusion of in charter 
 
 see "Certificate of Incorporation," subheading " amendment." 
 
 POWERS,' DUTIES AND LIABILITIES 
 
 as to creditors and debtors, see " Dealings with Creditors and Debtors." 
 
 PRACTICE OF LAW 
 see " Law." 
 
 PREFERRED STOCK 
 
 see " Stock and Capital Stock." 
 
 PREFERRED STOCKHOLDERS 
 dividends to, see "Dividends." 
 see " Stockholders." 
 
 PRINCIPAL PLACE OF BUSINESS 
 see " Office." 
 
1436 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 PRIVATE ACTS 
 
 see " Public and Private Acts." 
 
 PRIVATE CORPORATIONS 
 see " Corporations." 
 
 PROCESS 
 
 service of in actions against corporations, see " Service of Process." 
 service of on agent to bind corporation, see " Agents," subheading " process, 
 service on." 
 
 PROMOTERS 
 contracts by 
 
 not generally binding on corporation, 3. 
 
 evidence necessary to bind corporation, 4. 
 
 who may ratify on behalf of corporation, 4. 
 
 method of proof to fasten on corporation, 5. 
 
 cannot bind corporation to accept bad cheque for subscription, 5. 
 
 with corporation 
 
 not enforcible when rights thereunder surrendered, 4. 
 
 bind corporation ratifying them, 4. 
 agreements by 
 
 in fraud of corporation voidable, 4. 
 definition, 1. 
 
 distinguished from corporation, 3. 
 agreement to sell out to co-promoters, 2. 
 agreements with corporation's representative before incorporation 
 
 ratified by overpayment on contract after incorporation, 5. 
 cannot secretly profit on sale to corporation, 3. 
 suable by corporation for secret profit, 3. 
 note given to 
 
 unenforcible by corporation, 4. 
 agreement to form corporation 
 
 cannot compel stockholders to agree in advance to employ promoter as 
 corporate agent and his compensation, 2. 
 
 may fix price for which stock to be issued, 2. 
 
 stipulation for management not binding on directors, 2. 
 
 may agree upon management of corporation, 2. 
 
 assumed lawful, 1. 
 
 void when deprives directors of power, 1. 
 
 unenforcible if parties cannot agree, 1. 
 agreement to pay attorney 
 
 evidence admissible, 2. 
 agieement for secret profit 
 
 not binding on innocent stock-purchaser, 3. 
 secret profit 
 
 burden on him to prove fairness, 3. 
 liability 
 
 for each others misrepresentations in prospectus, 2. 
 when partners, 2. 
 
 to subscribers for concealment, 6. 
 
 to subscribers for false statement as to payment for stock. 6. 
 
 to subscriber when corporation not formed for money paid, 6. 
 
 for false prospectus, 5. 
 
INDEX 1437 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 lOMOTBRS — continued 
 liability — continued 
 
 to subscribers for misrepresentation, 5. 
 pay for services 
 
 when may hold corporation and when only officer accepting same, 5. 
 agreement for with corporation 
 
 lost by surrender of rights, 4. 
 
 ROOF OR ACKNOWLEDGMENT 
 
 correcting defective, to charter, by corporators or directors, see " Certifi- 
 cate of Incorporation," subheading " Amendment." 
 
 ROSPECTUS 
 
 purchase and sale of stock through, see " Stock and Capital Stock," sub- 
 heading " purchase and sale." 
 liability for false, of promoters, see " Promoters." 
 
 ROXY 
 
 see " Stockholders," subheading " powers." 
 
 not a stockholder may call stockholders' meeting to order at president's 
 
 request, 175. 
 for consideration, is misdemeanor, 178. 
 
 ■UBLIC AND PRIVATE ACTS 
 defined, 14. 
 
 private cannot regulate bridge-building corporations, 15. 
 general laws for corporate franchises, taxation and bridge-building, 15. 
 public for incorporations except when not feasible, 15. 
 affecting corporations, repealable, 15. 
 private cannot relieve corporation from taxation, 15. 
 private must state subject in title, 15. 
 private cannot grant corporation exclusive privilege, 15. 
 title must express object 
 
 when may be waived, 16. 
 examples of titles not indicating objects, 16. 
 construed as constitutional if possible, 16. 
 permitting incorporation, repealable, 17. 
 
 " and " instead of " on " in statute prescribing purposes for which corpora- 
 tion might be formed, 21. 
 
 URCHASE BY CORPORATION 
 when promoter involved 
 see " Promoters." 
 
 'UROHASE OF STOCK 
 
 see "Stock and Capital Stock," subheading "purchase and srls." 
 
 'URPOSES 
 
 of corporation, see " Corporations." 
 
 'XIRPOSES OF CORPORATION 
 
 amendment of charter to express tiue 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
1438 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1 . 
 
 PURPOSES OF CORPORATIOX — comfinited w 
 
 amendment of charter to include new 
 
 see " Certificate of Incorporation," subheading " amendment." 
 certificate of incorporation to give, 20. 
 " the mining of gold, silver and lead," a sufficient statement of, 20. 
 
 QUORUM 
 
 of directors, see " Directors," subheading " meetings." 
 
 of stockholders, see " Stockholders," subheading " meetings." 
 
 REAL ESTATE 
 
 powers of foreign corporations as to, see " Foreign Corporations," sub- 
 heading " real estate." 
 
 REAL ESTATE TAX 
 
 see " Taxation," subheading " real estate." 
 
 REAL ESTATE TAXATION 
 
 see " Taxation," subheading " real estate." 
 
 RECEIVERS 
 
 accountings and distribution 
 governing statutes, 657. 
 must keep account, 657. 
 
 payment of distributive shares shown by quarterly statement, 664. 
 governing statutes, 664. 
 distribution ii\ general, 667. 
 
 order of distribution, see subheading " creditors " infra. 
 distribution to stockholders after second dividend. 666. 
 summary order to pay over. 650. 
 removal and penalty for failure to distribute, 665. 
 removal for failure to distribute, 665. 
 filing and settlement of account 
 
 application for settlement or extension 
 within year of qualifying, 657. 
 governing statutes, 657. 
 notice to Attorney -General, 657. 
 contents of application. 657. 
 discretion of court in granting, 657. 
 creditor or Attorney-General may get order for, 657. 
 attorney may seek at any time, 658. 
 Attorney-General to require after eighteen months, 658. 
 appeal from order for, 658. 
 
 order for when other than Attorney-General applies, 658. 
 required only as statute requires, 658. 
 notice of 
 
 by publication, 658. 
 to sureties, 658. 
 
 to Attorney-General only, binding on creditors? 659. 
 hearing, 659. 
 reference 
 
 in general, 659. 
 
 when ordered, 6")9. 660. 
 
TNDEX ■ 1439 
 
 References are to pages — See also Cyclopedic Analysis preceding pag3 1. 
 
 lECEIVERS — continued 
 
 accountings and distribution — continued 
 
 filing and settlement of account — continued 
 decree 
 
 in general, 659. 
 
 in other jurisdictions, protect receivers, 659. 
 in sequestration or dissolution 
 must keep account, 657. 
 .must file statement quarterly, 657. 
 open to inspection, 657. 
 final judgment in sequestration or dissolution to provide for distriliu- 
 tion, 664, 665. 
 actions 
 
 for determination of claim to real property, 680. 
 
 calendar preference, 680. , 
 
 preference when order to account has heen made, 680. 
 
 appearance in is for all concerned, 680. 
 
 begun before appointment, judgment not bind, at common law, 680 
 
 may move to vacate service against corporation, 680. 
 
 appeal from order in, when party also as trustee and to which did not 
 
 object as trustee, 680, 681. . 
 may not appeal from order of discharge, 681. 
 
 to recover distribution of capital by corporation while insolvent, 681. 
 appeal from affirmance of order to pay claim, 681. 
 temporary receiver in dissolution not necessary party to foreclosure of 
 
 corporation's mortgage, 681. 
 temporary receiver in dissolution proper party to creditor's represen- 
 tative action, 681, 682. 
 retaining enough to cover actions against corporations, 654. 
 payment of funds retained to cover, 666. 
 
 by 
 
 to recover anything arising from illegal combination for which 
 corporation dissolved, 682. 
 
 to enforce president's agreement with creditor not to take salary, 
 682. 
 
 aside from statute, 682. 
 
 to collect and realize on corporate assets, 682. 
 
 in dissolution, continuance of prior action, 682. 
 
 in sequestration, continuance of prior action, 682. 
 
 of ancillary receiver, of prior action for unpaid calls, 682. 
 
 limitation same as for trustee of express trust, 082. 
 
 to follow as trust fund into stockholders' hands ultra vires pay- 
 ments of corporation, 683. 
 
 to set aside collusive judgment against corporation, 683. 
 
 to enjoin foreclosure in foreign State, 682, 683. 
 
 to recover property covered by chattel mortgage not refiled, 683. 
 
 to determine what bonds secured by mortgage. 683. 
 
 to hold for conversion one getting corporate property while insol- 
 vent, 683. 
 
 to recover fraudulent preference, 683. 
 
 to sue directors for misconduct or accounting, 684. 
 
 notice to Attorney-General of warrant for discovery, 684. 
 
1440 • INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 EECEIVEES — contimied 
 actions — continued 
 by — continued 
 
 stockholders as parties to action to recover assets, 684. 
 offset in, of claim against corporation, 684. 
 against 
 
 without leave, remedy, 684. 
 
 striking out when provisionally discharged, 684. 
 substitution after advertising for claims including that of plain- 
 tiff, 685. 
 discontinuance as of right, 685. 
 injunction against prosecuting, not effective against foreign corpo- 
 
 tion, 685. 
 bringing in as co-defendant corporation to which receivers have sold 
 out, 685. 
 to recover property needed for conduct of corporate business, 685. 
 
 discharged, not necessary party to action by creditors to hold 
 officers individually liable, 685. 
 appointment 
 
 only as incident to other relief sought, 622. 
 when title of receivers relates back to, 634. 
 
 by irregular order in proceeding for voluntary dissolution, 623. 
 when order for complies with statute's mandate that all persons inter- 
 ested show cause, 623. 
 sustaining denied allegation of, 624. 
 who may apply for 
 
 person interested, 623. 
 creditor-at-large, 623. 
 when made 
 
 in general, 624. 
 governing statutes, 624. 
 
 in action by Attorney-General to vacate or annul charter, 626. 
 on forfeiture of charter for nuisance, 626. 
 in action for sequestration and dissolution 
 only by authority of statute, 627. 
 not by chancery, 627. 
 governing statute, 627. 
 frivolous answer by corporation, 627. 
 temporary 
 
 not on complaint alone in sequestration, 627, 628. 
 not when assets exceed liabilities in dissolution schedules, 628. 
 not in proceedings for voluntary dissolution, 628. 
 in proceedings for voluntary dissolution, 628. 
 grounds 
 
 corporation organized simply to take over another against whicl- 
 applicant had judgment, 626. 
 of property of corporation 
 when made 
 
 in supplementary proceedings, 626. 
 to dissolve, 624. 
 
 when no creditors' rights involved, 625. 
 in general, 624. 
 
INDEX 1441 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — continuea, 
 appointment — continued 
 
 of property of corporation — continued 
 when made — continued 
 
 to .compel account for oflScial conduct, 624. 
 
 to preserve assets, 624. 
 
 to foreclose mortgage, 624. 
 
 to vacate or annul, 624. 
 
 in suit by stockholder, 625. 
 
 in suit by stockholder alleging fraudulent diversion of assets, 
 
 625, 626. 
 in suit by stockholder when insolvent, directors will not move, 
 
 etc., 625. 
 in suit by stockholder to compel restitution by oflScers, 625. 
 in suit by stockholder alleging concealment of books, labor- 
 boycott, etc., 625. 
 to sequestrate, 624. 
 to suspend or remove, 624. 
 by what court 
 
 State, of corporation, after appointment by Federal, of property, 
 etc., 629. 
 where made 
 
 State, when Federal already has appointed, 629. 
 
 in any county, in action by people, 628, 629. 
 
 in judicial district where triable, in action by Attorney-General, 
 
 629. 
 to foreclose mortgage, 629. 
 notice of application for 
 
 when necessary to corporation, 630. 
 governing statute, 630. 
 notice of 
 
 governing statutes, 630. 
 on foreclosure 
 
 not to Attorney -General, 631. , 
 by permanent receivers in insolvency or on dissolution 
 form and contents, 630, 631. 
 publication, 630. 
 in general, 630. 
 in sequestration 
 
 to Attorney-General, 631, 
 referee 
 
 when, 622. 
 
 order for set aside in action for sequestration and dissolution not 
 
 brought by Attorney-General, 627. 
 in action to obtain, 622. 
 
 no reference as of course upon consent unless Attorney-General 
 plaintiff, 622. 
 on foreclosure 
 
 on verified complaint alone, 628. 
 temporary 
 
 theory of, 622. 
 
 how far interfere with assets, 623. 
 
 B. C. N. Y.— 91 
 
1442 INDEX 
 
 References are to pages — See also Cyclopedic Analysis pteceding page 1. 
 
 RECEIVERS — continued 
 appointment — continued 
 temporary — continued 
 
 of insolvent corporation, before order to show cause for its dis- 
 solution, 623. 
 
 only when clearly necessary, 626. 
 effect 
 
 in state court after appointment in federal, 632. 
 
 on stockholders' liability for debts, 632. 
 
 on agreement to pay majority stockholder for sale of stock control, 
 632. 
 
 on liens, 632. 
 
 of common law receiver of property, on title of corporation. G32. 
 
 on suit for fraudulent diversion of assets by officers, 632. 
 
 temporary receiver pendente lite, 633. 
 
 on title to corporate receiver, by appointment temporary receiver 
 pendente lite, 633. 
 
 on others when binding on corporation, 633. 
 
 on payment of rent by corporation, 633. 
 
 on lease by corporation, 633. 
 
 on execution in favor of judgment-creditor, 633. 
 
 on title, as affected by time of entry or signing of order, 634. 
 
 on attachment, in voluntary dissolution receivership, 634. 
 
 on title of receiver in voluntary dissolution, 634. 
 
 on action to foreclose, 634. 
 
 on motion to vacate attachment, 634. 
 vacation of 
 
 when judgment against corporation opened up, 627. 
 
 because no notice to judgment-creditor or attorney-general, 631. 
 on insolvency or dissolution 
 
 debtors notified to pay, 630. 
 notice of appointment, 630. 
 contractees notified to exhibit contracts, 631. 
 creditors notified to present claims, 631. 
 holders of property notified to deliver same, 631. 
 appraisal of property in hands of 
 governing statutes, 649. 
 how valued, 649. 
 bond 
 
 by temporary receiver permits suit though none given as permanent 
 
 receiver, 636. 
 to be given before intermeddles, 636. 
 effectuates title of receiver, 636. 
 of temporary receiver, 635. 
 new bond, 635. 
 in general, 635. 
 action on, 636. 
 certificates 
 
 right of court to issue, 655, 656. 
 
 proceeds of to pay unsecured claims, 656. 
 
 of equal standing with receivers' notes, 656. 
 
 when authorized, 656. 
 
 in sequestration pending foreclosure not prior lien, 656. 
 
INDEX 1443 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — continued 
 compensation 
 
 gpverning statute, 660. 
 
 in general, 663. 
 
 when render no services, 663', 664. 
 
 division among when more than one, 663. 
 
 review on appeal of lower court's allowance, 663. 
 
 new statute for not govern for services performed, 663. 
 
 temporary 
 
 fixed on application to resume business, 660. 
 ' in voluntary dissolution 
 
 governing statutes, 661, 662. 
 percentages, 662. 
 
 minimum $100 in court's discretion, 662. 
 in cases other than voluntary dissolution 
 percentages, 662. 
 governing statutes, 662. 
 minimum $100 in court's discretion, 662. 
 on vacation of order appointing, 663. 
 of removed receiver 
 
 order to compel new receiver to pay, 663. 
 of continuing or successor receiver, 663. 
 on what based 
 
 cash, securities, notes, bonds, mortgages, evidences of debt, 664. 
 realty, 664. 
 
 reassessments on associates of insurance company, 664. 
 sums received and paid out, 664. 
 on entire property received and paid out, 664. 
 ' additional allowance 
 
 governing statutes, 663. 
 on final accounting only, 663. 
 when made, 663. 
 contracts 
 
 notice to contractors to present contracts to receivers, 652. 
 creditors i 
 
 dividends, see subheading " dividends," infra. 
 attachment 
 
 vacating of, by receiver, 681. 
 notice to deliver accounts and demands to receivers, 652. 
 whose claims not due on distribution, rebate, 654. 
 set-off 
 ' in general, 654. 
 
 subtenant of insolvent corporation, of debt against corporation, 
 672. 
 action by against, authorized despite statute providing method for 
 
 adjustment, 655. 
 unsecured, not paid from proceeds sale receiver's certificates, 656. 
 not answerable to after second dividend unless demands proven, 666, 667. 
 non-resident treated like resident in payments, 667. 
 domestic protected from transmission of funds to foreign state, 668. 
 by judgment, when receiver in supplementary proceedings also receiver 
 in pending foreclosure, 668. 
 
1444 INDEX 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — continued 
 creditors — continued 
 
 secured, may prove full claim, 668. 
 for 250 days' services at $100 a day, 668. 
 claims fixed as of date of appointment, not presentation, 668. 
 claims fixed as of date of commencement of action for dissolution, 668. 
 interest on claims, 669. 
 
 interest, as between preferred and unpreferred, 669. 
 ' may hold corporation, officers, stockholders, directors for transfer in 
 contemplation of receivership, 670. 
 claims not affected by receiver's discharge, 676. 
 order of payment 
 
 creditor neglecting to exhibit claim before first dividend, 665, 066. 
 governing statutes, 665. 
 preferred 
 
 governing statutes, 669 
 
 order of preference, 669. 
 
 not permitted by transfer in contemplation of receivership, 670. 
 
 lawyer whose bill made lien by agreement directors and temporary 
 
 receiver, 671. 
 taxes 
 
 paid before creditors, 671. 
 attachment creditors, 671. 
 : judgment-creditors by action begun before action for receivership. 
 
 671. 
 not officer, by making bookkeeping entry, 671. 
 holder of unauthorized receivers' notes, 672. 
 wages of employees 
 
 governing statutes, 670. 
 
 who is "employee," 670. 
 
 not assignable before receiver appointed, 670. 
 
 orders by corporation for, equivalent to payment, 671. 
 
 come immediately after valid prior liens and encumbrances, 
 
 672. 
 when earned prior to act preferring, 672. 
 what are " wages," 672, 673. 
 
 " employees," limited by accompanying words, 673. 
 bookkeeper, is? 673, 674. 
 "employee" correlative of "employer," 673. 
 bookkeepers and salesmen, are, 673. 
 clerk's, superintendent, foremen and officers at annual salary, 
 
 not, 673. 
 assistant-superintendent at $700 a month, 674. 
 superintendent, 674. 
 attorney, 674, 675. 
 
 clerk, draftsmen, superintendent, foreman, paid monthly, 674. 
 assistant to general manager, paid monthly, 674. ' 
 manager paid weekly $40, 674. 
 independent contractor, 675. 
 
 traveling salesman paid annual salary and commission, 675. 
 traveling salesmen; 675. 
 weekly salary and percentage of sales, 675, 676. 
 
INDEX 1445 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — continued 
 debtors 
 
 notice to present statement and pay to receivers, 651, 652. 
 
 notice to deliver property to receivers, 652. 
 
 must answer to receivers, 652. 
 
 forfeit for failure to account and deliver over, 652. 
 
 set-off, 654. 
 
 permanent, 622. 
 
 temporary, 622. 
 
 imclaimed for one year, distributed, 666. 
 
 second 
 
 how made, 666. 
 notice of, 666. 
 
 distribution of mpneys left after, among stockholders, 666. 
 none other except to creditors suing, 666. 
 out of what made, 666. 
 when made, 666. 
 expenses 
 
 disbursements 
 
 governing statutes, 660. 
 court sanction should be obtained, 660. 
 premium of bond, 662, 663. 
 incurred without court sanction, 660. 
 attorney's fees, 661. 
 
 of resisting receiver's appointment in bad faith, 661. 
 of contract completed by him though assigned by his corporation to 
 
 another, 66.1. 
 costs of action against corporation defended by him, 661. 
 individual liability for unauthorized, 661. 
 prior liens 
 
 printing, advertising, legal, referee's and stenographic fees, in 
 dissolution, 661. 
 jurisdiction of court over 
 
 to vacate order obtained by receiver for fraudulent purpose, fi2f). 
 
 forbidding interference with receiver, 629. 
 
 after presentation of petition for dissolution, 630. 
 
 to enjoin receiver from prosecuting action in another state, 630. 
 
 in general, 641. 
 
 when receiverships sought simultaneously in foreclosure and dissolution, 
 
 641. 
 temporary receiver in dissolution or sequestration, 641. 
 to compel account, 641. 
 oath, 635. 
 penalties 
 
 for failure to distribute, 665. 
 powers, duties and liabilities 
 
 see subheading " actions," su/pra. 
 
 when irregularly appointed, 636, 637. 
 
 when appointed on application of attorney-general, 637. 
 
 liability to pay creditor for goods under agreement, 638. 
 
 power to enforce statutory action against directors given creditors and 
 
 stockholders, 638. 
 takes for benefit of all creditors, 638. 
 
1446 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — cmtinued 
 
 powers, duties and liabilities — continued 
 
 of railway pendente lite for coal used in operation, 640. 
 
 cannot repudiate legal transaction of corporation, 640. 
 
 in equity pendente lite, 640. 
 
 of- insolvent corporation, 640. 
 
 to disafSrm dealings in fraud of creditor's rights, 640. 
 
 concerning mortgages and pledges and judgments, 640. 
 
 to release judgment-assets to prior judgment-creditor, 641. 
 
 when one only and when more than one, 642. 
 
 deposit of funds, 642. 
 
 funds kept separate from individual moneys, 642. 
 
 rights to corporate books, 642. 
 
 investment of funds, 642. 
 
 liability on draft, 642. 
 
 funds' condition proven from books, 642. 
 
 preforming contracts, 643. 
 
 canceling contingent contracts, 643. 
 
 right by order to show cause to determine title of assignee of corporate 
 
 property, 643. 
 entering into contracts, 643. 
 on leases, 644. 
 
 for goods supplied to complete contract under court order, 644. 
 restraining enforcement of forfeiture clause in contract, 644. 
 stock subscriptions to be recovered, 646. 
 to recover property and securities, 646. 
 to sue to recover property, debts and choses in action, 646. 
 to demand attached property from sheriff, 647. 
 to take possession of property, books, etc., 647. 
 set-off against debts sued for, 647. 
 penalties, recovery of and disposition, 649. 
 right to property of corporation generally assigned, 649. 
 holding real property in trust, 650. 
 when appointed in actions to sequestrate and dissolve 
 
 governing statutes, 637. 
 
 in general, 638. 
 
 liability for personal injury to employee, 638. 
 
 trustee for creditors and stockholders, 639. 
 
 to convert property into money, 639. 
 temporary receiver 
 
 governing statutes, 638, 639. 
 
 with and without special grant by order, 639. 
 
 to distribute, 639. 
 
 policy of statutes, 639. 
 
 to collect, preserve and sell, 639. 
 
 to sue, 639. 
 
 incidental, 639. 
 
 to contract to pay truckmen, 644. 
 on foreclosure 
 
 as party to suit against corporation for trespass, 641. 
 
 to incur debts for rolling stock, 641. 
 contracts 
 
 cancellation of insurances and contingent engagements, 6.54. 
 
 retaining funds needed to cancel, 654. 
 
INDEX 1447 
 
 keferences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — cmtmued 
 
 powers, duties and liabilities — continued 
 counsel employed 
 
 governing statutes, 644. 
 written contract required, 644. 
 
 charge of for defending corporation against dissolution, 645. 
 charge of, 645. 
 
 disagreement between receivers, 645. 
 lor not over eighteen months, 645. 
 
 payment only on notice to attorney-general by court order, 645. 
 court approval of, nunc pro tunc, 646. 
 court order to recover assets 
 governing statutes, 647. 
 petition, 647. 
 petition, contents, 647. 
 where and when applied for, 647. 
 testimony not excused because incriminating, 648. 
 injunction as part of, 648. 
 contents of, 648. 
 notice, or not, for, 648. 
 liearing before referee or court, 648. 
 adjournment of hearing on, 648. 
 
 witness fees, oath, penalties, counsel, examination, 648. 
 order for delivery of property or otherwise, 649. 
 testimony on hearing pursuant to, signed, sworn to and filed, 649. 
 creditors 
 
 to examine on oath, 652. 
 
 set-off of mutual debts and credits, 654. 
 
 to settle with 
 
 governing statutes, 652. ' 
 reference, 652, 653, 655. 
 meeting of 
 
 governing statutes, 655. 
 when called, 655. 
 adjustment of accoimt at, 655. 
 notice, 655. 
 debtors 
 
 to settle with 
 
 governing statutes, 652. 
 to examine on oath 
 
 governing statutes, 652. 
 to settle with 
 
 reference, 652, 653. 
 set-off of mutual debts and credits, 654. 
 sale and conversion into money of property 
 governing statutes, 650. 
 in general, 650. 
 
 of property of illegal combinationj 651. ■ 
 by court order 
 
 governing statutes, 650. 
 
 application, 650. 
 
 notice of application, 650. 
 
1448 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECEIVERS — continued 
 
 powers, duties and liabilities — continued 
 
 sale and conversion into money of property — continued 
 by court order — continued 
 
 not on affidavits only in dissolution, 651. 
 when otherwise guilty of conversion, 651. 
 releasing promoters of corporation, 651. 
 in dissolution, when no notice to attorney-general, 651. 
 at public auction 
 
 governing statutes, 650. 
 
 subject to mortgage, pledge, judgment, etc., 650. 
 notice of, 650. 
 credit allowed on, 650. 
 conveyance and bill of sale, 650. 
 redeeming mortgages, pledges, judgments, etc., 650. 
 reports 
 
 governing statutes, 657. 
 copy served on attorney-general, 657. 
 motion by attorney-general to compel, 657. 
 removal 
 
 for failure to perform any duty, 665. 
 
 for failure to keep quarterly statement and books open for inspection, 
 
 665. 
 for failure to distribute, 665. 
 security for costs, 637. 
 survivor and successor 
 
 powers and rights, 679. 
 
 notice of order to predecessor to produce books, 679. 
 executors of as parties to accounting by coreceiver, 679. 
 subsequent to first account, 659. 
 tenure of office 
 
 in general, 676. 
 
 not continued after directors complained of supplanted, 676. 
 
 discharge 
 
 prevents further litigation with by creditor, 676. 
 eflfect on creditor's unpaid claim, 676. 
 cannot appeal from, 681. 
 removal, see also subheading " removal," supra. 
 removal 
 
 on motion of attorney-general at any time, 678. 
 
 on application of attorney-general on insufficient ground and notice, 
 
 678. 
 on attorney-general's application backed by only bare majority 
 
 of bondholders, 678, 679. 
 appeal from order of had by attorney-general, 678. 
 for failure by permanent receiver in sequestration or dissolution 
 
 to permit inspection of books, 678. 
 for failure of permanent receiver in sequestration or dissolution 
 
 to pay demand shown in quarterly statement, 678. 
 by court on own motion, 678. 
 
 because had been director and treasurer of corporation, 679. 
 because judgment of creditor preceding appointment coUusively 
 obtained, 679. 
 
INDEX 1449 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 RECBIVTJJBS — continued 
 
 tenure of office — continued 
 renunciation 
 
 governing statutes, 677. 
 application for order to show cause, 677. 
 account to accompany application 
 governing statutes, 677. 
 form and contents, 677. 
 affidavit annexed to, 677. 
 must be verified, 677. 
 notice of application 
 published, 677. 
 required of order, 677. 
 order to show cause 
 
 governing stautes, 677. 
 
 requires notice to be given, 677. 
 order permitting 
 
 discharges receiver, 677. 
 when granted, 677. 
 expense of proceeding paid by receiver, 678. 
 vacation of appointment 
 
 see also subheading " vacation.'' 
 because of mistake in spelling corporate name, 67&. 
 vacancy 
 
 how filled, 679. 
 title relates back from time of giving security, 636. 
 
 RECORDS 
 
 as evidence, see " Resolution." 
 
 REDUCTION OF CAPITAL STOCK 
 
 see " Stock and Capital Stock," subheading " decrease." 
 
 REDUCTION OP NXBIBER OR PAR VALUE OF STOCK 
 
 by amendment of charter or otherwise, see " Stock and Capital Stock." 
 
 REDUCTION OP NUMBER OF SHARES OP STOCK. 
 
 see " Stock and Capital Stock," subheading " decrease." 
 
 REDUCTION OP STOCK 
 
 by amendment of charter or otherwise, see " Stock and Capital Stock." 
 
 REFERENCE 
 
 in dispute between receiver and creditor or debtor, see "Receivers." 
 
 REGISTRARS 
 
 see " Corporate Bonds and Mortgages,'' subheading " registrars." 
 
 REINCORPORATION 
 
 name of, see " Name." 
 
 REINCORPORATION UNDER BUSINESS CORPORATIONS LAW 
 
 see "Reorganization," subheading "imder business corporations law." 
 
1450 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 REORGANIZATION 
 
 name on, see " Name." 
 
 new company formed by same persons as to whom property transferred, 
 
 taking same, charged with conditions, 612. 
 by syndicate agreement 
 
 practice in suit thereon, 613. 
 agreement for 
 
 in general, 615. 
 construction 
 
 when no time limit for exchanging stock in old for bonds in new 
 
 corporation, 615. 
 what road referred to when stock of new company formed to 
 
 operate road to be distributed, 619. 
 when provides reorganization committee has right to construe it, 
 
 615. 
 when prepared by reorganization committee, 615. 
 modification or rescission 
 
 no modification inferable when nothing to show, 615. 
 necessary conditions to rescission, 615. 
 
 to pay attorney in stock because reorganization plans somewhat 
 altered, 616. 
 bondholders' rights, etc. 
 
 wheii entitles them to " detailed plan of reorganization " from com- 
 mittee, 616, 617. 
 to consent to or reject reorganization scheme, 616. 
 to abide by scheme submitted to them to decide whether, 616. 
 action against reorganization committee, in tort or contract, 616. 
 committee's rights, etc. 
 
 bound by plan as to matters specifically covered, 617. 
 
 letter signed by member individually, adding '• chairman.," 617, 618. 
 
 agreement strictly construed as against, 617. 
 
 express power not extended by construction, 617. 
 
 general powers not implied, 617. 
 
 when agreement says not responsible save for willful misconduct, 
 
 617. 
 to account, allegations sufficient to call for account, 618. 
 to account to creditor for his contribution to expenses, 618. 
 to have contract made by them avoided for fraud, 618. 
 to distribute stock before time set, 618. 
 to depositors of claims, 618. 
 
 protected by following agreement which bondholders approved, 618. 
 old and new company's rights, etc. 
 
 company issuing bonds under agreement proper party to action 
 
 against committee, 619. 
 value of relief to which entitled immaterial to its being granted, 
 
 613. 
 of new under bonds of old when assumes old's obligation, 619. 
 of new for debts of old results from contract relationship, not by 
 
 operation of law, 620. * 
 
 of new for liabilities of receiver of old, 620. 
 of new for judgment-debt against old, 620. 
 
 of new for indebtedness of old assumed for it and benefits of 
 which it received, 620. 
 
INDEX 1451 
 
 Kefeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 REOEfiANIZ ATION — continued 
 agreement for — continued 
 
 old and new company's rights, etc. — continued 
 
 of new under contract of old when new formed by components of 
 old to carry on old's business, 620. 
 imder Business Corporations Law 
 
 ■governing statutes, 613. ' 
 
 manner of, 613. 
 certificate of proceedings for 
 governing statute, 613. 
 how executed and acknowledged, 613. 
 contents, 613, 614. 
 eflfect of filing, 614 
 filing, 614. 
 meeting of stockholders 
 
 called by directors, 613. 
 organization of, 613. 
 personal service or by mail, 613. 
 publication of notice, 613. 
 notice, 613. 
 
 majority vote essential, 613. 
 effect, 614. 
 committee 
 
 action against 
 
 demurrer by depositary-corporation, 613. 
 to provide for non-par stock 
 governing statutes, 614. 
 
 all rights and liabilities of non par stock corporations acquired, 614. 
 procedure, 614. 
 certificate 
 
 statutory form required, 614. 
 approval of State Comptroller 
 
 when capital less than previously, 614. 
 certificate of proceedings 
 filing 
 
 not affect liabilities, 614. 
 debts 
 
 liability of corporation, officers, directors and stockholders con- 
 tinues, 614. 
 not incurred till assets acquired equal to amount given as to 
 begin business with, 614. 
 
 EEPEAL OF CHAPTERS 
 
 see " Certificate of Incorporation." subheading " amendment." 
 
 REPORTS. 
 
 of receivers, see " Receivers," subheading " reports." 
 annual by corporations, see " Annual Reports." 
 
 RESOLUTIONS 
 
 admission that " duly adopted " precludes claim of invalidity, 6^. 
 authorizing " proper officers " to execute assignment, 376. 
 
1452 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 EESOLUTIOXS — continued 
 
 to increase already entirely issued capital means sale of some thereof 
 
 already surrendered to corporation, 63. 
 offering stock for sale not repealed by later resolution for issue of bonds 
 
 to retire notes, 63. 
 as evidence 
 
 when, only partly show agreement, parol evidence admissible, 62. 
 
 train sheet and record, when admissible, 64. 
 
 if in writing should be produced, 62, 63. 
 
 admissible if entered in minutes under direction of and signed by 
 
 secretary, 63. 
 entries in minute book, coming from proper custody, competent, 62. 
 ancient corporate deed apparently duly executed admissible as sharing 
 
 grant by corporation, 63. 
 by directors, of employment of agent, 63. 
 
 not to be changed by oral contradiction save if mistaken or fraudu- 
 lent, 63. 
 minutes in secretary's writing from proper source unsigned, good, 
 
 62. 
 corporate records admissible as proof of corporate action but not of 
 value of stock and property deduced from expert's report therein, 
 62. 
 
 RESTRAINT OF TRADE 
 
 see " Combinations in Eestraint of Trade." 
 by foreign corporation, 826. 
 
 SALARIES 
 
 of directors, see " Directors." 
 of officers, see " Officers," subheading " salaries." 
 
 to majority stockholders in fraud of minority, see "^Stockholders," sub- 
 heading " powers " — " of majority " and — " of minority." 
 
 SALE OF CORPORATE FRANCHISES AND PROPERTY 
 see "Sale of Corporate Franchises." 
 name on, see " Name." 
 in general, 599. 
 
 purpose of statute permitting, 599. 
 
 kind of sale statute permits voluntarily by corporation, 600. 
 stockholder voting for estopped from disputing, 600. 
 to retire from business, with stockholders' consent, 600. 
 to domestic or foreign corporation 
 
 in general, 600. 
 
 when to domestic and when to foreign, 600. 
 
 both franchises and property to domestic corporation, 600. 
 
 property outside state only to foreign corporation, 600. 
 
 to foreign corporation only if of adjoining state, 600. 
 
 to foreign corporation only if of state where selling corporation carries 
 on principal business and has property, 600. 
 
 to domestic corporation only if in same line, 600. , 
 
 to domestic corporation of any interest or part in both franchises and 
 property, 601. 
 
INDEX 1-153 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SALE OF CORORATE FRANCHISES AND PROPERTY — continued 
 to domestic or foreign corporation — continued 
 on dissolution, by directors 
 in general, 601. 
 
 two-thirds in amount, of stockholders must consent, GOl. 
 only after payment of obligations, 601. 
 for stock and bonds thereof, 601. 
 
 stockholder's application for appraisal of holdings, 601. 
 procedure concerning objecting stockholder, 601. 
 Btockholders' consent 
 
 meeting necessary on same notice as for annual meeting, 602. 
 
 to foreign corporation, ninety-iive per centum, 602. 
 
 to domestic corporation, two-thirds, 602. 
 
 governing statutes, 602. 
 
 application for appraisal of holdings 
 
 filling vacancy among appraisers, 602. 
 within sixty days of meeting, 602. 
 procedure of appraisers, 602, 603. 
 to supreme court, 602. 
 not if voted for sale, 602. 
 appointment of appraisers, 602. 
 where, 602. 
 
 sixty-day limitation, is of time of service of notice of applica- 
 tion, 602. 
 stockholders' dissent 
 
 application for appraisal of holdings 
 
 not if did not object twenty days from meeting. 602. 
 effect 
 
 to foreign corporation, vests all property, 60.3. 
 
 to domestic corporation, vests all rights and property, 603. 
 
 application for appraisal of holdings 
 
 effect of payment of appraised value, 603. 
 of failure to pay dissenting stockholder, 603. 
 
 of payment of appraised value of dissenting stockholder's holdings, , 
 603. 
 
 SALE OF STOCK 
 
 see " Stock and Capital Stock " subheading ",purchase and sale." 
 
 SEAL 
 
 of secretary of state 
 
 to certified copy, fees see " Organization Fees and Taxes.'' 
 adoption of 
 
 in general, 48. 
 
 at first meeting of directors, 43. 
 
 of any seal for particular occasion, 48. 
 corporation may have and • alter at pleasure, 47. 
 how to be impressed, 47. 
 
 one to document having several signatures, 48. 
 affixed to contract sufficient to bind corporation till impeached, 49. 
 private seal considered corporate if no corporate seal adopted, 47. 
 ■ to deed presumptively executed by corporate authority, 49. 
 when use of required for disposal of corporate property, board's assent 
 necessary, 47. 
 
1454 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SEAL — continued 
 
 new one may be adopted by directors when retiring officer retains former 
 
 one, 48. 
 presumptive evidence of sufficiency of consideration to contract, 47. 
 affixed to document signed by corporate officers prima facie duly affixed, 48. 
 on negotiable corporate paper, effect, 48. 
 presumption that seal properly attached rebuttable, 49. 
 affixed to contract signed by officers not preclude proof of ultra vires, 49. 
 notary, etc., need not take evidence that seal affixed by authority, 49. 
 
 SECRETARY 
 
 powers and duties 
 
 by-laws prescribe, 44. 
 refusing to file certificate because of similarity of name, see " Name," sub- 
 heading " protection of," and " Filing, Indexing and Recording," sub- 
 heading " certificate of incorporation." 
 fees in various matters see specific headings and " Organization Fees and 
 
 Taxes." 
 filing, certificate of incorporation 
 in his office may refuse, 25. 
 
 SEQUESTRATION 
 
 definition, 5fi5, 566. 
 
 distinguished from dissolution, 565. 
 
 solely dependent on statute, 567. 
 
 chancery has no jurisdiction over, 567. 
 
 governing statutes, 566. 
 
 statutes for does not affect stockholders' liabilities under other statutes, 
 
 567. 
 statute for does not affect other statutes putting end to corporations, 566. 
 who may bring, 566. 
 
 judgment-creditor bringing may join directors and transferees with cor- 
 poration as defendants, 567. 
 corporation cannot prosecute but may defend and appeal, 565. 
 when judgment-creditor may bring, 566. 
 when attorney-general may bring, 566. 
 in what county attorney-general may bring, 566. 
 examination of moving spirit in transfer of property, 568. 
 testimony by stockholder, officer, alienee or agent not excused because 
 
 incriminating, 567. 
 as to foreign corporations, 826. 
 creditors 
 
 order enjoining from suing corporation, 5^8. 
 
 order requiring exhibition and proof of claims and barring other claims, 
 
 .568. 
 claim of surety on bond of defaulting contractor shares with other 
 
 fixed claims, 569. 
 may join stockliolders, directors, officers liable for debt with corpora- 
 tion as defendants, 569. 
 may obtain separate action against stockholders, directors, officers liable 
 
 for debt, 569. 
 court may enforce individual liability of stockholder, director or officer 
 
 for debt, 569. 
 notice of order for proof of claims, etc., 5<)9. 
 
INDEX 1455 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SEQUESTRATIOiN — continued 
 
 injunction pending, from collecting or paying out, 567. 
 
 injunction by court only, 567. 
 
 injunction governed by code provisions, 567. 
 
 judgment provides for distribution, 566. 
 
 application to attorney-general to bring, 566. 
 
 judgment to distribute, 569. 
 
 judgment, when to adjudge payment by stockholders under individual 
 
 liability, 569. ^ 
 
 judgment, when to adjudge liability of directors and oflBcers, 570. 
 judgment, where entered, 570. 
 receivers, see "Receivers." 
 
 SERVICE OF PROCESS 
 
 on agents, on directors, on officers, see such headings, subheadings " service 
 
 on of process against corporation." 
 from county . court, if made within county good, wherever corporation 
 
 located, 535. 
 time limit, when attempt made to commence action by delivery to sheriff, 
 
 etc., 535. 
 attempt to serve, when extends time limit for service, 536. 
 by court order on affidavit no qualified person discoverable on whom service 
 
 under statute may be made, 535. 
 by publication when other methods fail, 535. 
 injunction order, 535. 
 
 precept in summary proceedings to recover possession of real property, 537. 
 of citation, 537. 
 
 of justice of the peace's process, 538. 
 method authorized by legislature must be reasonably calculated to give 
 
 notice, 538. 
 theory of, 538. 
 on director good, 538. 
 
 on director after sale of stock- and election of successor, 538. 
 on resigned director bad, 538. 
 
 notice of sale ''on foreign corporate mortgagor, 916. 
 on foreign corporations 
 in general, 899, 900. 
 governing statutes, 899. 
 who may be served, 899. 
 object of service to notify defendant, 900. 
 theory of, 900. 
 by publication, 900. 
 substituted service, 903. 
 
 method good against domestic good against foreign corporation, 901. 
 on public holiday, 903. 
 
 in general, 903. 
 in proceedings supplementary to execution, 902, 903. 
 after consolidation, 902. 
 
 on general receivers of foreign corporation, 908. 
 statute permitting 
 
 constitutional, 901. 
 whp may be served 
 
 legislature may prescribe, 901. 
 
1456 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SERVICE OF PROCESS — comtmued 
 on foreign corporations — conlinued 
 wJio may be served — continued 
 
 governing statutes, 903. 
 
 when action by resident as disinguished from non-resident, 904. 
 when corporation doing business here 
 
 how determined, 901, 902. 
 
 on agent of foreign hotel company, 901. 
 
 must^ be doing to obtain jurisdiction for personal judgment, 902. 
 
 how determined, 904. . 
 when corporation licensed to do business here effect, 902. 
 on agent 
 
 of foreign' hotel company, 901. 
 on agent designated therefor 
 
 in general, 907. 
 
 governing statutes, 907. 
 
 object of statute covering, 907. 
 
 when corporation does business here, 908. 
 
 when action is against federal receivers of corporation, 908. 
 
 when designating body later says it is not corporation, 908. 
 
 when cause of action does not relate to business done here, 90S. 
 on domestic sales manager temporarily here, 906. 
 on president 
 
 residing here with executive committee which meets here, etc., 904, 
 905 
 
 passing through to summer resort, 905. 
 
 temporarily here, 905. 
 cashier or treasurer 
 
 or one acting as such here, 905. 
 officer passing through or temporarily in state, 905. 
 on officer here as witness, 906. 
 on officer who has resigned, 906. 
 on secretary of state 
 
 in general, 908. 
 
 when allowed, 908. 
 
 governing statutes, 908. 
 
 en liability arising outside state in action, 909. 
 
 burden on plaintiff to prove case one permitting, 909. 
 
 no presumption corporation has property here because obtained 
 license here, 909. 
 
 fee upon such service, 909. 
 
 after voluntary surrender of corporation of license, 910. 
 on cashier, director or rdanaging agent 
 
 governing statutes, 910. 
 
 in general, 910. 
 
 when may be made, 910. 
 
 when on managing agent, 910, 911. 
 
 ■who is " cashier," 910. 
 
 on director 
 
 when possible, 911, 912. 
 
 when all property here is unissued bonds, maps and some 
 books, 912. 
 
INDEX 1457 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SERVICE OF FHOOESS — continued 
 on foreign corporations — oontinti/ed 
 
 on cashier, director or managing agent — continued 
 on director — continued 
 
 on director in fact good, 912. 
 
 named as such on letter-heads, 912, 913. 
 ■when corporation executor of decedent against whom action 
 
 would have accrued, 912. 
 when cause of action arises here, 912. 
 temporarily here on own business, 912. 
 on managing agent only when due diligence shown unavailing to 
 
 serve other officers, 911. 
 on managing agent 
 
 by own say-so only, 913. 
 
 motion to vacate, 913. 
 
 dependent on corporation doing business here, 91.3. 
 
 in action in court not of record, 913. 
 
 diligent ieffort to serve other officers necessary first, 913. . 
 
 who is, 913, 914. 
 
 one in charge of office here, 914. 
 
 agent (not to accept process) is, 914. 
 
 rank necessary to constitute one, 914. 
 
 one bearing similar relationship to corporation is good person 
 
 to serve, 914. 
 " Eastern representative," 914. 
 metropolitan agent, 914. 
 "general sales manager," 914. 
 solicitor here for advertising, 915. 
 freight agent, 915. 
 
 member of exchange acting for corporation, 915. 
 assistant-secretary to corporation, 915. 
 
 SHARES OF STOCK 
 
 see " Stock and Capital Stock." 
 
 SLANDER 
 
 see " Libel and Slander." 
 
 SPECIAL FRANCHISE 
 definition, 767. 
 
 SPECIAL FRANCHISE TAXATION 
 
 see " Taxation," subheading " special franchise." 
 distinguished from general franchise, '13. 
 
 STATE TREASURER 
 
 organization tax to, see " Organization Fees and Taxes." 
 
 STATUTES 
 
 construction of, see " Corporate Powers, Duties and Liabilities," subheading 
 
 " under statute." 
 powers, etc., of corporations under, see " Corporate Powers, Duties and 
 Liabilities," subheading "under statute." 
 
1458 INDEX • 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STATUTE OF FRAUDS 
 
 memo, of sale of stock, 152, 153. 
 
 STOCK CORPOEATION 
 see " Corporation." 
 
 STOCK WITHOUT NOMINAL VALUE 
 see " Stock and Capital Stock." 
 
 STOCK AND CAPITAL STOCK 
 see " Stockholders." 
 acquisition and disposition by one corporation of another's, see " Acquiring; 
 
 and Disposing of Securities and Paper of Another Corporation." 
 books of certificates, account, transfer and registry 
 
 secretary directed to keep at first meeting of directors, 44. 
 calls for payment, see infra this title, subheading, " subscriptions," " pay- 
 ment." 
 capital stock 
 
 definitions and distinctions, 72. 
 
 divided into share stock, 73. 
 
 carried as liability, 73. 
 "cash capital," means • — ? 68. 
 "cash capital $150,000," means — ? 68. 
 certificate of incorporation to state details, 19. 
 not created by certificate of incorporation, 68. 
 definitions, 67. 
 
 distinguished from certificate or scrip, 67. 
 dividends, see " Dividends." 
 donee, gratuitously, not liable for value, 77. 
 non par value, issue of, see subheading " issue." supra, 99. 
 reissue, see subheading "issue " under this title, 
 shares of, rights under, 68. 
 share of, definition, 68, 
 shares, decrease and increase of number of, see this title subheadings 
 
 " increase " and " decrease." 
 shares of, in nature of chose in action, 67. 
 statements in certificate of incorporation, 22. 
 treasury distinguished from unissued stock, unissued' distinguished from 
 
 treasury stock, 72. 
 assessments 
 
 how holdings determined to get at assessments, 104. 
 
 to pay corporate current expenses under specific by-law, 104. 
 
 by-law imposing on full-paid stock void as to non-assenting stockholder, 
 104. 
 certificates of ■ 
 
 form approved at first meeting of directors, 43. 
 
 prepared by directors, 114. 
 
 subject of conversion by corporation, 68. 
 
 signed by prescribed officers, 114. 
 
 countersignature of, 114. 
 
 sealed, 114. 
 
 transferable as law and by-laws prescribe, 114. 
 
 doctrine of lis pendens not apply to, 122. 
 
INDEX 1459 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AMD CAPITAL eTTOCK — continued 
 certificates of — continued 
 
 one entitled to, held by corporation, must sue at law, 122. 
 , interpleading and restraining rival claimants to, 122. 
 law of negotiable instruments not apply to, 122. 
 negotiability of, 121. 
 must represent stock, 114. 
 what entitles holder to, in general, 165. 
 are not stock but only evidence of its ownership, 121. 
 possession of no presumptive proof of ownership, 121. 
 ownership evidenced by possession rebuttable, 121. 
 ownership evidenced by possession rebuttable by corporate records, 121, 
 
 122. 
 when admissible as ancient document, 122. 
 writings on when admissible in evidence, 153. 
 when issued are representation that holder is owner and can transfer 
 
 them, 114. 
 book for 
 
 procurement directed at first meeting of directors, 43. 
 as evidence of title 
 
 possession as showing ownership rebuttable, 121. 
 in general, 121. 
 
 rebuttable by other evidence, 121. 
 not by mere possession of, 121. 
 when assigned in blank, 121. 
 issue 
 
 liability of corporation for issue by oflScers, 114. 
 
 of surrendered but uncancelled certificates by corporate employee 
 
 fraudulently, 115. 
 by officers to themselves, 115. 
 
 by executive committee without power gives purchaser no title, 115. 
 fraudulently, binds corporation stating certificates in shape for 
 
 transfer, 115. 
 penalty for fraud in, by oflScer, agent or other, 115. 
 beyond authorized capital by authorized officer renders corporation 
 
 liable to bona fide buyer, 116. 
 beyond authorized capital, cancelled in equity, 116. 
 beyond authorized capital through fraud of tran'Sfer agent not bind 
 
 corporation if first holder knew of fraud, 116. 
 forgery of transfer agent binds corporation, 116. 
 countersignature by one having evidence of genuineness binds cor- 
 poration, 116. 
 fraudulently by officers makes them liable to all bona fide buyers, 
 
 117. 
 fraudulently by president in names of resigned officers not bind 
 
 corporation, 117. 
 refusal by corporation to transfer on books condition to cause of 
 action for, 133. 
 lost or destroyed 
 
 governing statutes, 117. 
 
 owner may reclaim from anyone, 117. 
 
 statute granting remedy for not destroy equity's jurisdiction, 117. 
 
1460 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AXD CAPITAL STOCK — continited 
 certificates of — continued 
 
 lost or destroyed — continued 
 in general, 117. 
 
 owner may have court relief, 117. 
 indemnity bond 
 
 entitles holder of stock to extra dividend, 118. 
 penalty, 118. 
 sureties, 118. 
 
 relieves corporation from liability, 119. 
 form, 118. 
 
 required by consent of one seeking issue of new certificate, 118. 
 claimant has recourse to, 119'. 
 court proceedings to obtain replacement of hearing on return of 
 order to show cause, 119. 
 
 service of petition and order to show cause, 119. 
 
 order to show cause, 119. 
 
 petition, form and contents, 119. 
 
 order by court for new certificates to replace, enforceable 
 
 against corporate officers, 119. 
 corporation absolved from liability on complying with court 
 
 order for certificates to replace, 119. 
 conditions precedent to order for issue of new certificate, 119. 
 application denied if corporation by afiidavit denies petition, 
 
 until open examination had, 120. 
 order for issue of new certificate, contents, 119, 120. 
 proof must be taken on return of order to show cause, 120. 
 demand for new certificate from corporation precedent to order 
 
 therefor, 120. 
 proof of ownership and loss needed) 120. 
 
 notice published before or after order for issue of new certifi- 
 cate, 120. 
 proof that old certificate signed by ofiicers unnecessary, 120, 
 121. 
 stolen 
 
 owner may reclaim from anyone, 117. 
 recoverable though endorsed in blank, 118. 
 change in classification of issued stock 
 in general, 69. 
 not without consent when by-law fixes shares as equal in value and- 
 
 right, 69. 
 not without consent of all stockholders, 69. 
 classes of, certificate of incorporation may provide for, 23. 
 classes, kinds and rights of, in general, 68, 69. 
 classification of permitted, 69. 
 common and preferred 
 
 certificate of incorporation may provide for, 23. 
 conversion 
 
 refusal by tenant in common of proceeds of sale of stock to pay co- 
 tenant, 155. 
 one selling some of shares evidenced by a certificate and then selling all 
 and endorsing certificate for all, 155. 
 
INDEX 1461 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 rrOCK AND CAPITAL STOCK — oontinued 
 conversion — continued 
 
 by sale by pledgee-lender without demand and notice, 156. 
 corporation's liability for when signs receipt for proceeds, 156, 157. 
 actions, pleadings and practice 
 
 by pledgee not entitle pledgor to have return without tender of 
 
 payment of debt, 157. 
 joint action against corporation and individual pledgee, several 
 
 recovery, 157. 
 director not connected with corporation till after conversion not 
 proper party to action, 157. 
 by pledgee mistakenly, owner's remedy to replace after notice and 
 recover as damages highest market value within reasonable time, 157, 
 158. 
 damages 
 
 par value alone no measure of, 158. 
 damages for, by pledgee 
 
 highest market value within reasonable time, 158. 
 of decedent 
 
 liability of representative, see " Stockholders," subheading " deceased." 
 full-paid stock 
 
 certificate or amended certificate of incorporation may provide for, 23. 
 decrease or reduction 
 
 governing statutes, 110. 
 
 not to relieve owner of existing liability, 110. 
 
 not below minimum prescribed for similar corporations, 110. 
 
 not below amount of debts and liabilities. 111. 
 
 capital over reduced capital returned to stockholders, 112. 
 
 not to be used as means to distribute capital, 112, 113. 
 
 to reduce voting power of one class of stock, 113. 
 
 under peculiar statutes, 113. 
 
 stockholders cannot bind successors not to, 183. 
 
 of number of shares or amount of capital 
 
 by corporation having non-par value stock. 111, 112. 
 of number of shares 
 in general, 113. 
 
 same procedure as in decrease of capital stock, 113, 114. 
 new shares to be issued for old, 114 
 by stockholders' unanimous consent 
 governing statute, 110. 
 form and contents, 110. 
 
 filed with secretary of state and county clerk, 110. 
 must be in writing, 111. 
 copy entered on minutes, 110. 
 
 effective when filed with comptroller's approval, 110. 
 comptroller must endorse approval on, 110. 
 by stockholders' vote in meeting 
 governing statutes, 110, 111. 
 meeting called as law or by-laws provide. 111. 
 organization of meeting. 111. 
 notice of meeting 
 
 to be published. 111, 
 
1462 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 6TOCK AXD CAPITAL STOCK — con tinuet? 
 decrease or deduction — continued 
 
 by stockholders' vote in meeting — oontimied 
 notice of meeting — continued 
 
 mailed or served to or on stockholders. 111. 
 contents and form, 111. 
 must be majority vote, 111. 
 proceedings entered on minutes, 111. 
 certificate of proceedings 
 form and contents, 111. 
 comptroller's approval endorsed on. 111. 
 signed, verified and acknowledged, 111. 
 filed with secretary of state and county clerk. 111. 
 comptroller's approval necessary. 111. 
 
 eflfective when certificate of proceedings with comptroller's approval 
 filed. 111. 
 exchange 
 
 of preferred for common 
 
 by two-thirds vote of directors, 104. 
 
 by written request of preferred, 104. 
 
 in general, 104, 105. 
 
 valuation agreed upon in charter or on issue of preferred or share 
 
 for share, 105. 
 total capital not to be iiicreased, 105. 
 increase of 
 
 resolution to, when all stock already issued, construed to mean sale of 
 
 part thereof already surrendered to company, 63. 
 in general, 105. 
 
 not above maximum fixed by law, 105. 
 not by directors or ofiicers, 107. 
 
 by directors' resolution when permitted by charter, 107. 
 stockholder no inherent right to prevent, 107. 
 only by charter or legislative authority, 107. 
 
 defective through failure to fulfill statutory requirements bind stock- 
 holders accepting benefits of, 107. 
 either by awarding stock as dividends or selling increase and paying 
 
 cash dividends, 109. 
 
 stockholders cannot bind successors not to increase, 183. 
 
 by stockholders' unanimous consent 
 
 in general, 105. 
 
 where filed, 105. 
 
 in writing 105. 
 
 copy entered on minutes, 105. 
 effective when filed, 105. 
 by stockholders' vote in meeting 
 in general, 105. 
 majority necessary, 105. 
 necessary when no unanimous consent, 105. 
 meeting called specially as by-laws or law provide, 105. 
 organization of meeting, 105. 
 notice of meeting necessary, 105. 
 notice of meeting served or mailed, 105. 
 notice of meeting published, 105. 
 proceedings of meeting entered on minutes, 106. 
 
INDEX 1463 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AN© CAPITAL STOCK — continued 
 increase of — conti/nued 
 
 by stockholders' vote in meeting — continued 
 certificate of proceedings 
 
 filed with county clerk and secretary of state, 106. 
 form and contents, 106. 
 
 signature, verification and acknowledgment, 106. 
 effective when certificate of proceedings filed, 106. 
 certificate or consent 
 
 fee of secretary of state for filing, 108. 
 " subscribed and sworn to " is " acknowledged," 108. 
 what statement of amount of capital paid in suffices, 108. 
 restraint 
 
 action for, need not join all stockholders and directors as defend- 
 ants, 108. 
 not on basis of statement in directors' report i^hat no increase will 
 
 be made, 107. 
 stockholder has burden of showing unauthorized by charter, 107. 
 subscription to 
 
 stockholders' rights 
 
 not to original unissued stock, 108. 
 must be availed of within reasonable time, 109. 
 when new shares issued, 109. 
 entitled to at same price offered to others, 109. 
 proportional to shares he owns, 109. 
 not when issued to buy necessary property, 109. 
 not when issued to effect consolidation, 109. 
 cannot be deprived of, without consent, 109. 
 only good while stock stays in corporation's possession, 109. 
 of number of shares or amount of capital 
 in general, 113. 
 
 same procedure as in increase of capital stock, 113, 114. 
 new shares to be issued for old, 114. 
 by corporation having non-par value stock, 106. 
 issue 
 
 power of stockholders to question, see " Stockholders," subheading 
 
 " powers." 
 price fixed by promoters' agreement, 2. 
 certificate of, by corporate officers, 69. 
 certificate of, filing and recording, 69. 
 without par value unless preferred as to principal, 69. 
 securities in control of corporation on April 5, 1918, deemed issued 
 
 thereafter for purpose of federal war finance corporation act, 97. 
 of over $100,000 controlled by Federal Capital Issues Committee, 97. 
 statutory conditions on must be pleaded, 97. 
 beyond authorized amount, corporation not liable though issued by 
 
 directors, 97. 
 of non-par value stock on formation or reorganization of business cor- 
 poration, 99. 
 not subject to call if for money, labor or property, 99. 
 return to holders of improperly surrendered stock not violate injunction 
 against issue of any stock, 103. 
 
1464 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AWD CAPITAL STOCK — con/inued 
 issue — continued 
 
 governing statutes, 114. 
 
 preferred, common and classes of preferred, 69. 
 
 common 
 
 by stockholders' unanimous written consent or two-thirds consent 
 at meeting, 69'. 
 when permitted 
 
 when charter so provides, 98. 
 by stockholders' unanimous consent, 98. 
 in general, 98. 
 
 by consent of two-thirds of stock in meeting, 98. 
 proceedings when by vote in meeting of two-thirds of stock, 98. 
 when reduces preferred holders' interest, 103, 104. 
 preferred cannot complain when dividends paid and capital still 
 intact, 104. 
 preferred 
 
 by stockholders' unanimous written consent or two-thirds consent 
 
 at meeting, 69. 
 if legislature not prescribe preferences allowed, corporation may 
 
 do so, 70. 
 common preferences granted, 70. 
 
 not without nominal or par value if preferred as to principal, 70. 
 permissible, with or without classes of, 70. 
 
 preference shown not only by stock certificate but by whole trans- 
 action of issue of stock, 70. 
 permits optionable division of profits, 70. 
 
 " to bear 6 per cent interest annually, payable semi-annually, cumu- 
 lative," 71. 
 when permitted 
 
 by stockholders' unanimous consent, 98. 
 by consent of two-thirds of stock in meeting, 98. 
 proceedings when by vote in meeting of two-thirds of stock, 98. 
 in general, 98. 
 
 when charter so provides, 98. 
 at common law only with com^non stockholders' consent, 98. 
 without common stockholders' consent under statute permitting 
 passed after corporation incorporated, 98. 
 partly paid 
 
 in generaf, 99. 
 
 charter may permit, 99. 
 
 subject to call till paid in full, 99. 
 by fraud or negligence 
 
 of directors beyond authorized amount, 97. 
 
 to corporate manager not entitle corporation to enjoin him, 97. 
 in general, 99. 
 for what 
 
 in general, 87. 
 
 purpose of statute prescribing consideration, 99, 100. 
 
 for anythiiig but money, labor or property, not void, 97. 
 
 for corporation's " lawful purposes," 100. 
 
 not for becoming ofScer and extending credit, 100. 
 
INDEX 1465 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 rOCK A^PD CAPITAL S^OCK — continued 
 issue — continued 
 
 for what — continued 
 
 not for services in incorporating, 100. 
 
 not to promoter for value realty which includes amount for services, 
 
 101. 
 not for services in futuro, 100. 
 
 not for executory contract for services in futuro, 101. 
 contracts inuring to company's benefit when formed, 101, 
 contract to build railway, 101. 
 contract work — allegations of complaint, 101. 
 franchise of competing company, 102. 
 valuation proper if no fraud though high, 100. 
 of common to preferred holders, 102. 
 
 stockholder subsequent to agreement between all stockholders can- 
 not question, 102. 
 business and good will 
 
 when to convert family partnership into family corporation, 
 100. 
 labor 
 
 theretofore performed, 101. 
 labor done, 99. 
 money 
 
 in general, 99. 
 for property 
 
 authorized by charter, 87. 
 
 judgment of directors of value of, conclusive if no fraud, 87. 
 
 necessity for corporate use and lawful purposes, 87. 
 
 authorized by charter, 99. 
 
 actually received for corporate use and purposes, 99. 
 
 directors' judgment of property's value conclusive if no 
 
 fraud, 99. 
 in general, 99. 
 
 necessary for use and lawful purposes of corporation, 99. 
 valuation put on immaterial when question arises only between 
 
 stockholders, 100. 
 at its "fair value," 101, 102. 
 " fair value," means at time of sale, 102. 
 large latitude in valuation of, 102. 
 " value thereof," meaning, 102. 
 division by seller with bargainers of consideration for property 
 
 as evidence of value of property, 103. 
 surrender to corporation of stock issued for property as evi- 
 dence of value of property, 103. 
 corporate books as evidence of value of, 103. 
 comparison with like property at diflFerent place, 103. 
 non-par value 
 
 deemed $100 par value each in determination by Federal Capital Issues 
 Committee whether sale of issue of over $100,000 of stock to be 
 allowed, 97. 
 ownership of 
 
 pending action in another state no uotice that ostensible owner of 
 stock is trustee, 122. 
 
1466 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AN\D CAPITAL STOCK — continued 
 payment 
 
 only by money, labor or property, see " issue of." 
 
 holder of stock issued for property safe, 89. 
 
 under specific resolution, 81, 82. 
 
 when issued by corporation to one on request of another, 89. 
 
 of half to be made within one year of incorporation, 96. 
 
 calls 
 
 transfer of not relieve transferor if corporation relied on his con- 
 tinued liability, 82. 
 
 transfer relieves from if corporation recognizes transfer, 82. 
 
 not transferable till previous ones paid, 82. 
 
 not binding after transfer on transferor, 82. 
 
 transferor relieved from if corporation sues transferee, 83. 
 
 transferee liable for, 83. 
 
 not enforced if oppressive, S3. 
 
 not enforced if illegal, 83. 
 certificate of half-payment 
 
 directors' direction to file, 43. 
 
 made within one year and thirty days of incorporation, 93. 
 
 signed, acknowledged and verified, 96. 
 filed where charter is, 96. 
 
 object of requiring, 96. 
 
 directors to make, 96. 
 
 to inform public of corporation's financial condition, 96. 
 
 made within thirty days after payment, 96. 
 who liable 
 
 record owner, 87. 
 see this title, subheading " subscriptions." 
 pledge 
 
 corporation not liable to pledgee of employee-pledgor unauthorizedly 
 
 using certificates through its negligence, 156. 
 for loan, and sale by pledgee without demand or notice, is conversion, 
 
 156. 
 by holder for loan to owner, 156. 
 
 of treasury stock by corporation to firm of its director for loan, 156. 
 actions, pleading and practice 
 
 by pledgee against one not fulfilling contract to buy if pledgor did 
 not redeem is for breach of contract and lack of stamps no 
 defense, 157. 
 damages for conversion or sale by pledgee 
 
 highest market value within reasonable time, 158. 
 damages, not based on par value alone, 158. 
 dividends 
 
 after pledge belong to pledgee, 167. 
 preferred 
 
 certificate of incorporation may provide for classes of, 23. 
 
 see subheading " issue of — preferred." 
 
 see " Issue of," subheading " preferred." 
 
 right to dividends under peculiar phraseology, 71. 
 
 as to dividends, by guarantee or priority, 71. 
 
 when dividends payable under peculiar phraseology, 71. 
 
INDEX 1467 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 rOCK AKO CAPITAL STOCK — continued 
 preferred — continued 
 
 preference under guaranty of another corporation by agreement lost on 
 
 modification thereof by two corporations' directors, 71, 72. 
 agreement on consolidation that person receive stated interest not 
 
 entitle to stock preferred accordingly, 72. 
 evidence admissible that stock certificate's statement of preference as 
 to dividends only is erroneous, 72. 
 purchase and sale 
 
 see also subheading " subscriptions." 
 by stockholder, see " Stockholder." 
 agreements for 
 
 as affecting dividends, see " Dividends," subheading " what stock- 
 holder entitled." 
 in general, 140. 
 falling due on holiday, 140. 
 combined with agreement for half control of directors, etc., for 
 
 period of years, void, 140. 
 not implied to one man to whom stock issued on request of another, 
 
 140. 
 at price paid for like stock does not mean price paid to obtain 
 
 settlement of suits, 140. 
 not prevent seller from voting, 140. 
 provision for forfeiture, when condition absolute, 141. 
 when to be held in escrow, demand must be made for delivery date 
 
 after time of escrow expires, 141. 
 conditional on stockholders voting to increase capital when buyer 
 
 enjoins increase, 141. 
 when certain notice required to be given, 141. 
 conditional when sale absolute only on transfer on books, 141. 
 when certificates must be tendered, 141. • 
 
 by several that one buy from another and others be released, etc., 
 
 142. 
 to hold in escrow by corporation to be formed and be divided by 
 
 majority vote at end of three years, 142. 
 by three to carry for benefit of one is a several agreement, 142. 
 when held in error to exchange for stock of new corporation and 
 
 one stockholder unauthorizedly signs another's name, 142. 
 not even, without unanimous consent, invalid, 143. 
 giving another first right not prevent passing good title, 143. 
 giving other stockholders first chance, 143. 
 not without mutual consent for limited time, good, 143. 
 breach gives damages, 143, 144. 
 at book value, remedy to ascertain, 144. 
 giving others first chance on death, good, 144. 
 that sale of all stock by one party shall terminate agreement, 
 
 means sale pursuant to agreement, 144. 
 allegations and remedy in representative action for breach, 145. 
 suit on for. failure to carry out no basis for holding for fraud in 
 
 issue, 150. 
 pleading due performance of all things sufficient to recover for 
 breach, 150. 
 
1468 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AND CAPITAL STOCK — continued 
 purchase and sale — continued 
 agreements for — continued 
 
 no suit under for difference between prices paid by different pur- 
 chasers and also for return of stock, 151. 
 actions on, need not allege payment of tax, 151. 
 action for price, counterclaim of fraud in inducing, 151. 
 action on, to recover value of stock not referred to hear and deter- 
 mine, 151, 152. 
 specific performance refused if damages suffice, 153. 
 measure of damages, 153. 
 
 specific performance only to one with clean hands, 153. 
 rescission for fraud dependent on disaffirmance and offer to return 
 
 stock, 154. 
 injunction against disposition of stock pending action for retrans- 
 
 fer of stock, 154. 
 specific performance not granted simply because no sales of stock, 
 
 154. 
 joint agreement to buy not enforceable severally, 154, 155. 
 actions, pleading and practice 
 
 for failure of person to buy if pledgor did not redeem, is in 
 contract, -157. 
 by seller to buy back 
 
 when statute of limitations begins to run, 142. 
 complaint for breach must allege tender and demand, 142. 
 syndicate 
 
 with manager as well as other parties void for manager's 
 
 fraud, 146. 
 in action for fraud tender of stock in new corporation condi- 
 tion of rescission, 147. 
 relief open to one induced by fraud to enter into syndicate 
 agreement for, 146. 
 by bad cheque accepted by promoter, 5. 
 when set< aside 
 
 not when stockholder knew of directors' resolution offering for sale 
 at stated price, 109. 
 effect, when by instrument under seal of part of shares all evidenced 
 
 by one certificate, 137. 
 charter condition that corporation and other stockholders have first 
 
 option, 143. 
 caveat emptor, purchaser proposing sale and being stockholder, 145. 
 fraud in, after dissolution and acquisition of business by defrauder, held 
 
 trustee for defrauded, 146. 
 power to vendee to take proceedings to enforce rights is personal to 
 
 vendee, 149, 150. 
 ratification of purchase not waiver of deceit in inducing, 150. 
 tender of delivery condition to action on executory contract to recover 
 
 purchase price, 150. 
 allegations by broker seeking recovery of commissions on, 152, 
 doctrine of fig pendens not apply to action for, 152. 
 fraud in, burden of proof, 152. , 
 
 measure of damages, 153. 
 
INDEX 1469 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 roCK AND CAPITAL STOCK — continued 
 purchase and sale — continued 
 
 memo, of within statute of frauds, 153. 
 
 action for fraud in inducing not joined with accounting for property 
 
 received on sale of stock in violation of agreement, 151. 
 action for return of stock exchanged for other stock through fraud 
 
 need allege no damage if loss of corporate control alleged, 151. 
 action for fraudulent inducement barred by statute from consumma- 
 tion of fraud, 152. 
 suit for damages through treasurer's false report both under statute 
 
 and common-law, 150. 
 actions, pleadings and practice 
 
 for rescission for misrepresentation, must be of something past or 
 
 present, 150. 
 tender of delivery condition to suit on executory contract to 
 
 recover purchase-price, 150. 
 representations inducing sale by living and dead suable by former 
 
 individually and as latter's representatives, 150. 
 ratification of purchase no waiver of claim for deceit inducing 
 
 purchase, 150. 
 for failure to fulfill agreement not suflBcient to hold for fraud 
 
 in issue, 150. 
 joinder for damages for fraud of treasurer in report under statute 
 
 and at common law, 150. 
 for breach of agreement, due performance alleged of all things by 
 
 plaintiff, 150. 
 for rescission may combine grounds of fraud and mistake, 150, 
 
 151. 
 joinder, for return of stock and damages for prices paid by dif- 
 ferent buyers, 151. 
 joinder for fraudulent inducement and for accounting on sale of 
 
 stock contra to agreement, 151. 
 for price, counterclaim of fraud in inducing, 151. 
 payment of tax need not be alleged, 151. 
 no reference of, to hear and determine, to recover value of stock, 
 
 151, 152. 
 measure of damages, 153. 
 reply required to answer alleging no transfer stock tax paid on 
 
 stock-agreement sought to be specifically performed, 154. 
 rescission for fraud not allowed if damages sufficient and legal 
 statute of limitations governs, 155. 
 equity may bring in persons guilty of fraud in suit to set aside sub- 
 scription for fraud, 155. 
 denial of allegation of no remedy at law permits contention that 
 equity without jurisdiction, 154. 
 purchase by corporation of own 
 not except from surplus, 75. 
 
 legal if creditors unaffected, stockholders and directors concur, 138. 
 by option to purchaser on installment plan, 138. 
 contract for not release corporation unless shows had no surplus, 
 
 138, 139. 
 in general, 138. 
 
1470 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK ANiD CAPITAL STOCK — continued 
 purchase and sale — continued 
 
 by one corporation of another corporation's 
 
 governing statutes, 139. 
 by officer or director of his corporation's 
 president may buy, 139. 
 director buying need not disclose to stockholder selling all he 
 
 knows about corporation, 139. 
 in general, 139. 
 prospectus 
 
 liability under determined by impression ordinarily created, 148. 
 one relying on may hold anyone circulating, knowing fraud and 
 
 intending to deceive, 148. 
 fraudulent intent presumed from false statements in alone, 148. 
 jury passes on representations in that dividends paid, 149: 
 jury passes on statement in that stated shares issued or con- 
 tracted to be, 149. 
 statements in, made on reports of others but made as own bind 
 teller, 149. 
 representation that fully paid if untrue subjects officers niakin<; to 
 
 charge conspiracy, 145. 
 representation that property unencumbered made without knowledge 
 
 justifies rescission, 145. 
 representation of corporate loss and bad business to induce. 14fl. 
 representations by holder of 98% and controller of rest of stock bind 
 
 corporation, 147. 
 representations in prospectus, see above " Prospectus." 
 representations inducing sale by living and dead sued upon by former 
 
 individually and as representative of latter, 150. 
 representations to induce, stockholders not responsible for corporation's 
 
 208. 
 rescission on restoration when purchase by authorized agent, 147. 
 rescission when agent to buy sells own stock to buyer, 147. 
 rescission dependent on misrepresentation of something past or present, 
 
 150. 
 rescission, complaint may state grounds both of fraud and mistake, 
 150, 151. 
 subscriptions, see also subheading, " purchase and sale.'' 
 
 certificate of incorporation to state number of shares each subscriber 
 
 takes, 75. 
 directors may open books for if not all filled in certificate of incorpora- 
 tion, 75. 
 receivable by directors till whole capital subscribed, 76. 
 pen'alty for fictitious, 76. 
 
 when corporation to be formed as against one already formed, 77. 
 recission of, for fraud, facts must be shown, 77, 78. 
 sufficient by signature to charter with number of shares siibscribed 
 
 added, 78. 
 consideration for, corporate liability to issue stock, etc., 78. 
 not give rights as stockholders, 79. 
 recovery when capital illegally increased by one acceding to increase, 
 
 83. 
 not by secret agreement benefiting one subscriber, 84. 
 
INDEX 1471 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 OCK ANID CAPITAL STOCK ~ continued 
 subscriptions, see also subheading, " purchase and sale." — continued ' 
 signed individually and aa " exr." bind in both capacities, 8S. 
 liability on public subscriptions, 88. 
 purchaser of unpaid protected against mortgage, 88. 
 only bind subscribers to pay sums subscribed, 89. 
 contribution among subscribers, 90. 
 conditional on scrip being issued 
 
 rights of subscriber, 102. 
 stockholders may inter sese release from, if no corporate business or 
 
 creditors, 176. 
 stock-subscription agreement evidence of stockholding, 122. 
 actions, jplcading and practice , 
 
 one advar.jing corporation subscription-price on agreement sub- 
 scriber to guarantee may sue therefor though corporation could 
 not because 10% not paid, 155. 
 books of subscription 
 
 directors may open, 76. 
 
 place and notice of opening, "76. 
 in agreement distinct from charter 
 
 binds subsequent incorporator to corporation's receiver, 78. 
 
 no formal acceptance needed, 79. 
 
 not enforceable by pledgee of 10% cash payment not made, 80. 
 
 10% cash payment necessary, 81. 
 in certificate of incorporation 
 
 eflfective when certificate filed, 78. 
 contracts for 
 
 not for subscription in future, 76. 
 
 governed by statute and not common-law, 76. 
 
 govern subscribers' liability, 76, 77. 
 
 create contract liability, 77. 
 payment, see also this title, subheading " payment." 
 
 payable as directors require, 76. 
 
 10% cash on making, 76. 
 
 10% in cash of, payable on making, 76. 
 
 receiver or court may require, 76. 
 
 by money loaned on subscriber's note, 77. 
 
 by note to corporation binds if accepted, 77 
 
 not by note to corporation, 77. 
 
 failure of, in full, as defense, must be pleaded, 77. 
 
 when required in cash, note not suffice, 81. 
 
 when required in cash, cheque suffice? 81. 
 
 complaint to recover need not allege whole capital subscribed, 83. 
 
 not till whole capital subscribed for, 83. 
 
 secret agreement releasing from, void, 84. 
 
 unpaid, trust fund for creditors 
 
 not by common-law bu,t by statute, 85, 86- 
 
 trustee in bankruptcy of corporation may sue for, 85, 86. 
 
 subscriber liable to corporate creditors till made, 85, 86. 
 
 receiver cannot hold bona fide, third person buyer, 88, 89. 
 
 receiver cannot hold second subscriber to stock validly issued by 
 corporation to bona fide buyer, 88. 
 
1472 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AND CAPITAL STOCK — continued 
 
 subscriptions, see also subheading, " purchase and sale." — continued 
 payment, see also this title, subheading " payment.'' — continued 
 
 barred by statute, do not entitle deceased subscriber's repre- 
 sentative to issue of stock, 88. 
 not by subscriber after transfer stock, 89, 90. 
 at common law need not be of par value, 89. 
 not absolved from by change in route of corporation's railroad, 
 
 90. 
 corporation may compel though charter not filed, 90. 
 avoided by- false representations of which corporation retains 
 
 benefit, 90, 91. 
 not avoided by false representations not adopted by corporation, 90. 
 not avoided by acts of corporate monoply, 90. 
 verbal conditions of subscription shown, 90. 
 not avoided by adoption of diflferent corporate name, 91. 
 not avoided by change in charter, 91. 
 not avoided by defective corporate organization in which subscriber 
 
 took part, 91, 92. 
 not avoided by agreement with one subscriber to buy back his 
 
 stock, 92. 
 not avoided because on many sheets, 92. 
 
 not avoided by cancellation of another subscriber's name, 92. 
 not avoided by agreement to deliver another's subscription with- 
 out payment, 93. 
 statute of limitations, when corporation defunct, 93. 
 statute of limitations runs, when, 93. 
 statute of limitations bars corporate creditor, 93. 
 when agreement is to form corporation and subscribe and when to 
 
 subscribe to stock of corporation to be formed, 94. 
 receiver may continue action begun by corporation, 94. 
 when agreement to subscribe for number of dollars ■ instead of 
 
 stated sum, 95. 
 enforced against collateral security, 95. 
 delivery of certificate not condition precedent to action against 
 
 original subscriber, 95. 
 enforced by action by creditor to sequestrate, 95. 
 default in installment 
 
 directors forfeit stock and prior installments, 76. 
 notice necessary to subscriber, 76. 
 default in 
 
 directors may forfeit, 83, 84. 
 
 forfeiture of stock bars claim on subscription agreement, 84. 
 must be declared by directors as a board, 84. 
 statute requirements strictly followed, 84. 
 calls for 
 
 receiver may make when corporation bankrupt, 81. 
 
 to be by directors, 81. 
 
 no allegation of, if payable on demand, 82. 
 
 not necessary when agreement is to pay when directors . so 
 
 resolve, 82. 
 not necessary if charter says to commence business with capital 
 all paid in, 82. 
 
INDEX 1473 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 3T0CK Am> CAPITAL STOCK — continued 
 
 subscriptions, see also subheading, " purchase and sale." — continued 
 payments, see also this title, subheading " payment." — continued 
 calls for — contitnued 
 
 not condition precedent to suit if time of payment not con- 
 ditioned, 94. 
 notice of forfeiture by directors, 84, 95, 96. 
 directors forfeit stock and prior installments, 95. 
 stock cancelled if not reissued, 96. 
 stock may be reissued or resubscribed, 96. 
 when 10% cash payment necessary 
 
 only by subscribers after organization, 80. 
 not on original subscription for purpose of organization, 80. 
 in general, 80. 
 who liable 
 
 record owner, 87. 
 
 not purchaser from subscriber to stock marked " assessable." 
 
 87. 
 not transferee of subseriber to whom corporation has issued 
 
 certificate, 87. 
 not subscriber to stock of corporation to be formed for one 
 purpose and formed for another, 88. 
 who may enforce 
 corporation, 93. 
 syndicate managers, 94. 
 creditor of corporation, by attachment, 94. 
 party agreed on by subscribers, 94. 
 when implied and when express promise, 94. 
 when binding 
 
 when corporation formed and when to be formed, 79. 
 after corporation formed and accepts, 78. 
 not till corporation legally formed for purposes specified, 79. 
 for corporation to deal vn automobile not good for corporation to 
 
 make same, 79. 
 for corporation to deal in stated article not good for corporation 
 dealing in like articles ,in general, 80. 
 surplus 
 
 what is, 73, 74. 
 not part of capital stock, 74. 
 transfer 
 
 efl^ect when made on books, see subheading " by corporation on books," 
 
 sn>/prai^ 
 by-laws may govern, 123', 134. 
 by-laws may regulate, 133. 
 by-law prohibiting to holder of original issue till certain notices given, 
 
 134. 
 by-law limitations not binding on third persons, 134. 
 by-law cannot refuse if holder indebted to corporation, 46. 
 charter only can limit right of holder to, 134. 
 charter limitations as aifecting third persons, 134. 
 regulated by Stock Corporation Law and by-laws, 123. 
 invalid unless entered on stock book, 53. 
 not till all previous calls paid, 82. 
 B. C. N. Y.— 93 
 
1474 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AXD CAPITAL STOCK — continued 
 transfer — continued 
 
 relieves from future calls if transfer bona fide, 82. 
 
 relieves from future calls if corporation accepts, 82. 
 
 relieves from future calls if corporation sues transferee, 83. 
 
 makes transferee liable for unpaid calls, 83. 
 
 issue of original certificates is not, 122, 123. 
 
 refused till holder's indebtedness to corporation paid, 123. 
 
 by holder in contemplation of corporation's insolvency void, 123. 
 
 not till previous calls paid, 123. 
 
 invalid unless on books save to make transferee liable for corporate 
 
 debts, 123. 
 governing statutes, 123. 
 
 presumed to be in ordinary course of business, 124. 
 on same day received, deemed received before transferred, 124. 
 by one owning no stock not validated by his subsequent acquisition of 
 
 stock, 124. 
 proven by acknowledgment of subscribing witness to power of attorney 
 
 to transfer, 124. 
 sufficient consideration for a cheque, 125. 
 delivery presumed from holder's possession with certificate endorsed, 
 
 125. 
 without consideration to one from wife of record holder, 125. 
 not enjoined as incident to suit to determine rights of holders of, 125. 
 enjoined till accounting had from holder under agreement not to sell 
 
 and divide profits, 125. 
 in name of one in trust and endorsed in same way carries no title, 
 
 128. 
 by agent unauthorizedly binds master, 128. 
 rules and formalities regulating, proper, 134. 
 not till previous calls paid, 134. 
 
 when refused if holder indebted to corporation, 134. 
 corporation's liability for, without surrender of stock certificates, 135. 
 corporation's liability for officers' and agents' wrongful, 135. 
 corporation's transfer agent's liability for loss from delay in, 135. 
 corporation's liability when made under forged power of attorney, 135. 
 corporation's liability for permitting sale by stockholder having suffi- 
 cient holdings to cover sale, 135. 
 stockholder may question, 133. 
 
 of stockholder where suit against corporation put it to expense, 105. 
 to corporation 
 
 under resolution permitting debtor stockholders to pay in such 
 way, 125. 
 consideration for 
 
 precedent debt as against one furnishing consideration of issue of 
 stock to debtor -transferror, 125. 
 by corporation on books 
 
 statute and by-law requirements for may be waived by corpora- 
 tion, 129', 130. 
 not necessary to give transferee in due form title, if corporation 
 
 refuses demand for transfer, 130. 
 corporation bound without, if pays dividends to transferee, 130. 
 without surrender of certificate, makes liable to owner, 130. 
 
INDEX 1475 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK ANT> CAPITAL STOCK — continued 
 transfer — continued 
 
 by corporation on books — continued 
 
 required only as to transfers between stockholders, not as to orig- 
 inal issue, 131. 
 compellable by any bona fide buyer, 131. 
 
 not good save to make transferee liable for debts unless made, 131. 
 required to protect against secret sales, 131. 
 split up into as many certificates as holder demands, 132. 
 compellable in same action as injunction against issue depreciating 
 
 holder's holdings, 132, 133. 
 compellable for full amount surrendered, 132. 
 action for refusal against corporation, not ofiicer, 132. 
 compellable in equity, not at law or by mandamus, 132. 
 when directors refuse to elect oflBcer to transfer, 133. 
 refusal condition precedent to cause of action against corporation 
 
 for issue, 133, 
 necessary to validate, except that transferee anyway liable for 
 
 corporate debts, 137. ' 
 
 binds anyone permitting to his name, so far as corporate creditors 
 
 go, 137. 
 into infants' names prevents return to one securing transfer, 137, 
 
 138. 
 to one after has been sold to another, 138. | 
 
 of decedent's stock 
 
 under writing in decedent's hand found anneyed to stock on death, 
 
 128. 
 in possession of one and indorsed by decedent in blank, 128. 
 by corporation of stock issued after holder's death to one " attorney ' 
 
 for " him, 128. 
 identity of decedent's name with that of holder no proof of estate's 
 
 title to, 129. 
 when certificate signed by foreign executors, 129. 
 to personal representatives only on surrender of certificate of stock, 
 
 129. 
 by executor in individual name by instrument under, seal not eyi- ' 
 
 denced by certificate, 129. 
 by executor to discharge personal debt, 129. 
 by power of attorney 
 
 cancellation of revenue stamps on leads to presumption power 
 
 executed on day canceled, 124. 
 general mode of such transfer, 126. 
 
 when accompanies blank transfer gives holder apparent title, 126. 
 in blank, signed by holder, good, 126, 127. 
 on paper separate from certificate, 127. 
 on paper separate from certificate not bearing name of stock but 
 
 pinned to certificate, 127. 
 not good as to shares acquired after date of power, 127. 
 when number of shares and np,me of attorney blank, 127. 
 effect 
 
 not same as if negotiable instrument, 136. 
 
 not on books, when certificate requires, 136. 
 
 record holder's action in corporate management binds unrecorded 
 
 transferee, 136. 
 
1476 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCK AND CAPITAL STOCK — continued 
 transfer — continued 
 effect — continued 
 
 record holder cannot bind unrecorded transferee by contracts not 
 
 within express or implied corporate powers, 136, 137. 
 before and after transfer on books, 136. 
 none on lien of creditor on corporate property, 137. 
 by instrument under seal of part of shares, all evidenced by one 
 certificate, 137. 
 trust funds for creditors 
 
 substitute for personal liability in personal ownership, 74. 
 in general, 74. 
 
 may be followed into hands of directors and stockholders, 74. 
 prevents corporation from buying own stock except from surplus, 74, 75. 
 may not be followed in hands of bone iide buyer, 75. 
 after creditors satisfied, for stockholders, 75. 
 
 creditor may recover from corporation's transferee by transfer made 
 while action pending against corporation, 75. 
 
 STOCK-BOOK 
 
 see " Books and Records." 
 directors may adopt new one, 49. 
 
 STOCK TRANSFER BOOK 
 entry of stock transfer in 
 
 essential to protect transferror from liability for corporate debts, 123. 
 by-law may close before stockholders' meetings, 177. 
 to be produced at meeting of members on request, 177. 
 
 STOCK TRANSFER TAX 
 
 see " Taxation," subheading " stock-transfer tax." 
 
 defense of failure to fix stamps in actions involving purchase and sale, 
 
 pledge and conversion, of stock, see " Stock and Capital Stock," subheadings 
 
 " purchase and sale," " pledge " and " conversion." 
 allegation of payment in action on agreement to sell stock, 151. 
 
 STOCKHOLDERS 
 
 rights when still but subscribers, see " Stock and Capital Stock," subheading 
 
 " subscriptions." 
 see " Stock and Capital Stock." 
 
 transfer of stock, see " Stock and Capital Stock," subheading " transfer." 
 right to inspect books, see " Books and Records," " By-Laws " and " Stock 
 
 Book." 
 inspection of corporate books, see " Corporate Books." 
 right to subscribe to increase in capital stock, see " Stock and Capital 
 
 Stock," subheading " increase." 
 dividends on death, see "Dividends." 
 
 consent to corporate mortgage, see " Corporate Bonds and Mortgages." 
 borrowing from corporation, see " Dealings with Creditors and Debtors,'' 
 
 subheading " debtors — loaning money." 
 rights 
 
 to dividends, see " Dividends." 
 of foreign corporation, see " Foreign Corporation,'' subheading " officers, 
 
 directors and stockholders." 
 
INDEX 1477 
 
 References are to pages— 'See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — contmued 
 
 bound by right of legislature to repeal charter, 17. 
 
 distinguished from corporators, 6. 
 
 subscriber to stock ipso facto such without issue of stock certificate, 172. 
 
 distinguished from bondholder, 173. 
 
 assignee of shares by appointment by trustees according to charter, is, 173. 
 
 passing chance for preference bound by choice, 99. 
 
 no presumption of still being because once has been and alleges transfer of 
 
 his holdings fraudulently obtained, 125. 
 assignee of bound by assignor's agreement as to stock preferences, 70. 
 who is 
 
 person subscribing in own name for another who pays installments, 88. 
 actions by 
 
 not subject to expenses of, against corporation, outside of costs, 195. 
 minority against one majority on ground fraud, 195. 
 to recover stock and rescind transaction, when delivered for one pur- 
 pose and used for another, 195. 
 when enjoined from disposing of holdings pending action to rescind 
 
 contract by which acquired them, not a contempt, 195, 196. 
 against co-stockholders receiving dividends he did not receive, 199. 
 who may sue 
 
 one who has put stock in voting trust, 196. 
 
 one buying stock to sue, no injunction, only damages, 196. 
 
 any one owning stock and having personal interest, irrespective of 
 
 motive, 196. 
 equitable owner, in equity, to protect interest, 196. 
 stockholders of holding, for subsidiary company, 196.. 
 one pledging stock with voting trustee, for injury to own stock as 
 
 distinguished from injury to corporation, 196. 
 one becoming stockholder after fraudulent transaction to set it 
 
 aside, 196, 197. 
 one such before stock issued at overvaluation may set aside, 197. 
 one becoming stockholder after injury to business by individual for 
 which damages sought, 197. 
 when by corporation and when by stockholder 
 
 by corporation for unlawful obtaining by director or officer of cor- 
 porate property, 199. 
 by corporation to set aside fraudulently induced surrender of stock- 
 holder's stock, 199. 
 by stockholders of lessor company controlled by lessee corporation 
 refusing to pay rent, 199. 
 when demand upon corporation to sue necessary 
 
 not when for fraudulent dissipation of assets in which all officers 
 
 and directors participated, 198. 
 if to nullify fraudulent corporate act rendering stock valueless, 198. 
 if for spoliation of corporate assets by officers and directors, 198. 
 if cause of action belong to corporation, 198. 
 not when for conspiracy to waste assets to which all officers were 
 
 parties, 199. 
 set aside sale of all property for stock of foreign corporation, 200. 
 not of committee on voluntary liquidation, in addition to demand 
 of directors, 201. 
 
1478 INDEX 
 
 Refeiences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 actions by — continued 
 
 when demand upon corporation to sue necessary — continued 
 
 not when facts plead show unavailing, 201. 
 
 in derivative action, 201. 
 
 in action to set aside unconscionable retainer of lawyer, unless 
 futile, 202. 
 
 not when allegations show stockholder is such in lessor company 
 wholly controlled by lessee-defendant company, 202. 
 
 not when prejudicial acts continue to commencement of action, '20.j. 
 
 for fraud injuring corporation, 207. 
 when by stockholder individually and when as representative 
 
 test whether damages belong to individual stockholder or corpora- 
 tion, 197. 
 
 individually when for paying or receiving wrong price for stock, 
 197. 
 
 as representative when for waste of corporate property, 197. 
 
 individually in equity for right in corporation if ultra vires or 
 injurious act of directors or officers threatens and corporation 
 will be injured, 198. 
 
 as representative to enjoin scheme to issue stock to give control 
 to individual directors, 199. 
 
 as representative to enforce contract of promoter adopted by it 
 which it refuses to enforce, 200. 
 
 as representative to recover moneys received by officers as corpora- 
 tion's agent, 200. 
 
 in general, 200. 
 
 joinder of cause in each capacity, when demurrable, 206. 
 representative 
 
 hurt or benefit to corporation sole issue, 195. 
 
 not till stock to which entitled issued to plaintiff, 195. 
 
 to compel accounting by another stockholder to bankrupt corpora- 
 tion, 206. 
 grounds for 
 
 to enforce promoter's contract adopted by corporation it refuses 
 to enforce, 200. 
 
 to avoid inter-corporate contract when corporations' directors are 
 common, 200. 
 
 sale of all corporate property for stock of foreign corporation, 200. 
 
 in equity for accounting and to prevent forfeiture of stock for non- 
 payment of assessments when books confused, 200. 
 
 to recover moneys received by officers as corporation's agents, 200. 
 
 to compel keeping proper books of account, 205. 
 pleading, practice and evidence 
 
 election necessary between claim of exclusion from stockholder's 
 rights and claim to dividends, 200. 
 
 when demand upon corporation to sue necessary, see this title, sub- 
 heading supra, " when demand upon corporation to sue neces- 
 sary." 
 
 when plaintiff sues individually and when as representative, see this 
 title, subheading supra, "when individually and when as repre- 
 sentative. 
 
INDEX 1479 
 
 Sefetences are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 actions by — contimued 
 
 pleading, practice and evidence — continued 
 
 allegation of non-assent of predecessors to fraudulent transaction 
 unnecessary, 201. 
 
 in representative action only necessary to allege plaintiff was and 
 still is stockholder, if evidence on trial shows demand on cor- 
 poration by stockholder, 201. 
 
 in derivative action, necessary allegations, 201. • 
 
 allegation of purchase of and payment for stock in reliance on 
 guaranty of dividends sued for obviates allegation of ownership, 
 201. 
 
 allegation of demand and refusal of corporation to sue unneces- 
 sary when facts plead show unavailing, 201. 
 
 demand on corporation to sue must be alleged, and refusal, in 
 derivative action, 201. 
 
 allegations for conspiracy to impair value of stock by scrip divi- 
 dends, 202. 
 
 for unlawful issue of shares by trustee, 202. 
 
 objection of plaintiff's failure to sue representatively available 
 only by answer or demurrer, 202. 
 
 to enforce contract by another corporation with plaintiff's, directors 
 of neither proper parties, 202, 203. 
 
 in representative action causes of action for damages for injury to 
 business and for damages for lessened value of stock held by 
 corporation cannot be joined unless separately stated, 203. 
 
 Individually to recover from defendant stock of another corpora- 
 tion paid for by plaintiff's corporation, 203. 
 
 in representative action allegations of neglect and willful wrong- 
 doing of directors combined, 203. 
 
 independent causes of action if corporation sued, joined when stock- 
 holder sues, 203. 
 
 joinder to recover as representative and to destroy corporate life 
 not allowed, 203. 
 
 to regain position as controlling stockholders, 203. 
 
 as representative to recover unpaid subscriptions and adjust cred- 
 itors' claims should join all stockholders, 204. 
 
 to recover, stock for which has received property, must offer to 
 return property, 204. 
 
 judgment for repayment of improper salaries, 204. 
 
 burden of proof in derivative action to recover money fraudulently 
 obtained by vendor to corporation, 204. 
 
 for dividends, at law and by individual action when undeclared, but 
 by representative suit when declared but undistributed, 205. 
 
 several stockholders seeking redress may join in action, 205. 
 
 in representative action other stockholders not parties if no relief 
 against them asked, 205. 
 
 examination before trial to frame complaint against sole director 
 refused if complaint alleges sufficient, cause of action, 206. 
 
 costs and attorneys' fees after dissolution of injunction against 
 issue of corporate securities, 206. 
 
1480 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 actions by — continued 
 defenses 
 
 solvency of, or benefit to corporation despite illegal acts complained 
 
 of, 207. 
 available if available if corporation sued, 207. 
 when barred 
 
 representative action to compel restitution of corporate loans to 
 
 stockholder and director, 204. 
 not by awaiting results of like suits by other stockholders, 206. 
 creditors 
 
 of stockholder satisfied by execution against stock, 472. 
 deceased 
 
 liability of executor on stock, 208. 
 
 liability of representative for corporate debts, 208, 209. 
 as to directors 
 
 complaint of directors' suspension of corporate functions, 174. 
 ratification of acts of, 174. 
 duties 
 
 cannot be relieved from by certificate of incorporation, 20. 
 liabilities 
 
 for directors' acts 
 
 when elected them by using stock not outstanding, 208. 
 for corporation's acts 
 
 not because hold majority of stock, 188. 
 for amount unpaid on stock 
 
 not to corporation, 207, 208. 
 on notes for corporation's accommodation, 208. 
 not for corporation's business transactions, 208. 
 when corporation full-liability one by charter, 207. 
 under statute not presumed, 207. 
 selling vote, as misdemeanor, 178. 
 for representations inducing purchase of corporation's stock 
 
 not when took no part in statement, 208. 
 of majority 
 
 as trustees for corporate property bought to exclude minority, 190. 
 for corporate debts 
 
 actions to enforce, see subheading " pleading, practice and evi- 
 dence,'.' infra. 
 see also same subheadings under title " Subscribers," infra. 
 only debts contracted while held stock, 89. 
 to amount unpaid on holdings, 89. 
 when hold as executors, 209. 
 only when payable within two years, 209. 
 not if hold as collateral security, 209. 
 limited to amount unpaid on holdings, 209. 
 must have been contracted while stockholder, 209. 
 when invested in representative or trust capacity, 209. 
 holdings must not be full paid, 209. 
 when hold as trustees, 209. 
 
 not till execution imsatisfied or judgment against corporation, 200. 
 when corporation reorganized to issue non-par value stock, 209'. 
 when hold as guardians, 209. 
 
INDEX 1481 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — contmued 
 liabilities — continued 
 
 for corporate debts — continued 
 
 in general, 209. 
 
 governing statutes, 209. 
 
 statutory or contractual, 210, 211. 
 
 not at common law, only by statute, 210. 
 
 when corporation reorganized to have non-par value stock, 210. 
 
 costs recoverable plus amount unsatisfied on execution against cor- 
 poration, 210. 
 
 law in eflFect when contracted governs, 211. 
 
 judgment against corporation, how far effective, 211. 
 
 what creditor must prove, 211. 
 
 subsequent legislation cannot remove, 211. 
 
 on corporate note governed by law in effect when made, 211. 
 
 only if judgment thereon had against corporation, 212. 
 
 for all debts and contracts within statutory limits, 212. 
 
 only if action brought against corporation within two years from 
 time due, 212. 
 
 what debts, in general, 212. 
 
 incurred after expiration of corporate life, 212, 213. 
 
 only if payable within two years from contraction, 212. 
 
 contracted by stockholders' unanimous consent, 212. 
 
 organization debts, 212. 
 
 not to exceed amount unpaid on stock, 212. 
 
 for professional services, 212. 
 
 only if contracted while held stock, 212. 
 
 only if execution returned unsatisfied as against corporation, 212. 
 
 ratification of officer's unauthorized payment not relieve from, 212. 
 
 to indorser of corporate note, 213. 
 
 to what creditors, 213. 
 
 to assignee of claim against corporation from stockholder, 213. 
 
 to treasurer using money paid to corporation by stockholder, 213. 
 
 who is creditor, decisions under former statutes, 214n. 
 
 to receiver appointed for corporation, 214. 
 
 to corporation's trustee in bankruptcy, 214. 
 
 only if stock not fully paid, 215. 
 
 one holding stock in own name under verbal agreement for another, 
 215. 
 
 what stockholders liable in general, 215. 
 
 is several, not joint, 215. 
 
 not if hold stock as executor, administrator, guardian or trustee 
 unless invested as such therein, 215. 
 
 not if hold stocks as collateral 215. 
 
 only if holds stock absolutely, 215. 
 
 only for debts contracted while held stock, 215. 
 
 on change in capital stock, decisions under old statutes, 217n. 
 
 on reduction of capital stock, 217. 
 
 on increase of corporate capital stock, 217. 
 
 when debts must become due, old statutes, 217n. 
 
 not if contracted before became stockholders, 217. 
 
 on reorganization to permit of non-par stock, 218. 
 
 for jury's decision if dummy book-holder is liable, 218. 
 
1482 INDEX 
 
 References are to pages — See also Cyclopedic Analysis pieceding page 1. 
 
 STOCKHOLDERS — continued 
 liabilities — continued 
 
 for corporate debts — continued 
 
 name on books prima facie fixes, 218. 
 
 effect of transfer on books, 218. 
 
 not if bona-fide purchaser of stock represented as, but not, fully 
 
 paid, 219. 
 not for debt contracted after sale of stock though liable to corpora- 
 tion for unpaid portion of purchase price, 219. 
 hoiia-fidc transfer relieves from, 219. 
 stock-transfer' presumed fraudulent made unanimously to dummy 
 
 wliile corporation insolvent, 219. 
 one who has contracted to buy, 219. 
 changed since 1901, 220, 221. 
 only up to amount unpaid on holdings, 220. 
 to what extent, in general, 220. 
 
 after disposal of holdings, decisions under repealed statutes, 220n. 
 in suit here under foreign statute, 221. 
 
 only once as to any one debt as against any particular stock, 221. 
 to what extent, decisions under repealed statutes, 221n. 
 when directors make themselves creditors for salaries, 234. 
 when corporation's officers give notes out of usual course of 
 
 business with fraudulent intent of holding stockholders, 234. 
 one who has agreed to take stock liable, 234. 
 defenses, in general, 234, 235. 
 under former statutes, 234, 235. 
 
 when director buys debts while corporation insolvent, 235. 
 offset of to corporation, 235. 
 may offset judgments against corporation, 235. 
 officer-stockholder signing corporate notes cannot question corpora- 
 tion's debt thereunder, 235. 
 defective organization no defense, 235. 
 contribution inter sese, 236. 
 municipal and city courts have jurisdiction of actions to enforce, 
 
 236. 
 one stockholder cannot enforce against another stockholder, 236, 
 after division of corporate property among stockholders while 
 
 debts xmpaid, 239. 
 what debts, in general, 212. 
 all kinds of debts included, 212. 
 under foreign statutes 
 
 if provide remedy, exclusive, if not, common law remedy 
 
 enforceable here against resident, 244. 
 for par value of stock enforceable primarily in foreign state, 
 
 244. 
 barred here when barred by foreign statute of limitations, 
 
 244. 
 ■when foreign statutes to be plead here, 244. 
 when enforceable in this state, 244. 
 for interest on 
 
 in general, 233. 
 
 allowed if not swell liability beyond statutory limit, 234. 
 
 only from time suit began, 234. 
 
INDEX 1483 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDEES — eontinued 
 liabilities — continued 
 
 for corporate debts — continued 
 
 when is stoclc fully paid so as to relieve from 
 in general, 222. 
 
 mistaken overvaluation of property not render liable, 222. 
 question of fact if property paid for stock fraudulently valued, 
 
 222. 
 exhorbitant valuation of property presumably fraudulent, 223. 
 decisions under repealed statutes making stockholders liable 
 
 till all capital paid in, 223n. 
 action must be brought within two years from time ceased to be 
 
 such, 210. 
 statute of limitations against 
 in general, 230. 
 
 action against corporation 2 years after due, 230. 
 payable within two years from contraction, 230, 231. 
 pleading, 231. 
 action against stockholder within 2 years after ceased to be 
 
 such, 231. 
 legislature can (not) alter as to existing stockholders, 231. 
 begins to run whenever stockholder divested of interest in 
 
 corporation, 231. 
 how aileeted by renewal notes by corporation, 232. 
 governs full liability companies, 232. 
 purpose of statute, 232. 
 under special statute, 232. 
 time corporation, and not prior debtor liable, determines 
 
 computation of 2 years, 232. 
 when rent payable quarterly by corporation becomes debt, 
 
 233. 
 period for which creditors enjoined from suing no part of 
 
 2 year period, 233. 
 decisions under former statutes, 233n. 
 cease 2 years after dissolution and receivership, 235. 
 action, Judgment and unsatisfied execution, against corporation 
 
 conditions precedent to, 224. 
 return unsatisfied of execution sufficient, 226. 
 creditor need not set aside transactions in fraud of sheriff, 
 
 226. 
 necessary as to continuing stockholder, 226. 
 necessary even as to purchaser before maturity of corporate 
 
 notes, 226. 
 must be had in New York State, 226. 
 complaint need not allege if alleges excuse, 227. 
 not necessary if dissolved, injunction issued in sequestration 
 
 or statute prohibits suit, 227, 228. 
 must be unsatisfied on judgment which is basis of suit, 227. 
 under special statutes, 227. 
 
 appointment of receiver not dispensed with, 228. 
 performance impossible or illegal by law dispenses with, 228. 
 appointment impossible or illegal by law dispenses with, 228. 
 proceeding for voluntary dissolution not dispense with, 228. 
 under special statutes, 228, 229. 
 
1484 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 liabilities — continued 
 
 for corporate debts — continued 
 
 action, judgment and unsatisfied execution — continued 
 judgment against corporation 
 unsatisfied, measures amount recoverable, 229. 
 not satisfied by less than verdict, 229. 
 not per se sufficient to fix stockholder's liability, 229. 
 limits extent of, 229. 
 
 dissolution, but not receiver and injunction, dispense with, 229. 
 as measure of stockholder's liability, decisions under former 
 
 statutes, 230. 
 as evidence of debt, decisions under former statutes, 230. 
 as evidence of amount plaintiff may recover, 251. 
 excused by judgment sequestrating corporate property, 251. 
 pleading, practice and evidence 
 in general, 236. 
 
 necessity of averring corporation insolvent, 236. 
 substitution of attorneys as first move toward discontinuance^of 
 
 representative action barred by statute, 23i6. 
 proof essential that defendant stockholder liable on unpaid 
 
 subscription, 237. 
 bankruptcy trustee need not go to court to find amount unpaid 
 
 on subscription, 237. 
 receiver appointed of stockholdings loss or removal of which 
 
 threatens, 237. 
 receiver not to be joined with stockholders, 237. 
 right of suit in creditors, not receiver, 237. 
 evidence competent that stock assigned to defendant as col- 
 lateral, 237. 
 may be sued with corporation or separately, 238. 
 proof of overvaluation in bad faitli needed, 238. 
 may be made defendants to suit against corporation and 
 
 liability fixed therein, 238. 
 one creditor alone may sue one stockholder, 239. 
 defendant cannot object to joinder as defendant of one on 
 
 books as stockholder, 239. 
 amendment of course when one shown by books as stockholder 
 
 and made defendant found not to be, 239. 
 when statute gives legal and when equitable remedy, 240. 
 when in equity for benefit all creditors, all stockholders and 
 
 representatives joined, 240. 
 decisions under statute prior to 1901 amendment, 240. 
 Buit against stockholder direct only when statute permits, 
 
 240. 
 complaint by bankruptcy trustee need not show need of collect- 
 ing all unpaid subscriptions to pay creditors, 241. 
 complaint need only allege defendant was stockholder when 
 
 debt created, 241. 
 complaint must allege subscription unpaid when judgment 
 
 recovered against corporation, 242. 
 complaint, sufficiency of allegations under former statutes, 
 
 242n. 
 complaint alleging larger subscription than defendant paid 
 
 in cash, insufficient, 242. 
 
INDEX 1485 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 liabilities — continued 
 
 for corporate debts — continued 
 
 action, judgment and unsatisfied execution — continued 
 pleading, practice and evidence — continued 
 complaint must show corporation is stock corporation, 242. 
 dedfense that defendant member of joint stock company need 
 
 not be plead, 243. 
 answer denying on information allegations as to incorpora- 
 tion, payment of capital, etc., not frivolous, 243. 
 judgment authorizing county treasurer to docket same against 
 
 stockholders permits execution for his commissions, 243. 
 judgment, when for one or many creditors against each or 
 all stockholders, 243. 
 for corporate debts to employees, etc. 
 in general, 247. 
 governing statutes, 245. 
 purpose of statute, 245. 
 
 settlement by foreman after corporation's business ceased not bind- 
 ing, 245. 
 contribution from co-stockholders, 246. 
 to assignee of employee, 246. 
 
 to employee payable monthly, only for one year's wages, 248. 
 to transferee of bill of exchange drawn by employee on corporation 
 
 and accepted by it, 248. 
 what stockholders liable 
 
 persons directors who could legally be such only if stock- 
 holders, 246. 
 burden of proof on plaintiff, 246. 
 those stockholders when debts due, 246. 
 not holder as collateral, executor, administrator, guardian or 
 
 trustee, 246. 
 stockholder on books who has pledged or assigned holding^:. 
 246. 
 for what debts 
 
 in general, 247. 
 governing statutes, 247. 
 rule of construction of ■statute, 247. 
 iiot for costs in action other than for services, 247. 
 not for breach of contract, 247. 
 not for anything but services rendered, 247. 
 who are laborers, servants and employees 
 governing statute, 248. 
 rule of statutory construction, 248. 
 laborer for contractor is not, 249. 
 contractors are not, 249. 
 in general, 249. 
 
 civil engineer arid traveling agent, 249. 
 foreman at $1,000 under superintendent, 250. 
 bookkeeper, 250. 
 
 bookkeeper paid weekly doing other work, too, 250. 
 bookkeeper and general manager at $1,200, 250. 
 secretary, 250. 
 general superintendent doing some manual labor, 250. 
 
1486 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 liabilities — continued 
 
 for corporate debts to employees, etc. — continued 
 judgment and execution against corporation 
 must be in this state, 251. 
 in justice's court good, 251. 
 excused by injunction, 251. 
 not good if in court without jurisdiction, 251. 
 necessity of in general, 251. 
 pleading, practice and evidence 
 in general, 252. 
 
 complaint, necessary allegations, 252. 
 
 complaint alleging services rendered " as secretary and other- 
 wise " insufficient, 252. 
 objection of misjoinder of defendant as stockholder not good 
 
 if such on books, 252. 
 discontinuance against one stockholder, 252. 
 when stockholder severally and when jointly sued, 253. 
 amendment when one on books as stockholder not such or dead, 
 
 etc., 253. 
 compromise by one defendant stockholder as affecting liability 
 of others, 253. 
 meetings 
 
 quorum regulated by by-laws, 44. 
 call of regulated by by-laws, 44. 
 by-laws fix amount of stock for quorum, 176. 
 by-laws provide for calling, 176. 
 powers 
 
 may be limited by certificate of incorporation, 23. 
 may be limited by charter, 173. 
 in general, 173. 
 
 cannot act in relation to ordinary corporate business, 173. 
 prescribed by statute, 173. 
 of ratification, 173, 174. 
 
 to complain of directors' suspension of corporate functions, 174. 
 cannot transfer corporate property though owning all its stock, 175. 
 to lease, when charter appoints directors to manage affairs, though also 
 ♦ directors, 175. 
 may vote to discontinue action by corporation, 175. 
 admissions cannot charge corporation unless agent of corporation to 
 
 make, 175. 
 to waive notice and lapse of time prerequisite to any corporate act, 176. 
 by-laws fix number for quorum, 176. 
 may inter sese release from stock subscriptions if no corporate business 
 
 or creditors, 176. 
 by unanimous consent may do anything could do at formal meeting, 176. 
 to close books, 176, 177. 
 
 to sell out holdings and personally buy all corporate assets, 183. 
 to take mortgage from corporation for loan to it, 183. 
 to buy goods from corporation, 183. 
 to deny connection with company, not when has acted as connected with, 
 
 184." 
 of minority, see also subheading, infra, " majority." 
 
INDEX 1487 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 powers — continued 
 
 of minority, see also subheading, infra, " majority " — continued 
 
 of corporations buying out other corporations, 189. 
 
 suing to prevent all profits going as salaries to majority must 
 allege demand on corporation for redress, 190. 
 
 suit by administrator of deceased to redress all profits going as 
 salaries to majority, must allege decedent stockholder, 190. 
 
 to recover salaries voted by majority as directors using all corporate 
 earnings, 190. , 
 
 to set aside contract by corporation after laches, knowledge and 
 profit from, 191. 
 
 to enjoin sale of corporate property to foreign corporation, 194. 
 
 to set aside sale at inadequate price of corporate property, 194. 
 
 to prevent majority from selling their stock, 194. 
 of majority 
 
 see also subheading, supra, " minority." 
 
 to ratify illegal corporate act, 188. 
 
 to enjoin sale of further stock, 188. 
 
 to enjoin oflScera and directors pending suit to cancel stock issue, 
 188. 
 
 though constituted but of one person, not permit donation of cor- 
 poration's property, 188. 
 
 under by-laws, bind purchaser of stock, 188, 189. 
 
 to agree for corporate control even after death, 189. 
 
 by agreement to perpetuate control of corporation, not partner- 
 ship agreement, 189. 
 
 to ratify acts of directors being sued by minority for accounting, 
 189, 190. 
 
 to ratify salaries voted by directors from treasury without author- 
 ity for unauthorized services, 190. 
 
 salaries voted themselves, using all profits in fraud of minority, 189. 
 
 to vote to discontinue corporate business, 190. 
 
 to profit secretly from sale of whole stock, 191. 
 
 to set aside directors' election had while enjoined by minority, after 
 injunction dissolved, 191. 
 to bind successors 
 
 not to change capital or directors, 182, 183. 
 
 to share in profits, 183. 
 to question corporate existence 
 
 not when have signed book reciting formation of company and filing 
 of papers, 183, 184. 
 
 not when contracted with corporation and acted as director thereof, 
 184. 
 to question corporation's acts and powers 
 
 not when assents, though ultra vires, 183. 
 
 not when knew thereof, though ultra vires, 183, 184. 
 
 transfer of all property, not when knew of, 184. 
 
 issue of stock, not after insolvency when have accepted benefits, 184. 
 
 implied ratification and equitable estoppel distinguished, 184. 
 
 long knowledge precludes, 184. 
 
 loan to outsider, of which know, 194. 
 
1488 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 powers — continued 
 
 to question corporation's acts and powers — continued 
 
 security taken for debt, not wlieii refuses president's offer to pay 
 
 debt and take same security, 184. 
 only those of own corporation, in acquiring stock of another cor- 
 poration, 185. 
 to complain of corporate acts 
 
 not because ultra vires if accepts benefits, 206. 
 
 in suit ton his benefit cannot set up failure of organizers' duty, 207. 
 to ratify unauthorized acts of directors and officers 
 in general, 182. 
 
 by blanket resolution at annual meeting, 182. 
 sale of corporate property to syndicate, 182. 
 misappropriation of corporate p.ssets, 182. 
 to vote 
 
 when has agreed to sell stock, see " Stock and Capital Stock," and 
 
 subheading " purchase and sale." 
 when legislature may take away, 18. 
 
 one vote for every share unless charter otherwise provides, 176. 
 cumulative, provided by charter, 176. 
 each share, as against each stockholder, entitled, 177. 
 only if stockholder on books at time stipulated by statute, 177. 
 subheading, infra, " by proxy." 
 on stock wholly subscribed and part paid in full when remainder 
 
 held in trust till rest of subscription paid, 178', 179. 
 by one corporation as stockholder in another, 178. 
 any way he sees fit and to own interest, 178. 
 reorganization committee may vote, 179. 
 of testamentary trustee, 179. 
 pending trial of ownership of stock, 179. 
 production of books showing, on challenge, 181,. 
 at special to elect directors 
 
 sworn statement required when corporate books not on hand, 
 178. 
 challenge 
 
 inspectors or presiding officer to require production of corporate 
 
 books, 177. 
 right to, 177. 
 oath 
 
 must be filed, 177. 
 
 inspector or presiding officer may administer, 177. 
 form of, 177. 
 
 to be taken when required by inspector or presiding officer, 177. 
 by proxy 
 
 in general, 180. 
 
 revocable at pleasure, 180. 
 
 proxy to be presented, 180. 
 
 good for definite period stated, 180. 
 
 oath required of proxy, 180. 
 
 good for eleven months, 180. 
 
 must be executed by stockholder or attorney, 180. 
 
 must be in writing, 180. 
 
INDEX 1489 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHO'LDEES — continued 
 powers — continued 
 
 to vote — continued 
 
 by proxy — continued 
 
 misdemeanor to give proxy for consideration, 181. 
 inspectors administer oath to proxy, 181. 
 no proxy for money or thing of value, 181. 
 by-law requiring proxy to be stockholder, 181. , 
 if books show them to be stockholders, 181. 
 agreement perpetually to give, by stockholders inter sese, 181. 
 transfer of stock solely to vote for consideration void, 181. 
 proxies to be filed, 181. 
 oaths of proxies to be filed, 181. 
 to pledgor by pledgee on demand, 181. 
 presiding officer to take oath of proxy, 181. 
 coupled with interest, void, 182. 
 by voting trust 
 
 by written agreement, 180. 
 
 notation in corporate books of, on transfer of stock to trustee, 
 
 180. 
 when trustee may vote stock, 180. 
 not for over five years, 180. 
 
 duplicate of trust agreement filed in corporate office, 180. 
 terms and conditions to be stated, 180. 
 duplicate of trust agreement open to inspection, 180. 
 others may join in, when one stockholder creates, 180. 
 transfer of stock to trustee, 180. 
 
 cancellation of stock pooled and issue of new to trustee, 180. 
 preferred 
 
 does not lose right to cumulative dividends if protests applying earn- 
 ings to common stockholders, 70. 
 entitled to interest on cumulative dividends not paid but used to pay 
 common siockholders' dividends, 71. 
 purchase of stock 
 
 not bound by promoter's secret agreement for profit, 3. 
 rights 
 
 in general, 174. 
 
 equal with those of co-stockholders, 174. 
 
 lending stock certificates to corporation not entitled to specific certifi- 
 cates back, 175. 
 may defend action pro corporation in which judgment had coUusively, 
 
 175. 
 to financial statement 
 
 must own 5 per cent of capital if not over $100,000, 185. 
 
 must have' 3 per cent of stock of corporation over $100,000, 185. 
 
 must have 5 per cent of stock of $100,000 corporation, 185. 
 
 must own 3 per cent of capital if over $100,000, 185. 
 
 treasurer to make and deliver within thirty days of request, 185. 
 
 treasurer to keep on file twelve months after made, 185. 
 
 treasurer need deliver only one a year, 185. 
 
 treasurer's filed copy open for inspection, 185. 
 
 court may extend treasurer's time to make, 185. 
 
 •written request of treasurer or fiscal oflicer, 185. 
 
1490 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 STOCKHOLDERS — continued 
 rights — continued 
 
 to financial statement — continued 
 penalty for refusing, 185. 
 
 open to inspection after made for one year, 180. 
 contents, 186. 
 
 ■whether also director, or not, 186. 
 
 court order to representative of deceased stockholder refused con- 
 firmation by corporation, 186. 
 only one a year need treasurer give, 186. 
 unsworn insufficient unless oath waived, 187. 
 unsworn and not up to date siifficient if accepted without objection, 
 
 187. 
 of assets and liabilities suffices, 187. 
 penalty 
 
 to demandant, 187. 
 
 $50 plus $10 for each 24 hours of delay, 187. 
 action for must be under statute in effect when default occur- 
 red, 187. 
 personal demand of treasurer condition precedent to suit for, 
 
 187. 
 demand not requiring oath to statement sufficient basis for suit 
 
 for, 187. 
 amount, 187. 
 must allege treasurer not delivered statement during current 
 
 year, 186. 
 for refusing, only to stockholder of record when demand made, 
 186. 
 of minority 
 
 to accounting on sale of corporate stock, 191. 
 
 to refund of contribution to joint investigation on consolidation 
 
 to determine value of stock, 191. 
 to court's aid 
 
 to determine advisability of corporate policy in entering into 
 
 agreement, 192, 193. 
 not when action within corporate powers unless so against its 
 interests as to indicate fraud, 192, 193. 
 to compel owners of property they used to pay for their stock to 
 
 return consideration they paid therefor, 193. 
 to undo lease of corporate property by majority, 193. 
 to enjoin lump sale of corporate property not to be properly carried 
 out, 193. 
 voting, see subheading " powers." 
 • may be limited by certificate of incorporation, 23. 
 to what classes granted 
 
 certificate of incorporation may provide, 23. 
 
 STOLEN STOCK CERTIFICATES 
 
 see " Stock and Capital Stock," subheading " certificates of." 
 
 SUBSCRIBERS 
 
 rights against promoters, see "Promoters." 
 
 certificate of incorporation to give names, addresses and subscriptions, 20, 
 
 need not sign certificate of. incorporation, 25. 
 
INDEX 1491 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 SUBSCRIBERS — continued 
 
 not bound when incomplete certificate of incorporation shown them is 
 
 later changed, 25. 
 names, addresses and subscriptions to be in certificate of incorporation, 25. 
 liabilities 
 
 for corporate debts 
 
 see also same subheadings under title " Stockholders," supra. 
 begins on signing certificate of incorporation, 216. 
 when subscription only paper preliminary to charter, 216. 
 exists from signing charter irrespective of 10% payment on sub- 
 scription, 216. 
 exists from signing charter irrespective of full payment of capital, 
 
 216. 
 when not yet made payment if corporation recognizes, 216. 
 when contractor liable taking stock for building road, 216. 
 decisions under statutes no longer extant, 216n. 
 
 SUBSCRIPTIONS 
 
 see " Stock and Capital Stock." 
 
 to corporate bonds and mortgages, see " Corporate Bonds and Mortgages." 
 
 SUBSCRIPTION TO INCREASE IN CAPITAL STOCK 
 see " Stock and Capital Stock," subheading " increase." 
 
 SUPPLEMENTARY PROCEEDINGS 
 
 see " Actions By and Against Corporations." , 
 
 as to foreign corporations, see " Foreign Corporation," subheading " actions.'' 
 
 SURPLUS 
 
 see " Stock and Capital Stock." 
 
 SURRENDER OF CORPORATE FRANCHISES 
 
 see " Dissolution," subheadings " voluntary " and " by incorporators before 
 payment of capital." 
 
 SUSPENSION OF CHARTER 
 
 see " Certificate of Incorporation," subheading " amendment." 
 
 SYNDICATE 
 
 for subscriptions to corporate bonds and mortgages, see " Corporate Bonds 
 
 and Mortgages." 
 distinguished from partnership, etc., 11. 
 
 TAXATION 
 
 certiorari, see " Certiorari." 
 
 of foreign corporations, see "Foreign Corporation," subheading "taxation." 
 
 on organization, see " Organization Fees and Taxes." 
 
 repeal of charter exemption from, when property transferred on faith 
 
 of, 19. 
 repeal of legislative charter exemption from, 18. 
 of corporations, how secured, 15. 
 "annual," definition, 711. 
 property exempt from 
 
 tax assessment board's report, 689. 
 
1492 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 of franchises, in general, 691. 
 
 of property employed in interstate commerce, 692. 
 
 property exempt from 
 
 real and personal, 689. 
 curative statute cures defective assessment directly, 691. 
 constitutionality 
 
 property employed in interstate commerce, 692. 
 of statute stating object as to meet state expenses, 692, 
 general statement which various corporations pay, 689. 
 system in state, 690, 691. 
 in general, 691. 
 capital-stock tax 
 
 non-mercantile and non-manufacturing corporations pay, 690. 
 indirect personal property tax. 691. 
 franchise tax 
 
 what is taxable 
 
 good will, 754. 
 apportionment when company -in operation for only part of year, 711. 
 in general, 708, 709. 
 constitutional, 710. 
 overpayment, credit, 734. 
 on capital stock, 709. 
 
 offset of credit to another corporation on, 711. 
 non-mercantile and non-manufacturing corporations pay, 690. 
 not tax on property, 709. 
 imposed "annually," 711. 
 
 on right of corporation to exist and exercise powers, 691. 
 on what based 
 
 in general, 709. 
 
 on past transactions but prospective in operation, 710, 711. 
 statute imposing 
 curative, 692. 
 
 stating applicable to current state expenses not unconstitutional for 
 failure to state object, 692. 
 
 confined to capital employed in state good under U. S. constitution, 
 
 710. 
 on dividends declared, constitutional, 710. 
 repeals conflicting statutes, 710. 
 construed in taxpayer's favor, 710. 
 prospective in operation, 710. 
 constitutional, 710. 
 
 title stating object to apply to current expenses sufficient, 710. 
 collection 
 
 proceedings when corporation insolvent, 711, 712. 
 what corporations pay 
 in general, 712. 
 
 not manufacturing and mercantile corporations, 712. 
 transmission and transportation companies do not, 712. 
 mining companies do not, 712. 
 
 financial, insurance, trust, surety, title companies do not, 712. 
 in receiver's hands, 713. ■• 
 
INDEX 1493 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 franchise tax — continued 
 
 what corporations pay — continued 
 
 " incorporated " companies, etc., what are, 713. 
 
 engaged in interstate commerce, 713, 714. 
 
 investing in U. S. bonds, 714. 
 
 liquidating and paying back capital to stockholders, 714. 
 
 holding property exempt by act of congress, 714. 
 
 holding patents from U. S., 714. 
 
 holding purchase-money mortgage and distributing as collected, 714, 
 715. 
 
 owning and managing apartment, 716. 
 
 buying and leasing real estate, 716. 
 
 holding realty of decedent, 716, 717. 
 
 granting patents for stock in other corporations, 717. 
 
 realty company holding realty and structures, 717. 
 
 holding land partly rented and balance for sale, 717. 
 capital stock employed in state 
 
 stock and not dividend taxable, 715. 
 
 when employed for purpose specified in charter, 716. 
 
 owning and managing apartment, 716. 
 
 charter privileges determine if so employed, 716. 
 
 buying and leasing realty, 716. 
 I holding realty of decedent, 716, 717. 
 
 investment in real estate not used, 717. 
 
 granting patents for stock in other corporations, 717. 
 
 holding land partly rented and balance for sale, 717. 
 
 stock held in another company, 717. 
 
 investment in non-taxable municipal bonds, 717. 
 
 realty and structures thereon of realty company, 717. 
 
 railway rolling stock, 718. 
 
 property bought with surplus or not, 718. 
 
 see also subheading infra; see also " exercising franchises in state." 
 
 expenditures on leased lines is not, 718. 
 
 average bank balance on October 31, 718. 
 
 United States, railway and newspaper bonds, 718. 
 exercising franchises in state 
 
 see also subheading supra, " capital stock employed in state." 
 
 real estate companies, 719. 
 
 examples of, 719. 
 
 condition precedent to taxation, 719. 
 
 ultra vires not excuse from, 719. 
 
 must be during year for which taxed, 719. 
 
 holding real estate ultra vires, 720. 
 
 company organized to hold realty pending litigation for convenience, 
 720. 
 
 real estate company holding swamp, 720. 
 
 when petition to review tax says so, 720. 
 computation and determination of 
 
 in general, 720, 721. 
 
 governing statutes, 720, 721. 
 
 capital stock 
 
 what is, 721, 722. 
 
1494 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 f rancliise tax — continued 
 
 computation and determination of — continued 
 
 at present value, 721. 
 
 basis of, 721. 
 
 is value of net assets, 721. 
 
 equivalent to " capital," 721. 
 
 when not all employed in state, 722. 
 
 actual, not par, value, 722. 
 
 average during year, 723. 
 
 payment by one electrical company to another for electricity 
 bought, 725. 
 
 what may be considered in determining, 725. 
 
 V. S. bonds, 725. 
 
 real estate subject to local taxation, 725, 726. 
 
 patents, 726. 
 
 stock received for patents, 726. 
 
 bonds received for patents, 726. 
 
 patents, how valued, 726, 727. 
 
 real estate and U. S. bonds in foreign state, 725. 
 
 when estopped from asserting is not, 723. 
 
 when increased during year, 723. 
 
 not necessarily amount outstanding on October 31, 723. 
 earnings 
 
 what are, 724. 
 
 not capital, 724, 725. 
 surplus 
 
 governs in, 724. 
 
 what is, 724. 
 good will, 725. 
 dividends 
 
 monej' received save by stockholders' contribution, 727. 
 
 return of contribution to surplus, 727. 
 
 award in condemnation over value of capital, 727. 
 
 amount received on cancellation of lease, 727. 
 
 what are, 727. 
 
 in shape of free rent to stockholders, 727, 728. 
 
 stock dividend, 728. 
 
 anticipated, 728. 
 
 stock, lump dividend, 728. 
 
 sum paid from surplus before tax act passed, 728. 
 location of for taxation 
 
 coal of railway outside state, 729. 
 
 earnings from transportation from one. state to another, 729. 
 
 bills receivable for merchandise sold outside state, 729. 
 
 when both in and out of state, 729. 
 
 in another company, 728, 729. 
 
 place where money earned immaterial, 729. 
 rate 
 
 when dividends 6% or more 
 
 in general, 729', 730. 
 
 governing statutes, 729, 730. 
 
 based on par value, 730. 
 
INDEX 1495 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 rate — continued 
 
 when dividends 6% or more — continued 
 statute legal, 730. 
 
 when stock doubled in mid-year, 730. 
 when no dividends or less than 6%. 
 in general, 730, 731. 
 governing statutes, 730, 731. 
 method in general, 731, 
 
 average sale price evidence of actual value, 731. 
 based on actual value, 731. 
 market value of stock as basis, 731. 
 
 surplus considered in determining stock's value, 731, 732. 
 sales-price as evidence of value, 732. 
 
 sales-prjce minimum but not maximum limit of valuation, 732. 
 estimate of value by corporate officers, 732. 
 when more than one kind of stock and dividends 
 governing statute, 732. 
 in general, 732. 
 
 refers to common and preferred stock, 733. 
 in all other cases, 733. 
 when stock has no par value, 733. 
 review 
 
 by certiorari, see "Certiorari." 
 by application to comptroller 
 governing statute, 733. 
 on what, based, 733. 
 duty of comptroller, 733. 
 order denying, 734. 
 mandamus to compel, 734. 
 time-limit, 734. 
 
 credit for excess-payment, 734. 
 increase forbidden, 734. 
 
 comptroller need not act if tax paid under mistake of law, 734. 
 income tax 
 
 to United States, 690. 
 income franchise tax 
 
 mercantile and manufacturing corporations pay, 690. 
 in general, 695; 
 what corporations pay, 695. 
 
 auditing and apportionment of tax in state, 708. 
 deposit and disposition of revenue from, 708. 
 powers of tax commission, 708. 
 secrecy of officials having to do with, 708. 
 statute of limitations in proceedings concerning, 708. 
 warrants and actions for recovery of, 708. 
 what are manufacturing corporations 
 in general, 696n, 697. 
 Webster's definition, 697. 
 word used in ordinary sense, 697. 
 domestic company manufacturing outside state, 698. 
 company holding stock in manufacturing company, 698. 
 illuminating gas, 698. 
 
1496 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 income franchise tax — continued 
 
 what are manufacturing corporations — continued 
 making asphaltum, 698. 
 manufacturing lead boilers, 698. 
 crushing stone, 698. 
 making paving compound, 698. 
 electric light and power, 699. 
 natural ice, 699. 
 fountain pens, 699. 
 refining bullion, 699. 
 mixing teas and coffees, 699. 
 sheep and hides, 699. 
 newspaper, 700. 
 old-statutes, 700n. 
 pasteurizing milk, TOO. 
 what are mercantile corporations- 
 
 in general, 701. 
 income taxed 
 
 if all business done in New York 
 
 tax based on income returned to U. S. A., 701. 
 is income from November 1 to November 1 unless fiscal year used in 
 
 federal report, 702. 
 dependent on all business being transacted in New York or part 
 
 within and part without, 701. 
 if all business not done in New York 
 tax based on proportion, 701. 
 
 how proportion of income taxable determined, 701, 702. 
 rate 
 
 three per cent, 703. 
 reports 
 
 contents and form 
 
 blanks supplied by State Tax Commission, 703. 
 not excused by failure to secure blanks, 703. 
 on merger or consolidation, 703. 
 extension of time for, 703. 
 to whom made 
 
 state tax commission, 703. 
 when made 
 
 before July 1 or within 30 days of report to U. S. A., 703. 
 penalty for fraudulent 
 $i.000, 705. 
 
 collected in suit by commission, 705. 
 further or supplemental required by State Tax Commission, 70.'). 
 contents and form 
 
 depend on whether consents to be taxed on entire net income 
 
 or not, 703, 704. 
 affidavit to, 705. 
 $5,000, 705. 
 
 commission may fix tax, 705. 
 collected in suit by commission, 705. 
 notice of tax 
 by mail, 705. 
 
INDEX 1497 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 income franchise tax — continued 
 notice of tax — continued 
 
 record of presumptivs evidence of, 705. 
 when tax commission fixes on default of report, 706. 
 revision and review 
 
 when tax based on estimate by commission, 706. 
 
 when U. S. A. changes amount of taxable net income, 706. 
 
 by certiorari 
 
 amount of taxes, interest, etc., deposited with commission as 
 
 condition of, 707. 
 eight day's notice to commission of application for, 707. 
 notice for to be given within 30 days of commission's deter- 
 mination, 707. 
 hearing by commission on application within year, 706. 
 undertaking filed with commission as condition precedent, 707. 
 governing statutes, 707. 
 to whom payable 
 
 comptroller, 707. 
 when payable 
 
 before January first or within 30 days of notice of or of change in 
 U. S. A. tax, 707, 708. 
 penalty for non-payment 
 
 10 per cent of tax plus 1 per cent for each month unpaid, 708. 
 lien on real and personal property, 708. 
 organization tax 
 
 domestic corporations pay, 689. 
 
 payable on incorporation and change of capital and character of stock 
 
 and consolidation, 689, 690. 
 in nature of license fee, 691. 
 on incorporation, 692. 
 
 on increase, following decrease, of capital stock, 692. 
 on increase of capital stock, 692. 
 
 on reorganization by purchase of franchises on foreclosure, 692. 
 on consolidation, 693, 694. 
 
 on reorganization under Business Corporations Law, 693. 
 minimum, $10, 693. 
 when stock has par value, 693. 
 when stock has no par value, 693. 
 
 payable on incorporation, increase of capital, reorganization or con- 
 solidation, as case may be, 694. 
 failure to pay, charter cannot be filed on powers exercised, 694. 
 minimum $25 on reorganization to have non-par stock, 694. 
 on reorganization to become corporation with stock without par value, 
 
 694. 
 on consolidation 
 
 not property tax, 694. 
 personal property and capital stock tax 
 
 taxable if situated or owned in New York, 689. 
 
 exemptions, 689. 
 
 local, 734, 735. 
 
 what corporations pay, 735. 
 
 what are " incorporated companies " liable to, 738. 
 
1498 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 personal property and capital stock tax — continued 
 when insolvent, 738. 
 when only has bank-account here, 738. 
 joint-stock company, 738. 
 debts, 739. 
 
 on capital stock, 740. 
 exemptions 
 
 not by local or private bill, 734, 735. 
 because Lex situs elsewhere, 738. 
 governing statutes, 739. 
 in general, 739. 
 
 " except such part as shall have been excepted in the assessment- 
 roll," 747, 748. 
 franchises, 753. 
 patents, 753. 
 
 of surplus or reserve, 748. 
 of real estate 
 
 theory of statute, 748. 
 vaults, 750. 
 in another state or county, valuation, 749. 
 when all stock invested in. 750. 
 
 include actual and deduct assessed, 748, 749. 
 
 fixing value of same differently, 749. 
 
 assessed value, 748. 
 
 at price paid therefor, 750. 
 
 when mortgaged, 748. 
 
 stock in other corporations, 751. 
 
 debts and liabilities 
 
 when assets insufficient to pay bonds, 752. 
 
 presumption that represent property, 752. 
 
 in general, 751. 
 
 reinsurance reserve of guaranty company, 752. 
 
 though statute does not expressly permit, 751. 
 
 bonds of another corporation payment of which is 
 
 guaranteed, 752. 
 when capital unimpaired, 751. 
 prepaid subscriptions to periodicals, 753. 
 not from already made estimate of stock, 751, 752. 
 notes given for stock of another corporation, 752, 753. 
 when affidavit that debts exceed personalty, 751. 
 amount received for goods to be repurchased, 753. , 
 
 what is taxable 
 
 governing statutes, 738, 739. 
 
 in general, 738, 739. 
 
 goods in original packages, 740. 
 
 good-will, 754. 
 
 dividends, 754. 
 
 situate in another state, 740. 
 
 elevated fee damages, 740. 
 
 cash in bank payable on cheques, etc., 740. 
 
INDEX 1499 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 personal property and capital stock tax — continued 
 what is taxable — continued 
 corporate capital 
 
 not excepted in assessment-roll, 741. 
 
 governing statutes, 741. 
 
 shares of other corporations, 741. 
 
 not invested in realty, 741. 
 
 in general, 741. 
 
 what is " capital stock," 741, 743. 
 
 in general, 741. 
 
 how valued, 741. 
 
 not exempt by law, 741. 
 
 not invested in realty, 741. 
 surplus or reserve 
 
 governing statutes, 741. 
 
 exceeding 10 per cent of capital, 741. 
 capital stock 
 
 how avlue ascertained, 742, 743, 744. 
 
 what is, 742. 
 
 deductions, 742. 
 valuation of 
 leases, 744. 
 
 at full value less debts, 739. 
 eajntal stock 
 
 at actual value, 746. 
 
 market value, 746, 747. 
 
 not share stock, 744, 745. 
 place of taxation 
 
 governing statutes, 755. 
 
 conclusiveness of character of by-law statement of place of busi- 
 ness, 755, 756. 
 where is its principal oflBce or place of business, 755, 756. 
 when twice assessed in different localities, 755, 756. 
 procedure of assessment 
 
 ascertaining property exempt, 757. 
 
 ascertaining property and corporations taxable, 757. 
 
 assessment on the rolls 
 
 how prepared, 758. 
 
 governing statutes, 758. 
 
 insertion of omitted property of corporation, 759.' 
 
 need not be in single volume or attached sheets, 759, 
 . reports and statements 
 
 governing statutes, 760. 
 penalty, 760. 
 verification, 760. 
 when to be made, 760. 
 contents arid form, 760. 
 construction of 
 
 reasonable, 761. 
 how far binding on taxing authorities 
 
 cannot question if reasonably sufficient, 701. 
 
 may rely upon statements in 761. 
 
1500 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 peraonal property and capital stock tax — continued 
 reports and statements — continued 
 
 how far binding on taxing authorities — continued 
 when good reason for disbelieving, 762. 
 cannot disregard, 761, 762. 
 when no testimony contradictory to, 762. 
 equalization and cancellation of assessment 
 
 cancellation by one officer not binding on successor, 755, 766. 
 inequality under Tax Law and New York charter — how deter- 
 mined, 766. 
 statute permitting " correction " not permit increase, 766. 
 assessments 
 
 examination of 
 
 time limit, 762. 
 complaints of assessments 
 
 see also subheading infra " equalization and cancellation of assess- 
 ment." 
 who may make 
 
 in general, 762. 
 
 another corporation making it a business to reduce assessments, 
 
 763. 
 corporation's tax agent, 763. 
 form of, 762. 
 form and contents 
 
 when ground of complaint is higher proportionate assess- 
 ment, 764. 
 time for necessary to constitutionality of taxing act, 762. 
 notice of time and place to make, 762, 763. 
 statement to be filed, 762. 
 verification of 
 
 on information and belief, 763. 
 grounds 
 
 in New York city and county, 763. 
 estoppel 
 
 when first statement for reduction did not include debt later 
 sought to be taken off, 764. 
 hearing 
 
 governing statutes, 764. 
 
 effect of refusal to attend or testify, 764. 
 
 minutes of, 764. 
 
 appearance prevents later claim of lack of jurisdiction, 765. 
 
 appearances, 764. • 
 
 oaths and testimony, 764. 
 
 procedure, 764. 
 
 taxing on contradicted statement of officer that stock worth 
 
 par, 765. 
 taxing authorities bound by evidence, 765. 
 fixing value of property after, 764. 
 •ssessment-roll 
 oath to, 766. 
 filing, 766, 767. 
 completion of, 762. 
 
INDEX 1501 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 personal property and capital stock tax — continued 
 assessment-roll — continued 
 delivery and filing, 767. 
 
 notice of completing, filing and availability for inspection, 767. 
 inspection, 767. 
 collection 
 
 dismissal of action for because indebtedness exceeds value' of 
 
 property, 766. 
 application by county treasurer allowed by court only, 767. 
 warrant to collect 6 per cent instead of 5 per cent additional, 766. 
 real estate 
 
 taxable if in New York, 689. 
 
 exemptions, 689. 
 
 domestic corporation pays, 690. 
 
 same as individuals, 691. 
 
 exemption 
 
 not by local or private bill, 734, 735. 
 local, 734, 735. 
 what corporations pay, 735. 
 assessment deemed against, 735. 
 sold by state, 736. 
 leased by state, 736. 
 tunnel, 736. 
 
 machinery attached to realty, 736. 
 machinery for electricity or gas, 736, 737. 
 subways, 737. 
 
 fixtures at actual or replacement value, 737. 
 of railroad, at what value, 737. 
 place of taxation, 737. 
 elevated railroad's structures, 737. 
 what is taxable as 
 
 governing statutes, 735, 736. 
 in general, 735, 736. 
 special franchise, 736. 
 procedure of assessment 
 
 ascertaining property and corporations taxable, 757. 
 ascertaining property exempt, 757. 
 assessment on the rolls 
 how prepared, 758. 
 governing statutes, 758. 
 
 insertion of omitted property or corporation, 759. 
 special franchise 
 what is, 736. 
 terminal, 736. 
 assessment-roll 
 
 must distinguish, 767. 
 
 must contain value fixed by commission, 767. 
 object of, 767, 768. 
 statute imposing constitutional, 767. 
 
 statutes imposing apply to steam surface railways, 769. 
 place of taxation, 772. 
 notice of hearing for complaints, 775. 
 
1502 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 special franchise — continued 
 apportionment 
 
 when parts of franchise in separate villages, 777. 
 apportionment among school and special districts, 767. 
 on what based 
 
 not charter but on grant of special franchise or right, 767. 
 what taxable as 
 
 items taxable, 768. 
 
 grant from property- owner to corporation of soil through which its 
 property runs, 768. 
 
 easement to rai],way forever to occupy strip in street, 768. 
 
 governing statutes, 768. 
 
 in general, 768. 
 
 street-crossing, 768, 769. 
 
 right to travel on avenue not yet laid out, 769. 
 
 of right of way to railway, 769. 
 
 test as to railway's, 769. 
 
 estoppel to object when railway acts as if acquiesces in city's con- 
 tention, 770. 
 
 ownership of soil in street, 768. 
 
 crossing of rajlway over canal lands, 770. 
 
 bridges and trestles, 771. 
 
 pavement between tracks, 772. 
 
 crossing laid over land after acquired by railway. 770. 
 
 crossing of steam railroad over existing street, 770. 
 
 state grant to use street for which United States later gives 
 license, 770. 
 
 right from city to use subsurface property, city having right to 
 use imderneath soil, 771. 
 
 right to build railway over water-courses, 771. 
 
 right to runs cars over bridge, 771. 
 
 bridge, abutments built on land owned in fee, 771. 
 
 viaduct built partly each by town and corporation, 771. 
 
 crossing of two highways, 772. 
 
 crossing of highway, canal and bridge, 772. 
 
 viaduct, 772. 
 
 tangible property under public waters, 772. 
 
 contract to construct and operate railways and paying city fixed 
 sum, 771. 
 
 property included with property not taxable, 771, 772. 
 reports by corporation . 
 
 on acquisition of special franchise, 772. 
 
 annual, 772. 
 
 form, 772. 
 
 verification, 772. 
 
 disclosure of contents by tax commission, 773. 
 
 penalty for failure, 773. 
 hearing 
 
 notice of, 775. 
 
 procedure in general, 775. 
 
 governing statutes, 775. 
 valuation and equalization of special franchises 
 
 see also subheading supra, " What is taxable as." 
 
INDEX 1503 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 lAXATIOX — continued 
 
 special franchise — continued 
 
 valuation and equalization of special franchises — continued 
 tangible property valued with, 773. 
 without diminution for local public charges, 773. 
 when wires extend into several wards of city, 773. 
 not on whole town in bulk, 775. 
 annually by commission, 773. 
 including value of paving within track, 776. 
 including tunnel under water, 776. 
 no exclusive rule applicable to all cases, 778. 
 in villages, 773. 
 
 comparison of track and passenger mileage, 776, 777. 
 when rule changed by courts between trial and appeal, 778. 
 of crossing, population considered, 777. 
 
 information required for, by commission, to be furnished, 783. 
 is basis for all taxes on the special franchise, 783. 
 land taken at then and not at cost value, 776. 
 final 
 
 usual rules govern, 776. 
 governing statutes, 775, 776. 
 after hearing, 775, 776. 
 testimony and information usable, 776. 
 net earnings rule 
 
 preferred to expert testimony, 778. 
 
 theory of, 778. 
 
 what are " net earnings," 778. 
 
 what it is, 779v 780, 781. 
 
 when available, 777, 778. 
 
 applicable to several street railways making general street 
 
 railway system, 780. 
 allowance of franchise tax, 782. 
 allowance for depreciation, 782. 
 allowance for replacement, 782. 
 allowances of payments for damage claims, 782. 
 allowing payments for percentages of gross earnings and car 
 
 license fees, 783. 
 rental from cars rented, 783. 
 statement of 
 
 to be entered in assessment^rolls, 783. 
 time for filing, 783. 
 
 to be delivered to taking authorities, 783. 
 to be filed by commission, 783. 
 relief from and credit for other taxes 
 ■governing statutes, 783, 784. 
 statute allowing deduction of payments,, based on percentages of 
 
 earnings, etc., to city, 785. 
 when tangible property assessed, 784. 
 private corporation furnishing water to village, 784. 
 in general, 783, 784. 
 
 assessments on crossings occupied by railway before occupied by 
 highways, 785. 
 
1504 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 special franchise tax — continued 
 
 relief from and credit for other taxes — continued 
 
 payments to city under ordinance for right to build and operate 
 
 tracks, 784. 
 bridge tolls to city, 784. 
 fees for car licenses to city, 784. 
 stock transfer tax 
 
 constitutionality, see subheading infra " statute imposing." 
 
 in general, 809. 
 
 amount and computation, 814. 
 
 bill, memorandum or agreement of sale 
 
 form and contents, 815. 
 clerical assistance to comptroller, 810. 
 corporations transferring stocks to keep books, 811. 
 corporations transferring stocks to register with comptroller, 810. 
 revenues, disposition, 811. 
 reimbursement 
 
 when stamps affixed under act later held unconstitutional, 809. 
 brokers affixing may sue for customers, 809. 
 statute imposing 
 
 constitutionality 
 
 when based on classifications of stock, 809. 
 
 on stock of foreign corporation by non-resident, 809. 
 
 when based on stated amount of face value, 810. 
 
 in general, 809, 810. 
 
 when precludes recovery on contract 
 
 to sell if tax not paid, 810. 
 when authorizing investigation by official to detect violations, 
 810, 
 need not give grievance day or require notice, 809, 810. 
 is excise tax on transfer, 809. 
 
 classification of stock by, as affecting constitutionality, 809. 
 stamps 
 
 preparation and sale of, 810. 
 
 old designs, penalties for using and surrender of, 810. 
 
 dies, 810. 
 
 new designs, 810. 
 
 affixation 
 
 by whom, 814. 
 to what, 814, 815. 
 penalty for failure to affix, 816. 
 cancellation 
 
 by whom, 815. 
 how, 815. 
 penalty for failure to cancel, 816. 
 penalty for removing, washing, counterfeiting, 816. 
 penalties 
 
 suit to recover, 811. 
 
 for failure to keep, alteration, falsification of books, etc., 811. 
 
 for non-payment, 815. 
 
 purpose of statute imposing, 815. 
 
INDEX 1505 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TAXATION — continued 
 
 stock transfer tax — continued 
 penalties — continued 
 
 for removing, washing, counterfeiting, etc., 816. 
 
 for failure to cancel, 816. 
 
 for transfer without, 817. 
 
 though seller ignorant of law, 816. 
 
 for failure to affix stamps, 816. 
 on what imposed 
 
 in general, 812. 
 
 governing statutes, 812. 
 
 intermediate certificate on increase of stock, 812. 
 
 loans of stock, 812. 
 
 transferee invested solely with legal title, 812. 
 
 whether transfer invest holder with beneficial interest on legal 
 title, 812. 
 
 agreement evidencing stock's deposit as security, 812. 
 
 stock deposited as security, 812. 
 
 double transfer ostensibly only one, 813. 
 
 transfer through trust company, 813. 
 
 certificates issued by trust company through which one company 
 buys assets of other companies for its stock, 813. 
 
 on original issue of stock, 813. 
 
 cancellation stock and making out new stock, both in name accom- 
 modation holder, 814. 
 
 delivery of stock to syndicate managers, 813. 
 
 transfer of title by election of vendor,- 814. 
 
 TAXES ON ORGANIZATION 
 
 see " Organization Fees and Taxes." 
 
 TORTS 
 
 liability of corporation for, 509 et seq. 
 liability of corporation for others 
 
 for oral representation by employee of validity of mortgage, 521. 
 for superintendent's representations as to goods sold, 521. 
 for general agent's trespass, 521. 
 
 for fraudulent money taken by innocent party from one empowered to 
 work the fraud, 521. 
 
 TRACKS 
 
 private bill cannot permit laying of, 15. 
 
 TRADE 
 
 restraint of, see " Combinations in Restraint of Trade." 
 
 TRANSFER OF STOCK 
 
 as affecting title to dividends, see " Dividends." 
 see " Stock." 
 
 TRANSFER WHILE INSOLVENT OR OBLIGATIONS DUE 
 in general, 474. 
 governing statutes, 473, 474. 
 in contemplation of insolvency void, 474. 
 B. C. N. Y.— 95 
 
1506 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TRANSFER WHILE INSOLVENT OR OBLIGATIONS DUE — continued 
 while insolvent, to give preference, void, 474. 
 domestic corporations only within statute, 474. 
 only void when by corporations financially embarrassed, 475. 
 prohibited act must itself accomplish transfer, 475. 
 purpose of statute to prevent evasion by stockholders of liability, 475. 
 insolvency and intent to prefer two essential elements, 476. 
 officials personally liable for, 476. 
 
 statute making officials personally liable not strictly construed, 476. 
 when surety released on principal paying back preferential payment, 476. 
 statute prevents officials from using official knowledge for individual profit, 
 
 476. 
 statute prevents general assignments with preferences, 476. 
 statute prohibits any transfer of corporate assets by official except for 
 
 cash, 476. 
 what is preference 
 
 in general, 476, 477. 
 
 turning over to creditor obligation of third person to corporation, 476, 
 
 477. 
 paying contract debt by transferring property subject to prior, larger 
 
 incumbrance, 477. 
 payment by officers void under statute not invalidate subsequent good 
 
 assignment, 477. 
 transfer to holder of corporate notes on which endorser good in con- 
 sideration of surrender of notes, 477. 
 transfer of claim to corporate officer to facilitate collection, 477. 
 assignment of good accounts shortly due, after recovery of judgment 
 
 for more than accounts, 477. 
 to creditor-stockholder of all property till his indebtedness paid, 477, 
 
 478. 
 cancellation of note for cancellation of contract, 478. 
 mortgage, 478. 
 receiver's expenses, 478. 
 chattel mortgage to stockholder, 479. 
 chattel mortgage to director for loan, 479. 
 trust mortgage to secure some creditors, 479. 
 temporary receiver empowered on insolvency to hold rents of mortgaged 
 
 property, 479. 
 mortgage executed while insolvent to fulfill contract before insolvency, 
 
 479. 
 mortgage while insolvent not per se void, 480. 
 
 trust mortgage under contract made before dissolution proceedings, 480. 
 judgment 
 
 not avoid judgment by default, 480. 
 
 only if by confession or consent, 480. 
 
 not by mere passivity of officers, 481. 
 
 in ordinary course, 482. 
 
 permitting while concealing entry of from other creditors, 481. 
 
 facts of each case determine, 481. 
 
 on offer of corporation, 482. 
 
 not by mere silence of corporation, 480, 481. 
 
 particular case, 482. 
 
INDEX 1507 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TEAXSFEU WHILE INSOLVENT OR OBLIGATIONS DUE — continued 
 intent to delay collection of debt, 482. 
 intent to prefer 
 
 must be proven, 482. 
 
 proof of fraud necessary, 482. 
 
 in general, 482. 
 
 belief of solvency negatives, 483. 
 
 honest expectation of continuing business negatives, 483. 
 
 creditor's intent not pertinent, 483. 
 
 subsequent knowledge of their insolvency no proof of, 483. 
 
 inability to meet obligations indicates, 484. 
 
 transfer by firm to corporation formed of its members indicates, 484. 
 
 proof necessary, 484. 
 
 failure to put in defense no proof of, 484. 
 when does insolvency exist 
 
 in general, 484. 
 
 definition of insolvency." 
 
 must be proven, 484. 
 
 not confined to default in payment of corporate paper, 485. 
 
 accounts based on agreements fixing rate of payment for services, not 
 " obligations." 
 
 demand notes outstanding, 485. 
 
 insufficient property to aflford security to those dealing with it, 485. 
 
 indebtedness to other creditors which unable to pay, 485. 
 
 assets less than liabilities, 485. 
 
 general inability to pay obligations as they become due, 485. 
 by whom prohibited 
 
 corporation, 486. 
 
 officer of claim against corporation to pay his bona fide creditor, 486. 
 
 corporation, officer, stockholder, director, 486. 
 
 in general, 486. 
 
 depositor withdrawing deposit from bank on ^word from director bank 
 about to close, 486. 
 to whom prohibited 
 
 officer, director, stockholder, 486. 
 
 purpose of statute, 486. 
 
 to anyone if corporation in default on payment and to ofificer, director 
 ' or stockholder in contemplation of insolvency, 487. 
 
 distinction between transfer to officer, director or stockholder any anyone 
 else, 487. 
 
 preferential lien sought to be prevented, 487. 
 
 to directors for benefit of creditors, 487. 
 
 for benefit of creditors, 488. 
 
 to copartnership of which stockholder member, 488. 
 
 to president under agreement, 488. 
 who may question 
 
 in general, 488. 
 
 tort creditors, 488. 
 
 judgment-creditor by judgment after in action begun before transfer, 
 489. 
 
 judgment-creditor for personal injuries, 489. 
 
 by injunction by judgment-creditor, 489'. 
 
1508 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 TEAJSrSFER WHILE INSOLVENT OR OBLIGATIONS BVE — continued 
 who may question — continued 
 
 judgment-creditor for own sole benefit, 489. 
 
 creditor assenting to, 489. 
 
 judgment-creditor whose execution not yet returned unsatisfied, 4S!). 400. 
 who accountable 
 
 see " Liabilities Common to Directors and Officers/' also " Stockholders." 
 
 every person receiving property, 490. 
 pleading, practice and evidence 
 
 in equity or at law, 490. 
 eflfect of setting aside transfer 
 
 no preference to creditor securing, 490. 
 
 TREASURER 
 
 stockholders' rights to financial statement from, see " Stockholders," sub- 
 heading " rights." 
 powers and duties 
 
 by-laws prescribe, 44. 
 
 TREASURY STOCK 
 
 distinguished from unissued stock, 72. 
 
 TRESPASS 
 
 to individuals on whose land corporation's water backs up, 511. 
 
 TRUST FUND 
 
 unpaid subscriptions to stock as, see " Stock and Capital Stock." 
 capital stock as, see " Stock and Capital Stock." 
 
 TRUSTEES 
 
 liabilities for corporate debts as stockholders, see " Stockholders," subhead- 
 ing " liabilities." 
 
 TRUSTEES OF MORTGAGES 
 
 see " Corporate Bonds and Mortgages,'' subheading " mortgage trustees." 
 
 ULTRA VIRES 
 
 see " Corporation," subheading " powers." 
 
 definition, 453, 454. 
 
 distinguished from unlawful, 453, 454. 
 
 when contracts are, 454. 
 
 doctrine of rests on relation of stockholders to corporation, 455. 
 
 distinction as doctrine applied to stockholders and third parties, 455, 456. 
 
 of corporation to manufacture electrical machinery, to buy contract of exclu- 
 sive agency to sell electrical supplies, 456. 
 
 doctrine of Lerolz applicable to private corporations, 456. 
 
 corporation first doing one object may later do another, 456. 
 
 issue of same instrument by different corporations, may be for one and not 
 for other, 456. 
 
 subway company using platforms for selling machines, 456. 
 
 musical instrument corporation conducting school to teach same, 456. 
 
 of coal mining and selling company, for delivery of coal to customers- by 
 outsider, 457. 
 
INDEX 1509 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1. 
 
 ULTRA VIRBS — continued 
 
 of manufacturer of musical instruments, 457. 
 
 of corporation without power to acquire realty, to take title to real estate, 
 
 457; 
 to take personalty by bequest, 457. 
 of theatrical company, to buy good will of opera, 457. 
 
 of corporation in trust to receive price for goods on ground trust void, 457. 
 of corporation to manufacture and sell stated articles, to sell them when 
 
 made by others, 457. 
 of liquor corporation, to guarantee payment of customer's, rent, 458. 
 of merchandise corporation, to advance customer, 458. 
 
 of corporation dealing in manufactured goods, to aid financially the manu- 
 facturer, 458. 
 defense of must be raised by pleadings, 462. 
 when defense of good 
 to corporation 
 
 other party performed, corporation has benefit, 459. 
 accomplish legal wrong and not advance justice, 459. 
 stockholders' acquiescence, 459, 460. 
 before delivery under contract, 460. 
 contract performed by other party, 460. 
 
 sale of chattel complete except payment by corporation, 460. 
 putting other party in statu quo, 460. 
 when corporation estopped, 460, 461. 
 purchase realty, 461. 
 guaranty payment dividends, 461. 
 ■when other party estopped, 461, 462. 
 to other party 
 
 retaining benefit, 461, 462. 
 performance by corporation, 462. 
 
 TJNAUTHORIZED MATTER IN CHARTER 
 
 striking out by corporators or directors, see " Certificate of Inoprppration,'' 
 subheading " amendment." 
 
 UNISSUED STOCK 
 
 distinguished from treasury stock, 72. 
 
 USURY 
 
 see " Dealings with Creditors and Debtors," subheading " usury.'' 
 
 VACATION, ANNULMENT AND INJUNCTION 
 receivers, see " Receivers." 
 governing statutes, 555. 
 in general 
 
 statute permitting action to vacate and annul not permit action to 
 
 forfeit or take away corporate rights and property, 555. 
 what must be shown to justify, 556. 
 i attorney-general has discretion, 556. 
 
 vacation and annulment 
 
 no previous notice of action necessary, 560. 
 
 judgment-roll filed and notice published with and by secretary of state, 
 564. 
 
1510 INDEX 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1., 
 
 VACATION. ANXULMENT? AXD IS Jljyi CfllON — continued 
 costs in action for, 562. 
 who may take steps for, 561, 562. 
 grounds 
 
 governing statute, 557. 
 
 for injunction against acting as corporation, 557. 
 for vacating or annuling charter 
 in general, 557. 
 
 offense against act creating, etc., 557. 
 violation of provision of law, 557. 
 failure to exercise powers, 557, 558. 
 surrender of rights, privileges, etc.. 558. 
 
 statute simply fixes cases in which attorney-gerfferal may move, 558. 
 exercise of franchise, etc., not conferred by law, 558. 
 statute gives no rule of liability, 558. 
 in general, 558. 
 
 for replacing broken plate glass for consideration, 559. 
 for failure to observe statute prescribing hours of labor, 559. 
 leave of court 
 
 must be obtained, 558. 
 
 court may require notice to corporation of application, 558. 
 
 court may hear corporation, 558. 
 
 court may dispense with notice to corporation, 560. 
 
 may be conditioned on previous notice to corporation, 560. 
 
 not necessary to action to oust corporation from franchise, 560. 
 
 necessary for vacation and annulment, not for enjoining people from 
 
 acting as corporation, 560. 
 in court's sound discretion, 560, 561. 
 granted if attorney-general presents prima facie case, irrespective of 
 
 wisdom of action, 561. 
 written application, with reasons, of attorney-general to be i^resented, 
 561. 
 trial and testimony 
 
 burden on state, 556. 
 in action to enjoin 
 
 party or witness not excused on ground of incrimination, 562. 
 in action to vacate or annul 
 jury trial as of right, 562. 
 jury trial, no order needed, 562. 
 
 stockholder, officer, alienee or agent not excused on ground may 
 forfeit corporate rights or incriminate him, 562, 56.3. 
 injunction 
 
 in action to enjoin 
 
 temporary injunction on proof by affidavit, 56.3. 
 permanent injunction if judgment for plaintiff, 563. 
 in action to vacate or annul 
 
 restraining directors and corporation, 563, 564. 
 at any stage of action, 563, 564. 
 code provisions govern, 564. 
 
 final judgment may grant perpetual injunction, 563. 
 creditors 
 
 in action to vacate or annul 
 
 order requiring exhibition and proof of claims, 565. 
 
INDEX 1511 
 
 References are to pages — See also Cyclopedic Analysis preceding page 1.. 
 
 VACATION, ANNULMENT AND INJUNCTION — co»*m«ei 
 creditors — continued 
 
 proof of claims, 565. 
 
 notice of order to present claims to be published, 565. 
 
 injunction against, 564. 
 
 VOLUNTARY DISSOLUTION 
 
 see " Dissolution," subheading " voluntary." 
 
 VOLINTARY SALE OF CORPORATE FRANCHISES AND PROPERTY 
 see " Sale of Corporate Franchises." 
 
 VOTE 
 
 power of stockholders to 
 
 when legislature may take away, 18. « 
 
 of stockholder who has agreed to sell stock, see " Stock and Capital Stock," 
 subheading " purchase and sale." 
 
 VOTING 
 
 by stockholders, see " Stockholders," subheading " powers." 
 
 VOTING TRUST 
 
 test to determine when agreement is, see " Stockholders," subheading 
 
 " powers." 
 voting by, see "Stockholders." 
 
 VOTING TRUST CERTIFICATE 
 
 when title of holder good if endorsed in blank, 118. 
 
 WAGES 
 
 as preferred claim in receivership, see " Receivers," subheading " creditors — 
 preferred." 
 
 WAGES OF CORPORATE EMPLOYEES 
 
 see " Dealings with Creditors and Debtors." 
 
 WAR FINANCE CORPORATION ACT 
 
 sale of issue of over $100,000 of stock subject to approval of federal 
 " Capital Issues Committee." 
 
 WITNESS 
 
 corporator as, see " Corporator." 
 
INDEX TO FORMS 
 
 Acknowledgment : page 
 
 by corporation 1153 
 
 correction of defective in chanter, see " Certifieate of Incorporation," 
 sublleading " amended." 
 Affidavits : 
 
 beginning 1153 
 
 ending or jurat 1153 
 
 to obtain, judgment by default under Soldiers and Sailors' Civil 
 
 Relief Act 1163 
 
 of service: 
 
 personally on domestic corporation 1 154 
 
 personally on foreign corporation 1154 
 
 by mailing pursuant to order for service by publication and mail- 
 ing 1 155 
 
 by personal service outside state 1155 
 
 to obtain order directing trial of issues in action against corporation 
 
 on note 1162 
 
 that reduced capital exceeds liabilities on reduction of capital stock. . 1193 
 of custodian of stock book on reorganization to change from par to 
 
 non-par stock 1201 
 
 of officers on reorganization to change from par to non-par value stock 
 
 when capital less than old par capital 1202 
 
 of officers on reorganization to change from par to non-par value stock 1202 
 of truth of statements in certificates of payment of half of capital 
 
 stock 1204 
 
 of custodian.of stock-book annexed to stockholders' consent to increase 
 
 or decrease of directors 1208 
 
 attached to certificate of foreign corporation of surrender of authority 
 
 to do business here 1338 
 
 Amendment to certificate of incorporation: 
 
 see " Certificate of Incorporation," subheading " amended." 
 Agreement : 
 
 of consolidation 1266, 1267 
 
 of corporate reorganization 1278 
 
 Annual report 1215 
 
 Answer : 
 
 to complaint for appointment of receiver .j 1302 
 
 Assignment : 
 
 of stock 1189 
 
 Bond: 
 
 of indemnity on replacing. lost or destroyed stock certificate 1188 
 
 corporate 1216 
 
 By-laws . ., 1176 
 
 Certificate : 
 
 of secretary re adoption of resolution for bank account 1183 
 
 of payment of half of capital stock.' 1184 
 
 of stock: 
 
 common stock without par value 1185 
 
 preferred stock with par value 1186 
 
 1513 
 
1514 INDEX TO FORMS 
 
 Certificate — continued 
 of stock — continued 
 
 lost or destroyed: PAGE 
 
 petition to court to replace 1187 
 
 order to show cause why new one not issue 1187 
 
 order for issue of new instead of old 1188 
 
 bond of indemnity 1188 
 
 of oflSce and incorporation on registration of corporation under 
 
 § 275-a, Tax Law 1192 
 
 of increase or decrease of capital stock: 
 
 on unanimous consent of stockliolders 1192 
 
 affidavit that reduced capital exceeds liabilities 1193 
 
 on stockholders' minutes: 
 
 notice to stockholders of meeting 1193 
 
 minutes of meeting 1 194 
 
 certificate on minutes 1195 
 
 of change in classification of capital stock: 
 on stockholders' minutes : 
 
 notice of stockholders' meeting 1196 
 
 minutes of meeting 1196 
 
 certificate on minutes 1197 
 
 on request of preferred stockholders and directors' meeting: 
 
 request of preferred stockholders for exchange 119'8 
 
 minutes of directors' meeting 1198 
 
 on stockholders' consent 1199 
 
 of change of number of shares without changing capital stock: 
 
 notice of stockholders' meeting 1199 
 
 minutes of stockholders' meeting 1200 
 
 certificate on stockholders' minutes 1200 
 
 of reorganization to permit issue of shares without nominal or par 
 
 ■value 1200 
 
 of verification of stockholders' minutes to increase or reduce .directors 1210 
 of Secretary of State of availability of new name on change of cor- 
 porate name 1212 
 
 of officers and directors of change of corporate office 1214 
 
 of stockholders' consent to mortgage 1264 
 
 of corporate merger 1265 
 
 of payment of half of capital stock 1204 
 
 by appraisers of value of holdings of stockholder dissenting from 
 
 consolidation 1278 
 
 of surrender of franchise by incorporators 1291 
 
 of appraisers of value of holdings of stockholder dissenting from 
 
 voluntary sale of property and franchises 129D 
 
 of receivers, see "Receivers," subheading "certificates." 
 
 of surrender of certificate of authority of foreign corporation to do 
 
 business here 1338 
 
 Certificate of incorporation: 
 
 the certificate 1 164 
 
 clause giving preference to holder of preferred stock jlgg 
 
 clause for retiring preferred stock jjgg 
 
 object or purpose clauses: 
 
 brokerage business ^ 1 1 (iO 
 
 chemicals, dyes, oils, paints 1168 
 
 combustibles lYCtH 
 
INDEX TO FORMS 1515 
 
 icate of incorporation — continvcd 
 
 bject or purpose clauses — coniinucd page 
 
 jewelry 1168 
 
 leather and lumber 1168 
 
 motors, engines, boilers 1169 
 
 motors, air-ships, automobiles 1169 
 
 moving pictures ' 1 1 69 
 
 real estate 1170 
 
 shades, shade-rollers, shade-cloth 1171 
 
 ships 1171 
 
 :mended : 
 
 to correct informality, inclusion of unauthorized matter or 
 
 defective proof or acknowledgment , 1172 
 
 by Supreme Court to make it truly set forth corporation's object 
 and purpose: 
 
 petition or affidavit 1172 
 
 notice of motion 1173 
 
 order 1173 
 
 the amended certificate 1 174 
 
 to alter original certificate to include powers enjoyed by like 
 corporations : 
 
 minutes of directors authorizing alteration ■. 1174 
 
 notice of meeting of stockholders to authorize alteration. ... 1174 
 
 minutes of stockholders authorizing alteration 1175 
 
 verification by director of proceedings for alteration il7n 
 
 the amended certificate 1175 
 
 orari : 
 
 ;o review taxation, see " Taxation,'' subheading " to review special 
 
 franchise tax." 
 ge in amount of capital stock: 
 
 ee " Certificate," subheading " of increase or decrease of capital stock." 
 ge in classification of capital stock: 
 ee " Certificate," subheading " of change in classification of capital 
 
 stock." 
 ge of number of shares of capital stock: 
 see " Certificate," subheading " of change of number of shares without 
 
 changing capital stock." 
 ge from par to non-par value stock: 
 
 ee " Certificate," subheading " of reorganization to permit issue of 
 shares without nominal par value," and "Affidavits," subheadings 
 " of custodian of stock book " and " of corporate officers," etc 
 a;e in number of directors: 
 
 ee " Directors," subheading " change in number." 
 ge in corporate name: . 
 
 ee " Name," subheading " change of." 
 ge of corporate office: 
 ee " Office," subheading " change of." 
 ;er: 
 
 ee " Certificate of incorporation." 
 laint: 
 
 or goods sold and delivered by foreign corporation 1160 
 
 or receiver 1300 
 
 :nt: 
 
 ee " Stockholders." 
 
1516 INDEX TO FORMS 
 
 ConsMit — continued PAGE 
 
 to appointment of receiver 1300 
 
 of person designated as agent of foreign corporation 1337 
 
 Consolidation : 
 
 agreement of : 1266, 1267 
 
 minutes of stockholders' meeting 1274 
 
 notice of stockholders' meeting 1274 
 
 notice by stockholder of objection to 1275 
 
 notice by stockholder of application for appraisal of dissenting stock 1276 
 
 petition by stockholder for appraisal of dissenting stock 1276 
 
 order appointing appraisers to value dissenting stock 1277 
 
 oath of appraisers of dissenting stock 1277 
 
 appraisers' certificate of value of dissenting stock 1278 
 
 Default : 
 
 judgment by, under " Soldiers' and Sailors' Civil Relief Act " 1163 
 
 Destroyed stock certificate: 
 
 see " Certificate," subheadings "' of stock," " lost or destroyed." 
 Directors : 
 
 change in number: 
 
 unanimous stockholders' consent to increase or decrease 1208 
 
 aflidavit-of custodian of stock book to such consent 1208 
 
 minutes of stockholders' meeting to increase or decrease 1208 
 
 notice of stockholders' special meeting to increase or reduce.... 1209 
 proof of service of notice of stockholders' meeting to increase or 
 
 reduce 1210 
 
 certificate of verification of stockholders' minutes to increase or 
 
 reduce , , 1210 
 
 election : 
 
 notice of annual stockholders' meeting for 1205 
 
 notice of meeting for, on failure to elect on day set by by-laws 
 
 or by law 1205 
 
 notice of meeting for, on failure of directors to call meeting for, 
 
 after failure to elect on day set by by-laws or by law 1205 
 
 oath of inspectors of 1205 
 
 report of inspectors of 1206 
 
 notice of application for court inquiry into 1207 
 
 affidavits on application for court inquiry into 1207 
 
 order on court inquiry into ; 1207 
 
 minutes of first meeting 1 182 
 
 minutes of meeting to change holdings of preferred stockholders for 
 
 common stock 1 198 
 
 minutes of meeting for voluntary dissolution 1292 
 
 notice of meeting for voluntary dissolution 1292 
 
 Dissolution : 
 voluntary : 
 
 by incorporators, certificate of 1291 
 
 by stockholders' consent: 
 
 notice of directors' meeting 1292 
 
 minutes of directors' meeting 1292 
 
 notice of stockholders' meeting 1293 
 
 minutes of stockholders' meeting 1893 
 
 consent of stockholders 1294 
 
 by court proceedings: 
 
 petition of directors for order dissolving 1295 
 
INDEX TO FORMS 1517 
 
 Dissolution — continued 
 voluntary — continued 
 
 by court proceedings — continued PAGE 
 
 order to show cause 1296 
 
 final order of dissolution 1297 
 
 Election : 
 
 of directors, see " Directors," subheading " Election." 
 Foreign corporation : 
 
 taxation, see " Taxation." 
 
 licensing to do business and designation of agent: 
 
 statement and designation under General Corporation Law, sec- 
 tion 16 1336 
 
 consent of person designated as agent 1337 
 
 resolution of board of directors 1337 
 
 oath to sworn copy of certificate of incorporation 1337 
 
 certificate of surrender of certificate of authority to do business. 1338 
 affidavit attached to certificate of foreign corporation of surrender 
 
 of authority to do business 1338 
 
 Franchise tax reports: 
 
 see " Taxation," subheading " reports." 
 Income tax reports : 
 
 see " Taxation," subheading " reports." 
 Incorporators : 
 
 minutes of meeting 1181 
 
 waiver of notice of meeting 1181 
 
 Inclusion of unauthorized matter in certificate of incorporation : 
 
 correction of, see " Certificate of incorporation," subheading " amended." 
 Informality in certificate of incorporation: 
 
 correction of, see " Certificate of incorporation,'* subheading " amended." 
 Inspectors of election of directors: 
 
 oath of 1205 
 
 report of i206 
 
 License to foreign corporation to do business: 
 
 see " Foreign corporation," subheading " licensing to do business and 
 designation of agent." 
 Lost stock certificate: 
 
 see " Certificate,' subheadings " of stock," " lost or destroyed." 
 Merger : 
 
 certificate of, with directors' resolution 1265 
 
 Minutes : 
 
 see " Incorporators," " Directors," " Stockholders," etc. 
 Mortgage and trust indenture: 
 
 form of 1216 
 
 stockholders' consent to: 
 
 minutes of meeting 1263 
 
 notice of meeting 1263 
 
 consent 1264 
 
 certificate of consent 1264 
 
 certificate of resolution 1264 
 
 Name : 
 
 change of: 
 
 petition to Supreme Court for 1211 
 
 certificate of secretary of state of availability of new name on . . 1212 
 
 notice of presentation of petition and motion for 1212 
 
 order allowing 1213 
 
1518 INDEX TO FORMS 
 
 Notice of meeting: Pagb 
 
 see " Stockholders," " Directors," etc. 
 
 Notice of application for court inquiry into election of directors 1207 
 
 Notice of presentation of petition for change of corporate name '. . . 1212 
 
 Notjce of motion for appointment of receiver 1299 
 
 Oath: 
 
 of appraisers of holdings of stockholder dissenting from consolidation. 1277 
 of appraisers of holdings of stockholder dissenting from voluntary sale 
 
 of franchises and property 1299 
 
 to sworn copy of charter of foreign corporation seeking license to do 
 
 business here 1337 
 
 Object clauses: 
 
 see " Certificate of incorporation." 
 
 Order : 
 
 for security for costs by plaintiff — foreign corporation 1161 
 
 directing trial of issues in action against corporation on note 11 (i2 
 
 on court inquiry into election of directors 1207 
 
 allowing change of corporate name 121.3 
 
 appointing appraisers to value holdings of stockholder dissenting from 
 
 consolidation 1277 
 
 to show cause for voluntary dissolution 12!)() 
 
 finally dissolving voluntarily 12!I7 
 
 appointing appraisers to value holdings of stockholder dissenting from 
 
 voluntary sale of property and franchises 1299 
 
 appointing receiver I.i04 
 
 discharging receiver and canceling bond 1305 
 
 for receiver's certificates 1 306 
 
 Office : 
 
 change of: 
 
 unanimous stockholders' consent 1213 
 
 notice of special meeting of stockholders for 1214 
 
 minutes of special stockholders' meeting for 1214 
 
 certificate of officers and directors of 1214 
 
 Petition : 
 
 for change of corporate name 12ii 
 
 by stockholder dissenting from consolidation for appointment of 
 
 appraisers to value stock 2295 
 
 by directors for order dissolving corporation 1295 
 
 by stockholder dissenting from voluntary sale of property and fran- 
 chises for appraisers to value stock " 1299 
 
 for receiver's certificates ' [ 13jq 
 
 Pleadings : 
 
 verification by corporation to, see " Verifications." 
 see " Complaint." 
 
 Power of attorney: 
 
 to transfer stock on books j jan 
 
 Practice : 
 
 see " Order," "Affidavits." 
 
 Process : 
 
 see " Summons." 
 
 1'°^ 1189 
 
 Keceivers : 
 
 appointment : 
 
 notice of motion for jotjj) 
 
 consent to ' , oj,^ 
 
INDEX TO FORMS 1519 
 
 Receivers — contimted 
 
 appointment — continued PASE 
 
 complaint for 1300 
 
 answer to complaint for 1302 
 
 order of 1304 
 
 order discharging and canceling bond 1305 
 
 certificate of: 
 
 order for 1306 
 
 form of 1308 
 
 petition for 1310 
 
 Receipt : 
 
 for stock certificate — temporary 1186 
 
 Registration : 
 
 of corporation with Comptroller under Tax Law, certificate 1192 
 
 Resolution : 
 
 re bank account — certificate of secretary of adoption 1183 
 
 of stockholders for mortgage 1264 
 
 of directors for merger 1265 
 
 of directors of foreign corporation to license it here 1337 
 
 Report : 
 
 annual 1215 
 
 Reorganization : 
 
 agreement for 1278 
 
 Sale of property and franchise: ' 
 
 see " Voluntary sale of property and franchise." 
 
 Service of process on corporation: 
 
 affidavits of, see "Affidavits," subheading " of service." 
 
 Service of notice of stockholders' meeting to increase or decrease directors : 
 
 proof of . 1210 
 
 Soldiers' and Sailors' Civil Relief Act: 
 
 aifidavits under, to obtain judgment by default 1163 
 
 Surrender of franchise by incorporators : 
 
 certificate of 1291 
 
 Stockholders : 
 
 consent to increase or decrease capital stock 1192 
 
 consent to change in classification of capital stock 1199 
 
 consent to increase or decrease of directors 1208 
 
 consent to change of corporate office 1213 
 
 consent to mortgage 1264 
 
 consent to voluntary dissolution 1294 
 
 minutes of annual laeeting 1190 
 
 minutes of special meeting ^ 1191 
 
 minutes of meeting to increase or decrease capital stock 1194 
 
 minutes of meeting to change classification of capital stock 1196 
 
 minutes of meeting to reorganize to permit stock without par value. 1203 
 
 minutes of meeting to increase or decrease directors 1208 
 
 minutes of meeting to consent to corporate mortgage 1263 
 
 minutes of meeting for consolidation 1274 
 
 minutes of meeting for voluntary dissolution 1293 
 
 minutes of meeting to consent to voluntary sale of property and fran- 
 chises 1299 
 
 notice of meeting to infcrease or reduce capital stock 1193 
 
 notice of meeting to change classification of capital stock 1196 
 
1520 INDEX TO FOEMS 
 
 Stockholders — continued page 
 notice of meeting to change number of shares without changing cap- 
 ital stock 119!) 
 
 notice of meeting to reorganize to permit non-par value stock 1203 
 
 notice of annual meeting to elect directors 1205 
 
 notice of meeting to elect directors on failure to elect on day desig- 
 nated by law or by by-laws 1205 
 
 notice of meeting to elect directors on failure of directors to call 
 meeting to so elect after failure to elect on day designated by law 
 or by by-laws or failure to so elect at such meeting called by 
 
 directors 1205 
 
 notice of special meeting to increase or decrease directors 1209 
 
 notice of special meeting to change corporate office 1214 
 
 notice of meeting to consent to mortgage 1263 
 
 notice of meeting for consolidation 1274 
 
 notice of meeting for voluntary dissolution 1293 
 
 notice of meeting to consent to voluntary sale of property and fran- . 
 
 chises 1 298 
 
 notice of objection to consolidation 1275 
 
 notice of application for appointment of appraisers to value stock. . 1276 
 notice of objection to voluntary sale of property and franchises .... 1299 
 notice of application for appraisers of stock of stockholder dissenting 
 
 from voluntary sale of property and franchises 1299' 
 
 Summons : 
 
 service by publication, mailing and outside state: 
 
 summons with notice 1159 
 
 order for such service 1159 
 
 affidavits of, see "Affidavits," subheading " of service." 
 Subscription to stock: 
 
 agreement for 1184 
 
 Taxation : 
 reports: 
 
 State — income tax 1316 
 
 State — capital stock tax, domestic corporation. 1320 
 
 State — license fee, foreign corporation 1323 
 
 statement and affidavit claiming exemption from making 1326 
 
 certiorari to review special franchise tax: 
 
 petition for writ of 1327 
 
 order for writ of 1331 
 
 ■writ of 1332 
 
 return to writ of t 1333 
 
 Verifications :^ 
 
 by domestic corporations: 
 
 by officer 1156 
 
 by resident attorney when neither corporation nor officer within 
 
 county where attorney resides 1156 
 
 by resident attorney when neither corporation nor officer within 
 county where attorney resides and capable of making verifica- 
 
 ti°" 1157 
 
 by non-resident attorney when officer not within county where 
 
 attorney has office and capable of making verification 1157 
 
 by foreign corporations: 
 
 by officer l]5g 
 
 by attorney 1158 
 
INDEX TO FOEMS 1521 
 
 erifications — continued PAGE 
 by directors of proceedings for alteration of certificate of incorpora- 
 tion to include other powers 1175 
 
 oluntary sale of property and franchises: 
 
 notice of stockholders' ineeting to consent to 1298 
 
 minutes of stockholders' meeting to consent to 1298 
 
 notice by stockholder of objection to 1299 
 
 notice by stockholder objecting to, of application for appraisers to 
 
 value stock 1299 
 
 petition by dissenting stockholder for appraisers to value his stock. . 1299 
 order appointing appraisers to value holdings of dissenting stock- 
 holder 1299 
 
 oath of appraisers valuing dissenting stockholder's holdings 1299 
 
 appraiser's certificate of value of dissenting stockholder's holdings. . 1299 
 
 ''oting trust agreement 1190