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Ins. Co., 34 Hun, 367; 103 N. Y., 645; Kruleirtz v. Eastern R. R. Co., 140 Mass. 575; Western News Co. v. Wilmarch, 33 Kan., 510; Buffalo L. O. Co. v. Standard O. Co., 106 N. Y., 669.
A corporation is liable for the damage resulting from a wrongful transfer of stock on the books of the company. Brisbane. D. L. & W. R. R. Co., 13 W. Dig., 184; N. Y. & N. H. R. R. Co. v. Schuyler, 34 N. Y., 30.
Where the stock is, by the terms of the charter or by-laws, transferable only on the corporate books, the purchaser receiving a certificate, with power of attorney, etc., acquires the entire interest of the vendor, with all his rights. N. Y. & N. H. R. R. Co. v. Schuyler, 34 N. Y., 30. If he neglects to have the transfer made on the books until after such stock is transferred to a bona fide holder without notice, he loses his right to demand and have the transfer thereof made to him. Id. But the corporation will be liable to the holder of such certificate for permitting the stock to be transferred to another, where it has notice of these outstanding certificates. Id.
A corporation is liable for the acts of a servant, within the general scope of his employment, while engaged in his master's business, and done with a view to the furtherance of that business and the master's interest, whether they are done negligently, wantonly or even willfully. Mott v. Consumers' Ice Co., 73 N. Y., 543; Buffalo L. O. Co. v. S. O. Co., 42 Hun, 153.
A pleading should allege that the acts complained of were done by the corporation and not by its agents. Buffalo, etc.. Co. v. Standard O. Co., 42 Hun, 153; Stoddard v. Onondaga County, 12 Barb., 575.
Promoters are liable for work done or material furnished for company on their order, in case it is never actually incorporated. Hub. Pub. Co. v. Richardson, 37 N. Y. St. Rep., 541.
Contemplated corporation is liable for work ordered by corporators for its benefit. Grier . H. H. & Co., 38 N. Y. St. Rep, 462.
Corporation, not in existence at time of employment is not liable on agreement made between third party to divide commission for services to be rendered on sale to be made by corporation. Wilbur v. N. Y. E. C. Co., 58 Super., 539.
Holmes, etc.. Co. v. Holmes, etc., Co., 53 Hun, 52; Sistare r. Best, 88 N. Y., 527; Crocker v. Whitney. 71 id., 170; Pratt v. Short, 79 id., 437; Whitney Arms Co. v. Barlow, 63 id., 62; Watts-Campbell Co. v. Yuengling, 51 Hun, 302; Holmes, etc., v. Willard, 5 N. Y. Supp., 610; Starin v. Edson, 112 N. Y., 206; Leslie v. Lorillard, 110 id., 519.
§ 11. Grant of general powers.-Every corporation as such has power, though not specified in the law under which it is incorporated: 1. To have succession for the period specified in its certificate of incorporation or by law, and perpetually when no period is specified. 2. To have a common seal, and alter the same at pleasure.
3. To acquire by grant, gift, purchase, devise or bequest, to hold and to dispose of such property as the purposes of the corporation shall require, subject to such limitations as may be prescribed by law. 4. To appoint such officers and agents as its business shall require, and to fix their compensation, and
5. To make by-laws, not inconsistent with any existing law, for the management of its property, the regulations of its affairs, and the transfer of its stock, if it has any, and the calling of meetings of its members. Such by-laws may also fix the amount of stock, which must be represented at meetings of the stockholders in order to constitute a quorum, unless otherwise provided by law. By-laws duly adopted at a meeting of the members of the corporation shall control the action of its directors. No by-law adopted by the board of directors regulating the election of directors or officers shall be valid unless
published for at least once a week for two successive weeks in a newspaper in the county where the election is to be held, and at least thirty days before such election. Subdivisions four and five of this section shall not apply to municipal corporations.
Am'd by chap. 672 of 1895. Took effect May 14, 1895.
Former section 8 amended.
See section 1, title 3, chap. 18, part I, R. S.; section 6, title 4, chap. 18, part 1, R. S.; sections 7, 26, chap. 40 of 1848; section 2, chap. 611 of 1875, and chap. 172 of 1850; all of which are repealed.
The powers of corporations are expressly limited to those specified in the statute or conferred by their charters. Matter of McGraw v. Cornell University, 45 Hun, 354; Halstead v. Mayor, etc., 3 N. Y., 433; Riley v. City of Rochester, 9 id., 64. The doctrine that no corporate act can be binding without being in writing, or under the corporate seal, has long ceased to be maintained. Leinkauf v. Calman, 110 N. Y., 50; Danforth v. Schoharie T. Co., 12 Johns., 227; Trustees, etc., v. Cagger, 6 Barb., 576; Moss v. Averell, 10 N. Y., 449.
The power to purchase lands was, at common law, incident to all corporations, unless they were specially restrained by their charters or by statute. Nicoll v. N. Y. & E. R. R. Co., 12 N. Y., 121.
Where a member of a corporate body has contracted with it in its corporate capacity, neither he nor it can dispute its corporate character, if the contract has been properly executed. Whitford v. Laidler, 94 N. Y., 145; Eaton v. Aspinwall, 19 id., 119; Buffalo, etc., Co. v. Cary, 26 id., 78. It is sufficient if it is a coporation de facto, exercising the powers and functions of a de jure corporation, and assuming to act as such. Id.
Where a corporation is authorized, under some circumstances, to hold and convey real estate, it will be presumed, in the absence of proof to the contrary, that real estate, conveyed by it, was held and conveyed in pursuance of its powers. Farmers' L. & T. Co. v. Curtis, 7. N. Y., 466.
Corporations, though limited in their duration, may purchase and hold a fee, and may sell such real estate whenever they shall find it no longer necessary or convenient. Nicoll v. N. Y. & E. R. R. Co., 12 N. Y., 121; 5 Denio, 389.
A by-law giving to the senior bailiff a casting vote in case of a tie, was held to be illegal. So, a by-law imposing an oath of office where none was required by the charter, was declared to be invalid. Rex v. Dean, 1 Strange, 536. So, a by-law restricting or extending the right of admission of a member, or of eligibility to office, or prescribing new or additional tests or qualifications to voters, was held to be unlawful. Id., 227. So, a by-law made by a company in a corporation, to restrain the number of apprentices to be taken by any of its members, was declared to be void. King v. Wardens, etc., 7 Term, 540; King v. Tappenden, 3 East, 186. So, it has been held that, while the number of electors might be narrowed or fixed by a by-law, the eligibility of members could not in that manner be changed. Rex v. Spencer, 3 Burr., 1827; People ex rel. Israel v. Tibbets, 4 Cow., 358; People ex rel. Barker v. Kip, id., 382.
The directors can not pass any by-law at variance with the positive provisions of the act of incorporation. People ex rel. Barker v. Kip, 4 Cow., 382, note.
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. Driscoll v. West B. & C. Mfg. Co., 59 N. Y., 96.
A by-law allowing the stockholders, on paying thirty per cent. on their shares, to forfeit their stock, is void as against creditors. Slee v. Bloom, 19 Johns., 456. But a by-law, that any stockholder paying fifty per cent. on his shares, shall be discharged from all future calls on his subscription, etc., other than proceeding by way of forfeiture was held to be valid. Id.
An incorporated company has no power to make a by-law, subjecting to forfeiture shares owned by individuals in the stock of the company for the non-payment of installments due upon such shares, unless the power to pass such by-law is expressly granted by its charter or act of incorporation. Matter of Long I. R. R. Co., 19 Wend., 37.
A by-law declaring that the ordinary business of the corporation may be transacted by a quorum of five directors, the whole number being twenty-three, is a valid regulation. Hoyt v. Thompson's Executors, 19 N. Y., 207. Such by-law
embraces the general business of the corporation, including as incident thereto the power of pledging or assigning its assets for the purpose of securing a debt. Id.
By-laws, which forbid a member to work at his trade at such prices as he chooses to accept, and compel him to join in a "strike" by punishing him for refusing to do so, are void as against public policy. People ex rel. Doyle v. N. Y. Ben. Soc., 3 Hun, 361.
Every by-law, made in pursuance of a general or incidental authority, must be a reasonable one. Driscoll v. West B. & C. Mfg. Co., 59 N. Y., 96. It is not a reasonable by-law, which, without authority express or to be clearly implied, interferes with the common rights of property and the dealings of third persons, and prevents the purchase or delivery of property. Id.
A corporation has no power, in the absence of a provision to that effect in its articles of association, to create or declare a lien upon its stock by by-law, or to refuse to permit a transfer until the indebtedness of the stockholder to the company is paid. Id. A bona fide purchaser of stock, without knowledge or notice of such a by-law, is not bound by it. Id. He can compel the transfer to him, upon the books of the corporation, of the stock purchased. Id. But does not section 26 of chap. 564 of 1890 authorize such by-law with the proviso therein mentioned ?
In the absence of some power to change the relative value of the shares conferred by statute on the articles of association, no change can be made without the consent of all the stockholders. Campbell v. American Zylonite Co., 122 N. Y., 455; Kent v. Quicksilver M. Co., 78 id., 159.
Rudolph v. Southern B. League, 23 Abb. N. C., 199; Austin v. Searing, 16 N. Y., 112; Protective Ass'n v. McGrath, 23 N. Y. St. Rep., 209; Loubat v. Le Roy, 15 Abb. N. C., 20; Lafond v. Deems, 81 N. Y., 514; People v. Society, 32 id., 194.
§ 12. Enlargement of limitations upon the amount of the property of non-stock corporations. If any general or special law heretofore passed, or any certificate of incorporation, shall limit the amount of property a corporation other than a stock corporation may take or hold, such corporation may take and hold property of the value of three million dollars or less, or the yearly income derived from which shall be five hundred thousand dollars or less, notwithstanding any such limitations. In computing the value of such property, no increase in value arising otherwise than from improveinents made thereon shall be taken into account.
Am'd by chap. 400 of 1894. Went into effect May 3, 1894. § 13. Acquisition of additional real property. When any 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.
Former section 10 amended.
§ 14. Acquisition of property in other states. Any domestic corporation transacting business in other states or foreign countries may acquire and dispose of such property as shall be requisite for such corporation in the convenient transaction of its business.
Former section 11 amended.
See section 1, chap. 146, of 1872, and section 1, chap. 361, of 1882, now repealed. If such other state does not permit the corporation to acquire or hold real property, it can not be inferred, but must be expressed in some affirmative way. Cowell v. Springs Co., 100 U. S., 55.
§ 15. Certificate of authority of a foreign corporation.-No foreign stock corporation other than a monied corportion, shall do business in this state without having first procured from the Secretary f State a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the business of the corporation to be carried on in this state is such as may be lawfully carried on by a corporation incorporated under the laws of this state for such or similar business, or, if more than one kind of business, by two or more corporations so incorporated for such kinds of business respectively. The Secretary of State shall deliver such certificate to every such corporation so complying with the requirements of law. No such corporation now doing business in this state shall do business herein after December 31, 1892, without having procured such certificate from the Secretary of State, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date.
No foreign stock corporation doing business in this state without such certificate shall maintain any action in this state upon any contract made by it in this state until it shall have procured such certificate.
§ 16. Proof to be filed before granting certificate.- Before granting such certificate the secretary of state shall require every such foreign corporation to file in his office a sworn copy in the English language of its charter or certificate of incorporation, and a statement under its corporate seal 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 in the manner prescribed in the code of civil procedure a person upon whom process against the corporation may be served within the State. The person so designated must have an office or place of business at the place where such corporation is to have its principal place of business within the State. Such designation shall continue in force until revoked by an instrument in writing designating in like manner some other person on whom process against the corporation may be served in this State. If the person so designated 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, 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, and before another designation is made, be served upon the secretary of state. At the time of such service the plaintiff shall pay to the secretary of state two dollars, to be included in his taxable costs and disbursements, and the secretary of state shall forthwith mail a copy of such notice to such corporation if its address, or the address of any officer thereof, is known to him.
Am'd by chap. 672 of 1895. Took effect May 14, 1895.
§ 17. Acquisition of real property in this state by certain foreign corporations.-Any foreign corporation created under the laws of the United States, or of any state or territory thereof, and doing business in this state, may acquire such real property in this state as may be necessary for its corporate purposes in the transaction of its business in this state, and convey the same by deed or other wise in the same manner as a domestic corporation.
Former section 12 amended.
See section 1, chap. 450 of 1887, now repealed.
The policy of a state may exclude foreign corporations from acting within its jurisdiction, and such policy may be clearly established by a reference to its general legislation. Demarest v. Flack, 128 Ñ. Y., 205. It is not necessary for a state to do so expressly by statute. Id. But no such policy is found in the laws of our state. Id. A corporation, formed in another state, by citizens of this state for the purpose of transacting business here, is not excluded from recognition by the courts of this state, unless it is formed to do acts prohibited by the laws of the state to its own citizens or corporations. Id. If it is legally incorporated and entitled to recognition in the courts of the state where it was organized, it is entitled to recognition and protection in the tribunals of this state. Id. The power rests exclusively with the legislature to say whether any, and, if so, what terms shall be imposed upon such a corporation as a condition of its doing business here. Id. The absence of such terms furnishes no ground for refusing to recognize it. Id.
Court has no jurisdiction to interfere with internal administration of affairs of foreign corporations. Berford v. New York I. Mine, 56 Supr., 236.
Section 1780 of Code does not violate section 2, art. 4, of Federal Constitution. Robinson v. Ocean S. N. Co., 20 N. Y. St. Rep., 741.
§ 18. Acquisition by foreign corporation of real property in this state. Any foreign corporation may purchase at a sale upon the foreclosure of any mortgage held by it, or, upon any judgment or decree for debts due it, or, upon any settlement to secure such debts, any real property within 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.
Am'd by chap. 136 of 1894. Took effect March 15, 1894.