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§ 19. Prohibition of banking powers. No corporation except a corporation formed under or subject to the banking laws, shall by any implication or construction be deemed to possess the power of carrying on the business of discounting bills, notes or other evidences of debt, of receiving deposits, of buying gold or silver bullion or foreign coins, or buying and selling bills of exchange, or shall issue bills, notes or other evidences of debt for circulation as money.
Former section 14.
See section 4, title 3, chap. 18, part 1, R. S. now repealed.
It is the settled policy of the legislature to prevent corporations, which are not formed for banking business, from carrying on, or in any manner interfering with the same. N. Y. State L. & T. Co. v. Helmer, 77 N. Y., 64. The courts are bound to carry out the law and to see that it is not violated. Id; Utica Ins. Co. v. Scott, 19 Johns., 1; People v. Utica Ins. Co., 15 id., 358; N. Y. Firemen Ins. Co. v. Ely, 2 Cow., 678; N. Y. L. Ins. Co. v. Beebe, 7 N. Y., 364; Talmadge v. Pell, id., 328; Utica Ins. Co. v. Kip, 8 Cow., 20; Oneida Bk. v. Ontario Bk., 21 N. Y., 490. Certificates of deposit irredeemable within twenty years and bearing interest, issued as loans by the New York Life Insurance and Trust Company, were held to be violations of the former statute upon this subject. N. Y. Life Ins. & T. Co. v. Beebe, 7 N. Y., 364.
The prohibition of this section extends to foreign corporations. Amer. L. Ins. & T. Co. v. Dobbin, Hill and Denio, 252. But such corporation is not prohibited by it, from purchasing promissory notes. Id.
The penalty or forfeiture declared in the statute, and no other, will be enforced. Pratt v. Short, 79 N. Y., 437. It was not intended that all claims to money loaned or advanced upon the prohibited security should be forfeited. Id; Davis S. M. Co. . Best, 30 Hun, 638; Rome Savings Bk. v. Krug, 102 N. Y., 331; N. Y. St. L. & T. Co. v. Helmer, 77 id., 64; Rome Sav. Bk. v. Kramer, 32 Hun, 270; Pratt v. Eaten, 79 N. Y., 449.
The history of the restraining acts is given, and the authorities on the subject collated, in Pratt v. Short, 79 N. Y., 437. See Utica Ins. Co. v. Caldwell, 3 Wend., 296; Same v. Bloodgood, 4 id., 652; Mercein v. People, 25 id., 64; Tracy v. Talmage, 14 N. Y., 189; Curtis v. Leavitt, 15 id., 97; Atlantic State Bk. v. Savery, 82 N. Y., 291. See further, Crocker v. Whitney, 71 N. Y., 161.
§ 20. Qualification of members as voters.-At every election of directors and meeting of the members of any corporation, every member who is not in default in the payment of his subscriptions upon his stock or disqualified by the by-laws, shall be entitled to one vote, if a non-stock corporation, and, if a stock corporation, to one vote for every share of stock held by him for ten days immediately preceding the election or meeting.
Every pledgor of stock standing in his name on the books of the corporation shall be deemed the owner thereof for the purposes of this section.
The certificate of incorporation of any stock corporation may provide that at all elections of directors of such corporation, each stockholder shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as he may see fit, which right, when exercised, shall be
termed cumulative voting. The stockholders of a corporation heretofore formed, who, by the provisions of laws existing on April 30, 1891, were entitled to the exercise of such right, may hereafter exercise such right according to the provisions of this section.
No person shall vote or issue a proxy to vote at any meeting of the stockholders or bondholders, or both, of a stock corporation, upon any stock or bonds which have not been owned by him for at least ten days next preceding such meeting, notwithstanding such stock or bonds may stand in his name on the books of the corporation.
No member of a corporation shall sell his vote or issue a proxy to vote to any person for any sum of money or any thing of value.
The books and papers containing the record of membership of the corporation shall be produced at any meeting of its members upon the request of any member. If the right to vote at any such meeting shall be challenged, the inspectors of election, or other persons presiding thereat, shall require such books, if they can be had, to be produced as evidence of the right of the person challenged to vote at such meeting, and all persons who may appear from such books to be members of the corporation may vote at such meeting in person or by proxy, subject to the provisions of this chapter.
Part of section 54 of stock corporation law amended.
§ 21. Proxies.- Every member of a corporation, except a religious corporation, entitled to vote at any meeting thereof may so vote by proxy.
No officer, clerk, teller or bookkeeper of a corporation formed under or subject to the banking law shall act as proxy for any 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 members, and the length of time for which proxies may be executed.
Part of section 54 of stock corporation law amended.
§ 22. Challenges.- Every member of a corporation offering to vote at any election or meeting of the corporation shall, if required by an inspector of election or other officer presiding at such election or meeting, or by any other member present, take and subscribe the following oath: "I do solemnly swear that in voting at this election I have not, either directly, indirectly or impliedly, received any
promise or any sum of money or anything of value to influence the giving of my vote or votes at this meeting or as a consideration therefor." If it is a stock corporation, the oath so taken and subscribed shall contain the following additional provision: "That I have not sold or otherwise disposed of my interest in or title to any shares of stock or bonds in respect to which I offer to vote at this election, but that all such shares or bonds are still owned by me," but if such stock or bonds be pledged, the oath may so state. 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 anything of value to induce the giving of a proxy to me to vote at this election, or received any promise or any sum of money or anything of value to influence the giving of my vote at this meeting, or as a consideration therefor." If a stock corporation, the oath so taken and subscribed shall contain the following additional provision: "And that the title to the stocks and bonds upon which I now offer to vote is, to the best of my knowledge and belief, truly and in good faith vested in the persons in whose names they now stand," but if such stocks or bonds be held as security, the oath may so state. 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.
Am'd by chap. 672 of 1895. Took effect May 14, 1895.
§ 23. 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.
Former section 18.
See section 27, chap. 611 of 1875, now repealed.
A corporation is not dissolved because of the failure to elect trustees, where it is declared that such omission shall not produce its dessolution. People v. Twaddell, 18 Hun, 427.
The failure of a board of trustees to adopt by-laws prescribing the time, place and manner for the annual election of trustees, or to hold such election, does not dissolve the corporation. Matter of Vandenburgh v. Broadway Ry. Co., 29 Hun,
This section expressly provides for such omission.
On the dissolution of a corporation, the title to real estate held by it reverts back to its original grantor and his heirs, unless there is some provision in the charter, or some other statutory provision, to avert that consequence. Bingham v. Weiderwax, 1 N. Y., 509.
Webster v. Turner, 12 Hun, 264; Brooklyn S. T. Co. v. City of Brooklyn, 78 N. Y., 524; Kincaid v. Dwinelle, 59 id.. 548; Central Sav. Inst., 5 Hun, 34; 66 N. Y., 424; Chamberlain v. Rochester S. P. V. Co.. 7 Hun, 557; People v. Albany & V. R. R. Co., 77 N. Y., 232; rev'g, 15 Hun, 126; Atty.-Gen. v. N. A. L. Ins. Co., 77
N. Y., 297; rev'g, 15 Hun, 18; Ex Parte French Mfg. Co., 12 id., 488; Medbury v. Rochester F. S. Co., 19 id., 498; Kittredge v. Kellogg B. Co., 8 Abb. N. C., 168; Denicke v. N. Y. & R. L & C. Co., 80 N. Y., 599; Belknap v. N. A. L. Ins. Co., 11 Hun, 282; Cole v. Knickerbocker L. Ins. Co., 23 id., 255; Frothingham v. Barney, 6 id., 366; Ex Parte W. T. Skirt Co., 8 id., 508; People v. Nat. Trust Co., 82 N. Y., 283; Central C. R. R. Co. v. 23d St. R. R. Co., 54 How., 168; Matter of N. Y. E. R. R. Co., 70 N. Y., 327; People v. Hektograph Co., 10 Abb. N. C., 358; Ex Parte Pyrolusite M. Co., 29 Hun, 429.
§ 24. Mode of calling special election of directors.- If the election has not been held on the day so designated, the directors shall forthwith call a meeting of the members of the corporation for the purpose of electing directors, of which meeting notice shall be given in the same manner as of the annual meeting for the election of directors.
If such meeting shall not be so called within one month, or, if held, shall result in a failure to elect directors, any member of the corporation may call a meeting for the 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 bylaws 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.
Transferred from stock corporation law, sections 53, 54 and 55.
§ 25. Mode of conducting special elections of directors.— Such meeting shall be held at the office of the corporation, or if it has none, at the place in this state where its principal business has been 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.
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.
§ 26. Qualification of voters and canvass of votes at special elections. In the absence at such meeting of the books of the corporation showing who are members thereof, each person, before voting, shall present his sworn statement setting forth that he is a member of the corporation; and if a stock corporation, the number of shares of stock owned by him and standing in his name on the books of the 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 standing in his name on the books of the corporation.
The inspectors shall return and file such statements, with a certificate of the result of the election, verified by them, in the office of the clerk of the county in which such election is held, and the persons so elected shall be the directors of the corporation.
§ 27. 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 allegations of the parties, or otherwise inquire into the matters or causes of complaint, and establish the election or order a new election, or make such order and give such relief as right and justice may require.
Former section 15.
See section 5, title 4, chap. 18, part 1, R. S., now repealed.
No one but a party named as aggrieved in the notice of application to set aside the election, is entitled to be heard. Matter of Mohawk & H. R. R. Co., 19 Wend., 135.
A corporation has the right, under this section, to make application to the supreme court, for the purpose of establishing an election of its trustees, who have been declared elected, or to have the election set aside and a new election ordered. Matter of Pioneer Paper Co., 36 How.. 111.
On such application, notice to the persons who claim to have been elected, and to the corporation, if not made by it, is sufficient. Schoharie Valley R. R. Co., 12 Abb., N. S., 394. It is not necessary that all the stockholders have notice of the application. Id.
This section does not authorize any person whomsoever, who chooses to make a complaint, to institute the proceeding. Matter of Application of Syracuse, C. & N. Y. R. R. Co., 91 N. Y., 1. But it must be some person, whose rights have been infringed, and who is justly entitled to complain. Id.
Where an application is made, under this section, to settle contests arising out of a disputed election, the court may go behind the entries in the transfer book of the company, and determine whether a transfer appearing thereon was a sale or only a pledge of the shares, and whether the pledgor or pledgee was entitled to vote thereon. Matter of Strong v. Smith. 15 Hun, 222.
The continuous neglect of corporation, for a number of years, to hold any election of officers, affords a proper case for the issue of a mandamus on the relation of a corporator, without proof of a special request to the directors to hold an election. People ex rel. Walker . Albany Hospital, 11 Abb., N. S., 4.
A mandamus will lie to compel an election of the officers of a corporation, other than municipal, if a proper case is made. People ex rel. Walker v. Albany Hospital, 11 Abb., N. S., 4.
§ 28. Stay of proceedings in actions collusively brought.- If an action is 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,