As to the payment of dividends from a fund set aside by the directors as an additional working capital, see Bassett v. U. S. Cast Iron Pipe & Foundry Co., 70 Atl. Rep., 929; aff'd 73 Id., 514.

New York decisions.

Under the provisions of a New York statute, similar to the foregoing, cases have been decided as follows:

A stockholder of a New Jersey corporation, transacting business in New York by virtue of a certificate of authority so to do, may maintain an action on behalf of himself and others similarly situated, to compel a director who participated in declaring dividends, in violation of section 30 of the New Jersey General Corporation Law, to restore to the treasury of the corporation the amount of dividends unlawfully declared and paid, if the corporation refuses to bring the action. Hutchinson v. Stadler, 85 App. Div., 424.

A director who is absent from the meeting when an unlawful dividend is declared, is not liable, although he is present at a meeting subsequently held at which the minutes of the former meeting were ratified. Hutchinson v. Curtiss, 45 Misc., 484.

The liability imposed upon directors who declare a dividend except from surplus profits, is to be treated as a provision for indemnity against any loss which the corporation or its creditors may sustain by reason of the payment of an unlawful dividend. Dykman v. Keeney, 16 App. Div., 131; aff'd 160 N. Y., 677. See also Dykman v. Keeney, 34 App. Div., 45.

Directors have no right to pay any dividend, either in stock or money, unless the capital of the corporation is left unimpaired. Berwind-White Coal Mining Co. v. Ewart, 11 Misc., 490, aff'd 90 Hun., 60.

31. Voluntary Dissolution.

Whenever, in the judgment of the board of directors, it shall be deemed advisable and most for the benefit of such corporation that it should be dissolved, the board, within ten days after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, of which meeting every director shall have received at least three days' notice, shall cause notice of the adoption of such resolution to be mailed to each stockholder residing in the United States, and also beginning within said ten days cause a like notice to be pub

lished in a newspaper published in the county wherein the corporation shall have its principal office, at least four weeks successively, once a week, next preceding the time appointed for the same, of a meeting of the stockholders to be held at the office of the corporation, to take action upon the resolutions so adopted by the board of directors, which meeting shall be held between the hours of ten o'clock in the forenoon and three o'clock in the afternoon of the day so named, and which meeting may, on the day so appointed, by consent of a majority in interest of the stockholders present, be adjourned from time to time for not less than eight days at any one time, of which adjourned meeting notice by advertisement in said newspaper shall be given; and if at any such meeting two-thirds in interest of all the stockholders shall consent that a dissolution shall take place and signify their consent in writing, such consent, together with a list of the names and residences of the directors and officers, certified by the president and the secretary or treasurer, shall be filed in the office of the secretary of state, who, upon being satisfied by due proof that the requirements aforesaid have been complied with, shall issue a certificate that such consent has been filed, and the board of directors shall cause such certificate to be published four weeks successively, at least once a week, in a newspaper published in said county; and upon the filing in the office of the secretary of state of an affidavit that said certificate has been so published, the corporation shall be dissolved and the board shall proceed to settle up and adjust its business and affairs; whenever all the stockholders shall consent in writing to a dissolution, no meeting or notice thereof shall be necessary, but on filing said consent in the office of the secretary of state he shall forthwith issue

a certificate of dissolution, which shall be published as above provided.

P. L. 1870, p. 8; Act of 1875, §34; P. L. 1877, p. 20; P. L. 1893, p. 445, §4.

It rests in the judgment of the directors whether the stockholders shall be called together under this section.

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"It is well settled that the shareholders in a corporation cannot extinguish its charter or dissolve it, and that a court of equity cannot dissolve it at their instance. In the absence of a statutory provision the franchises can be declared forfeited and extinguished only at the suit of the State in an appropriate proceeding at law. But where it plainly appears that the object for which the company was formed is impossible of attainment, it becomes the duty of the company's agents to put an end to its operations and wind up its affairs, and should they, even though supported by a majority of the shareholders, pursue operations which must eventually be ruinous, any shareholder feeling aggrieved would, upon plain equitable principle, be entitled to the assistance of this court, and a decree should be made compelling the directors to wind up the company's business and distribute the assets among those who are entitled to them, unless they can lawfully be used for other business purposes allowed by the charter." Benedict v. Columbus Construction Co., 49 N. J. Eq., 23, 36.

In the absence of fraud or acts beyond their lawful powers as stockholders, the minority have no standing to enjoin the exercise of the right of the majority to vote for dissolution. Riker & Son Co. v. United Drug Co., 79 Atl. Rep., 1044.

Whatever may be the effect of the statutory provisions relating to the conduct of the corporation after dissolution or the carrying out of a plan of reorganization, it cannot govern the right of the stockholders to vote for dissolution. A court is not required to decide in advance questions which may arise in consequence of dissolution. Id. The power of the directors and stockholders to dissolve the corporation being purely statutory, it is important that every requirement of the statute be strictly carried out.

It will be noted that two methods of dissolving the corporation are prescribed by this section:

1st. Where unanimous consent of the stockholders cannot be obtained.

2d.

Where all the stockholders consent.

In the first case this section requires:

(1) A meeting and resolution of the board of directors; (2) the mailing and publication of a notice to and meeting of stockholders; (3) a consent in writing filed with the Secretary of State signed by two-thirds in interest of the stockholders; (4) the filing with

the Secretary of State of a list of the names and residences of the directors and officers certified by the president and secretary or treas urer; (5) the issuing by the Secretary of State of "a certificate that such consent has been filed," which certificate is not "a certificate of dissolution," but is a certificate preliminary to dissolution; (6) the publication of such certificate; (7) the filing of an affidavit of publication with the Secretary of State.

The certificate issued by the Secretary of State should comply with the provisions of Section 43a.

The dissolution will then be complete and of record.

In the second case, apparently, no meeting of directors is required nor any meeting of the stockholders; simply the filing of the written consent of all the stockholders verified by an officer of the company. There should be attached to all certificates of dissolution filed in the office of the Secretary of State a certificate of the Comptroller of the Treasury that all state taxes have been paid. P. L. 1900, p. 316. This certificate of dissolution must be published as in the first case, and affidavit of publication should be filed in the office of the Secretary of State.

Windmuller v. Standard Distilling and Distributing Company, 114 Fed. Rep., 491, held that there is no provision in the law which authorizes the court to review the judgment of the directors as to the advisability of dissolution, and that the fact that more than two-thirds of the stock of the company to be dissolved was held and owned by another corporation to whose interest it was that such dissolution should take place did not prevent such corporation from exercising its right under the statute to vote on such stock. The Standard Distilling and Distributing Company had guaranteed the payment of certain dividends on the preferred stock of the Spirits Distributing Company during the existence of said Distributing Company. The Distilling Company of America was the owner of a large majority of the shares of both the Standard Company and the Distributing Company and it was to the interest of the Distilling Company that the contract between the Standard Company and the Distributing Company providing for such guarantee should be abrogated.

Subsequently in Windmuller v. Standard Distilling & Distributing Company, et al., 115 Fed. Rep., 748, involving the same matters, the court said: "This court is inclined to concur with Judge Kirkpatrick in the conclusion that a majority stockholder may vote to dissolve even if he be influenced to that course by a wish to destroy a contract beneficial to the corporation but onerous to himself."

This section does not provide a substitute method of winding up the affairs of an insolvent corporation. Sections 63-86 provide for such. Fitzgerald v. State Mut. Bldg. & Loan Ass'n, 69 Atl. Rep., 564.

Where a sale of corporate property amounts to dissolution, a stockholder may restrain the proceedings unless the provisions of this sec

tion have been followed. Coler v. Tacoma Ry. & Power Co., 65 N. J. Eq., 347. As to lease for 999 years see Dickinson v. Consolidated Traction Co., 119 Fed. Rep., 871.

Merger, carried out as provided in sections 105-107, is in effect a dissolution of the merging corporations. Beling v. American Tobacco Co., 72 N. J. Eq., 32.

Directors and trustees upon dissolution, $53 et seq.

As to assent of stockholders, see Section 17.

32. Incorporators May Dissolve Corporation.

The incorporators named in any certificate of incorporation, before the payment of any part of the capital, and before beginning the business for which the corporation was created, may surrender all their corporate rights and franchises, by filing in the office of the secretary of state a certificate, verified by oath, that no part of the capital has been paid and such business has not been begun, and surrendering all rights and franchises, and thereupon the said corporation shall be dissolved.

P. L. 1893, p. 444.

III.-Elections; Stockholders' Meetings.

33. Stock and Transfer Books Must Be Kept in Registered Office; Annual List of Stockholders.

Every corporation shall keep at its principal and registered office in this state the transfer books in which the transfer of stock shall be registered, and the stock books, which shall contain the name and address of the stockholders, the number of shares held by them respectively, which shall at all times during the usual hours for business be open to the examination of every stockholder; the directors shall cause the secretary, or other officer designated by them having charge of said books, to make, at least ten days before every election after the first election, a full, true and com