As to interference by court to protect minority stockholders against the consummation of design to destroy their rights, see Robinson v. N. Y., Westchester, etc., Ry. Co., 123 App. Div. 339, 108 N. Y. Supp. 91; Colby v. Equitable Trust Co., 124 App. Div. 262, 108 N. Y. Supp. 978.

§ 16. Voluntary sale of franchise and property. A stock corporation, except a railroad corporation and except as otherwise provided by law, with the consent of two-thirds of its stock, may sell and convey its property, rights, privileges and franchises, or any interest therein or any part thereof to a domestic corporation, engaged in a business of the same general character, or which might be included in the certificate of incorporation of a corporation organizing under any general law of this state for a business of the same general character, and a domestic 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 corporation conveying them. Before such sale or conveyance shall be made such consent shall be obtained at a meeting of the stockholders called upon like notice as that required for an annual meeting.

(L. 1893, ch. 638, § 1, as amended by L. 1901, ch. 130, §. 1.)

§ 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 stockholder, if demanded; the charges and expenses of the appraisers shall be paid by the corporation. When the corporation shall have paid the amount of such appraisal, as directed by the court, such 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 corporation.

(L. 1893, ch. 638, § 1, as amended by L. 1901, ch. 130, §. 1.)

Application for appraisal of stock is properly begun within sixty days' limitation by srevice of application within that time, though the hearing be had after its expiration. Matter of Ennis v. Federal Brewing Co., 123 App. Div. 691.

§ 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 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 certificate, executed by the president and secretary, stating the alteration proposed, and that the same has been duly authorized by a vote of a majority of the directors and also by vote of stockholders representing at least three-fifths of the capital stock, at a meeting of the stockholders called for the purpose in the manner provided in section sixty-three of this chapter, and a copy of the proceedings of such meeting, verified by the affidavit of one of the directors present thereat, shall be filed with such amended certificate.

(Former section 32, added by L. 1892, ch. 688, § 32, as amended by L. 1901, ch. 354, § 1; L. 1905, ch. 751, § 1.)

SECTION 25. Directors.

ARTICLE III.

DIRECTORS AND OFFICERS.

26. Change of number of directors.

27. When acts of directors void.

28. Liability of directors for making unauthorized dividends.

29. Liability of directors for loans to stockholders.

30. Officers.

31. Inspectors and their oath.

32. Books to be kept.

33. Stock books of foreign corporations.

34. Annual report to secretary of state.

35. Liability of officers for false certificates, reports or public notices.

8 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 bylaw adopted by a stockholders' meeting. Vacancies in the board of directors shall be filled in the manner prescribed in the by-laws. Notice of the time and place of holding any election of directors shall be given by publication thereof, at least once in each week for two successive weeks immediately preceding such election, in a newspaper published in the county where such election is to be held, and in such other manner as may be prescribed in the by-laws. Policyholders of an insurance corporation shall be eligible to election as directors, whether or not they be stockholders. At least one-fourth in number of the directors of every such stock corporation shall be elected annually.

(L. 1890, ch. 564, § 20, as amended by L. 1892, ch. 688, § 20; L. 1901, ch. 354, § 1; L. 1906, ch. 238, § 1.)

1. The powers vested in a corporation, which has a board of trustees, reside, for all purposes of practical administration, in the board as a governing body. People's Bank v. St. Anthony's Roman Catholic Church, 109 N. Y. 512.

2. Directors, composing a majority of the board, cannot make a bargain with themselves binding upon the company. Coleman v. Second Ave. R. R. Co., 38

N. Y. 201.

3. Trustees cannot exercise their powers and manage or appropriate the prop

erty of which they have control for their own profit or emolument, nor take advantage of their position to obtain any personal benefit to themselves at the expense of the stockholders. Ogden v. Murray, 39 N. Y. 202.

4. The directors cannot control the corporation as to make it contract with themselves, when their personal interests are involved. MacNaughton v. Osgood, 41 Hun, 109; Hoyle v. Plattsburgh & M. R. R. Co., 54 N. Y. 314; Blake v. Buffalo C. R. R. Co., 56 id. 486; Met. E. R. Co. v. Man. R. Co., 14 Abb. N. C. 103; Duncomb v. N. Y., H. & N. R. R. Co., 84 N. Y. 190; Gardner v. Ogden, 22 id. 327; Smith v. Lansing, id. 531; Barnes v. Brown, 80 id, 527; Risley v. Q., B. & W. R. R. Co., 62 id. 240.

5. Such a contract is not absolutely void, but it is voidable as the corporation may elect. Barnes v. Brown, 80 N. Y. 527; MacNaughton v. Osgood, 41 Hun, 109; Met. E. R. Co. v. Man. R. Co., 14 Abb. N. C. 103; Martin v. Niagara F. P. Mfg. Co., 44 Hun, 130.

6. Though the corporation may avoid a resolution of the board of trustees fixing the amount of salary to be paid to any of their number for his services, it cannot do so except upon equitable terms, and must restore to him what it receives from him. Duncombe v. N. Y., H. & N. R. R. Co., 84 N. Y. 190; MacNaughton v. Osgood, 41 Hun, 109; Met. E. R. Co. v. Man. R. Co., 14 Abb. N. C. 103. It ought upon rescinding, to pay the reasonable value of such services. Id. 7. As to circumstances under which a director, trustee or executive officer of corporation may enter into contract with himself and for his individual benefit. Matter of N. F. P. Mfg. Co., 122 N. Y. 177.

8. When a stockholder may sue directors in his own name. Averill v. Barber, 25 N. Y. St. Rep. 194.

9. Board of trustees may license corporation to make and use invention patented by one of them on payment of royalty. Burden v. Burden Iron Co., 39

Misc. 559.

10. As to liability of directors for waste. See Gilbert v. Finch, 173 N. Y. 455. Where charter does not otherwise provide a share of stock is a voting unit. Lord v. Equitable Life Assurance Soc., 47 Misc. 187.

11. When an election of directors is not held at the regular meeting, notice mailed twelve days before proposed election is not sufficient where the by-laws provide for longer notice. Matter of Keller, 116 App. Div. 58, 101 N. Y. Supp. 133.

See sections 10, 26, chap. 611 of 1875; section 1, chap. 422 of 1881; section 1, chap. 232 of 1883, and section 2, chap. 23 of 1890, now repealed.

12. The powers vested in a corporation aggregate, which has a board of trus tees, reside, for all purposes of practical administration, in the board as a governing body. People's Bank v. St. Anthony's Roman Catholic Church, 109 N. Y. 512, 17 N. E. 408.

13. Provisions in statutes and by-laws requiring the election of directors to be held on a specified day, are regarded as directory. The election, if not then held, may be held on a later day, and the directors then chosen will, if there be no other irregularity or infirmity in their title, be directors de jure. Beardsley et al. v. Johnson et al., 121 N. Y. 224, 24 N. E. 380.

14. As to liability of directors to corporations, see editorial note to Bosworth v. Allen, 55 L. R. A. 751, presenting the authorities on that subject.

§ 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 owning 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 increase or reduction of the number of directors. This section shall apply to any stock corporation whether organized under a general or special law, and the number of directors may be increased as hereby provided notwithstanding the maximum number of directors now prescribed by law. If the number of 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 provide that the directors shall be divided into two or more classes, whose terms of office shall respectively expire at different times, the additional directors shall be divided among such classes as nearly as practicable in proportion to the respective numbers of directors constituting each class prior to such increase.