4. An assistant, who performs all the duties of the superintendent in his absence, and receives a stated salary, is not a laborer or servant within the meaning of this section. Dean v. De Wolf, 16 Hun, 186; aff'd 82 N. Y, 626.

5. The performance of some manual labor, merely incident to his position of general superintendent of the company, does not bring a person within the provisions of this section. Krauser v. Ruckel, 17 Hun, 463; Ericsson v. Brown, 38 Barb. 390.

§ 58. Non-liability in certain cases. No person holding stock in any corporation 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.

(L. 1890, ch. 564, § 57, as amended by L. 1892, ch. 688, § 54; L. 1901, ch. 354, §1.)

§ 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.

(L. 1890, ch. 564, § 58, as re-enacted by L. 1892, ch. 688, § 55.)

1. A suit for the collection of the debt must be brought against the corporation within two years after it becomes due, in order to such liability, unless some

cause intervenes before the expiration of such period sufficient to excuse such action. Hardman v. Sage, 47 Hun, 230; Kincaid v. Dwinelle, 59 N. Y. 548; Cuykendall v. Corning, 88 id. 129.

2. Where the time of the payment of a debt is extended by the taking of a promissory note, which is sued within two years from the date of its maturity, but more than two years after the debt becomes due, the claim of the creditor against the stockholders is lost and they cannot be charged with the payment of the debt. Hardman v. Sage, 124 N. Y. 25, 26 N. E. 354.

3. In Fisher v. Marvin, 47 Barb. 159, it was held that the debt was contracted when the renewal note was given, but this case was overruled on this point by Jagger Iron Co. v. Walker, 76 N. Y. 521.

4. As to conflict of laws as to limitation of action against stockholders, see editorial note to Brunswick Terminal Co. v. Nat. Bank of Baltimore, 48 L. R. A. 637, presenting the authorities on that question.

§ 60. Partly paid stock. The original or the amended certificate 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 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 pursuant to sections fifty-seven, fifty-eight and fiftynine 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.

(L. 1901, ch. 354, § 3.)

§ 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 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, 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 common stock therefor, upon such valuation as may have been agreed upon in the certificate of organization 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.

1. There is no power in a corporate body, nor in a majority of the stockholders, to provide by a by-law for the creation of a preferred stock, so as to bind a minority of the stockholders not assenting thereto. Kent v. Quicksilver M. Co., 78 N. Y. 159.

2. A corporation may begin its corporate action by classifying the shares in its capital stock, with peculiar privileges to one share over another, and thus offer its stock to the public for subscriptions thereto. Id.

3. The right of every shareholder to his proportion of the profits of a corporation is a vested individual right, and, in the absence of some power conferred by statute, or by the articles of association, to change the relative value of shares by giving some a preference over others as to dividends, the power cannot be implied, and no such change may be made without the consent of all the shareholders. Campbell v. Am. Zylonite Co., 122 N. Y. 455, 11 L. R. A. 596,

25 N. E. 853.

§ 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 additional 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 shall 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.

(L. 1890, ch. 564, § 44, as amended by L. 1892, ch. 688, § 44; L. 1894, ch. 346, § 1; L. 1899, ch. 696, § 1; L. 1901, ch. 354, § 1.)

1. A corporation has no implied authority to increase or diminish its capital stock, and can only legally do so when and in the manner authorized by statute. Sutherland v. Olcott, 95 N. Y. 93.

2. An agreement with a stockholder as to the exchange of his stock for a reduced amount made by the officers of the company in proceedings to induce the capital stock is binding upon the company. Abbott v. The Petersburg Granite Quarrying Co., 43 N. Y. St. Rep. 235, 17 N. Y. Supp. 140, S. C. 62 Hun, 622.

§ 63. Notice of meeting to increase or reduce capital stock. -Every such 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 office 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. 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, 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.

(L. 1890, ch. 564, § 45, as amended by L. 1892, ch. 688, § 45; L. 1893, ch. 700, § 1; L. 1901, ch. 354, § 1.)

In the absence of evidence that due and sufficient notice of the meeting was not given to the stockholders, the books of minutes of the company and the certificate showing that more than two-thirds of the stockholders appeared in person or by proxy, and voted for the increase of the stock, establishes, in an action to enforce an assessment upon stock, that the stock was increased at a regularly assembled meeting of the stockholders. Cuykendall v. Douglas, 19 Hun, 577.

§ 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 proceeding 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, and a duplicate thereof in the office of the secretary of state. In case of a reduction of the capital stock, except of a railroad corporation or a moneyed corporation, such certificate or consent hereinafter provided for shall have indorsed thereon 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; 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,

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