also as to their trustees or directors. The directors can lawfully act only when duly convened as a board. This is the law even where the act by which the company derived its corporate existence makes no provision for the manner in which the corporators are to be convoked or how they are to vote.' Where the organic law of the body is silent on these points its proceedings and the validity of acts done in its name must be judged according to the principles of law applicable to corporations in general as above set forth, and such by-laws as may have been adopted for the regulation of its conduct. So that, unless the contrary be provided by statute or charter, there are but two ways in which a corporation as such can act, shown in any way that they had determined, the directors upon whom they had determined would be validly appointed, although such determination was not reached at any meeting; and in the present case the directors had been appointed, and the allotment made by them was valid. Hallows v. Fernie, 15 L. T. Rep. N. S. 602; L. Rep. 3 Eq. 520, followed. D'Arcy v. Tamar &c. Railway Company, L. R. 2 Ex. 158, distinguished. Cf. Granger v. Grubb, (1870) 7 Phila. 850; Graham v. Boston &c. R. Co., (1886) 118 U. S. 161. 65 N. Y. 252. In England it is enacted that at the first meeting of directors held after the passing of the special act of incorporation, and at the first meeting of the directors held after each annual appointment of directors, the directors present at such meeting shall choose one of the directors to act as chairman of the directors for the year following such choice, and shall also, if they think fit, choose another director to act as deputy chairman for the same period; and if the chairman or deputy chairman die or resign, or cease to be a director, or otherwise become disqualified to act, the directors present at the meeting next after the occurrence of the vacancy shall choose some other of the directors to fill such vacancy; and every such chairman or deputy chairman so elected as last aforesaid shall continue in office so long only as the person in whose stead he may be so elected would been entitled to continue if such death, resignation, removal or disBuild. qualification had not happened. 8 1 Buttrick v. Nashua &c. R. Co., (1882) 62 N. H. 413; s. c. 13 Am. St. Rep. 578. 2 Gashwiler v. Willis, (1867) 33 Cal. 11; People's Bank v. St. Anthony's R. C. Church, 39 Hun, 498, where a majority of the trustees of a Romish church attempted to bind the church upon notes executed without a meeting of the board. Cf. Granger v. Grubb, (1870) 7 Phila. 350. Pierce v. New Orleans Assoc., (1836) 9 La. 397. Pierce v. New Orleans Build. Assoc., (1836) 9 La. 397; People v. Albany &c. R. Co., (1869) 55 Barb. 314. Cf. Craw v. Easterly, (1873) 54 N. Y. 679; Easteriy v. Barber, (1875) Vic. ch. 16, § 93. If at any meeting of the directors neither the chairman nor deputy chairman be present the directors present shall choose some one of their number to be chairman of such meeting. 8 Vic. ch. 16, § 94 to wit, either through its president and directors, or at a meeting of the stockholders duly convoked and conducted in conformity with the general rules governing corporate meetings, or the special by-laws supplementary thereto. Any material departure therefrom destroys the validity of the proceedings so taken. Unless, of course, provision be made for suspension of the rules. It has been held in Colorado, however, that where claims against a corporation are approved by a majority of the board of directors, acting separately, in accordance with a customary usage, the approval is sufficient, there being no law or by-law restricting the directors to a different mode.3 § 273. Called or special meetings.- Provisions for calling special meetings found in the charter or by-laws of the companies or in the statutes of the incorporating States, generally make it obligatory upon the directors or some specified corporate officer to issue a call upon the demand of a certain number of members or of shareholders owning a certain percentage of the capital stock. While as a general rule it should appear in the notice that the meeting has been summoned by the proper official, the board of directors, or the general agent of the company,' and while the provisions of the statute or by-laws relating to the calling of special meetings, must be complied with in every particular, yet meeting called by the secretary was illegal, the code prescribing that the 1 Pierce v. New Orleans Build. Assoc., (1836) 9 La. 397. 2 Pierce v. New Orleans Build. directors should issue the call. Assoc., (1836) 9 La. 397. 3 Longmont Supply Ditch Co. v. Coffman, (1888) 11 Colo. 551. 8 7 Stebbins v. Merritt, (1852) 10 Cush. 27. 8 Reilly v. Oglebay, (1884) 25 W. 48 Vic. ch. 16, § 70; W. Va. Code, Va. 36, where it was held under the ch. 53, § 41. 5 Stevens v. Eden Meeting House Soc., (1839) 12 Vt. 688; State v. Pettineli, (1875) 10 Nev. 141; Johnson v. Jones, (1872) 23 N. J. Eq. 216; Congregational Soc. v. Sperry, (1834) 10 Conn. 200; Evans v. Osgood, (1841) 18 Me. 213; Ang. & Ames, Corp. 491. 6 Reilly v. Oglebay, (1884) 25 W. Va. 36, decided under W. Va. Code, ch. 53, § 41, and holding that a West Virginia Code, ch. 53, § 41, providing that "a general meeting of the stockholders may be called at any time by the board of directors, or by any number of stockholders, holding together at least one tenth of the capital," that a call by the secretary simply on authority of stockholders holding one tenth of the capital was invalid and all proceedings thereunder illegal. there are circumstances under which a meeting may be otherwise lawfully assembled. If the directors fail to call the meeting when required or send out insufficient notices thereof, the members may call a meeting themselves. Especial care is to be observed in respect of the notifications sent to members and stockholders. The same is true in calling special meetings of governing corporate bodies, such as boards of trustees or directors, undue haste and irregularity respecting notification being fatal to the legality of the proceedings. The notification should set forth in a general way the nature of the business to be transacted at the special meeting, and action taken upon matters not mentioned in the notice is invalid. Where, however, the minutes recite that a meeting was "called for the purpose" of transacting a certain piece of business, it will be presumed until the contrary is proven that the purpose was specified in the call. The presumption omnia rite acta covers a multitude of sins in such cases, and throws the burden on those who would deny the regularity of a meeting for want of due notice, to establish it by proof." And in the absence of fraud or conspiracy irregularities in the calling of special meetings may be cured by the reading and approval of the minutes at a subsequent meeting properly called." § 274. Qualifications of voters — (a) In general.— In companies and associations not having capital stock the qualifications of voters at corporate meetings are generally prescribed 1 Newcomb v. Reed, (1866) 12 Allen, 362; Citizens' Mutual F. Ins. Co. v. Sortwell, (1864) 8 Allen, 217; Judah v. American Live Stock Ins. Co., (1853) 4 Ind. 333; Chamberlain v. Painesville &c. R. Co., (1864) 15 Ohio St. 225. 28 Vic. ch. 16, § 70; Isle of Wight Ry. Co. v. Tahourdin, 25 Ch. Div. 320; Browne & Theobald's Ry. Law, 98. Cf. W. Va. Code, ch. 53, § 41. State v. Smith, (1887) 15 Oregon, 98. 4 Isle of Wight Ry. Co. v. Tabourdin, 25 Ch. Div. 320; D'Arcy v. Tamar &c. Ry. Co. L. R. 2 Ex. 158; 8 Vic. ch. 16, § 69; Doyle v. Mizner, 42 Mich. 332; Kersey Oil Co. v. Oilcreek &c. R. Co., 12 Phila. 374; Pike Co. v. Rowland, 94 Pa. St. 238; State v. Ferguson, 31 N. J. 107; Farwell v. Houghton Copper Works, (1881) 8 Fed. Rep. 66; Harding v. Vandewater, (1870) 40 Cal. 77. 5 Chase v. Tuttle, (1887) 55 Conn. 455; s. c. 3 Am. St. Rep. 64, 66. 6 Sargent v. Webster, (1847) 18 Met. 504; s. c. 46 Am. Des. 743. County Court v. Baltimore & O. R. Co., (1888) 35 Fed. Rep. 161. by the by-laws of the organization. It is not every "member" of such associations that is entitled to participate in its corporate meetings. There are but few examples, however, of companies having capital stock where any other qualification than the bona fide ownership of shares and registration for a certain number of days prior to the corporate meeting, is required of persons offering to take part therein,2 the right to vote at corporate meetings being incident to the ownership of shares both by natural persons, and by other companies or corporations, municipal or private. And this right is not to be impaired by any by-law of the corporation. But a railroad company, in issuing certificates of preferred stock, can stipulate that the holders shall not have or exercise the right to vote at any meeting of the holders of the capital stock of the company. The best evidence of ownership is the registration of the stockholder upon the corporate books.' 1 See cases cited supra, p. 123, n. 1. Cf. §§ 71, 80 and 81, supra. 2 See, for example, the New York General Incorporation Act, N. Y. Laws of 1890, ch. 564, §§ 54 et seq., and the General Railway Act, N. Y. Laws of 1850, ch. 140, § 5. 3 A stockholder is entitled to vote upon stock issued by way of dividend as well as upon his original shares. Bailey v. Railroad Co., 22 Wall. 604, 637. As to whether scrip certificates issued by way of dividend can be voted, see Bailey v. Railroad Co., 22 Wall. 604, 635. But see State v. Hunton, 28 Vt. 594, from which it would seem that a statutory restriction of the right to citizens of the State may be constitutional. Kreiger v. Shelby R. Co., (1886) 84 Ky. 66, per Pryor, J. As to votes upon stock held by partners, see Kenton Furnace, Railroad & Manuf. Co. v. McAlpin, 5 Fed. Rep. 787; Hardy v. Norfolk Manuf. Co., 80 Va. 404; Allen v. Hill, 16 Cal. 113. In England if several persons be jointly entitled to a share, the person whose name stands first in the register of shareholders as one of the holders of such share shall, for the purpose of voting at any meeting, be deemed the sole proprietor thereof; and on all occasions the vote of such firstnamed shareholder, either in person or by proxy, shall be allowed as the vote in respect of such share, without proof of the concurrence of the other holders thereof. 8 Vic. ch. 16, § 78. Cf. Hoppin v. Buffum, 9 R. I. 513; s. c. 11 Am. Rep. 291; In re St. Lawrence Steamboat Co., 44 N. J. 529; Downing v. Potts, 23 N. J. 66. 5 Brewster v. Hartley, (1869) 37 Cal. 15, 24; s. c. 99 Am. Dec. 237; People v. Kip, 4 Cow. 382, n.; Rex v. Spencer, 3 Burr. 1827. 6 Miller v. Batterman, (Ohio, 1890) 24 N. E. Rep. 496. 7 Registration as owner of the shares being usually held conclusive of the right to vote thereon. Ex parte Willcocks, (1827) 7 Cow. 402; s. c. 17 Am. Dec. 525; Beckett v. Houston, 32 Ind. 393; State v. Ferris, 42 Conn. 560, 568; Vandenburgh v. Broadway Ry. Co., 29 Hun, 348, there are circumstances under which a meeting may business, it will be presur the purpose was speci omnia rite acta cover throws the burden of a meeting for w And in the absen calling of speci approval of t called." 8 274. panies a tions 36 17 dany State any Ican see Peo the corporate meeting, is required of p of shares and registration for a certa art therein the right to vote at oor dent to the ownertip of stora by other compatI O OFFE this night, www of the organization. It is not every "member" There are but few examples, however, of come al stock where any other qual Seation tran CORPORATE MEETINGS AND ELECTIONS. 457 such nsferred to of enabling you on at this election, and have not contracted to sell transfer them upon any condition, - agreement, or understanding in re- where it is wner must be alether registered or v. Smith, 15 Hun, 222. 6. Hill, 16 Cal. 113. "In where the right of voting share or shares of the stock incorporated company of this shall be questioned, it shall be the duty of the inspectors of the elections to require the transfer books of said company as evidence of stock held in the said company; and all such shares as may appear standing thereon in the name of any person or persons shall be voted on by such person or persons directly by themselves, or by proxy, subject to the provisions of the act of incorporation." 2 N. Y. Rev. Stat., (7th ed.) 1535. See also N. Y. Laws of 1990, ch. 564, § 54. |