of the state authorized by law to investigate the affairs of such corporation. For any refusal to allow such book to be inspected, such corporation and the officer or agent so refusing shall each forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made.

(L. 1890, ch. 564, § 56, as amended by L. 1892, ch. 688, § 53, and amended by L. 1897, ch. 384, § 3.

The transfer agent of any corporation existing beyond the jurisdiction of this State is required at all reasonable times during the usual business hours, to exhibit to any stockholder, when required, the transfer book of such corporation, and also a list of the stockholders thereof, if in his power to do so. People ex rel. Del. Mar. v. St. Louis, etc., Ry. Co., 19 Abb. N. C. 1. It is no answer to such application that the law of the State, where the corporation was created, requires it to keep in such State a stock register or transfer book, if it appears that the officers of the company have in their possession in this State a book containing entries of the transfer of its stock. Id. The name, by which it is called, is immaterial, if it contains the information which the act gives the stockholders the right to obtain. Id. See also, Kennedy v. Chicago, etc. R. R. Co., 14 Abb. N. C. 326. In the latter case, it was held that a demand for the exhibition of the stock book is not sufficient as a demand for the transfer book.

§ 34. Annual report to secretary of state. Every domestic stock corporation and every foreign stock corporation doing business within this state, except moneyed and railroad corporations, shall annually, during the month of January, or, if doing business without the United States, before the first day of May, may make a report as of the first day of January, which will state:

1. The amount of its capital stock, and the proportion actually issued.

2. The amount of its debts or an amount which they do not exceed. 3. The amount of its assets or an amount which its assets at least

equal.

4. The names and addresses of all the directors and officers of the company, and in the case of a foreign corporation, the name also of the person designated in the manner prescribed by the code of civil procedure, as a person upon whom process against the corporation may be served within this state.

Such report shall be made by the president or a vice-president or the treasurer or a secretary of the corporation and shall be filed in the office of the secretary of state. If such report be not so made and

filed, any such officer who shall thereafter neglect or refuse to make and to file such report, within ten days after written request so to do shall have been made by a creditor or by a stockholder of the corporation, shall forfeit to the people the sum of fifty dollars for every day he shall so neglect or refuse.

(L. 1890, ch. 564, § 30, as amended by L. 1892, ch. 2, § 1, and ch. 688, § 30; L. 1897, ch. 384, § 2; L. 1901, ch. 354, § 1; L. 1905, ch. 415, § 1.

1. The object of this section is stated in Cincinnati Cooperage Co. v. O'Keefe, 44 Hun, 64.

2. The purpose for which the annual reports are required, stated. Pier v. Hanmore, 36 N. Y. 101; Walton v. Godwin, 58 Hun, 91, 33 N. Y. St. Rep. 886, 11 N. Y. Supp. 391; Torbett v. Godwin, 41 N. Y. St. Rep. 323.

3. As soon as a director parts with all beneficial interest in, and control over, the stock which the statute, section 2, chapter 567 of 1890, requires him to hold, and requests the officers of the corporation to make a proper transfer of such stock on the books of the company, he ceases to be a director, and is not liable to creditors by reason of any subsequent failure to file the report under this section. Chemical Nat. Bank v. Colwell, 43 N. Y. St. Rep. 876.

4. A corporation is not liable for the acts of its trustees, done prior to the filing of the articles of incorporation and not ratified by it. Berridge v. Abernethy, 24 W. Dig. 513.

5. The filing of the certificate in the county clerk's office, immediately followed by user, renders the company a corporation de facto, and imposes upon it the duty of making and publishing a report. Meridan Tool Co. v. Morgan, 1 Abb. N. C.

125n.

6. The duty, imposed by this section, of making and filing an annual report, is a corporate duty. Cornell v. Roach, 101 N. Y. 373, 5 N. E. 52. This duty is not cast upon the trustees, either as such or in their individual capacity. Id. 7. The provisions of this section, as to time of making and filing the report, is not complied with by doing so within twenty days before the first of January, though it is regular in other respects. Cincinnati C. Co. v. O'Keefe, 120 N. Y.

603, 24 N. E. 993.

8. Good faith on the part of the directors is making and filing the report prematurely is no defense to the liability imposed upon them for non-compliance with this provision. Cincinnati C. Co. v. O'Keefe, 120 N. Y. 603, 24 N. E. 993. See S. I. M. R. R. Co. v. Hinchcliffe, 170 N. Y. 473, 63 N. E. 545; Sheppard v. Fulton, 171 N. Y. 184, 63 N. E 966.

35. Liability of officers for false certificates, reports or public notices. If any certificate or report made or public notice given by the officers or directors of a stock corporation shall be false in any material representation, the officers and directors signing the same shall jointly and severally be personally liable to any person who has become a creditor or stockholder of the corporation upon the faith of any such certificate, report, notice or any material representation

therein to the amount of the debt contracted upon the faith thereof if not paid when due, or the damage sustained by any purchaser of or subscriber to its stock upon the faith thereof. The liability imposed by this section shall exist in all cases where the contents of any such certificate, report or notice or of any material representation therein shall have been communicated either directly or indirectly to the person so becoming a creditor or stockholder and he became such creditor or stockholder upon the faith thereof. No action can be maintained for a cause of action created by this section unless brought within two years from the time the certificate, report or public notice shall have been made or given by the officers or directors of such corporation.

(L. 1890, ch. 564, § 31, as amended by L. 1892, ch. § 31.)

1. As to liability under this section, see N. Y. Law Review, No. 1, vol. 1, pp. 14, 15.

2. This section must be strictly construed. 17 N. Y. Supp. 46, 27 Abb. N. C. 444.

Torbett v. Godwin, 62 Hun, 407,

3. The liabilities imposed upon trustees for making false reports, and allowing the indebedtness of the corporation to exceed its capital stock, are in their nature penal, and each act of this character enters into and becomes a separate cause of action. Anderson v. Speers, 8 Abb. N. C. 382.

4. A trustee, who has not signed the report, is not liable under this section. Bonnell v. Wheeler, 3 T. & C. 557.

5. An action under this section is local and must be tried in the county where the cause of action, or some part thereof, arose. Veeder v. Baker, 83 N. Y. 156.

ARTICLE IV.

STOCK AND STOCKHOLDERS.

SECTION 50. Issue and transfers of stock.

51. Transfers of stock by stockholder indebted to corporation.
52. Purchase of stock of other corporations.

53. Subscriptions to stock.

54. Time of payment of subscriptions to stock.

55. Consideration for issue of stock and bonds.

56. Liabilities of stockholders.

57. Liabilities of stockholders to laborers, servants or employees.

58. Non-liability in certain cases.

59. Limitation of stockholder's liability.

60. Partly paid stock.

61. Preferred and common stock.

62. Increase or reduction of capital stock.

63. Notice of meeting to increase or reduce capital stock.

64. Conduct of such meeting; certificate of increase of reduction.

65. Change in par value of shares.

66. Prohibited transfers to officers or stockholders.

67. Application to court to order issue of new in place of lost certifi

cate of stock.

68. Order of court upon such application.

69. Financial statement to stockholders.

70. Liabilities of officers, directors and stockholders of foreign corpo

rations.

8 50. Issue and transfers of stock. The stock of every stock corporation shall be represented by certificates prepared by the directors and signed by the president or vice-president and secretary or treasurer and sealed with the seal of the corporation, and shall be transferable in the manner prescribed in this chapter and in the by-laws. No share shall be transferable until all previous calls thereon shall have been fully paid in.

(L. 1890, ch. 564, § 40, as amended by L. 1892, ch. 688, § 40; L. 1902, ch. 601, § 1.)

1. The capital stock is the money contributed by the corporators to the capital, and is usually represented by shares issued to the subscribers to the stock on the initiation of the corporate enterprise. Christensen v. Eno, 106 N. Y. 97, 60 Am. Rep. 429, 12 N. E. 648; Burrall v. Bushwick R. R. Co., 75 N. Y. 211.

2. Where a certificate is filled out and signed by the president and secretary it constitutes the person named in it a holder of the shares specified therein,

although the corporate seal is not affixed and it is not detached from the certificate book. Halstead v. Dodge, 51 Superior Ct. 169; aff'd 103 N. Y. 636.

3. While a corporation may not purchase or deal in the stock of other corporations, unless expressly authorized by law so to do, it may take title to such stock in payment of a debt owing to it. The Holmes and Griggs Mfg. Co. v. The Holmes & Wessell Metal Co., 127 N. Y. 252, 24 Am. St. Rep. 448, 27 N. E. 831.

4. An agreement of a State bank to subscribe for the stock of a railroad is not authorized by statute and is against public policy; and so long as it is execu tory the bank cannot enforce it. Nassau Bank v. Jones, 95 N. Y. 115, 47 Am.

Rep. 14.

5. "The property of every stock company consists of three things, its capital existing in money or property, its surplus if any, and its franchise. These, which are several in the ownership of the company, are united in the ownership of the stockholders, and the share stock or capital stock as owned by the shareholders covers all three." People ex rel. U. S. Trust Co. v. Coleman et al, 126 N. Y. 433, 12 L. R. A. 762, 27 N. E. 818.

51. Transfers of stock by stockholder indebted to corporation. If a stockholder shall be indebted to the corporation, the directors may refuse to consent to a transfer of his stock until such indebtedness is paid, provided a copy of this section is written or printed upon the certificate of stock.

§ 52. Purchase of stock of other corporations. Any stock corporation, domestic or foreign, now existing or hereafter organized, except moneyed corporations, may purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any corporation, domestic or foreign, and issue in exchange therefor its stock, bonds or other obligations if authorized so to do by a provision in the certificate of incorporation of such stock corporation, or in any certificate amendatory thereof or supplementary thereto, filed in pursuance of law, or if the corporation whose stock is so purchased, acquired, held or disposed of, is engaged in a business similar to that of such stock corporation, or engaged in the manufacture, use or sale of the property, or in the construction or operation of works necessary or useful in the business of such stock corporation, or in which or in connection with which the manufactured articles, product or property of such stock corporation are or may be used, or is a corporation with which such stock corporation is or may be authorized to consolidate. When any such corporation shall be a stockholder in any other corporation, as herein provided, its president or other officers