454. Waiver of irregularities and illegality. Irregularities in the proceedings of stockholders' meetings may be waived by a failure to enter a prompt protest against them.' Neither a shareholder himse:f, nor the transferree of a shareholder,2 who participated in the proceedings of a corporate meeting alleged to be illegal or fraudulent, or who was guilty of negligence, as, for example, by failing to challenge illegal votes, or who has acquiesced in the result, has any equitable right to have the proceedings set aside."

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1 State v. Lehre, 7 Rich. 231, 325; Prettyman v. Tazewell Co. 19 Ill. 406; 71 An. Dec. 23); King v. Trevenen, 2 Barn. & Ald. 339; Mosgrave v. Nevinson, 2 Raym. Ld. 1358.

2 In re Syracuse etc. R. R. Co. 91 N. Y. 1.

3 Wiltz v. Peters, 4 La. An. 339.

4 Wiltz v. Peters, 4 La. An. 339.

5 In re Chenango etc. Ins. Co. 19 Wend. 635. Cf. The Schoharie Valley R. R. Case, 12 Abb. Pr. N. S. 394.

6 Wiltz v. Peters, 4 La. An. 339. 7 Cook on Stock & Stockh. § 616.

§ 455. The presumption omnia rite acta, applicable to corporate meetings.-The presumption is in favor of the regularity of corporate meetings.1 Accordingly, if the minutes be silent as to the mode in which officers were elected, it will be presumed that they were chosen in the manner required by law, until evidence to the contrary be produced. In England, by the Companies' Clauses Act of 1845, it is provided, that whenever in that act, or in the special act of incorporation, the consent of any particular majority of votes at any meeting of the company is required in order to authorize any proceeding of the company, that particular majority shall only be required to be proved in the event of a poll being demanded at the meet

ing; and if a poll be not demanded, then a declaration by the chairman that the resolution authorizing the proceeding has been carried, and an entry to that effect in the book of proceedings of the company, shall be sufficient authority for such proceding, without proof of the number or proportion of votes recorded in favor of or against the same.3 But, independently of statutory enactment, the minutes of corporate meetings are received as prima facie evidence of the statements therein contained. Thus, when the books of a corporation, or of its board of directors, in the minutes of a meeting state that a certain proposition was passed, it is prima facie evidence that it passed regularly, having the requisite vote, a majority, or two-thirds, as the case may be. For the minutes of corporate meetings are seldom kept with nice accuracy of detail. Results reached are usually about all that is stated. Accordingly, "the presumption in favor of the regularity of proceedings of meetings of corporations and boards of directors is almost a matter of necessity." If the minutes of a corporation state that certain business was transacted at a special meeting duly called, and that proper notice was given, it will be presumed that a quorum was present. Where the record showed that a quorum was present at a corporate meeting, it will be presumed that all the members were notified. "The presumption omnia rite acta covers a multitude of defects 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.”

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1 Blanchard v. Dow, 32 Me. 557; Ashtabula etc. R. R. Co. v. Gardiner, 1 Ch. Div. 13, and cases cited infra.

2 Beardsley v. Johnson (1888), 49 Hun, 607; Hathaway v. Addison, 48 Me. 440.

3 8 Vict. ch. 16, § 80.

4 Heintzelman v. Druids' Relief Assoc. 38 Minn. 138; 4 R'y & Corp. Law J. 356; McDaniels v. Flower Brook Manuf. Co. 22 Vt. 274; Sanborn v. School District, 12 Minn. 17; Isbell v. Railroad Co. 25 Conn. 556.

5 Heintzelman v. Druids' Relief Assoc. 38 Minn. 138; 4 R'y & Corp. Law J. 356; McDaniels v. Flower Brook Manuf. Co. 22 Vt. 274.

6 Heintzelman v. Druids' Relief Assoc. 38 Minn. 138; 4 R'y & Corp. Law J. 356.

7 Insurance Co. v. Sortewell, 8 Allen, 223; Baile v. Educational Soc. 47 Md. 117.

8 Lane v. Brainerd, 30 Conn. 565; Insurance Co. v. Holmes, 68 Mo. 601; Sargent v. Webster, 13 Met. 497; 46 Am. Dec. 743.

9 Sargent v. Webster, 13 Met. 497; 46 Am. Dec 743. Acc. Porter v. Robinson, 3) Hun, 209; Medical and Surgical Society v. Weatherly, 75 Ala. 248: Sargent v. Webster, 13 Met. 497; 46 Am. Dec. 743; McDaniels v. Flower Brook Manuf. Co. 22 Vt. 274. Cf. Lane v. Brainerd, 30 Conn. 565; Pitts v. Temple, 2 Mass. 538; Copp v. Lamb, 12 Me. 312.

CHAPTER XIX.

DIRECTORS, OFFICERS AND AGENTS.

§ 456. Of the number of directors.

§ 457. Qualifications of directors at common law.

Statutory qualifications of directors.

§ 460. Disqualification after election.

§ 458.

§ 459.

The election of an unqualified person voidable merely.

§ 462.

§ 463.

Of the removal of directors, officers and agents.

Of the term of office of directors-Expiration of, not a revocation of authority of agent-Holding over.

§ 465. Directors' meetings-Of the place and time.

§ 466. Directors' meetings-Of notice.

§ 467. Directors' meetings - Organization-Proceedings-Minutes-Presumption of regularity.

§ 468.

§ 469.

§ 470.

The extent of the powers of directors-The general rule.
The same subject, continued-Certain powers enumerated.
The same subject, continued-Certain acts not to be done by the
directors.

§ 471.

The discretion of directors not to be questioned.

§ 472.

The discretionary powers of directors not to be delegated.
Of the delegation of powers to committees-The English statute.
The appointment of agents need not be under seal, nor by formal
vote.

§ 473.

§ 474.

§ 475. The fiduciary relation of directors to the corporation and its cred

itors.

§ 476. Of transactions between two companies having directors in com

mon.

§ 477. Of transactions between directors and the corporation.

§ 478. Of loans made by the directors to the corporation.

§ 479.

§ 480.

Of secret profits by directors in dealings with the corporation.
Of the company's election to avoid or enforce transactions with
directors.

§ 481. Directors to be restored to their original position when the transaction is set aside.

§ 482. Of the president

$483. The same subject, continued.

§ 431.

Of the compensation of directors and the president.
Of the compensation of other officers and agents.

§ 433.

§ 436.

The degree of diligence required of directors, officers and agents. § 437. Directors not personally liable on contracts within their power to make.

§ 408. Indemnification of directors.

§ 483.

Liability of directors upon contracts beyond their own and the corporate powers.

§ 490. The same subject, continued-Upon debts beyond the charter or statutory limit.

§ 491. Liability of directors, officers and agents for fraudulent and illegal

acts.

§ 492. Liability of directors for the misfeasance of their appointees.

§ 493.

Of the joint and several liability of directors.

§ 434.

Of contribution between directors jointly liable.

§ 435.

Liability of directors under the New York Penal Code.

§ 496.

Liability of directors, officers and agents under the New York
Penal Code.

§ 497. Directors and officers prohibited from gambling in the securities of the company.

§ 498. Of de facto directors, officers and agents.

§ 456. Of the number of directors.-The board of directors of every corporation formed under the General Railroad Act of New York consists of thirteen members.1 But the board of directors of a road not exceeding twenty miles in length may consist of seven of its stockholders. In England, where the company shall be authorized by the special act of incorporation to increase or to reduce the number of the directors, it shall be lawful for the company, from time to time, in general meeting, after due notice for that purpose, to increase or reduce the number of directors within the prescribed limits, if any, and to determine the order of rotation in which such reduced or increased number shall

go