der any doctrine of the common law to vary the contract entered into between them and the directors that the latter shall hold office for a given period; and no power of removal exists unless expressly conferred by statute or charter.1 Illegal acts by newly e'ected directors cannot operate to re nstate their predecessors. And a director may bring an action against the company and his codirectors for wrongfully excluding him from acting as a director.3 But where a meeting of the shareholders has power to remove directors for reasonable cause, the court will not interfere in the absence of fraud, on the ground that the cause was not such as a court of justice would think reasonable. But while in the absence of statutory or charter authority, the shareholders cannot remove the directors by direct proceedings, yet illegally electe l directors may be restrained from exercising the duties of the office, and in an action for that purpose the legality of their election may be inquired into. Thus, illegally elected directors may be restrained by injunction from selling a shareholder's stock for non-payment of calls, and from making future calls; and in a bill filed for that purpose by a shareholder, the legality of their election may be collaterally inquired into, although a bill could not be brought directly for the purpose of setting the election aside. In the case last cited it was sought also to enjoin the directors from using the property of the company for the purpose of extending the railway, upon the ground that the proposed extension was unauthorized and against the wishes of a majority of the shareholders; but it was decided that a permanent injunction would

not be granted therefor in the absence of allegations that the extension was ultra vires, or in breach of trust. When, however, the shareholders have the power to remove the directors, the court will not restrain them from performing the duties of their office. To remove an officer of a private corporation on the ground that the meeting at which he was elected was illegal, and that as to the time for holding such meeting he deceived the relators, the information must not necessarily contain an averment that had the relators been present they would have voted against him." When an action to set aside an election of directors is maintainable, it may be brought by a shareholder, even though when the election took place he was not entitled to vole, by reason of not having been registered as a shareholder for the requisite time before the meeting. Agents holding office at the pleasure of superior officers may be dismissed without cause."

1 Beardsley v. Johrson, 1 N. Y. Suppl. 608; Ex parte Paine, 1 Hill, 665; State v. Bryce, 7 Co, (pt. 2d), 82; Imperial etc. Hotel Co. v. Han. pson, 23 Ch. Div. 1, 7; Cook on Stock & Stockh. § 627. Contra, Bury v. McDonald, 3 Freem. Ch. (Miss.) 151.

2 Beardsley v. Johnson, 1 N. Y. Suppl. 608.

3 Pulbrook v. Richmond Mining Co. 9 Ch. Div. 610.

4 Inderwick v. Snell, 2 Macn. & G. 217; Browne & Theobald's Railway Law, 101.

5 Moses v. Tompkins. 84 Ala. 613; 4 R'y & Corp. Law J. 268.

6 Moses v. Tompkins, 84 Ala. 613; 4 R'y & Corp. Law J. 268.

7 Moses v. Tompkins, 84 Ala. 613; 4 R'y & Corp. Law J. 268.

8 Hattersley v. Earl of Shelburne, 10 Week. R. 881; 31 Law J. Ch. 873; Browne & Theobald's Railway Law, 104.

9 Armington v. State, 95 Ind. 421.

10 Wright v. Central California etc. Co. 67 Cal. 532.

11 Hunter v. Sun Mutual Ins. Co. 26 La. An. 13.

$ 464

Of supplying vacancies. The manner

of supplying vacancies upon the board of directors

2

is generally regulated by the by-laws of the company.1 Provision is sometimes made for vacancies, by statute or charter, by authorizing the directors to fill vacancies temporarily, until the next regular meeting of the shareholders, or for the unexpired terms of those in whose place they are elected, Thus, under the Companies' Clauses Act of 145, it is provided that if any director die, or resign, or become disqualified or incompetent to act as a director, or cease to be a director by any other cause than that of going out of office by rotation, as therein provided, the remaining directors if they think proper so to do, may elect in his place some other shareholder, duly qualified to be a director; and the shareholder so elected to fill up any such vacancy shall continue in office as a director so long only as the person in whose place he shall have been elected would have been entitled to continue if he had remained in office. When such authority is conferred upon the directors, it is exclusive, and the vacancies cannot be filled by the stockholders at a special meeting. But, where the vacancies have reduced the directors to a number less than the minimum prescribed by the aricles of association as necessary to constitute a board, although there remain a number sufficient to constitute a quorum, if a legally constituted board were in existence, they cannot validly elect new directors to fill the vacancies.5 Thus, where five of seven directors designated by the act of incorporation became disqualified to serve, it was held that the two remaining directors could not fill the vacancies thereby occasioned. The corpora

6

3

tion is not, however, thereby dissolved, for a board of directors is not essential to corporate existence.'

1 See N. Y. Laws of 1850, ch. 140, § 5, where it is enacted that "vacanc'ts in the board of directors shall be filled in such manner as shall be proscribed by the by-laws of the corporation.

2 Ala. Code, $ 1924. See Moses v. Tompkins and Moses v. Woodson (reported together, Ala. 1883), 4 R'y & Corp. Law J. 268.

3 8 Vict. ch. 16, § 89.

4 Moses v. Tompkins and Moses v. Woodson (reported together, Ala. 1883). 4 R'y & Corp. Law J. 238, 270, citing Gashwiler v. Willis, 33 Cal. 11; 91 Am. Dec. 607.

5 Foure Electric Co. v. Phillipart (Q. B. Di. 1898), 4 R'y & Corp. Law J. 319, 322, citing Bottomley's case, 16 Ch. Div. €81.

6 Moses v. Tompkins, 84 Ala. 613; 4 R'y & Corp. Law J. 263.

7 Moses v. Tompkins, 84 Ala. 613; 4 R'y & Corp. Law J. 238.

§ 465. Directors' meetings-Of the place and time. While a corporation may not validly transact any business relating to its internal polity beyond the limits of the incorporating State, it may act in foreign States through the medium of its agents; and directors, being merely corporate agents, may lawfully hold meetings in a foreign State. It would certainly be an extraordinary anomaly if, while by the comity prevailing between the States the corporation is allowed through its agents to conduct its business in a State other than that from which it derives its charter, it could disavow the acts of those whom it has appointed to direct its business in another State, on the ground that the votes by which they were done were passed in that State. In England, it is enacted by the Companies' Clauses Act of 1845 that the directors shall hold meetings at such times as they shall ap point for the purpose, and they may meet and adjourn as they think proper from time to time, and from place to place; that at any time any two of the directors may require the secretary to call a meeting of

the directors, and in order to constitute a meeting of directors there shall be present at the least the quorum prescribed in the act of incorporation, and when no quorum shall be prescribed in the act of incorporation, there shall be present at least one-third of the directors; that all questions at any such meeting shall be determined by the majority of votes present, and in case of an equal division of votes the chairman shall have a casting vote in addition to his vote as one of the directors.1

1 Saltmarsh v. Spaulding (1888), 147 Mass. 224, 4 R'y & Corp. Law J. 151, 153, distinguishing Miller v. Ewer, 27 Mo. 509, 46 Am. Dec. 619, which only holds that a corporation chartered in one State may not organize in another State. See, also, Angell & Ames on Corporations, § 274.

2 Galveston Railroad v. Cowdery, 11 Wall. 459, 476; Smith v. Alvord, 63 Barb. 415; Wood Hydraulic etc. Co. v. King, 45 Ga. 34; McCall v. Byram Manuf. Co. 6 Conn. 428; Armes v. Conant, 36 Vt. 744; Ohio etc. R. R. Co. v. McPherson, 35 Mo. 13; 86 Am. Dec. 128; Bellows v. Todd, 39 Iowa, 209, 217; Wright v. Bundy, 11 Ind. 398, 404.

3 Saltmarsh v. Spaulding, 147 Mass. 224, distinguishing Miller v. Ewer, 27 Me. 509, 46 Am. Dec. 619, cited by Angell & Ames on Corporations, § 274; but which only holds that a corporation cannot organize in another State.

4 8 Vict. ch. 16, § 92.

§ 466. Directors' meetings - Of notice. - A quorum of a board of directors can act for the company only at a meeting of the board duly summoned with proper notice.1 Provision is often made in the by-laws of the company with respect to notice of directors' meetings, and the matter is sometimes regulated by statute. Thus, under the California civil code,2 it is required, that "when no provision is made in the by-laws for regular meetings of the directors and the mode of calling special meetings, all meetings must be called by special notice in writing, to be given to each director by the secretary." Under such a statute an adjourned meeting is considered a special meeting, and ac

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