ment, they shall be personally liable for all claims and demands. against such corporation.

3. By-laws for the government of the corporation, and for the distribution of its net earnings among its workmen, patrons, and shareholders, not inconsistent with the constitution and laws of the state, may be made by the stockholders. 81 O. L. 54.

Two sections bearing these numbers, each covering a different subject, are in force.

§ 3245a (2). Application for appointment of inspectors of election-Notice—

Within fifteen days next before any meeting held for the election of directors or trustees, or for the determination of any question, by the stockholders of any corporation, or by the subscribers to its stock, or by its creditors and stockholders for its reorganization, any person or persons entitled to vote at said meeting and owning at least a one-tenth interest in its stock may apply to the court of common pleas of the county wherein said meeting is to be held, or, if the court be not in session, to a judge thereof, or, in case of the absence or disability of such judge, then to the probate court, for the appointment of inspectors for such meeting; but no such application shall be acted upon until notice thereof has been served upon the corporation at its general office; and the court or judge may require such additional notice by newspaper publication, or otherwise, as may be deemed proper. 84 O. L. 15.

§ 3245b(2). Appointment of inspectors-Vacancies

Upon the hearing of such application the court or judge shall appoint three competent disinterested persons inspectors for such meeting, if such appointment be considered proper and right, and for good cause may thereafter vacate such appointment as to one or more of said persons and appoint another or others instead. In case of the failure of any inspector to attend said meeting, or to act thereat, the stockholders may fill the vacancy so caused. 84 O. L. 115.

§ 3245c. List of stockholders to be delivered to inspectors-Stock ownership how ascertained—

Before every such meeting it shall be the duty of the officer or the agent of the corporation having charge of the transfer of its

stock, to make out, under oath, a list of its stockholders, showing the number and classes of share, held by each, as shown by its books, on the date fixed for closing the stock transfers before its meetings; and if no time be fixed therefor, then on the tenth day prior to the date of such meeting. Such list shall be delivered to the inspectors of the meeting, and shall be prima facie evidence of the ownership of its stock; but in case of its absence the inspectors shall ascertain the ownership of stock by the corporation books, stock certificates or other satisfactory proof. 84 O. L. 115.

§ 3245d. Conduct of election by inspectors-Certificate of result

The inspectors so appointed, or if none be appointed, then those selected by the meeting, shall receive and count the votes cast at such meeting, or at any adjournment thereof, either upon an election, or for the decision of any question to be decided by vote, and determine the result, and their certificate of result shall be prima facie evidence thereof. 84 O. L. 115.

§ 3245e. Compensation of inspectors

The court or judge making the appointment of inspectors may fix their compensation, and may require the applicants for their appointment to secure its payment; but the corporation shall be liable therefor if the meeting by vote so determine. 84 0. L. 115.

§ 3246. Annual and other elections for trustees and di

rectors

Unless the regulations of the corporation otherwise provide, an annual election for trustees or directors shall be held on the first Monday in January of each year; if trustees or directors are, for any cause, not elected at the annual meeting, or other meeting called for that purpose, they may be chosen at a members' or stockholders' meeting, at which all the members or stockholders are present in person or by proxies, or at a meeting called by the trustees or directors, or any two members or stockholders, notice of which has been given, in writing, to each stockholder, or by publication in some newspaper printed in the county where the corporation is situate, or has its principal office, for ten days ; and trustees and directors shall continue in office until their suc

cessors are elected and qualified. Except that any corporation, the principal object of which is the owning and operating of a club-house for the use of its stockholders, the club-house of which is not kept open and operated for the use of its stockholders during the winter season, shall hold its annual election of directors on the third Monday in July of each year, and such election shall be held at the club-house owned and operated by such corporation. 94 O. L. 374.

See note to form under this section.

Where the stockholders' meeting is stated and general notice of the time and place of holding it, or of the business to be transacted, is, in the absence of provision or regulation to the contrary, in no case required. State v. Bonnell, 35 Ohio St. 10. An adjourned meeting is simply a continuation of the regular meeting, and notice to the stockholders of the holding of such adjourned meeting is not necessary; and any business commenced at the regular meeting may be completed at an adjourned meeting. Ib.; Wiswell v. First Cong. Church, 14 Ohio St. 31. But when the corporation was restrained from holding an election for directors on the day named in the charter, and a small number of the stockholders met, organized and adjourned till the next day, at which time an election was held by a minority of the stockholders, without notice to others who were in the vicinity for the purpose of the meeting, and might have been readily notified: Held, that such election was unfair, and must be held to be invalid, whether the restraining order did or did not bind the stockholders; and the directors chosen at such adjourned meeting were ousted, and those elected at the preceding annual election were restored to office, to continue therein till their successors were duly elected and qualified. Ib.

Election may be had, though property sold by receiver. State v. Merchant, 37 Ohio St. 251.

To vote more than once at such election is not a criminal offense. Lane v. State, 39 Ohio St. 314.

The validity of the election of a director does not depend upon what he may contemplate doing when elected. Railway Co. v. State, 49 Ohio St. 668.

Where at a meeting it is understood that the election be postponed until an hour agreed on, or that takes place which justifies the holders of a majority of stock in such understanding an election held by minority stockholders, parties to such arrangement, in the absence of the other parties, and prior to such time agreed on, will not be upheld. State v. Smalley, 7 C. C. 400.

§3247. Oath and duties of trustees and directors

Each trustee and director shall, before entering upon his duties, take an oath faithfully to discharge the same; the trustees or directors chosen at any election shall, as soon thereafter as convenient, choose one of their number to be president, and, un

less the regulations otherwise provide for the election of such officers, shall appoint a secretary and treasurer of the corporation; and a majority of the trustees or directors shall form a board.

A president pro tem. has no power, without special authority from the directors, to execute an assignment for benefit of creditors, or a mortgage, for the corporation. Bank v. Bank, 3 C. C. 516.

The president of a corporation has no power by virtue of his office to execute a judgment note for the corperation; but such act may be authorized or ratified. Smead Foundry Co. v. Chesbraugh, 18 C. C. 783.

A committee, duly empowered by a corporation to negotiate a sale of bonds, have power to employ a broker to sell same, who may recover the reasonable value of such services. But a sale at less than par is not authorized in absence of authority from the board of directors. East Clev. Ry. Co. v. Everett, 15 C. C. 181.

But president has no power by virtue of his office, nor as general manager of company's routine business, to sell the bonds or employ another to do so; nor would such contract of hiring be brought to notice of board of directors or be ratified by the fact that two directors knew of efforts to sell and were present when some of the bonds were delivered to purchasers. Duty of borrowing money and mortgaging property is placed upon the board of diEast Clev. Ry. Co. v. Everett, 19 C. C. 205.

rectors.

A person holding one share may serve as director, although he has given an option, not yet exercised, to sell his share at a price named. Kuhn v. Woolson Spice Co., 13 C. C. 547.

Directors are personally liable for loss of corporate assets through their gross negligence. Miesse v. Loren, 5 N. P. 307 (C. P.).

§ 3248. Powers of the board of trustees and directors— The corporate powers, business and property of corporations formed under this title must be exercised, conducted and controlled by the board of directors, or, where there is no capital stock, by the board of trustees; a majority of the directors must be citizens of the state; all directors, and all executive officers, must be holders of stock in an amount to be fixed by the by-laws, and trustees of corporations must be members thereof; and whenever the office of director or trustee becomes vacant, the board of directors or trustees may fill the same for the unexpired term by appointment, unless the by-laws otherwise provide; and no person shall be appointed or act as a receiver of any railroad or other corporation within this state unless he is a resident citizen. of this state.

Corporations are trustees for the individuals of which they are composed, and those who act for the corporation are trustees for it, and cannot apply

the corporate property to any other purpose than for the general interests of the corporation and its creditors. Taylor v. Exporting Co., 5 Ohio, 162. The creditors and stockholders may pursue the property of the corporation which has been fraudulently or wrongfully disposed of by the directors, into the hands of all purchasers with notice, and assert their lien upon it, or their claims for its value. Goodin v. Canal Co., 18 Ohio St. 169. And the officers, agents and assenting stockholders of a corporation, who, in the exercise of powers not granted to the corporation, occasion injury to others, are liable in damages therefor. Medill v. Collier, 16 Ohio St. 599; Kearney v. Buttles, 1 Ohio St. 362; Lawler v. Burt, 7 Ohio St. 340, where the unauthorized issue of notes as money by a corporation was held to make the stockholders liable in tort, overruling Lawler v. Walker, 18 Ohio, 151.

Where agent of corporation makes contract for services and property for use of company, which is performed by the other party, the company deriving the benefit, such company cannot refuse to perform on ground that the agent was not authorized to stipulate for payment in the mode specified in contract. Powell Tool Co. v. McDonald, 13 B. 64.

Mere irregularities in organizing a corporation will not deprive the officers and stockholders of the protection of the charter, but such organization, to protect them, must be substantially in accordance with the charter. Bartholomew v. Bentley, 1 Ohio St. 37. Where the charter provided that stockholders only should be elected directors, persons having no interest in the stock, but fraudulently and collusively receiving the transfer of a share to qualify them, are not eligible, and the stockholders combining in such fraud have no power to confer upon them authority to do corporate acts; and such fraud upon the charter, and combination to defraud the public, will prevent those participating in it from claiming any protection under its provisions, to escape private responsibility. Ib. A board of directors has no power to fill vacancies after so long a period since the last election that the delay must be regarded as an abandonment or resignation of the office. Ib. The acts of a board with less than a quorum are voidable, not void. Rolling Stock Co. v. R. R. Co., 34 Ohio St. 450.

Corporation may borrow money to pay debts and carry on business, and may mortgage all its property to secure such loans; such mortgage executed by president and secretary, though without knowledge of other directors, is valid in hands of mortgagee without knowledge of that fact; creditor is not bound to inquire whether meeting held and formal resolution passed. Bosche v. Toledo Display Horse Co., 14 C. C. 289.

Question whether a director may buy property of corporation at foreclosure sale, discussed. Secor, Trustee, v. Maumee Rolling Mill Co., 1 N. P. 100 (C. P.).

Executory contract between director and corporation is voidable at option of corporation. Browne v. U. S. Co., 6 N. P. 254 (C. P.).

Corporation cannot become a partner. Merchants' Bank v. Standard Wagon Co., 6 N. P. 264 (Sup. Ct., Cin.).

A corporation duly organized continues to have corporate existence until dissolved under the statute. Removal of plant and directors to another state does not end the corporation. Lattimer v. Mosaic Glass Co., 13 C. C. 163.