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different States to the same corporation is to be construed. It cannot be understood literally, as the Constitution of the United States forbids a State, without the consent of Congress, to enter into any agreement or compact with another State. The effect of such concurrent legislation is not to make the body a corporation of two States, created by their joint act, but to make the same body a corporation of each State.2

A grant of authority to a foreign corporation, to exercise its franchises and hold property in a State, does not confer jurisdiction on the courts of the foreign State as to such property. Thus, where two corporations of different States are consolidated under lawful authority, one of which was subject in one State to a mortgage prior to such consolidation, the courts of the other State do not thereby acquire jurisdiction so as to enforce a foreclosure of the mortgage.3

Where a railroad, lying partly in one State and partly in another, is subject to a mortgage, the courts of one State, having jurisdiction of the mortgagor and trustees under the mortgage, may order the sale of the road as an entirety; but such sale would be subject to liens existing in the other State.1

A consolidated railroad corporation, formed by the union of two corporations, each created by a different State, is, so far as property and business within each State are concerned, subject, unless otherwise provided in the act of consolidation, to the same control therein as before, and in each State is to be treated as a domestic corporation. It is, as to property within each State, subject, in the appointment of receivers and otherwise, to the jurisIdiction of its courts.7 The Circuit Court of the United States, for a district in one State, has been held to have jurisdiction to

1 Art. I. § 10. See Union Branch R. Co. v. East Tenn. & G. R. Co., 14 Ga. 327; Covington v. Covington & C. Bridge Co., 10 Bush, 69, 79.

2 Quincy Bridge Co. v. Adams County, 88 Ill. 615; McGregor v. Erie R. Co., 6 Vroom, 115; State v. Metz, 3 Vroom, 199; Sprague v. Hartford, P., & F. R. Co., 5 R. I. 233; Chicago & N. W. R. Co. v. Chicago & P. R. Co., 6 Biss. 219.

457.

Eaton & H. R. Co. v. Hunt, 20 Ind.

4 McElrath v. Pittsburg & S. R. Co., 55 Pa. St. 189, Muller v. Dows, 94 U. S.

444; Hand v. Savannah & C. R. Co., 12 S. C. 314, 366; Mead v. New York, H., & N. R. Co., 45 Conn. 199.

5 Peik v. Chicago & N. W. R. Co., 94 U. S. 164.

6 Sage, In re, 70 N. Y. 220; Muller v. Dows, 94 U. S. 444.

7 United States Rolling-Stock Co., In re, 57 How. Pr. 16, 55 How. Pr. 286; Taylor v. Atlantic & G. W. R. Co., 57 How. Pr. 9, 55 How. Pr. 275; Ellis v. Boston, H., & E. R. Co., 107 Mass. 1; Richardson v. Vt.. & M. R. Co., 44 Vt. 613.

appoint a receiver for an entire line, whether lying within or without the State.1

A corporation which has received similar charters from different States may be dissolved and wound up in each one without its franchise in the other States being affected. Its charter may be amended in one State, so as to control its action and property therein, although the amendment may be contrary to some statutory or constitutional provision of another State which has granted it a charter.3

1 Wilmer v. Atlanta & R. A. L. R. Co.,

2 Woods, 409.

2 Hart v. Boston, H., & E. R. Co., 40 Conn. 524.

3 Covington v. Covington & C. Bridge R. Co., 10 Bush, 69.

CHAPTER II.

THE DIRECTION OF THE CORPORATION.

THE affairs of commercial or business corporations are conducted by a board of official managers, usually called directors. As the corporation is only a legal existence and not a living personality, the directors become, in a practical sense, the corporation itself, so far, at least, as its relations to the public are concerned.1 The right to elect such officers is inherent in the body; but their number and the mode of their election are usually prescribed by statute.2 In the case of corporations organized under a general law, a provisional board of directors with limited powers is usually to be named in the articles of association.8

Qualifications of Directors and Voters. The qualifications of directors, unless prescribed by statute, may be determined by the corporation. The director need not be a stockholder where the statute or by-laws are silent as to such a requirement. If he is required to be such, he may qualify between his election and acceptance; and if he appears by the books to be an owner of stock, he is eligible for the office, although the beneficial interest is in another.6

The books of the corporation, containing the names of the stockholders, determine who are entitled to vote at its meetings. The right to vote depends on the record title, and not on the actual ownership.8 The corporation may, by bylaws, regulate the voting upon stock except as provided by

1 Perkins v. New York Cent. R. Co., 24 N. Y. 196, 213; Steinweg v. Erie R. Co., 43 id. 123, 126; Burrill v. Nahant Bank, 2 Met. 163. Legally the directors are distinct from the corporation. Ellis v. Boston, H., & E. R. Co., 107 Mass. 1, 13.

2 Hughes v. Parker, 20 N. H. 58; Brewster v. Hartley, 37 Cal. 15; 2 Kent Com. 293-295.

3 Allman v. Havana R. & E. R. Co., 88 Ill. 521.

117 Mass. 226; State v. McDaniel, 22 Ohio St. 354; Despatch Line of Packets v. Bellamy Man. Co., 12 N. H. 205.

5 Karuth's Case, L. R. 20 Eq. Cas. 506. See Jenner's Case, L. R. 7 Ch Div. 132. 6 State v. Ferris, 42 Conn. 560.

7 State v. Ferris, 42 Conn. 560; Hoppin v. Buffum, 9 R. I. 513; Long Island R. Co., In re, 19 Wend. 37; Downing v. Potts, 3 Zab. 66.

4 Wight v. Springfield & N. L. R. Co., 482.

8 Mousseaux v. Urquhart, 19 La. An.

statute. The right to vote by proxy is not a general right, but exists only under special authority of law. A non-resident may be a corporator.3 Ordinarily, the general and legal owner of stock holds the right to vote upon it. Thus the right belongs to the pledgor unless he makes a transfer on the books to the pledgee; to the vendor until the assignment is recorded on the books; 5 to the trustee who appears by them to be the legal owner; to the duly qualified administrator;7 and to a bankrupt voting with his assignee's consent.8

The right to vote on shares of the capital stock is suspended while they are held by the corporation itself, whether standing on the books in its own name or that of a trustee or pledgee; for otherwise the directors might, by means of such votes, perpetuate themselves in office.9 Stock so held by the corporation may be sold, where the legal effect of its ownership has not extinguished or merged it; and the right of purchasers to vote is not affected by the motive of the officers in selling the same to their favorites.10 The directors, however, may be restrained, it has been considered, from using the power to sell such stock where their purpose was thereby to control an election.11

Elections. The corporation may, in the absence of statute provisions, regulate by by-laws the mode of electing directors.12 Where statute provisions concerning elections are construed to be

1 Chandler v. Northern Cross R. Co., 18 Ill. 190; Brewster v. Hartley, 37 Cal. 15.

2 Phillips v. Wickham, 1 Paige, 590, 598; People v. Twaddell, 18 Hun, 427; Taylor v. Griswold, 2 Green (N. J.), 222; Craig v. First Presbyterian Church, 88 Pa. St. 42; 2 Kent Com. 294, 295; Angell & A. on Corp. §§ 128-130.

3 Central R. Co. v. Penn. R. Co., 4 Stewart (N. J.), 475, 5 Stewart (N. J.), 755.

4 Brewster v. Hartley, 37 Cal. 15; McDaniels v. Flower Brook M. Co., 22 Vt. 274; Hoppin v. Buffum, 9 R. I. 513; Willcocks's Case, 7 Cowen, 402, 411; Barker's Case, 6 Wend. 509; Angell & A. on Corp. §§ 131, 132.

5 McNeil v. Tenth Nat. Bank, 46 N. Y. 325, 331, 332.

Hoppin v. Buffum, 9 R. I. 513; Wilson v. Central Bridge, 9 R. I. 590; Mohawk v. Hudson R. Co., 19 Wend. 135.

7 North Shore Staten Island Ferry Co., In re, 63 Barb. 556.

8 State v. Ferris, 42 Conn. 560.

9 Holmes's Case, 5 Cowen, 426; Willcocks's Case, 7 Cowen, 402; Vail v. Hamilton, 20 Hun, 355, 359; American RailwayFrog Co. v. Haven, 101 Mass. 398; State v. Smith, 48 Vt. 266; Brewster v. Hartley, 37 Cal. 15; Mousseaux v. Urquhart, 19 La. An. 482. As to the right of contribution between directors who buy shares for a corporation under an ultra vires resolution, see Ashhurst v. Mason, L. R. 20 Eq. Cas. 225.

10 State v. Smith, 48 Vt. 266; Hartridge v. Rockwell, R. M. Charlton (Ga.), 260; Williams v. Savage Man. Co., 3 Md. Ch. 418; City Bank v. Bruce, 17 N. Y. 507.

11 Fraser v. Whalley, 2 Hem. & M. 10. See State v. Smith, 48 Vt. 266.

12 Brewster v. Hartley, 37 Cal. 15; Long Island R. Co., In re, 19 Wend. 37.

directory only, they do not avoid elections in which they were not observed.1 Thus a provision which requires an election to be held at a particular time, as at the annual meeting, is treated as of this character, so that an election at another time, though irregular, does not affect the title of the directors so far as their general relations to the public are concerned.2 An election is legal, although in an emergency there was a departure from ordinary modes of procedure. An acceptance of the office is essential, but the acceptance need not be express. An election may be declared void for the rejection of legal and the counting of illegal votes, which changed-the result; and for substantial irregularities, surprise, and fraud.5

Notice of Meetings.

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Meetings of stockholders, in order to be valid, must be notified in the manner prescribed by the statute. The election of directors at a meeting not notified in the manner prescribed, cannot be questioned collaterally.7

Officers de Facto. -The title and acts of officers de facto cannot be questioned collaterally in a suit at law or in equity; and their acts bind the corporation in the same manner as if they held their offices de jure.8 Directors holding over after the expiration of their terms, to whom no successors have been chosen, are officers de facto, unless, by statute, their places become vacant on the expiration of their terms. In proceedings to

2 Hughes v. Parker, 20 N. H. 58; Nashua Fire Ins. Co. v. Moore, 55 N. H. 48; Angell & A. on Corp. §§ 286, 287.

3 Wheeler's Case, 2 Abbott Pr. N. s. 361.

4 Lockwood v. Mechanics' National Bank, 9 R. I. 308, 341.

1 Downing v. Potts, 3 Zab. 66; 2 Kent Co., 5 Stewart (N. J.), 236; Despatch Com. 295. Line of Packets v. Bellamy Man. Co., 12 N. H. 205; Hughes v. Parker, 20 N. H. 58; Nashua Fire Ins. Co. v. Moore, 55 N. H. 48; Penobscot & K. R. Co. v. Dunn, 39 Me. 587, 599; Bucksport & B. R. Co. v. Buck, 68 Me. 81, 65 Me. 536; Cahill v. Kalamazoo Mut. Ins. Co., 2 Doug. (Mich.) 124; Cincinnati, L., & C. R. Co. v. Danville & V. R. Co., 75 Ill. 113; Atlantic T. & O. R. Co. v. Johnston, 70 N. C. 348; Ohio & M. R. Co. v. McPherson, 35 Mo. 13; Chamberlain v. Painesville & H. R. Co., 15 Ohio St. 225; Clarke v. Thomas, 34 Ohio St. 46, 58; Eakright v. Logansport & N. I. R. Co., 13 Ind. 404; 2 Kent Com. 295.

5 Long Island R. Co., In re, 19 Wend. 37; People v. Albany & S. R. Co., 1 Lans. 308, 55 Barb. 344; Johnston v. Jones, 8 C. E. Green, 216. Whether a director may vote for himself for president, see Hedges v. Paquett, 3 Oreg. 77.

6 Shelby R. Co. v. Louisville, C., & L. R. Co., 12 Bush, 62.

7 Chamberlain v. Painesville & H. R. Co., 15 Ohio St. 225.

8 People v. Hills, 1 Lans. 202; Mechanics' National Bank v. Burnet Man.

Thorington v. Gould, 59 Ala. 461; People v. Twaddell, 18 Hun, 427; Penobscot & K. R. Co. v. Dunn, 39 Me. 587, 599.

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