restrain directors from illegal action, it is not necessary to prove their title de jure; but it is sufficient to show that they are acting as directors. A clerk continues in office until his successor is appointed, unless his term is limited by statute or by-law.2 Remedy for Illegal Elections. The usual remedy for determining the title to corporate offices is by quo warranto, in which a judgment of ouster is given against parties who have usurped them. The judgment will not have the effect to give the election to the defeated party, who claims to have had a majority of votes, but to require a new election. The remedy is criminal in form, but civil in nature, and is granted at discretion; 5 and, the issue being a legal one, there may be a trial by jury. Mandamus will lie, on the petition of the corporation, to compel the surrender to its lawful officers of its books and papers held by persons who have usurped the offices by means of illegal votes, although the usurpers are in possession under a claim of right, and are exercising the functions annexed to the offices. It is a proper remedy to compel officers to call a meeting for an election.8 A court of equity will not entertain a bill to determine the validity of an election, but, having jurisdiction of the subject-matter of a controversy, as, for instance, a breach of trust, it may, for the purposes of the suit, pass upon the title to an office, and restrain parties unlawfully claiming it; the decree, however, will not effect an ouster or determine finally the title.9 Place of Meeting of the Corporation and of the Directors. -Upon the principle that the legal existence of a corporation is confined to the limits of the sovereignty creating it, its corporate meetings should be held within those limits. This restriction applies to all 1 Morrill v. Boston & M. R., 58 N. H. 68. 2 South Meadow Dam Co. v. Gray, 30 Me. 547. 3 State v. McDaniel, 22 Ohio St. 354; Hoppin v. Buffum, 9 R. I. 513; People v. Albany & S. R. Co., 1 Lans. 308, 55 Barb. 344; Owen v. Whitaker, 5 C. E. Green, 122; State v. Smith, 48 Vt. 266; State v. New Orleans, J., & G. N. R. Co., 20 La. An. 489; Miller v. State, 15 Wall. 478; Angell & A. on Corp., ch. 21. 4 State v. McDaniel, 22 Ohio St. 354; People v. Phillips, 1 Den. 388. People v. Albany & S. R. Co., 57 N. Y. 161, 5 Lans. 25. 7 American Railway-Frog Co. v. Haven, 101 Mass. 398; Melvin v. Hoitt, 52 N. H. 61; State v. Goll, 3 Vroom, 285; Angell & A. on Corp. ch. 20. 8 People v. Albany Hospital, 61 Barb. 397; State v. Wright, 10 Nev. 167; Owen v. Whitaker, 5 C. E. Green, 122. 9 Johnston v. Jones, 8 C. E. Green, 216; Mechanics' National Bank v. Burnet Man. Co., 5 Stewart (N. J.), 236; Pond v. Vt. Valley R. Co., 12 Blatch. State v. McDaniel, 22 Ohio St. 354; 280. State v. Smith, 48 Vt. 266. meetings of stockholders, and particularly to the meeting for organization. Accordingly, it has been held that corporate action, like the election of directors and the making of assessments upon stock, at meetings held without the State, is illegal. Some authorities go to the length of treating it as a nullity,1 while others regard it only as voidable, and hold the corporation to be estopped from setting up the defence; 2 and parties who have contracted with it, or recognized its action, to be estopped from taking advantage of the irregularity. A corporation may, however, unless prohibited by statute, perform many acts outside of the jurisdiction which created it, such as making contracts, and doing various kinds of business. The directors may, when personally outside of the State, make such contracts and do such business in its behalf; and they may, according to the current of the authorities, when so absent from the domicile of the corporation, hold meetings for the transaction of business. They are, when so met, regarded as acting in the capacity of agents of the corporation rather than as the corporation itself.5 Thus they may at such meetings execute contracts, deeds, and mortgages, or authorize their execution, appoint a secretary, or even, it has been considered, issue certificates of stock.8 - A corporation which has received a charter in like terms from different States may hold its meetings in each.9 The corporation, by keeping its principal place of business and its records, and holding its meetings in a foreign State, has been deemed to have committed a breach of duty, which would be a sufficient ground for declaring a forfeiture of its charter.10 Its acts have also been 1 Miller v. Ewer, 27 Me. 509; Freeman v. Machias Water Power & M. Co., 38 Me. 343; Ormsby v. Vt. Copper M. Co., 56 N. Y. 623; Hilles v Parrish, 1 McCarter (N. J.), 380; Aspinwall v. Ohio & M. R. Co., 20 Ind. 492. 6 Arms v. Conant, 36 Vt. 744; Wright v. Bundy, 11 Ind. 398; Bellows v. Todd, 39 Iowa, 209; Galveston R. Co. v. Cowdrey, 11 Wall. 459; Coe v. New Jersey Midland R. Co., 4 Stewart, 105, 117; Wood Hydraulic H. M. Co. v. King, 45 2 Heath v. Silverthorn L. M. & S. Co., Ga. 34; Ohio & M. R. Co. v. McPherson, 39 Wis. 146. 3 Ohio & M. R. Co. v. McPherson, 35 Mo. 13. 4 Merrick v. Van Santvoord, 34 N. Y. 208, 88 Barb. 574. 5 Ohio & M. R. Co. v. McPherson, 35 Mo. 13; Wood Hydraulic H. M. Co. v. King, 45 Ga. 34; Smith v. Alvord, 63 Barb. 415; Coe v. New Jersey Midland R. Co, 4 Stewart, 105, 117. 35 Mo. 13. 7 McCall v. Byram Man. Co., 6 Conn. 428. 8 Courtright v. Deeds, 37 Iowa, 503. But see Hilles v. Parrish, 1 McCarter (N. J.), 380. 9 Covington & C. Bridge Co. v. Mayer, 31 Ohio St. 317. 10 State v. Mil., L. S., & W. R. Co., 45 Wis. 579. denied validity where it had, by holding its meetings and doing other corporate action abroad, practically transferred itself to another State.1 Rule of the Majority. a Quorum. - The majority governs in the management of corporations. This rule is subject to the usual statute provision which allows voting by shares instead of voting per capita. What constitutes a quorum for the transaction of business may be regulated by statute; but if not, at a meeting of the whole body, that is, the stockholders, a majority of those present determines corporate action; while at a meeting of a select and definite body, as the board of directors, a majority is required for a quorum; and then a majority of such quorum decides.3 The rules of the common law as to the number of votes required for corporate action may be varied by statute, and by reasonable by-laws of the corporation. A by-law making five out of twentythree directors a quorum has been held valid ; and the number who usually act has been held to be a quorum.6 An interested director should not be counted as a part of the quorum.7 The whole number should have an opportunity to be present, although a less number is made a quorum; but if the statute declares a certain number to be a quorum, and neither the statute nor the by-laws require notice, a notice to the rest is not essential to the validity of the action of the number named.8 Meetings of directors are presumed to have been legally notified, and formality in 1 Aspinwall v. Ohio & M. R. Co., 20 Ind. 492. But see Merrick v. Van Santvoord, 34 N. Y. 208. 2 Angell & A. on Corp. § 499; Cushing's Law and Practice of Legislative Assemblies, §§ 115, 412; Black v. Del. & R. Canal Co., 7 C. E. Green, 130, 407, 9 C. E. Green, 455; Covington v. Covington & C. Bridge Co., 10 Bush, 69. The privilege of "cumulative" voting in the election of directors is allowed by the constitution of Pennsylvania. Hays v. Commonwealth, 82 Pa. St. 518. 3 Willcocks's Case, 7 Cowen, 402; Field v. Field, 9 Wend. 394, 403; Craig v. First Presbyterian Church, 88 Pa. St. 42; Cahill v. Kalamazoo Mut. Ins. Co., 2 Doug. (Mich.) 124; Price v. Grand Rapids & I. R. Co., 13 Ind. 58; Junction R. Co. v. Reeve, 15 Ind. 236; People v. Twaddell, 18 Hun, 427, 430; Cram v. Bangor House Proprietary, 12 Me. 354; Monmouth Mut. Fire Ins. Co. v. Lowell, 59 Me. 504; Sargent v. Webster, 13 Met. 497; Despatch Line of Packets v. Bellamy Man. Co., 12 N. H. 205; Edgerly ». Emerson, 23 N. H. 555; Wells v. Rahway White Rubber Co., 4 C. E. Green, 402; Lockwood v. Mechanics' Nat. Bank, 9 R. I. 308; Buell v. Buckingham, 16 Iowa, 284; 2 Kent Com. 293; Angell & A. on Corp. §§ 501, 502. 4 Lane v. Brainerd, 30 Conn. 565; 2 Kent Com. 293. 5 Hoyt v. Thompson, 19 N. Y. 207. 6 Lyster's Case, L. R. 4 Eq. Cas. 233. 7 Butts v. Wood, 37 N. Y. 317; Ernest v. Nicholls, 6 H. L. C. 401, 416. 8 Edgerly v. Emerson, 23 N. H. 555; State v. Smith, 48 Vt. 266. the notice is not required. The majority, whether directors or stockholders, may be restrained when it undertakes to deal with the corporate property in a manner not authorized by law; but equity will not interfere, at the instance of a minority, to control the discretion of the majority when acting within its powers.2 Statutes sometimes require the assent of a larger proportion than a majority of the stockholders, as essential to corporate action.3 The corporation cannot, without the unanimous consent of the stockholders, condone gratuitously the fraud of its officers.* Mode in which Directors act. The regular mode by which directors act is by vote at a meeting; but the separate assent of a majority is held in ordinary matters, as in the appointment of agents, to be equivalent to formal action where they are accustomed to act by giving their assent separately. Such assent may be implied as well as express, and it may be implied from acquiescence and the course of business. But corporate acts which can be done by the directors only should be done by them as a board at a meeting, and not by separate assent; and the directors, in order to make the act a corporate one, should act as directors, and not in some other capacity.8 A by-law which prescribes a mode of action may be modified by practice, but a statute pre 1 Sargent v. Webster, 13 Met. 497; Penobscot & K. R. Co. v. Dunn, 39 Me. 587, 600; Lane v. Brainerd, 30 Conn. 565; Mahaska County R. Co. v. Des Moines Valley R. Co., 28 Iowa, 437. 2 Stevens v. Rutland & B. R. Co., 29 Vt. 545; Kean v. Johnson, 1 Stock. 401; Gifford v. New Jersey R. & T. Co., 2 Stock. 171; Black v. Del. & R. Canal Co., 7 C. E. Green, 180, 9 C. E. Green, 455; Lauman v. Lebanon Valley R. Co., 30 Pa. St. 42; Mowrey v. Indianapolis & C. R. Co., 4 Biss. 78; Treadwell v. Salisbury Man. Co., 7 Gray, 393, Durfee v. Old Colony & F. R. R. Co., 5 Ailen, 230; Barnard v. Vt. & M. R. Co., 7 Allen, 512; Rogers v. Lafayette Agricultural Works, 52 Ind. 296; Sprague v. Illinois River R. Co, 19 Ill. 174; Bach v. Pacific Mail Steamship Co., 12 Abbott Pr. N. s. 373; Hedges v. Paquett, 3 Oreg. 77; East Tennessee & V. R. Co. v. Gammon, 5 Sneed, 567; Pratt v. Pratt, 33 Conn. 446. 3 Joslyn v. Pacific Mail Steamship Co., 12 Abbott Pr. N. s. 329. Hazard v. Durant, 11 R. I. 195. 5 Bank of Middlebury v. Rutland & W. R. Co., 30 Vt. 159; Foot v. Rutland & W. R. Co., 32 Vt. 633; Bradstreet v. Bank of Royalton, 42 Vt. 128; Rogers v. Hastings & D. R. Co., 22 Minn. 25; Bee v. San Francisco & H. B. R. Co., 46 Cal. 248. 6 Sherman v. Fitch, 98 Mass. 59; Lyndeborough Glass Co. v. Mass. Glass Co., 111 Mass. 315; Pittsburg & C. R. Co. v. Clarke, 29 Pa. St. 146, 152. 7 Johnston v. Jones, 8 C. E. Green, 216; Junction R. Co. v. Reeve, 15 Ind. 236; Despatch Line of Packets v. Bellamy Man. Co., 12 N. H. 205; Edgerly v. Emerson, 23 N. H. 555, 567; Pittsburg & C. R. Co. v. Clarke, 29 Pa. St. 146. 8 Gashwiler v. Willis, 33 Cal. 11. See People v. Sterling Man. Co., 82 Ill. 457. 9 Pittsburg & C. R. Co. v. Clarke, 29 Pa. St. 146. scribing a mode must be followed. A record of the votes of di rectors is not essential to their validity, and they may be proved by parol evidence; but a record, if made, is the best evidence of their action.2 Compensation of Directors. The directors are presumed to perform the duties of their trust gratuitously. They are not entitled to compensation, even for services outside of the ordinary duties of their office, unless it is expressly stipulated before the services. are rendered; but an express contract by the board to pay a fixed or reasonable sum is binding. Some authorities require a vote or resolution as evidence of the agreement, while others do not regard such formal action as essential where there is an actual employment. A subsequent vote of the board to pay a director for his services, where there was no previous agreement, is not binding. The expectation of a director that he was to receive compensation, there being no previous vote or promise, does not entitle him to it.5 The rule which excludes compensation applies to the president chosen by the directors from their own number, and also to a treasurer, when a director; but not to officers and agents not being directors, who are entitled to recover on a quantum meruit where no price is fixed. It does not prevent recovery for advances of money on an implied promise to repay.9 1 Pittsburg & C. R. Co. v. Clarke, 29 Pa. St. 146, 152. 2 Edgerly r. Emerson, 23 N. H. 555; Cram . Bangor House Proprietary, 12 Me. 354; Langsdale v. Bouton, 12 Ind. 467. See Junction R. Co. v. Reeve, 15 Ind. 236. Hall v. Vt. & M. R. Co., 28 Vt. 401; Henry v. Rutland & B. R. Co., 27 Vt. 435; Hodges v. Rutland & B. R. Co., 29 Vt. 220; Chandler v. Monmouth Bank, 1 Green (N. J.), 255; American Cent. R. Co. v. Miles, 52 Ill. 174; Rockford, R. I., & St. L. R. Co. v. Sage, 65 Ill. 328; Gridley v. Lafayette, B., & M. R. Co., 71 Ill. 200; Cheeny v. Lafayette, B., & M. R. Co., 68 Ill. 570, 87 Ill. 446; Illinois Linen Co. r. Hough, 91 Ill. 63; Maux Ferry Gravel Road Co. v. Branegan, 40 Ind. 361, Butts r. Wood, 37 N. Y. 317; Jackson v. New York Cent. R. Co., 2 Thomp. & C. 653, Bailey v. Buffalo C. R. Co., 14 Hun. 483; Angell & A. on Corp. § 317. Pa. St. 534; Holder v. Lafayette, B., & 5 New York & N. H. R. Co. v. Ketchum, 27 Conn. 170. 6 Merrick v. Peru Coal Co., 61 III. 472; Gridley v. Lafayette B., & M. R. Co., 71 Ill. 200; Levisee v. Shreveport City R. Co., 27 La. An. 641; Kilpatrick v. Penrose Ferry Bridge Co., 49 Pa. St. 118. See Commonwealth Ins. Co. v. Crane, 6 Met. 64. 7 Holder v. Lafayette, B., & M R. Co., 71 Ill. 106. 8 Rogers v. Hastings & D. R. Co., 22 Minn. 25; Missouri River R. Co. v. Richards, 8 Kan. 101; Fraylor v. Sonora Mining Co., 17 Cal. 594; Angell & A. on Corp. § 317. 9 Merrick v. Peru Coal Co., 61 Ill. 472; Gridley v. Lafayette, B., & M. R. Co., 71 4 Loan Association v. Stonemetz, 29 Ill. 200. |