77. How may a corporation be dissolved?
(1) By the expiration of its charter.
(2) By surrendering its charter to the state.
(3) By the enactment of some statute.
(4) By decree of court.

A corporation cannot usually continue after the time for which it was formed has expired even though all the shareholders desire it. But in New York its existence may be prolonged by filing a certificate prescribed by statute.

In the second instance the state may refuse to accept the surrender of the charter.

In the third instance the members of the corporation make a contract with the state and the legislature has no right to pass a law which shall constitute a breach of this contract, unless the members of the corporation are willing.

In the last case a corporation may forfeit its charter by either a misuser or a nonuser of its privileges. The state is the plaintiff in court for this purpose.

In many of the states there are statutes regulating the dissolution of corporations. These statutes generally specify what persons may institute legal proceedings for a dissolution of the corporation and point out, in detail, the procedure which must be strictly followed.

78. Who can institute an action to forfeit a corporate charter?

Only the Attorney General.

This is so for the reason that it is for the State alone to withdraw the charter which the State has given.

79. What is the legal effect of sales and purchases of property to and from the corporation by its officers?

The corporate officers, especially the directors, have no lawful right to act for themselves personally in dealing with the corporation which they represent. It is said they will not be allowed to unite the two opposite characters of buyer and seller. If they make sales to the corporation they may be compelled to pay over to the corporation the profit realized by such sales, or the corporation may refuse altogether to complete the contract. Generally speaking, such purchases and sales may be treated by the corporation as voidable being against public policy.

80. What is the result of dissolution?

143

The property of the corporation is distributed, by a court having authority, among the creditors in payment of claims. If there is anything remaining after paying up the debts of the company it is distributed among the shareholders.

Form of By-Laws for a Corporation.

By-Laws of the X. Y. Z. Co.

Article I.-Meeting of Stockholders.

§1. The annual meeting of the stockholders of this company shall be held at its office, No. 999 State Street, in the city of Albany, State of New York, on the first Tuesday in January of each year, at 12 o'clock, noon, to elect directors and two inspectors of election who shall serve for one year, and to transact such other business as may come before the meeting. At least two weeks prior to such meeting, notice of the time, place and object thereof shall be mailed to each stockholder at his address appearing on the books of the company.

§2. Except as otherwise expressly prescribed by law, a special meeting of the stockholders may be called at any time by a majority of the directors, or by the president whenever he shall be thereunto requested in writing by stockholders owning a majority of the capital stock, notice of which special meeting must be given each stockholder as hereinbefore provided in respect to the annual meeting.

§3. No person shall be entitled to vote, in person or by proxy, at any meeting of the stockholders unless his name shall have appeared as a stockholder upon the transfer books of this company for at least forty days immediately prior thereto.

§4. All questions raised at any meeting of the stockholders shall be decided by a majority of the shares of stock represented by those present.

§5. The presence, in person or by proxy, of stockholders owning a majority of the capital stock of this company shall be necessary to constitute a quorum at any meeting of the stockholders.

§6. At each annual meeting the order of business shall be as follows:

I. Roll call;

2. Filing proof of due publication and service of notice of the meeting;

3. Reports of officers;

4. Reports of committees;

5. Election of directors and inspectors of election; 6. Miscellaneous business.

Article II.-Directors.

§1. Except as herein otherwise provided for filling vacancies, the directors of this corporation shall be chosen by ballot, for a term of one year, by the stockholders, from among their own number, at their annual meeting.

§2. Vacancies in the board of directors shall be filled by the stockholders at a special meeting called for that purpose. §3. The board of directors shall meet on Monday of each week, and at such other times as the president may convene them upon notice to each director.

Article III.-Officers.

Immediately after the annual meeting the board of directors shall choose a president, vice-president, secretary and treasurer, each of whom shall hold office until the next annual meeting, and shall discharge such duties as the board of directors may prescribe.

Article IV.-Capital Stock.

The board of directors shall, by resolution, make rules regulating the time for payment of subscriptions to the capital stock, and the amounts of the installments thereof, and the registration, authentication, issuance and transfer of the certificates of stock.

Article V.-Dividends.

The board of directors shall, whenever they deem best. declare by resolution and pay to the stockholders dividends out of the surplus profits of the corporation.

Article VI.-Seal.

The seal of this company shall be circular in form and shall be inscribed with the name of the company and the date of its incorporation.

Article VII.—Amendments.

These by-laws may be amended only at a special meeting of the stockholders called for that sole purpose, by the vote, in person or by proxy, of stockholders owning a majority of the capital stock. Within three days after the adoption of an amendment, a copy thereof shall be mailed to each stockholder.

BAILMENTS

"A notice by a common carrier is no evidence of assent by the owner."

1. What is a bailment?

A bailment is the delivery of a chattel for some particular purpose without a transfer of the ownership of the chattel which is to be returned or delivered over after such purpose is accomplished.

2. Who are the parties to a bailment?

The one delivering the property, the bailor; the one receiving the property, the bailee.

3. How are bailments classified?

Into deposit, mandate, loan for gratuitous use, pledge or pawn and locatio or bailments for a compensation.

4. How further are bailments classified?

Into those beneficial to the bailor only; those beneficial to the bailee only; those beneficial to both parties.

5. What is the peculiarity of the first three classes of bailments?

That there is no express consideration to support the contract.

6. What then is said to be the consideration in these bailments?

The law deems the entrusting of the goods on the one hand and the receiving of them on the other, to be a sufficient consideration. In other words the mutual trust or confidence is the consideration.

7. What determines the degree of care that the bailor may exact of the bailee?

It is set by the benefit which the bailee receives from the bailment or by the provisions of the contract if one exists.

One may promise to undertake a bailment from which he is to receive no reward and yet not be compelled to undertake it because of lack of consideration, but if once undertaken, some degree of care must be used in the performance of the

trust.

8. What are the different degrees of care?

Slight, ordinary and great, and over against these are the correlative three degrees of negligence, gross, ordinary and slight.

9. What are the degrees of care required in deposit and mandate?

Only slight care, since in these bailments the bailee receives no compensation. Even slight care, however, varies to an extent with the nature of the thing bailed and the conditions existing where the bailment is to be performed.

10. What is required in gratuitous loan for use?

That the bailee exercise great care in the use of the thing borrowed. The bailor may give special instructions too as to the use of the thing bailed and as long as these are reasonable the bailee is bound to follow the instructions given.

II. In loan for gratuitous use for what injuries to the thing bailed is the borrower liable?

For any that may result from even his slight negligence, but is not liable for unavoidable accidents or the natural wear of the thing borrowed.

12. When must the bailee return the thing bailed? Upon the accomplishment of the purpose of the bailment. 13. What if the bailee refuse to re-deliver the thing bailed?

He becomes liable to an action for the value of the bailment, or the subject-matter of the bailment may be replevied.

14. What if he deliver the thing to some one other than the owner?

The bailee is responsible to the rightful owner for its value, or it may be replevied.

15. Where is the bailee to deliver the thing bailed?

It is to be returned to the place at which it was received unless some other agreement has been made.