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action, and on proof of the facts in such further manner and upon such notice as the court may direct, it may stay such proceedings or set aside and vacate the same, or grant such other relief as may seem proper, and which will not injuriously affect an innocent party, who, without notice of such wrongdoing and for a valuable consideration, has acquired rights under such proceedings.

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§ 34. Quorum of directors and powers of majority. The affairs of every corporation shall be managed by its board of directors, at least one of whom shall be a resident of this state. Unless otherwise provided a majority of the board of directors of a corporation at a meeting duly assembled shall be necessary to constitute a quorum for the transaction of business and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. The members of a corporation may in by-laws fix the number of directors necessary to constitute a quorum at a number less than a majority of the board, but at least equal to one-third of its number. Subject to the by-laws, if any, adopted by members of a corporation, the directors may make necessary by-laws of the corporation.

1. All powers conferred upon a corporation unless otherwise expressly prescribed must be exercised by its directors who are constituted by the law as the agency for that purpose, and the consent of, or ratification by, the stockholders is not necessary to the validity of a corporate act unless expressly required by statute or the by-laws. Beveredge v. N. Y. E. R. R., 112 N. Y. 1, 2 L. R. A. 648, 19 N. E. 489.

2. Contracts therefore can in general be made by the directors without the consent or ratification of the stockholders, and in the absence of fraud or collusion they are binding on the corporation. Ib.

3. It is a general rule in regard to all corporations that a quorum must be present to transact business and unless a statute otherwise directs, this consists of a majority of the whole board. Craig Medicine Co. v. Merchants' Bank, 59 Hun, 561, 14 N. Y. Supp. 16.

4. No director or trustee of a corporation can vote at a meeting of the board by proxy. Ib.

5. A corporation may become bound by contracts, express or implied, under the same circumstances as an individual. To make a corporation liable it is not necessary to show an express resolution of the board of directors. Cunningham v. M. S. & F. C. R. R. Co., 63 Hun, 439, 18 N. Y. Supp. 600.

6. Under the corresponding provision of the Revised Statutes (1 R. S. 600, § 1, subd. 5) the board of trustees of a manufacturing corporation could appoint an executive committee of its members and invest it with power to transact the business of the company during the interval between the meetings of its board

of trustees.

Such committee may delegate to one of its number merely ministerial acts, such as indorsing checks payable to the order of the corporation and receiving the proceeds thereof. The Sheridan Electric Light Co. v. The Chatham Nat. Bank, 127 N. Y. 517, 28 N. E. 467.

7. A contract entered into by a trustee of a corporation for his services to be rendered to it at a meeting of the trustees where his presence was necessary to constitute a majority of the trustees and his assent necessary to secure corporate action upon the contract, Held, illegal in the absence of approval by the stockholders and no action can be maintained thereon as on contract. In such case an action upon a quantum meruit is the only means of recovery. Copeland v. Johnson Mfg. Co., 47 Hun, 235.

8. The director of a corporation occupies a fiduciary position and so is within the rule prohibiting a trustee from dealing in his own behalf with the matters involved in the trust. The voidability of such dealings does not depend upon the bona fides of the transaction at all, but upon public policy and the hazard "of allowing any sort of collision between the personal interests of the individual and his duties as trustee in his fiduciary character." Duncomb v. N. Y. H. & N. R. Co., 84 N. Y. 191.

9. The rule which invalidates all contracts made by a trustee or fiduciary in which he is personally interested at the election of the party he represents, reiterated in case of a contract entered into by the directors of a corporation in its behalf, in which one or more of the directors had a private interest. In such case it is not necessary to show that the contract is unfair to the corporation, or that the influence of the director or directors having the private interest determined the action of the board. The disclosure of the relation is sufficient. Munson v. The S. G. & C. R. R. Co., 103 N. Y. 58, 8 N. E. 355.

10. But in the absence of bad faith an act of a director in violation of the rule will not be avoided without his consideration, if any, to the corporation being restored, Duncomb v. N. Y. H. & N. R. R. Co., supra.

11. When a director or other trustee of a corporation obtains possession of its property as collateral security for a debt honestly due or a liability justly incurred, the above rule has no application, since the payment of the debt and the discharge of the liability is an essential prerequisite of the avoidance. It makes no difference whether the debt is present or precedent; the equities equally exist. The transaction in either case is valid. Ib. Citing Smith v. Lansing, 22 N. Y. 520.

12. A director may sell property to the corporation of which he is director, so long as he does not, while acting in his own interest on the one side, also act on the other in his capacity of trustee or representative, so that his interest and duty may conflict. Gamble v. Queens County W. Co., 123 N. Y. 91, 9 L. R. A. 527, 25 N. E. 201.

13. In the absence of express authority so to do, the action of the board of directors of a corporation in voting salaries to officers, is not binding upon the company, when the directors in whose favor the salary is voted are present participating in the proceeding. Kelsey v. Sargent, 40 Hun, 150; McNaughton v. Osgood et al., 41 Hun, 109.

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14. Dectors of a corporation have no authority to vote interest-bearing emselves as a gratuity, and such an act is void. Stockholders may hypothe ate the property to pay debts or raise money for its corporate purposes,

but can do nothing further. Virginia Tide Water Co. v. Mercantile Trust Co., 35 N. Y. St. Rep. 141, 12 N. Y. Supp. 529.

15. "A corporate mortgage is not invalidated by the fact that the resolution authorizing it was voted for by some of the persons to be secured where the indebtedness is a valid one and the rate of interest thereon is reduced by the mortgage." Rittenhouse v. Winch, 32 St. Rep. 506, 11 N. Y. Supp. 122.

§ 35. Directors as trustees in case of dissolution. Upon the dissolution of any corporation, its directors, unless other persons shall be appointed by the legislature, or by some court of competent jurisdiction, shall be the trustees of its creditors, stockholders or members, and shall have full power to settle its affairs, collect and pay outstanding debts, and divide among the persons entitled thereto the money and other property remaining after payment of debts and necessary expenses.

Such trustees shall have authority to sue for and recover the debts and property of the corporation, by their name as such trustees, and shall jointly and severally be personally liable to its creditors, stockholders or members, to the extent of its property and effects that shall come into their hands.

§ 36. Forfeiture for non-user. If any corporation, except a railroad, turnpike, plank-road or bridge corporation, shall not organize and commence the transaction of its business or undertake the discharge of its corporate duties within two years from the date of its incorporation, its corporate powers shall cease.

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§ 37. Extension of corporate existence. Any domestic corporation at any time before the expiration thereof, may extend the term of its existence beyond the time specified in its original certificate of incorporation, or by law, or in any certificate of extension of corporate existence, by the consent of the stockholders owning twothirds in amount of its capital stock, or if not a stock corporation, by the consent of two-thirds of its members which consent shall be given either in writing or by vote at a special meeting of the stockholders called for that purpose, upon the same notice as that required for the annual meetings of the corporation; and a certificate under the seal of the corporation that such consent was given by the stockholders in writing, or that it was given by vote at a meeting as aforesaid, shall be subscribed and acknowledged by the president or a

vice-president, and by the secretary or an assistant secretary of the corporation, and shall be filed in the office of the secretary of state, and shall by him be duly recorded and indexed in a book specially provided therefor, and a certified copy of such certificate, with a certificate of the secretary of state of such filing and record, or a duplicate original of such certificate, shall be filed and similarly recorded and indexed in the office of the clerk of the county wherein the corporation has its principal place of business, and shall be noted in the margin of the record of the original certificates of such corporation, if any, in such offices, and thereafter the term of the existence of such corporation shall be extended as designated in such certificate.

The certificate of incorporation of any corporation whose duration. is limited by such certificate or by law, may require that the consent of stockholders owning a greater percentage than two-thirds of the stock, if a stock corporation, or of more than two-thirds of the members, if a non-stock corporation, shall be requisite to effect an extension of corporate existence as authorized by this section.

§ 38. Revival of corporate existence. If the term of existence of any domestic corporation shall have expired and it shall be made satisfactorily to appear to the supreme court that such corporation was legally organized pursuant to any law of this state, and that it shall have issued its bonds payable at a date beyond the date fixed in its charter or certificate of incorporation for the expiration of its corporate existence, and such bonds shall be unmatured and unpaid, the supreme court may, upon the application of any person interested and upon such notice to such other parties as the court may require, by order, authorize the filing and recording of a certificate reviving the existence of such corporation, upon such conditions and with such limitations as such order shall specify, and extending such corporate existence for a term not exceeding the term for which it was originally incorporated. Upon filing and recording such certificate in the same manner as certificates of extension of corporate existence duly issued before the expiration of the existence of a domestic corporation are authorized by law to be filed and recorded, such corporate existence shall be revived and extended in pursuance of the terms of such order, but such revival and extension shall not affect

any litigation commenced after such expiration and pending at the time of such revival.

§ 39. Approval of certificates of extension or revival; when required. In the case of a corporation formed under or subject to the banking law, no certificate of extension or revival shall be filed or recorded unless it shall have indorsed thereon the written approval of the superintendent of banks; or, if an insurance corporation, unless it shall have indorsed thereon the written approval of the superintend ent of insurance; and, if a turnpike or bridge corporation, it shall not be filed unless it shall have indorsed thereon or annexed thereto a certified copy of a resolution of the board of supervisors of each county in which such turnpike or bridge is located, approving of and authorizing such extension.

§ 40. Extension when stock is owned by another corporation. — If all the stock of a corporation other than a corporation formed under or subject to the banking law, or an insurance corporation, or a turnpike, plank-road or bridge corporation shall be lawfully owned by another stock corporation entitled by law to take a surrender and merger thereof, the corporate existence of such corporation whose stock is so owned may be extended at any time for the term of the corporate existence of the possessor corporation, by filing in the office or offices in which the original certificate or certificates of incorporation of the first-mentioned corporation were filed a certificate of such extension executed by its president and secretary and by such corporation owning all the shares of its capital stock.

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8 41. Effect of extension. Every corporation extending its corporate existence under this chapter or under any general law of the state shall thereafter be subject to the provisions of this chapter and of such general law, notwithstanding any special provisions in its charter and shall thereafter be deemed to be incorporated under the general laws of the state relating to the incorporation of a corporation for the purpose of carrying on the business in which it is engaged, and shall be subject to the provisions of such law.

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§ 42. When notice of lapse of time unnecessary. the provisions of any of the corporate laws a corporation is authorized

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