vidual stockholder cannot be applied to pay the debt of a partnership of which he is a member.*

A dividend accruing after the sale of stock, but before the bank had received any knowledge of the transaction could once be retained to pay a debt actually due at the time the bank learned of the sale.5 It may be questioned whether this rule

any longer prevails.

A dividend declared after the debtor has transferred his stock cannot be withheld, because it belongs to the assignee or purchaser. And the same rule applies to a dividend declared after the death of an insolvent stockholder who is indebted to the bank,8

34 Who Are Stockholders.

The stock-book is supposed to contain a correct record of the stockholders, but as we shall hereafter learn, the real stockholder may be another person. He may have parted with his interest without completing the transfer. This question has most frequently arisen when stockholders have been required to make additional payments to discharge the indebtedness of their bank, and the law will be presented in that connection. The question also occasionally arises at the meetings of stockholders, especially in contests for control.10

4 American Nat. Bank v. Nashville Warehouse Co., 36 S. W. (Tenn. Ch. App.) 960. See Flint v. Tillman, 2 Heisk. (Tenn.) 202.

5 Bates v. N. Y. Ins. Co., 3 Johns. Cas. (N. Y.) 238; St. Louis Perpetual Ins. Co. v. Goodfellow, 9 Mo. 149, 153.

6 Gemmell v. Davis, 75 Md. 546; American Nat. Bank v. Nashville Warehouse Co., 36 S. W. (Tenn. Ch. App.) 960.

7 Gemmell v. Davis, 75 Md. 546; Abercrombie v. Riddle, 3 Md. Ch. 320.

8 Brent v. Bank, 2 Cranch C. C. (U. S.) 517; Attorney General v. State Bank, 1 Dev. & B. Eq. (N. C.) 515; Merchants' Bank v. Shouse, 102 Pa. 448.

9 O'Connor v. Witherby, III Cal. 523; Coffin v. Collins, 17 Me. 440; Agricultural Bank v. Burr, 24 Me. 256; U. S. Trust Co. v. U. S. Fire Ins. Co., 18 N. Y. 199; Hoppin v. Buffum, 9 R. I. 513; Wilson v. Central Bridge, 9 R I. 590; Turnbull v. Payson, 95 U. S. 418; Williams v. American Nat. Bank, 29 C. C. A. 203. See I Cook on Corp. 855.

ΙΟ A stockholder purchased a large amount of stock for the purpose of controlling the election of directors, and after accomplishing his purpose

35. Stockholders' Meetings.

The statutes prescribe how stockholders' meetings shall be conducted, and very few questions of this nature have arisen among bank corporations. They must be called in the manner prescribed by statute, or charter, for the direction is mandatory." A substantial compliance will satisfy this requirement. 12

Meetings are regular, and special; and positive law makes some regulations concerning them, which are supplemented by by-laws, adopted by the stockholders, or by the directors when endowed with authority to prepare and adopt them.13

Stockholders must be duly notified 14 of any meeting, and if it be regular the stockholders need not be notified of the business that is to be presented, unless it be of unusual importance. 15 But whenever a special meeting is called the notice must state the object.16 Defects, however, in the notice may be waived by attendance, or ratified expressly by acquiescence.1 And if a stockholder was present himself or by proxy, and participated without objection to the notice, he cannot afterward complain;18 nor can other stockholders who

17

sold the stock to the company. The sale was declared to be legal, as the stock was sold at a fair price. Taylor v. Miami Exposition Co., 6 Ohio 176.

II Matthews v. Columbia Nat. Bank, 79 Fed. 558.

12 Hardenberg v. Farmers' & Mech. Bank, 3 N. J. Eq. 68.

13 See Boisot on By-Laws, §92.

14 People v. Batchelor, 22 N. Y. 128, 134; 1 Morawetz on Corp. §479. 15 Warner v. Mower, 11 Vt. 385; Sampson v. Bodoinham Steam Mill Co., 36 Me. 78.

16 Imperial Bank of China v. Bank of Hindustan, L. R. 6 Eq. (Eng.) 91; Stow v. Wyse, 7 Conn. 214, 219; Atlantic De Laine Co. v. Mason, 5 R. I. 463, 471.

17 Nelson v. Hubbard, 96 Ala. 238; Central Trust Co. v. Condon, 14 C. C. A. 314; Synnott v. Cumberland B. & L. Assn. 54 C. C. A. 553, 559; Kenton Furnace R. v. McAlpin, 5 Fed. 737. This requirement may be waived by stockholders by attending and participating in the special meeting without objection. Synnott v. Cumberland B. & L. Assn., 54 C. C. A. 553.

18 Columbia Nat. Bank v. Matthews, 29 C. C. A. 491; Nickum v. Burckhardt, 30 Or. 464.

have not been injured.19 A stockholder can vote by proxy only when authorized by statute, articles, or by-laws of the bank.20 And the authority thus conferred on another may be revoked at any time.21 Lastly, no notice of an adjourned meeting need be given to absent stockholders unless this is required by statute or by-law.22

By common law less than a majority of the stockholders may hold a properly convened meeting, but a different rule is often established by statute, or by-law.23 Where a majority is required, a smaller number, though unable to hold a valid meeting, can lawfully adjourn.24 Again, while a minority of stockholders cannot call and hold a stated meeting,25 they can. continue a meeting regularly called after the majority have withdrawn.26

A different rule applies to directors, because they are a select, definite body, while stockholders are the constituent members. By the common law, therefore, a majority of the stockholders who appear can act, while a majority of the definite body must be present, and then a majority of the quorum may decide.27

A court may enjoin a corporation from denying to a stockholder his right to vote,28 or enjoin it for receiving the vote

19 Appeal of Columbia Nat. Bank, 16 Pa. Week. Notes, 357.

20 McKee v. Home Sav. & Trust Co., 98 N. W. (Iowa) 609; Commonwealth v. Bringhurst, 103 Pa. 134; Commonwealth v. Detwiler, 131 Pa. 614, 623, 634; Market St. R. v. Hellman, 109 Cal. 571; People v. Crossley, 69 Ill. 195.

22 Western Imp. Co. v. Des Moines Nat. Bank, 103 Iowa 455; Smith v. Law, 21 N. Y. 296; Synnott v. Cumberland B. & L. Assn., 54 C. C. A. 553, 559; Warner v. Mower, 11 Vt. 385, 391.

23 Gilchrist v. Collopy, 82 S. W. (Ky.) 1018.

24 Ellsworth Woollen Mfg. Co. v. Faunce, 79 Me. 440.

25 Haskell v. Read, 68 Neb. 107.

26 Ibid.

27 Gilchrist v. Collopy, 82 S. W. (Ky.) 1018; 2 Kent's Com., p. 293. 28 Brown v. Pacific Mail Steamship Co., 5 Blatch. (U. S.) 525. A pledgor can vote his stock. Haskell v. Read, 68 Neb. 107. A stockholder need not be required to pay for his stock before voting. Haskell

.

29

of one who has no right to cast the same.2 A vendor is entitled to vote on his stock until the transfer is recorded30; also the pledgor, mortgagor,31 trustee, 32 and administrator.33

In conducting an election, an officer of the corporation cannot look behind the books, showing who are registered, for the purpose of learning who are members; but a court of equity can do so, and enjoin a pledgee, for example, from voting shares pledged to the prejudice of the pledgor.34

An election is not invalid because the meeting is continued beyond the time prescribed by law, by-law, or notice, and votes are received until the close.35 Nor will the opening of the polls to receive additional votes invalidate an election,36 if this is done before announcing the result; but the polls cannot be opened afterwards.37 The stockholders have a right by quo warranto to inquire into the validity of an election,38 and ask for adequate relief by having the election set aside for fraud,

v. Read, 68 Neb. 107; Price v. Holcomb, 89 Iowa 123; Savage v. Ball, 17 N. J. Eq. 142.

29 George v. Cent. R. & Banking Co., 101 Ala. 607; Clarke v. Cent. R. & Bkg. Co., 50 Fed. 338.

30 McNeil v. Tenth Nat. Bank, 46 N. Y. 325, 332; Johnston v. Jones, 23 N. J. Eq. 216, 223; Monsseaux Urquhart, 19 La. Ann. 482; Hoppin v. Buffum, 9 R. I. 513.

31 Hoppin v. Buffum, 9 R. I. 513; Scholfield v. Union Bank, 2 Cranch C. C. (U. S.) 115; Ex Parte Wilcocks, 7 Cow. (N. Y.) 402. Application of Barker, 6 Wend, 509.

32 Hoppin v. Buffum, 9 R. I. 513; In re Mohawk & Hudson R., 19 Wend. (N. Y.) 135; Application of Barker, 6 Wend. 509. See Wilson v. Central Bridge, 9 R. I. 590.

33 In re North Shore Ferry Co., 63 Barb. (N. Y.) 556.

34 Haskell v. Read, 68 Neb. 107; Brewster v. Hartley, 37 Cal. 15; State v. Smith, 15 Or. 98; Vowell v. Thompson, 3 Cranch C. C. (U. S.) 428.

35 In re Mohawk & Hudson R., 19 Wend. 135; Rudolph v. Southern League, 23 Abb. N. C. 199.

82.

36 Hardenburgh v. Farmers' & Mech. Bank, 3 N. J. Eq. (2 Green) 68,

37 Forsyth v. Brown, 2 Pa. Dist. 765.

38 Wiltz v. Peters, 4 La. Ann. 339.

surprise, or other illegality.39 They must come into court with clean hands; guilty participants cannot invoke its aid.40

No records need be kept of the proceedings of a corporate meeting, unless expressly required; and if none exist, its action may be proved by parol.41 When records are kept these may be shown on proper occasion.42 When existing and properly authenticated, they are admissible as the best evidence to prove what was done;43 they are the regular evidence of a bank's action.44

36. Their Right to Inspect Books.

The right of a stockholder to inspect at all reasonable times the books and other records of his bank by common law or statute is unquestioned.45 Indeed, this right may be exercised after his bank has gone into liquidation, or its charter has expired.46 Nor is the common law right abridged by the na

39 Jackson v. Munster Bank, 13 L. R. (Irish) 118; Cannon v. Trask, L. R. 20 Eq. (Eng.) 669; Nathan v. Tompkins, 82 Ala. 437; Johnston v. Jones, 23 N. J. Eq. 216; In re Argus Co. v. Manning, 138 N. Y. 357. 40 Wiltz v. Peters, 4 La. Ann. 339.

41 Bank v. Schuylkill Bank, 1 Pars. Eq. Cas. (Pa.) 180; Handley v. Stutz, 139 U. S. 417, 422; Moss v. Averell, ro N. Y. 449; Selley v. Am. Lubricator Co., 119 Iowa 591, 596.

42 Selley v. Am. Lubricator Co., 119 Iowa 591, 596.

43 People v. Oakland Co. Bank, 1 Doug. (Mich.) 282; Booth v. Dexter Steam Fire Engine Co., 118 Ala. 369; Lane v. Brainerd, 30 Conn. 565; Coffin v. Collins, 17 Me. 440.

44 Coffin v. Collins, 17 Me. 440.

45 Harkness v. Guthrie, 75 Pac. (Utah) 624, affd. 199 U. S. 149; Meysenburg v. People, 88 Ill. App. 328; People v. Consolidated Nat. Bank, 105 N. Y. App. Div. 409; Winter v. Baldwin, 89 Ala. 483; Matter of Tuttle v. Iron Nat. Bank, 170 N. Y. 9; Hatch v. City Bank, I Rob. (La.) 470; Cockburn v. Union Bank, 13 La. Ann. 289; State v. Citizens' Bank, 51 La. Ann. 426; State v. Laughlin, 53 Mo. App. 542; Union Nat. Bank v. Hunt, 76 Mo. 439; Huylar v. Cragin Cattle Co., 40 N. J. Eq. 392, 398; Gerner v. Mosher, 58 Neb. 135; Deaderick v. Wilson, 8 Bax. (Tenn.) 108. See valuable notes containing many cases in 14 Am. & Eng. Corp. Cases (N. S.) 906 and 107 Am. State Rep. 674.

46 Matter of Tuttle v. Iron Nat. Bank, 170 N. Y. 9; Matter of Steinway, 159 N. Y. 251.