the defendant company; and, as the individual defendants owned all the stock except that owned by plaintiff and the one share held by Bobrick, their actions have been ratified by a majority of the stock.

[1] It is urged on behalf of defendants that the above referred to bylaw is in violation of the Corporation Law of this state, and therefore void. The section relied on is section 34 of article 2, which provides substantially that unless otherwise provided the action of the majority of a board of directors at a lawful meeting shall be the act of the board of directors. As the statutory provision expressly excepted cases otherwise provided for, it was evidently intended to permit different regulations, and the by-law in question manifestly comes within the exception and in no sense violates the statutory provision. Bylaws may control the actions of directors. Article 2, § 11, subd. 5.

[2] The general rule applicable to a corporation ceasing to do business and selling out its assets is well settled. In the case of private corporations exercising no public or quasi public functions, the right of the company to discontinue its operations when they have become unprofitable for the purpose of protecting its shareholders from loss is undoubted. Jameson v. Hartford Fire Ins. Co., 14 App. Div. 388, 44 N. Y. Supp. 15; Mayo v. Knowlton, 134 N. Y. 250, 31 N. E. 985. In Raymond v. Security Trust & Life Ins. Co., 111 App. Div. 191, 97 N. Y. Supp. 557, the court, commenting on the previous case of Jameson v. Hartford Fire Ins. Co., 14 App. Div. 380, 44 N. Y. Supp. 15, lays down the general rule as follows:

"In that case the rule that a hopelessly insolvent corporation must wind up its affairs in the manner prescribed by law, and the other rule that a corporation doing a profitable and paying business owes some duty to the public to continue to exercise the functions conferred upon it, are both recognized; but another rule is declared to exist, not in conflict with either of the others, and that is, that where a corporation is not insolvent, but is doing a losing business and unable to continue without further loss, it has the right to sell out its business to another corporation and to cease operations, and a contract to that effect, made in good faith, is valid and binding."

In a recent case, very similar to the one at bar, it was held, in a stockholder's suit against directors for selling out the assets and using the proceeds to pay the company's debts, that in the absence of fraud or bad faith no action would lie. Weingreen v. Michelbacher, 149 N. Y. Supp. 110. That a private corporation, when unable to do business except at a loss, has the right to cease doing business is therefore plain.

[3] How far the directors are authorized, in the absence of authority from or ratification by the stockholders, to cease operations and sell out its assets, it is unnecessary to now decide, as here the by-law expressly provided they should not have the right so to do except by the unanimous vote of all its directors at a meeting of the board, and here that was not had. That these defendants' actions, in the absence of such vote, were in excess of their lawful powers may be conceded. It does not follow, however, that they were bound to continue a losing business. Plaintiff's contention is that they should have resorted to the statutory proceeding for the dissolution of the company. Assuming this to be so, it is manifest a sale of assets under such proceedings would not have been in the usual course of business, but would have been a winding up

sale, and there is nothing to show that any greater prices would have been thereby realized. In fact, common experience would indicate that with the expenses incident to such proceeding the result would have been less beneficial. While, therefore, defendants may have exceeded their powers, there is no evidence that plaintiff has in any way suffered thereby. If fraud or bad faith on the part of the defendant had been shown, an entirely different question would have been presented. In such case defendants might well be held to account for the loss entailed in closing up the business and selling the assets in the manner pursued, but where the only cause of complaint is that they sold the property direct instead of through a receiver or other similar method in dissolution proceedings, the case is very different. In the absence of fraud or bad faith, or evidence that the assets were sacrificed or sold for less than their value at sales of that character, or that any of the property or proceeds thereof have come into defendants' possession, plaintiff has failed to prove facts sufficient to warrant the interference of a court of equity. In the recent case of Clubb v. Cook, 147 N. Y. Supp. 94, it was held that a failure by directors to perform a duty, in the absence of bad faith and where no injury resulted, was not sufficient to support a stockholder's action. The complaint must be dismissed on the merits. Complaint dismissed on the merits.

(86 Misc. Rep. 88)

PEOPLE ex rel. GROSS v. HAYES, Warden of City Prison.

(Supreme Court, Special Term, Kings County. June, 1914.)

1. OFFICERS (§ 40*)-DE FACTO OFFICER-EXISTENCE.

There can be no de facto officer where there is no office to fill. [Ed. Note.-For other cases, see Officers, Cent. Dig. § 62; Dec. Dig. § 40.*]

2. HABEAS CORPUS (§ 94*)-DE FACTO OFFICER-DETERMINATION OF RIGHT TO OFFICE.

Whether a judge conducting the trial of a cause is a de facto judge may be determined in habeas corpus proceedings.

[Ed. Note.-For other cases, see Habeas Corpus, Cent. Dig. §§ 82, 92; Dec. Dig. § 94.*]

3. JUDGES (§ 6*)-DE FACTO JUDGE-APPOINTEE OF Governor.

An appointee of the Governor, as judge of the County Court of Kings county, is a de facto judge, where he performs the duties of such office, without regard to whether the constitutional amendment adopted in 1913 vested the Governor with power to make such appointment.

[Ed. Note. For other cases, see Judges, Cent. Dig. §§ 11, 12; Dec. Dig. § 6.*]

Habeas corpus by the People, on the relation of Sadie Gross, against Thomas Hayes, as warden of the city prison. Writ dismissed.

Robert H. Elder, of New York City, for relator.

Edward A. Freshman, Asst. Dist. Atty., of Brooklyn (James C. Cropsey, Dist. Atty., and Hersey Egginton, Asst. Dist. Atty., both of Brooklyn, on the brief), for defendant.

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

JAYCOX, J. The time which, under the urgent solicitation of counsel, I may devote to this matter and other matters pressing for decision renders it impossible for me to state other than in the briefest manner the reasons for the decision about to be made. The contention of the relator is that the judge before whom she was tried was neither a de jure nor a de facto judge, and that, if said judge was not a de facto judge, that question may be raised by habeas corpus. Relator concedes the power of the Governor to appoint; that the appointment of Judge Hylan is regular in form; that he duly qualified; and that he has openly and notoriously performed the duties of county judge of Kings county. The relator, however, contends that there was no office of county judge to which he could be appointed, claiming that such office had not yet come into existence.

[1] There is a line of cases holding that there can be no de facto officer when there is no office to fill. People ex rel. Sinkler v. Terry, 42 Hun, 273; Matter of Quinn, 152 N. Y. 89, 46 N. E. 175; Norton v. Shelby Co., 118 U. S. 425, 6 Sup. Ct. 1121, 30 L. Ed. 178; Ex parte Ward, 173 U. S. 452, 19 Şup. Ct. 459, 43 L. Ed. 765; United States v. Alexander (D. C.) 46 Fed. 728. With the doctrine of those cases I agree.

[2] In the last case cited above, what I consider the true rule as to the limit of the inquiry upon habeas corpus is laid down as follows:

"While the question of strict title to an office can be inquired into and determined only by direct proceeding, and while courts will not, in a collateral proceeding, make such investigation, they may and will make such inquiry as will establish the line between the mere intruder into an office and one holding it under some color of title, some semblance of right, between him without any authority whatever and the de facto officer. It has long been established that as to the public and third persons the acts of a de facto officer are valid, and their virtue cannot be impeached by any inquiry, in a collateral way, into the strict title to the office. This rule is established, as a matter of public policy and necessity, for the protection of the public who have dealings with officials."

The right to determine, in habeas corpus proceedings, the question as to whether the judge conducting the trial is a de facto judge or not is upheld in People ex rel. Sinkler v. Terry, supra, and Matter of Quinn, supra.

[3] It is therefore necessary to determine only as to the existence of the office. If the office of county judge exists, to which, under some circumstances, the Governor may appoint, then the appointee of the Governor is a de facto judge, without regard to whether the circumstances exist which would make the appointment legal or not. Terhune v. City of New York, 88 N. Y. 247. The County Court of Kings county is duly established, and it is the court which has jurisdiction of the offense and not the judge. Prior to the amendment to the Constitution which gives rise to this question, the Constitution provided for two judges of that court in Kings county. That brings the present case directly in line with Curtin v. Barton, 139 N. Y. 505, 34 N. E. 1093; where the court, speaking through O'Brien, J., said:

"The judges were in fact appointed by the Governor, were in possession of the office, engaged in discharging the duties under color of such appointment. They were therefore officers de facto, discharging judicial duties under color

of legal title, and such title can be questioned only by the state under whose authority they were invested with the character at least of de facto officers. This principle is founded on considerations of public policy, and its maintenance is essential to the preservation of order, the security of private rights, and the due enforcement of the laws. Moreover, it is sanctioned by abundant authority. Carpenter v. People, 64 N. Y. 483; State v. Carroll, 38 Conn. 449 19 Am. Rep. 409]; Read v. Buffalo, *42 N. Y. 447; People v. Petrea, 30 Hun, 110. # When a court with competent jurisdiction is duly established, a suitor who resorts to it for the administration of justice and the protection of private rights should not be defeated or embarrassed by questions relating to the title of the judge, who presides in the court, to his office. If the court exists under the Constitution and laws, and it had jurisdiction of the case, any defect in the election or mode of appointing the judge is not available to litigants."

See, also, Trounstine v. Britt, 147 N. Y. Supp. 875.

I therefore am of the opinion that John R. Hylan was a de facto county judge of Kings county, without regard to whether the constitutional amendment adopted in 1913 vested in the Governor the power of immediately appointing two additional county judges or postponed their selection until chosen by the electors in 1915. Writ dismissed, and relator remanded.

Writ dismissed.

PEOPLE ex rel. YOUNG et al. v. GULVIN et al.

(Supreme Court, Trial Term, Ontario County. May, 1914.)

1. STATUTES (§ 181*)-CONSTRUCTION-INTENT OF LEGISLATURE.

In construing statutes, the intent of the Legislature must govern. [Ed. Note.-For other cases, see Statutes, Cent. Dig. §§ 259, 263; Dec. Dig. § 181.*]

2. STATUTES (§ 162*)-CONSTRUCTION-IMPLIED REPEAL.

A special statute, applicable to one locality or to a particular case, is not repealed by implication by a statute general in its terms and otherwise state-wide in its application, unless the legislative intent to do away with the special statute appears.

[Ed. Note. For other cases, see Statutes, Cent. Dig. §§ 235-237; Dec. Dig. § 162.*]

3. HEALTH (§ 3*)-BOARDS OF HEALTH-STATUTES-APPOINTMENT AND TEN

URE.

Public Health Law (Laws 1893, c. 661) § 20, provided that local boards of health in the several cities and villages, except certain named cities, should be continued and should consist of the mayor and six other persons appointed by the common council, upon nomination of the mayor, for a term of three years. The charter of the city of Geneva (Laws 1897, c. 360) provided that the board of health should consist of five members appointed by the mayor for terms of five years. Although several times re-enacted for purposes of amendment, the Public Health Law has continued practically the same provisions, and despite these amendments, Geneva charter has, through several amendments and re-enactments, continued its original provisions. Held, that Geneva charter was not repealed by the Public Health Law, and the board of health of that municipality should be appointed by the mayor for a term of five years.

[Ed. Note. For other cases, see Health, Cent. Dig. § 2; Dec. Dig. § 3.*] For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

4. HEALTH (§ 3*)-BOARDS OF HEALTH-APPOINTMENT BY MAYOR.

Where the mayor of a municipality, though authorized under the law to appoint members of the board of health, upon a vacancy occurring, filed a written document with the clerk of the common council, nominating the respondent for appointment by the council, the written nomination will, upon the respondent's taking oath of office, be treated as an appointment by the mayor.

[Ed. Note.-For other cases, see Health, Cent. Dig. § 2; Dec. Dig. § 3.*] 5. HEALTH (§ 3*)-BOARDS OF HEALTH-APPOINTMENT BY THE MAYOR.

Where the mayor, through a misapprehension of the law, appointed respondent as a member of the board of health for a term of three years when the term should have been five years, the improper limitation of respondent's term will be disregarded, and he may hold for the full term.

[Ed. Note. For other cases, see Health, Cent. Dig. § 2; Dec. Dig. § 3.*] Quo warranto by the People, on the relation of Gardner B. Young and others, against Reuben H. Gulvin and others and William S. Moore. Judgment for relators and the last-named respondent.

W. Smith O'Brien, of Geneva, for plaintiffs.
Nathan D. Lapham, of Geneva, for defendants.

SUTHERLAND, J.. This action is to determine which of two rival boards is the lawful board of health of the city of Geneva, the old board, whose regularity is asserted by the relators, consisting of five members, four of whom were appointed prior to 1914 by the mayor under the charter of that city for terms of five years each, which period has not expired, or the new board, consisting of the seven defendants, six of whom were appointed by the common council for terms of three years, upon nomination of the mayor in January, 1914, pursuant to the Public Health Law, or that interpretation thereof for which the defendants contend, the mayor ex-officio being the seventh member, if that law governs the situation.

We must decide whether the charter of Geneva or the Public Health Law controls the appointment. The three relators, together with E. H. Eaton and Patrick J. Casey, constituted the board which was in office December 31, 1913. They had been appointed in previous years by the mayor pursuant to the city charter for terms of five years each. The term of Commissioner Casey expired by limitation on that day, but the terms of the others have not expired, if the charter method of appointment controls, in which case the relators should be recognized and restored to their office, which has been taken possession of by the new board of seven members. The new board has been appointed upon the theory that the charter provision has been abrogated by certain amendments to the Public Health Law which have been passed since the Geneva charter was enacted.

[1-3] This question is not free from doubt, but it seems to me that the local charter prevails, and has not been repealed or modified by the Public Health Law in this respect, and that accordingly the relators must have the relief demanded in the complaint.

When Geneva was incorporated as a city in 1897, the Public Health Law (chapter 661 of Laws of 1893, § 20), provided:

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes