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small; but the court should proceed cautiously and discreetly, according to the facts of the particular case. To the extent, however, that an absolute right is conferred by statute, nothing is left to the discretion of the court; but the writ should issue as a matter of course. Although even then, doubtless, due precautions as to time and place may be taken, so as to prevent interruption of business, or other serious inconvenience.

This rule applies to all the books of a corporation, though by statute the common law has been changed in most jurisdictions so that the stockholder has the right to inspect those books only which pertain to a corporation and are not necessary in other forms of business enterprises. A stockholder's examination usually may be conducted by his agents, such as his attorney or his expert accountant.

The statutes in most of the states have reiterated the common law and in some cases have extended it in certain particulars, or have limited it as to the time and place of the inspection. The statutes of some states give a stockholder to whom this right has been refused an action for damages against the officers of the corporation for refusing the right.

441. Payment for capital stock.-Capital stock may be usually issued in any denomination and to any maximum amount, the minimum being limited to from $500 to $2,000. In New York the minimum is $500, in New Jersey and Delaware the minimum is $2,000, and in Maine and Massachusetts the minimum is $1,000; in Arizona there is no minimum. In New York shares may be issued without par value.

The statutes of most states provide that capital stock may be paid for in money, property, services or labor. When nothing is said in the statutes, the courts will not require a corporation for which services have been ren

dered or to which property has been sold to pay money and then take it back in payment for capital stock, but in some states there is a direct prohibition against accepting anything but money in exchange for stock. In those states it is always wise to pay for stock in money only.

In many jurisdictions, including New Jersey and Maine, the statutes provide that where property is given in exchange for stock the directors may appraise the property. (See the recent New Jersey statutes printed in Appendix V.) The courts have recently interpreted this provision very strictly and have held that where there is any considerable difference between the par value of the stock and the real value of the property fraud will be presumed and creditors of an insolvent corporation will have the right to make the stockholders who have given to the corporation the overvalued property pay into the corporation the amount of the over-valuation.

442. Certificate of shares.-Shares of capital stock are choses in action of which the certificate of stock is a physical representation. Share holders are entitled to certificates evidencing their holdings. These certificates are usually executed by officers designated in the by-laws of the corporation,-usually the president and the secretary, or the president and the treasurer. In New Jersey these officers alone have the power to sign certificates. A certificate of stock is not negotiable in the broadest sense, but the decisions are somewhat confused. Several states, including New York, have recently adopted the Uniform Stock Transfer Law making certificates fully negotiable.

If a stockholder loses his certificate, he may compel the corporation to issue a new one by giving it sufficient

security to indemnify it in case the lost certificate is presented by a bona fide purchaser. The usual practice is to require an affidavit from the stockholder setting forth the facts and the deposit of a bond for the par value of the stock, or for twice that amount.

448. Rights of minority stockholders.-Corporations are governed by the majority, whose acts cannot be interfered with by the minority stockholders unless in the case of unauthorized, fraudulent or illegal acts, nor can the minority interfere with the acts of the directors. If, however, the act complained of is one which is not within the powers of the corporation, or is one which constitutes a breach of trust or fraud by the directors, the courts will interfere at the instance of minority stockholders, and enjoin the carrying out of the unauthorized or illegal act. If the act has been committed and the company has suffered loss, the courts will compel the offending directors to account to the corporation for such loss.

The courts require that before a suit can be brought by a stockholder, demand must first be made upon the board of directors to bring the suit. If, however, the offending directors are still in control of the board, the demand is not necessary.

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444. Liabilities of shareholders to the corporation and to creditors.-Stockholders are bound to take and pay for the proportion of stock subscribed for by them, and the corporation may enforce the payment of the amount due up to the value of the stock unless the corporation is a going concern and there is an express agreement to the contrary. If a stockholder sell his stock before the full amount due thereon is paid, liability to pay the deficiency is transferred to the new owner, for the corporation by cancelling the old certificate and issu

ing a new one waives all claims on the original certificate.1

The liability of the stockholder to his corporation may be enforced by creditors who have procured judgment against the corporation and whose judgment cannot be satisfied out of the corporate assets. In Indiana and New Hampshire only those shareholders are liable who were such when the debt was contracted, and this liability survives the transfer of their shares. In Connecticut and a few other states, only those shareholders are liable who were such at the time of the commencement of the action by the creditors. In Illinois, all shareholders who were such either at the time the debt was contracted or who became shareholders prior to the commencement of the action are liable. This liability, it must be remembered, is to pay the difference between the par value of the stock and the value of the consideration for which the stock was issued.

445. Special liabilities of shareholders.-In some states, stockholders have added liabilities. In New York and several other jurisdictions, a wage-earner who has recovered a judgment against the corporation for wages and is unable to collect the judgment out of the corporate assets, may bring an action against individual stockholders. In Minnesota, stockholders have the same liability as the stockholders of national banks, namely, to contribute an amount equal to the par value of their holdings. In California, stockholders have unlimited liability, and this doctrine applies in that state to stockholders of foreign corporations which do business within the territorial limits of the state. The extra liability of bank stockholders has already been mentioned.

1 Tucker v. Gilman, 121 N. Y. 189.

2 Thomas v. Wentworth Hotel Company, 110 Pac. Rep. 942.

446. Officers. The officers of a corporation are those agents elected or appointed by the directors or by the stockholders as the direct executive representatives of the corporation. They may be appointed orally or in writing under seal, but usually are elected as prescribed by the by-laws of the corporation. Directors usually elect officers and fix their salaries. The chief officers of a corporation are the president, treasurer and secretary, the latter two of whom need not be selected from the board of directors.

447. Powers of officers.-The relation of a corporate officer to his corporation is governed by the law of agency, and where an act is performed by an appropriate officer he is presumed to have the requisite power.

448. Compensation of officers.-The compensation of officers is governed by their contract whether special or contained in the by-laws. Directors and officers, however, can claim no payment for their services in the absence of any provision. It would seem that an officer who is not a director may claim the reasonable value of his services.

449. Duties of officers.-The duties of officers are those prescribed by the by-laws or by custom. The general rule is that the president is the head of the corporation and "when an act is performed by him the presumption will be indulged that the act is legally done, and is binding upon the body; and, as a general rule, in the absence of the president, or when a vacancy occurs in the office, the vice-president may act in his stead, and perform the duties which devolved upon the president."

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According to the rules of agency, notice to an officer in the course of a transaction in which the corporation

1 Smith v. Smith, 62 Ill. 493.

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