Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/176

 § 184.] THR LAW OF PRIVATE CORPORATIONS. [CHAP. VII. ment is vested in a board of directors, is to be applied most cautiously. 1 A shareholders' meeting would rarely act except in regard to matters of vital importance to corporate interests; and there are certainly acts which the corporate constitution may authorize, that are beyond the authority of the board of directors, although the management is vested in the board. 2 Such acts — even if a shareholders' meeting would not by itself have been sufficient authority for them — if done by the direct- ors, at least require for their validity the shareholders' ratifi- cation. 3 And certainly the final authority of all in a corpora- tion, to say whether the business shall be carried on or wound up, rests with the shareholders and not with the directors. 4 § 183. Unquestionably all the shareholders, or all the share- holders and creditors, acting unanimously, have more exten- sive powers than the body corporate acting by a majority, and may validly do acts which would have been invalid had they been done by the body corporate through an ordinary vote. Such acts, however, are rarely acts within the scope of the cor- porate powers ; and it is only w T ith doubtful propriety that they may be called acts of the corporation ; for they are rather acts whereby the individuals interested in the corporate enterprise authorize or ratify what it was legally incompetent for the cor- poration as such to do. 5 § 184. To be valid in themselves, acts done by the body cor- porate must be done in a corporate meeting duly Manner in ' x ~ J which the assembled; 6 though any irregularity may be cured rate should by the acquiescence of those who would have had the right to complain of it. 7 In considering the re- 1 Although the management be vested in the directors, a sharehold- ers' meeting may appoint a commit- tee to investigate the affairs of the corporation and incur the necessary expenses; for which the corpora- tion will be liable. Star Line v. Van Vliet, 43 Mich. 364. 2 E. g., directors have no power to increase the capital stock, or lease the entire property of the corpora- tion; see §§ 226-229. 3 See Hancock v. Holbrook, 3 Fed. Rep. 353. 4 See §§ 229, 230. 5 Compare Railroad Co. v. Howard, 7 Wall. 392. A conveyance of the land of a corporation as a donation to a public improvement, if assented to by all the stockholders is valid, 6 As to the manner of holding cor- porate meetings and elections, see §§ 573-576. 156 Nelson v. Hubbard, 96 Ala. 238.