Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/212

 § 227.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. cbusetts case, directors of a corporation, suddenly rendered in- solvent by the burning of its works, have authority to convey to a creditor all the corporate property provisionally, upon con- dition to pay or provide for the payment of the just debts of the corporation to himself ; he giving proper security to apply no more than necessary and pay over the remainder to the treas- urer of the corporation for the benefit of other creditors. 1 § 226. Under the second general rule, that directors cannot First ^ene- cnan o e ^ ne scneme °f the corporate enterprise nor rai liiaita- bring- the business to a conclusion, there are four tion. i. i • i t things which directors cannot do. § 227. First, they cannot change the nature or plan of the corporate business, nor, in the absence of special authorization, can they accept from the legislature any substantial alteration or amendment in the corporate constitution. 2 But the rule de- Ala. 281 ; Rogers v. Pell, 154 1ST. Y. 518. See Merrick v. Bank of the Metropolis, 8 Gill, 59; Sheldon Hat Blocking Co. v. Eickemeyer Hat Blocking Machine. Co., 90 N. Y. 607; Duneomb v. New York, H. & N. R. R. Co., 88 N. Y. 1; S. C, 84 N. Y. 190; Boynton v. Roe, 114 Mich. 401; Cf. Parker v. Bank, 53 S. C. 583; Contra, Bk. Com'rs v. Bank of Brest, Harrington's Ch. (Mich.) 100; Kyle v. Wagner, 45 W. Va. 349. An as- signment made, without the consent of shareholders, by the directors of a bank of all its assets is voidable at the suit of shareholders; but a cred- itor cannot object to the directors' lack of power. Eppright i Nicker- son, 78 Mo. 482. See § 230, note. 1 Sargent v. Webster, 13 Mete. (Mass.) 497. 2 Baker's Appeal, 109 Pa. St. 461; Commonwealth v. Cullen, 13 Pa. St. 133; Brown v. Fairmount Gold Mg. Co., 10 Phila. 32; Marlborough Mfg. Co. p. Smith, 2 Conn. 579; Hope Mat. Fire Ins. Co. ». Beckmann, 47 Mo. 93, 96; Mississippi, etc., R R. Co. v. Cas- ter, 24 Ark. 96. See Venner ». Atchi- son, etc., R. Co., 28 Fed. Rep. 581. 192 But see semble contra, Dayton, etc., R. R. Co. v. Hatch, 1 Disney (Cin. Sup. Ct. ), 86; Matter of Excelsior Fire Ins. Co., 16 Abb. Pr. (N. Y.) 8; Illinois River R. R. Co. v. Zimmer, 20 111. 654; Banet v. Alton, etc., R. R. Co., 13 111. 504, 508. Compare Case of St. Mary's Church, 6 S. & R. 498; S. C, 7 S. & R. 517; Railway Co. v. Allerton, 18 Wall. 233, 235. In some of the cases in this note holding it beyond the power of directors to ac- cept an amendment, the assent of all the shareholders might have been necessary. See § 532. In the absence of express power in the deed of settlement, it is not com- petent for the directors to amalga- mate with auother company carrying on the same business, and assume on behalf of their own corporation the liabilities of the other company. A clause in the deed of settlement au- thorizing the directors "generally, where these presents are silent, or do not otherwise provide, to act in the direction of the concerns of the society in such manner as at their absolute discretion they shall think most conducive to the interests of