Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/604

 § 577.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. have power to call meetings, the managing board has also that power. 1 § 576. The methods of voting and of conducting the meet- By-laws, ings may be regulated by by-laws, 2 provided the by- irreguiariy laws are not inconsistent with the terms of the transacted. c h ar t er or other statutes applicable. 3 And generally business transacted in disregard of the required formalities may be set aside, unless the divergence was trivial, or the rights of outsiders who have acted without notice of the irregularities intervene. 4 § 577. At common law each member of a corporation was entitled to one vote ; and this rule is still of general Each 1 share- application to corporations other than stock corpora- as°mlny as tions. With regard to the latter, by statute and by- votes as laws, and by custom so general as to amount to shares. - ° Cumulative accepted law, a shareholder is entitled to as many voting. votes as he holds shares. 5 Shareholders cannot be deprived of the right to vote, nor can it be changed bv legisla- 1 Citizens' Mat. Fire Ins. Co. v. Sortwell, 8 Allen, 217. Compare Chamberlain ». Painesville, etc., R. R. Co., 15 Ohio St. 225. 2 Commonwealth v. Woelper, 3 S. & R. (Pa.) 29; Jukeru. Common- wealth, 20 Pa. St. 484; People v. Crossley, 69 111. 195. See Matter of Long Island R. R. Co., 19 Wend. 37. 8 When the statute prescribes the mode of electing directors, it cannot be changed by by-law. Brewster v. Hartley, 37 Cal. 15. When the char- ter provides that annual meetings shall be held by the shareholders or the election of directors, the di- rectors cannot by a by-law so change the time of holding the annual elec- tion that they will continue them- selves in office more than a year against the wishes of a holder of a majority of stock. Elkins v. Cam- den and Atlantic R. R. Co., 36 N. J. Eq. 467. Compare S. C. on Appeal, 37 N. J. Eq. 273, which further holds 584 that directors who are in office can- not dispute the rights of shareholders to obtain a new election, in accord- ance with the by-laws, and thus pro- long their own authority, on the ground that the proposed election is a step towards the illegal and im- proper control of the property or business of the corporation, and that the complainant stockholder, who holds a majority of the stock, has bought it with the money of rival companies and means to use his rights for purposes detrimental to the corporation. Camden and A. R. R. Co. v. Elkins, 37 N. J. Eq. 273. Compare Ryder p. Alton, etc., R. R. Co, 13 111. 516; State v. Coonan, 23 Nev. 437. 4 People v. Albany, etc., R. R. Co., 55 Barb. 344. See § 184. 5 See Proctor C'l Co. i Finley, 98 Ky. 405. The old rule was applied to a stock corporation in Taylor v. Griswold, 14 N. J. L. 222, 237. In