Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/611

 CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 584. not contravene the charter or enabling act and articles of asso- ciation. 1 A by-law that would deprive a shareholder of vested rights is invalid, 2 as, for instance, one prohibiting a share- holder from alienating his shares. 3 And a majority cannot by a by-law impose on shareholders individual liability for corpo- rate indebtedness. 4 A by-law consisting of several distinct and independent parts may be valid in one part and void in another. 5 § 5S4. The authority which is competent to enact by-laws is competent to repeal them; 6 but no more can their repeal than their passage affect a vested right. 7 1 Martin v. Nashville B'ld'g Ass'n, 2 Coldw. (Term.) 418; State v. Cur- tis, 9 Nev. 325; Andrews v. Union Mut. Fire Ins. Co., 37 Me. 256; Seneca County Bank v. Lamb, 26 Barb. 595; Bergman v. St. Paul Mut. B'ld'g Ass'n, 29 Minn. 275. See Adley v. Reeves, 2 Maule & S. 53; Gordon v. Muchler, 34 La. Ann. 604. Compare Goddard v. Mer- chants' Exchange, 9 Mo. App. 290; aff'd 78 Mo. 609; Kolff v. St. Paul Fuel Exchange, 48 Minn. 215. As to by-laws in restraint of trade, see Matthews y. Associated Press, 136 N. Y. 333; Trowbridge v. Hamilton, 18 Wash. 686; Bailey v. Master Plumbers, 103 Tenn. 99. 2 See Kent v. Quicksilver M'g Co., 78 N. Y. 159, 182; Peutz v. Citizens' Fire Ins. Co., 35 Md. 73; Holyoke Bldg. Ass'n v. Lewis, 1 Col. App. 127. But it is held that a person becoming a member of a corporation (not a stock corporation), may be bound by an agreement that his relations thereto shall be subject to by-laws then in force or thereafter to be en- acted. Supreme Commandery v. Aiusworth, 71 Ala. 436; cf. May- nard v. Interstate Ass'n, 112 Ga. 443, overruled in Interstate Ass'n v. Wooten, 113 Ga. 247. Pain v. Societe St. Jean Baptiste, 172 Mass. 319. But see Parish v. N. Y. Produce Ex- change, 169 N. Y. 34. 3 Moore v. Bk. of Commerce, 52 Mo. 377; In re Klaus, 67 Wis. 401; Ire- land v. Globe Milling Co., 21 R. I. 9. Compare Spurlock v. Pacific Rail- road, 61 Mo. 319. See McNulta v. Corn Belt Bk., 164 111. 427. A by- law providing that a shareholder who wishes to sell his shares must first give other shareholders an oppor- tunity to buy at the price which he can get, is invalid. Bloede Co. v. Bloede, 84 Md. 129. See, also, Trust, etc., Co. v. Lumber Co., 118 Mo. 447. Compare New Eng. T. Co. v. Abbott, 162 Mass. 148. 4 Reid v. Eatonton M'f'gCo., 40 Ga. 98; Trustees v. Flint, 13 Mete. 539. As to the reasonable construction that should be placed on by-laws, see In re Dunkerson, 4 Biss. 227; State v. Conklin, 34 Wis. 21. 5 Amesbury ». Bowditch Mut. Fire Ins. Co., 6 Gray, 596; State v. Curtis, 9 Nev. 325, 337. 6 Smith v. Nelson, 18 Vt. 511 ; Un- derbill v. Santa Barb. Land Co., 93 Cal. 300. 7 See Kent v. Quicksilver M'g Co., 78 N. Y. 159, 182; Parish v. N. Y. Produce Exchange, 169 N. Y. 34; Savage ». People's B. & L. Assn., 45 W. Va. 275. 591