of them, directly or indirectly, to purchase or be interested in the purchase of any promissory note or other evidence of debt issued by any such company at a less sum than appears by the face thereof to be due and payable; and any person offending against the provisions of this section shall forfeit and pay three times the nominal amount of the note or other evidence of debt so purchased, to be recovered with costs of suit by any person who will sue for the same in any court of competent jurisdiction.

Officers, etc., of Corporations not to Loan upon Certain Notes-Notes, etc., Void-Further Penalty.

§ 10. It shall not be lawful for any person being president, director, cashier, clerk, agent, or any way interested or concerned in the management of the concerns of any such company to discount, or directly or indirectly make any loan upon any note, bill or other evidence of debt which shall have been offered to such directors for discount; and every note, bill or other evidence of debt so discounted, or upon which any loan shall have been made by any of the persons aforesaid, knowing that such note had been so offered and refused, shall be utterly void; and the person offending herein, knowing that such note had been so offered and refused by making any discount or loan, shall for every such offence forfeit and pay to any person who will sue for the same, twice the amount of any such discount or loan, to be recovered by action of debt, with costs of suit, in any court of competent jurisdiction.

Application.

§ 11. The provisions of this title shall not apply to any religious society, nor to any moneyed corporation which shall have been, or shall be, created, or whose charter shall be renewed or extended after the first day of January, one thousand eight hundred and twenty-eight, and which shall be subject to the provisions of the second title of this chapter. (Thus amended by Laws of 1871, ch. 883.)

Laws of 1850–Chapter 172.

AN ACT TO PROHIBIT CORPORATIONS FROM INTERPOSING THE DEFENCE OF USURY IN ANY ACTION. PASSED APRIL 6, 1850.

Defence of Usury not to be Interposed.

§ 1. No corporation shall hereafter interpose the defence of usury in any action.

1. The prohibition contained in this section is retrospective. Curtis v. Leavitt, 15 N. Y. 151.

2. This act only prevents the avoidance of its own contracts by a corporation on the ground of usury; it does not apply to a case where the corporation succeeds to the rights of the party who might avail himself of the provisions of the usury laws. Merchants' Exchange Bank v. Commercial Warehouse Co., 49 N. Y. 635.

3. A corporation may avail itself of the plea of usury against a note made by it for the accommodation of an indorser, who indorsed and delivered it to the plaintiff for a usurious consideration. Strong v. N. Y. L. M. Co., 37 N. Y. Sup. Ct. 229.

Definition of Term Corporation.

§ 2. The term corporation, as used in this act, shall be construed to include all associations and joint-stock companies having any of the powers and privileges of corporations not possessed by individuals or partnerships.

Laws of 1870-Chapter 135.

AN ACT FOR THE RELIEF OF CORPORATIONS ORGANINZED UNDER GENERAL LAWS. PASSED APRIL 5, 1870.

Filing of Amended Certificates-How Deemed and

Taken.

§ 1. The directors of any corporation organized under any general act for the formation of companies, in whose original certificate of incorporation any informality may exist, by reason of an omission of any matter required to be therein stated, are hereby authorized to make and file an amended certificate or certificates of incorporation, to conform to the general act under which said corporation may be organized; and upon the making and filing of such amended certificate, the said corporation shall, for all pur

poses, be deemed and taken to be a corporation, from the time of filing such original certificate.

Proviso.

$2. Nothing in this act contained shall in any manner affect any suit or proceeding at the time of filing such amended certificate pending against said corporation, or impair any rights already accrued.

It seems that this statute is to enable companies to remedy patent omissions, that is, the omission of matters which are required to be stated, and which, being omitted, make the certificate imperfect on its face. In re N. Y. L. E. & W. R. R. Co., 25 Hun, 556.

SECTION IV.

TRUSTEES MAY CALL IN SUBSCRIPTIONS-FORFEITURE—

NOTICE.

§ 4. It shall be lawful for the trustees to call in and demand from the stockholders respectively, all such sums of money by them subscribed, at such times and in such payments or instalments as the articles of association shall prescribe, under the penalty of forfeiting the shares of stock subscribed for, and all previous payments made thereon, if payment shall not be made by the stockholder within sixty days after a personal demand or notice requiring such payment shall have been published for six successive weeks in the newspaper nearest to the place where the business of the company shall be carried on as aforesaid.

This is a statutory right of forfeiture of the share of defaulting shareholders. To secure the benefit of it to the association, strict adherence to the letter and spirit of this section and to the appropriate articles of association, must be observed. On becoming a member, the shareholder contracts to perform certain duties to the association, and default or omission is ordinarily a breach of contract and a suit at law is the available remedy. This section goes further than the common law, and gives an additional and a more summary remedy. It terminates the ownership of the shares, and the accrued profits as well as payments

previously made by the defaulting member revert to the association. Forfeitures are not favored by the law and statutory provisions that allow them are to be strictly construed.

Notice of proceedings for forfeiture should be given by personal service, if the articles of association do not prescribe any.

Wachtel Admrx. v. Noah Benevolent Society, 11 N. Y. Weekly Digest, 457.

SECTION V.

ASSOCIATIONS MAY BORROW-LOANS MAY NOT EXCEED TWO YEARS-LIMITATION ON AMOUNT OF LOAN.

§ 5. All corporations formed under this act shall have power to borrow money for temporary purposes not inconsistent with the objects of their organization; but no loan for such purposes shall have a longer duration than two years, nor shall such indebtedness exceed at any one time one-fourth of the aggregate amount of the shares and parts of shares, and the income thereof actually paid in and received.

SECTION VI.

MINORS AND MARRIED WOMEN MAY OWN SHARES-LIMITATIONS OF THIS PRIVILEGE.

§ 6. Parents and guardians may take and hold shares in such association in behalf and for the use of their minor children or wards, provided the cost of such shares be defrayed from the personal earnings of such minor children or wards, or by gifts from persons other than their male parents; married women may take and hold shares in such associations, provided the cost of such shares be defrayed from their personal earnings, the personal earnings of their children voluntarily bestowed for this purpose, or

from property bequeathed or given to them by persons. other than their husbands.

The intention of this section seems to be a prevention of fraudulent conversions of money into shares for the purpose of avoiding creditors. In the case of minor children, parents or guardians become trustees and are chargeable with all the duties and responsibilities of that important fiduciary relation. When the minors attain their majority they become absolute owners of the stock with all the incidental duties and privileges of membership. During the minority, the parent or guardian is entitled to all the rights of actual membership, to be used for the benefit of the ward. Between the association and the parent legal ownership is in the parent. In the event of improper or dishonest acts of the guardian the ward may apply for his removal. When the ward attains his majority the trustee should notify the association of the fact and full membership will attach to the former minor.

Married women are not now at any disability at commou law when coming within either of the following classes: those who have a separate estate, and those who have a separate business or occupation.

Although these enabling statutes are in some respects in derogation of common law, and should therefore be strictly construed, there is but slight foundation for the legal doubt that minors, through trustees, may not validly mortgage their land to the association for loans. The trust created by this section is ample warrant for the taking of title by the association when the land mortgaged is purchased with the funds loaned by the association. It is questionable, however, whether trustees can even under the authority conveyed by this section validly mortgage the realty of minors which they own independently of any membership in an association.

Monumental Building Association v. Herman, 33 Maryland Rep., 128.

SECTION VII.

TERMINATION OF CORPORATE LIFE-SERIAL, PERMANENT AND TERMINATING ASSOCIATIONS-DIVIDENDS-USURY -LIABILITY OF TRUSTEES-ANNUAL REPORT-EXAMINATION.

§ 7. Every such corporation shall terminate, except for the purpose of settling its affairs, whenever all the shares thereof shall be redeemed by advances thereon, or whenever the owners of unredeemed shares shall be paid the