New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1854-09-22

.n1 70 tr.nsf.r Of n. oek shall thereafter be made or s
ted ihout the surrender Of .sld csruac.ie u4s as
.h. - -. o. si.sd sad ,her ouv speo.l resoli'1
~, po.re II ir- md in com,s-ec win tls fule 30
rststien' e Hs 'en: 'He 8; l1 en' = % as 70 Id
r.q5ired from IN, b the BoAsd q Dree-lrs
SCHUYLER. beilr the Prssiieri u TIE Company. Wa
eupoiri.d tie Transfer Agent n Nsw-fc-S; slnhs
a, = e. bef.a e---i-led f. G-d BIstor.
ssor afterward TIE crp''sl Fas increased 70 thrs'
Millions a. authorized ty the section already qno'ed
III. whole Of which wa paid in and sc1p eertalc rs
Issued Tor the shares 20 the respective Owners. iie
csrits Lss fhus stood at three millions, beyoad wheh
l. could not te increased without Al Get ~ me Legs
lsture Of Connecticut for nearly ten Yea In ths
autumn Of 1853. and subsequently, Schuyler, scanS
a. Traufer Agent. having blank certircies OF '''cN
in hs uossesson for the purpose Of ranserrl1g e1-
sting shares when the ola certificates should he sd
=, u4.red made illegal issue Of e ttc4;e. pIrpo-
inc 10 IeuTeseDt shares IN the Company, SIth01i tue
k-owI.age or authority Of the Board OF DrectoFs OF
sty member q Il; DO prior valid certificate Of shar
being surrendered. These Illegal certificates were -
the some form, and sgned in the same manner a. lie
vslid cert fcates, with tie name OF " Scbuyhf
Transfer Agent; il having beea the uniform GsL-e
Of he Company 20 afI no name u their stock cer-
fcs'es oLer than that Of their Transfer AGENT AZ the
place wh,re the transfer was made. These certiI-
csfss 10 the amount Of neary 90 100 OCD, were Issued
10 L & G.. l. Schuyler fra N which he wa
member and 10 other persons - whom they 2-i ned
them and were used by Schuyler 10 his own private
business or in that Of the firm: chiefly BY o0rO"ins
money upon them, sud pledging them az collateral.
None Of The transactions IN these shares we're, osn-
sibv or really for the benefit OF the Company; nor
IN "a sirg Them did Schuyler profess 70 set as the
Pr sidcnt or Trsnffer Agent OF the Company, BAT
SIMPLY ior the firm a. the OwOers OF the shares E4,h
certificate for large number Of shares, add nose
iisLed 10 h, firm were generally delivered WIN DialA
roNers Of attorney to trnns.er tie stock, signed by
SCI uvler in the name u hs firm. without bel1, sc:l
tlly transferred on the books.
UI0n these fects we are OF opinion,
!. That these certificates OF stock are Illegal and
void ara that thes confer upOn the holders rights
~ stockholders. II the Board Of Directors mai
originally used like exec ,sive number Of shares
their oct N 20 doing ~oald have been Illegal a ii
void: ard these clu stand on 70 better crounl In
iced, the holders of them nre in 4 much worse con-
diuon than the holders Of such shares would have
been.
il. That the Company is rot bound 70, and that il
carrot lawfully recognize or adopt .nem, 9s repre-
setting Sd res 10 the Company, or a. et'iilng tls
iodeis 10 6ny Of the rights Of shareholders. The
Board Of D ectors could not, b, any vote or resou-
iiun Whatever Increase the stock BE- Ond the three
Millions her poter OF that subject was exhausted
wbfn they brought il up 10 that sun, and ary effort
10 20 teyond il. would not only have been invalid,
but violation Of he charter war; snting forfeiture.
II follows a necessary CO nseqlsnce, that no sub
Groin ate tgent OF the Company could do what the
Board Of Drecfsrs Itself cOnld not. and that the
Hoarc Of Directors have no power to rstify or con-
firm any act which they could not originally perform.
be 20 es to ADMIT the holders Of thee illegal shares
as OsD u of stock, requires not smply their al MS
tuu O. steel hudCrf but the power 10 reject ant ex
cluGe al equal Iumuer of lawful shareholders from
their rights a. such. II tie holders of the Illegal
shares al entitled TO co ne ia at all II Il a. stock
holders in Company with stock OF three millions;
Il ~ received the shares os such and not "a shares IN
cs,al Of five millions, and their just rights in that
event quire the custer of equa number Of iawial
shares So a. K, ep the capital within three ml )ns.
II is Qu ie obvious that the Company have no power
to do either Of these things.
Ill. That the unau hoTiZed and Illegal act Of the
Trensfer Agent il issuing these certificates to his
frm and raising money upon them for his and their
own ne does not create any debt or any legal O5ga-
ton agoiDst the Company. He was only the a-ent Of
the Company TO issue new certncates OF stock for me
three millions of its lawful capital whenever certi
eetes previously Issued surrendered His agency
did not EXTEND could it lawfully extend to the Gre
alton Of new shares No such power had been con
fer. upon the Company and Of course II could not
be conferred upon BIN. He was not empowered 20
Eel or transfer shros, nut simply to transfer the
old ones and AL bey Ond this was plain excess Of
power ard obvious ilegalify. "A corporation is
never responsibe for the unauthorized and unlawful
acts If IL ocers rauscendng their corporate powers,
though done ooO7e ofcu. To fix the liability, il must
appear that the officers authorized by the charter
10 90 The act that it was done bona ffe pursuance
Of general authority in relation to tne subject OF u,
or thai il has been adopted or ratified by the corpora
tom where il is a matter wi;hlH the corporate au-
thoTty.
In the case Of general agent his acts will be bind
inc on the principal though he violates his particular
Instructions, pow the acts done ii violation
thereof come within the general scope OF his au-
iboIity But il caunO; j. said that an act extending
beyond the subject aud Of course beyond this limits
Of the agent authority can be valid when also trans
cends the power ard authority OF the principal HIM
self and ore especially when in thus irsnsrending
N, authority Of the principal il is at the same time
Illegal and against he policy Of the law.
" Ii follow from these views that that the Board
Of Directors Las more eothority to recognize the
hodUs OF these illegal certificates a. creditors Of The
COMPANY for the amount advanced upon them, ihaa
il has 20 20 nit them the rights OF stockholders.
Tie Directors Of Corporation have No power to
sppropTietr lie funds or TO give an obligation 10 pay
al i'll gal claim which is made against il. This was
settleo by The Court Of Appeals in the Gaze Of Hal
stead VS. The M0yOr of Mar York, 10 Cost X, 4jJl
where the Corporation Of this City gave its drlfts 70
the Corporation Counsel to pay the costs of defend,
ing suit against some of the Aldermen who had
done an act n which the City not interested, in
yola'ion Of law the defense hlving been assumed by
a resoluti, of the Common Council Ii held
that the drafts were void even in the hands of
third party. If therefore the Directors should apply
The funds Of the Company to pay these advances
without the consent of the lawful stockholders they
would be personally liable for Incorporating the
Companys property, and if they should give the
Con pany bonds for the amount they would be void,
and DO recovery could be had upon them.
V. That if ali the holders of the lawful stock should
consent the Board of Directors might recognize the
holders Of the Illegal shares as creditors for the sums
advanced upon them, and might pay give the bones
Of tie Compeny for the amount; 70 if like consent
WIS given they might be recognized as stockholders
bot in order 10 90 this act OF the Legislature of
Connec would be necessary TO in crease the capri
tai 60 as 10 include the whole number of legal and
spurious shares TO reduce the original stock so as
to brig it after adding the spurious shares within
tie prescribed Limit Of three millious. la no other
way can this be lawfully done.
VIZ. Curtis MOVES,
George WOOD.
Mex. York August g. 1854.