Case Name: The People, Appellants, v. The Bankers' Loan & Investment Co., Respondent
Court: New York Court of Common Pleas
Jurisdiction: New York
Decision Date: 1895-06
Citations: 13 Misc. 221
Docket Number: 
Parties: The People, Appellants, v. The Bankers’ Loan & Investment Co., Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 13
Pages: 221–222

Head Matter:
The People, Appellants, v. The Bankers’ Loan & Investment Co., Respondent.
(New York Common Pleas—General Term,
June, 1895.)
The directors of the defendant have authoritj’-, under its constitution, to charge losses pro rata against the stock of the company’s shareholders in establishing the book value of the shares, and such action does not amount to a reduction of the capital stock of the company.
Action for dissolution of defendant corporation, and appeal from order at Special Term adjudging that defendant’s board of directors had power to fix the book value of its stock, and discharging temporary receiver.
Theodore E. Hancock, Attorney-General, and Straley, Hasbrouck ds Schloeder, for. appellants.
Wheeler & Oortis and John O. Ten Eyck, for respondent.

Opinion:
Per Curiam.
The defendant company having suffered a loss of $150,000, the board of directors charged this loss pro rata against the stock of the company's shareholders in establishing the book value of shares, and the single question submitted for decision is whether the board had authority for the act.
Unquestionably a board of directors has no power to reduce the capital stock of a corporation as fixed by its constitution. New York & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30 ; Sutherland v. Olcott, 95 id. 93 ; Railway Co. v. Allerton, 18 Wall. 233, 234. If the defendant may be said to have a capital stock its amount is not ascertained, nor is it reduced otherwise than to meet losses sustained by the company in the prosecution of its business. The board of directors, has the management of the common concerns of the company (Const, art. IY; Taylor Corp. § 180, 683), and we are of the opinion that to charge the losses of the company against its stock was an ordinary incident of its administration. People v. Lowe, 117 N. Y. 175. By article YIII of defendant's constitution the book value of a share of stock is ascertained by charging losses against shares. This is precisely what was done, and we conclude it to be clearly within the competency of the board. Taylor Corp., supra.
The order is affirmed, with costs.
Present: Bookstaver, Bisohoee and Pryor, JJ.
Order affirmed, with costs.