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and generally for transacting, managing and directing the affairs of the corporation; provided such by-laws, rules and regulations are not repugnant to, nor inconsistent with the provisions of this act, the constitution and laws of this State or of the United States." 1

§ 1002. Telegraph Companies. "The board of directors" of telegraph companies — "shall provide a code of by-laws for the government of the corporation and the management of its business." 2

"The trustees" of trust com

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§ 1003. Trust Companies. panies "shall have power to make and use a common seal and shall have power, from time to time, to make and establish such bylaws, rules and regulations, not inconsistent with the laws of this State or of the United States, as they shall deem expedient for the conduct and management of the business affairs and property of said company; for the issue and transfer of the stock of said company; for determining the time and manner of holding elections and meetings of the company and of the trustees, for the filling of vacancies in the board of trustees, and for the conduct, management and regulation of all other matters that may appertain to the concerns of said corporation." 3

SECTION

ARTICLE III. REQUISITES AND VALIDITY.

1010. General statements of the requisites of good by-laws.

1011. Must not be contrary to the charter.

1012. Illustrations.

1013. Must not be contrary to law. 1014. Limitations of the foregoing rule.

1015. Must not be contrary to the articles of incorporation.

1016. Must not be contrary to common right.

1017. Illustrations of municipal or-
dinances contrary to com-
mon right.

1018. Must operate equally.
1019. Must not disturb vested rights.
1020. Must not be unreasonable, op-

pressive or extortionate.

12 Rev. Stat. N. Y. (Banks & Bros. 8th ed.), p. 1566, § 251.

'Rev. Stat. Ind. (1888), § 4167.

SECTION

1021. Must be reasonable.
1022. Reasonableness of corporate by-
laws a question of law.
1023. Illustrations of by-laws held
void because unreasonable.
1024. Instances of municipal by-laws
held unreasonable and hence
void.

1025. Illustrations of municipal by-
laws held not unreasonable.

1026. By-laws touching the admission of persons to the freedom of a place.

1027. By-law compelling elected member to wear livery, and pay initiation fee or a forfeiture. 1028. Must not be in restraint of trade. 1029. The ancient law on this subject.

32 Rev. Stat. N. Y. (Banks & Bros. 8th ed.), p. 1599, § 18.

SECTION

to

1030. By-laws establishing combinations among workmen maintain prices.

1031. Regulating or restraining transfers of shares.

1032. Creating a lien upon shares. 1033. Releasing shareholders from

their obligation of payment. 1034. Restricting the right to sue in the courts. 1035. Compelling members to submit

their disputes to arbitration. 1036. Power to enforce by pecuniary fines.

1037. Cannot be enforced by a forfeiture of property.

1038. Nor by a forfeiture of shares. 1039. Otherwise where power ex

pressly conferred by charter. 1040. The fine or penalty must be certain.

1041. Making the corporation a judge in its own case.

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SECTION

1042. Views as to the proper measure of such fines.

1043. Illustrations: by-laws of build-
ing associations imposing ex-
cessive fines.

1044. Imposing fine for non-accept-
ance of a corporate office.
1045. Imposing fines for non-attend-
ance at corporate meetings.
1046. By-laws regulating the conduct
of corporate members.
1047. Disinclination of the courts to
interfere with the by-laws of
societies.

1048. Valid in part and void in part.
1049. Establishing a quorum of the
board of directors.

1050. Regulating corporate elections. 1051. Forbidding secret societies in colleges.

1052. Instances of by-laws which have been held valid.

1053. Conclusion of title one.

§ 1010. General Statements of the Requisites of Good By-Laws. - Collecting certain general statements of the requisites of good by-laws which are to be met with in the decisions, it may be said that a by-law must be certain;1 must be directed to all within the sphere of its operation, and must operate equally upon all to whom it applies. To these it may be added that it must not be contrary to the charter, or articles of association of the corporation, or to the constitution or common or statute law of the State, nor retroactive, nor violative of vested rights, nor in restraint of trade, nor unreasonable,10 nor contrary to good morals or public policy."1

1 Goddard v. Merchants' Exchange,

9 Mo. App. 290, 295.

2 Post, § 1018.

3 Goddard v. Merchants' Exchange, 9 Mo. App. 290, 295; Stewart v. Father Matthew Society, 41 Mich. 67; Cartan v. Father Matthew Society, 3 Daly (N. Y.), 20; People v. Medical Society, 24 Barb. (N. Y.) 570.

4 Post, ¿1011.

5

6

9

Post, § 1015.

Post, § 1013.

Post, § 1019.

8 Post, § 1019.

9 Post, $1028. 10 Post, § 1021.

11 "The power of a corporation to make by-laws for the government of its members does not authorize it to violate law, nor to require its mem

§ 1011. Must not be Contrary to the Charter. By-laws which are contrary to the charter or governing statute of the corporation are of course void.1 Stated in general terms, no by-law is valid which either enlarges or restricts the rights and powers conferred by the charter or governing statute; for, as already seen, a body of co-adventurers cannot make themselves a corporation, or take to themselves corporate franchises without the authorization of the State. So, by a parity of reasoning, they cannot enlarge, by the mere passage of by-laws, the powers and franchises which the State has seen fit to confer upon them; nor can the majority of them curtail or diminish those powers and franchises to the injury of a dissenting minority. A common illustration of this principle is found in the proposition, supported by decisions almost without number, that the power given to a municipal corporation, by its charter or governing statute, to establish ordinances in certain cases and for certain

bers to do so. The power is limited by the nature of the corporation and the laws of the country. It can make no rule which is contrary to law, good morals, or public policy." Sayre v. Louisville &c. Asso., 1 Duv. (Ky.) 143; 8. c. 85 Am. Dec. 613; citing Ang. & A. Corp., § 335. "Every by-law by which the benefit of the corporation is advanced is a good by-law for that very reason; that being the true touchstone of all by-laws." London City v. Vanacker, Carth. 480, 482, per Lord Holt, C. J.

1 Kent v. Quicksilver Mining Co., 78 N. Y. 157, 182; Bergman v. St. Paul &c. Building Asso., 29 Minn. 275; State v. Curtis, 9 Nev. 325; Presbyterian &c. Fund v. Allen, 106 Ind. 593; American Legion of Honor v. Perry, 140 Mass. 580; State v. Curtis, Nev. 325; Kearney v. Andrews, 10 N. J. Eq. 70; Brewster v. Hartley, 37 Cal. 15, 24; s. c. 99 Am. Dec. 237; Andrews v. Union &c. Ins. Co., 37 Me. 256; Rex v. Weymouth, 7 Mod. 373; Rex v. Bermstead, 2 Barn. & Ad. 699; Rex v. Spencer, 3 Burr. 1827. "A by-law

may subject persons to penalties, but
cannot make an act void which is war-
ranted by the original constitution."
Dr. Harscot's Case, Comb. 202, 203,
per Holt, C. J.
"They ought," said
Lord Mansfield, "(as being the crea-
ture of the charter), to be restrained
from making any by-laws inconsistent
with it, or counteracting the end, in-
tention, and directions of it; though
it may not be unreasonable to allow a
greater latitude in making by-laws,
for the good of the corporation, to the
common council of a corporation by
prescription, where the common coun-
cil is by prescription, and such pre-
scription authorizes them to make by-
laws for the good of the corporation."
Rex v. Cutbush, 4 Burr. 2204.

2 Brewster v. Hartley, 37 Cal. 15; s. c. 99 Am. Dec. 237; Great Falls &c. Ins. Co. v. Harvey, 45 N. H. 292; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Railway Co. v. Allerton, 18 Wall. (U.S.) 233.

3 Ante, § 35.

▲ Brewster v. Hartley, 37 Cal. 15, 24; s. c. 99 Am. Dec. 237.

purposes, is a delegation of legislative power for those cases and those purposes only, and all others are excluded by implication.1 Where there are general provisions for the enactment of ordinances or by-laws, and in the same charter there are specific provisions for special subject-matters, the general provisions do not enlarge or restrict the special provisions; nor do the specific provisions, for special subject-matters, curtail the power under the general provisions, any further than necessarily results from the nature of the special provisions, unless a contrary intent is apparent. But it seems that a by-law is not necessarily void. because it still further restricts a provision of the charter, unless the provision of the charter is couched in such terms as to show that the power to restrict was intended to be excluded.3

2

§ 1012. Illustrations. Thus, where the charter gives to the stockholders the power to elect the directors, the corporation cannot, by a by-law, take away this power. So, where the charter of an insurance company authorizes it to insure against fire only, a by-law referred to in a policy recognizing damages by lightning as one of the risks assumed, imposes no obligation upon a company to pay for losses other than by fire,5 a decision which puts the public dealing with corporations at the peril of knowing the powers conferred by every special charter. So, where the salaries of some of the officers of a corporation are fixed by the charter, the corporation have no authority to change such salaries by the by-laws, although the charter contains a clause authorizing them to fix salaries. This can apply only to salaries not fixed by the charter."

1 New Orleans v. Philippi, 9 La. An. 44; Dill. Mun. Corp. (4th ed.), § 316.

2 Huesing v. City of Rock Island, 128 Ill. 465.

3 The charter of a borough provided that the mayor was to be chosen by the capital burgesses, out of the capital burgesses who should number 24; but a usage, founded on a by-law, was to the effect that the common burgesses should put five of the capital burgesses in nomination, out of which five the capital burgesses should

choose one to be mayor. This was held to be but a usage, its object being merely to avoid popular confusion. Barber v. Boulton, 1 Strange, 314. But it is obvious that in this case the by-law was not at all restrictive of the charter provision, which simply regulated the mode of selection.

4 Brewster v. Hartley, 37 Cal. 15, 24; s. c. 99 Am. Dec. 237.

5 Andrews v. Union &c. Ins. Co., 37 Me. 256.

6 Carr v. City of St. Louis, 9 Mo.

191.

§ 1013. Must not be Contrary to Law. Generally speaking, a by-law which is contrary to the law of the land, common or statutory, is void.1 For stronger reasons, it is void if it is contrary to the constitution of the State, for an act of the legislature in such a case is void. As the legislative power cannot be delegated, it has been reasoned that the legislature cannot confer on a moneyed corporation power to enact by-laws contravening, repealing or in any wise changing, the statutory or common law of the land.3

§ 1014. Limitations of the Foregoing Rule. But this is to be understood rather of by-laws which violate the positive injunctions of the statute law of the State, which are intended to operate universally and of those cases where no power has been conferred upon the corporation to make a different rule for the particular corporation or particular case. And, in its relation to the common law, it is to be understood of by-laws which violate those fundamental principles of right which are embodied in the common law. Obviously, the mere fact that a by-law makes a different rule for the government of the particular class of persons upon whom it operates, from the general rule of the common law, is no objection to its validity; for otherwise by-laws would be of no value, because unnecessary. As they could not dis

1 Bullard v. Bank, 18 Wall. (U. S.) 589; People v. Benevolent Society, 3 Hun (N. Y.), 361; People v. Fire Department, 31 Mich. 458; People v. Crockett, 9 Cal. 112; Kennebec &c. R. Co. v. Kendall, 31 Me. 470; Hayden v. Noyes, 5 Conn. 391; People v. Medical Soc., 24 Barb. (N. Y.) 570; New Orleans v. Philippi, 9 La. An. 44. So a municipal ordinance which is repugnant either to the constitution of the United States, the constitution of the particular State, or its general law, whether statute or common, is ipso facto void. Burlington v. Kellar, 18 Iowa, 65; Pesterfield v. Vickers, 3 Coldw. (Tenn.) 205; Indianapolis v. Gaslight Co., 66 Ind. 396; Wilkesbarre City Hospital v. Luzerne, 84 Pa. St.

59; Livingston v. Albany, 41 Ga. 22; Wood v. Brooklyn, 14 Barb. (N. Y.) 425; State v. Hardy, 7 Neb. 377; Cullinan v. New Orleans, 28 La. An. 102; Illinois Central R. Co. v. Bloomington, 76 Ill. 447; Shreveport v. Levy, 26 La. An. 671; s. c. 21 Am. Rep. 553; Judson v. Reardon, 16 Minn. 431, 435; New Orleans v. Savings Bank, 31 La. An. 637; Walker v. New Orleans, 31 La. An. 828; State v. Caldwell, 3 La. An. 435; Vance v. Little Rock, 30 Ark. 435; Mayor v. Hussey, 21 Ga. 80; Haywood v. Mayor, 12 Ga. 404.

2 State v. City of Cincinnati, 23 Ohio St. 445.

3 Seneca County Bank v. Lamb, 26 Barb. (N. Y.) 595.

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