any part of its capital stock, or reduce its capital stock, except § 31 according to this act, and in case of any violation of the provisions of this section, the directors under whose administration the same may happen shall be jointly and severally liable, at any time within six years after paying such dividend, to the corporation and to its creditors, in the event of its dissolution or insolvency, to the full amount of the dividend made or capital stock so divided, withdrawn, paid out or reduced, with interest on the same from the time such liability accrued; provided, that any director who may have been absent when the same was done, or who may have dissented from the act or resolution by which the same was done, may exonerate himself from such liability by causing his dissent to be entered at large on the minutes of the directors, at the time the same was done, or forthwith after he shall have notice of the same, and by causing a true copy of said dissent to be published, within two weeks after the same shall have been so entered, in a newspaper published in the county where the corporation has its principal office.

P. L. 1846, p. 17; P. L. 1846, p. 68; P. L. 1846, p. 69; P. L. 1849, p. 305; Act of 1875, § 7.

Williams v. Boice, 38 N. J. Eq., 364, held that an express statutory provision, holding corporation directors personally responsible for dividends paid out of the capital instead of the profits, does not exonerate the stockholders from liability to repay such dividends for the benefit of the creditors of the corporation. "It is undeniably true, as a general proposi "tion, that stockholders are liable in equity to repay, for the benefit of "the creditors of the corporation, money which has been paid to them "out of the capital stock. This is not based on any statute, but upon the "equitable ground that the stock is regarded as a trust fund for all the "debts of the corporation, and no stockholder can entitle himself to any “dividend or share of it until all the debts are paid. And the remedy is in equity and not at law." (ld., p. 367.)

See further as to dividends, § 47 and notes.

31. Voluntary dissolution.

Whenever, in the judgment of the board of directors, it shall be deemed advisable and most for the benefit of such corporation that it should be dissolved, the board, within ten days after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, of which meeting every director shall have received at least three days' notice, shall cause notice of the adoption of such resolution to be mailed to each stockholder residing in the United States, and also beginning within said ten days cause a like notice to be published in

§ 31 a newspaper published in the county wherein the corporation shall have its principal office, at least four weeks successively, once a week, next preceding the time appointed for the same, of a meeting of the stockholders to be held at the office of the corporation, to take action upon the resolutions so adopted by the board of directors, which meeting shall be held between the hours of ten o'clock in the forenoon and three o'clock in the afternoon of the day so named, and which meeting may, on the day so appointed, by a consent of a majority in interest of the stockholders present, be adjourned from time to time for not less than eight days at any one time, of which adjourned meeting notice by advertisement in said newspaper shall be given; and if at any such meeting two-thirds in interest of all the stockholders shall consent that a dissolution shall take place and signify their consent in writing, such consent, together with a list of the names and residences of the directors and officers, certified by the president and the secretary or treasurer, shall be filed in the office of the secretary of state, who, upon being satisfied by due proof that the requirements aforesaid have been complied with, shall issue a certificate that such consent has been filed, and the board of directors shall cause such certificate to be published four weeks successively, at least once a week, in a newspaper published in said county; and upon filing in the office of the secretary of state of an affidavit that said certificate has been so published, the corporation shall be dissolved and the board shall proceed to settle up and adjust its business and affairs; whenever all the stockholders shall consent in writing to a dissolution, no meeting or notice thereof shall be necessary, but on filing said consent in the office of the secretary of state he shall forthwith issue a certificate of dissolution, which shall be published as above provided.

P. L. 1870, p. 8; Act of 1875, § 34; P. L. 1877, p. 20; P. L. 1893, p. 445, § 4.

It rests in the judgment of the directors whether the stockholders shall be called together under this section. "It is well settled that the "shareholders in a corporation cannot extinguish its charter or dissolve "it, and that a court of equity cannot dissolve it at their instance. In the "absence of a statutory provision the franchises can be declared forfeited "and extinguished only at the suit of the State in an appropriate proceed"ing at law. But when it plainly appears that the object for "which the company is formed is impossible of attainment, it becomes "the duty of the company's agents to put an end to its operations and "wind up its affairs, and should they, even though supported by a majority of the shareholders, pursue operations which must eventually be

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ruinous, any shareholder feeling aggrieved would, upon plain equitable § 32

principle, be entitled to the assistance of this court, and a decree should "be made compelling the directors to wind up the company's business and "distribute the assets among those who are entitled to them, unless they "can lawfully be used for other business purposes allowed by the char"ter." (Benedict v. Columbus Construction Co., 49 N. J. Eq., 23, 36). The power of the directors and stockholders to dissolve the corporation being purely statutory, it is important that every requirement of the statute be strictly carried out.

It will be noted that two methods of dissolving the corporation are prescribed by this section:

Ist. Where unanimous consent of the stockholders cannot be obtained. 2d. Where all the stockholders consent.

In the first case this section requires:

(1) A meeting and resolution of the board of directors; (2) the mailing and publication of a notice to and meeting of stockholders; (3) a consent in writing filed with the secretary of state signed by two-thirds in interest of the stockholders; (4) the filing with the secretary of state of a list of the names and residences of the directors and officers certified by the president and secretary or treasurer; (5) the issuing by the secretary of state of "A certificate that such consent has been filed," which certificate is not"a certificate of dissolution," but is a certificate preliminary to dissolution; (6) the publication of such certificate; (7) the filing of an affidavit of publication with the secretary of state.

The certificate issued by the secretary of state should comply with the provisions of section 43a.

The dissolution will then be complete and of record.

In the second case, apparently, no meeting of directors is required nor any meeting of the stockholders; nor does it seem to be necessary to file a list of officers and directors; all that is required is the filing of the written consent of all the stockholders, whereupon the secretary of state issues a certificate of dissolution. This certificate must be published as in the first case, and affidavit of publication should be filed in the office of the secretary of state.

There should be attached to all certificates of dissolution filed in the office of the secretary of state a certificate of the comptroller of the treasury that all state taxes have been paid. (P. L. 1900, p. 316.)

In all cases of dissolution the directors become trustees of the creditors and stockholders in the distribution of the assets. (§ 53 et seq.)

32. Incorporators may dissolve corporation.

The incorporators named in any certificate of incorporation, before the payment of any part of the capital, and before beginning the business for which the corporation was created, may surrender all their corporate rights and franchises, by filing in the office of the secretary of state a certificate, verified by oath, that no part of the capital has been paid and such business has not been begun, and surrendering all rights and franchises, and thereupon the said corporation shall be dissolved.

P. L. 1893, P. 444.

§ 33

III-Elections; Stockholders' Meetings.

33. Stock and transfer books must be kept in registered office; annual list of stockholders.

Every corporation shall keep at its principal and registered office in this state the transfer books in which the transfer of stock shall be registered, and the stock books, which shall contain the name and address of the stockholders, the number of shares held by them respectively, which shall at all times during the usual hours for business be open to the examination of every stockholder; the directors shall cause the secretary, or other officer designated by them having charge of said books, to make, at least ten days before every election, after the first election, a full, true and complete list, in alphabetical order, of all the stockholders entitled to vote at the ensuing election, with the residence of each, and the number of shares held by each, which list shall at all times during the usual hours for business be kept at such principal and registered office, and open to the examination of any stockholder at said office, and if any officer having charge of such books or list shall, upon demand by any stockholder, refuse or neglect to exhibit such books or list, or submit them to examination as aforesaid, he shall for every such offense forfeit the sum of two hundred dollars, one-half thereof to the use of the state of New Jersey, and the other half to him who will sue for the same, to be recovered by action of debt in any court of record, together with costs of suit, and the books aforesaid shall be the only evidence as to who are the stockholders entitled to examine such books or list, and to vote at such election; and the board of directors shall produce at the time and place of such election such books and list, there to remain during the election, and the neglect or refusal of said directors to produce the same shall render them ineligible to any office at such election.

(As amended by Chap. 172, § 3, Laws of 1898; P. L. 1898, p. 408.) P. L. 1825, p. 81; P. L. 1841, p. 117; P. L. 1846, p. 70; R. S. (Ed. of 1846), p. 139, §§ 1, 4; P. L. 1849, p. 306; Act of 1875, $$ 36-41.

The Acts of 1846 and 1875 required the books to be open to the examination of every stockholder for thirty days previous to any election of directors. The present act requires them to be open at all times during business hours.

The Supreme Court in 1851, construing the phrase "books containing