obedience to the subpoena of the court, or referee acting under such order, or either of them or in any such case or proceeding.

§ 7. A referee appointed as provided in this act possesses all the powers and is subject to all the duties of a referee appointed under section ten hundred and eighteen of the code of civil procedure, so far as practicable, and may punish for contempt a witness duly served as prescribed in this act for non-attendance or refusal to be sworn or to testify, or to produce books, papers and documents according to the direction of the indorsement aforesaid, in the same manner, and to the same extent as a referee appointed to hear, try and determine an issue of fact or of law.

§ 8. Chapter three hundred and eighty-three of the laws of eighteen hundred and ninety-seven is hereby repealed.

§ 9. This act shall take effect immediately.

§ 8. Record of mortgage as evidence of certain recitals, etc.*-Whenever any mortgage affecting property or franchises within this state heretofore or hereafter executed by authority of the board of directors in behalf of any stock corporation, domestic or foreign, of any description, recites or represents in substance or effect that the execution of such mortgage has been duly consented to, or authorized by stockholders, such recital or representation in any such mortgage, after public record thereof within this state shall be presumptive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law. After any such mortgage heretofore or hereafter shall have been publicly recorded for more than one year in one or more of the counties of this state containing the mortgaged premises or any part thereof, and the corporation shall have received value for bonds actually issued under and secured by such mortgage, and interest shall have been paid on any of such bonds according to

*This heading is descriptive merely, and is not a part of the section as enacted.

the terms thereof, such recital or representation of such mortgage so recorded shall be conclusive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law, and its validity shall not be impaired by reason of any defect or insufficiency of consent or authority of stockholders or in filing or recording such consent or authority, and such mortgage shall be valid and binding upon the corporation, and those claiming under it, as security for all valid bonds issued or to be issued thereunder, unless such mortgage shall be adjudged invalid in an action begun. as hereinafter, in this section, provided. Notwithstanding the foregoing provisions of this section, the invalidity of any such mortgage heretofore recorded because of insufficiency of consent by stockholders may be adjudged in any action for such purpose begun before the first day of April, nineteen hundred and two, and the invalidity of any such mortgage hereafter recorded, because of insufficiency of consent by stockholders, may be adjudged in any action for such purpose begun, within one year after the earliest record of such mortgage in any county in this state, provided in either case that such action shall have been so begun by or in behalf of the corporation by direction of the board of directors acting in their own discretion, or upon the written request of the holders of not less than one-third of the capital stock of the corporation; and in any such action so begun by or in behalf of the corporation, the recitals or representations of the mortgage shall be presumptive evidence only as first above provided. Whenever hereafter, in compliance with any law of this state, the officers of any corporation shall have made and filed and recorded a certificate that the execution of a mortgage hereafter made by the corporation has been duly consented to by stockholders, such certificate shall be conclusive

evidence as to the

truth thereof, in favor of

any and all persons who in good faith shall receive or purchase, for value, any bond or obligation purporting to be secured by such mortgage, at any time when said certificate shall remain of record and uncancelled. Nothing in this section contained shall affect any right or any remedy in respect of any such right of any creditor accrued before this enactment nor shall it dispense with the necessity of obtaining the consent of the board of railroad commissioners to any mortgage by a railroad corporation.

Added by L. 1901, c. 354.

ARTICLE II.

DIRECTORS AND OFFICERS; THEIR ELECTION, DUTIES AND LIABILITIES.

SECTION 20. Directors.*

21. Change of number of directors.

22. When acts of directors void.

23. Liability of directors for making unauthorized divi

dends.

24. Liability of directors for contracting unauthorized debts and over-issue of bonds. (Repealed by L. 1901, c. 354.)

25. Liability of directors for loans to stockholders.

26. Transfers of stock by stockholders indebted to corporation.

27. Officers.

28. Inspectors and their oath.

29. Books to be kept.

30. Annual report.

31. Liability of officers for false certificates, reports or pub

lic notices.

32. Alteration of business.

33. Sale of franchise and property.

34. Liability of directors and officers defined.

SECTION 20. Directors.-The directors of every stock corporation shall be chosent at the time and place fixed by the by-laws of the corporation by a plurality of the votes at such election. Each director shall be a stock

* The lapse between § 7 of Article I. and § 20 of Article II. permits new sections to be added to the former article without disturbing the numerical arrangement of those of the latter.

The words "from the stockholders " were omitted by L. 1901, § 354, to correspond with the new provision allowing persons other than stockholders to become directors if the certificate of incorporation or a by-law adopted by a stockholders' meeting so provides. The former provision that a director must vacate his office when he ceases to be a stockholder was omitted by said amendment.

holder unless otherwise provided in the certificate, or in a by-law adopted by a stockholders' meeting. Vacancies in the board of directors shall be filled in the manner prescribed by the by-laws. Notice of the time and place of holding any election of directors shall be given by publication thereof, at least once in each week for two successive weeks immediately preceding such election, in a newspaper published in the county where such election is to be held, and in such other manner as may be prescribed in the by-laws. Policy-holders of an insurance corporation shall be eligible to election as directors, whether or not they be stockholders. At least one-fourth in number of the directors of every stock corporation shall be elected annually.

See L. 1811, c. 67, § 3; L. 1847, c. 210, § 38; L. 1848, c. 37, § 3; L. 1848, c. 40, § 3; L. 1848, c. 259, § 5; L. 1850, c. 140, § 5; L. 1852, c. 228, § 3; L. 1853, c. 117, § 3; L. 1853, c. 135, §§ 3, 7; L. 1853, c. 395, § 6; L. 1854, c. 232, § 3; L. 1854, c. 282, § 1; L. 1855, c. 425; L. 1857, c. 546, § 3; L. 1860, c. 269, § 1; L. 1867, c. 971, § 5; L. 1867, c. 974, § 5; L. 1873, c. 710; L. 1875, c. 606, § 11; L. 1875, c. 611, §§ 10, 26; L. 1877, c. 228, § 4; L. 1878, c. 203, § 5; L. 1879, c. 393, § 1; L. 1888, c. 462, § 4; L. 1890, c. 564, § 20; L. 1892, c. 688, § 20; L. 1901, c. 354; L. 1906, c. 238.

See 163 N. Y. 423.

The election of directors and the rights of stockholders thereat are regulated by § 20 of the General Corporation Law. See post, page 89. Any stockholder may call a meeting for the election of directors, if the latter fail to call the same within one month from the day designated by law or in the by-laws; or if the election result in a failure to elect directors. See post, page 94.

For provisions relating to the appointment of inspectors of election, their compensation and oath (which must be filed in the county clerk's office, together with a certificate of the result of the vote), see post, page 40.

§§ 1781-1783 of the Code of Civil Procedure refer to proceedings against directors for misconduct. For provisions of the Penal Code relating to corporations and their officers, see post, page 165 et seq.

For form of notice of annual election, and of oath and certificate of inspectors, see forms IV and V, post, pages 181 and 182.