holders directly or indirectly to recover from the directors the very § 31 moneys which they have already received." In the opinion the vice-chancellor makes an exhaustive review of the authorities on the various points covered by this section. (Siegman v. Maloney, 51 Atl. Rep., 1003.)

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 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 news

§ 31 paper 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 proceeding at law. * * * But where it plainly appears that the object for which the company was 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 ruinous, any shareholder feeling aggrieved would, upon plain equitable 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 dis-' tribute the assets among those who are entitled to them, unless they can lawfully be used for other business purposes allowed by the charter." (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 twothirds 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; simply the filing of the written consent of all the stockholders verified by an officer of the company. 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.) This certificate of dissolution must be published as in the first case, and affidavit of publication should be filed in the office of the secretary of state.

§ 31

In Windmuller v. Standard Distilling & Distributing Company (114 Fed. Rep., 491), Kirkpatrick, District Judge, held that there is no provision in the law which authorizes the Court to review the judgment of the Directors as to the advisability of dissolution. He further held that the fact that more than two-thirds of the stock of the Company to be dissolved was held and owned by another corporation to whose interest it was that such dissolution should take place did not prevent such corporation from exercising its right under the statute to vote on such stock. The Standard Distilling and Distributing Company had guaranteed the payment of certain dividends on the preferred stock of the Spirits Distributing Company during the existence of said Distributing Company. The Distilling Company of America was the owner of a large majority of the shares of both the Standard Company and the Distributing Company and it was to the interest of the Distilling Company that the contract between the Standard Company and the Distributing Company providing for such guarantee should be abrogated.

As stated above, however, the court held that this personal interest of the Distilling Company of America did not disqualify it from voting to dissolve the Distributing Company.

Subsequently, Lacombe, Circuit Judge, in Windmuller v. Standard Distilling & Distributing Company et al., (15 Fed. Rep., 749) in the United States Circuit Court for the Southern District of New York, involving the same matters, concurred in Judge Kirkpatrick's decision saying, "This court is inclined to concur with Judge Kirkpatrick in the conclusion that a majority stockholder may vote to dissolve even if he be influenced to that course by a wish to destroy a contract beneficial to the corporation but onerous to himself."

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

See Section 17, p. 38, ante, as amended in 1901, and note as to assent of stockholders.

§ 32-33

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.

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 § 33 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 right to examine the stock and transfer books is neither an unqualified nor an unlimited right.

The application must be made by a stockholder with respect to his interest as such, or with a view to his status as a stockholder. A stockholder is not entitled to an open examination of the stock and transfer books for any purpose he may desire. (See cases cited p. 84, supra.) The common law right of inspection is not enlarged.

Query. Can this right be limited by charter restrictions? answer is probably in the affirmative.

The

Precedents. Amended Certificate National Biscuit Co. filed October

17, 1902.

Decisions, State ex rel. O'Hara v. National Biscuit Co., Supreme Court, February, 1902 (not officially reported).

* *

*

The Supreme Court in 1851, construing the statute in force at that time, held that the provision requiring a full, true and complete list, etc., to be made out ten days before the election, was directory merely, and that a failure to comply with it would not render the election invalid. "The design of the first section was to afford to every corporator a knowledge of his co-corporators, and an opportunity of corresponding with them on the affairs of the institution, of the necessity or expediency of a change in its direction, and thereby rescuing the election from the immediate control of the board or of officers whose misconduct or incapacity may have rendered a change necessary. (Downing v. Potts, 23 N. J. Law, 66, 72.) The list of stockholders does not operate as a registry of voters. The right of the stockholder to vote does not depend upon his name being contained in the list; on the contrary, the statute expressly declares that the books of the corporation shall be the only evidence who are the stockholders entitled to vote." (Id., p. 73.) (See also Matter of St. Lawrence Steamboat Co., 44 N. J. Law, 529, 539.) The Court held that the evidence of right to vote under the statute comprised the stock ledger, the certificate book and the transfer book, but that the ledger is evidence only subordinate to and as supported by the other books, and that in case of dispute the transfer book must control the rest. "It is no answer to say that the transfer book had not been much used or that it did not truly represent the actual condition of the stock. The fact that the books have been negligently or improp