although they were in the vicinity and might have been easily notified, the proceedings will be set aside.1

§ 295. Minutes.- Resolutions of a meeting of directors of a private corporation may be shown by the record of the proceedings, if one is kept; otherwise parol evidence is admissible to show what was resolved, and by what vote. Entries in the minutes made by the officers of corporations are presumed to be true. The presumption omnia rite acta applies in favor of the regularity of corporate meetings. An entry in the minutes of a meeting of a corporation, or its board of directors, that a certain proposition was adopted, is prima

facie evidence that it received the number of votes necessary to legally adopt it. An entry that certain officers were elected, is prima facie evidence that enough votes were cast to elect them. So also if the minutes be silent as to the mode in which officers were elected, it will be presumed that they were chosen in the manner required by law, until evidence to the contrary be produced. If the minutes set forth that certain business was transacted at a special meeting duly called, and that proper notice was given, it will be presumed that a quorum was present. It has been held, however, that where it does not appear by the record that a majority of the members of a corporation were present at a meeting at which it was voted to repair a church building, to raise the money by assessment on the pews, and also add an overlay to the sum thus assessed, the assessment is invalid.' While it is permitted to contradict the record of a voluntary society, or show that its records do not fully disclose all the proceedings which ought to be recorded, proof of that kind must be so convincing and satisfactory as to leave no doubt but that the matter attempted to be interpolated into the records of the proceedings actually occurred. A certificate of the secretary of a railroad company purporting to recite proceedings of a meeting of stockholders, which is not shown to come from any book of records, and as to its recital that the secretary, and a large stockholder, said to have acted as chairman, were pres

6

1 Heintzelman v. Druids' Relief Assoc., (1888) 38 Minn. 138; s. c. 4 Ry. & Corp. L. J. 356; McDaniels v. Flower Brook Manuf. Co., 22 Vt. 274; Sanborn v. School District, 12 Minn. 17; Isbell v. Railroad Co., 25 Conn. 556.

Knights of Honor, (1887) 29 Fed. Rep. 770. In a voluntary society in which the standing of its members, and the mode of suspending and reinstating them in membership, is regulated by its laws, if the records of the proceedings of the body show

2 Beardsley v. Johnson, (1888) 49 that a member is not in good stand

Hun, 607.

3 Beardsley v. Johnson, (1888) 49 Hun, 607; Hathaway v. Addison, 48 Me. 440.

4 Insurance Co. v. Sortwell, (1864) 8 Allen, 223; Baile v. Educational Soc., 47 Md. 117.

5

27.

ing, he must be bound by these records and the action of his society in that regard; especially when he has exercised his right of appeal to a higher lodge, and the action of which he complains has been affirmed by the appellate tribunal. Hawkshaw v.

Mayberry v. Mead, (1888) 80 Me. Supreme Lodge of Knights of Honor, (1887) 29 Fed. Rep. 770.

6 Hawkshaw v. Supreme Lodge of

ent, is contradicted by the testimony of persons who were at the meeting, fails to prove any such proceedings by the company. A corporation is not bound, as to third persons, by interpolations fraudulently inserted in its records, if the third persons have not acted on or seen or known of the existence of the matters interpolated and appearing to be a part of the records.

§ 296. Irregularities.-The courts will not readily listen to complaints respecting the regularity of the proceedings of corporate meetings. "Looking at the nature of these companies, looking at the way in which their articles are formed, and that they are not all lawyers who attend these meetings, nothing can be more likely than that there should be something more or less irregular done at them." If the thing complained of is a thing which, in substance, the majority of the members are entitled to do, or if something has been done irregularly which the majority are entitled to do regularly, or if something has been done illegally which the majority are entitled to do legally, there can be no use in having a litigation about it, the end of which is only that a meeting has to be called, and then ultimately the majority gets its wishes. If it is a matter of that nature it only comes to this, that the majority are the only persons who can complain that a thing which they are entitled to do has been done irregularly.1 Accordingly, in an action against a corporation upon a note signed by its officers, where it appears that the execution of the note was expressly authorized at a meeting of the board. of directors, it will be presumed, in the absence of any proof to the contrary, that the board was rightfully in session at the time the authority was given. A shareholder who has re1 Brown v. Dibble, (1887) 65 Mich. v. Potts, (1851) 23 N. J. 66; Harden520. burgh v. Farmers' &c. Bank, (1834)

5

2 Holden v. Hoyt, (1883) 134 Mass. 3 N. J. Eq. 68; Gorham v. Campbell,

181.

3 MacDougall v. Gardiner, (1875) 1 Ch. Div. 13, 25; People v. Peck, (1834) 11 Wend. 604; s. c. 27 Am. Dec. 104; In re Wheeler, (1886) 2 Abb. Pr. N. S. 361; People v. Wickham, (1829) 1 Paige, 590; Hughes v. Parker, (1849) 20 N. H. 58; Downing

(1852) 2 Cal. 135.

4 MacDougall v. Gardiner, (1875) 1 Ch. Div. 12, 25, citing Mozley v. Alston, 1 Phill, Ch. 790; Foss v. Harbottle, 2 Hare, 461.

3 Hardin v. Iowa Ry. & Const. Co., (1889) 78 Iowa, 726.

ceived notice of the purpose of a corporate meeting by means of circulars will not be heard to question the legality of proceedings taken thereat on the mere ground that the company omitted to advertise the meeting in the public prints as required by the articles of association. And it does not lie in the mouth of a member who has participated in the irregular proceedings to question their legality. One who has failed at the time to challenge illegal votes has no equitable right to have the result set aside. And generally, the right to object to irregularities in the proceedings of a corporate meeting may be lost by laches,' either by attending and remaining silent at the time or by failing to protest promptly upon learning of the doings of the meeting. And this rule applies

1 In re British Sugar Refining Co., (1857) 3 Kay & J. 408, 417.

2 In re British Sugar Refining Co., (1857) 3 Kay & J. 408; Wiltz v. Peters, 4 La. Ann. 339. Nor can his transferee raise the question. In re Syracuse &c. R. Co., 91 N. Y. 1. In Reed v. Hayt, (1888) 109 N. Y. 659, a president of a corporation, to whom stock had been issued for services and advances, sold his stock, including the shares so issued, to defendant, who refused to pay the purchase money on the ground of defect of title, because only three of the five directors (of whom the president was one) were present at the meeting which ordered the issuing of the stock. Neither the company, as then constituted, nor after the resignation of the president and the election of defendant as his successor, nor any stockholder, made any objection to the issue; and defendant, with full knowledge of the facts, used the other stock purchased of plaintiff, the former president, took an extension of time for the performance of the contract of sale, and neither the president nor stockholder made any attempt to annul or avoid the acts of the board. It was held that the facts amounted to

a ratification thereof by the company, and that defendant, by his conduct, was estopped from denying plaintiff's title to the stock. And it was further held in the same case that the stockholders and interested parties having full knowledge also of the fact that the directors not present had no notice of the meeting, and countenancing plaintiff's dealing with the shares as his own, and taking no steps to disaffirm the action of the board in issuing the stock, will be presumed to have ratified the action, and the title of plaintiff to the stock will be validated thereby.

3 In re Chenango &c. Ins. Co., (1838) 19 Wend. 635. Cf. Schoharie Valley R. Case, 12 Abb. Pr. N. S. 394.

4 State v. Lehre, (1854) 7 Rich. 234, 325; Prettyman v. Tazewell Co., 19 Ill. 406; s. c. 71 Am. Dec. 230; King v. Trevenen, (1819) 2 Barn. & Ald. 339; Musgrave v. Nevinson, (1737) 2 Ld. Ray. 1358.

5 State v. Lehre, (1854) 7 Rich. 234, 325; Prettyman v. Supervisors, (1858) 19 Ill. 406; King v. Trevenen, (1819) 2 Barn. & Ald. 332; Musgrave v. Nevinson, (1737) 2 Ld. Ray. 1358.

not only to participating shareholders but also to persons subsequently deriving their shares through them. The proceedings of a meeting are not invalidated by the president requesting a person to call it to order and to preside over it in his absence therefrom. The request is a sufficient authority to that person to act in the president's stead."

2

§ 297. Trick, secrecy, or surprise and bribery. While mere irregularities in the proceedings of corporate meetings do not necessarily constitute a ground for equitable interference, any acts done by a portion of the members which bear the appearance of trick, secrecy or fraud, are invalid and will constitute grounds for avoiding an election,3 or other proceedings of the meeting. Accordingly, the members are entitled to full information concerning any matter upon which action is to be taken, and to notice of the purpose for which the meeting is to be held; unless it be a regular general meeting for the transaction of all or any business within the corporate powers; and any variation from the usual course of business,

5

Where a plan for reorganization of a railroad company is not prohibited by law, one who purchases stock, after the plan is adopted, from a stockholder who voted for it, can not object that it is ultra vires. Hollins v. St. Paul, M. & M. R. Co., (1890) 9 N. Y. Supl. 909.

2 People v. Albany & S. R. Co., (1869) 55 Barb. 344, 361, holding that the person called to preside need not be a stockholder. It is sufficient if he hold a proxy to vote at the meeting.

3 People v. Albany & S. R. Co., (1869) 55 Barb. 344, 363, citing Wilcox on Corporations, 51; Rex v. Gaborian, 11 East, 77; Grant on Corporations, 204; People v. Peck, (1834) 11 Wend. 611; In re Pioneer Paper Co., 36 How. 108.

4 In a case in point in New York, there was a contract between two companies whose lines were parallel, by which tributary territory was pre

served to each, to prevent an unprofitable war of construction. After the directors of one of the contracting companies had passed resolutions to construct branch lines in violation of the contract, a meeting of the stockholders passed a resolution ratifying all the acts of the directors during a period of time covering the dates of the resolutions referred to, but it did not appear that those resolutions were read at the meeting, or the attention of the stockholders called to them, and there was evidence that some of the assenting stockholders were actually misled. Accordingly, there was held to be no such ratification of the directors' resolutions as would preclude the stockholders from insisting that the contract be performed. Ives v. Smith, (1889) 19 N. Y. St. Rep. 556. 5 Vide supra, § 283.

6 Warner v. Mower, (1839) 11 Vt. 385, 391, 394.