If business is not commenced within one year from the filing of the articles of association, the corporate powers will cease (2 Rev. Stat., p. 391, § 7), see "Powers."

The lawful and duly authorized business must be commenced within one year. The Supreme Court of this State (General Term, 3rd Judicial District), has passed upon this statutory penalty in the case of The People v. Troy House Company, 44 Barb. 625. The defendant was a corporation organized to erect buildings by co-operative enterprise; it had not erected any building within one year from its organization, although it had altered and improved certain buildings. It was the opinion of the Court that if the defendant corporation had not "erected" buildings, but had improved them, this section of the Revised Statutes was applicable and the corporation lost its corporate powers.

The "powers, privileges and provisions" of Title 3, ch. 18, Part 1, Rev. Stat., mentioned in this section, are as follows:

ARTICLE II.

GENERAL POWERS, PRIVILEGES AND LIABILITIES OF CORporations. 1828, R. S., Part 1, Ch. XVIII, Title III.-Of the General Powers, Privileges and Liabilities of Corporations.

General Powers.

§ 1. Every corporation as such has power:

1. To have succession by its corporate name for the period limited in its charter, and when no period is limited perpetually.

2. To sue and be sued, complain and defend, in any court of law or equity.

3. To make and use a common seal, and alter the same at pleasure.

4. To hold, purchase and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited in its charter.

5. To appoint such subordinate officers and agents as the business of the corporation shall require and to allow them a suitable compensation.

6. To make by-laws not consistent with any existing law, for the management of its property, the regulation of its affairs, and for the transfer of its stock.

1. Within the limitations prescribed in its charter, or an express viovision of law, every corporation as such, for the purpose of effecting the objects of its incorpoation, has the capacity to take and grant property and to contract obligations, and in so doing may deal precisely as an individual. Barry v. Merchants' Exchange Company, 1 Sandf. Ch. 280.

2. It will be presumed that a corporation acted within the scope of its lawful powers in taking or transferring real estate in any instance, although not authorized under all circumstances and for every purpose to do so. Farmers' Loan and Trust Company v. Curtis, 7 N. Y. 466.

3. A corporation authorized to take and hold land, may take the title thereto in fee, though itself created for a limited period. Nicoll v. The New York and Erie R. R. Co., 12 N. Y., 121.

4. The title to land held by a corporation will, in case of the dissolution of the latter, revert to the grantor, unless there be some provision in the charter of the corporation or statute to avert that consequence. Bingham v. Weiderwax, 1 N. Y. 513; 2 Kent's Com. 305; Angell & Ames on Corporations, 128, 129. But see Owen v. Smith, 31 Barb. 641.

5. A corporation cannot be bound by the acts of its agents, when such acts are without the power conferred upon it by its charter. "Such contracts being ultra vires, cannot be made valid by subsequent ratification of the directors or trustees." McCullough v. Moss, 5 Denio, 567. (Overruling Moss v. Rossie Lead Mining Co., 5 Hill, 137; Boom v. City of Utica, 2 Barb. 104).

6. Corporations may arbitrate, and a simple resolution to that effect at a meeting of the corporation is sufficient. The form of submission is a matter of indifference, and need not be under seal. Brady v. Mayor of Brooklyn, 1 Barb. 584. (Citing the Mayor, etc., of New York v. Butler, 1 Barb. 325).

In What Corporations to Vest.

§ 2. The powers enumerated in the preceding section shall vest in every corporation that shall hereafter be created, although they may not be specified in its charter or in the act under which it shall be incorporated.

New York Firemen's Insurance Co. v. Sturges, 2 Cow. 664; McCullough . Moss, 5 Denio, 567.

What other Powers to be Possessed.

$ 3. In addition to the powers enumerated in the first section of this title, and to those expressly given in its

charter, or in the act under which it is or shall be incorporated, no corporation shall possess or exercise any corporate powers, except such as shall be necessary to the exercise of the powers so enumerated and given.

1. A corporation has no other powers than those conferred by the act of incorporation, and such as are necessary to carry these powers into effect. The New York Firemen's Insurance Company v. Sturges, 2 Cow. 664. (Citing 15 Johns. 383; Halstead v. The Mayor, etc., of New York, 3 N. Y. 430).

2. This section does not establish any rule inconsistent with the presumption that a corporation, being an artificial person, is capable of making every contract a natural person could make. (Feeney v. People's Fire Insurance Company, 2 Robt. 599).

3. Corporations may enter into contracts in the same manner as individuals, and within the restrictions imposed by their charter or necessary implication, have the same powers with respect thereto. Brady v. Mayor of Brooklyn, 1 Barb. 584; Bank of Columbia v. Patterson, 7 Cranch, 299; Mott v. Hicks, 1 Cow. 519.

Exercise of Banking Powers Prohibited.

§ 4. No corporation created, or to be created, and not expressly incorporated for banking purposes, shall, by any implication or construction, be deemed, to possess the power of discounting bills, notes, or other evidences of debt, of receiving deposits, of buying gold and silver, bullion or foreign coins, of buying and selling bills of exchange or issuing bills, notes, or other evidences of debt upon loan, or for circulation as money.

People v. The Manhattan Company, 9 Wend. 392; Curtis v. Leavitt, 17 Barb. 316; New York Life Insurance and Trust Compauy v. Beebe, 7 N. Y. 364. 12 N. Y. 506.

1. As stated in Section 3 of the Building Association Act, these sections of the Revised Statutes apply only when not inconsistent with the provisions of the Act of 1851 here discussed. It will be noticed that these associations are authorized to receive deposits in the form of dues, etc. The prohibition against this privilege in the above section therefore does not apply.

2. It is clear that building associations are not "expressly authorized for banking purposes," and they can have no legal power to discount notes or transact such business as is exclusively that of a banking institution.

Liability of Stockholders.

§ 5. Where the whole capital of a corporation shall not have been paid in, and the capital paid shall be insufficient to satisfy the claims of its creditors, each stockholder shall be bound to pay, on each share held by him, the sum necessary to complete the amount of such share, as fixed by the charter of the company, or such proportion of that sum as shall be required to satisfy the debts of the company.

1. A transfer of stock of a corporation by a holder thereof, to be perfect, need not, in the absence of such requirement in the charter or . by-laws of the corporation, be entered in the books of the latter, and where the transfer has come to the knowledge of and been recognized by the officers of the corporation, the transferer of such stock is relieved from all liability under this section. Cutting v. Danerel, 88 N. Y. 410. (Discriminated from 6 Hill, 624; 2 Barb. 294, and 11 N. Y. 148, and reversing same case, 23 Hun, 339.)

Quorum.

§ 6. When the corporate powers of any corporation are directed by its charter to be exercised by any particular body, or number of persons, a majority of such body, or persons, if it be not otherwise provided in the charter, shall be a sufficient number to form a board for the transaction of business; and every decision of a majority of the persons duly assembled as a board shall be valid as a corporate act.

Forfeiture for Non-user.

§ 7. If any corporation hereafter created by the Legislature shall not organize and commence the transaction of its business within one year from the date of its incorporation, its corporate powers shall cease.

Johnson v. Bush, 3 Barb. Ch. 237.

1. Where a special act of incorporation declares that the company thereby incorporated shall be deemed to be organized upon the happening of certain events, which do not happen within a year from the date of incorporation, it will be held that the Legislature intended to and did relieve the corporation from the effect of this section. People v. Bowen, 30 Barb. 24.

2. The word "business" as used in this section refers only to such business as the corporation can lawfully do under the act of incorpora

tion; the transaction of other business would not be a user of the powers conferred. The People v. Troy House Co., 44 Barb. 633.

Preservation of Power to Repeal, etc.

§ 8. The charter of every corporation that shall hereafter be granted by the Legislature shall be subject to alteration, suspension and repeal, in the discretion of the Legislature.

1. Where a general act providing for the formation of certain corporations contains special provisions which are thereby made applicable to existing corporations of the kind referred to in the act, these special provisions become as much a part of the charter of said existing cor'porations formed since the Revised Statutes took effect as if they had been originally inserted in their charters. Suydam v. Moore, 8 Barb. 364.

Trustees in Case of Dissolution.

§ 9. Upon the dissolution of any corporation created, or to be created, and unless other persons shall be appointed by the Legislature, or by some Court of competent authority, the directors or managers of the affairs of such corporation at the time of its dissolution, by whatever name they may be known in law, shall be the trustees of the creditors and stockholders of the corporation dissolved, and shail have full power to settle the affairs of the corporation, collect and pay the outstanding debts, and divide among the stockholders the moneys and other property that shall remain after the payment of debts and necessary expenses. 1 R. L. 248, § 1.

1. The directors or other managers of the affairs of a corporation who are by statute, on its dissolution, made trustees, with power to settle its concerns, are entitled to the benefit of the plea of the statute of limitations. Kane v. Bloodgood, 7 Johns' Ch. 128.

2. Only those who are stockholders at the time a suit is instituted, are liable under a provision in its charter making the stockholders of a corporation liable for its debts. McCullough v. Moss, 5 Denio, 567.

3. Creditors of dissolved corporations have an equitable lien on its assets for the payment of their debts. Tinkham v. Borst, 31 Barb. 407. 4. Under the Revised Statutes, both the real and personal property of a corporation, upon its dissolution, vests in trustees for the benefit of creditors and stockholders. Owen v. Smith, 31 Barb. 611; Tower v. Hale, 46 Id. 365; Heath v. Barmore, 50 N. Y. 302.