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(3) The notice is no longer to be signed by a majority of the directors," but must be signed by "the president or a vice-president and the secretary."

(4) The time for mailing notices for such meeting to stockholders has been changed from three to two weeks prior thereto; and

(5) Such notices may be personally served not less than five days, instead of three weeks, before the meeting.

$46. Conduct of such meeting; certificate of increase or reduction.-If, at the time and place specified in the notice, the stockholders shall appear in person or by proxy in numbers representing at least a majority of all the shares of stock, they shall organize by choosing from their number a chairman and secretary, and take a vote of those present in person or by proxy, and if a sufficient number of votes shall be given in favor of such increase or reduction, or if the same shall have been authorized by the unanimous consent of stockholders expressed in writing signed by them or their duly authorized proxies,* a certificate of the proceedings showing a compliance with the provisions of this chapter, the amount of capital theretofore authorized, and the proportion thereof actually issued, and the amount of the increased or reduced capital stock, and in case of the reduction of capital stock the whole amount of the ascertained debts and liabilities of the corporation shall be made, signed, verified and acknowledged by the chairman and secretary of the meeting, and filed in the office of the clerk of the county where its principal place of business shall be located, and a duplicate thereof in the office of the secretary of state. In case of a reduction of the capital stock, except of a railroad corporation or a moneyed corporation, such certificate or consent hereinafter provided for shall have indorsed thereon the ap

*It is to be noted that the words, "or their duly authorize l proxies," added in 1901, do not appear in § 45 as then amended.

proval of the comptroller, to the effect that the reduced capital is sufficient for the proper purposes of the corporation, and is in excess of its ascertained debts and liabilities; and in case of the increase or reduction of the capital stock of a railroad corporation or a moneyed corporation, the certificate or the unanimous consent of stockholders as the case may be, shall have indorsed thereon the approval of the board of railroad commissioners, if a railroad corporation; of the superintendent of banks, if a corporation formed under or subject to the banking law, and of the superintendent of insurance, if an insurance corporation. When the certificate herein provided for, or the unanimous consent of stockholders in writing, signed by them or their duly authorized proxies, approved as aforesaid has been filed, the capital stock of such corporation shall be increased or reduced, as the case may be, to the amount specified in such certificate or consent. The proceedings of the meeting at which such increase or reduction is voted, or, if such increase or reduction shall have been authorized by unanimous consent without a meeting, then a copy of such consent shall be entered upon the minutes of the corporation. If the capital stock is reduced, the amount of capital over and above the amount of the reduced capital shall, if the meeting or consents so determine or provide, be returned to the stockholders pro rata, at such times and in such manner as the directors shall determine, except in the case of the reduction of the capital stock of an insurance corporation, as an alternative to make good an existing impairment.

See L. 1848, c. 37, § 22; L. 1848, c. 40, § 22; L. 1848, c. 265, § 8; L. 1852, c. 228, § 14; L. 1853, c. 117, § 22; L. 1854, c. 232, § 21; L. 1866, c. 73, § 2; L. 1872, c. 248, § 7; L. 1872, c. 820, § 15; L. 1873, c. 737, § 7; L. 1875, c. 611, § 15; L. 1878, c. 264, § 3; L. 1890, c. 564, § 46; L. 1892, c. 688, § 46; L. 1893, c. 700; L. 1901, c. 354; L. 1902, c. 286; L. 1904, c. 123.

For form of by-laws, see form IX, post, page 187. capital stock, see form VIII, post, pages 184 and 186.

$47. Preferred and common stock.-Every domestic stock corporation may issue preferred stock and common stock and different classes of preferred stock, if the certificate of incorporation so provides, or by the consent of the holders of record of two-thirds of the capital stock, given at a meeting called for that purpose upon notice such as is required for the annual meeting of the corporation. A certificate of the proceedings of such meeting, signed and sworn to by the president or vice-president, and by the secretary or assistant-secretary, of the corporation, shall be filed and recorded in the offices where the original certificate of incorporation of such corporation was filed and recorded; and the corporation may, upon the written request of the holders of any preferred stock, by a twothirds vote of its directors, exchange the same for common stock, and issue certificates for common stock therefor, upon such valuation as may have been agreed upon in the certificate of organization of such corporation, or the issue of such preferred stock, or share for share, but the total amount of such capital stock shall not be increased thereby.

See L. 1880, c. 225; L. 1890, c. 564, § 47; L. 1892, c. 688, § 47; L. 1901, c. 354.

See 78 N. Y. 159.

Two important changes were made in § 47 by the amendment of 1901:

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(1) Instead of requiring, as formerly, the unanimous consent of the stockholders" to the issue of preferred stock and different classes of preferred stock, as well as common stock (in cases where the certificate of incorporation fails so to provide), it is now sufficient to obtain the consent of the holders of two-thirds of the capital stock at a meeting called for that purpose in the manner required for the annual meeting.

(2) A certificate of such proceedings is now required to be signed and verified in the manner prescribed, and filed and recorded in the offices named.

§ 48. Prohibited transfers to officers or stockholders. -No corporation which shall have refused to pay any of its notes or other obligations, when due, in lawful money of the United States, nor any of its officers or directors, shall transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of the property paid in cash. No conveyance, assignment or transfer of any property of any such corporation by it or by any officer, director or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insolvent or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation shall be valid, except that laborers' wages for services shall be preferred claims and be entitled to payment before any other creditors out of the corporation assets in excess of valid prior liens or incumbrances. No corporation formed under or subject to the banking, insurance or railroad law shall make any assignment in contemplation of insolvency. Every person receiving by means of any such prohibited act or deed any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees. No stockholder of any such corporation shall make any transfer or assignment of his stock therein to any person in contemplation of its insolvency. Every transfer or assignment

*

* This sentence was added in 1901, and absolutely prohibits a domestic banking, insurance or railroad corporation from making any assignment in contemplation of insolvency.

or other act done in violation of the foregoing provisions of this section shall be void. No conveyance, assignment or transfer of any property of a corporation formed under or subject to the banking law, exceeding in value one thousand dollars, shall be made by such corporation, or by any officer or director thereof, unless authorized by previous resolution of its board of directors, except promissory notes or other evidences of debt issued or received by the officers of the corporation in the transaction of its ordinary business and except payments in specie or other current money or in bank bills made by such officers. No such conveyance, assignment or transfer shall be void in the hands of a purchaser for a valuable consideration without notice. Every director or officer of a corporation who shall violate or be concerned in violating any provisions of this section, shall be personally liable to the creditors and stockholders of the corporation of which he shall be director or an officer to the full extent of any loss they may respectively sustain by such violation.

See L. 1890, c. 564, § 48; L. 1892, c. 688, § 48; L. 1901, c. 354. See 145 N. Y. 441; 159 N. Y. 490; 161 N. Y. 226, 539; 162 N. Y. 268; 163 N. Y. 340; 109 App. Div. 840; 94 App. Div. 117; 79 App. Div. 419; 56 App. Div. 43; 55 App. Div. 87; 45 App. Div. 579; 37 App. Div. 203.

§ 48 prohibits transfers of property or stock in contemplation of insolvency. The last paragraph makes every director and officer personally liable for any violation of the provisions of the section.

An assignment for the benefit of creditors, made in this state by an insolvent foreign corporation, is valid here, if valid under the law of its domicile. 140 N. Y. 563, 569; 154 N. Y. 518; 56 App. Div. 43.

By the amendment of 1901, laborers' wages for services are declared to be entitled to payment as preferred claims out of the corporation assets in excess of valid prior liens. Such claims were already preferred by law in cases of a general assignment. See L. 1877, c. 466, § 29; L. 1884, c. 328; L. 1886, c. 283. Compare L. 1885, c. 376, and 158 N. Y. 526.