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8 41

Corporations Not Elsewhere Authorized

L. 1909, cha 40

Farm bureau.—An agricultural league may be formed under this section for the purpose of establishing a farm bureau. The creation of such a cor. poration is not prohibited by section 191, infra, restricting the creation of more than one agricultural society in a county, as that section is meant to apply to town and county fair societies. Op. Atty.-Gen. (1912) 486.

Athletic clubs.— By the enactment of the so-called Horton Law (Penal Law, § 1017), the legislature did not intend " to allow associations incorporated under the Membership Law to engage in business or occupations for pecuniary profit, but intended to allow such corporations to have sparring exhibitions for its members privately or, in any event, did not intend to permit such associations to charge admission fees to such entertainments," even though the tickets of admission bore the words “membership ticket.” People v. Johnson, (1897) 22 Misc. 150, 49 N. Y. S. 382.

Social clubs.- “ The Membership Law superseded the older social club law, and it provides, among other things, that the term 'membership corporation does not include a stock corporation or a corporation organized for pecuniary benefit.” People v. Johnson, (1897) 22 Misc. 150, 49 N. Y. S. 382.

Dental society.- The secretary of state is not required to file in his office a proposed certificate of incorporation for the formation of a dental society where the incorporators propose to incorporate as such under the Membership Corporations Law. Section 192 of the Public Health Law, providing for incorporation of district dental societies, is exclusive. Such a corporation may not be created under article III of the Membership Corporations Law, because it has been elsewhere provided for, namely, by said section 192. Op. Atty.-Gen. (1915) 247.

Practice of law. The court refused to sustain the attorney-general in a contention that a membership corporation which had for its object tect the members, who are merchants of character, in preventing and exposing the commission of frauds and collusive bankruptcy proceedings by dishonest methods of debtors with whom its members are trading or may do business," was attempting to practice law. Matter of Creditors Audit, etc., Ass'n, (1911) 72 Misc. 461, 131 N. Y. S. 263. See, generally, BUSINESS CORPORATIONS LAW, § 2, note, and § 3 and note.

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III. DISSOLUTION Annulling charter of club for violating the law: see 41 L. R. A. (N. S.) 683 note.

Disposition of real estate upon dissolution of corporation created for social purposes : see 35 L. R. A. (N. S.) 895 note.

Ground generally.—A voluntary association organized for moral benevolent and social objects “ should not be dissolved for slight causes, and if at all, only when it is entirely apparent that the organization has ceased to answer the ends of its existence and no other mode of relief is attainable.” Lafond v. Deems, (1880) 81 N. Y. 507.

§ 41. Certificates of incorporation. Five or more persons may become a membership corporation for any one of the purposes for which a corporation may be formed under this article or for any two or more of such purposes of a kindred nature, by making, acknowledging and filing a certificate, stating the particular objects for which the corporation is to be formed, each of which must be such as is authorized by this article; the name of the

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Corporations Not Elsewhere Authorized

§ 41

proposed corporation; the territory in which its operations are to be principally conducted; the town, village or city in which its principal office is to be located, if it be then practicable to fix such location; the number of its directors, not less than three nor more than forty; and the names and places of residence of the persons to be its directors until its first annual meeting. Such certificate shall not be filed without the written approval, indorsed thereupon or annexed thereto, of a justice of the supreme court. If such certificate specify among such purposes the care of orphan, pauper or destitute children, the establishment or maintenance of a maternity hospital or lying-in asylum where women may be received, cared for or treated during pregnancy or during or after delivery, or for boarding or keeping nursing children, the written approval of the state board of charities shall also be indorsed thereupon or annexed thereto, before the filing thereof. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corporation in accordance with the provisions of such certificate. Any corporation heretofore or hereafter organized under this article for the purpose of gathering, obtaining and procuring information and intelligence, telegraphic or otherwise, for the use and benefit of its members, and to furnish and supply the same to its members for publication in newspapers owned or represented by them may admit as members thereof, other corporations, limited liability companies, joint-stock and other associations, partnerships and individuals engaged in the same business or in the publication of newspapers, periodicals or other publications, upon such terms and conditions, not inconsistent with law or with its certificate of incorporation, as may be prescribed in its by-laws.

This section was derived from the Membership Corporations Law of 1895, $ 31, as amended by L. 1901, ch. 436, § 1. It was amended to read as above by L. 1916, ch. 19. This amendment changed the maximum number of directors to “ forty" instead of “thirty.”

Section 41 of the Membership Corporations Law of 1895 is now covered by section 61.

Term certificate of incorporation: see GENERAL CORPORATION LAW, $ 3, subd. 7.

Corporate names generally: see GENERAL CORPORATION LAW, § 6.

Unlawful use of certain titles in connection with corporate name: PENAL LAW, § 666.

Similarity of names. A corporation organized under L. 1875, ch. 267, under the name “ The Society of the War of 1812,” “ to collect and preserve the manuscript rolls, records and other documents relating to that war and to commemorate the land and naval victories of the American army

see

§ 41

Corporations Not Elsewhere Authorized

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in that war; to undertake and assist in the erection of proper memorials," etc., is entitled to restrain a corporation organized under the Membership Corporations Law from using the words “The Society of the War of 1812,” as a part of its corporate title, where it appears that confusion and injury would result therefrom. Society of the War of 1812 v. Society of the War of 1812, (1900) 46 App. Div. 568, 62 N. Y. S. 355. A corporation organized by special Act under the name “ Benevolent and Protective Order of Elks” is entitled to an injunction restraining a corporation organized under the Membership Corporations Law for similar purposes from using the name

Improved Benevolent and Protective Order of Elks of the World,” although the membership of the one is composed of white people, while that of the other is composed of colored people, and although neither is engaged in carrying on any trade, industrial or financial business which would be injuriously affected by the similarity. Benevolent, etc., Order of Elks v. Improved Ben olent, etc., Order of Elks of rld, (1912) 205 N. Y. 459, 98 N. E. 756, Ann. Cas. 1913E 639, L. R. A. 1915B 1074.

Compliance with Act as condition precedent to filing of certificate."A compliance with the act, as well in substance, by associating for one or more of the authorized objects, as in form, by signing and acknowledging a proper certificate, stating the facts required, is a condition precedent to the right of the associates to avail themselves of the act, and place the certificate on file.” People v. Nelson, (1871) 46 N. Y. 477.

Necessity of approval by justice of Supreme Court.-" The approval of the certificate by a justice of the Supreme Court is an indispensable requisite to the creation of a 'membership corporation.” Matter of Wendover Athletic Ass'n, (1911) 70 Misc. 273, 128 N. Y. S. 561; Matter of Agudath Hakehiloth, (1896) 18 Misc. 717, 42 N. Y. S. 985.

Conclusiveness of approval of justice of Supreme Court.— The approval of a justice of the Supreme Court where required is not conclusive upon the secretary of state, who may determine for himself whether the statute has been complied with. People v. Rice, (1893) 68 Hun 24, 22 N. Y. S. 631, affirmed (1891) 128 N. Y. 591, 28 N. E. 251. The consent and approbation of a justice of the Supreme Court, required by the Act, is but one of the conditions precedent to the right to file the certificate, and is cumulative to the other requisites of the Act, but decides nothing, and is not conclusive either upon the public or the secretary of state. People v. Nelson, (1871) 46 N. Y. 477.

Approval of state board of charities.— The certificate of incorporation of a corporation organized “to maintain and conduct a summer home or homes and to provide free outings for children and their mothers, cannot be filed without the approval of the state board of charities.” Op. Atty.-Gen. Aug. 2, 1909.

Proof of facts by affidavit. " Where a number of individuals combine for the purpose of acquiring a corporate existence each one should assume responsibility by submitting proof of the existence of the facts required by law. This should be done by affidavits containing averments, first, by all as to each being of full age; second, by each of them who is a citizen, and third, by one who is a resident. There should also be an averment as to whether any previous application for incorporation has been made.” Matter of Wendover Athletic Ass'n, (1911) 70 Misc. 273, 128 N. Y. S. 561.

Signing of certificate. -A certificate for the incorporation of an unincorporated association under this section is not sufficient if signed by only three of the directors of such association. Op. Atty.-Gen. (1913) 464. See also, supra, § 5.

Meetings without the state.-A membership corporation has no power to hold meetings of either members or directors outside of the state of New York. Op. Atty.-Gen. (1911) 530; Op. Atty.-Gen. (1902) 305.

Date of annual meeting.--" It is improper to fix a definite date for the holding of the annual meeting, as that date may fall on Sunday, and the

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law discountenances the use of that day for such purposes." Matter of Wendover Athletic Ass'n, (1911) 70 Misc. 273, 128 N. Y. S. 561. A certificate of incorporation of a membership corporation which appoints the annual meetings to be held “ on each and every Sunday in January of each and every year” will not be approved, because the holding of corporate meetings for the transaction of secular business on Sunday is contrary to the public policy of the state. Matter of Agudath Hakehiloth, (1896) 18 Misc. 717, 42 N. Y. S. 985.

Provision for increase of directors. The secretary of state is not required to file in his office a certificate of incorporation drawn under the Membership Corporations Law which states that the number of directors of said corporation shall be five until “after the first annual meeting, after which time the number shall be increased to ten,” for this would increase the number of directors of the proposed corporation in a manner not provided by law. Op. Atty.-Gen. (1914) 3.

Venue of mandamus to compel filing of certificate. -An application for a writ of mandamus to compel the filing of a certificate of incorporation by the secretary of state need not necessarily be made in the judicial district which includes the city of Albany. The proper district “is to be resolved by determining in what county or place an issue of fact joined by an alternative writ of mandamus, if granted, would be triable.” People v. Rice, (1893) 68 Hun 24, 22 N. Y. S. 631.

Certificate as determinative of status under Tax Law.-- The status of a corporation organized under this Act as a “religious corporation” or as a corporation“ organized exclusively for Bible or tract purposes ” within the provisions of section 221 of the Tax Law “ must be determined by the statutory law and its certificate of incorporation, rather than by what it has assumed to do thereunder,” and evidence tending to show that the major part of the business transacted by it was of a charitable nature is consequently inadmissible. Matter of White, (1907) 118 App. Div. 869, 103 N. Y. S. 688.

Proof of incorporation.— Proof of the filing and recording in the county clerk's office of a certificate of incorporation is ordinarily sufficient proof of incorporation without proof of filing in the office of the secretary of state. Georgeson v. Caffrey, (1893) 71 Hun 472, 24 N. Y. S. 971.

Collateral attack on incorporation.— The validity of the incorporation of a corporation cannot be attacked by an executor in an action to construe the will of his testator where it appears that its certificate of incorporation had been filed and the state had expressly recognized its existence by increasing its powers. Smith v. Havens Relief Fund Soc., (1907) 118 App. Div. 678, 103 N. Y. S. 770, affirmed (1908) 190 N. Y. 557 mem.

Cited.— In Op. Atty.-Gen. (1915) 300, this section was cited in connection with the right to incorporate under section 40. See supra, § 40, note.

$ 42. Incorporation of association of more than one thousand members. Any association, society or league, having no capital stock and not organized for pecuniary profit, composed of more than one thousand members and governed by a representative body may incorporate under the provisions of this article for the purposes for which it was organized, if such purpose is one for which a corporation may be formed under this article. The certificate of incorporation shall be made by a committee of not less than five members who must be authorized to procure the

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Corporations Not Elsewhere Authorized

L. 1909, cha 40

incorporation and make the particular certificate, by the same affirmative vote, taken in the same manner, as the constitution or fundamental law of the association, society or league requires for an amendment or change in the constitution or fundamental law thereof.

This section was derived from the Membership Corporations Law of 1895, § 32, as added by L. 1900, ch. 681, § 1. It was amended to read as above by L. 1915, ch. 440. This amendment changed the number of members from five thousand to one thousand.

Section 42 of the Membership Corporations Law of 1895 is now covered by section 62.

§ 43. Effect of incorporation. The members of such association, society or league shall become the members of the corporation created under the provisions of the preceding section; all the property owned by, held for or in any wise belonging to such association, society or league shall belong to the corporation; the constitution and by-laws, together with the official terms and duties of all officers and committees, are continued, except so far as contrary to the provisions of this chapter; and the business or purposes of the corporation may be carried on beyond the limits of the state.

This section was derived from the Membership Corporations Law of 1895, § 33, as added by L. 1900, ch. 681, § 1.

Section 43 of the Membership Corporations Law of 1895 is now covered by section 63.

§ 44. Annual assembly or convention. In place of holding an annual meeting of all the members, such corporation may provide in its constitution and by-laws for an annual election by its members, of representatives or delegates either at large or from special districts; and in such case, no annual meeting of the members shall be held. Such delegates or representatives, when assembled under the name and in the manner directed by the constitution and by-laws of the corporation, shall have and may exercise all the powers, rights and privileges of an annual meeting of the corporation. The time and place of holding such annual assembly or convention may be prescribed in the constitution or by-laws of the corporation and changed from time to time. The annual assembly or convention may be held without the state.

This section was derived from the Membership Corporations Law of 1895, $ 34, as added by L. 1900, ch. 681, § 1.

Section 44 of the Membership Corporations Law of 1895 is now covered by section 64.

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