provision in the event of dissolution of the corporation, except where they have caused their dissent to be entered in the minutes, it is not necessary to render a director liable that he should be subject to liability at the dissolution of the corporation (Stoltz v. Scott, 23 Idaho 104, 129 Pac. 340).

The corporate powers, business, and property of all corporations must be exercised, conducted, and controlled by the board of directors (Moody v. Crane, 34 Idaho 103, 199 Pac. 652).

(14) ILLINOIS

It is not necessary that the directors of a corporation should be stockholders therein (Fey v. Peoria Watch Co., 32 Ill. App. 618).

(16) IOWA

Where officers and directors of a corporation divert the funds thereof or pay dividends which leave insufficient funds with the corporation to meet its contractual obligations, such officers are jointly and severally liable for the debts of such corporation existing at the time they received such dividends or assets of the corporation (Wisconsin & Arkansas Lumber Co. v. Cable, 159 Iowa 81, 140 N. W. 211).

(18) KENTUCKY

Dividends are payable from the profits and surplus funds of a corporation as the directors, in the exercise of a sound discretion, declare, with which diseretion the courts will not interfere except for the directors' bad faith or willful abuse (Smith v. Southern Foundry Co., 166 Ky. 208, 179 S. W. 205).

(20) MAINE

The directors have the authority to transact the ordinary business of the company, unless charter and bylaws otherwise determine (Rollins v. Clay, 33 Maine 132).

(21) MARYLAND

A director of a corporation at the time a sale of its property was contemplated and made, and who actively took part in all the measures tending to its completion, and had full knowledge of all the circumstances attending its progress, is not competent to become the purchaser of such property at such sale. and the sale made to him cannot be sustained if resisted by the corporation (Hoffman Steam Coal Co. v. Cumberland Coal Co., 16 Md. 456).

(22) MASSACHUSETTS

Independently of statute, directors may be held liable for debts of the corporation incurred after they have distributed its assets to stockholders (Calkins v. Wire Hardware Co., 267 Mass. 52, 165 N. E. 889).

Directors must manage the corporate affairs before their personal concerns with reasonable intelligence as they occupy a fiduciary relation but they cannot be held for errors of judgment (Brown v. Little, Brown & Co., 269 Mass. 102, 168 N. E. 521).

Corporate directors were not bound to forecast a sudden drop in the price of stock held in another corporation (Crowell & Thurslow Steamship Co. v. Crowell, 182 N. E. 569).

The sale of all the corporate assets to another corporation is not made voidable merely because a majority of the boards of directors are common to both corporations (Calnan v. the Guaranty Security Corporation, 171 N. E. 830) Directors drawing and accepting checks to effect the payment of an illegal dividend distribution voted by other directors assent to the distribution, rendering them liable for debts to the amount of said dividend (Calkins v. Wire Hardware Co., supra).

(23) MICHIGAN

Two corporations may have the same directors, who are active agents transacting the business between the corporations; contracts between such corporations must be closely scrutinized when questioned, but are void in the

absence of fraud or bad faith (Turner v. Calumet & Hecla Mining Co., 187 Mich. 238).

When a note is made by the directors of one corporation and is transferred to another, and one of the makers is also payee and endorser and is president of both corporations, he is not in a position to consent for the corporation creditor to any arrangement which will release his own personal responsibility or that of his codirectors and impair the creditors' security (Gallery v. National Exchange Bank of Albion, 41 Mich. 169).

(33) NEW YORK

The power to declare dividends is vested solely in the directors (Burden v. Burden, 159 N. Y. 287).

Dividends may be made payable in stock (Williams v. Western Union Telegraph Co., 93 N. Y. 162).

Unless their powers are expressly limited in the certificate of incorporation, the power of directors in the management of the business is supreme, and so long as their acts are in the power of the corporation they may not be interfered with by the stockholders, either collectively or individually, through legal proceedings (Hoyt v. Thompson, 19 N. Y. 207; Beveridge v. N. Y. E. R. Co., 112 N. Y. 1).

To what amount dividends shall be made and the extent of the surplus which the interests of the company may require to be retained are within the statutory delegation of authority confided to the directors (McNab v. McNab Manufacturing Co., 133 N. Y. 687).

Directors have a wide discretion in the management of the corporate affairs, and their declaration of a dividend from surplus assets when honestly exercised will not be interfered with by the courts; but that does not mean that they have the power to discriminate in the division of the surplus and the impairment of any prior right thereto (Roberts v. Roberts-Wicks Co., 184 N. Y. 257; see also Liebman v. Auto Strop Co., 212 A. D. 306; Musson v. The New York & Queens Electric, etc., Co., 138 Misc. 881, 888).

The only right intended to be given or liability to be imposed by this section 58 and section 114 of the stock-corporation law upon the directors of a foreign corporation for making unauthorized dividends is the same liability or obligation as that imposed by the statute of the State from which the corporation received its charter (De Raismes v. U. S. Lithograph Co., 161 A. D. 781).

(34) NORTH CAROLINA

A director of a company occupies a fiduciary relation to the company which, by virtue of his office, he represents in the management of its principal functions (Hill v. Lumber Co., 113 N. C. 173, 18 S. E. 107).

Where the directors or managing officers of a corporation are liable in damages for their willful or negligent failure to exercise the care and attention to the corporate affairs intrusted to them and which they have assumed, an action will lie against them in favor of the corporation, and in case of its insolvency and receivership in favor of its receiver. Directors are to be considered and dealt with as trustees or quasi trustees (Besseliew v. Brown, 177 N. C. 65, 97 S. E. 743).

Good faith alone will not relieve the directors of a corporation from liability to its creditors for damages caused them by their gross mismanagement and neglect of its affairs (Anthony v. Jeffress, 172 N. C. 378, 90 S. E. 414).

It is well settled that the directors of a corporation, unless they are specifically restrained by the charter or bylaws, have the power to borrow money with which to conduct the business and to secure payment by mortgage of the corporation property (Wall v. Rothrock, 171 N. C. 388, 88 S. E. 633).

(36) OHIO

The corporate powers, business, and property of the corporation must be exercised, conducted, and controlled by the board of directors (Belting Co. v. Gibson, 68 O. S. 442).

Directors are liable in damages to those who rely upon false reports as to the corporation's financial condition published by the directors (Bonds v. Pogue, 11 D. Rep. 798).

Directors of a corporation are entitled to hold their positions for the term for which they are elected unless removed for cause on notice and hearing (Light & Power Co. v. Smith, 205 Fed. 643).

(37) OKLAHOMA

Creditors were held to have a right of action against directors of a corporation on debts created by them in excess of the subscribed capital stock, the court stating that the liability of directors is in the nature of a trust fund against which all creditors may join in a single suit (Colcord v. Granzow, 137 Okla. 194). No right of action accrues to a creditor of a corporation against its directors for creating debts beyond the subscribed capital stock until after a dissolution of the corporation shall have been duly adjudged (Swofford, D. G. Co. v. Owen, 37 Okla. 616; Stevirmac Oil & Gas Co. v. Smith, 259 Fed. 650).

Mandamus will lie to compel the entry and recording of the transfer of stock where the right to the same is unquestioned (Flowderdale Greenhouse v. McJunkin, 106 Okla. 198, 233 P. 758).

(38) OREGON

Directors who secure to themselves an advantage over other shareholders or creditors will be held to be trustees to that extent for the benefit of the corporation or injured parties (Corbett v. Woodward, 5 Sawyer (U. S.) 403).

Statutory right of action against the directors for declaring dividends when the corporation is insolvent accrues at least when the debt is due, and action thereon is barred in 3 years, and neither an agreement for an extension between the corporation and the creditor nor a part payment by the corporation stops the running of the statute of limitation (Patterson v. Thompson, 86 Fed. 85; 95 Fed. 647).

Powers vested in a corporation are to be exercised by the directors to conduct and carry out the business designated in the articles of incorporation (In re Quartz Gold Mining Co., 157 Fed. 243).

The board of directors is the person of the corporation, and in this board lies the authority of agents and officers, and one dealing with such an agent does so at his own peril (Wilson v. Investment Co., 80 Oreg. 233; 156 P. 249. French v. Columbia Life Ins. Co. et al., 80 Oreg. 412; 156 P. 1042).

(42) RHODE ISLAND

In an action to enforce a director's liability under the general laws of 1909 making directors liable for the amount of the indebtedness of a manufacturing corporation in excess of its paid-in capital stock in event of bankruptcy, where the defendant was also president of the company, a stockholder for several years down to the time of its failure, and actively interested in its affairs. it will be presumed in the absence of denial on the part of the defendant that he was cognizant of the proceeding at the time of the failure and it will not be presumed that he had no knowledge of the commencement of the bankruptcy proceeding (Smith & Thayer Co., v. Arnold, 37 R. I. 512).

(43) SOUTH CAROLINA

Under this section (Criminal Code, sec. 1353) the phrase "false statement" means something more than merely untrue or erroneous; it implies also that the statement is designedly untrue and deceitful and made with intention to deceive the person to whom the false statement is made or exhibited. And a false statement by an officer or director of a corporation as to its financial status need not result in damage to any person (State v. Johnston, 149 S. C. 195, 146 S. E. 657).

(44) SOUTH DAKOTA

R. C. section 8779 refers exclusively to the stockholders' liability for unpaid subscriptions to stock, while section 8789 has reference to the liability of directors for creating debts beyond subscribed capital stock, and a director who is a stockholder may be liable in both capacities under both sections at the same time (opin'on of attorney general, April 3, 1929).

(45) TENNESSEE

Representations in a statement to a bank for credit purposes if fraudulent are not available to another bank to which the first-named bank pledged loan notes as collateral, it not appearing that the pledgee bank took the paper upon faith in the statement. But where a financial statement was made by a corporation to a bank whose president in spite of the statement knew of the true financial condition of the corporation, the bank is bound by his knowledge; so that if there were fraud, it would not work to the detriment of the bank (Russell v. Tennessee & Kentucky Tobacco Co., 65 S. W. (2d) 256).

The cases provided for by statute are cases of intentional fraud. The liability for mere negligence depends upon the general principles of law regulating the relation of parties. (Hume v. Commercial Bank, 77 Tenn. (9 Lea) 728). The directors occupy fiduciary relation toward the stockholders and are bound to good faith and reasonable diligence in the performance of their duties; they are not express trustees and are trustees only in the sense in which every agent is a trustee for his principal, but they are bound to exercise diligence and good faith to all the parties interested in the affairs of the corporation; they must also use care, attention, and circumspection in the affairs of the corporation and particularly in the safekeeping and disbursement of the funds committed to their control. They must see that these funds are appropriated as intended to the purposes of the trust and if they misappropriate them or allow others to divert them from these purposes, they must answer individually for it. Ignorance will not excuse them when they have the means of knowledge (Shea v. Mabry, 69 Tenn. (1 Lea) 319; Vance v. Phoenix Insurance Co., 72 Tenn. (4 Lea) 385).

(48) VIRGINIA

The board of directors have the widest of powers. All of the various acts and contracts which a corporation may enter into are entered into by and through the board of directors (Taylor v. Sutherlin-Meade Tobacco Co., 107 Va. 787, 60 S. E. 132. See also Addison v. Lewis, 75 Va. 701; Burr v. McDonald, 44 Va. 215.)

The powers of a private corporation so far as its dealings with third parties are concerned are primarily lodged in its board of directors, from which source the officers, either expressly or by implication, derive such authority as may be bestowed upon them (Clement v. Adams Brothers-Paynes Co., 113 Va. 547, 75 S. E. 294).

A majority of the board of directors cannot undertake to act in their individual names for the board itself. They can only bind their railroad corporation by acting together as a board (Honaker v. New River, etc., R. R. Co., 116 Va. 662, 82 S. E. 727).

(51) WEST VIRGINIA

The directors of a corporation are, as to purposes of dealing with others, the corporation itself, and, when convened as a board, they are the primary possessors of all the powers possessed by the corporation (Hulings v. Hulings Lumber Co., 38 W. Va. 351, 18 S. E. 620).

g. Inspection of books by stockholders

(6) COLORADO

Only stockholders and creditors and their personal representatives are entitled to inspect the corporate books required to be kept under Mills' Ann. Stat., sec. 588 (Butterfly-Terrible G. M. Co. v. Brind, 41 Col. 29, 91 Pac. 1101).

(7) CONNECTICUT

The right of inspection of the books and records of a corporation at reasonable times and for proper purposes is a common-law privilege incident to the ownership of shares in a corporation. This common-law right is a qualified and not an absolute one. It is qualified by the conditions, among others, that the purpose of the stockholder desiring to make the examination is generally to his interest as such stockholder, proper and lawful in its character, and not inimical 102777-34-PT 69-A--25

to the interests of the corporation itself. Courts will not enforce its recognition under other conditions (The State ex rel. Costello v. Middlesex Banking Co., 87 Conn. 483).

(8) DELAWARE

A stockholder has a right to inspect and make extracts from the corporation's books at a proper time and for proper purposes (State v. Jessup & Moore Paper Co., 77 Atl. 16. State v. United Brokerage Co., 101 Atl. 433).

(14) ILLINOIS

The general incorporation act, requiring every stock corporation to keep correct books of account at their principal office in this State, and giving every stockholder the right to examine such books, applies to corporations organized under prior special laws which are silent on the subject (Venner v. Chicago City Ry. Co., 246 Ill. 170).

A stockholder of a corporation is entitled, at all reasonable times and in a reasonable manner, to inspect the books of a company (Original Vienna Bakery v. Heissler, 50 Ill. App. 406. Mathews v. McClaughry, 83 Ill. App. 224).

A holder of a small amount of stock has as much right to examine the books of a corporation as has the owner of a large amount (Richmond v. Hill, 148 Ill. App. 179).

The right of a stockholder to examine the records and books of account of a corporation extends to all papers, contracts, minute books, or other instruments from which he can derive any information which will enable him to better protect his interests and perform his duties (Stone v. Kellogg, 165 Ill. 192).

(15) INDIANA

The common-law right of a stockholder to examine the books and accounts of his corporation is not absolute but is qualified by the condition that his purpose in making the examination is germane to his interest as such stockholder (Charles Hegewald Co. v. State ex rel. Hegewald, 196 Ind. 600, 149 N. E. 170).

(16) IOWA

By statutory provision it is the absolute right of any person to examine the stock and transfer books of a corporation organized under the laws, of this State, whether he shows his interest therein or not, but perhaps this does not give such person the right to examine the original papers and vouchers pertaining to the business of the corporation. The fact, however, that a person asks more than he is entitled to in this respect does not justify a refusal to allow him to inspect such books as he is entitled to inspect (Ellsworth v. Dorwart, 95 Iowa 108, 63 N. W. 588).

In making such inspection, the person is entitled to the assistance of his attorney (Id.).

To entitle a person to examine the original papers and vouchers of the corporation, he should show some property right involved and some specific and valuable interest in question, to settle which an inspection of the documents is necessary (Id. Boardman v. Marshalltown Grocery Co., 105 Iowa 445, 75 N. W. 343).

(18) KENTUCKY

A stockholder has the right to know how the affairs of the company are conducted, and whether the capital is being prudently and profitably employed, and to inspect the books to obtain such knowledge, the right resting on the fact of ownership (Otis-Hidden Co. v. Scheirich, 187 Ky. 423, 219 S. W. 191).

(20) MAINE

At common law, stockholders have right to examine books, records, and papers of corporation at proper times and for proper purposes (White v. Manter, 109 Maine 408. Withington v. Bradley, 111 Maine 384).

Mandamus will not be ordered to prevent the plaintiff, who acquired one of thousands of shares, for the purpose of selling copies of the list of stock