plaintiff. This was done. One M. had, in 1877, begun suit against the Missouri company and obtained judgment against it in 1885, and under an execution issued upon this judgment, the mining lands in question was sold to Reinhard, who claims title to them. The lower court directed the plaintiff to pay the judgment and the title to the land to be quieted.]

BLACK, Č. J.

The defendants insist that the deed from

the Missouri company to the English company is void because executed and delivered in England.

As our statute provides that the articles of association shall state the city or town and the county in which the corporation is to be located, it is but fair and reasonable that acts of the body corporate itself, such as annual elections of directors, votes to increase or diminish the stock, and other meetings of the stockholders, should take place at the home office. But where, as here, there is no prohibitory statute, and all of the shareholders give their consent, the acts of the stockholders at a meeting held in a foreign jurisdiction are valid. 1 Morawetz on Private Corporations (2 ed.), § 484; Taylor on Corporations (2 ed.), § 382. Directors are the agents of the corporation, and it is now quite well settled that they may hold meetings and transact business in a foreign state if they desire to do so unless the contrary is expressly provided by the charter, by-laws or the general laws of the state under which the corporation was organized. Morawetz on Private Corporations, (2 ed.), § 533; Taylor on Corporations (2 ed.), § 381; Railroad v. McPherson, 35 Mo. 13; Handley v. Stutz, 139 U. S. 422. These three persons who transacted the business in London held all of the stock and were the duly-appointed directors. The law of this state did not prohibit them from holding meetings there, and it follows that the action of these directors in making the contract for the sale of the property, and in directing the president to execute the deed, and his act in delivering it, were and are just as valid as if they had been performed here at the office of the corporation.

The further contention that the English company had and has no power to take and hold real property in this state is equally untenable. Though it was said in Bank v. Earle, 13 Pet. 584, that a corporation. "must dwell in the place of its creation, and can not migrate to another sovereignty," still it was there held that it did not follow that it could not do business in other jurisdictions. Though corporations are mere artificial beings and creatures of the law where organized, still it is settled beyond a shadow of doubt that they may hold property and transact business in a foreign state or country when not prohibited from doing so by the laws of such country. But wherever a corporation "goes for business it carries its charter, as that is the law of its existence, and the charter is the same abroad as at home." Railroad v. Gebhard, 109 U. S. 527.

Affirmed.

Note. Compare, 1900, Union Natl. Bank v. State Natl. Bank, 155 Mo. 95 78 Am. St. Rep. 560.

Sec. 234. Same.

GRAHAM v. BOSTON, HARTFORD AND ERIE R. CO.1

1886. IN THE SUPREME COURT OF THE UNITED States. S. Rep. 161-180.

118 U.

[Bill in equity in circuit court of the United States, by a stockholder on behalf of himself and the other shareholders and the creditors, to set aside a mortgage given by the railroad company upon all its property.]

BLATCHFORD, J. * It appears by the bill that the mortgagor corporation was chartered by its name by the legislature of Connecticut at its May session, 1863; that thereafter acts were passed by the legislatures of Massachusetts and Rhode Island making it a corporation of those states; that in August, 1863, the Southern Midland Railroad Company having previously acquired all the franchises and property of the Boston and New York Central Railroad Company, a corporation chartered under the laws of Massachusetts, Connecticut and New York, conveyed all its franchises and property to the Boston, Hartford and Erie Company; and that in November, 1863, the latter company, under authority contained in acts of the legislatures of all four of the states, acquired the franchises and property of the Hartford, Providence and Fishkill Railroad Company, a corporation created under the laws of New York, Rhode Island and Connecticut.

*

The first ground alleged in the bill for declaring the mortgage invalid is, that it was authorized and made at a meeting of the shareholders of the company held in the city of New York; that it was not a corporation of New York, but was a corporation of Connecticut, Massachusetts and Rhode Island; and that, therefore, the meeting was illegal and the mortgage void. The circuit court held that the corporation was a New York corporation; that the meeting was lawfully held; and that its proceedings were valid and binding on the company.

That a meeting in one of several states of the stockholders of a corporation chartered by all those states is valid in respect to the property of the corporation in all of them without the necessity of a repetition of the meeting in any other of those states is, we think, a sound proposition, whether it be or be not true that proceedings of persons professing to act as corporators, when assembled without the bounds of the sovereignty granting the charter, are void. Miller v. Ewer, 27 Maine 509. There is no principle which requires that the corporators of this consolidated corporation should meet in more than one of the states in which it has a domicile in order to the validity of a corporate act.

The Boston, Hartford and Erie Company, though made up of dis

1 Statement of facts greatly abridged. Only part of the opinion relating to the single point is given, and this is rearranged and transposed.

tinct corporations, chartered by the legislatures of different states, had a capital stock which was a unit, and only one set of shareholders, who had an interest by virtue of their ownership of shares of such stock in all of its property everywhere. In its organization and action and the practical management of its property it was one corporation, having one board of directors, though in its relations to any state it was a separate corporation, governed by the laws of that state as to its property therein. It, therefore, had a domicile in each state, and the corporators or shareholders could, in the absence of any statutory provision to the contrary, hold meetings and transact corporate business in any one state, so as to bind the corporation in respect to its property everywhere. Bridge Co. v. Mayer, 31 Ohio St. 317; Pierce on Railroads, 20.

Affirmed.

Note. 1. A great number of decisions hold that business done at an organization meeting, or other meeting of shareholders held out of the state creating the corporation, is void, and of no effect: 1854, Freeman v. Machias Water, etc., Co., 38 Maine 343; 1858, Hill v. Beach, 12 N. J. Eq. 31; 1862, Hilles v. Parrish, 14 N. J. Eq. 380; 1863, Aspinwall v. Ohio, etc., R. Co., 20 Ind. 492, 83 Am. D. 329; 1874, Bellows v. Todd, 39 Iowa 209, 217; 1874, Ormsby v. Vermont Copper M. Co., 56 N. Y. 623; 1876, Mitchell v. Vermont C. M. Co., 67 N. Y. 280; 1883, Franco Texan Land Co. v. Laigle, 59 Texas 339 (so held although the charter expressly authorized the business to be done in France); 1885, Smith v. Silver Valley, 64 Md. 85, 54 Am. Rep. 760; 1890, Mack v. De Bardeleben, 90 Ala. 396; 1890, Welch v. Old Dominion, etc., R., 10 N. Y. Supp. 174; 1891, Hodgson v. Duluth, etc., R., 46 Minn. 454; 1894, Jones v. Pearl M. Co., 20 Colo. 417; 1895, Taylor v. Branham, 35 Fla. 297; 1895, Craig Silver Co. v. Smith, 163 Mass. 262, on 265; 1896, Duke v. Taylor, 37 Fla. 64, 53 Am. St. Rep. 232, 31 L. R. A. 484 (this intimates that if the statute authorized, such meeting would be valid); 1897, Bastian v. Modern Woodmen of Am., 166 Ill. 595 (this seems to intimate that statutory authority might make such meeting valid). 1899, Harding v. Glucose Co., 182 Ill. 557, 74 Am. St. Rep. 189.

2. Several cases, however, hold that such extraterritorial acts are not. void, but, at least, are sufficient to estop the corporation or participating shareholders, and third parties can not complain, non-participating shareholders being the only parties who may object. 1864, Ohio & M. R. Co. v. McPherson, 35 Mo. 13, on 26; 1867, Camp v. Byrne, 41 Mo. 525; 1875, Heath v. Silverthorn L. M. Co., 39 Wis. 146; 1880, Humphreys v. Mooney, 5 Colo. 282; 1891, Handley v. Stutz, 139 U. S. 417; 1892, Wright v. Lee, 2 S. Dak. 596.

3. There seems to be no doubt but that consolidated companies formed by the union of several corporations, organized in different states, can hold a valid meeting in either state, as held in Graham v. R. Co., supra. 1877, Covington, etc., Bridge Co. v. Mayer, 31 Ohio St. 317; 1888, Ohio, etc., R. v. People, 123 Ill. 467.

4. As indicated in Miller v. Ewer, the directors, being only corporate agents, may hold valid meetings outside the state creating the corporation. 1827, McCall v. Mfg. Co., 6 Conn. 428; 1864, Arms v. Conant, 36 Vt. 744; 1864, Ohio & M. R. Co. v. McPherson, 35 Mo. 13; 1872, Wood, etc., M. Co. v. King, 45 Ga. 34; 1874, Bellows v. Todd, 39 Iowa 209; 1880, Humphreys v. Mooney, 5 Colo. 282; 1881, Parsons v. Lent, 34 N. J. Eq. 67; 1888, Saltmarsh v. Spaulding, 147 Mass. 224; 1892, Wright v. Lee, 2 S. Dak. 596; 1893, Brockway v. Gadsden M. L. Co., 102 Ala. 620. But, see, 1874, Ormsby v. Vermont C. M. Co., 56 N. Y. 623, contra.

Statutes sometimes require the directors to meet within the state creating. the corporation. 1897, State National Bank v. Union Nat'l Bank, 168 Ill. 519.

Sec. 235.

Directors' meeting, necessity, notice and quorum.

BANK OF LITTLE ROCK v. M'CARTHY.1

1892. IN THE SUPREME COURT OF ARKANSAS. 55 Ark. Rep. 473482, 29 Am. St. R. 60, 37 Am. & E. C. C. 671.

[Suit instituted by a dissenting stockholder to have a receiver appointed for a lumber company. In August, 1869, this company owed the bank and McCarthy about $25,000 each, and others about $6,500. In order to meet pressing claims the president sought a further loan from McCarthy, who offered to advance $10,000, provided the company would give a mortgage securing that sum and his existing claim of $25,000. This necessitated a meeting of directors, a call for which was prepared and served upon all but one, Field. Inquiry was made at Field's office, but without ascertaining where he was. The president then went with a notice of the meeting to Field's residence, and finding no one there, inserted it between the door and casing and left it. Field's family was away, the residence was unoccupied at the time, except by a man who slept there, and the notice was not received by Field. The meeting was held, and all of the direc tors (there being five), except Field, were present. At this meeting it was determined by a vote of three to one that the mortgage should be made to McCarthy. The shareholders were the same as the direc tors, and the dissenting director as a shareholder instituted the suit the same day the mortgage was executed. A receiver was appointed and it then became apparent the company was insolvent. The bank put in a cross-bill asking that the mortgage to McCarthy be canceled, and McCarthy asked a foreclosure and secured a decree to that effect. The bank appealed.]

HEMINGWAY, J. The statute provides that the stock, property, affairs and business of business corporations shall be managed by not less than three directors (Mansf. Dig., § 964): and, further, that a majority of the directors, convened according to the by-laws, shall constitute a quorum for the transaction of business (section 969).

In the case of Simon v. Sevier Association, 54 Ark. 58, the validity of a general assignment authorized by a majority of the directors at a meeting of which the absent directors had no notice was considered, and we held that the statute authorized a majority to act only at a meeting legally convened, and that it was essential to a legal meeting that it be called in accordance with the by-laws or rules of the corporation or upon due and legal notice given to each of the members. There was no contention that notice could not have been served on each member, and no expression of the law where that was a fact. Subsequent investigation has not altered our views as then expressed, but we are convinced that they are in a line with the authority of textwriters and adjudged cases. If the rule were otherwise, the rights 1 1 Statement abridged. Arguments and part of opinion omitted.

and interests of minority holders would be liable to great abuse. Even majorities might suffer, for, by absence of some of their number, the minority might become the majority, hold a meeting without notice to the absentees and change the entire course or policy of the business, or do acts destructive to its prosperity or future existence. Such abuse of corporate power is not unknown to the history of corporations, and its evidence is found in the records of the courts. Rules intended to check or prevent it should be rigidly observed, except where reason requires that they be relaxed. The wisdom of the rule and the dangers incident to any other are very clearly stated by Judge Brewer in the case of the Paola & Fall River R. Co. v. Comrs. of Anderson Co., 16 Kan. 309, where he shows that if any other rule prevailed it would be possible, with a board composed of twelve members, for four directors to convene a meeting of seven by giving notice to three and witholding it from five others, and to bind the corporation to acts condemned by eight. That case called for no expression as to the law in cases of emergency where notice to any director was impracticable, and contains no discussion of such cases, but there is an intimation that the rule might admit exceptions in such

cases.

That such cases may arise as will justify and require exceptions to be made, is a conclusion to which reflection inevitably leads. In fact, it is conceded by the learned counsel for the appellant "that a director can not put a stop to corporate business by simply leaving its jurisdiction"; and that, "if after a reasonable search the parties are unable to find him, the remaining directors may attend to the necessary affairs." This indicates that the exception arises upon a concurrence of three conditions, first, the impracticability of notice; second, the existence of an emergency for action; and third, a reasonable necessity for the action taken.

Without committing the court to a full approval of this form of stating the exception, we may say that it seems to be substantially correct. Where notice is practicable, it must be given; it can be dispensed with when impracticable, only to meet an emergency; and the act done must appear reasonably necessary to the welfare of the corporation. If the act is merely proper, but not necessary, or if it appear that it may become necessary, but the necessity is not present, the rule should not yield, for in such cases notice may become practicable, and the presence of the absent director be secured before the necessity arises or the emergency is present. Such we consider the rule deducible from the case of Chase v. Tuttle, 55 Conn. 455, relied upon by the appellee. For it had been held in earlier decisions of that court that a meeting attended by a majority of the directors, of which the minority had no notice, was not lawful, and it does not appear that there was any intention to overrule those decisions. Stow v. Wyse, 7 Conn. 214; s. c., 18 Am. Dec. 99.1 The learned judge who delivered the opinion in that case says that "the exigency demanded immediate action to save the property and to save expense,' Supra, p. 835.

54-WIL. CASES.