The insertion of charter provisions prescribing the duties of the treasurer is, however, unusual even in the states where they are permitted. Such regulations properly belong in the by-laws and the only object of bringing them into the charter would be to secure the permanence characteristic of charter provisions on account of the difficulty of changing them. Usually this permanence is not desired, so that even in those states where special charter provisions are permitted, the requirements referring to the treasurer's duties are almost invariably found in the by-laws.

24. By-Law Provisions.

In many states the statutes specifically provide that the powers, duties and qualifications of the corporate officials. either shall or may be stated in the by-laws. These statute provisions when permissive merely restate a power already possessed by the corporation.

In practice the by-laws are almost invariably the source from which come both the powers and the duties of the treasurer. Under these circumstances an inspection of the by-law provisions of the better modern corporations relating to the treasurer, will give a clear and comprehensive view of his powers and duties that could hardly be obtained in any other way. For this reason the following chapter of the present volume is devoted entirely to the consideration of by-law provisions relating to the treasurer.12

By-law provisions are superior in authority to directors' resolutions and are not usually subject to change at the hands of the directors. They may, however, ordinarily be amended or repealed by the stockholders at any annual meeting, or at any special meeting called for the purpose, the by-laws themselves usually providing the procedure for repeal or amendment. In short, while by-law provisions may be amended without undue difficulty or serious delay, they have a reason

12 Chap. IV; see also § 6.

able stability and are not subject to sudden or unpremeditated change and therefore offer a peculiarly suitable medium for the expression and regulation of the treasurer's duties.

§ 25. Directors' Resolutions.

In the care and management of the corporate funds and for the discharge of any duties connected therewith, the treasurer is the active agent of the corporation, and of its governing body, the board of directors.13 He is therefore subject to the direction of this board in all such matters, except in so far as his powers and duties have already been prescribed by higher authority.

If no provisions as to the powers and duties of the treasurer are found in the charter or by-laws of the corporation, the directors, as an incident of their general control of the corporate affairs, are fully competent to determine these powers and duties and to authorize him to their performance.14

If, however, charter or by-law provisions exist defining and fixing the powers and duties of the treasurer, these cannot ordinarily be disturbed by the directors. They have no power to modify charter provisions, neither can they ordinarily repeal or modify by-law provisions. If, then, the scope of the treasurer's powers and duties has been fixed by either of these authorities, the directors may neither deny nor interfere. They · can, however, amplify and supplement as may be necessary.

As a rule, the by-laws prescribe the powers and duties of the treasurer with more or less detail. The directors then adopt only such supplementary or additional rules as may be necessary to guide the treasurer or to expedite the business of the corporation.

For instance, the by-laws usually provide that the corporate funds shall be deposited in some bank to be designated

13 See also § 7.

14 Beveridge_v. N. Y. E. R. Co., 112 N. Y. 1 (1889); Park v. Grant Locomotive Works, 40 N. J. Eq. 114 (1885); Saltmarsh v. Spaulding, 147 Mass. 224 (1888); Leslie v. Lorillard et al, 110 N. Y. 519 (1888).

by the board of directors. Also they usually state that books of account shall be kept, and perhaps provide for certain reports to be made by the treasurer. The directors cannot change these provisions, but, supplementing them, they will designate the particular bank in which the funds are to be deposited, prescribe what books are to be kept and what reports shall be made by the treasurer. Also in the absence of specific by-law provisions, they might decide the signature to checks on which the corporate funds are to be drawn out and also specify in what form and by whom checks are to be endorsed for deposit, and prescribe any other working details that might be necessary and not in conflict with the by-law provisions.

In some few states the directors either have power under the statutes to make and alter by-laws, or may be given such power by the corporation itself. When this is the case the directors are enabled thereby to exercise an unusually complete and unquestioned control over the corporate officials.

The action of the board of directors may be expressed either in the form of a motion or a resolution. There is no distinct line of demarcation between these two. They are both the expressions of the decisions or wishes of the board. The motion is the simpler in form and usually the briefer. The resolution is more formal. A short resolution without any preamble might, however, correctly be styled a motion and a motion might easily be amplified into a resolution. The legal force of the two is the same. 15

It may be said in passing that where the management of the corporation has, by statute, charter or by-law provision, been vested in the directors, the stockholders have no right to direct the action of the treasurer or of the other corporation officials in any way, save through the medium of the by-laws. Under such circumstances, stockholders' motions or resolutions instructing the treasurer or fixing his duties, would be abso

15 Goodwin, etc. v. U. S. Annuity & L. I. Co., 24 Conn. 591 (1856); Ten Eyck v. Railroad Co., 74 Mich. 226 (1889).

lutely ineffective, even though passed by the unanimous vote of every stockholder of the company.16 Should the treasurer obey such a motion or resolution in opposition to the mandates of the board or to a requirement of the by-laws, he would be entirely at fault and subject to removal for disregard of the proper authority.

§ 26. The Treasurer's Authority for Action.

The treasurer is expected to inform himself as to the powers conferred upon him by the charter and by-laws. When resolutions or motions are passed affecting him, it is the secretary's duty to call them to his attention. Usually this is done very informally. If the treasurer is a member of the board of directors, his mere presence when the resolution or motion is passed suffices without further notice. If not present, a verbal notification by the secretary is ordinarily deemed sufficient, though if some action of importance is to be taken by the treasurer, a formal written notice of the authorizing resolution should be given him.

As to outside parties, notice of the treasurer's authority for acts he performs will vary according to the conditions and the importance of his action. If the act is one within the usual range of his duties, and such as he customarily performs, his authority will rarely, if ever, be questioned. Where, however, some specific action of importance is to be taken by the treasurer, and particularly when this is outside the usual line of his duties, formal evidence of his authority is ordinarily and properly required by those with whom he deals.

In matters of small moment, the treasurer's authority if questioned, might be substantiated by a mere reference to the by-laws, or by an uncertified copy of the motion or resolution. under which he is acting. Where the matter is important, a certified copy of his authorization is properly required.

In any such case the secretary must be called upon for the

16 Smith v. Hurd, 12 Metc. (Mass.) 371, 385 (1847).

required evidence of authority. This is usually a copy of the empowering by-law or resolution, the authenticity of the original, and the correctness of the transcript being duly certified by the secretary under the seal of the corporation. Sometimes in matters of special importance the president of the company will join with the secretary in the certification. These certified copies of enabling by-laws and resolutions are the customary form in which official authority is evidenced and are of frequent use.17

§ 27. Place of Action.

The usual place in which the treasurer's duties are performed and his powers are exercised, is the office of the corporation. The law does not, however, circumscribe his powers to any one place. When properly representing the company in the discharge of his duties, his acts are as valid in one place as another and equally binding upon the corporation. When duly authorized thereto, he may sign a corporate check or contract in his office, or in another state with equal validity. The whole matter is one of authority and not of the place in which the authority is exercised. 18

17 See "Forms," Chap. XXXIV.

18 Hastings v. Ins. Co., 138 N. Y. 473, 479 (1893).