Eidman v. Bowman

Citations

• 58 Ill. 444

Syllabus

<p>1. Corporations—powers of board of directors—Mast St. Louis Bank. The charter of the East St. Louis Bank provided that its capital stock should be one hundred thousand dollars, with power to increase it to five hundred thousand. The charter did not provide by whom this power might be exercised: Held, the board of directors of the bank did not, merely by virtue of their position as such, have authority to increase the capital stock without the assent of the shareholders.</p> <p>3. It seems the management and transaction of all business for which a corporation is created, and its general affairs, are within the usual powers of the board of directors, but a power given to a corporation to increase its capital stock, can not be exercised by the directors, except they be specially authorized so to do, either by the charter or by the shareholders.</p> <p>3. Same—increase of the capital stock—who entitled to the shares. If the capital stock of a bank, or other corporation, be increased by proper authority, the right to such additional stock vests in the original stockholders, eacli one to take in proportion to the amount held bj' him of the original stock, if he will pay for it. This right may be waived, but if it is not, the party entitled can not be deprived of it by the board of directors of the corporation, or otherwise.</p> <p>4. Pleading in chancery—averment of ratification. A bill in chancery was filed for relief against the action of the board of directors of a bank, in increasing the capital stock thereof, without authority of law, or the consent of the complainants, who were shareholders. The answer averred, that the action of the directors had been ratified by the shareholders ; but as the time, manner or circumstances thereof, were not showm, the averment was deemed insufficient.</p>