to it. The drawer may, in the interim between the delivery to the payee and its presentation for payment, draw his deposit from the bank and place it to the credit of another person, or encumber it so as to defeat the check; and we can, therefore, see no good reason why, as between the immediate parties to the check (where innocent parties are not affected), the drawer may not revoke or countermand it.

not been acted upon at the time of the coun. termand, and the court held that the countermand was therefore in season, and good. Another recent English case also well illustrates the operation of the doctrine of this section. A debtor gave a check in payment of his indebtedness. Before presentation of the check, garnishee process was served on him in a suit against the payee. The drawer at once countermanded his We are referred to the decision of the Illi- check, and directed that it should not be nois supreme court which held that the paid. The court held that by this stopping drawer of a check cannot revoke payment, payment on the check the original debt from and that the bank, if it had the funds, must the drawer to the payee was revived, and pay it when presented. But it seems to us, was held by the garnishee process." It is both upon principle and the decided weight further said in reference to the right of of authority, that the rule is the other way. the drawer to countermand the check as folMorse, in his work on Banks and Banking lows: "This right he possesses until the (§ 397), referring to the Illinois case with bank has paid it out, or promised or bedisapproval, says: "The general current of come bound to pay it out, upon some order authority is very strong to the effect that emanating from him, and presented for paythe drawer may countermand." 1 Morse, ment or acceptance at the bank counter, or Banks & Banking, § 398, in discussing the until the operation of law intervenes by question under consideration, says: "The reason of some process. It is a matter of remark once fell from Judge Story, in the no consequence how many checks are, with oft-cited Matter of Brown, that the drawer the knowledge of the bank, outstanding in of a check had no right to countermand the hands of his creditors at the time of his payment at the bank. It was obvious from counter direction or demand of payment of the context that the judge referred rather the whole fund to himself. The bank is not, to moral right than to legal right. He and has no right to constitute itself, the meant simply that a debtor who had given agent of these parties. It not only to his creditor a check in payment of the owes them no duty, but it has not even any debt had no right as towards that creditor, legal power to act in their behalf." It may 'right' being considered as a matter of hon- be conceded that the supreme court of Ilesty to order nonpayment of the check. The linois has announced a different doctrine language of the judge, taken in isolation from the foregoing; also that Daniel on Nefrom the circumstances of the case and from gotiable Instruments seems to be in accord the remainder of the opinion, seems to ad- with the doctrine announced by the Illinois mit a different meaning, and is therefore supreme court; but it seems to us that the capable of a misinterpretation and misuse great weight of authority is against the conwhich have sometimes been feebly attempt-clusions of the Illinois court and Mr. Daned. But, if such a misunderstanding is iel. It will be seen from the opinion in the possible, still the authorities to the con- case of Lester v. Given, 8 Bush, 357, that trary effect are numerous, and leave no the court incidentally recognizes the right shadow of doubt upon the point." In fur- of the drawer to revoke the check before its ther support of the above quotation the presentation for payment; and, besides, the learned writer cites with approval the case question of revocation or death of the of Gibson v. Minet, 2 Bing. 7. Gibson exe-drawer is not discussed or considered in the cuted the following writing: "Waterford, opinion. Nor have we been referred to any July, 1822. I request you to hold over £400 case in which the precise facts existed as from my private account to the disposal of appear in the case at bar. J. Mintern & Co. Wm. Gibson." This or der was addressed to Messrs. Minet & Stride. "This order Was delivered to a partner in the house of Mintern & Co. on July 8th, and to Messrs. Minet & Stride on July 13th. The drawer had funds to his credit to the amount called for. Upon the receipt of it, one of the bankers wrote upon the debit side of Gibson's account: 'N. B. By Mr. Gibson's letter of the 8th of July, 1822, £400 is to be held at the disposal of Messrs. J. Mintern & Co.' Mintern & Co. were customers with the same banker. On March 19, 1823, Gibson notified the bankers that he countermanded the order. The bankers immediately notified Mintern & Co., and desired instructions. Mintern & Co. replied, requiring the amount be carried to their credit, and the bankers complied, and notified Gibson. The jury found that the order to the bankers was executory, and had

The case of Dana v. Third Nat. Bank, 13 Allen, 445, 90 Am. Dec. 216, conclusively settles the question adversely to the contention of appellee. It will be seen in the case at bar that before the check became payable, and before presentation, the drawer died, and that the check was for $360, and the only amount of money in the bank due to the drawer was $199. And it is averred in the petition that on the 21st of August, at the time the check was presented, the plaintiff notified the bank of the death of the drawer and forbade the payment of the check, and that the appellee bank protested the check, but afterwards paid the $199 thereon, and afterwards plaintiff drew the check upon the bank, which the bank refused to pay. The right of the bank to refuse to pay a check drawn for a larger sum than it has funds of the drawer seems to 'be admitted and sustained by all the au

thorities. The bank in this case exercised | should have followed the rule (and the dethat privilege, but afterwards undertook to ductions which necessarily followed it). revoke its action and pay part of the check. enunciated in Lester v. Given, 8 Bush, 357, We think it clear that the bank had no such and reaffirmed in Weinstock v. Bellwood, 12 authority. The great weight of authority Bush, 139. In those cases the court held seems to be that the drawer may at any that a check is an absolute appropriation time revoke the payment of a check before of so much money in the hands of the bankits presentation and demand for payment. er to the holder to remain there until called The decided weight of authority is that the for, and cannot after notice be withdrawn death of the drawer operates as a revocation by the drawer. As between the drawer and of the check; but, if the check be paid by holder of the check the appropriation is abthe bank before notice of the death of the solute, but the law will not allow the bank drawer, it seems that the payment will be to suffer before notice that the check has held valid. It may also be well to remem- been withdrawn by the misconduct and the ber that the giving of a check does not pay wrong of the drawer in beating the holder or extinguish a debt due from the drawer of the check to the bank. If there is an to the payee until the check is actually paid, absolute appropriation of the money to the unless it is specially agreed by the parties holder of the check, it logically follows that that the check is accepted in satisfaction of the drawer of it cannot deprive the holder the debt. The bank is, in a sense, the agent of his right to the fund by notifying the of the depositor, and must at all times obey bank not to pay the check. When the the order or direction of the depositor, un- holder's right to the fund has attached, it less other legal rights have intervened. It is only by his consent that the drawer can may be true that the drawer who gives a again be reinvested with any right to the check and then countermands the payment fund. This being true, when the drawer may be guilty of a moral wrong towards the dies, it being necessary to have the consent payee. It may sometimes happen that a of the holder of the check to reinvest the revocation of a check by death will result drawer with an interest in the fund, his in loss or inconvenience to the payee. But (drawer's) death cannot reinvest his essuch things cannot change, and ought not to tate with a right to the fund which in lifechange, the well-settled rule of law govern- he had voluntarily appropriated to another. ing such transactions. Commercial business and the convenience of banks and depositors seem to require the enforcement and maintenance of the law as herein indicated.

It results from the foregoing that the court erred in sustaining the demurrer to the petition. Judgment reversed and cause remanded, with directions to overrule the demurrer, and for proceedings consistent herewith.

Paynter, Ch. J., dissenting:

In the disposition of this case the court

The fact that there was not fund enough in bank to pay the entire amount of the check did not deprive the holder of the right to have paid to him the assessment actually in bank.

This court heretofore has followed the doctrine of Daniels on Negotiable Instruments, and I am of the opinion that it is the correct one.

Judges Hobson and Burnam concur.

PENNSYLVANIA SUPREME COURT.

PPEAL by defendants from a decree of A the Court of Common Pleas for Venant go County confirming the report of the master as to the election of directors at the annual meeting of the Reno Oil Company. Reversed.

The facts are stated in the opinion. Messrs. S. S. Mehard, J. W. Lee, and Ash, Speer, & McSweeney, for appellants:

Although, when a day certain is appointed for a particular business, no notice may be necessary when that alone is to be transacted, or the mere ordinary affairs of the corporation are to be acted upon, yet, when the intention is to do other acts of importance, a notice of it is required. The election or amotion of an officer, the making of a by-law, or any act of similar importance, on any day not expressly set

apart for that particular transaction, is il- the laws of the land. 1 Bl. Com. 476; 2 legal and void. Kent, Com. 278. By its by-laws the manAng. & A. Priv. Corp. 11th ed. § 489; agement of a corporation's affairs is regu Morawetz, Priv. Corp. 2d ed. § 482; Samp-lated, and most frequently-as in the presson v. Bowdoinham Steam Mill Corp. 36 ent case-its directors or managers are Me. 78; Warner v. Mower, 11 Vt. 385; Peo-chosen in accordance with their provisions. ple's Mut. Ins. Co. v. Westcott, 14 Gray, They are adopted, in the first instance, by 440; 2 Cook, Corp. § 595.

Messrs. W. H. Forbes, Breene & Wilbert, and John J. Henderson for pellees.

Brown, J., delivered the opinion of the

court:

diately direct its conduct. The agreement of the members of a corporation as to what shall be its mode of life is found in its bylaws, and their first and most important duty is to adopt them. In some instances there may be found in the charter itself provision for the election of directors who are to manage the affairs of the company, but in the absence of any such provisionas in the case now before us-the by-laws provide for the number and the time and mode of the election of those to whom are committed the interests of stockholders and the active management of the association. By-laws, having once been adopted, become the permanent rule to govern the association's conduct, and every member of it ought to be able to so regard them, and to feel that they will be neither repealed nor amended without notice to him of an intention to do so, even at a regular or annual meeting of the stockholders. Upon the bylaws, as adopted and regulating the affairs of a corporation in which a stockholder has

the members of the association at a meeting where, if all do not attend, all must at least ap-have an opportunity to be present; and when adopted they become as binding upon every member as the charter itself, into which they are written, as the association's rule of conduct. A corporation may begin This bill was filed by the appellees for the to live the moment its charter issues, but appointment of a master to supervise the it may not be able to act for the purposes election of directors by the stockholders of of its creation until those to whom the franthe Reno Oil Company at the annual meet-chises are given, and who make up its coring held January 18, 1900. The appoint-porate existence, have agreed how it shall ment was made, and the master attended act, what it shall do, and who shall immethe meeting; but before proceeding to elect directors a resolution was offered amending the by-laws by increasing the number of directors from nine to eleven. No notice had been given of this proposed change, but a vote was taken, and the amendment was adopted, whereupon the stockholders proceeded to elect five, instead of three, directors. The master held that under his appointment his authority did not extend to the supervision of the vote on this proposed change in the by-laws; but in passing upon the validity of the election of the directors who the appellees claim were elected he did consider and pass upon the validity of the amendment, because it involved the legality of the election of the five directors. There was no provision in the by-laws for their amendment, but there was a rule of the company, under its contract of consolidation with the American Petroleum Company, that an amendment could be made with the written consent of the owners of three fifths in number of the shares of the company, given in writing, filed with the secretary, and re-invested his money, he relies for a managecorded in the minutes of the proceedings of the company. The master was of opinion that, as the holders of three fifths of the shares had cast their ballots in favor of the proposed amendment, there had been a compliance with this rule; but there had not been, for no consent of the owners of three fifths in number of the shares of the company had been given in writing that had been filed with the secretary and recorded in the minutes of the proceedings of the company. The by-laws were not amended as required by the rule referred to, and the first and fundamental question raised by the appellants is whether the by-laws of the company could "be lawfully amended, and the number of directors increased, at the annual meeting of stockholders, without previous notice given of the purpose to offer such amendment." The by-laws of a corporation are the rule of its life. It comes into being through some general or special statute, with its charter as the evidence of its existence, and one of its necessary and inseparable incidents is the power to make by-laws, which become its private statutes for its own government, unless contrary to

ment as therein provided, and it is not reasonable that even at a regular or annual meeting radical changes should be made without notice to him of such contemplated action. By experience and observation we know that at these regular annual meetings. only the general routine of business is transacted, and the corporation passes from one year of its existence into the next with the by-laws regulating the number of its di rectors and its general management unchanged. A majority of stockholders rarely attend in person. Their proxies are given to attorneys to vote for them on the usual and ordinary questions and matters that arise. If one or more stockholders contemplate action of an unusual or extraordinary character, it is but reasonable that their associates should have notice that rad ical, and what may prove disastrous, changes are contemplated, and that an effort will be made to effect them. If such changes are made with the approval of a majority of the stockholders upon notice to all, they affect and bind all; but they should not be made until all have had an opportunity to be heard by receiving notice of

what changes will be attempted, unless pro- or any act of similar importance on any day vision be made for them in the by-laws. not expressly set apart for that particular Cook, Stock, Stockholders, & Corp. Law, 2d transaction is illegal and void." Ang. & A. ed. 595. No more radical change can be Priv. Corp. § 489. "In general, the notice made in the management of the affairs of a need not specify the business to be considcorporation than an increase in the number ered, where the meeting is one prescribed by of its directors as fixed by its by-laws. Such charter, or where the business is prescribed increase may result in taking the control of by charter or statute or by-law, and no una prosperous business from the hands of usual business is to be transacted. But if the those who have successfully conducted it, meeting is to be held at a time not provided and committing it to those who, with dif- by the charter, or if unusual business is to ferent notions, may lead it into ruin and be transacted [at a meeting which is a cusdisaster; honest management may be fol- tomary one], the call must specify particulowed by a dishonest one; prodigality may larly the time and it seems also the unusual take the place of frugality; a sense of se- business." Cook, Stock, Stockholders & curity may be succeeded by unrest; and Corp. Law, 2d ed. § 595. "In the case of where all was right everything may be the former [corporate meetings], provided wrong. Such changes, with such possible re- for by the laws of the association, all memsults to stockholders, ought not to take place bers are bound to take notice of both time before notice given of what the majority may and place of holding them, where both are do, and to which the minority must bow, if specified by the by-laws, as well as of the unable to avert the changes, after having usual character of the business to be transhad an opportunity to be heard and to act. acted at such meetings; but where matters A change in the by-laws increasing the not usually brought up at such meetings are number of directors of a corporation, being to be considered, and where their objects are manifestly of great importance, extraordi- to be defined by express provision of the bynary, and out of the usual business trans- laws, special notice of the subjects intended acted at a regular or annual meeting of the to be submitted should be given." Endlich, stockholders, the weight of authority seems Bldg. Asso. 2d ed. § 159. Our act of asto be, as it ought to be, that, in the ab- sembly of April 29, 1874 (P. L. 77, § 5), sence of notice previously given, it cannot providing that "the members of said corbe made. In People's Mut. Ins. Co. v. poration may at a meeting to be called for Westcott, 14 Gray, 440, a meeting of a mu that purpose determine, fix, or change the tual fire insurance company having been number of directors or trustees that shall called "for the purpose of making such al- thereafter govern its affairs;" that of May terations in the by-laws, and for 31, 1887 (P. L. 281, § 1), "that it shall be the transaction of such other business as may lawful from and after the passage of this come before them;" and the number of di- act for any corporation, chartered or existrectors, which had not been limited by the ing by or under any law of this state, to deby-laws, having been increased at the meet- termine by the vote of its stockholders holding, and the additional directors elected, it ing a majority in interest of all its stock, was held: "But a decisive objection to the at a meeting duly called for the purpose, choice of these new directors is that in the the time of holding the annual meeting for call for the meeting at which they were the election of officers of the corporation, chosen there was no intimation of any pur- and the number of directors that shall pose to make such an election. The only thereafter govern its affairs;" and that of specific subject of action named was the al- May 14, 1891 (P. L. 61, § 5), that ́"the teration of the by-laws. There was no by- members of said corporation may, at a meetlaw limiting the number of directors, and ing to be called for that purpose, deterno new by-law was adopted respecting the mine, fix, or change the number of directors number to be chosen, or altering the time of or trustees that shall thereafter govern its holding the annual meeting. A measure of affairs," all indicate the great importance such importance to the members of the com-recognized by the legislature to the stockpany, which might transfer the whole cor- holders of a corporation of fixing and changporate power to new hands, could not fairly ing the number of directors, and are but be embraced in the phrase 'for the transac-declaratory of the unwritten law, which altion of such business as may come before them.' It is unnecessary to notify the shareholders of the particular business to be brought before an ordinary or general meet ing, unless it be of great importance, and of an extraordinary character. In the latter case the object of the meeting must be specified. Morawetz, Priv. Corp. § 359. "Although, when a day certain is appointed for a particular business, no notice may be necessary when that alone is to be transacted, or the mere ordinary affairs of the corporation are to be acted upon, yet when the intention is to do other acts of importance a notice of it is required. The election or motion of an officer, the making of a by-law,

ways has reason as its foundation. We are of the opinion that the amendment of the by-laws of the Reno Oil Company increasing the number of directors was invalid for want of notice to the stockholders, and that the election of the five directors cannot be sustained. The other two questions need not be considered.

The decree of the court below that James R. Adams, James R. Gilmore, Frederick J. Lancaster, W. H. Forbes, and C. E. Hamford were duly elected as directors of the Reno Oil Company on January 18, 1900, is reversed; the costs of this proceeding and of the proceedings below to be paid by the Reno Oil Company.

SOUTH DAKOTA SUPREME COURT.