LEGAL PHASES OF COOPEKATIVE ASSOCIATIONS 31 
ciation result in its dissolution. 54 A charter may be canceled by the 
State for fraud in its procurement. 55 
If those interested in an association continue to do business in its 
name after the expiration of the charter, or after the dissolution of 
the association, they incur personal responsibility and liability. 
In some of the States there are statutes providing for the renewal 
of charters of corporations that are about to expire, or after they 
have expired, provided that an application for renewal is filed, 
usually with the secretary of state, before a certain date. 
BOARD OF DIRECTORS 
Membership on a cooperative board of directors is ordinarilj 
looked upon as a post of honor, but the board member who has 
examined the statutes and court decisions on the subject will also look 
upon the office as a post of great legal responsibility. Not only does 
the welfare of the cooperative rest upon the board as a group, but 
the office of director carries with it the possibility of great personal 
liability both at common law and under statutes. 
In the discussion which follows, the rules and principles stated 
are the common-law rules, unless a statutory provision is referred to ; 
and they are as applicable to directors of cooperative corporations as 
to directors of corporations of any other type. 
First, all the corporate powers of an association are in its direc- 
tors; that is, the directors of an association collectively and prima- 
rily possess all the powers that the association has under the law. 56 
It is true that these powers are executed by the officers, agents, and 
employees of the association, but the authority for their acts is found 
in the board of directors. They determine either expressly or by 
implication, directly or indirectly, the acts to be performed and the 
plans and methods to be followed by the officers, agents, and employ- 
ees of the association. It is the function and duty of directors of 
an association to direct and supervise in a fundamental way the 
activities of the association. The members or stockholders of an as- 
sociation through appropriate by-laws, undoubtedly could prescribe 
rules which the directors should observe in the conduct of the 
business of the association, for it will be remembered that a director 
is an agent and the general rules of agency apply to him in his rela- 
tion to the corporation. 57 
The first directors of a cooperative association under the statutes 
providing for the formation of cooperative associations are usually 
named in the articles of incorporation, and generally in practice 
they are the incorporators. These directors are sometimes referred 
to as the incorporating directors. They are usually authorized to 
serve until their successors are elected and qualified. The members 
or stockholders elect the successors of these directors, usually at a 
special meeting or at the first annual meeting of the association. 
M State v. Farmers' Co-op. Packing Co., 50 S. D. 627, 211 N. W. 602 ; Haynes v. Central 
Business Property Co., Wash. , 249 P. 1057. 
• 55 State v. U. S. Realty Imp. Co., Del., Ch. , 132 A. 138. 
58 Elggren v. Woolley. 64 Utah 183, 228 P. 906. 
57 Nicholson v. Kingery, Wyo. , 261 P. 122 ; Holcomb v. Forsyth, — — Ala. 
, 113 So. 516. 
