It has been repeatedly asserted in this state that repeals by implication are not favored. The repealing statute must either avow its purpose expressly, or its provisions must be so clearly repugnant to the prior law that the two can not exist together*. §99. Amendment by Stockholders. The charter contract is as binding upon the corporation as upon the State. Changes in the charter may be made only by the State's permission. If the power of amendment is not granted, it does not exist. In Michigan the right to amend the articles of association is vested in the stockholders by many of the enabling acts, as well as by the provisions of a broad, general law. The corporate name, objects, capital stock, classes of stock, number and par value of shares, as well as the location and duration of the company, and other incidents of the articles may be amended by the prescribed vote of the stockholders; the only limitations being, that no vested property rights shall be impaired, and that the articles of association, after amendment. shall not be otherwise than they might have been in the first instance. It has been argued that this exercise of amendatory power by the majority stockholders is, or may be, in the nature of an impairment of the contractual rights of the minority. It has been urged that a change in the purposes of the organization is a diversion of the corporate funds from the object for which of the charter, and which could not be exercised by unincorporated private persons under the general laws of the state, is abrogated by the repeal of the law which granted these special rights." "Personal and real property acquired by the corporation during its lawful existence, rights of contract, or choses in action so acquired, and which do not, in their nature. depend upon the general powers conferred by the charter, are not destroyed by such a repeal, and the courts may, if the legislature does not provide some special remedy. enforce such rights by the means within their power."—Justice Miller, in Greenwood V. Union Freight R. R. Co., 105 U. S. 13, 26 L. ed. 961. 4. Tillotson v. City of Saginaw, 94 Mich. 240: Hoffman v. H. M. Loud & Sons Lumber Co., 138 Mich. 5; Connors v. Carp River Iron Co., 54 Mich. 168; People v. Grand Rapids & W. P. R. Co., 67 Mich. 5. 5. C. L. 1897, Sec. 8533, Am. Act 176 Pub. Acts 1901, p. 251; Act 317 Pub. Acts 1905, p. 495. Under this statute it has been held that a nonstock corporation having power to hold property may amend its articles so as to create a capital stock divided into transferable shares.Detroit Chamber of Commerce v. Secretary of State, 109 Mich. 691; People V. Plainfield Ave. Gravel Road Co., 105 Mich. 9. Where amendment is unauthorized by the enabling act, it may be made under this general statute.-Great Hive L. O. T. M. v. Supreme Hive, 129 Mich. 324-334. they were originally invested. A complete answer to this objection is, that every member of the corporation has impliedly consented to all of the provisions of the charter, including the right of the majority to amend, and, having thus consented, the right to object is waived. The general power of amendment is unquestionably beneficial, and its exercise is rarely detrimental to minority interests. The necessity for the power springs from the fact that it is impossible, at the outset, to foresee and provide for all of the conditions which may afterwards arise through the development of the corporate enterprise. An authorized capital that would be ridiculous or impossible in the first instance, often becomes essential by reason of the growth of the company. Objects foreign to the original intent often become material through the merest accidents of invention, or through the varying circumstances of competition and trade. The creation of a class of preferred stock with such advantages that it will command a market may be found indispensable to the continuance of corporate solvency. Liberal power of amendment simply enables corporations to do what natural persons might do under like circumstances to adapt themselves to new conditions as new conditions arise. Were it not for this power, the sole remedy. would be by way of dissolution of the old company and organization of a new one, at the cost of delays and sacrifices. When a corporation in good faith makes an ineffectual effort, under a valid permissive law, to amend its articles of association, the rights that would have been conferred had the amendment been regular, become de facto rights of the company. The state alone can complain of the irregularity. A de facto corporation has no power to amend its articles of association. The benefits of amendment laws are intended for de jure corporations only. Under a statute permitting amendments extending or diminishing the corporate duration, it is possible to bring the corporate life to an abrupt close by an amendment reducing the period of corporate existence. §100. Consolidation. A consolidation of corporations is a legalized combination of the property and franchises of two or more incorporated com 6. Hoeft v. Kock, 123 Mich. 171. 7. Continental Paint Co. v. Secretary of State, 128 Mich. 621-626. panies, effected either by creation of a new corporation, or by continuation of an old one, in which the assets of the consolidating companies are merged. The absorbed companies are designated as "the consolidating corporations." The continuing company is known as "the consolidated corporation." The state has power to authorize consolidations. This power has been exercised in Michigan by the enactment of several statutes enabling consolidations. The proceedings incident to a consolidation are purely statutory, and the statute should be strictly pursued. A colorable consolidation, made in good faith under a valid law imperfectly followed, may give rise to a de facto consolidation. Those who have recognized the de facto consolidated corporation by dealing with it are not permitted to attack its validity. The state alone can complain1o. It has been repeatedly held however, that in the absence of an estoppel, nothing less than a de jure consolidation will support a proceeding brought by the consolidated company to enforce stock subscriptions made to the absorbed corporations11. In the absence of a statutory provision making the consolidated corporation liable for the obligations of the absorbed companies, the naked fact of consolidation does not establish such liability. Proof of something more is necessary12 Liability may be fastened upon the consolidated corporation by, 8. State Treasurer V. Auditor General, 46 Mich. 224-232. 9. C. L. 1897, Sec. 8572-8573. It is held that this statute is inapplicable to foreign corporations. Dieterle v. Ann Arbor Paint & Enamel Co., 143 Mich. 421. As to the consolidation of railroad companies, see Act No. 30, Public Acts 1901, p. 50.-As to consolidation of street railways, electric light and gas light companies, see Act. 33 Pub. Acts 1907, p. 35: Act 61 Pub. Acts 1903, p. 81; Act 50 Pub. Acts 1903, p. 64; Act 128 Pub. Acts 1899, p. 178. 10. Shadford v. Detroit, etc. Ry.. 130 Mich. 300-305; Niles v. Benton Harbor, etc. R. Co., 154 Mich. 378381; Swartwout V. Michigan Air Line R. Co., 24 Mich. 388-392. 11. Peninsular Ry. Co. v. Tharp, 28 Mich. 505-506; Mansfield, Coldwater & L. M. R. Co. v. Drinker, 30 Mich. 124-126; Wells v. Rodgers, 60 Mich. 525; See also Brown v. Estate of Dibble, 65 Mich. 520. 12. In Chase v. Michigan Telephone Co., 121 Mich. 631-634, Chief Justice Grant states the law as follows: "The law is well settled in regard to liability of the consolidated or purchasing corporation for the debts and liabilities of the consolidating or selling corporation. Such obligations are assumed (1) when two or more corporations consolidate and form a new corporation, making no provision for the payment of the obligations of the old; (2) when by agreement, express or implied, a purchasing corporation promises to pay the debts of the selling corporation; (3) when the new corporation is a mere continuance of the old; (4) when the sale is fraudulent, and the property of the old corporation, liable for its debts, can be followed into the hands of the purchaser." See also Grenell v. Ferry, 110 Mich. 262. (a) Proof that such liability has been assumed13, or (b) Proof that no provision has been made11 for payment of the debts of the consolidating corporations, or (c) Proof that the new corporation is but a continuation of the old one in a new form15, or (d) Proof that the transfer to the new corporation was fraudulent16. In any of these cases, the consolidated corporation will be liable for obligations of the absorbed concerns, whether such obligations arose ex contractu or ex delicto1. Where a corporation is absorbed by consolidation, under circumstances which make the consolidated corporation liable for the consolidating company's debts, it is immaterial that the absorbed company was insolvent. The continuing corporation must bear the burdens imposed by its improvident bargain's. It seems that where the consolidating corporation continues undissolved, suit may be brought, primarily, against it for its own obligations19. When judgment has been recovered, and an execution has been issued and returned nulla bona, a creditor's bill will lie against the consolidated company if the circumstances are such that it is liable20. Where, at the time of commencement of suit, the consolidation has been effected, the action may be brought directly against the consolidated corporation21. Under such circumstances, the declaration should allege, and the proof should establish, such facts as will fix the liability upon the continuing corporation22. When two or more corporations 13. Rehberg v. Tontine Surety Co., 131 Mich. 135; Kobogum v. Jackson Iron Co., 70 Mich. 498-504. 14. Grenell v. Detroit Gas Co., 112 Mich. 70. Where a corporation buys out a partnership and assumes its obligations, the corporation may be held liable.-Piette v. Bavarian Brewing Co., 91 Mich. 605-611. 15. Chase v. Mich. Tel. Co., 121 Mich. 631. 16. Grenell v. Ferry, 110 Mich. 262. 17. Howell v. Lansing & Suburban Traction Co., 146 Mich. 450: Rheberg v. Tontine Surety Co., 131 Mich. 135-138; Shadford v. Detroit etc. Ry., 130 Mich. 300; Grennell v. Detroit Gas Co., 112 Mich. 70; Batterson v. Chicago & Grand Trunk Ry Co.. 53 Mich. 125-127; Chicago M. & St. P. R. Co. v. Third National 19. Thomson v. McMorran Milling Co., 132 Mich. 591-599. 20. Turnbull v. Prentiss Lumber Co., 55 Mich. 387; Grenell v. Ferry, 110 Mich. 262. 21. Howell v. Lansing & Suburban Traction Co., 146 Mich. 450; Shadford etc. v. Detroit Ry. Co.. 130 Mich. 300; Niles v. Benton Harbor, etc. R. Co., 154 Mich. 378; Chicago & Indiana Coal R. Co. v. Hall, 135 Ind. 91, 23 L. R. A. 231, and notes. 22. Howell v. Lansing & Suburban Traction Co., 146 Mich. 450; Marquette. Houghton & Ontonagon R. Co. v. Langton, 22 Mich. 250. In merge, so that the identity of the original company is lost, the merger amounts to a breach of existing contracts of employment between the absorbed companies and their employees. This result arises from the fact that an employee can not be compelled to consent to the substitution of a master not of his own choice23. When authorized by statute, a domestic corporation may consolidate with a foreign corporation, but the domestic corporation remains domestic, and the foreign corporation remains foreign, and concert of action, not unity of being, is all that is accomplished by the consolidation24. $101. Dissolution. It was early held that an assignment for the benefit of creditors operated as the surrender of the charter25. But it is now well established that this view was erroneous, and that neither an assignment, nor bankruptcy, nor any act other than the expiration of the charter, or a judicial dissolution, can end the corporate life26. Termination may be by limitation or by dissolution. When the corporate period has expired, and no valid reorganization or extension has been accomplished, the corporation is at an end27. It is incapable of longer exercising corporate functions, except for the purpose of winding up its business, paying its obligations, and distributing the net residue of its estate among the stockholders28. The mere fact that the corporation continues the case last cited Justice Campbell said: "While our laws subject consolidated companies to the obligations of their constituents, the consolidation creates a new, distinct corporation and any declaration against this for an old cause of action should state against what company it arose, and aver such facts as will subject the new company to be sued upon it." 23. Globe & Rutgers Fire Ins. Co. v. Jones, 129 Mich. 664-668. 24. Chicago & North Western Ry. Co. v. Auditor General, 53 Mich. 79. 25. Bank Commissioners v. Bank of Brest, Harr. Chan. (Mich.) 106. 26. People v. Bank of Pontiac, 12 Mich. 526-537. 27. Negaunee Iron Co. v. Iron Cliffs Co., 134 Mich. 264-278: Brown v. Mining Co., 105 Mich. 653657. Equity will enjoin the threatened acts of those who assume to act in the name of a defunct corporation. Negaunee Iron Co. V. Iron Cliffs Co., (Id.) 28. Mason v. Perkins, 73 Mich. 303-319. By statute a corporation, however terminated, has three years in which it may continue for the purpose of gradually winding up its affairs.-C. L. 1897, Sec. 8534. Whether, after dissolution, a corporation retains the exclusive right to the use of its corporate name during the three-year period allowed by statute for the gradual settlement of the company's affairs. is a question that has been raised, but is undecided. People v. Sticky Fly Paper Co., 144 Mich. 221-231. The name is properly in the nature of a com |