to exercise franchises without objection by the State does not alter the company's legal status. Corporate life can not be extended by waiver29.

When the life of a private corporation ends, its assets, after payment of creditors, belong to its stockholders. In a corporation having assets, but no capital stock, the net amount upon termination of the corporation is, in equity, the property of its members, and does not escheat to the State". Where a corporation, for any reason, is wholly unable to further carry on its purposes or attain its objects, the directors are charged with the duty of having the organization dissolved in equity. Should they be guilty of unreasonable neglect or delay in so doing, anyone having an interest in the corporate property may institute the proceedings31.

mon law trade mark.-Lamb KnitGoods Co. v. Lamb Glove & Mitten Co., 120 Mich. 159. Moreover, it is a kind of property that may exist as well in the absence, as in the presence, of incorporation. It is assignable with the good will and established business of the company, of which it forms a part. The three years' grace is conferred to enable the corporation to remain active during the whole period of its corporate life, and then to gradually close its affairs without the sacrifices incident to forced sales. To hold that, by delaying liquidation until expiration of its charter, the corporation sacrifices an asset whose existence might continue independent of the charter, would seem to be without the support of reason, and would certainly defeat, in part, the benevolent purpose of the law. In Bewick v. Alpena Harbor Co., 39 Mich. 700, Chief Justice Campbell, recites the history of this statute and states its principal object as follows: "The object of this clause was not to limit, but to enlarge, the corporate privileges, so that a corporation whose existence was nearing its end might enjoy the advantages of doing general business during the whole charter period, instead of being compelled to wind up its affairs before it ended."

29. Grand Rapids Bridge Co. v.

Prange, 35 Mich. 399-405.

30. Hopkins V. Crossley, 138 Mich. 561-566; Id, 132 Mich. 612.

31. In Miner v. Belle Isle Ice. Co., 93 Mich. 97-112 Justice McGrath made the following statement: "It has been held that, when it turns out that the purposes for which a corporation was formed cannot be attained, it is the duty of the company to wind up its affairs; that the ultimate object of every ordinary trading corporation is the pecuniary gain of its stockholders; that it is for this purpose, and no other, that the capital has been advanced; and if circumstances have rendered it impossible to continue to carry out the purpose for which it was formed with profit to its stockholders, it is the duty of its managing agents to wind up its affairs." See also Stamm v. Northwestern etc. Assn., 65 Mich. 317; C. H. Little Co. v. Cemetery Association, 135 Mich. 248-253; Brown v. Mining Co., 105 Mich. 653. In Stamm v. Mutual Benefit Association it was held that, where a corporation has net assets but no capital stock, the assets will be divided, upon dissolution, pro rata among those who were members at the time the corporation finally ceased to exercise its corporate functions. The legal representatives of those who have died since that occurrence stand in the stead of such decedent members.

Dissolution must be in accordance with legislative permission expressed in the charter, or in the general laws of the State 2. In the absence of the statutory reasons hereinafter considered, a majority can not force dissolution upon a minority, except through exercise of the power of amendment by way of reducing the term of corporate existence. It is clearly beyond the power of a majority of the stockholders to wind up the affairs of the company by exchanging its property for the shares of another corporation. Minority stockholders can not be compelled to accept such stock against their will, and the dissent of a single stockholder will overthrow the transaction33.

In Michigan there is a general statute regulating dissolutions34. The provisions of this statute are substantially as follows:

(a) A majority of the directors, upon finding the corporation insolvent, or about to become insolvent, or otherwise unable to longer carry out its corporate purposes advantageously, may go into equity by sworn petition praying dissolution35. (b) The petition must contain

I. An inventory of all assets,

II. A statement of the names, residences and holdings of each stockholder, and of the amount sub

32. Calkins v. Bump, 120 Mich. 335-342; Town v. Bank of River Raisin, 2 Doug. (Mich.) 530.

33. Emery v. Construction Co., 132 Mich. 560; Mason v. Pewabic Mining Co., 133 U. S. 50, 33 L. ed. 524. The latter case was an appeal from the Circuit Court of the United States for the Western District of Michigan, and affords a striking example of the injury which might arise to minority holders if the majority had power to exchange corporate assets for stock in a new company. By vote of 27,919 shares against 6,754 shares, resolutions, in substance as follows were adopted: "Resolved that the board of directors be authorized to sell and dispose of the property of the company for a sum not less than $50,000 "Resolved that the property shall be sold to a new corporation organized on the basis of 40,000 shares (the same as

......

the antecedent company) and that the stockholders receive an equal number of new shares in exchange for their old shares or, that any stockholder may receive his pro rata share in money." Sale was made to the new company at a price of $50,000, and an offer was made to settle with dissenting stockholders in cash on the basis of that valuation. The effect of this was that the majority holders of the original company arrogated to themselves the right to compel a sale to themselves at a price fixed by themselves. If the injustice of such a proceeding required any illustration, it would be found in the fact that the property in this case, valued by the directors at $50,000, was ascertained by the master in chancery to be worth $498,412.24.

34. C. L. 1897, Chap. 300, Sec. 10855, et seq.

35. C. L. 1897, Sec. 10852, 10854.

scribed, and of the amount paid in, and of the amount remaining unpaid, by each of them,

III. A statement of encumbrances,

IV.

A list of debtors and creditors, with amounts of debits and credits36.

(c) An order to show cause before a master in chancery why dissolution should not be decreed must be entered and published37.

(d) If the master's report shows it desirable, dissolution will be decreed and a receiver will be appointed38.

(e) Any officer, director, or stockholder may be appointed as receiver with power to collect the assets, including unpaid subscriptions39.

(f) The estate is to be distributed as follows:

I. Debts entitled to perference under the laws of the United States,

II. Executions actually levied, to the extent of the property levied upon, and according to priority, III. Special deposits,

It is a familiar principle, that upon dissolution, creditors are to be first paid. Assets prematurely distributed to stockholders may be followed and recovered11. A creditor having neither a judgment nor a lien upon the property of the corporation, can not complain of the distribution of that property, unless he is authorized by statute to do so. The doctrine that creditors of

all sums collected above $1,000 up to $5,000, 1% on all sums collected in excess of $5,000, $1 per day for time employed. Also such additional amount as the court may allow for extraordinary services. For a case where a compensation of $125 per month was allowed, see in re Angell, 131 Mich. 345-351. In our Supreme Court the tendency is to affirm the allowance made by the court of first instance. "No one is in a position to know what allowance should be made so well as the court appointing the receiver."-In re Angell Id.

40.

C. L. 1897. Sec. 10873, 10877. 41. Brewer v. Mich. Salt Ass'n. 58 Mich. 351-355; Id. 47 Mich. 526.

an insolvent corporation have an equitable lien upon its assets is expressly repudiated in Michigan12.

A corporation may be dissolved upon bill or petition of the attorney general, or at the instance of any creditor, or of any director, trustee or other managing officer whenever it shall appear that the company has been continuously insolvent during one year, or when the company has neglected or refused to pay its debts during a like period. To enable a creditor to take advantage of these statutory provisions, he must be a judgment creditor+5.

Where, in a quo warranto proceeding, it is found that the corporation defendant has forfeited its rights through misuser, non-user, or through insolvency16, or by non-payment of debts for a period of one year17, judgment may be rendered that the corporation be ousted from its rights, privileges and franchises. and that it shall be absolutely dissolved18.

42. McKee v. City Garbage Co., 140 Mich. 497; O. W. Shipman Co. v. Detroit etc. Ry. Co., 140 Mich. 589; Bank of Montreal v. Lumber Co., 90 Mich. 345.

43. C. L. 1897, Sec. 9759. But the insolvency of a corporation is not ground for a suit in equity by a stockholder to wind up its affairs.Heap v. Heap Mfg. Co., 97 Mich.,

147; Fuller v. McCormick, 16 D. L. N. 195 (May, 1909.)

44. C. L. 1897, Sec. 9762.

45. McKee v. City Garbage Co., 140 Mich. 497.

46. People v. Sticky Fly Paper Co., 144 Mich. 221.

47.

48.

C. L. 1897, Sec. 9762.
C. L. 1897, Sec. 9961.

CHAPTER XII.

ACTIONS AND PROCEDURE APPLICABLE TO
CORPORATIONS.

$102. Status.

$103. Abatement of Actions by Dissolution.

$104.

Commencement of Suits.

$105. Return of Officer.

$106. Waiver of Irregularity.

$107. Statutory Proceedings Against Stockholders. $108. Quo Warranto.

$109. Mandamus.

$110. Bankruptcy.

$111. Remedies in Equity.

$112. Receivers.

It is the settled policy of the law in this State to deal with corporations, as nearly as may be, as though they were natural persons. Again and again in statutes and decisions, this policy has been announced1. It is applied in full force to proceedings by and against corporations in courts of justice. Often at the expense of public criticism, these tribunals have steadfastly declined to be swerved from duty by the popular clamor which has, not infrequently, demanded one kind of justice for corporations and another kind of justice for private individuals. The position of our Supreme Court has been repeatedly stated on this subject in passing upon remarks of counsel assigned as error. It is firmly established in this State that deprecatory allusions, made by counsel for the purpose of arousing the prejudices of a jury toward a corporation litigant, may be, if

1. C. L. 1897, Sec. 10468 provides that. "Suits against (domestic) corporations may be commenced (in circuit court) in the same manner that personal actions may be commenced against individuals." C. L. 1897, Sec. 753, is as follows "All actions

against corporations, except municipal corporations, shall be cognizable before a justice of the peace in like manner and with the like restrictions as the same are or may be by law before a justice of the peace when brought by an individual.”