veyed or mortgaged to said corporation by way of security, or in satisfaction of debts. Any corporation formed under this act may purchase real or personal property necessary for its business, and issue its authorized capital stock to the amount of the value thereof in payment therefor, and the capital stock so issued shall be full paid stock, and not liable to any further call, neither shall the holder thereof be liable to any further payment under any of the provisions of this act, except the liability imposed by section twenty-nine; and in the absence of actual fraud in the transaction, the judgment of the directors as to the value of the property shall be conclusive. And in addition to the powers hereinbefore enumerated, every corporation organized under this act shall possess and exercise all such rights and powers as are necessarily incidental to the exercise of the powers expressly granted herein. It may also purchase and hold any grant of land made by the government to aid in any work of internal improvement.

§206. Power to Hold Property.

The power to hold property, both real and personal, is incident to every corporation, unless there is an express prohibition, or such power is repugnant to the purpose for which the corporation was created.Regents v. Detroit, 12 Mich. 138-160; Thompson v. Waters, 25 Mich, 214.

§207. Stock Issued for Property.

The only important provision of Sec. 14 of the Act is that which relates to the issue of full-paid stock for property. The issue is to be "the amount of the value thereof," and "the capital stock so issued shall be full paid stock," and "in the absence of actual fraud in the transaction the judgment of the directors as to the value of the property shall be conclusive."

The "trust fund doctrine" prevails in this state.-Clark v. E. C. Clark Machine Co., 151 Mich. 416-424. Where this doctrine is in force, the rule that payment in "money or in money's worth" applies.-Moore v. Universal Elevator Co., 122 Mich. 48-54. But this rule may undoubtedly be relaxed by statute.-Moore v. Universal Elevator Co. (Id.) Here it has been relaxed. But there are still at least three contingencies to be reckoned with:

(a) There must be no actual fraud,-i. e. fraud other than constructive fraud, or what is known as "fraud in law."

(b) The judgment of the directors must have been exercised. A mere arbitrary or reckless valuation is not within the protection of the act.

(c) An adequate "itemized description of the property" must be included in the articles. Sections 2 and 14 of the act are to be construed together. Should any one of these elements be wanting, it is fair to conclude,

upon authority of Wood v. Sloman, 150 Mich. 177, and the cases there cited, that original subscribers, and such transferees as are not bona fide holders, might be held for assessments for the benefit of creditors, in case of actual fraud or gross overvaluation.

§208. Consolidated Corporation Law.-Section Relating to Corporate Books.

Section 15. The books of every such corporation containing their accounts shall be kept, and shall at all reasonable times be open in the city, village, or town where such corporation is located, or at the office of the treasurer of such corporation, within this state, for inspection by any of the stockholders of said corporation, and said stockholders shall have access to the books and statements of said corporation, and shall have the right to examine the same in said city, village or town, or at said office; and as often as once in each year a true statement of the accounts of said corporation shall be made and exhibited to the stockholders.

$209. Right of Stockholders to Inspect Books.

Under this provision, the right of inspection is absolute and the purpose is immaterial.-Thomp. Corp., Sec. 4412; Cook's Corp., Sec. 514; Weihenmayer v. Bitner, 45 L. R. A. 446-448; Cincinnati Volksblatt Co. v. Hoffmeister, 48 L. R. A. 732. But this absolute right extends only to books of account and such statements as to the statute requires to be made "as often as once each year." As to all other corporate records, the common law rule prevails. At common law, the right of inspection does not exist for the purpose of enabling a stockholder to gratify idle curiosity. He must have some interest at stake that makes inspection necessary.-People v. Walker, 9 Mich. 328-330. If he has such an interest, his motive is immaterial. The inspection must be permitted, even though its purpose be to obtain data upon which to found a suit against the company by reason of an existing dispute.-Woodworth v. Old Second National Bank, 154 Mich. 459-467.

$210. Consolidated Corporation Law.-Section Relating to Transfers.

Section 16. The stock of every such corporation shall be deemed personal property, and be transferred only on the books of such corporation, in such form and manner as their by-laws shall prescribe, and such corporation shall at all times have a lien upon all the stock or property of its members invested therein, for all debts due from them to such corporation.

$211. Transfers.

Transfers on the books of the company are not essential to the validity of the transferee's title.-Mandelbaum v. Mining Co., 4 Mich. 464. Delivery of a certificate endorsed in blank is sufficient.-Walker v. Detroit Transit R. Co., 47 Mich., 338-350; Noller v. Wright, 138 Mich. 416; May v. McQuillan, 129 Mich. 392-396; Judson v. Stonington Mining Co., 128 Mich. 103. An unrecorded transfer is good, even as against levies made by creditors of the transferor.-Newberry v. Detroit & L. S. Iron Co., 17 Mich., 141; May v. Cleland, 117 Mich. 45-47.

The provision making stock "transferable only on the books of the company," operates merely as a protection to the corporation.-Matthews v. Hoagland, 48 N. J. Eq., 455-486. For example, the transferee of shares. under an unregistered transfer, could not recover from the corporation a dividend by it paid to his transferor, who appeared from the books of the company to be the holder of the shares at the time the dividend was paid.-Marshall's Corp., p. 741. So also an unrecorded transfer of which the corporation has no notice does not prevent a lien in favor of the corporation attaching to the shares in the hands of the transferee for subsequent indebtedness of the transferor to the company.-Michigan Trust Co. v. State Bank, 111 Mich. 306; Citizen's State Bank v. Kalamazoo Bank, 111 Mich., 313; Oakland Co. Savings Bank v. State Bank, 113 Mich. 284.

$212. Statutory Lien.

A statutory lien is notice to all the world. Strictly speaking, there can be no bona fide purchaser of shares subject to such a right of lien, for all persons are charged with knowledge that the corporation may have a claim. Good faith purchasers, who give value, take, nevertheless, subject to such rights in the shares as the corporation may have gained.-Newberry v. Detroit, etc., 117 Mich. 141; Citizens State Bank v. Kalamazoo Bank, 111 Mich. 313; Michigan Trust Co. v. State Bank, 111 Mich. 306.

But the corporation may waive its lien by permitting a transfer.-Just v. State Savings Bank, 132 Mich. 600. Or by falsely denying that it has such a claim.-Oakland County Savings Bank v. State Bank, 113 Mich. 284-287. Or, where the lien is for an unpaid subscription, by issuing its certificates marked "fully paid and non-assessable."-Young v. Erie Iron Co., 65 Mich. 111.

$213. Lien for "Debts Due."

A debt is defined by Judge Cooley to be, "That which one person is bound to pay another, either presently or at some future period; something which may be the subject of suit as a debt." Lockhart v. Van Alstyne, 31 Mich. 76-78; Estate of Lambie, 94 Mich. 489-492. The word "due" has two well established meanings. It is sometimes held to mean "immediately payable."-Northwestern Mut. Life Ins. Co. v. Greiner, 115 Mich. 641; Cross v. McMaken, 17 Mich. 511-515. Again it is held to mean "owing" or

It has been

“remaining unpaid."-Fowler v. Hoffman, 31 Mich. 214-219. applied in the latter sense in construing C. L. 1897, Sec. 10714 of the Mechanic's Lien Law.-Smalley v. Ashland Brown Stone Co., 114 Mich. 104-106. Also in construing C. L. 1897, Sec. 7326, relating to the time when suits may be commenced against certain insurance companies.-Putze v. Saginaw Mut. Fire Ins. Co., 132 Mich. 670-677 (Justices Hooker and Grant dissenting). There would seem to be no sound reason why the word "due" should be given the meaning of "past due" in construing the Act before us. That construction would enable an indebted stockholder to transfer his stock, lien-free, at any time before his debt matured. Had the Legislature supposed that it was leaving open so wide an avenue of escape, it is fair to assume that Sec. 27 of the Act would not have been confined to the subject of indebtedness arising after transfer.

In view of the purpose of the legislation, the mischief arising from an opposite construction, the trend of decision, and utterances of text writers, it is safe to assert that the words "debts due" as used in this section of the Act, mean debts owing, whether matured or unmatured.-Cook's Corp. Sec. 527; Thomp. Corp. Sec. 2327. (A similar question was raised, but was not decided, in Citizens Bank v. Kalamazoo Bank, 111 Mich. 313320.) $214.

Consolidated Corporation Law.-Section Relating to
General Amendments.

Section 17. Every corporation organized or existing under the provisions of this act may at any annual meeting or any meeting duly called for that purpose, by a resolution adopted by a vote of two-thirds in interest of its capital stock, amend its articles of association in any manner not inconsistent with the provisions of this act, but such amendment shall not become operative until a copy of such resolution, signed by the president and secretary of the corporation, shall have been recorded as is provided herein for the recording of original articles of association, when such amendments shall have the same force and effect as though said amendments had been included in the original articles, and the record, or a copy of the record, of such resolution, certified as provided in section nine, shall be received in all courts of this state, as prima facie evidence of the things therein stated.

$215. Amendment of Articles.

Pursuant to the provisions of this section of the Act, all amendments (except increase or decrease of the capital stock, which may be accomplished only as provided by Sec. 2 of the act) consistent with the enabling law, may be made.-People v. Green, 116 Mich. 505; People v. Plainfield Gravel-Road Co., 105 Mich. 9.

$216. Extension of Corporate Existence.

Corporate existence may be extended by an amendment made in conformity with this provision, to any date being not more than thirty years from the date of original organization.—Ovid Elevator Co. v. Secretary of State, 90 Mich., 466-469.

§217. Amendments Increasing or Diminishing Capital Stock.

This section does not apply to changes of the amount of the capital stock. In such cases, even though other amendments are included (such as a change of corporate name), the procedure must conform to the requirements of Sec. 2 of the act, and the president and a majority of the directors (instead of the president and secretary) must make the certificate.Continental Paint Co. v. Secretary of State, 128 Mich. 621.

$218. Amendments De Facto.

A duly adopted resolution of amendment, remaining unrecorded, becomes an amendment de facto, and can be objected to by the state only.Hoeft v. Kock, 123 Mich., 171.

$219. Amendments Must Not Violate Obligation of Contract.

A class of preferred stock may be created by a three-fourths vote in value of interest. (Act Sec. 35). But when created such preference may not be abolished, except by unanimous assent of holders of the preferred shares. The preference is a contractual right, which, when once invoked, no majority has power to set aside.

$220. Consolidated Corporation Law.-Section Relating to

Removals.

Section 18. Any corporation organized or existing under the provisions of this act may remove its place of business from any city, village, or town in this state where it is or may be located, to any other city, village, or town in this state by a vote of twothirds of its stockholders in interest. But in case of a removal from one county to another, the president and secretary of such corporation shall attach to their articles of association, a certificate that such corporation has thus removed and said articles of association, together with said certificate, shall be left for record immediately on such removal, in the office of the county clerk of the county to which such corporation shall remove, and they shall be recorded by such clerk, at full length in the book kept by him for that purpose. And the president and secretary of such corporation shall immediately upon such removal, cause a certificate thereof, to be recorded in the office