of the Secretary of State, and also in the office of the county clerk of the county from which it removes.

$221. Removal from County.

It was early held in this State, that removal from one county to another, if without legislative permission, violated the charter.-Attorney General v. Oakland County Bank, Walk. Chan. (Mich.) 90-97; People v. Oakland Co. Bank, 1 Doug. (Mich.) 282; Underwood v. Waldron, 12 Mich. 73; Thompson v. Waters, 25 Mich. 241. Hence, permission has been given. This refers to the place of business-the county where the articles are recorded; the place where the corporation resides for purposes of taxation, and where process may be served-as distinguished from its place of operation.

Removal of the business office from one county to another, within this State, is to be attended by three distinct acts:

(a) The articles of association, with a certificate of removal attached, executed by the president and secretary, are to be immediately recorded in the office of the county clerk of the county to which the office is removed; (b) The certificate of removal is to be immediately recorded in the office of the Secretary of State;

(c) A like certificate should be immediately recorded in the office of the county clerk of the county from which the corporation has removed. As a matter of practice, the certificate of removal may be executed in triplicate, and should be acknowledged by the executing officers, although the statute does not affirmatively require acknowledgment.

There is no penalty imposed for failure to make or record the certificate. The State alone can complain.

$222. Consolidated Corporation Law.-Section Relating to Recording Fees.

Section 19. The Secretary of State and any County Clerk, after recording the articles of association and certificates specified by this act to be recorded by them, shall return the same, each with his endorsement of record thereon, to said corporation; and for recording the articles of association and certificates required in this act, the Secretary of State and County Clerk shall each be entitled to receive at the rate of twenty cents for each folio.

$223. Legal Folio.

It is provided by C. L. 1897, Sec. 11239, as follows: "The term 'folio' when used as a measure for computing fees or compensation, shall be construed to mean one hundred words, counting every figure necessarily used, as a word; and any portion of a folio when in the whole draft or paper

there shall not be a complete folio, and when there shall be any excess over the last folio, shall be computed as a folio."-That mere estimates are not the proper method by which to fix recording fees, see Thornton v. Sturgis, 38 Mich. 642.

$224. Consolidated Corporation Law.-Section Relating to Business Offices.

Section 20. It shall be lawful for any corporation organized or existing under the provisions of this act to establish an office or offices for the transaction of business without this state and within the United States, and to hold any meeting of stockholders or directors of such company at such office so provided for: Provided, that there shall always be one business office. within this state and that service of any notice or process may be made upon the agent in charge of such office, which shall be binding upon such corporation. The place of holding such offices shall be fixed by a vote of a majority of the stockholders at any lawful meeting called for that purpose, and after being fixed shall not be changed within one year, and shall be certified by the directors of such corporation to the Secretary of State of this state within two months from the time such office or offices were so located.

$225.

Business Office Within This State.

A fair construction of this section of the act would ad to the conclusion that there must not only be a business office maintained in Michigan by every corporation organized under this act, but that there must be, as well, a resident agent in charge of such office. While the statute omits to require, in terms, the presence of a resident agent, there is a clear implication that the office shall be in charge of some one capable of receiving service of process. Probably under the strict rules of construction applicable to Sec. 23 of the act, mere failure to have such an agent would not render the directors liable for corporate debts. Substituted service of process being permitted (Act. Sec. 30) absence of the agent would work no injury to creditors. Undoubtedly an actual office, maintained, but not established by vote of the stockholders, nor certified as required by law, would be a de facto office, and service of process at such office would be valid.

$226. Transfer Books to be Kept Within State.

Where the principal office of the corporation is outside this State, a list of stockholders and a transfer book must be kept within this State.-Ċ. L. 1897, Sec. 8567. And transfers may be made at the local office where the transfer book is kept.-Id. Sec. 8568.

§227. Consolidated Corporation Law.-Section Relating to Withdrawal of Capital.

Section 21. If the capital stock of any such corporation shall be withdrawn, and refunded to the stockholders before the payment of all the debts of the corporation for which such stock would have been liable, the stockholders of such corporation shall be jointly and severally liable to any creditor of such corporation, in an action founded on this statute, to the amount of the sum refunded to him or them respectively.

§228. Dividends Paid from Capital Stock.

This provision was passed upon in American Steel & Wire Co. v. Eddy, 130 Mich. 266. In that case, Chief Justice Hooker said: "We see no reason to doubt that such dividends" (i. e. dividends paid out of the capital stock) "could be reached if there were no statute, as being a fraudulent disposition of assets. This statute provides a new procedure, permitting one who has exhausted his remedy against the company, (if not others), to sue the stockholders in an action at law.... The preferred stockholder is not excepted by this statute, and has no greater right to a dividend from the capital stock of an insolvent corporation than has any other stockholder, until the debts are paid."

When it established that a payment of dividends has impaired the capital stock, it is immaterial that the payment was made and received in good faith. American Steel & Wire Co. v. Eddy, 138 Mich. 403-408. See also Brewer v. Michigan Salt Association, 58 Mich., 351-355; Lockhart v. Van Alstyne, 31 Mich., 75. Dividends so paid from capital stock may be followed by creditors and recovered from stockholders who receive them.-American Steel & Wire Co. v. Eddy, ante.

$229. Sale Not Withdrawal.

The fact that all the property of a corporation has been sold to one of its stockholders is not evidence of withdrawal of capital stock. The presumption is that the corporation received an equivalent in return.-Chase v. Michigan Telephone Co., 121 Mich., 631-637.

$230. Consolidated Corporation Law.-Section Kelating to Dividends.

Section 22. If the directors of any such corporation shall declare and pay a dividend when the corporation is insolvent, or any dividend the payment of which would render it insolvent, knowing such corporation to be insolvent, or that the payment of such dividend would render it so, the directors assenting thereto shall be jointly and severally liable in an action founded

on this statute, for all debts due from such corporation at the time of paying or declaring such dividend.

$231. Dividends.

"A dividend is a fund which a corporation sets aside from its profits to be divided among its members..... .It is a sum which can be divided among stockholders without touching the capital stock."-Justice Cooley in Lockhart v. Van Alstyne, 31 Mich. 75.

The directors have exclusive power to declare dividends and to fix the amount thereof.-Hunter v. Roberts, 83 Mich., 63.

This provision of the act is designed to prevent the managing board from dissipating the corporation's capital by way of dividends. It exerts a salutary influence in discouraging the temptation to distribute funds equitably belonging to creditors, or to simulate corporate prosperity by dividing fictitious profits. The statute is penal; assenting directors alone become liable, and the right of contribution exists.

§232. Consolidated Corporation Law.-Section Relating to Violations of Act.

Section 23. If any corporation organized or existing under this act shall violate any of its provisions, the directors ordering or assenting to such violation, shall be jointly and severally liable in an action founded on this statute, for all debts contracted after such violation as aforesaid, to the extent of three times the amount paid in on the stock standing in the name of such director in any such corporation.

$233. Assent to Violation.

In Patterson v. Minnesota Mfg. Co., 41 Minn. 84; 4 L. R. A. 745, in sustaining an action brought against a director under a statute almost identical with this section, Justice Mitchell said: "Plaintiff's contention is that it is the duty of a director to know what is being done in corporate matters; that it is negligence for him not to know,-and therefore he is conclusively presumed to have known, and, not objecting, he must be deemed assenting. Such a construction would impose this severe, statutory liability for at least every act of mere negligence for which he would be liable at common law; but, as the act is highly penal, we do not think it ought to receive so broad a construction. The language of the various sections all tends to indicate that the legislature intended that something more than mere negligence should be necessary to subject a person to those heavy penalties, something amounting to wilful, or at least intentional, violation of legal duty either ordering the act done, participating in doing it, or assenting to its being done with knowledge that it was being, or about to be, done.

"This assent, however, need not be express. If a director knew that a violation of law was being, or about to be, committed, and made no objection when duty required him to object, and when he had the opportunity of doing so, this would amount to 'assent.'"

$234. Liability Extends Only to Debts.

Justice Cooley, in passing upon a similar statute, said: "This statute, it will be perceived, only makes the directors personally liable for 'debts.' Liabilities of the company which may give rise to causes of action against it and result in judgments are not within the statute unless they constitute present debts."-Lockhart v. Van Alstyne, 31 Mich. 78; Wachusett National Bank v. Steel, 135 Mich. 688; Leighton v. Campbell, 17 R. I. 51, 9 L. R. A. 187.

$235. Misjoinder of Counts.

This statute is highly penal.-Gennert v. Ives, 102 Mich. 547; Grand Rapids Savings Bank v. Warren, 52 Mich. 557-561; Breitung v. Lindauer, 37 Mich. 217. An action founded upon a penal statute cannot be joined with an action at common law.-Hogsett v. Ellis, 17 Mich. 351-359; People v. Judges, 1 Doug. (Mich.) 434-447. Thus, where the common counts in assumpit were added to special counts based upon this statute, it was held a misjoinder of causes of action-Wachusett National Bank v. Steel, 135 Mich. 688.

§236. Consolidated Corporation Law.-Section Relating to

Notice of Lien.

Section 24. Any corporation organized or existing under this act, which has a lien upon the stock of any stockholder therein as provided by the sixteenth section, may give notice to such stockholder that unless he shall pay his indebtedness to said corporation within three months from the time of giving such notice, then such corporation will proceed to sell and transfer the stock of such stockholder in said corporation, and upon default of payment said corporation may sell the stock of such indebted stockholder as hereinafter provided, and any such corporation may prescribe by its by-laws the manner of giving the notice required by this section.

$237. Lien for Debts Due.

We have seen that the term "debts due," as used in Sec. 16 of the Act, includes debts owing from the stockholder to the corporation, whether such debts have matured or are to mature at some future time. To this we may add, that it includes all debts, regardless of when and how contracted.