Thus, the lien attaches for a debt owed by the stockholder as a surety, guarantor, indorser, or as a partner in another concern.-Citizens Bank v. Kalamazoo Bank, 111 Mich. 313. And the lien attaches to dividends as well as to the stock.-Cook's Corp. Sec. 526.

The lien follows the stock, even into the hands of innocent purchasers or pledgees who have given value.-Citizens State Bank v. Kalamazoo Co. Bank, 111 Mich. 313; Oakland Co. Savings Bank v. State Bank, 113 Mich. 284; Michigan Trust Co. v. State Bank, 111 Mich. 306; Newberry v. Detroit etc. Iron Co., 17 Mich. 141. In this respect a statutory lien differs from a lien created by by-law.-Just v. State Savings Bank, 132 Mich. 600-607; Bronson Electric Co. v. Rheubottom, 122 Mich. 608.

$238. Foreclosure of Lien.

Foreclosure of the lien, being a statutory proceeding for the divestment of a property right, the statute must be strictly pursued. Equity has no jurisdiction to decree foreclosure of such a lien, except for the purpose of doing justice between the parties in a suit brought for other purposes.— Aldine Mfg. Co. v. Phillips, 118 Mich. 162.

Should the by-laws fail to provide for the manner of giving notice, personal notice will be necessary, and notice by mail would be insufficient.Tuttle v. Mich. Air Line R. Co., 35 Mich 246. Where the by-laws provide for the giving of notice by mail, that method will be sufficient.-Stradley v. Cargill Elevator Co., 135 Mich. 367. As a matter of practice, such notices, when sent by mail, should be sent by registered mail. Where the by-laws provide a method of serving notice, that method must be followed.--Westcott v. Mining Co., 23 Mich. 144.

$239. Consolidated Corporation Law.-Section Relating to Foreclosure of Lien on Stock.

Section 25. Such corporation may, at any time within six months after it shall have given the notice required by the preceding section to such indebted stockholder of its intention to sell such stock, and the three months' notice shall have expired. advertise in one or more newspapers published in said county. where such corporation is located, and if there is no newspaper published in said county, then in a newspaper published in an adjoining county, giving at least three weeks' notice of the time and place when and where such stock will be sold, and at the time and place of sale shall state the amount due from such stockholder to such corporation, and then proceed to sell for cash at public auction, to the highest bidder therefor, so much of the stock of such indebted stockholder as shall pay in full the indebtedness of such stockholder to such corporation, together with the necessary costs of sale; and if the sale of the

entire stock of such indebted stockholder shall not be sufficient to pay in full the claim of said corporation on said stock, such corporation shall credit the amount received for such stock, less the costs of sale, to said indebted stockholder, and may proceed to collect the remainder of their debt by any proper action for that purpose.

$240. Notice.

"Three weeks' notice" means one notice published three full weeks before the date of sale.-Lane v. Burnap, 39 Mich. 736. It does not mean a notice published three successive weeks. Yet, because the statute has not been judicially construed, and because the remedy is a harsh one in most instances, it is not deemed good practice to proceed with the minimum notice allowed, but rather with the maximum notice suggested. The better procedure is to publish the notice once in each week during a period of three successive weeks (making, in all, four insertions) prior to the date of sale. The first insertion should be three clear weeks, or more, prior to the selling date. The day of first publication and the day of sale should be excluded in computing the time.-Cox v. Commissioner, 83 Mich. 193194; Platt v. Commissioner, 38 Mich. 247-248; Lane v. Burnap, 39 Mich. 736-738; Powers' Appeal, 29 Mich. 504-508.

Proof of publication should be procured and preserved as a warrant for subsequent proceedings.

For form of Notice of Sale, see Sec. 465 post.

$241. Recovery of Deficit.

Assumpsit lies for recovery of the deficit if the stock, on sale, fails to bring the amount of the lien and costs of sale.-Carson v. Arctic Mining Company, 5 Mich. 288; Merrimac Mining Co. v. Bagley, 14 Mich. 501

504.

As to liens on stock see Sec. 85 ante.

$242. Consolidated Corporation Law.-Section Relating to Transfer After Foreclosure.

Section 26. Whenever the purchaser of said stock shall have complied with the conditions of said sale, the corporation shall issue new certificates of stock to such purchaser, or to their order, and shall cancel upon the books of the corporation the certificates of such indebted stockholders, and the new certificates. so issued shall entitle the holder thereof to all the privileges, rights and interests of a stockholder in such corporation.

$243. Cancellation of Certificates.

There being no such thing as a bona fide purchaser of lien-encumbered shares under this Act, cancellation of the outstanding certificates after sale

is of no importance. The law contemplates that a record of the fact of sale upon foreclosure shall be kept. The purpose is to inform future officers of what has been done, so that, in case the old certificates are afterward presented for transfer, the fact of their cancellation by foreclosure shall appear.

There is no doubt that a regular sale under a valid statutory lien will vest perfect title in the purchaser.

$244. Consolidated Corporation Law.-Section Relating to Secondary Liens.

Section 27. Whenever any stockholder in any such corporation shall have made a transfer or assignment of his stock as security for his indebtedness to a third party, and afterwards shall become a debtor to such corporation, such corporation may sell the equity of redemption of such stock in the same manner as is provided for the sale of stock on which it has a lien, and shall credit the amount received from such sale to such indebted stockholder. Such corporation may require the party holding the transfer or assignment of such stock, to give a statement to the treasurer of such corporation, under oath, of the amount for which said stock was pledged; and if said party shall not give such a statement at or before the time such sale is to take place, he shall forfeit all claim and lien on such stock or any part thereof, and such corporation may sell the same as herein provided.

§245. Secondary Liens.

This section is meant to provide for the foreclosure of a secondary lien-a lien upon an equity of redemption. The provision is badly drawn. It includes cases where it is inapplicable, and omits cases where it might be beneficial. The section apparently proceeds upon the theory that secondary liens arise in only one way,-i. e., through debts contracted after transfer-and that the lien for such debt is always secondary. Both of these notions are fallacious.

(a) Where a corporation, through some act, is estopped to deny that a pledgee has a superior claim, its lien becomes secondary to his, although it may grow out of debt pre-existing the pledge.-Oakland County Savings Bank v. State Bank, 113 Mich. 284.

(b) In the absence of notice to the corporation, an unregistered pledge is secondary to a statutory lien arising out of a subsequent indebtedness of the pledgor to the company.-Michigan Trust Co. v. State Bank, 111 Mich. 306.

(c) But if the corporation is given actual notice of the transfer by entry on its books, or otherwise, its lien for debts of the transferor

contracted thereafter is subject to the rights of the transferee.-Curtice etc. Co. v. Bank, 118 Fed. Rep. 390; Birmingham Trust & Savings Co. v. Louisiana National Bank, 99 Ala. 379, 20 L. R. A. 600.

§246. Consolidated Corporation Law.-Section Relating to

Levies.

Section 28. Nothing contained in the four preceding sections shall affect any lien or right acquired by any other party by virtue of any attachment or levy of execution upon the stock of any stockholder in any such corporation.

$247. Levies Upon Stock.

This section of the act does not mean that levies shall be superior to pre-existing corporate liens Corporate liens upon stock for debts of stockholders are created by Sec. 16, of the act, and not by any of "the four preceding sections." The evident purpose of this section is to declare that these preceding sections have nothing to do with the subject of levies, and that levies are still wholly governed by C. L., 1897, 10335-10339 and amendments thereto. See Act 219 of 1903.

Purchasers of shares at execution sale acquire no better title than was held by the execution debtor at the time of the levy.-Newberry v. Detroit, etc., Co. 17 Mich. 141; May v. Cleland, 117 Mich. 45.

The right to levy upon shares of a corporation is confined to cases where the debtor's status is that of a stockholder and legal possessor of the interest seized. The right of levy does not extend to mere equitable interests. Van Norman v. Jackson Circuit Judge, 45 Mich. 204-210. Nor can

it be exercised when the debtor has assigned his stock, even though the transfer has not been made upon the books of the company.-Newberry v. Detroit etc., Co., ante.

$248. Consolidated Corporation Law.-Section Relating to Labor Debts.

Section 29. The stockholders of all corporations organized or existing under this act shall be individually liable for all labor performed for such corporations, which said liability may be enforced against any stockholder by action founded on this statute, at any time after an execution shall be returned unsatisfied, in whole or in part, against the corporation, or at any time after an adjudication in bankruptcy against said corporation, and the amount due on such execution shall be prima facie evidence of the amount recoverable, with costs against any such stockholder; and if any stockholder shall be compelled by any such action to pay the debts of any creditor, or any part thereof,

he shall have the right to call upon all of the responsible stockholders to contribute their equal part of the sum so paid by him as aforesaid, and may sue them, jointly or severally, or any number of them, and recover in such action the amount due from the stockholder or stockholders so sued.

$249. Liability for Labor Debts.

The term "labor" as here used, refers to manual labor.-Appeal of Clark, 100 Mich. 448. Labor performed by a man's team is regarded as having been performed by the man himself.-Chicago & N. E. R. Co. v. Sturgis, 44 Mich. 538-540.

A labor claim cannot be split up into separate actions.-Milroy v. Spurr Mountain etc. Co., 43 Mich. 231. The laborer himself may proceed under this statute, but his assignee is limited to the procedure prescribed by C. L. 1897, Sec. 8554, et seq.-Musselman v. Wright, 107 Mich. 639-642; Connors v. Carp River Iron Co., 54 Mich. 168.

$250. Execution Unsatisfied.

The sheriff's return of an execution nulla bona is conclusive as between the parties.-Michael v. Stork, 52 Mich. 260. The creditor is not bound to look beyond the county where he has obtained judgment.-Ripley v. Evans, 87 Mich. 217-226. Judgment against the corporation is conclusive upon the stockholders.-Mutual Fire Ins. Co. v. Furniture Co., 108 Mich. 170-176. They may, however, attack it on the ground of collusion or fraud.McBryan v. Universal Elevator Co., 130 Mich. 111-116; Bohn v. Brown, 33 Mich. 257.

It has been held that the return nulla bona of a Justice Court execution was sufficient in a case within the exclusive original jurisdiction of that court, i. e. a case involving less than $100.-Voight v. Dregge, 97 Mich. 322-325,

$251. Consolidated Corporation Law.-Section Relating to Service of Process.

Section 30. Service of any notice or legal process against any corporation formed or existing under this act may be made on the president or any vice-president, secretary, treasurer. assistant secretary or treasurer, general manager, superintendent, cashier or any other officer of the corporation, or upon the agent in charge of any business office of such corporation within this state, or if neither of such officers or agents can be found, then such service may be made by posting a true copy thereof in some conspicuous place at the business office of the corporation in this state.