scribers become members of the association thereby.-Ante Sec. 80. And their interest is assignable.-Ante Sec. 80. But whether or not the assignee of such interest thereby becomes a member of the association depends upon considerations which do not arise in relation to ordinary corporations. Post Sec. 296.

The authorized capital of a partnership association limited may be fixed at any amount agreed upon among its organizers. Until the amendment of 1903, the statute required no specific proportion of the capital to be subscribed or paid in. This apparent leniency was really less liberal than the requirement of the present law, for, in the absence of statutory permission that less may be subscribed, it is held that de jure organization is impossible until subscriptions to the entire authorized capital have been obtained. Ante Sec. 33.

Capital may be paid up in cash, or in notes immediately convertible into cash.-Rouse, Hazard & Co. v. Detroit Cycle Co., 111 Mich. 251; Cook's Corp., Sec. 20-or in real or personal estate. Subscriptions beyond the ten per cent of the authorized capital required to be paid in at the time of organization may be made payable upon call of the board of managers.Cook's Corp., Sec. 109.

Shares.-The articles should state the number of shares into which the authorized capital stock is divided, and the par value of each share, which may be fixed at any amount-preferably $10 or $100. The statute does not require such statement, but good practice demands it.

$294. Character of Business.

The "character of the business to be conducted" refers to the intents designated as "purpose or purposes" in ordinary corporation enabling acts. The inclusive method of statement recommended under the general corporation law is applicable here.-Ante Sec. 29. It is good practice, after describing the business, to add a clause to the effect that the business is to be carried on "in the State of Michigan and elsewhere."-Stradley v. Cargill Elevator Co., 135 Mich, 367-376.

$295. Location.

"The location of the same" undoubtedly refer to the situs of the principal office or place of business (as distinguished from the mill, factory, warehouse or other place where operations are carried on) which must be maintained within this State.

$296. Restrictive Provisions Concerning Transferees.

Reference to section four of the act discloses that one of three courses is open to the organizers:

(a) They may, by mere silence, cause the transferee of shares, however acquired, to gain no rights of membership as to such shares, until he shall have been "elected thereto by a vote of a majority of members in number and value of their interest."

(b) They may, by provision in the articles, permit the membership rights and liabilities of a deceased member to be transferred to, and assumed by, some person to be selected, at pleasure, by the representative of such deceased member's estate.

(c) They may expressly declare in the articles that the capital subscribed shall not be subject to any of the restrictive provisions of section four of the act.

For a statement of the purpose of the restrictive provisions, see Sec. 311, post.

$297. Name.

The word "limited" must be the last word (Act. Sec. 3) of the association name. This requirement evidently grew out of the fact that, originally, the use of the word "company" in connection with the name of a limited partnership was prohibited. In Pennsylvania, prior to 1868, there was nothing in the firm name of such organizations to distinguish them from other copartnerships. As a result persons who were in ignorance of the public records were misled. It was to remedy this evil that the Pennsylvania legislature in the act of 1874 (the act borrowed by Michigan in 1877), required the use of the word "limited" as a distinguishing mark. It is a protection both to third parties and to members. Indeed there are instances where this peculiarity of name alone might confer immunities against individual liabilities that would attach to stockholders of an ordinary corporation. For example, Harrison and Company, a common law partnership, may reorganize under the same name as a full-fledged corporation. As to those who have dealt with the concern as a partnership, the members, in subsequent dealings, remain liable as partners, in the absence of actual or constructive notice of the change of status.-Edwards v. Wheeler's Estate, 130 Mich. 219; Tousignant v. Iron Co., 96 Mich. 87. But suppose Harrison & Company had reorganized under the limited partnership association act as Harrison & Company, Limited. The name itself would operate as notice of the change. As was stated by Justice Grant, in Staver & Abbott Mfg. Co. v. Blake, 111 Mich. 282-286: "The very name of the association implied a warning to plaintiff that it was not dealing with the members or stockholders of this association in their individual capacity, but in their associate capacity, with their liability limited."

$298. Duration.

The duration of a partnership association cannot exceed twenty years. If a shorter time is originally fixed, it may be extended by amendment of the articles, but not to exceed twenty years in all from the date of original organization. Ovid Elevator Co. v. Secretary of State, 90 Mich. 466-469. Amendments made by stockholders cannot override legislation.

The State Constitution (Const. 1850, Art. XV. Sec. 10, as amended in 1889; Const. 1908, Art. XII, Sec. 3) provides that the legislature may enact statutes, authorizing corporations (and this term, as used in the constitution,

includes "all associations") to extend their corporate life for one or more periods not exceeding thirty years each. From time to time the legislature has acted upon this constitutional authority, the last statute being Act 328 Pub. Acts 1905, p. 506. Nowhere else is there any authority for the extension of the duration of these associations. Is such authority conferred by this statute? If at all, it must be by implication. Extension of corporate life is really a grant of power to be a body corporate during a further term of years. "No corporation can exist, except by force of express law." -Schuetzen Bund v. Agitations Verein, 44 Mich. 313-315. May such an important grant rest upon an implication? It would seem not. At all events, there is nothing in the act of 1905 to warrant the conclusion that the legislature intended it to extend to partnership associations. No public interest would be served by such extension. The act contemplates extensions running thirty years, while twenty years is the allotted life of such associations. Moreover, it contemplates the execution of new articles by a president and secretary. A partnership association has no president. Clearly the legislature did not have these associations in mind when it passed Act 328 of 1905. It follows that, as our statutes stand today, the duration of a partnership association, limited, cannot be extended beyond twenty years from the date of organization.

In this connection another question forces itself upon our attention. Does the general corporation statute (C. L. 1897, Sec. 8534) providing, that a dissolved corporation shall have three years after dissolution for the purpose of prosecuting and defending suits, and gradually closing up its business but not for the purpose of continuing its principle business-apply to partnership associations? The better opinion seems to be that it does

not.

$299. Officers.

Since the names of the officers of the association must be stated in the articles, it is necessary that the first meeting of the stockholders shall be held prior to execution of the constating instrument. This putting of "the cart before the horse," to use a homely phrase, is, perhaps, typical of the hardy Pennsylvania farmers who enacted the original law. A complete excuse is found, however, in the fact that they were simply authorizing a new kind of partnership.

$300. Contributions.

Subscriptions may be paid by transferring to the association, at a unanimously approved valuation, such property "as shall be available to aid the business and pay creditors."-Vanhorne v. Corcoran, 127 Pa. 255, 4 L. R. A. 386-388. As to the character of the property which may be contributed, Chief Justice Paxson, in the case last cited, stated "It is to be noticed that the act gives a wide latitude as to the kind of property that may be contributed as capital. At the same time it is very evident that it contemplates a real, actual capital in cash, or in property available for

the business of the company and the payment of its debts. It was never intended that the property contributed as capital should be moonshine, wild lands or water-lots. If the business be merchandising, a stock of goods and the storehouse in which they are contained would be legitimate; if the business be mining, a mine, with its machinery and improvements, would be appropriate; and if manufacturing, the factory building, with its machinery and the stock manufactured and unmanufactured, would be in the direct line of its business, and therefore a proper and available contribution to capital."

§301. Valuation.

"Contributions to capital stock may be in real or personal estate, at a valuation to be approved by all the members subscribing to the capital of such association." In Pennsylvania this language is thus construed: "By the plain terms of the Act, the valuation is in the discretion of the parties, and (assuming, of course, good faith) may be sanguine or cautious."-Laflin & Rand Powder Co. v. Steytler, 146 Pa. 434, 14 L. R. A. 690; Rehfuss v. Moore, 134 Pa. 462, 7 L. R. A. 663; Cock v. Bailey, 146 Pa. 328. The case last cited holds, in substance, that there is no limit upon the valuation which may be adopted. The fact that it is agreed upon is made all controling.

Is this the rule in Michigan? Certainly not unqualifiedly. Wood v. Sloman, 150 Mich. 177, is the only decision of our highest court, thus far, upon this point. The majority opinion in that case holds, that where the sole purpose of fixing the value is to produce fictitiously paid up stock for resale at less than par, the valuation is subject to review.

This is a definite departure from the Pennsylvania doctrine, and clearly indicates that, in the construction of this statute, in this particular, as in others, the Supreme Court of Michigan respects, but declines to follow, the Pennsylvania decisions. Having declared these associations governed by the principles of corporation law,-Rouse, Hazard & Co. v. Detroit Cycle Co., 111 Mich. 251-and having announced that the capital stock of a private corporation is a trust fund for payment of present and future creditorsClark v. E. C. Clark Machine Co., 151 Mich. 416-423-there is reason to believe that organizers under this statute will be found individually liable in all cases where gross and intentional, or reckless, overvaluation have worked an injury to creditors. It follows, that the safe course in the formation of such associations is to conform to the rules of valuation applicable to corporations.-Ante Sec. 39. The fair and reasonable exercise of an honest discretion can harm no one, and may, as was shown in the case of Graves v. Brooks, 117 Mich. 424, prove to be a most reliable safeguard. §302. Schedule.

"A vague or general lumping description is not sufficient."-Laflin & Rand Powder Co. v. Steytler, 146 Pa. 434, 14 L. R. A. 690; Maloney v. Bruce, 94 Pa. 249; Vanhorne v. Corcoran, 127 Pa. 255, 4 L. R. A. 386; Wood v. Sloman, 150 Mich. 177. "It is not intended, however, nor would

it be practical in many cases where an existing business is the basis of the new firm, to require minute specification of details that may change from day to day. Certainty to a fair business intent is the safe, practical criterion."-Laflin & Rand Powder Co. v. Steytler, ante; Rehfuss v. Moore, 134 Pa. 462, 7 L. R. A. 663. A description which would enable a creditor to identify the property, or a sheriff to levy upon it, is sufficient.-Rehfuss v. Moore, ante.

Distinct and independent items should be valued separately. Different kinds of property, when most valuable in combination, should be described separately, but may be valued in a single lump sum.-Rehfuss v. Moore, Id.

303. Recording Articles.

The provision that the articles shall not be deemed valid until recorded is for the benefit of the State. Both the association and those who deal with it as such are precluded from denying the validity of acts performed after organization and before the articles of association have been recorded. -Whitney v. Wyman, 101 U. S. 392, 25 L. ed. 1050-1052; Staver & Abbott Mfg. Co. v. Blake, 111 Mich. 282-288.

§304. Partnership Associations, Limited, Law.-Section

Relating to Executions.

Section 2. The members of any such partnership association shall not be liable under any judgment, decree, or order which shall be obtained against such association, or for any debt or engagement of such company, further or otherwise than is hereinafter provided, that is to say: If any execution or other process in the nature of execution, either at law or in equity, shall have been issued against the property or effects of the company, and if there cannot be found sufficient thereof whereon to levy or enforce such execution or other process, then such execution or other process may be issued against any of the members to the extent of the portions of their subscriptions respectively in the capital of the association not then paid up;"

"Provided always, That no such execution shall issue against any member, except upon an order of court or of a judge of the court in which the action, suit, or other proceeding shall have been brought or instituted; and the said court or judge may compel the production of the books of the association, showing the names of the members thereof, and the amount of capital remaining to be paid upon their respective subscriptions, and from them or other sources of information, ascertain the truth in regard thereto, and may order execution to issue accordingly; and the said association shall be and it is hereby required to keep a subscription list book for that purpose, and the same