ing the last week of June of each year, report to the Attorney General in writing, the name and post office address of each and every association which has failed to comply with the provisions of this section. And upon the receipt of such report, it shall be the duty of the Attorney General to institute proceedings in any court of competent jurisdiction, to collect said penalties, and all necessary expenses incurred by the Attorney General in such proceedings shall be audited by the Board of State Auditors, and paid from the general fund of the State.

And in case an association organized or doing business under the provisions of this act shall be dissolved by process of law, or whose term of existence shall terminate by limitation, or whose property and franchises shall be sold at mortgage sale, or at private sale, it shall be the duty of the last board of managers of such association, within thirty days thereafter, to give written notice of such change to the Secretary of State and the county clerk of the county where the principal office of such association is located, signed by a majority of such last board of managers, which said notice shall be recorded as amendments are required to be recorded. And in case of neglect to give such notice, they shall be subject to the same penalities provided in case of neglect to make annual reports, which said penalties shall be collected and applied in the same manner as in case of neglect in making annual reports. The neglect or refusal to file the reports required by this section to be filed, shall be deemed to be wilful when the report required is not filed within the time herein limited.

Whenever any association has neglected or refused to make and file its report within twenty days after the time limited in this section, the Secretary of State shall cause notice of that fact to be given by mail to such association, and to each last known officer and manager thereof, directed to their respective post office addresses. The certificate of the Secretary of State or his deputy, of the mailing of such notices, shall be prima facie evidence in all courts and places of that fact, and that such notices were duly received by said association. All actions and suits based on the neglect or refusal of the officers or managers of such association to make and file the reports required by this section, shall be commenced within two years next after such neglect or refusal has occurred, and not afterwards.

§331. Penalties.

The penalties for failure to file annual reports, and for failure to file notice of change of status, are identical. The penalty is imposed upon the defaulting managers only, and inures to the benefit of the State alone.

The statute is penal, and therefore cannot be extended by construction. -People v. Crucible Steel Co., 151 Mich. 618-620; Bank of Saginaw v. Pierson, 112 Mich. 410-413; Gennert v. Ives, 102 Mich. 547; Crosby v. Pere Marquette R. Co., 131 Mich. 288; Van Buren v. Wylie, 56 Mich. 501. It applies to wilful neglects or refusals (expressly so as to defaults in filing annual reports, and impliedly so as to defaults in filing notice of a change of status) and provides that the presumption of wilfulness shall arise from the fact of the default. The same presumption would arise without aid of the statute.-Gennert v. Ives, 102 Mich. 547; Van Etten v. Eaton, 19 Mich. 187; Bank of Saginaw v. Pierson, 112 Mich. 410-412. This presumption may be rebutted. Collection of the penalty may be defeated by proof establishing that the default was not wilful.-Gennert v. Ives, 102 Mich. 547-551. See also Sec. 200, ante.

§332. Partnership Associations, Limited, Law.-Section Relating to Association Existing Prior to Amendment of 1903. Section 14. Every partnership association heretofore organized, is required to file a copy of its statement in writing or articles of association, verified by the oath of the secretary of the board of managers or certified by the register of deeds of the county in which said statement or articles were recorded, as a full and true copy of the same with its date of record together with all amendments to such statement or articles, if any have been made and recorded, in the office of the Secretary of State of this State on or before the first day of January, nineteen hundred and four. The officers and managers of every such partnership association failing to file such copy of its statement in writing or articles within the time herein prescribed, shall each be subject to a penalty of twenty-five dollars, and in addition thereto the sum of five dollars for each and every secular day after January first, nineteen hundred and four. Such penalty shall be for the same use, and shall be collected in the same manner, by the Attorney General as prescribed in section thirteen. of this act: Provided that partnership associations already organized shall not be required to pay a franchise fee upon their recording articles of association under this act.

$333. Statute of Limitations.

Section 14 is now a matter of history, and is reproduced merely for the sake of completeness. As a matter of fact, many decadent associations

never complied with its terms. Where companies were out of business, though not legally dissolved, the State generously refrained from enforcing the penalties provided. Such actions not having been begun within two years after January 1, 1904, the right of action has long since been barred by limitation.-See Sec. 330, ante.

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

Relating to Amendments.

Section 15. Every association 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 value of 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 chairman and secretary of the board of managers of such association, shall have been recorded as is provided herein for the recording of the 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 a record or copy of the record of such resolution certified as provided in section one for the certification of the original articles of association shall be received in all courts of this state as prima facie evidence of the things therein stated.

§335. Amendment of Articles of Association.

By section 15 of the act, adopted in 1903, the legislature conferred a beneficial power upon every partnership association. Until that time, amendments were required to be made in the same manner as the original articles. -C. L. 1897, Sec. 6079. This required unanimous assent of the members. Moreover, that assent was necessarily expressed by means of amended articles, signed and acknowledged by all of the members in person or by attorney. In associations having a numerous and widely scattered membership, the power of amendment was practically defeated by the difficulties attending its exercise.

Section 15 of the act provides a plain, simple procedure, which enables the making of all amendments not inconsistent with the terms of the enabling law. Under its provisions, the name, capital stock, par value of shares, location of business office, duration and even the purposes of the association may be changed.-Meredith v. New Jersey Zinc & Iron Co., 59 N. J. Eq. 257, 44 Atlantic R. 55. §336. Partnership Associations, Limited, Law.-Section Relating to Reorganizations Prior to July 1, 1905.

Section 16. Every partnership association, now existing, organized under act number one hundred ninety-one of the public

acts of eighteen hundred seventy-seven, as amended, being chapter one hundred and sixty of the Compiled Laws of eighteen hundred and ninety-seven, may at any time within two years from and after the first day of July in the year nineteen hundred and three reorganize under any act providing for the incorporation of companies for a purpose or purposes for which such association was organized: Provided, such reorganization is authorized and directed by a vote of two-thirds in interest of the members holding the capital stock of any such partnership association, at a regular meeting of the members of such association, or at a meeting called expressly for that purpose in accordance with the by-laws or statement in writing by which it was organized. The resolution or other action by which said vote is expressed shall be certified in duplicate by the executive officers of the association so reorganizing and attached to its articles of incorporation when the same are recorded; and in addition to said resolution or other action, the said officers shall certify the name of the association and the date upon which the same was organized under the statute now known as chapter one hundred sixty of the Compiled Laws of eighteen hundred ninety-seven and every such association so organized before this act becomes operative may reorganize as herein provided without paying the franchise fee provided in act number one hundred eighty-two of the public acts of eighteen hundred ninety-one, being section eight thousand five hundred seventy-four of the Compiled Laws of eighteen hundred ninety-seven: Provided, that the period for the existence of the corporation so organized shall be coincident with the period of existence remaining to the partnership association at the date of its reorganization as above provided:

This act is ordered to take immediate effect.
Approved June 18, 1903.

$337. Status of Reorganized Companies.

When, in 1903, the legislature introduced radical changes into the partnership associations, limited, law, section 16 of the act was inserted in a spirit of fairness to enable existing associations to reorganize under any other suitable act, without payment of a franchise fee. Numerous companies accepted the invitation and took up existence under one or another of the regular corporation enabling acts. This procedure gave rise to an interesting question, namely, Was the identity of the original association preserved in the company resulting from the reorganization? If so, simple compliance with the terms of the statute completed the transaction; but, if

otherwise, the property of the old company must be transferred to the new; elections must be held; by-laws must be adopted, and all of the formalities incident to setting up a distinct and separate corporation must be observed.

The question raised has not been settled by judicial decision in this jurisdiction. "The term 'reorganization' does not necessarily imply that a new corporation has been created. Nor, on the other hand, does it necessarily imply that an old corporation is merely continued. Its effect in any particular case must depend upon the intention of the parties and the terms of the statute under which it takes place."-Marshall's Corp., p. 458.

The situation and intent of the parties must control. New articles were to be executed; a new name might be assumed; new powers might be gained; new purposes, not inconsistent with the old, might be claimed; duration alone was expressly limited. Above all, a true corporation was to result. The legislature has never regarded partnership associations as corporations. Attorney General v. McVichie, 138 Mich. 387. The language of this very section indicates that the distinction between such associations and corporations was present in the legislative mind. There is nothing in the section of sufficient force to support the conclusion, that the legislature's intent was to make these two, differing, artificial persons, identical. If they did not become identical, they remained separate. If separate, the result of the reorganization was a distinct company, to be brought under an independent internal government, and to be invested, by proper tranfers, with the property of the abandoned association.

This much has been said because it is known that reorganizations—even where title to real estate was involved-were effected under this statutory permission without transfers of property, and in reliance upon an opposite interpretation of the law. If the view here expressed is correct, such reorganizations were-perhaps still are-imperfect and incomplete. In any event, observance of the omitted proceedings could have worked no harm.

No formalities were necessary for the protection of creditors.-Chase v. Michigan Telephone Co., 121 Mich. 631-634; Grenell v. Ferry, 110 Mich. 262; Grenell v. Detroit Gas Co., 112 Mich. 70; Howell v. Lansing & Suburban Trac. Co., 146 Mich. 450-nor of stockholders.-Kobogum v. Jackson Iron Co., 76 Mich. 498; Sparrow v. E. Bement & Sons, 142 Mich. 441.