not the seal of the corporation11. The effect of this would be to leave the instrument unsealed.

The corporate seal impressed upon an instrument executed in the corporate name is presumptive proof of the authority of the executing officer, and that the instrument is a valid corporate act42.

By statute, in Michigan, all corporations, where no other provision is specially made, are given power "to make by-laws and regulations consistent with the laws of the State, for their own government, and for the due and orderly conduct of their affairs, and the management of their property'

A by-law is a continuing, self-made rule of corporate conduct. To be valid, it must be general and uniform in its operation44, certain in its terms45, consistent with the charter46, reasonable in its requirements17, and not in violation of vested rights18, nor

in restraint of trade19, nor retroactive50 nor in contravention of law or public policy51.

Power to make and alter by-laws does not confer power to so adopt a new by-law, or to so amend an old one, as to impair vested rights52. Such rights remain unchanged, unless the alteration was made with the assent of the person by whom such rights are claimed. Where express consent is given, the right to object is waived53.

§20. Power to Act as a Trustee.

It is well settled that a corporation has power to receive as a trustee, and to hold in trust, such property as it might hold in its own right. Within this field, its power to act as a trustee is the same as that enjoyed by natural persons54.

$21. Power to Incur Partnership Liability.

A corporation may so contract with a private individual, in furtherance of its corporate objects, as to give rise to the partnership relation55. But two or more corporations cannot become partners56. As to third persons, the partnership liability may be incurred by a corporation, even where no partnership exists, or could exist57.

§22. De Facto Powers.

It sometimes happens that a de jure corporation assumes the right to carry on a business outside the scope of its charter authority. As to such ultra vires acts, it is upon the same footing as a de facto corporation. Those who have recognized its apparent power by dealing with it, are estopped to deny that its power, as to such dealings, is lawful. The State alone can

49. Bailey v. Master Plumbers Ass'n, 103 Tenn. 99, 46 L. R. A. 561.

50. Carlisle v. Saginaw Valley & St. Louis R. Co., 27 Mich. 315317.

51. Pulford v. Fire Dept., 31 Mich. 457-465.

52. Kern V. Arbeiter Verein, 139 Mich. 233-245; Pokrefky v. Fireman's Fund Ass'n, 121 Mich.

456.

53. Wheeler v. Order of Iron Hall, 110 Mich. 437; Starling v. Royal Templars, 108 Mich. 440;

Becker v. Farmers' Mut. Ins. Co., 48 Mich. 610.

54. White v. Rice, 112 Mich. 403-408; Maynard v. Woodward, 36 Mich. 423.

55. Cleveland Paper Co. V. Courier Co., 67 Mich. 152-158.

56. In White Star Line v. Star Line, 141 Mich. 604-610, Justice McAlvay said: "The law appears well settled that corporations can not enter into copartnership with each other."

57. Cleveland Paper Co. V. Courier Co., 67 Mich. 152-158.

restrain the usurpation of authority, except in instances where no estoppel exists and where individual rights are invaded58.

$23. Corporate Franchises.

The franchises of a private corporation consist of those rights and privileges conferred upon it by the State, not possessed by natural persons under the general law59.

Franchises are classified as follows.

(a) The right to be a corporation;

(b) The right to act as a corporation;

(c) The right to have, use and exercise exceptional powers and privileges not conferred upon natural persons under general laws60.

The first and second classes of franchises, namely the right to be and act as a corporation, can not be transferred by lease, mortgage, sale, or in any other manner, without express legislative authority1.

Contrary to the numerical preponderance of authority, and in accordance with the more advanced conceptions of corporate powers, special franchises are, in Michigan, held to be transferable, except where transferability is negatived by the express terms of the grant63.

58. Electric Light Co. v. Wyandotte, 124 Mich. 43-48; Calkins v. Bump, 120 Mich. 335-342; Detroit Street Ry. v. Mills, 85 Mich. 634648; Potter V. Saginaw Union Street Ry., 83 Mich. 285-297.

V.

59. In Bank of Augusta Earle, 13 Peters 518, 10 L. ed. 311, Chief Justice Taney said: "Franchises are special privileges conferred by a government upon individuals, and which do not belong to the citizens of the country generally of common right."-See also California v. Cent. Pacific R. Co., 127 U. S. 40, 32 L. ed. 150.

60. Citizens Street R. Co. v. Common Council, 125 Mich. 673678.

61. Joy v. Jackson & Mich. P. R. Co., 11 Mich. 155-163. There being no statutory authority in Michigan permitting transfer of the right to be and act as a corporation, such franchises are nontransferable. Citizens St. R. Co.,

v. Common Council, 125 Mich. 673679.

62.

Marshall's Corp. page 206.

63. Mich. Tel. Co. v. City of St. Joseph, 121 Mich. 502-509; City of Kalamazoo V. Power Co., 124 Mich. 74-83; Detroit v. Mutual Gas-Light Co., 43 Mich. 594. Even before the enactment of the statute permitting transfer of special franchises (Act 112 of 1889, p. 126; C. L. 1897, Secs. 8572-8573) it was the established law in this State, that a corporation, unless restricted by the grant itself, had power to transfer, by mortgage or by absolute sale, all of its franchises, other than its right to organize, exist, have succession, and exercise eminent domain. Joy v. Jackson & Mich. P. R. Co., 11 Mich. 155-163; Detroit v. Mutual GasLight Co., 43 Mich. 594-599; Mich. Tel. Co. v. St. Joseph, 121 Mich. 502-509.

Where a corporation sells its franchises, the vendee takes them subject to the same obligations that were imposed by them upon the vendor64.

When a corporation possesses a franchise granted without time limit, the law implies that the franchise is for the life of the corporation, which, under the constitution of Michigan, can not, except in special instances, exceed thirty years. Under this constructive limitation, the franchise ceases with the corporation, and is not renewed by renewal of the corporate charter65.

64. Township of Grosse Pointe v. Detroit, etc. Ry., 130 Mich. 363366; Mich. Tel. Co. v. City of St. Joseph, 121 Mich. 502-509; Detroit v. Mutual Gas-Light Co., 43 Mich. 594-599.

65. Rockwith V. State Road Bridge Co., 145 Mich. 455; Wyandotte Electric Light Co. v. Wyan

dotte, 124 Mich. 43. The rule above stated is inapplicable where franchise is granted to the corporation, "it successors or assigns" (Detroit Citizens St. Ry. Co. v. Detroit, 64 Fed. 628); and also in cases where the duration of the corporation is unlimited.— Louisville Trust Co. v. Cincinnati, 76 Fed. 296.

The first duty of a corporation is to obey the law1. Violation of the law of its being is punishable by the death penalty of ouster3. Regardless of charter limitations, all corporations have legal power to perform all requirements of the law of the land3, and when a corporation loses its financial ability to fulfill its obligations toward the public or the State, that fact warrants its extermination. So, too, when a corporation ceases to be able to carry out the objects for which it was formed, it becomes the duty of the directors to cause its dissolution, the payment of its debts, and distribution of its net assets. If, after demand, the directors fail to do this, the stockholders, or any of them, may invoke the aid of equity to that end. When through

1. Middleton V. Flat River Booming Co., 27 Mich. 533-535; People V. Bank of Pontiac, 12 Mich. 526-536.

2. Stewart v. Father Matthew Society, 41 Mich. 67; C. L. 1897, Secs. 9959-9961; People v. Oakland County Savings Bank, 1 Doug. (Mich.) 282-291.

3. Knight v. Female Seminary, 152 Mich. 616-618.

4. People v. Sticky Fly Paper Co., 144 Mich. 221-230; Coon v. Plymouth P. R. Co., 32 Mich. 248250. In People v. Gravel Road Co.. 105 Mich. 9-13, Justice Grant said: "Inability to perform its functions, no matter what the reason, is one of the most potent grounds of forfeiture."

5. In Stamm v. Northwestern Mut. Ben. Ass'n, 65 Mich. 317-328,

the following statement was made by Justice Champlin: "We have here, then, the case of a corporation which circumstances have rendered it impossible to continue to carry on its business successfully, or to attain the object for which it was formed. It has a large fund in its hands which cannot be applied nor used to carry out the original intent for which it was accumulated, and it would appear to be the obvious duty of the managing agents, under the circumstances, to wind up the affairs of the concern voluntarily, under the statute; and, if they neglect to do so, any one interested in the fund may seek relief in a court of equity to obtain a distribution among the members to whom it belongs."