redress for corporate maladministration must be brought in equity; but the rule is not without exceptions. Thus, where all of the other stockholders had conspired to cause the giving and foreclosure of a mortgage for the purpose of wrecking the corporation and appropriating its assets, it was held that a defrauded stockholder might bring an action on the case for the recovery of such damages as he had sustained through the fraud25. Accounting, receivership, injunction-in short, such equitable remedies as may be appropriate according to circumstances will be granted by the courts for relief of stockholders against frauds and abuses for which no adequate remedy exists within the corporation itself, or on the law side of the court2. And such relief may be granted at the instance of a single stockholder27. Thus where the corporate officers fail to act for the preservation of the corporate property against injury or loss, a stockholder may resort to equity for reliefs. As a general rule it is necessary to first request the proper officers of the corporation to take action, but where these officers are themselves the wrongdoers, or where it is a foregone conclusion that they will refuse to act, if requested, such request is not an indispensable condition precedent to the institution of suit by a stockholder29. This proposition rests upon the principle that the courts will not insist upon performance of an obviously idle ceremony for the purpose of grounding a legal right.

§52. Majority Rule.

Except as otherwise provided by statute, corporate action must find its authority in the will of the majority3o. When not

25. Hanley v. Balch, 94 Mich. 315-318; Smith v. Thompson, 94 Mich. 381.

26. Torrey v. Toledo Cement Co., 150 Mich. 86-91; Edwards v. Investment Co., 132 Mich. 1-5; Miner v. Belle Isle Ice Co., 93 Mich. 97-112.

27. Miner v. Belle Isle Ice Co. (Id.).

28. Starr v. Shepard, 145 Mich. 302-309.

29. In Miner v. Belle Isle Ice Co., 93 Mich. 97-112, Justice McGrath said: "There is no doubt of the power of a court of equity, in case of fraud, abuse of trust, or misappropriation of corporate

funds, at the instance of a single stockholder to grant relief and compel a restitution; and where the holders of the majority of the stock control the directorate, and are themselves the wrong-doers, without any showing that the directors have been requested, or the corporation has refused to act." For case involving discussion of a bill (held insufficient) attempting to interfere with corporate management, see Aldrich v. Crawford Chair Co., 152 Mich. 369.

30. "It cannot be denied that minority stockholders are bound hand and foot to the majority in all matters of legitimate adminis

otherwise required by charter or by-law, the action of a majority of a quorum sufficiently complies with this principle31. Where a by-law requires a vote to be passed by a certain majority, it is held that such action cannot be rescinded by a less majority32.

The law exacts of the majority, fairness and good faith toward the minority. Voting control confers no right to transgress the trust relation which subsists between the corporation, its officers and the stockholders33. Yet it is competent for any stockholder to acquire a majority of the stock of the corporation. There is no fiduciary relation between stockholders, and the motive inciting the procurement of control is immaterial. Having gained the stock, the right to vote it follows, and the fact that the member in control selects a board of directors agreeable to himself and his policies gives no ground for complaint34.

§53. Meetings and Notice.

The will of the majority, either of stockholders or of directors, must be expressed by way of duly called meetings,

tration of the corporate affairs; and the courts are powerless to redress many forms of oppression, practiced upon the minority under a guise of legal sanction, which fall short of actual fraud. This is a consequence of the implied contract of association, by which it is agreed in advance that a majority shall bind the whole body as to all transactions within the scope of the corporate powers. But it is also of the essence of the contract that the corporate powers shall only be exercised to accomplish the objects for which they were called into existence, and that the majority shall not control those powers to pervert or destroy the original purposes of the corporators."-Justice McGrath in Miner v. The Belle Isle Ice Co., 93 Mich. 97-114, 17 L. R. A. 412; Sparrow v. E. Bement & Sons, 142 Mich. 441-455; Smith v. Smith, Sturgeon & Co., 125 Mich. 234; Joy v. Jackson & Mich. P. R. Co., 11 Mich.

155-171.

31. Where a charter authorized the president and directors to make bylaws, it was held that the

president and a majority of the directors could do so. Cahill v. Kalamazoo Mut. Ins. Co., 2 Doug. (Mich.) 123-138. "It is not necessary to the binding action of a board, that each member should take part in its deliberations. The general rule is that a majority of the members of the board constitute a quorum for the transaction of business, and a majority of the quorum have power to bind the corporation by their vote."-Justice Champlin, in Ten Eyck v. Pontiac, Oxford & P. A. Co., 74 Mich. 226-233.

32. Stockdale V. Wayland School District, 47 Mich. 226-228. 33. "The law requires of the majority the utmost good faith in the control and management of the corporation as to the minority. It is the essence of this trust that it shall be so managed as to produce for each stockholder the best possible return for his investment."-Justice McGrath in Miner V. Belle Isle Ice Co., 93 Mich. 97-116, 17 L. R. A. 412.

34. Jones v. Green, 129 Mich. 203-207.

except in instances where the formalities have been waived35. A majority has no power to bind the minority by proceedings taken at a meeting where the minority members are not present, and of which they have not received proper notice36. At common law, all notices were required to be personal, and any departure from this must find its authorization in statute or bylaw. Thus, notice by mail is nugatory unless so authorized. In the absence of statutory inhibition, a reasonable by-law providing for the giving of notice by mail is valid39. In the absence of statutory regulation, the parties have a right to provide for such notice of calls, meetings and the like, as they shall see fit. When they have done this, no other notice will be sufficient in the absence of a waiver. Thus verbal notice is inoperative when a written notice is specified. Where the length of the required notice is not specified, the law will require the giving of a notice reasonable according to circumstances—that is, a notice providing sufficient time between its receipt and the event to be attended, to enable the recipient, by the exercise of reasonable diligence, to attend1. In the absence of proof to the contrary, the law presumes that sufficient notice has been given12.

Where by charter or by-law the power to call meetings of the stockholders is vested in the board of directors, such power does not exist in officers of the board, except when they act by virtue of the express instruction of the board, as its agents13. Where important action is to be taken, as, for example, the making of a general mortgage for creditors, good faith requires that the stockholders be given notice44. Power to execute such a mortgage being vested in the board, it may be, and usually is, un

35. Eureka Iron & Steel Works v. Bresnahan, 60 Mich. 332-338.

36. Doyle v. Mizner, 42 Mich. 332-341; Macklem v. Fales, 130 Mich. 66-69.

37. Tuttle v. Mich. Air Line R. Co., 35 Mich. 246-251.

38. Burhans v. Corey, 17 Mich. 282; Tuttle v. Mich. Air Line R. Co., 35 Mich. 246-375.

39. Stradley v. Cargill Elevator Co., 135 Mich. 367-375.

40. Westcott v. Minn. Mining Co., 23 Mich. 144-162.

41. In Covert v. Rogers, 38 Mich. 363-367, Justice Marston said: "In the absence of any provision for the length of notice,

the law will require it to be given a reasonable time before the meeting is to be held, in order that the person to whom it is addressed may, if sent by mail, be presumed to have received it, and have sufficient time, traveling in the usual and customary manner, to get there." See also Phoenix Ins. Co. v. Allen, 11 Mich. 501.

42. Stradley v. Cargill Elevator Co., 135 Mich. 367-377; Wells v. Rodgers, 60 Mich. 525.

43. Dusenbury v. Looker, 110 Mich. 58.

necessary as a matter of law, to assemble the stockholders and obtain their assent. But as a matter of fair administration, this should always be done where the action is one that works a substantial change in the property or policy of the company. For example, where a bond issue is to be authorized, the mere fact that the directors have power to make such authorization should not be accepted as a warrant for ignoring the opinions and wishes of the stockholders. The observance of business courtesy to stockholders in matters of this kind will frequently be found of practical, as well as of ethical, value. Thus, in the floatation if a bond issue, the strength of the securities will be enhanced by the fact that they were authorized by the unanimous vote of the stockholders, as well as by the board of directors. Where notices are given of the holding of a meeting at which it is expected that special or exceptional action will be taken, such notices should embody a statement of the object or objects. for which the meeting is called45. While formal meetings of stockholders, as well as of directors, are the proper and regular way of taking corporate action, there is no objection to any action, even the most important, being taken at an informal. meeting at which all stockholders (or all directors, as the case may be) are present, participate and acquiesce. But the absence or objection of any of the members of the corporation would render such meeting irregular, and its proceedings voidable, if not void. All that can be said of such a meeting is, that the parties have, by attendance and participation, waived all objections as to notice and other formalities.

§54. Voting.

In corporations having a capital stock, it is a general rule that each share entitles its holder to one vote on all questions coming before any meeting of the stockholders. One holding a certificate of stock properly endorsed to him may vote the shares which it represents, although the transfer may not have been made upon the books of the company. Production of the endorsed certificate is evidence of this right18. Stock certificates

45. Tuttle v. Mich. Air Line R. Co., 35 Mich. 246-251.

46. Eureka Iron & Steel Works v. Bresnahan, 60 Mich. 332-338. For a case holding that one who has sold all of his stock can not complain that a meeting has been

held of which he received no notice, see Anderson Carriage Co. v. Pungs, 127 Mich. 543-548.

47. McLean v. Medicine Co., 96 Mich. 479-481.

48.

416.

Noller v. Wright, 138 Mich.

are merely authenticated evidence of title to shares. All of the rights of a stockholder may exist in the absence of any certificate19.

Stock standing in the name of an administrator, or in the name of a decedent represented by an administrator, before distribution of the estate, may be voted by the administrator. He may even vote such shares against the wishes of those who are interested as beneficiaries in the shares voted50. Shares held by the corporation, or held in the name of a trustee for the benefit of the corporation, have no vote51. In this State, there is a cumulative voting law in force as to all corporations, other than municipal, insurance and banking corporations, organized under any general law of this State. This law was enacted in 188552 and has been repeatedly amended53. The law was early attacked upon the ground that, as to existing corporations, it impaired vested rights. The correctness of this contention was denied by the Supreme Court of Michigan55, and also by the Federal Supreme Court56.

$55. Corporate Records.

Officers and

Records are the permanent corporate memory. agents change; the books alone remain to perpetuate the history of the corporation's acts and transactions. Accurate and complete records, essential to every other form of business organization, are doubly essential to corporations57. Corporate action may be proved by such records58. Yet, when no record, or an incomplete record, of corporate action has been made, or preserved, what was done may usually be shown by paro159.

51.

Cook's Corp., Sec. 613.

52. Act 112, Pub. Acts 1885, p. 116; C. L. 1897, Sec. 8553.

53. Act 223 Pub. Acts 1903, p. 351; Act 61 Pub. Acts 1905, p. 85; Act 141 Pub. Acts 1907, p. 179. In Attorney General v. McVichie, 138 Mich. 387, it was held that the cumulative voting law was inapplicable to partnership associations organized under Chapter 160, C. L. 1897. Act 45, Pub. Acts of 1909. p. 72, extended the benefits of the cumulative law to these as

sociations. That the cumulative voting law has been inapplicable to State banks since 1887, see Attorney General v. Bridgman, 134 Mich. 379.

54. Attorney General v. Looker, 111 Mich. 498.

55. Attorney General v. Looker (Id.).

56. Looker v. Maynard, 179 U. S. 44, 45 L. ed. 79.

57. Crossette v. Jordan, 132 Mich. 78-81.

58. Ten Eyck v. Pontiac & Oxford R. Co., 74 Mich. 226-232.

59. Ismon v. Loder, 135 Mich. 345-348; Eureka Iron & Steel Works v. Bresnahan, 60 Mich.