under the seal of the State, shall be received in all courts of this State as prima facie evidence of the things therein stated.

Where the law requires articles of association to be acknowledged and filed in the office of the Secretary of State, as a condition precedent to the exercise of corporate functions, unacknowledged articles are not evidence of incorporation. Doyle v. Mizner, 42 / 332. Proof of articles by copy certified by the Secretary of State must be a complete copy.-Ibid.

The certificate of the Secretary of State to a legal conclusion is of no validity as evidence. A mere certificate that a paper required to be acknowledged, is accompanied by an acknowledgment in the usual form, is of no effect. Ibid.

Whether this statute does not recognize the corporation as in existence before the filing of the articles; and whether the want of such filing before commencing business is not an objection which can only be made on behalf of the State, as we are inclined to think, Quaere.-Whipple v. Packer, 29 / 369.

Where articles of association have been executed and the company carries on business as a corporation, it is a corporation de facto, although its articles of association have not been recorded.-People v. Carter, 122 / 668.

SEC. 10. A majority of the directors of every manufactur- Quorum. ing or mercantile corporation convened according to the bylaws, shall constitute a quorum for the transaction of business; and the stockholders holding a majority of the stock, at Stockholders, any meeting of the stockholders, shall be capable of transact- meeting. ing the business of that meeting, except as herein otherwise provided; and at all meetings of such stockholders each share shall be entitled to one vote. Stockholders may appear and vote. vote in person or by proxy duly filed.

Directors holding over have the same power as during their regular term. -Preston National Bank V. Purifier Co., 84/364; Kimball v. Goodburn, 32 / 10.

Whatever a corporation may authorize to be done by its officers, it may ratify and adopt when done without authority.-McLaughlin v. D. & M. Ry. Co., 8/100. But the act ratified must be one which the company could have legally performed.-Taymouth v. Koehler, 35 / 22. The acts of a corporation may be proved by its records. Such records are the best evidence, etc.-Koehler v. Mechanics' Aid Soc., 22/86. But the discussions of the directors upon the subject of a resolution prior to its adoption are not provable as the expressions of the corporate body.-Kalamazoo, etc., Co. v. Macalister, 40/84. Nor as evidence of their final action upon it.-Peek v. Detroit Novelty Works, 29/313. Nor are the statements of individual directors made when the board was not in session. and not accompanying any official act, competent evidence of corporate action.-Ibid.

Though parol evidence is not admissible to contradict a record, it may be introduced to show facts omitted to be stated of record; and the rights of creditors or third persons cannot be prejudiced by the neglect of the clerk to perform his duty in properly recording actual proceedings.-Taymouth v. Koehler, 35 / 22.

stock called in

ment.

SEC. 11. The directors may call in the subscription to the Subscription capital stock of such corporation by installments, in such to capital proportion and at such times and places as they shall think by installproper, by giving notice thereof, as the by-laws shall prescribe; and in case any stockholder shall neglect or refuse Neglect to payment of any such installment for the space of thirty days pay. after the same shall have become due and payable, and after he shall have been notified thereof, said corporation may re- Sale of stock cover the amount of said installment from such negligent stockholder in any proper action for that purpose, or so much of the stock of such delinquent stockholder as may be necessary to pay such installment so due, may be sold by the directors at public auction at the office of the secretary of the corporation, giving at least thirty days' notice of such sale in some newspaper published in the county where said office is

for.

located, if there is a newspaper published in such county; if not, then in some newspaper published in some adjoining county; and in case of a sale of said stock the proceeds thereof shall be first applied in payment of the installment called for and the expenses of the sale, and the residue, if any, shall be refunded to the delinquent stockholder. In case the proceeds of such sale shall be insufficient to pay said installment, said corporation may recover the balance from such negligent stockholder. Such sale shall entitle the purchaser to all the stock so sold. rights of a stockholder. to the extent of the shares so purchased.

Rights of purchaser of

Annual dup

Proviso,
flour milling
corporations.

Fiscal year.

Equity will compel the collection of unpaid subscriptions to stock as a fund for the benefit of creditors.-Pettibone v. McGraw, 6/441.

When articles of association prescribe conditions upon which stock assessments are to be made, they must be strictly complied with.-Westcott v. Minnesota Mining Co., 23 / 145.

When a person signs articles of association of a corporation, the subscription itself constitutes the subscriber a stockholder, and he becomes liable to pay the amount, and the corporation becomes obligated to issue the stock to him upon payment of the amount. It is a mutual contract and such rights are assignable.-Valentine v. Water Power Co., 128 / 280.

SEC. 12.

Every corporation subject to this act, includlicate reports. ing every foreign corporation admitted to carry on business in this State under the provisions of this act, shall annually, in the month of January or February, make duplicate reports showing the condition of such corporation on the thirtyfirst day of December next preceding, on suitable blanks to be furnished by the Secretary of State, as hereinafter provided: Provided, Flour milling corporations shall make and deposit annual reports in the month of July for the year ending June thirty, preceding: Provided further, That any such corporation, which shall make and file with the Secretary of State a statement in writing certified to by its president and secretary, showing that its fiscal year ends at a time other than December thirty-first and that it is its custom to take an inventory and balance its accounts at the close of such fiscal year, and cannot make an accurate report for any other date, shall make its report showing its condition at the close of its fiscal year, such report to be filed within What to state. sixty days after such close of its fiscal year. Such reports shall state the amount each of common and preferred capital stock authorized, and the amount thereof subscribed for, and the amount thereof actually paid in in cash, and the amount thereof paid in property; the total value as near as may be estimated, of all property owned by the corporation; the value of different items or classes of property as follows: Real estate used in its business; real estate not used in its business; goods, chattels, merchandise, material and other tangible property; patent rights, copyrights, trademarks and formulas; good will; and all other property, specifying the kind; value of all credits owing to the corporation; the amount of debts of the corporation; the name and postoffice address of each stockholder and the number of shares of preferred and common stock held by him at the date of such

state to furn

and verified.

county clerk.

make report.

report; the name and postoffice address of each officer and director of the corporation, and such other information as the Secretary of State may require. It shall be the duty of Secretary of the Secretary of State in the month of December in each year, ish blanks. or in case of corporations whose fiscal year ends prior to December thirty-first, on application of such corporation, to mail to each corporation which is subject to the provisions of this act, suitable blanks on which shall be printed a copy of this section. Such reports shall be signed by a majority How signed of the board of directors and verified by the oath of the secretary of the corporation, and deposited in the office of the Secretary of State within the said month of January or February, or within sixty days after the close of such fiscal year, accompanied by a filing fee of fifty cents. The Secretary of State shall carefully examine such reports, and if upon such examination they shall be found to comply with all the requirements of this section, he shall then file one of them in his office, and shall forward the other by mail or express to the county clerk of the county in which the office in this State, for the transaction of the business of said corporation, is situated. And it shall be the duty of such Duty of county clerk, upon receipt of such report, to immediately cause the same to be filed in his office. If any corporation Penalty for neglect or refuse to make and file the reports required by neglect to this section within the time herein specified, and shall continue in default for ten days thereafter, its corporate powers shall be suspended thereafter until it shall file such report, and it shall not maintain an action in any court of this State upon any contract entered into during the time of such default; and any director of such corporation so in default, who has neglected or refused to join in the making of such report, shall be liable for all the debts of such corporation contracted since the filing of the last report of such corporation, and shall also be liable to such corporation for any damages sustained by it by reason of such refusal or neglect. And in case a corporation organized or doing busi- Termination ness under the provisions of this act shall be dissolved by existence, etc. 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, or if for any reason the attitude of the corporation toward the State shall be changed from that set forth in the articles of association, it shall be the duty of the last board of directors of such corporation within thirty days thereafter to give written notice Secretary of of such change to the Secretary of State, signed by a majority county clerk of such directors and accompanied by a recording fee of to be notified. fifty cents, which said notice shall be recorded as amendments are required to be recorded. And in case of neglect Penalty for to give such notice, they shall each be subject to a penalty neglect to of five dollars for each and every day during the continuance

of corporate

state and

notify.

to file report

When neglect of such neglect or refusal. The neglect or refusal to file the deemed wilful. report, or to record the notice required by this section to be filed or recorded, shall be deemed wilful when such report or notice is not filed or recorded within the time herein limited. Whenever any corporation 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 corporation, directed to its postoffice address. The certificate of the Secretary of State or his deputy, of the mailing of such notice, shall be prima facie evidence in all courts and places of that fact, and that such notices were duly received by said corporation.

Corporate powers.

Am. 1905, Act 194: 1907, Act 137.

Prior to present Const. many special charters required reports. First general act was 144 of 1851. See Sec. 11. Act 41, 1853, Secs. 5, 18 and 19. Act 232, 1885, Sec. 12.

This statute applies only to such of the directors as wilfully neglect or refuse to make the report.-Gennert v. Ives. 102 / 547. A presumption arises that the failure to file the report was intentional, and therefore wilful.-Ibid. 3 How. Stat., Sec. 4161b, which provides that manufacturing companies shall file an annual report with the Secretary of State, and that, if any of the directors shall wilfully neglect or refuse to make such report. they shall each be liable for all of the corporate debts, and subject to a prescribed penalty, only applies to such of the directors as wilfully neglect or refuse to make the report.-Gottlieb Gennert v. Albert Ives, Jr., 102547. Persons dealing with manufacturing corporations upon the strength of the reports which they are required to file with the Secretary of State and county clerk, a knowledge of which is acquired through the usual channels, have the right to rely upon the fairness and honesty of the statements therein made.-Henry Silberman and David Silberman v. Thomas Munroe, 104 / 352.

The report required by Sec. 12, and neglect to furnish which renders the directors of the corporation liable in certain cases to a penalty and to the creditors of the corporation,, was very clearly intended as a means of furnishing information to those dealing with the corporation.-Ibid.

Under section 12 of Act No. 232, P. A. 1885, providing that the directors of corporations organized under said acts shall, in case of their wilful neglect to file an annual report, be individually liable for "all the debts" of the corporation, and subject to a prescribed penalty for each day during the pendency of the default, the directors are liable for corporate debts incurred after the default in filing a report, and before a second default.-Bank of Saginaw v. Pierson, 112 / 410.

The individual liability of directors of corporations for corporate debts, based upon their failure to make the annual report required by Sec. 12 of Act No. 232, P. A. 1885, extends to corporate debts contracted pending the default.-M. I. Wilcox Cordage and Supply Co. v. Mosher, 114 / 64.

SEC. 13. Every corporation organized or existing under this act shall have power to have succession by its corporate name for the period limited in its charter, or by this act; to sue and be sued in any court of law or equity, with the same rights and obligations as a natural person; to make and use a common seal and alter the same at pleasure; to ordain and establish by-laws for the government and regulation of its affairs, and to alter and repeal the same; to elect all neces sary officers and to appoint and employ such agents as the business may require.

The charter defines the grant of power to the corporation with its restrictions and limitations; and unless some other statute enlarges or restricts those powers, it has no other or different rights.-Bank of Michigan v. Niles, 1 Doug., 401.

Corporations possess only such properties and powers as are specifically granted by their charters, or as are incident to their existence, and necessary to carry into effect the powers expressly given.-Orr v. Lacey, 2 Doug., 253.

As incident to their powers, corporations may appoint servants and agents

for the transaction of their business.-Town v. Bank of River Raisin, 2 Doug., 549. Such appointments may be made and proved by parol. So, the authority of an agent may be inferred from the recognition and adoption of his acts, or acquiescence therein by the corporation.-Peninsular Bank v. Hanmer, 14/208; Taymouth v. Koehler, 35/22. Any limitations on the usual powers of a general agent of a corporation will not bind those dealing with him without notice of the restrictions.-Adams Mining Co. v. Senter, 26 / 73. The same person may be the general agent of two companies, and act for both in their dealings with each other.-Ibid. But an agent cannot as such agent, deal or contract with himself as an individual. People v. Overyssel, 11 / 222; Flint & P. M. Ry. v. Dewey, 14 / 477. Unless specially empowered so to do, a general agent has no authority to make promissory notes in the name of his corporation.-N. Y. Iron Mine v. Bank of Negaunee, 39/644. The corporation, and not its managing agent, is liable for the trespasses committed by his subordinates, unless they were the servants of and acting for the agent in the business in which the trespass was committed.-Bath v. Caton, 37 / 199.

Whatever a company may do or authorize to be done, may be ratified and adopted as its act, when performed without its authority by its officers or agents. McLaughlin v. D. & M. R'y Co., 8/100.

Suits to enforce corporate rights must be brought in the name of the corporation. LaGrange v. State Treasurer, 24 / 468. It may sue in its own name on claims assigned to it.-Watertown Ins. Co. v. G. & B. S. M. Co., 41 / 131. Stockholders cannot sue in their own names to secure corporate rights, unless there is default and breach of duty, and a refusal by the corporation itself to sue. LaGrange v. State Treasurer, 24/468; Talbot Scripps, 31 / 268. Provisions in an act for the organization of corporations regulating the bringing of suits against them, when later than the general law of the State on that subject, must be regarded as exceptions to it.-Dewey v. Cent. Mfg. Co., 42 / 399.

V.

Corporate franchises and privileges must be such franchises and privileges as an unincorporated collection of people cannot possess.-M. E. Church of Newark v. Clark, 41/730, 731. They are vested in the corporation and not in the stockholders or members.-Detroit v. Mutual Gas Light Co., 43 / 594. The acts which a corporation may do are not necessarily separate franchises. Some of its powers may be franchises which cannot be exercised without State permission. As to such of its business as any one may do, a corporation stands on the same footing with a private person.-Thompson v. Waters, 25/241.

The grant of specific powers under restrictions, impliedly excludes all other powers in reference to the same subject matter not granted by the charter. Bank of Mich. v. Niles, 1 Doug., 401.

Except as prohibited by statute, a corporation may mortgage its property, rights and franchises, the same as an individual may mortgage, etc. But the power to mortgage such franchises as are essentially corporate, such as the franchise of being a corporation, or of exercising the right of eminent domain, requires special authority.-Joy v. J. & M. P. R. Co., 11/155. The foreclosure purchaser of the property, rights and franchises of a corporation may exercise and enjoy them the same as the corporation could, but subject to the same restrictions and conditions.-Detroit v. Mutual Gas Light Co., 43/594. A mortgage authorized by a majority of the directors when the others were not legally notified, is invalid.-Doyle v. Mizner, 42/332. A mortgage executed by the president and secretary without any formal action by the company authorizing it, but agreed on by the directors and stockholders when assembled, held good.-Eureka Iron Works v. Bresnahan, 60 / 332.

An association or body, exercising corporate powers and having contracted as a corporation, will not be allowed to evade its obligations by denying its corporate character.-Empire Mnfg. Co. v. Stuart, 46/482. But it seems that a corporation will not be estopped from denying its power to make a contract previously entered into by it.-Dermont v. Mayor, 4/435, 445. A person associating with others in forming a pretended corporation and in claiming existence for it, will be estopped from denying the validity of its organization.-Swartwout V. Mich. A. L. R. R. Co., 24 / 389; Monroe v. Fort Wayne, I. & S. R. R. Co., 28/ 272; Jhons v. People, 25/499. But there will be no estoppel where such recognition has been fraudulently procured. Doyle v. Mizner, 42/332.

Corporations are bound by the acts of their agents to the same extent, and under the same circumstances, as natural persons.-Delta Lumber Co. v. Williams, 73 / 86.

A chattel mortgage executed by the president and the secretary of a corporation, with the consent of all the stockholders, is valid.-Kalamazoo Spring & Axle Co. v. Winans, Pratt & Co., 106 / 193.

A note and mortgage given by a corporation cannot be defeated in the hands of a good faith purchaser before dishonor, who took the same as a result of negotiations with the officers of the corporation, on the ground tha the transaction out of which the securities grew was ultra vires.-Woodcock v. First Nat. Bank of Niles, 113 / 236.

SEC. 14. Every such corporation shall have power to pur Power to hold chase, hold and convey all such real and personal estate as the property.