C. N. Ray Corp. v. Sec'y of State

• Decision Date: 03 January 1928
• Docket Number: No. 36,Oct. Term.,36
• Parties: C. N. RAY CORPORATION v. SECRETARY OF STATE.
• Court: Michigan Supreme Court

241 Mich. 457

217 N.W. 334

C. N. RAY CORPORATION

v.SECRETARY OF STATE.

No. 36, Oct. Term.

Supreme Court of Michigan.

Jan. 3, 1928.

Application by the C. N. Ray Corporation for mandamus, directed to Secretary of State, John S. Haggerty. Defendant directed to accept and file evidence of plaintiff's extension of corporate existence without exacting a franchise fee.

Argued before the Entire Bench.

Bryant, Lincoln & Miller, of Detroit (Joseph H. Clark, of Detroit, of counsel), for plaintiff.

William W. Potter, Atty. Gen., Emerson R. Boyles, Deputy Atty. Gen., and Harry A. Metcalf, Asst. Atty. Gen., for defendant.

WIEST, J.

Plaintiff, a Michigan corporation, organized for profit, seeks our writ of mandamus, directing the secretary of state to accept and file the proper papers extending its corporate existence beyond the initial term of 30 years without exacting a franchise fee.

Plaintiff, under another name, was organized December 31, 1897, with a corporate existence ending, unless renewed, December 31, 1927. In accord with privilege granted by chapter 4 of part 1 of Act No. 84, Public Acts 1921, sanctioned by the Constitution, § 3, art. 12, proper action was taken to extend plaintiff's corporate existence 30 years, and the evidence thereof tendered the secretary of state for acceptance and filing. The secretary of state refused to accept the renewal articles unless paid a franchise fee of $625. The sole question is whether, upon a renewal or extension of corporate existence, a franchise fee, as in case of a new corporation, is exacted by law.

The mentioned act of 1921 is silent on the subject of a franchise fee in case of extension of corporate existence. The act grants the privilege of having the corporate life extended, and points the method and means for its accomplishment, and provides:

‘Any corporation which has thus been renewed shall be the same corporation, shall hold and own all the rights, franchises and property held and owned by the corporation before renewal, be subject to all its liabilities, and have the same stockholders, members and officers.’ Part 1, c. 4, § 5.

This language is clear, and speaks, not of a new corporation, but of a renewal or extension of old corporate life.

Plaintiff, a stock company, organized for profit, had an original term of existence of 30 years, but the provision in the Constitution, § 3, art. 12, so limiting the initial term, also permits the Legislature to provide by general law, ‘for one or more extensions of the term of such corporations, while such term is running, not exceeding thirty years for each extension, on the consent of not less than two-thirds of the capital stock of the corporation.’ Such provision contemplates a continuation of corporate existence and not the creation of a new corporation.

It will be noted that the action looking toward an extension of the corporate life must be taken while the corporation is functioning, and leaves power with the stockholders to let dissolution by time limit take place or by action to such end extend the lease of corporate life.

The Attorney General contends that section 4, Act 182, Public Acts 1891, as added by Pub. Acts 1895, No. 91 (C. L. 1915, § 11355), and Act No. 84, Public Acts 1921, are in pari materia, and therefore the franchise fee is payable. The act of 1891 provided that:

‘All corporations whose term of corporate existence, as fixed by their articles of association, shall have expired or shall be about to expire by limitation, and who shall renew such corporate existence, in accordance with law, shall, for the purpose contemplated by this act, be treated and regarded as new corporations, and shall be required to pay the fee provided by this act.’

The act of 1891 was entitled, ‘An act to provide for the payment of a franchise fee by corporations.’ The act of 1921 is a general revision and consolidation of statutes relating to certain corporations, inclusive of plaintiff, and expressly repealed numerous statutes, but not Act No. 182 of 1891. Counsel for plaintiff contend that Act No. 84, Public Acts 1921, repeals by necessary implication Act No. 182, Public Acts 1891, and besides the Legislature, by Act No. 211, Public Acts 1927, declared the act of 1891 obsolete and inoperative, and repealed it before plaintiff sought an extension of corporate life.

Counsel for defendant point out the fact that the mentioned act of 1927 failed of accomplishment for want of a repealing clause. Such is the fact. The act of 1927 is entitled, ‘An act to repeal certain obsolete and inoperative laws.’ The act specifically enumerated 138 laws, parts of laws, and joint resolutions, inclusive of Act No. 182, Public Acts 1891, but failed to carry out its object by a repealing clause. For want of a repealing clause, Act No. 211, Public Acts 1927, repealed nothing. While such abortive effort to repeal is no law, yet the solemn attempt serves as a legislative declaration or construction to the effect that the act of 1891 is obsolete and inoperative, and, although not a construction binding upon the court, it is entitled to some weight. See Burridge v. City of Detroit, 117 Mich. 557, 559, 76 N. W. 84,42 L. R. A. 684, 72 Am. St. Rep. 582.

The object of the rule in pari materia is to carry into effect the purpose of the Legislature as found in harmonious statutes on a subject, but the rule is...