Voorheis v. Walker
Decision Date | 02 June 1924 |
Docket Number | No. 93.,93. |
Citation | 198 N.W. 994,227 Mich. 291 |
Parties | VOORHEIS, Pros. Atty., v. WALKER et al. |
Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Error to Circuit Court, Wayne County; Ormond F. Hunt, Judge.
Proceedings in the nature of quo warranto by Paul W. Voorheis, as Prosecuting Attorney, against Levi H. Walker and others. Judgment for defendants, and plaintiff brings error. Affirmed.
In Battige v. Walker Shoe Co., 213 Mich. 73, 181 N. W. 36, John C. Battige, one of the individual defendants in the instant case, and a stockholder in the corporate defendant, unsuccessfully sought a decree dissolving the corporation. The records of this court show that he also applied to the Attorney General to institute proceedings for that purpose, that the Attorney General refused, and that this court declined to issue an order requiring him to show cause why he should not be compelled so to do. This proceeding instituted by the prosecuting attorney of Wayne county seeks the same result. The grounds upon which the relief is sought are thus stated in the replication:
‘(1) That the articles of association of the said supposed company were not filed by the president of said company as required by law.
‘(2) That the said defendants and supposed company commenced doing business as such corporation and in its corporate name before filing articles of incorporation as required by law, and before obtaining any franchise to do so.
‘(3) That the original meeting as held to organize the company, if any was ever held, was not held pursuant to notice as required by law, nor was any waiver of said notice as required by law ever made.
‘(4) That corporate meetings have not been held as required by law, nor notice of such meetings ever given as required by law.
‘(5) That annual reports have not been filed as required by law.
‘(6) That no by-laws have ever been enacted by the said supposed corporation to comply with the requirements of the statute.
‘(7) That reports to the assessors of the townships and cities in which the supposed stockholders of said supposed company reside have not been made showing the shares held by each, as required by law.’
Argued before CLARK, C. J., and McDONALD, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ. John Rood, of Detroit, for appellant.
Guy W. Moore and Hal P. Wilson, both of Detroit, for appellees.
FELLOWS, J. (after stating the facts as above).
There are some general rules governing courts in proceedings of this character which we shall have in mind at the outset and through the consideration of the case. They are well stated in Ruling Case Law, and we quote some of them.
‘The courts lean against the forfeiture of corporate franchises; the object is to preserve and uphold the estate, unless it be clear that the rights vesting in it have been improvidently neglected or illegally abused, and such forfeiture will not be allowed except for a plain abuse of power, by which the corporation fails to fulfill the design and purpose of its organization.’ 7 R. C. L. 711.
‘To work a forfeiture of the franchises of a corporation, there must be a willful abuse of improper neglect, and something more than accidental negligence, excess of power, or mistake in the mode of exercising an acknowledged power’ 7 R. C. L. 713.
While in Attorney General v. Erie & K. R. R. Co., 55 Mich. 15, 20 N. W. 696, this court held that the court should exercise its discretion...
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