Peninsula Leasing Co. v. Cody, 161 Mich. 604

Peninsula Leasing Co. v. Cody

161 Mich. 604 | Mich. | 1910

Ostrander, J.

(after stating the facts). We are of opinion, based upon the testimony, that the appellant may not complain that the question whether his last payment was accepted in settlement of his alleged subscription was submitted to the jury as a question of fact.

As has been stated, the testimony tends to prove that all calls were made by the board of directors. The action was affirmative, and is evidenced by the record of proceedings of the board. Counsel for appellant say that *610two calls, viz., those of October 24, 1907, and January 1, 1908, appear to have been made at a meeting of the Peninsula Leasing Company, and one, viz., that of February 1, 1908, at a meeting of the Peninsular Mining Company, and they say “none of these meetings was a directors’ meeting.” But the records of proceedings at these meetings show much more. The persons named as being present and the business transacted indicate that they were, in fact, directors’ meetings. The statute of frauds (Sprague v. Hosie, 155 Mich. 80 [118 N. W. 497, 19 L. R. A. (N. S.) 874]) has no application in a case where the arrangement does not provide for or contemplate a sale of stock. Here the arrangement was that the stock, as it originated — as it was issued by the company — should stand in the name of defendant. Green v. Brookins, 23 Mich. 48, 54 (9 Am. Rep. 74).

It was a question of fact whether defendant had notice of the calls. The by-laws did not prescribe the notice to be given or the manner of giving it. But defendant did not question the form or manner of the notice of cails which he paid, and as we think his liability is established, in part, by such payments, and as he refused to pay any other or further calls, we do not regard it as important, for the purposes of this action, to know more than that he was thereafter requested, as he had been before, to pay calls; a reasonable time being afforded him. ■ He is neither surprised nor injured by a lack of formality. If it was sought to forfeit or to sell his shares for nonpayment of calls, a different question might be presented.

The meritorious question, the one which, if answered favorably to plaintiff, disposes of the other contentions of appellant, is whether the dealings of the parties estop defendant to deny his obligation to take and pay for 30 shares of stock and as well estop the plaintiff to deny him the right to 30 shares. It is undoubtedly of importance, especially when subscriptions to the capital stock of corporations are made, or sales thereof at or near the time of its organization, to know certainly who have become liable to' *611the responsibilities and are entitled to the rights of shareholders. And it is the general rule that no one can obtain the rights of a member in a corporation except in compliance with the governing law. If that law prescribes conditions or special methods for becoming a member, the law is imperative. This court has held rather strictly to this general rule. Carlisle v. Railroad Co., 27 Mich. 315; Shurtz v. Railroad Co., 9 Mich. 269; Parker v. Railroad Co., 33 Mich. 23. And see Swartwout v. Railroad Co., 24 Mich. 389; International Fair & Exposition Ass’n v. Walker, 88 Mich. 62 (49 N. W. 1086). But these cases, as well as those from other jurisdictions, also recognize the doctrine that the relation of a member in a corporation may arise out of mutual dealings between the individual and the corporation. In the case at bar the testimony warrants the conclusion that the whole movement to organize the plaintiff company was mutual among certain members of another corporation, of whom the defendant was one. There was, in fact, no sale of capital stock to defendant in the ordinary way. The testimony for plaintiff tends to prove an agreement, a mutual preliminary arrangement, carried out by the alleged allotment of shares. It tends to prove that defendant was, to his knowledge, relied upon by his associates to take some stock, and that he, to their knowledge, assented to both the preliminary arrangement and the subsequent actual allotment. There is no denying the fact that defendant acted in accordance with the idea that he was a subscriber for thirty shares of stock. It is just as plain that the corporation recognized him as the subscriber to thirty shares of stock. It cannot be doubted that, if he had continued to pay calls, he could not be denied the shares to which the record of the corporation showed him to be entitled. Upon this subject, see, generally, 10 Cyc. p. 532; 1 Cook on Stock & Stockholders, § 52 et seq. The verdict, upon the issues submitted to the jury, is supported by testimony, and the judgment entered on the verdict *612ought not, for any reason so far considered, to be disturbed. We find in the other contentions made none which are not disposed of adversely to appellant by- what has been said.

The judgment is affirmed.

Hooker, Moore, Blair, and Stone, JJ., concurred