60 Mich. 525 | Mich. | 1886
This is an action of assumpsit brought to recover the amount due upon two subscriptions made by the defendant to the capital stock of the Muskegon & Big Rapids Railroad Company. The first subscription, of thirty shares, was made in the articles of association. The second was a later, independent subscription, and was abandoned by plaintiffs on the trial.
The claim on the part of the plaintiffs to support their action was that said Muskegon & Big Rapids Railroad Company and the Chicago & Michigan Lake Shore Railroad Company were consolidated, after such subscription on the part of defendant, the corporation thus formed taking the name of said latter-mentioned company; that said consolidated company assigned said subscription to one Ephraim Mariner,
The declaration in the cause was filed on the twenty-third day of July, 1878, and the case has been twice before in this Court, and is reported in 44 Mich. 411; 50 Mich. 294.
Upon the last trial in the circuit court no evidence was offered upon the part of the defendant. The court directed a verdict for plaintiffs.
The objections urged upon the trial, and submitted here, are to the validity of the alleged consolidation of the two companies, and the assignment of the stock subscription under which plaintiffs claim.
The defendant was active in organizing the Muskegon & Big Rapids Railroad Company for the purpose of building a road from Muskegon to Big Rapids, and subscribed thirty shares of one hundred dollars each. It seems also that he was active in bringing about the consolidation of the companies. He was' present at the meeting of the board of directors of the Muskegon & Big Rapids Companj', and voted to instruct its president to enter into the agreement for consolidation substantially as it was entered into, and offered a resolution, which was adopted, calling in the unpaid balance of the subscribed stock, and fixing the dates of payment of the same, and the amounts or per cent, to be paid at such dates. This meeting of the directors was held on the twenty-sixth day of July, 1872.
An agreement to consolidate was prepared and dated July 27, 1872, which agreement in form complied with the statute, and was signed by the president of the respective corporations, with the corporate seals of both companies annexed thereto.
The board of directors of the Chicago & Michigan Lake Shore Company, at a meeting held on the first-day of August, 1872, directed and authorized its president, J. F. Joy, to enter into this agreement in their behalf, which he did.
Notices were then given to the stockholders of each company of meetings of said stockholders, to be held separately
Meetings of the stockholders of each company were held on that day separately, at which meetings the agreement was unanimously sanctioned and approved. The stock owned and held by defendant was voted, either in person or by proxy, in favor of the consolidation.
The objections, and the only ones, urged against the action of the stockholders, and impugning the validity of their approval of the agreement, are that the notices in each case-should Have been signed jointly by the secretaries of the two companies, instead of separately, and that the notice calling the stockholders of the Chicago & Michigan Lake Shore Company was not published in the counties of Mecosta and Newaygo.
It seems that the Muskegon & Big Rapids Railroad ran,, or was surveyed to run, through Muskegon, Mecosta, and Newaygo counties, and the other road through the counties of Oceana, Muskegon, Kent, Ottawa, Allegan, Yan Burén, and Berrien.
Under the statute which requires the meetings of these stockholders to be held separately and apart from each other, we think the publication required is .also intended to be separate, signed by the secretaries separately, and to be published only in the counties through which each road runs. It was not necessary to publish the notice of the meeting of the stockholders of the Chicago & Michigan Lake Shore Company in the counties of Mecosta and Newaygo, through : which the line of its road did not pass. There was no objection to the sufficiency of the proof of due publication of the notices under the statute, save those noted. Consequently it must be considered that the meetings were regularly called and held under the statute, and in substantial compliance therewith.
No real objection is urged against the validity of the action of either the directors or stockholders of the company to
But it is claimed that Mr. Joy, the president of the other company, entered into this agreement before he was authorized to do so by the directors of said company. This is urged for the reason that the agreement bears date the twenty-seventh of July, .while the directors did not authorize such action until August 1 of the same year.
But the record shows clearly enough that, although dated July 27, and probably signed and sealed by the president of the Muskegon & Big Rapids Company on that day, it was not signed and sealed by Mr. Joy until after the action of the directors of his company. There is therefore no force in this objection.
It is also urged that there was no proof of any notice to the directors of the Chicago & Michigan Lake Shore Company of the meeting of August 1, 1872, and a motion was made upon the trial to strike from the case the proceedings of the same for that reason, which motion was denied.
The record shows that a majority of the directors were present at such meeting, and that every director present voted to enter into this agreement. Under the statute then in force a majority of the directors constituted a quorum for the transaction of business. There was no proof of notice ; yet it did not appear affirmatively that there was a want of notice. The burden of proof is upon those who deny the regularity of a meeting for want of notice, to prove it: Sargent v. Webster, 13 Metc. 504. The law presumes, in the absence of any proof to the contrary, that the proper notice was given when a quorum are present at the meeting: Rorer R. R. 191; Mutual Fire Ins. Co. v. Sortwell, 8 Allen, 217; Com. v. Woelper, 3 Serg. & R. 29.
No notice of the meeting being required by the statute, and no showing that the articles of association or the by-laws of the company provided the manner of notice, or that there should be any, and a quorum being present, and all voting affirmatively, as shown by the record, we think the meeting was legally held, and its action valid, without proof of notice
The assignment to Mariner is objected to as not being the •assignment declared upon. It was declared upon as an assignment made by the consolidated company, and it is ■claimed that by its terms it purports to be and is the assign^ inent of the Muskegon & Big Rapids Company.
The stock subscription of the defendant, as it appears from the testimony, was assigned by the assistant treasurer of the consolidated company, upon receipt of a letter from the president of that company directing him to deliver notes of various parties in his possession, to the amount of $50,000, to D. L. Wells & Co.
In the instrument of assignment the assistant treasurer, Mr. Comstock, uses the words “ the Muskegon & Big Rapids Railroad Company hereby sells, assigns,” etc.; and signs the same, “ E. G. Comstock, Assistant Treasurer.” This was in November, 1873, at which time there was no Muskegon & Big Rapids Company in existence, the consolidation having taken place, and said company being merged thereby in the consolidated company, under the name of the Chicago & Michigan Lake Shore Railroad Company. By the statute, the consolidation proceedings being valid, this stock subscription had been transferred to the consolidated corporation by the force and virtue of such proceedings, and was its property: How. Stat. § 3344; Comp. Laws 1871, § 2348.
The assignment was undoubtedly meant to be an assignment from and by the new corporation, and before the commencement of this suit, and on the seventh day of June, 1878, the board of directors of the consolidated company ratified and confirmed the assignment made by the said Comstock as their own. We think this action effectually divested the corporation of any claim to this subscription, and vested the title and ownership of the same in said Mariner, or rather in his assignee, Daniel L. Wells, as he assigned to Wells in April, 1878.
We see no error in the proceedings in the court "below. The fact that the plaintiffs were allowed to prove the exist
His defense was entirely a technical one, without any merit in the technicalities raised. In view of his joining and acquiescing in every step of the consolidation proceedings on the part of his own company, and withal an active participant therein, there could be but little, if any, equity in 'his attempt, years afterwards, to avoid his subscription by picking flaws in the proceedings of the company in which he had no interest, and with whose action its own stockholders appear to be satisfied.
The judgment of the circuit court for the county of Muskegon is therefore affirmed, with costs.
