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Full-Text Articles in Law
Corporations-Appointment Of Receiver Solely For The Purpose Of Bringing Suit, William A. Bain, Jr. S.Ed.
Corporations-Appointment Of Receiver Solely For The Purpose Of Bringing Suit, William A. Bain, Jr. S.Ed.
Michigan Law Review
An ex parte petition was filed by a minority stockholder of a foreign corporation requesting the appointment of a special receiver for certain claims of the corporation against resident fiduciaries. The claims, which had not been prosecuted by the corporation, were about to be barred by the statute of limitations. A receiver was appointed and brought suit. The corporation appeared specially requesting that the order be set aside. Held, motion denied. A court of equity has inherent power to appoint a receiver for the assets of a foreign corporation in an ex parte proceeding instituted by a minority stockholder. …
Federal Procedure-Applicability Of State Decisional Law Interpreting State Statutes Of Limitations Under Section 11 (E) Of The Bankruptcy Act, Charles E. Oldfather S.Ed
Federal Procedure-Applicability Of State Decisional Law Interpreting State Statutes Of Limitations Under Section 11 (E) Of The Bankruptcy Act, Charles E. Oldfather S.Ed
Michigan Law Review
Plaintiff is the trustee in bankruptcy of a Virginia corporation whose petition for reorganization under chapter X of the Bankruptcy Act was approved by a Virginia federal district court in 1942. Plaintiff filed this action in a New York federal district court under section 11 (e) of the Bankruptcy Act against defendant, the principal stockholder, and others for breach of fiduciary duty. The alleged breaches of duty occurred in 1927 and 1929. The defendant pleaded the New York statute of limitations and contended that it should be applied as interpreted by New York decisions, which hold that the statute begins …
Corporation-Officers And Directors-Relationship Between Cumulative Voting And Removal Provisions, John W. Hupp S.Ed.
Corporation-Officers And Directors-Relationship Between Cumulative Voting And Removal Provisions, John W. Hupp S.Ed.
Michigan Law Review
Respondent corporation adopted a bylaw providing for removal of a director, with or without cause, by majority vote of the stockholders. The corporation subsequently amended its charter to provide for cumulative voting at all elections of directors. At a meeting of the stockholders and directors, one director was removed without cause by majority vote of the stockholders and another director elected in his place over the objection of petitioner, a minority stockholder owning 40% of the outstanding stock. On petitioner's application to have the election set aside, held, election invalidated and set aside. Adoption of the cumulative voting provision …
Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr.
Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr.
Michigan Law Review
The Big Bend Land Company was in the process of liquidation. The articles of incorporation provided for preferred stock which "in the event of any liquidation . . . " was " . . . entitled to be paid in full the par value thereof, and all accrued unpaid dividends thereon before any sum shall be paid to or any assets distributed among . . ." the common stock. No dividends had ever been declared or paid, nor had there ever been any surplus profits. After discharging all corporate liabilities, including payment of the par value of the preferred stock, …
Corporations-Insolvency-Corporate Officers As Preferred Wage Claimants, E. C.V. Greenwood
Corporations-Insolvency-Corporate Officers As Preferred Wage Claimants, E. C.V. Greenwood
Michigan Law Review
A closed corporation, soon after its formation, executed an assignment for the benefit of creditors. One of the large creditors objected to a preferred wage claim allowed by the assignee to a vice-president and director of the assignor, the officer who had in fact been instrumental in executing the assignment. The claim was for wages amounting to two hundred fifty dollars for alleged manual work for the assignor prior to the assignment and was granted by the assignee on the theory that preferential treatment was authorized by the New York debtor and creditor statutes. The applicable statute reads as follows: …
Corporations-Accrued Preferred Stock Dividends-Charter Amendment, T. M. Kubiniec S.Ed.
Corporations-Accrued Preferred Stock Dividends-Charter Amendment, T. M. Kubiniec S.Ed.
Michigan Law Review
In 1943 defendant corporation's charter was amended to cancel 5 per cent cumulative preferred stock, outstanding since 1926 or earlier, and all accrued dividends in exchange for new 5 per cent ,non-cumulative preferred and non-voting common stock. Dividends had accumulated on the old preferred stock both before and after 1939 in a total amount of $50 per share. The recapitalization plan rested on a 1939 amendment to the Ohio General Code providing that the terms of outstanding stock can be changed "in such a manner as to discharge (without payment), adjust or eliminate rights to accrued undeclared cumulative dividends" by …
Corporations-Torts-Liability Of A Corporate Officer For Inducing Corporation To Breach Its Contract, Ira M. Price, Ii
Corporations-Torts-Liability Of A Corporate Officer For Inducing Corporation To Breach Its Contract, Ira M. Price, Ii
Michigan Law Review
Defendant corporation elected to redeem its outstanding preferred stock at a price of $65 a share including accumulated dividends. When plaintiff tendered its certificates of the preferred stock for transfer to the corporation, the company refused to accept the certificates or to pay for them at their redemption price. Plaintiff alleged that defendant Vincent, president of defendant corporation and owner of most of its common stock, conspired with and induced the company to break its stock redemption contract with plaintiff after plaintiff's refusal to agree to share with Vincent 50 p.er cent of any profits that might accrue from redemption …
Corporations - Jurisdiction - Foreign Corporations And Venue In The Federal Courts - Consent To Be Sued, Theodore R. Vogt
Corporations - Jurisdiction - Foreign Corporations And Venue In The Federal Courts - Consent To Be Sued, Theodore R. Vogt
Michigan Law Review
In the long history of the struggle to hold foreign corporations subject to suit at the place of their business activity/ another chapter was written when the Supreme Court decided Neirbo Company v. Bethlehem Shipbuilding Corp., Ltd., hereinafter referred to as the Neirbo case. In that case the plaintiffs, who were citizens and residents of New Jersey, had brought an action in the United States District Court for the Southern District of New York and had sought and obtained the addition, as a party defendant, of Bethlehem, a Delaware corporation. Since, as between plaintiffs and Bethlehem, the suit had …
Corporations - Stockholder's Derivative Suit - Diversity Of Citizenship, Edward S. Biggar
Corporations - Stockholder's Derivative Suit - Diversity Of Citizenship, Edward S. Biggar
Michigan Law Review
Plaintiff, a New York corporation, brought a stockholder's derivative suit, in federal court, against the American Tobacco Company, a New Jersey corporation, and its directors, the majority of whom were citizens of New York. There being no federal question involved, defendant moved to dismiss the complaint because there was no proper diversity of citizenship. Plaintiff argued that by the New York decisions the ultimate interests of the defendant corporation and the plaintiff were identical, and that consequently the defendant corporation must be considered as the real plaintiff, thus supplying the necessary diversity of citizenship under the rule of Erie R.R. …
Corporations - Stockholders' Suits - Effect Of Erie Railroad V. Tompkins On Federal Equity Rule 27, Leonard D. Verdier Jr.
Corporations - Stockholders' Suits - Effect Of Erie Railroad V. Tompkins On Federal Equity Rule 27, Leonard D. Verdier Jr.
Michigan Law Review
Plaintiffs filed a stockholders' bill in federal equity court to enforce certain rights of Hearst Consolidated Publications, Inc., a Delaware corporation. The individual defendants, directors of the corporation, were charged with having effected a plan to sell various Hearst properties to the corporation at excessive prices. Defendants moved to strike from the bill of complaint paragraphs referring to transactions which occurred prior to the date when plaintiffs acquired their stock. The motion was based on equity rule 27. The contention of counsel for plaintiffs was that rule 27 is based on the federal general law, which on this point conflicts …
Corporations - Power Of Attorney To Transfer Stock On The Books Of The Corporation, Royal E. Thompson
Corporations - Power Of Attorney To Transfer Stock On The Books Of The Corporation, Royal E. Thompson
Michigan Law Review
Although a power of attorney to transfer stock on the books of the corporation is found almost as a matter of course on the reverse side of stock certificates, along with a form for assignment of the certificate, there is surprisingly little to be found in the authorities, as to why it is there. An inquiry into the reasons, if any, for such a provision is the purpose of this discussion. A decision of last summer, by the New York Supreme Court, New York County, lends present emphasis to the query. Three certificates of stock which had been indorsed in …
Corporations-Voting Trust Agreements - Extensions Beyond Statutory Limit
Corporations-Voting Trust Agreements - Extensions Beyond Statutory Limit
Michigan Law Review
A voting trust agreement provided that the trust should continue for ten years from the date thereof, and authorized the trustees at the expiration of such term to renew the agreement for a further term. Held, that under the New York statute limiting voting trusts to ten years the agreement was valid for such period, but the provision authorizing renewal was invalid. Kittinger v. Churchill Evangelistic Ass'n, 151 Misc. 350, 271 N. Y. S. 510 (1934).
Corporations - Conversion Of Corporate Stock
Corporations - Conversion Of Corporate Stock
Michigan Law Review
The defendant acquired in good faith certain stock certificates, each bearing an indorsement purporting to be that of the plaintiff. The certificates had been stolen from the plaintiff and the indorsements were forged. Upon learning that these certificates were in the possession of the defendant the plaintiff demanded their return, which was refused without qualification. The plaintiff then brought an action of trover to recover as damages the value of the stock. The Appellate Division limited the recovery to damages incurred by way of expenses, profits lost, or otherwise, flowing from the wrongful detention of the certificates as distinguished from …
Corporations - Service Of Process On A Subsidiary Corporation Doing Business In The State In An Action Against A Foreign Corporation
Michigan Law Review
The Freeport Texas Company, a Delaware corporation, owned all of the stock of the Freeport Sulphur Company, a Texas corporation, except a few qualifying shares. The directorates of the two corporations were interlocking; officers of the parent corporation occupied identical positions in the subsidiary; and common offices were occupied in New York. It also appeared that the board of the Texas corporation only passed on local operating matters and ratified ordinary contracts. The sales end of the organization was operated from New York and the board had no control over it. The fixing and payment of salaries, the amount of …
Corporations - Chattel Mortgages - Consent Of Stockholders
Corporations - Chattel Mortgages - Consent Of Stockholders
Michigan Law Review
The claimant held a chattel mortgage on certain fixtures, the property of a corporation in which the bankrupt held a controlling interest. The validity of the mortgage was challenged by the trustee for the reason that it had been executed in disregard of the statutory requirements. It was admitted that the assent of the stockholders was not formally expressed, but it appeared that the requisite number of stockholders had, in fact, assented. Held, that the mortgage is void since it did not have the statutory consent to its execution, the fact of actual consent being immaterial. In re Joseph …
Corporations-Duty Of Corporate Trustee To Record Mortgage Securing Bonds
Corporations-Duty Of Corporate Trustee To Record Mortgage Securing Bonds
Michigan Law Review
Plaintiff became the holder of bonds issued under and secured by a collateral trust agreement executed in Pennsylvania. The mortgage contained the provision that " * * * the trustee, save for its gross negligence or wilful default, shall not be personally liable for any loss or damage" and further that "It shall be no part of the duty of the trustee to record this instrument as a mortgage." The mortgage was not recorded nor the mortgage debt satisfied. Plaintiff sued the trustee in New York for negligence. Held, the contract limited the obligations and duties of the trustee, …
Torts-Negligent Misrepresentation-Duty Arising From Contract To Persons Not Parties
Torts-Negligent Misrepresentation-Duty Arising From Contract To Persons Not Parties
Michigan Law Review
The defendants, accountants, examined the books of the Stern Co., knowing that their balance sheet and 32 certified copies would be exhibited as a basis for future credit, but not knowing of the plaintiff particularly. Through negligence they failed to discover and report insolvency. Relying upon the report showing a solvent concern plaintiff extended credit to the Stem Co. He sued for his loss in two counts, negligence and fraud. Held, defendants had no duty to plaintiff to exercise due care, so he can not recover for negligence in the examination. But defendants might be liable for fraud as …
Corporations-Basis For Preemptive Rights
Corporations-Basis For Preemptive Rights
Michigan Law Review
Defendant corporation's authorized capital stock consisted of 800 shares of common stock, 76 shares of which remained unissued. Over the objection of the plaintiff, the directors of the corporation authorized the issue of 50 shares of the 76 to a salesman in satisfaction of a debt due him from the corporation, the remaining 26 shares to one of the directors for cash with which to meet corporate indebtedness. No contest for corporate control was afoot. No opportunity was given to the shareholders generally to purchase such shares. Later the faction of the individual defendants to whom said 26 shares had …