Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Law
Corporations - Exculpatory Provision In Bond - Stockholders' Liability For Illegal Dividends
Corporations - Exculpatory Provision In Bond - Stockholders' Liability For Illegal Dividends
Michigan Law Review
A bondholders' protective committee sued a holding company under a Michigan statute making stockholders in street railway companies, who knowingly receive dividends in impairment of capital stock, liable for corporate debt then existing and subsequently accruing while they remain stockholders. The defense relied on was a "no recourse" clause in the bonds wherein the creditors waived their rights to any assessment whatsoever "against any incorporator, stockholder, officer or director of the railway company, or any successor corporation." Held, the "no recourse" clause waived only liabilities where the defendant acted in good faith; not where the defendant acted fraudulently in …
Trusts--Reserved Powers Of Appointment-Creditor's Rights
Trusts--Reserved Powers Of Appointment-Creditor's Rights
Michigan Law Review
X, feme sole, in good faith transferred personalty to appellant in trust to pay the income therefrom to her for life and to transfer the principal and income to such persons as she might by will appoint, and in default of appointment then to her issue and if no issue survive her and the power be not exercised then to her next of kin. Subsequent creditors of X brought suit during her lifetime to compel payment out of the trust corpus. Held, the corpus was not subject to claims of subsequent creditors. Mercantile Trust Go. v. Bergdorf …