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Articles 751 - 780 of 1014

Full-Text Articles in Business Organizations Law

Corporations - Stockholders' Suits - Federal Courts -Requirement Of Stock Ownership At The Time Of The Injury Complained Of, Robert E. Sipes Mar 1939

Corporations - Stockholders' Suits - Federal Courts -Requirement Of Stock Ownership At The Time Of The Injury Complained Of, Robert E. Sipes

Michigan Law Review

When necessary to protect the interest of a stockholder, a court of equity will entertain an action by the stockholder to enforce a right belonging to the corporation. The suit is a derivative one, the corporation being the party primarily injured and the immediate beneficiary of the proceeds of any judgment. The basis for the suit has been explained in a number of ways. It has been held that in a proper case equity will disregard the corporate fiction and allow the derivative suit in order to protect the right which beneficially belongs to the stockholder although nominally to the …

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Bankruptcy - Corporate Reorganization - Fairness Of The Plan, Stanton J. Schuman Mar 1939

Bankruptcy - Corporate Reorganization - Fairness Of The Plan, Stanton J. Schuman

Michigan Law Review

In a reorganization under 77B the unsecured creditors were to be paid by receiving non-voting preferred stock of the insolvent debtor up to the amount of their claims. The old preferred stockholders were to keep the balance of this same class of stock. One thousand shares of voting common stock were to be given to the old shareholders on the basis of one new share for each old share. The plan was approved by ninety-four per cent of the creditors, but the master proposed an amendment whereby the creditors were to have the right to vote in the selection of …

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Corporations - Amendments By Majority Of The Stockholders - Provision In Certificate Of Incorporation Requiring More Than Majority, Stanton J. Schuman Mar 1939

Corporations - Amendments By Majority Of The Stockholders - Provision In Certificate Of Incorporation Requiring More Than Majority, Stanton J. Schuman

Michigan Law Review

A Delaware general corporation statute provided for changing the preferences, rights, or powers of any class of stock if a majority in interest of each class voted in the affirmative thereon. Another part of the statute allowed the certificate of incorporation to require a larger proportion. The certificate of incorporation of D corporation required a vote of seventy-five per cent of the outstanding preferred stock to change the "designations," preferences, and voting powers" of the preferred stock. This required vote was reduced to sixty per cent by an amendment which received a favorable vote of fifty-five per cent of such …

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Corporations - Stockholders' Suits - Effect Of Erie Railroad V. Tompkins On Federal Equity Rule 27, Leonard D. Verdier Jr. Feb 1939

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 …

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Corporations - Conditions Under Which Settlement Of Corporate Claims Will Not Prevent A Stockholder's Derivative Suit On Such Claims, John M. Ulman Feb 1939

Corporations - Conditions Under Which Settlement Of Corporate Claims Will Not Prevent A Stockholder's Derivative Suit On Such Claims, John M. Ulman

Michigan Law Review

In the recent case of United States Lines, Inc. v. United States Lines Co. the plaintiff was a minority stockholder in United States Lines, Inc., whose only asset was a minority stock interest in the United States Lines Company. A majority of the stock in both companies was owned by the International Mercantile Marine Company. An action originally brought by the United States Lines, Inc., but settled out of court, was sought to be continued by the plaintiff, who alleged: (1) that the Marine Company and its subsidiaries had entered into fraudulent contracts with the United States Lines Company and …

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Corporations -Parent And Subsidiary-Right Of Parent Or Subsidiary To Share With Other Creditors In Assets Of Associated Corporation On The Latter's Insolvency, Collins E. Brooks Jan 1939

Corporations -Parent And Subsidiary-Right Of Parent Or Subsidiary To Share With Other Creditors In Assets Of Associated Corporation On The Latter's Insolvency, Collins E. Brooks

Michigan Law Review

Increasingly in the past few years, courts throughout the country have seemed willing to disregard what Professor Ballantine has called the "basic theory of corporation law," the concept that a corporation is an entity entirely distinct and separate from its stockholders. It is not the purpose of this writer to take issue with this tendency; for the most part the decisions seem sound and the results just. It is believed, however, that the rules used by the courts in reaching those decisions are, in many instances, open to question. There is one situation in particular in which the courts have …

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Corporations - Negotiability Of Stock Certificates - Uniform Stock Transfer Act, Charles R. Linton Jan 1939

Corporations - Negotiability Of Stock Certificates - Uniform Stock Transfer Act, Charles R. Linton

Michigan Law Review

Plaintiff holding company was incorporated with Murtland and two dummies as shareholders and officers. Murtland pledged a stock certificate, representing shares of another corporation owned by his corporation, with the defendant bank to secure a personal loan; an assignment and power of attorney was executed by the plaintiff through Murtland and one of the dummy shareholders as officers, the other shareholder having knowledge of the transaction. Upon the bankruptcy of Murtland, defendant sought to sell the collateral; plaintiff seeks to enjoin the sale on the ground that the assignment had not been authorized by its board of directors. Held, …

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Corporations - Disregarding Corporate Entity - Fraud, Collins E. Brooks Dec 1938

Corporations - Disregarding Corporate Entity - Fraud, Collins E. Brooks

Michigan Law Review

A and B purchased from plaintiffs all of the stock of defendant corporation. Prior to the transaction, and as a basis for negotiations, plaintiffs had an accountant prepare a statement of corporate assets and liabilities, which showed that the corporation was in financial difficulties. A and B acknowledged the corporate indebtedness and took over the corporation. Later, plaintiffs brought suit against the corporation on claims for salaries and advancements allegedly due them from it, which claims had not appeared on the statement of corporate liabilities. Held, the corporate entity would be disregarded, and plaintiffs estopped from setting up their …

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Taxation - Income Tax - Surtax On Income Of Corporation Where Profits Are Accumulated To Avoid Surtax On Income Of Its Shareholders - Construction, Brackley Shaw Dec 1938

Taxation - Income Tax - Surtax On Income Of Corporation Where Profits Are Accumulated To Avoid Surtax On Income Of Its Shareholders - Construction, Brackley Shaw

Michigan Law Review

Section 104 of the Revenue Act of 1928 imposed a surtax on the net income of any corporation "formed or availed of for the purpose of preventing the imposition of the surtax on its shareholders through the medium of permitting its gains and profits to accumulate instead of being divided and distributed," and provided that "the fact that the gains or profits are permitted to accumulate beyond the reasonable needs of the business shall be prima facie evidence of a purpose to escape the surtax." Defendant corporation was formed in 1911 with $200,000 capital stock all owned by Kohl. In …

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Public Utility Holding Company Act - Corporate Simplification And Geographic Integration Under Section Ii, Brackley Shaw Jun 1938

Public Utility Holding Company Act - Corporate Simplification And Geographic Integration Under Section Ii, Brackley Shaw

Michigan Law Review

Section II of the Public Utility Holding Company Act of 1935, the so-called "death sentence" clause, carries the specifications for achieving two of the government's main objectives in passing the act: corporate simplification and geographical integration of the large utility holding company systems.

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Taxation - Capital Gains Tax (Revenue Act Of 1928) - Reorganizations - Definition Of A Party To A Reorganization, Milton A. Kramer May 1938

Taxation - Capital Gains Tax (Revenue Act Of 1928) - Reorganizations - Definition Of A Party To A Reorganization, Milton A. Kramer

Michigan Law Review

Although "certainty" is one of the most desirable features of taxation, that quality has been conspicuously absent in regard to the portions of the 1928 Revenue Act which deal with capital gains in corporate reorganizations. In the four situations which the act sets forth as constituting a reorganization, capital gains arising therefrom are exempt from tax computation, the general purpose being to remove any impediment to normal corporate adjustments and to prevent the recognition of gains or losses until they are actually realized. However, this provision soon became an invitation for ingenious counsel to arrange the sales of corporate assets …

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Associations - Massachusetts Trusts - Personal Liability Of Trustees On Contracts, Michigan Law Review May 1938

Associations - Massachusetts Trusts - Personal Liability Of Trustees On Contracts, Michigan Law Review

Michigan Law Review

The trustees of a business trust, by their agent, accepted seven trade acceptances in which there was no stipulation against the personal liability of the trustees. The trust instrument under which the business was operating provided that the trustees were to be under no "personal obligation or liability of any kind," and that all having transactions with the trustees are put on notice that no trustee or subscriber is personally liable, and further, that in all contracts made by the trustees, "specific mention shall be made therein of this trust to the end that any and all parties must look …

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Corporate Nationality And The Neutrality Law, Paul Weidenbaum Apr 1938

Corporate Nationality And The Neutrality Law, Paul Weidenbaum

Michigan Law Review

Even a superficial reading of the neutrality law indicates that certain problems of corporate entity and nationality are of utmost importance for its future working. This act seeks to give protection from certain real or assumed dangers. The problem arises whether such purpose cannot be wholly frustrated by the simple means and ways afforded by incorporation. This problem has never been hidden.

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Corporations-Foreign Corporations-Entrance Fees-Constitutionality, Charles E. Nadeau Apr 1938

Corporations-Foreign Corporations-Entrance Fees-Constitutionality, Charles E. Nadeau

Michigan Law Review

A Virginia statute, providing that foreign corporations desiring to carry on intrastate business there must pay an entrance fee graduated according to authorized capital stock, imposed on plaintiff a fee of $5,000. Only two-thirds of plaintiff's authorized stock was issued. A considerable amount of its assets were used in interstate commerce, though the sum invested in Virginia was negligible. Plaintiff contended that such an entrance fee burdened interstate commerce because measured by property used in interstate commerce, that it denied due process because measured by property without the state, and that it denied equal protection of the laws becaused measured …

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Corporations - Validity Of Contract Executed During Suspension Of Charter For Failure To File Proper Annual Report - Effect Of Innocent Mistake, Ralph Winkler Apr 1938

Corporations - Validity Of Contract Executed During Suspension Of Charter For Failure To File Proper Annual Report - Effect Of Innocent Mistake, Ralph Winkler

Michigan Law Review

A Virginia statute, providing that foreign corporations desiring to carry on intrastate business there must pay an entrance fee graduated according to authorized capital stock, imposed on plaintiff a fee of $5,000. Only two-thirds of plaintiff's authorized stock was issued. A considerable amount of its assets were used in interstate commerce, though the sum invested in Virginia was negligible. Plaintiff contended that such an entrance fee burdened interstate commerce because measured by property used in interstate commerce, that it denied due process because measured by property without the state, and that it denied equal protection of the laws becaused measured …

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Corporations - Corporate Seal - When Affixing Seal Makes The Instrument A Specialty, Edward D. Ransom Mar 1938

Corporations - Corporate Seal - When Affixing Seal Makes The Instrument A Specialty, Edward D. Ransom

Michigan Law Review

The plaintiff contracted to buy gasoline from a subsidiary of the defendant. The lengthy contract was signed at the end by the proper officers and in juxtaposition to the signatures were the corporate seals of both parties. The contract contained a recital of sealing. On a separate page, but attached to the contract, was a guaranty by the defendant of the subsidiary's performance. This also was sealed with the corporate seals of both parties adjacent to the signatures of the officers. No mention of sealing was contained in the guaranty. On default by the subsidiary, the plaintiff sued on the …

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Corporations-Amendment Of Charter - Fundamental Change Of Purpose, Michigan Law Review Feb 1938

Corporations-Amendment Of Charter - Fundamental Change Of Purpose, Michigan Law Review

Michigan Law Review

Plaintiff, a cooperative association incorporated under the laws of Minnesota as a wholesaler of oil, sued defendant, a member of the cooperative, for goods sold and delivered. Pursuant to the statute which provided that such cooperatives may amend their articles by a vote of the majority of the membership "in respect to any other matter which the original articles of incorporation of the same kind might lawfully have contained," plaintiff's articles of incorporation had been amended, adding to the original purposes "any mercantile, jobbing, wholesale and retail, mining, manufacturing and mechanical business on the cooperative plan." These were all objects …

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Corporations -Amendment Of Charter - Power Of Legislature To Authorize, Michigan Law Review Feb 1938

Corporations -Amendment Of Charter - Power Of Legislature To Authorize, Michigan Law Review

Michigan Law Review

Remington Rand, Inc., by amendments to its charter authorized by laws passed subsequent to its incorporation, reclassified its stock so as to extinguish $26.25 dividends cumulated on the first preferred stock. The complainant was owner of some of the first preferred stock. He filed a bill in equity to invalidate the reclassification, to compel restoration of the original capital structure, and to compel the payment of the cumulated dividend so extinguished. Held, complainant cannot succeed as to his demand for invalidation of reclassification and restoration of the capital structure because of laches. He cannot force the payment of dividends …

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Joint Adventure - Relationship Distinguished From That Of Employer-Employee, Wayne E. Babler Feb 1938

Joint Adventure - Relationship Distinguished From That Of Employer-Employee, Wayne E. Babler

Michigan Law Review

The taxpayer had an arrangement whereby he planned to furnish the Russian Government with shrapnel shells by farming out the various stages of manufacture to several different companies. A Canadian corporation, also having a contract for furnishing shrapnel, made arrangements with the taxpayer whereby the latter cancelled his contract and went in with the Canadian corporation. Under this arrangement the taxpayer was to furnish his manufacturing arrangement, plans, tools, gauges, drawings, etc., and to get fifteen per cent of the profits on the present contract and five per cent of the profits on future contracts of a similar nature. An …

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Corporations - Alteration Of Charter Under Reserved Power - Change In Remedy To Enforce Stockholders' Liability, Michigan Law Review Jan 1938

Corporations - Alteration Of Charter Under Reserved Power - Change In Remedy To Enforce Stockholders' Liability, Michigan Law Review

Michigan Law Review

The constitution of Maryland of I 867 provided that owners of bank stock should be liable for debts of the corporation to an extent equal to the value of the stock owned by them. The bank in which the defendants owned stock was organized under legislation of 1870 containing the provision, "this act and every part of it may be altered from time to time, or repealed by the legislature." The Maryland court held that, while the constitution provided no remedy, the right was conferred on each creditor in his individual capacity to be enforced by separate suits against those …

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Corporations - Corporate Form Used To Evade Bank Double Liability, Michigan Law Review Jan 1938

Corporations - Corporate Form Used To Evade Bank Double Liability, Michigan Law Review

Michigan Law Review

Plaintiff, the receiver for an insolvent bank, sued the individual stockholders of an investment corporation on an assessment to the amount of the par value of the bank stock as provided by the constitution and statutes of South Carolina. The investment corporation had been organized several years previously to secure control of a group of banks. Its holdings throughout consisted only of bank stock, and finally solely of stock of the closed bank. Plaintiff claimed, since the corporation had no assets, that the stockholders of the investment corporation were individually liable, because the use of a holding company for the …

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The Power To Carry On The Business Of A Decedent, Harry Adelman Dec 1937

The Power To Carry On The Business Of A Decedent, Harry Adelman

Michigan Law Review

The continuation of a business for the sole purpose of making a profit is clearly beyond the scope of liquidating the estate of a decedent. It is rather a trust of the business, created for the benefit of the creditors of the decedent and persons entitled to share in the distribution of the estate. The business is managed as a normal going concern, on a somewhat permanent basis, rather than as a temporary means of preserving the value for an advantageous sale.

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Bankruptcy - Corporate Reorganization - Effect Of Release Of Collateral Obligor On Dissenting Creditors, Edward D. Ransom Dec 1937

Bankruptcy - Corporate Reorganization - Effect Of Release Of Collateral Obligor On Dissenting Creditors, Edward D. Ransom

Michigan Law Review

The federal district court confirmed a plan of reorganization of debtor corporation, under section 77B of the Bankruptcy Act, which expressly released defendant from liability as guarantor of bonds of the corporation and provided for cancellation of the bonds and substitution of new certificates of stock. The plaintiff, a bondholder, made no objection when the plan was submitted to the court; objection by other bondholders was overruled. The plaintiff brought suit in municipal court on the defendant's guaranty. Defendant pleaded the confirmation of the plan by the district court as res adjudicata. The trial court denied the plea and entered …

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Corporations - Priority Between Parent Corporation And Preferred Stockholders Of Bankrupt Subsidiary, Erwin S. Simon Nov 1937

Corporations - Priority Between Parent Corporation And Preferred Stockholders Of Bankrupt Subsidiary, Erwin S. Simon

Michigan Law Review

It is well settled that when an undercapitalized subsidiary corporation is bankrupt, the claims for money loaned by the parent corporation which has dominated the subsidiary will be subordinated to the claims of other creditors. An analogous problem, which has seldom, if ever, been directly passed upon, is the priority between the claims of the nonvoting preferred stockholders of the subsidiary and those of the dominating corporation which owns all the common voting stock of the subsidiary. In spite of the fact that intercorporate loans are a common and approved method of financing subsidiaries, the question has heretofore been relatively …

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Charities - Corporation Organized For Political Purposes As A Charitable Organization, Charles R. Linton Nov 1937

Charities - Corporation Organized For Political Purposes As A Charitable Organization, Charles R. Linton

Michigan Law Review

A statute provided, in substance, that bequests in a will to charitable organizations may not collectively exceed one-third of the estate of a testator leaving heirs. Plaintiff, a legatee under a will, appealed from a decree which found the American Jewish Congress was not a charitable organization and therefore was entitled to the full sum bequeathed to it. Among the corporate purposes stated in the articles of incorporation were: (a) to further the development of the Jewish National Home in Palestine, and (b) to secure and maintain equality of opportunity for Jews everywhere. Held, decree reversed; although incorporated for …

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Corporations - Power Of Attorney To Transfer Stock On The Books Of The Corporation, Royal E. Thompson May 1937

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 …

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Corporations - Ratification Of Unauthorized Withdrawal Of Funds By An Officer Of A Corporation, Walter Probst Jr. May 1937

Corporations - Ratification Of Unauthorized Withdrawal Of Funds By An Officer Of A Corporation, Walter Probst Jr.

Michigan Law Review

The president of a corporation withdrew funds from the corporation with which to purchase stock for his own personal benefit. He used this money so as to save the brokerage cost of his securities. A great deal of the money was repaid a few days after its withdrawal. The board of directors, discovering these activities, approved all past actions and present loans of the president. Held, the attempted ratification by the board of directors did not relieve the president from his duty of accounting for the profits realized on the stock purchased with the funds, since there had not …

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Corporations - Foreign Corporations - Service Of Process Based Upon Solicitation, Donald H. Larmee Apr 1937

Corporations - Foreign Corporations - Service Of Process Based Upon Solicitation, Donald H. Larmee

Michigan Law Review

The question of just when a foreign corporation is amenable to process for an in personam action has long troubled the courts. To one who is seeking a clear and applicable formula, the cases in this field offer but little aid because of the confusion created by the multitude of decisions upon the problem. The decisions of the United States Supreme Court itself are of no great assistance in deriving such a formula. Many attempts have been made by legal writers to define a working rule for this problem as a whole. However, the present writer will endeavor only to …

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Corporation Statutes As The Answer To Parent-Subsidiary Liability, Elvin R. Latty Mar 1937

Corporation Statutes As The Answer To Parent-Subsidiary Liability, Elvin R. Latty

Michigan Law Review

The purpose of these few pages is to call attention to the view concerning the liability of a parent corporation for obligations of its subsidiaries set forth in a comment in a recent number of the Review.

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Corporations - Power Of Majority Stockholders To Reorganize By Transfer Of Assets To New Corporation In Exchange For Stock, Kenneth K. Luce Feb 1937

Corporations - Power Of Majority Stockholders To Reorganize By Transfer Of Assets To New Corporation In Exchange For Stock, Kenneth K. Luce

Michigan Law Review

A private corporation is solvent and prosperous but is nearing the time when its charter will expire. The directors call a stockholders' meeting at which the majority of the stockholders vote: first, to form a new corporation and, second, to transfer all the assets of the old corporation to the new corporation in consideration for the entire capital stock of the new corporation and the assumption by the new corporation of all liabilities of the old corporation. The plan further provides that the old corporation is then to be dissolved, and the stock of the new corporation is to be …

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