Jacobs v. E. Bement's Sons

Blair, J. I am of the opinion that the circuit judge reached a correct conclusion in this case. The maintenance of the plaintiff’s suit depends upon whether or not the provisions of section 8534, 3 Comp. Laws, apply to proceedings for the voluntary dissolution of a corporation under chapter 300 thereof. I think that section does not apply. It is a familiar rule of construction that— “When, after an enumeration, the statute employs some general term to embrace other cases, the other- cases must be understood to be cases of the same general character, sort, or kind with those named.” Brooks v. Cook, 44 Mich. 617 (7 N. W. 216, 38 Am. Rep. 282). See, also, Macumber v. Booming Co., 52 Mich. 195 (17 N. W. 806); Roberts v. City of Detroit, 102 Mich. 64 (60 N. W. 450, 27 L. R. A. 572); People v. Shurly, 124 Mich. 645 (83 N. W. 595). In accordance with this rule of construction, the words “or otherwise” in the provision of section 8534 that “all corporations whose charters shall expire by their own limitation, or shall be annulled by forfeiture or otherwise,” etc., should be referred to termination of the corporate existence by circumstances or acts not dependent upon the voluntary action of the corporation and not to voluntary proceedings in behalf of the corporation. Heap v. Manufacturing Co., 97 Mich. 147 (56 N. W. 349). In that case it was held that a forfeiture of the charter of a manufacturing corporation could only be adjudged at the suit of the State through its attorney general. The provisions of section 8534 are reasonable and beneficial as applied to a corporation whose charter has expired or whose charter has been adjudged forfeited at the suit of the attorney general. The provisions of the section, if sought to be applied to proceedings under chapter 300, would be in conflict with the plain provisions of the chapter and introduce great eonfu [418] sion into such proceedings. Section 8 of the chapter, being section 10859, 3 Conap. Laws, provides for the entry of a decree of dissolution “and such corporation shall thereupon be dissolved and shall cease.” In the language of Mr. Justice Campbell : “All the subsequent proceedings go upon the basis that there is no longer any corporation, and they are intended to secure the collection and distribution of the assets in complete analogy to proceedings concerning the estates of deceased persons and concerning insolvent estates. The receivers are put by two different sections on the footing of trustees of insolvents, and it is the insolvent law that gives the rule concerning references which are to be had under ‘the same power’ and with the like effect.” Cady v. Manufacturing Co., 48 Mich. 133 (11 N. W. 839). Furthermore, the provisions of chapter 300 relative to the voluntary dissolution of corporations were enacted later in point of time than the three-year clause, which “ was adopted when all corporations were created by special charter and when no power had been reserved to repeal any charter, except for cause.” Bewick v. Alpena Harbor Co., 39 Mich. 700. Sections 10886-10889, appear to me to support my conclusion, since these provisions are unnecessary so far as corporate litigation is concerned, if section 8534 applies. That section provides: “All corporations whose charters shall expire by their own limitation, or shall be annulled by forfeiture or otherwise, shall nevertheless continue to be bodies corporate, for the term of three years after the time when they would have been so dissolved, for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their concerns, to dispose of and convey their property, and to divide their capital stock; but not for the purpose of continuing the business for which such corporations have been or may be established.” The section contemplates the existence of the company for the purpose of gradually winding up its affairs with all the powers it had prior to the annulment of its charter, except those relating to the continuance of the business. [419] Such powers are manifestly repugnant to the scheme of chapter 300, which imperatively provides (section 10859): “Upon the coming in of the report of the master, if it shall appear to the court that such corporation is insolvent, or that for any reason a dissolution thereof will be beneficial to the stockholders, and not injurious to the public interest, a decree shall be entered, dissolving such corporation, and appointing one or more receivers of its estate and effects; and such corporation shall thereupon be dissolved and shall cease.” By Act No. 96, Pub. Acts 1905, section 10862 was so amended as to confer upon the receivers power to continue the business of the corporation “ for a period not exceeding sixteen months and to sell the property and assets of such corporation at private sale in the usual course of its business,” etc. The corporation cannot cease and be in existence at the same time. It cannot have the right to prosecute and defend suits itself when the only provisions in this regard in chapter 300 require that pending suits must be conducted by the receivers, although they may use their own names or the name of the corporation, and also that new suits must be conducted by the receiver in his own name or the name of the corporation. In either case it is the receiver that gives vitality to the prosecution or defense, whether he uses his own or the corporate name. As Mr. Justice Campbell remarked, the corporation in relation to the receiver occupies the position of a dead person to his executor. The shadow of the name alone remains. Section 10889 is not in conflict with section 10859, and should be construed in harmony with it. The fact that the court in which a suit is pending against the corporation may make an order for its continuance until final judgment affords no justification for wiping out the provision that after the appointment of a receiver the corporation “ shall cease.” Section 10865 indicates, as do all of the other essential sections, that the corporation does not have control of its defense. It provides that, after the filing of the petition for a dissolution,— [420] “All judgments confessed by such corporation after that time, shall be absolutely void as against the receivers who may be appointed on such petition, and as against the creditors of such corporation.” As the receivers become vested with “all the estate, real and personal, of such corporation,” how is the corporation to defend itself ? Manifestly, I think, through the receiver, who has its assets, and therefore the means of making a defense, and he will conduct the defense just as he may prosecute the suit of the corporation under section 10886 in the name of the corporation. Again, the appellant is not claiming the right to prosecute to final judgment a suit pending, against the receiver, at the time of its dissolution, for which provision is made by section 10889, but to institute an entirely new proceeding against the corporation after the receiver has been appointed, and he has presented his claim against the estate in his hands. And, if he may do this, he and all the other creditors may wait until the estate has been settled and the receiver discharged, provided the three years have not elapsed. No one, I think, would have the hardihood to contend that the corporation could continue after the appointment of the receiver “gradually to settle and close their concerns, to dispose of and convey their property, and to divide their capital stock.” I am also of the opinion that the receiver has full power to reach all assets of the dissolved corporation which could be reached by any creditor, and that such assets ought to be disclosed to such receiver by any creditor who has knowledge of them, for the benefit of all the creditors. 3 Comp. Laws, § 10866; Osgood v. Laytin, 48 Barb. (N. Y.) 463; 22 Enc. Pl. & Prac. 1286; Attorney General v. Insurance Co., 77 N. Y. 272; American Steel & Wire Co. v. Eddy, 130 Mich. 266 (89 N. W. 952). The judgment is affirmed, with costs to defendant. Ostrander, Moore, Brooke, and Stone, JJ., con. curred with Blair, J.