Corporate by-laws adopted under and following Act No. 84, Michigan Public Acts of 1921, required that directors be chosen from stockholders, the positions to become vacant should the directors dispose of their stock. In 1931 the statute was changed, now reading that "directors . . . need not be shareholders unless the articles so provide." The by-laws were not altered. Qualified directors subsequently disposed of their stock and petitioned the chancery court under the statute for dissolution of the corporation and appointment of a receiver. Appealing from an order granting that petition, creditors and stockholders of the corporation contended that the directors were not qualified and could not give the court jurisdiction. Held, the change in statute did not affect the by-law requirements; hence, petitioners were not directors de jure. But the court had jurisdiction to entertain the proceedings because they were de facto directors. In re Petition of Andrews, 265 Mich. 661, 252 N. W. 482 (1934).
CORPORATIONS-QUALIFICATIONS OF OFFICERS-EFFECT ON EXISTING BY-LAWS OF CHANGE IN STATUTE,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol32/iss8/14