CORPORATIONS - NON-PROFIT CORPORATIONS - POWER OF COURT OF EQUITY TO PRESERVE ORIGINAL PURPOSES AND SET-UP OF SUCH A CORPORATION

Authors

W. Wallace Kent, University of Michigan Law SchoolFollow

Abstract

The Osteopathic Hospital was incorporated in 1919 as a nonprofit corporation by five persons who subscribed funds for its support. Its articles provided that the qualifications for trustees, method of filling vacancies in the board of trustees and the manner in which persons could become members should be set out in the by-laws to be adopted by the original incorporators. The by-laws thus adopted provided for a self-perpetuating board of trustees with power in them to amend the by-laws. These by-laws were not questioned until January 20, 1938, when a group of the members attempted to amend the by-laws to permit election of the trustees by the members and the same group purported to elect trustees under such amendments. This bill in equity was brought by those who were trustees previous to January 20, 1938, in conjunction with the hospital, to determine who were the true trustees and also asking injunctive relief. The lower court found for the plaintiffs and enjoined the defendants from further attempts to amend the by-laws or elect trustees. Held, this was a trust and a court of equity had the power to enjoin interference with the intent of the founders. The injunction was properly granted. Detroit Osteopathic Hospital v. Johnson, 290 Mich. 283, 287 N. W. 466 (1939).

Recommended Citation

W. W. Kent, CORPORATIONS - NON-PROFIT CORPORATIONS - POWER OF COURT OF EQUITY TO PRESERVE ORIGINAL PURPOSES AND SET-UP OF SUCH A CORPORATION, 38 Mich. L. Rev. 406 (1940).
Available at: https://repository.law.umich.edu/mlr/vol38/iss3/15