claimed that the property is rich in iron ore to a great depth, and at the present time is of the value of $200,000.

After the death of Mr. Saxton, the record shows that the business of the Breen Mining Company was conducted by the surviving stockholders, and that the secretary of the company was very active in its affairs. During this time two others of the original incorporators, Ingalls, and Bartley Breen, died, leaving but two of the original incorporators living, namely, Thomas Breen and Oscar M. Saxton. The business of the corporation during this period was not prosperous, and as the time of the expiration of the 30-year period of the corporate existence of the Breen Mining Company approached, which would occur January 22, 1902, the secretary of the company made successive attempts to bring about some disposition of its assets for the purpose of paying its debts, claiming that considerable indebtedness was owed by it. The record shows that taxes had been allowed to become delinquent and tax titles had been acquired by the wife of the secretary of the corporation, who was heir of one of the deceased incorporators and was a stockholder at the time. Options were solicited from the stockholders and acquired by the secretary for the purpose of making a sale or leasing of the property, but expired without a sale or leasing having been consummated. Finally the secretary undertook a reorganization of this company which was to be brought about by giving a deed absolute in form of all of the corporate property to the secretary's wife for the sum of $3,800, which in fact was to be a conditional deed to be held by her upon certain conditions for the purpose of reorganization of the Breen Mining Company into a new corporation, to be known as the Breen Iron Company, which property so conveyed in trust for all the stockholders and creditors

181 Mich.-14.

of the Breen Mining Company was to be conveyed by the wife of the secretary to the new corporation. To carry out this purpose a meeting of the stockholders of the Breen Mining Company was called to be held December 26, 1901. This meeting was adjourned to January 3, 1902, at which time the following resolution was presented by the secretary and acted upon, as appears from the record of the meeting:

"A. L. Sawyer then presented and moved the adoption of the following resolution, to wit:

"Resolved, by the stockholders of the Breen Mining Company, that all the real estate of said company, the same being the northwest quarter of the northeast quarter and the north half of the northwest quarter of section twenty-two (22), town 39 N., R. 28 W., in Dickinson county, Michigan (excepting only and reserving such surface rights to lots and streets in the village of Waucedah as have been heretofore granted and conveyed by said Breen Mining Company to others, but including all mineral rights in such lots and streets and including all lots not heretofore conveyed by this company in the platted portion of the village of Waucedah in said county), be sold and conveyed to Josephine S. I. Sawyer for the consideration of $4,000.00, and that the directors of said company be and they are hereby authorized and directed to cause the proper officers of this company to make conveyance of said property to said Josephine S. I. Sawyer for said sum, which said sum is to be used in canceling the mortgage bonds and other indebtedness of this company, and the taxes upon said property; and whereas, a large portion of said indebtedness is due to members of the family of Josephine S. I. Sawyer; and whereas, the term of existence of this corporation is about to expire, and it is the desire of the stockholders hereof to preserve the right to retain an interest in said property proportionate to the interests represented by their respective holdings of the stock of this company, upon the payment by them, respectively, of like proportionate shares of the debts of this company, the unpaid taxes on said lands, and the expenses of organizing a new corporation; and whereas it is deemed desirable that such lands be held by a corporation to be capitalized on a low basis and in such a way as to make provisions for meeting the expenses and disbursements incident to its existence, and its holding property: Therefore, be it further resolved, that the conveyance of said

property above authorized to be made may be made in form absolute to the said Josephine S. I. Sawyer without the expression therein of any trust, but that nevertheless the title to said property shall be taken by said Josephine S. I. Sawyer on condition that she shall perform the trust herein specified, to wit: She shall cause to be incorporated under the laws of the State of Michigan a company to be capitalized at the sum of ten thousand dollars, one-half of which capital is to be paid in by the conveyance of said above-described property by said Josephine S. I. Sawyer to said newly organized corporation, concurrently with its organization. And as consideration for such conveyance to said corporation said Josephine S. I. Sawyer shall subscribe or cause to be subscribed for stock in such new corporation to the extent of at least five thousand dollars. It shall be the privilege of the incorporators of such new corporation to subscribe for all the stock thereof, calling the same one-half paid up, or to subscribe for one-half thereof, making the subscribed stock fully paid and leaving the remainder thereof in the treasury of the company. It shall likewise be the privilege of the incorporators of such company at its first meeting to grant authority to its officers to make sale of the company's land, and likewise to grant authority to issue mining leases and options for mining leases, and options for sale thereof. The stock so to be subscribed for by said Josephine S. I. Sawyer and her associates shall be used in the cancellation of the debts of this company in manner as follows: The said Josephine S. I. Sawyer shall ascertain, as near as may be, the aggregate amount required to pay the debts of this company, the taxes upon said property outside the village lots, or all such taxes and the expense incident to forming such new corporation, and shall apportion the aggregate amount thereof upon the stock of this corporation, share and share alike. The stockholders of this corporation shall be entitled to a like proportion of the subscribed stock of the new corporation as they respectively hold stock in this corporation on condition that they shall pay to said Josephine S. I. Sawyer such sum as may be apportioned to the holdings of such stockholders in this company, as above specified, provided any stockholder in this company to whom any portion of such indebtedness is due shall be privileged to take stock in such new corporation to the extent thereof, limited only by the right of each stockholder herein to take his portion of the stock in the new company upon the terms specified. Any stockholder in this company desiring to take his or her share of the stock in the corporation to be formed and to pay the amount so to be apportioned to his or her holdings of the stock

in this company shall notify said Josephine S. I. Sawyer of such election within ninety days of the date hereof, by written notice. Said Josephine S. I. Sawyer shall thereupon notify each of such stockholders so electing to take stock in the new company of the amount apportioned to such stockholder's stock in this company and such stockholder shall pay or provide for the payment thereof as follows:

"'First.

Such stockholder may set off against the amount so to be paid him or her any amount owing to him or her from this company.

"Second.

Such stockholder may pay in cash any excess of the amount apportioned to him or her over and above the amount so due him or her.

"Third. Such stockholder may execute to said Josephine S. I. Sawyer, in lieu of cash payment, his or her note for any cash payment due, such note to be dated as of this date and to bear six per cent. interest per annum, and made payable on or before fifteen months from this date, and the stock for which such note shall be given shall be held and retained by said Josephine S. I. Sawyer, as collateral security for the payment of such note. The trust hereby conferred upon said Josephine S. I. Sawyer shall be considered fulfilled upon the transferring by her of such stock as shall be paid for under the provisions hereof within a period of fifteen months from this date unless she shall by agreement in writing extend the time of some certain payment or payments to be made to her. In case any debt or tax shall be omitted by mistake, or otherwise, in the making up of the aggregate sum to be apportioned to the stock of this company, as above specified, such debt or tax shall be considered an obligation of such new company. In case any of the holders of stock in the present company shall fail to pay the portions of the indebtedness apportioned to their stock so that insufficient moneys shall be realized to pay the debts and expenses of the new organization, the said Josephine S. I. Sawyer shall only be obligated to pay upon such debts, expenses and taxes such amount as she may receive, and the holders of such unpaid debts may take stock in payment thereof at the same rate that stockholders in this corporation are privileged to take such stock under the provisions hereof.'

"The motion for the adoption of the resolutions was seconded by Thomas Breen, put by the acting president to a vote, and was carried and declared carried by the unanimous vote of all the stock recorded as represented at this meeting."

The stock, which during his lifetime belonged to Salmon P. Saxton, was not represented and voting at such meeting. The total number of shares of the Breen Mining Company outstanding at that time was 20,000, of which 14,853 1/3 shares were represented at this meeting and voted in favor of this resolution. This meeting adjourned until April 14, 1902, to allow stock not represented an opportunity, if desired, to ask a reconsideration of the action taken.

The secretary of the Breen Mining Company had been desirous of obtaining from the executors of the will of Mr. Saxton an approval of the plan of reorganization and a proxy authorizing him to appear for them and vote stock held by Mr. Saxton in his lifetime at the meeting of December 26, 1901, and any adjournment thereof. This proxy, which was dated November 30, 1901, had been prepared by the secretary and sent to one of the executors named in the will of Mr. Saxton with the request that he sign it and secure the signature of the other executor. On January 10th Mr. Henderson wrote a letter to the secretary of the corporation inclosing the prepared proxy signed by himself and Mr. Huff. The record does not show the date upon which this letter with the proxy inclosed was received by the secretary.

The articles of association of the Breen Iron Company were not executed until February 24, 1902, and were filed in the office of the secretary of State March 6, 1902.

Not any part of the one-fifth of the stock of the new corporation, defendant Breen Iron Company, to which they were admittedly entitled, was ever issued to the complainants or to any one representing them for the claimed reason that the executors named in the will were unable to raise funds to pay one-fifth of the claimed indebtedness of the Breen Mining Company.

In January, 1904, a majority of the capital stock of the defendant Breen Iron Company was acquired