Compo v. Jackson Iron Co.

16 N.W. 295, 50 Mich. 578, 1883 Mich. LEXIS 863
CourtMichigan Supreme Court
DecidedJune 13, 1883
StatusPublished
Cited by7 cases

This text of 16 N.W. 295 (Compo v. Jackson Iron Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Compo v. Jackson Iron Co., 16 N.W. 295, 50 Mich. 578, 1883 Mich. LEXIS 863 (Mich. 1883).

Opinion

Campbell, J.

(Minority opiniom) The object of the bill in this case is to obtain an accounting and other proper relief against defendant, by reason of an agreement made by the association now represented by defendant and existing in 1846, promising and securing to an Indian Chief named in the record Marji Gesick, twelve thirty-one hundredths of the mining property in Marquette county, originally known as location 593, owned and worked by defendant. The bill is substantially the same as when before us on demurrer, as the case is reported in 49 Mich. 39. It will only be necessary, therefore, to refer to the facts in evidence and the views taken of them by the parties.

In 1846 a joint stock association was in existence, unincorporated, organized chiefly by persons who had resided in Jackson, Michigan, the purpose of which was to pursue mining enterprises on Lake Superior. The affairs were managed for ordinary purposes by five trustees, including a president and secretary. The interests were divided into 3100 shares, of which 500 were treated as paid in full and unassessable, and the rest assessable. The paid up shares were to be used for sale to raise funds. The remaining 2600 shares were in private hands. It was contemplated by these articles that all lands purchased or otherwise procured should be dealt with as company property, on the footing of personalty, and the interests of share-holders be treated as personal property on the basis of partnership or corporate interests.

In 1845, before the' surveys were completed, and before any lands in that region were ready for sale or entry, the war department issued location warrants, commonly called permits, to individuals to authorize them to explore and locate tracts of one mile square, and on certain conditions to obtain leases of such locations which contemplated further . extensions unless Congress should legislate and provide for [580]*580sales. Some members of the company went up to Lake Superior and prepared to explore. Marji Gesick being with his people at L’Anse, which is considerably further up the lake, and being regarded as well qualified to give useful information concerning mineral deposits, Mr. Everett, one of the company’s agents, sent for him to assist them. Marji Gesick came over and showed them the iron mine in question, and the location was made by placing the centre near the principal outcrop, and surveying a square mile including it. This land was then included in a permit which had been issued to James Ganson, but was owned by the company. In due- time a lease was granted on the usual terms by the War Department. In 1847 Congress passed an act whereby lessees who had performed their conditions were allowed a pre-emption at $2.50 an acre. It does not appear distinctly how soon these lands were surveyed into' sections and open to formal entry, but the incorporated company obtained a pre-emption under the lease and finally became patentees. Some question was made on the argu'ment whether this title could be regarded as obtained under the permit and lease. It appears, however, that such was the ground on which the Land Office proceeded, and it is not open to controversy collaterally. There can be no doubt on the facts that the company could not have secured the property at the price in any other way.

In the summer of 1846, the directors sent up two of their members, Mr. Berry the president, and Mr. Kirtland the secretary, to attend to matters on Lake Superior, and gave them a formal authority in the shape of a power of attorney, signed by two directors other than these officers. These gentlemen came to a settlement with Marji Gesick for his services and gave him a writing signed by them officially, whereby it was agreed he should have an interest of twelve thirty-one hundredths in the location, and this is the interest in dispute.

The question is now made whether this instrument created any valid interest., It is first objected that it was made without authority. It is not seriously disputed that such an [581]*581arrangement could have been made by the board of directors as such. But it is said that two directors out of five could not grant such a power. It does not appear to us that any such difficulty exists. The articles expressly authorize action by a majority of the directors. It must not be overlooked that this was nothing more than a partnership, managed by a body of selected persons called directors. When the articles provided for a president and secretary it must be assumed that these officers were expected to execute such papers as might be proper to bind the company, and might as directors concur with others in determining what their duty in various cases should be. The power which was given them must be regarded as emanating from all of the four directors who agreed upon it. They cannot be excluded in the proceeding. And inasmuch as the instrument is one not apparently beyond the proper functions of a general agent of the company, it would not be incumbent on Marji Gfesiek to go behind or question the authenticity of an agreement bearing the signature of the only persons who usually act for such bodies. We think it bound the company, and we think the officers did not exceed their powers actual or presumptive.

Inasmuch as the instrument in question operated to give the grantee an absolute right to the shares mentioned in the mining location, it was equivalent to twelve full paid and unassignable shares in the company, and was so regarded in a subsecpient proceeding. It does not appear from the record whether certificates had been issued to the various share-owners. But their rights did not depend on the certificates, although these are the usual evidences of title.

In 1848 an act of incorporation was obtained from the State of Michigan, which appears plainly from the record to have been at the instance and for the benefit of this company, which deliberated as a body upon accepting the charter, and settled in advance upon the rights of members. In the preliminary action the rights of Marji Gesick and of some other Indians were expressly recognized and directed to be provided for, and were as before suggested [582]*582regarded as equivalent in character to unassessable shares. Some difficulty seems to have been found in the fact that the 500 shares before referred to had been sold. The committee directed to make the proper arrangements do not seem to have done anything. But this action not only recognized the right of Mar ji Gesick, but contemplated that it should pass into the new organization, as it must have done equitably, inasmuch as all of the partnership property became the property of the corporation. And it, for the same reason, passed into the present corporation, which is the successor of the old one, precisely as that succeeded its immediate predecessor, unless in some way wiped out of lawful existence. The proportionate, interest in the corporate fund must still exist in Marji Gesick’s successors unless destroyed by lapse of time. No other reason is to be found for denying its existence. We have not overlooked the fact that the company has other property, but under all the circumstances it is evident .that the whole concern has sprung up chiefly if not entirely from the mine or its proceeds, out of which the original outlay has been refunded.

Marji Gesick died, as nearly as we can determine from the record, about 1861 or 1862.

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Cite This Page — Counsel Stack

Bluebook (online)
16 N.W. 295, 50 Mich. 578, 1883 Mich. LEXIS 863, Counsel Stack Legal Research, https://law.counselstack.com/opinion/compo-v-jackson-iron-co-mich-1883.