Knight v. Michigan Female Seminary

Carpenter, J.

(after stating the facts). The question presented is this: Have the trustees of the defendant corporation authority to sell its property for the purpose of paying its debts? The act under which it is incorporated (chapter 218, 2 Comp. Laws) does not expressly grant that authority. Neither does it prohibit its exercise. The only authority expressly granted is this:

‘ ‘ To sell, mortgage, let or otherwise use and dispose of *618such property for the benefit of such academy.” 2 Comp. Laws, § 8144, subd. 2.

Complainant says this language does not grant authority to sell for the purpose of paying debts, and he invokes this rule:

The enumeration of powers in the charter of a corporation or in the act under which it is incorporated implies the exclusion of all other powers not enumerated.”

We deem this rule inapplicable. Under other statutes of this State, familiar alike to the legal profession and to laymen, the, first claim upon the property of defendant, legally speaking, was that of its creditors. Under the facts stated in complainant’s bill, these claims would exhaust all of such property. Nor was there any occasion to postpone the devotion of the property to the payment of the claims of creditors, for, confessedly, it hád ceased to be possible to use it for the purpose of a seminary — the purpose for which the fund was created. Under these circumstances, the creditors had a right to. have this property applied to the payment of their claims. The laws of this State gave them that right. It is impossible to say that the creditors had a right to have this property applied in payment of their debts and that the owner of the property had no right to so apply it. This right of the creditors by necessary implication imposed a duty upon the corporation and upon its trustees to sell the property and pay said debts. The rule invoked by complainant might apply if the authority in question were not granted by some other law. Here it is granted by another law. This conclusion is supported by authority. De Ruyter v. St. Peter’s Church, 3 Bar. Ch. (N. Y.) 119, 3 N. Y. 238; People v. Trustees of California College, 38 Cal. 166.

The decree is affirmed.

Grant, C. J., and Blair, Montgomery, and Hooker, J J., concurred.