This is an action at law to recover on a $500 bond, issued by the Detroit Curling Club, a nonprofit corporation, October 1, 1924, and due October 1, 1939. The bond, secured by trust mortgage, is one of a series aggregating $30,000, issued by the then Detroit Curling Club, which was organized in December, 1916. For failure to file its annual report the charter of the corporation was forfeited September 1, 1931, under the provisions of law at that time applicable, without right to file a delinquent report and revive the charter. The corporation possessed real estate and personal property and the bond issue was to raise money for equipment and improvements. On April 7, 1932, articles of incorporation were executed by seven of the members of the defunct corporation and, April 15, 1932, the defendant, a nonprofit corporation by the same name, was organized and many members of the old corporation were accepted as members of the new upon payment of dues. April 12, 1932, the old corporation, by warranty deed and bill of sale, wholly without consideration, conveyed all of its real and personal property to the new corporation. The bonds of the old corporation were secured by a trust mortgage to the Union Trust Company of Detroit on all the corporate property, real and personal. At the time of such transfer there were bonds to the amount of $21,400 in principal, plus defaulted interest, unpaid.
The deed to the new corporation recited that it was subject to the trust mortgage but contained no covenant or undertaking by the grantee to assume and pay the same. There is no provision in the corporate minutes of either corporation to the effect that transfer of the assets was made a condition *Page 341 that the indebtedness of the old corporation was to be assumed by the new corporation.
The new corporation, in 1933 and 1934, in its annual reports listed a liability of $20,000 on a mortgage, but in its annual reports for subsequent years recited that the mortgage was a lien on the real estate and the club was not liable.
The circuit judge found the new corporation liable on the bond by reason of merger and estoppel.
Defendant appeals.
There was no merger, for the old corporation was defunct and a subject for liquidation only. There was no assumption with promise to pay obligations of the old corporation. The new corporation is not liable to respond in payment of the mortgage bond to plaintiff.
Remedy, if any, is through the trustee, as the property covered by the mortgage has not been released and foreclosure in behalf of all bondholders may be had. There has been no liquidation of the old corporation, no merger in point of law, and no estoppel fastening liability upon the new corporation to respond to plaintiff as holder of the bond sued upon.
The judgment is reversed, with costs to defendant.
SHARPE, C.J., and BUSHNELL, BOYLES, CHANDLER, NORTH, and BUTZEL, JJ., concurred with WIEST, J.