Court Opinion

ID: 9670933
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:28:25.502173+00
Date Added: 2024-06-11T18:16:07.314667
License: Public Domain

*298Ryan, J.
(concurring). I fully concur in my brother’s opinion, but feel compelled to write separately to explicate my reason for holding that the individual liability penalty provision of MCL 450.87; MSA 21.87, hereinafter § 87, is inapplicable to defendant Spencer.
Section 87 serves to suspend corporate powers after ten days of neglect or refusal to file annual reports and/or pay privilege fees, and to impose individual liability on corporate officers for debts incurred in the name of the corporation during the period of neglect or refusal. This suspension of corporate powers is easily remedied by filing the delinquent reports and remitting the overdue fees.
However, after two consecutive years of neglect or refusal to file reports and pay fees, a corporate charter is automatically revoked by operation of law.
"If any profit corporation which has heretofore been, is now or may hereafter be required to file its annual report with and pay a privilege fee to the secretary of state, shall for 2 consecutive years neglect or refuse to file such report and/or to pay such fee, the charter of such corporation shall be absolutely void, without any judicial proceedings whatsoever, and such corporation shall be wound up in any manner provided by this act unless the secretary of state shall for good cause shown extend the time for the filing of such report or the payment of such fee as the case may be. In case of extension of time as provided in this section the secretary of state shall file in his office a certificate showing the length of time granted by such extension: Provided, That in no case shall the total extension of time granted be more than 1 year: And provided further, That such extension of time shall be granted prior to the expiration of the time fixed in section 82 of this act. The provisions of this act are hereby declared to be self-executing.” MCL 450.91; MSA 21.91 (repealed by 1972 PA 284).
*299This voidance does not signal the complete termination of the corporation, but merely marks the end of its existence as an ongoing concern. Thereafter, the corporation is statutorily granted three years to wind up its affairs. MCL 450.75; MSA 21.75 (repealed by 1972 PA 284). See also Stott v Stott Realty Co, 288 Mich 35; 284 NW 635 (1939); Mathews v Life Ins Co of Detroit, 284 Mich 352; 279 NW 858 (1938).
Moreover, a void corporate charter may be reinstated by payment of a penalty in addition to the delinquent fees, and by filing each intervening annual report. MCL 450.431; MSA 21.248(1) (repealed by 1972 PA 284). Once a corporate charter is revived, corporate powers are retroactively reinstated to validate all corporate acts transpiring during the voidance period.
"Upon compliance with the provisions of this act, the rights of such corporation shall be the same as though no forfeiture had been operative and all contracts entered into during such intervals shall become valid.” MCL 450.432; MSA 21.248(2) (repealed by 1972 PA 284).
This Court is bound to implement legislative intent when interpreting statutory enactments. Ballinger v Smith, 328 Mich 23; 43 NW2d 49 (1950). Accordingly, we must view an act in its entirety, reading the pertinent provisions together so as to effectuate the Legislature’s purpose in enacting the law. Roberts Tobacco Co v Dep’t of Revenue, 322 Mich 519, 530; 34 NW2d 54 (1948). Penalty provisions in the nature of that at issue herein must be strictly construed. Goetz v Black, 256 Mich 564; 240 NW 94; 84 ALR 802 (1932); Crosby v Pere Marquette R Co, 131 Mich 288; 91 NW 124 (1902).
I view §§ 87 and 91 as discrete segments on a *300continuum of statutory corporate dissolution. The initial default period commences ten days after the corporation’s first act of neglect or refusal in filing annual reports or paying privilege fees, and continues thereafter until the delinquencies are remedied. Corporate and individual disabilities and liabilities commensurate with this time period are set forth in § 87.
However, after two consecutive years of default the corporate charter is voided, the neglect or refusal period established by § 87 is terminated, and the three-year windup period begins. A new corporate legal status marking a further progression in the process of statutory dissolution commences and all corresponding liabilities and disabilities are established by §§ 91 and 75.
I find persuasive the fact that the penal provisions of § 87 are not expressly carried over into or included within the statutory language of § 91. This omission is indicative of the Legislature’s intention to limit the penalty of individual liability for corporate obligations to those incurred within the two-year period of default delineated by § 87, when construed with § 91.
"Because the statute governing the situation when the goods were delivered is not CL 1948, § 450.87, providing for officers’ liability, but CL 1948, § 450.91, which does not so provide, there is no statutory basis for the plaintiffs claim of liability against defendants as officers of the corporation.” Vlasic Foods Co v Russek, 382 Mich 544, 551; 170 NW2d 827 (1969) (Dethmers, J., dissenting).1
*301Moreover, it would be incongruous to judicially extend the penalty of individual liability for debts incurred in the corporate name beyond the two-year neglect or refusal period, in light of what I perceive to be the legislative purpose in enacting these two independent provisions.
Section 87 is intended to encourage compliance with certain provisions of the state’s incorporation laws and revenue raising statutes by imposing penalties on both the corporation and its officers. Reuter Hub & Spoke Co v Hicks, 181 Mich 250; 148 NW 339 (1914). Two consecutive years of default, despite the imposition of penalties, evidences the likely intent of the corporate officers to abandon the corporate form. Section 91 was enacted to facilitate the dissolution of an inactive corporation, thereby preventing the accumulation of fees and penalties and the possible ad infinitum existence of a defunct corporation. See 16 Wayne L Rev 753, 757, fn 15 (1970). Since the penalty provision of § 87 would do nothing to further this purpose, it should be applied only to corporate debts incurred subsequent to default but prior to the voidance of the corporate charter.
Construing these statutes together, as this Court *302is constrained to do, I reach the inescapable conclusion that the penalty provision of § 87 is limited to the time frame created by the two statutes, to wit, the two-year period of neglect and refusal prior to forfeiture of the corporate charter.
This interpretation is consistent with the rule of statutory construction that penal statutes are to be strictly construed. Because it does impose a penalty, this Court is not free to extend the applicability of § 87 beyond that envisioned by the Legislature. Moreover, the limitation of the § 87 penalty provision at issue herein to the two-year period prior to voidance of the corporate charter harmonizes with the Legislature’s repeal of that provision in 1973 as a result of its harshness and illogic.2
Since Zeeland Feeder Pig became indebted to Bergy Brothers subsequent to the voidance of the former’s corporate charter pursuant to § 91, Spencer cannot be held individually liable, pursuant to § 87, for that indebtedness.
Williams, Levin, and Coleman, JJ., concurred with Ryan, J.
Riley, J., took no part in the decision of this case.

 In Vlasic Foods Co v Russek, 382 Mich 544; 170 NW2d 827 (1969), the Court was presented with a similar issue but neither of the two opinions directed thereto was able to garner a majority of the Justices’ votes. The case was ultimately remanded on narrow grounds, leaving as precedent two nondispositive but instructive opinions. Justice Adams authored an opinion based on the premise that the duty to file annual reports and pay privilege fees ends when the *301corporate charter is voided. However, he would have found the corporate officer individually liable because of the two-year limitation provision of MCL 450.90; MSA 21.90.
"All actions and suits based on the neglect or refusal of the officers of such corporation to make and file the reports required by this act shall be commenced within 2 years after such neglect or refusal has occurred and not afterwards.”
Accordingly, Justice Adams holds that § 87, when read in conjunction with § 90, permits a corporate creditor to sue an officer of a corporation individually for any indebtedness incurred in the corporate name during the two years subsequent to the last date of neglect or refusal. We believe that Justice Adams misperceives the intendment of § 90. It was meant to be a statute of limitations, circumscribing the time period during which a timely accrued cause of action may be initiated, and not as a delineation of that period of time during which a cause of action may accrue.

 See Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 662-663; 213 NW2d 134 (1973), wherein Justice Levin notes, in dictum, the repeal of the penalty provisions of § 87.
"The new Business Corporation Act (1972 PA 284; MCL 450.1101 et seq.; MSA 21.200[101] et seq.) does not bar maintenance of an action on a contract entered into during a period of default in filing an annual report and paying franchise fees. This change in legislative policy might justify reconsideration of existing precedent as the in terrorem purpose of the harsh penalties of the former act are no longer functional.”