Case ID: la-ann_41/html/1020-01.html
Source: Caselaw Access Project
Author: {"author": "Fenner, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 10,397.
    Agricole Armant, Testamentary Executor, vs. New Orleans and Carrollton Railroad Company.
    1. Tho dccrco of a court of competent jurisdiction appointing a testamentary executor who has duly qualified stands as prima facie valid; and an exception to the capacity of the executor, not putting at issue tint regularity of his appointment and qualification, hut based on grounds extraneous to the. probate proceeding, throws on flic exceptor the burden of proving them, and, in absence of prooí', the exception, is properly overruled.
    2. Dividends declared on stock in corporations, like irregular deposits in. banks, are payable on demand, and until demand and refusal, prescription does not begin to run against tlie l>crson entitled.
    3. Where the stock of an expiring corporation is merged, into the stock of a new one, organized as its successor, acquiring its franchises and assumiug its obligations, a provision inserted in the charter of the new company forfeiting dividends not claimed within three years from the time when declared, is not binding upon the old stockholders except from the time when, expressly or by implication, they consent thereto by assuming the quality of stockholders in the new company. An old stockholder who has been ignorant of liis rights and of the transfer and who claims his dividends as soon as informed of their existence, cannot be affected by such provision except in futuro.
    
    APPEAL from the Civil District Court for the Parish of Orleans. Rkjhior, J,
    
      
      T. J. Semines cD Legendre for Plaintiff and Appellee :
    A debtor cannot inquire into the validity or invalidity of bis creditor’s will. Heirs and creditors alone can attack contracts and donations made to their xmojudice. The debtor of an estate cannot object to an administration of it on the ground that it owes no debts. Heirs alone can urge that objection. A decree appointing an administrator or executor cannot be attacked collaterally. 28 Ann. 807; 30 Ann. 269.
    A precarious possession cannot serve as the basis of prescription acquirendi cama.. To acquire property by prescription one must possess as owner. C. O. 3510.
    Prescription against an action to recover dividends on stocks runs only from demand on the corporation for payment of same. 34 Ann. 576; 30 Anil.486; 32 Ann.483; 20 ^nn. 381 ; 23 Ann. 300; 11 Pennsylvania 417.
    The act of incorporation of the How Orleans and Carrollton Railroad Company, granted by the Legislature in 1833, and accepted by the stockholders thereof, is a contract.
    Rights acquired under it cannot bo impaired or destroyed. 32 Ann. 1069: Morawetz on Corporations, sections 53, 196,191; Angelí on Corporations, sections 333, 335; Field on Corporations, sections 75, 76.
    Under Article 3 of the Charter of 1882 the New Orleans and Carrollton Railroad Company, defendant herein, expressly assumed the debts, contracts and obligations oí' the company organized in 1833.
    
      John M. .Bonner for Defendant and Appellant:
    Where a succession has been fully administered-and whore there are no debts to be paid a dative testamentary executor should not be appointed twenty-eight years after the death of the testator to bring suit, but the action should be brought in the names of the heirs.
    An action to recover di\ idends on certificates of stock issued by a corporation is a personal action and is prescribed by ten years. R. C. C. 3544; 32 A nn. 488; 34 Ann. 825.
    The charter of a eorporetion constitutes a contract between the corporation and its stockholders, and an art-iclo of the charter providing that dividends not called for in three years shall revert, to the company is valid and binding* on the stockholders.
   The opinion of the court was delivered hy

Fenner, J.

An exception was filed to the right of plaintiff to stand in judgment as testamentary executor on the grounds that the will under which he was appointed is invalid; that, if invalid, it is not shown that it has not been completely executed; and that, as there are no debts due by the succession, in this State, there is no necessity for an executor or administrator.

Tiie exception does not deny that the plaintiff has been regularly appointed and qualified as executor under the decree of a court of competent jurisdiction. Such a decree must be treated as prima facie valid; and even il' it were conceded, argv,mentí gratia, that defendant, a. mere debtor of the succession,- could attack it in this collateral way. yet as the grounds of the attack are matters extraneous to the probate proceeding, the burden of proof would lie on him, and he has offered no evidence whatever on the subject.

On the Merits.

The suit is brought, to recover dividends for many years on thirty-six shares of stock in the defendant company.

The ownership of the stock by the decedent is fully proved, and it is also proved that the dividends have been declared, have never been paid, and stand as due on the books of the company.

The prescription of three and of ten years is pleaded.

Dividends on stock are, like irregular deposits of money in a bank, payable only on demand, and until demand and refusal, prescription does not begin to run against, the person entitled. De St. Romes vs. Levee, 20 Ann. 381; Brown vs. Pike, 34 Ann. 576; State vs. R. R. Co., 6 Gill (Md.) 363; R. R. Co. vs. Hickman, 28 Penn. St. 329; Bank vs. Gray, 2 S. W. Rep. (Ky.) 329.

The defendant finally invokes the provision of its charter passed iu 1882 declaring: “Any dividend not called for within three years from the date of its being made payable shall revert to the company. ”

Defendant is, in effect, the successor of a former corporation bearing the same name whose charter expired in 1883. The stock of the new company was issued to the old company and distributed amongst its stockholders in lieu of their stock in the latter, and the new company assumed all the debts and obligations of the old of whatsoever nature.

The provision above quoted was not contained in the charter of the old company, and, of course, the new company could not destroy, abridge or forfeit rights acquired by the stockholders of the old, without their consent. The provision, therefore, cannot affect dividends which had accrued under the old organization and which the new company bound itself to pay. .

It is claimed, ho wove, that as concerns the dividends declared by the new company, the provision must be enforced.

Wo consider that the provision is binding on all stockholders of the old company who consented to the merging of their stock into the stock of the new company, from the time of such consent, whether given expressly or by implication from acts adopting the change.

Wo hold that by bringing this action for dividends declared by tlie new company, thejilaintiff, and those represented by him, give such consent, and will be bound hereafter by all valid provisions of the charter. But it fully appearing that they were ignorant of the existence of their lights and of all the proceedings had, until shortly before the institution of tliis suit, we. cannot hold that this consent shall rotroact in such manner as to operate a forfeiture of rights of the existence of which they were ignorant.

Judgment allirmod.