The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-10-27
FIGHT PAYMENT Of
PREFERRED DIVIDENDS
DreNry- Hughes Company Common
Stockholders Don't Want TO He
Eaten Up BY Paying In
earned Profits.

is a firm which has been in the
ing which time the business was con-
Quoted at a loss. liable to its stockhold-
ers for dividends for that period, is
the unusual point of law raised In
the appeal Yesterday granted by su-
preme Court OF Appeals OF Virginia
in the case of the Drewry- Hughes Co.
against G.. w. Throckmorton. The
charter Of the company provides that
the preferred stock issued liz to re-
ceive an annual dividend OF per cent.
which is always to have priority OF
any claims Of the holders of the COM
mon stock. It was on this provision
that the defendant In the case on ap-
peal based his clai,a for dividends.
1t has been shown. however. that
since January, 1917 no earnings have
been made by the company. and that
no dividends could he paid. The case
was first brought before the Law and
Equity Court. and submitted to the
judge of that court for arbitration,
He decided that under the charter,
the dividends on the preferred stock
should he paid as long as tho company
was doing business, and this was
ratified by the court, from which the
appeal was taken.
Operated At a Loss
According to the petition. early in
1914 the Drewry- Hughes Company
was forced into a friendly receiver
ship by three local banks to which the
company was indebted, and the busi-
ness was run under the superintend-
ence OF this receivership. Up to Janu-
airy, 1914, all holders of preferred
stock were paid their dividends. but
since that time the company has not
earned any profits. The company
claims that dividends are not due to
stockholders until they are earned.
and the business under the receiver
ship. and since January. 1914, was
by the company that II under the law
dividends must be paid as long as the
business Is operated. whether thay are
earned or not, this will work to an
undue advantage of the preferred
stockholders, to the burden OF the
holders OF common stock. the profits
OF the former to be paid by tho lat
ter.
Write OF Error Granted.
writ OF error was granted in the
case OF the Norfolk and Southern
Railroad Company against c. r.
Whitehead, on appeal from the decree
OF the Circuit Court OF Princess Anne
County. when the defendant was
awarded $500 for alleged injuries, said
to have been received when a train
of the plaintiff company struck an
automobile Of the defendant
In the case of Benjamin p. Wood
ward against J. w Smith, on appeal
from Circuit Court OF Southampton,
a writ Of error and supersedeas was
also granted. This case involved q
real estate transaction.
The Supreme Court refused the Pc
tttion of the American Seeding Ma
chine Company against the Quesen-
berry Lumber Company, on appeal
from the Circuit Court of Carroll
County. In this case the lower court
decided that only one member of the
lumber company was responsible for
machinery purchased Of the American
Seeding Machine Company, the pur-
chases having been made without the
knowledge and consent OF the two re-
naming members OF the Quesenberry
Lumber Company
Refusal was also made OF the ap-
peal OF Jacob b. Holler against the
Supervisors of Campbell County and
the Peoples National Bank. OF LYNCH
burg, from the decree of the Circuit
Court of the County OF Campbell. The
object of this suit was to restrain
Campbell County from issuing $780,
900 worth OF bonds for road work. the
plaintiff claiming that it was Illegal,
and that the law under which the
authorization OF bonds was made was
unconstitutional