Court Opinion

ID: 8058060
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:34:59.67884+00
Date Added: 2024-06-11T16:37:56.434126
License: Public Domain

Vredenburgh, J.,
(dissenting.) This is a suit brought by the plaintiffs to recover the sum of $850, the same be*95ing the amount of two dividends on 200 shares of the stock of the defendants, declared, respectively, in January and July, 1857.
The special verdict finds that the dividends were, by the direction of the defendants, made payable at the branch office of the Ohio Life Insurance and Trust Company in the city of New York, and that the money to pay the said dividends was deposited in said office before their respective days of payment, and there ready to be paid to the plaintiffs; that the said trust company had been appointed register of the defendants to transfer stock and pay dividends; that notice of the said dividends, and where and when payable, had been advertised in a daily paper in said city, where the said plaintiffs were doing business as bankers, for several days before and after the days of payment; that the plaintiffs failed to draw their dividends until the 21st day of August, 1857, when the said trust company failed.
Do these facts entitle the plaintiffs to recover their dividends from the defendants in an action of assumpsit?
The first question presenting itself is, what was the effect of the declaration of the dividends and placing them in the custody of the trust company? Did it make the corporation a debtor to that amount to each stockholder, or did the dividend, as a chattel, become the property of the stockholder? If it made the corporation a debtor, then it could only be solved by payment. If the dividend, as a chattel, became the property of the stockholder, then the corporation was only liable in ease of a want of ordinary care.
Until the dividend is declared the fund belongs solely to the corporation, and is answerable for its debts; but a dividend is supposed to be a thing done, that the profits are answerable to in actual specie, and are by the declaration separated from the corporation property, and declared to be and then to become the individual property of the stockholder. Neither before nor after the declaration of *96the simple fact of the declaration does the corporation become the debtor of the stockholder. It is a simple declaration that there is such an amount of chattels in their hands, or in the hands of their officers, which the stockholder can take if and when he sees fit. The corporation may or may not be liable for its loss by its own carelessness of the carelessness of its officers, but in its keeping they are only bound to ordinary diligence.
Here no want of such diligence is found by the verdict. It is not shown but that the deposit when made with the trust company was not in good faith, and in that case it makes no difference whether it was lost by the insolvency of the trust company or whether it had been stolen from the safe of the defendants. Le Roy v. The Globe Insurance Company, 2 Ed. Ch. R. 657.
I think the special case shows no right of action in the plaintiffs.
Affirmed, 5 Dutch. 504.