Court Opinion

ID: 8510876
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:39:56.258818+00
Date Added: 2024-06-11T16:51:06.086403
License: Public Domain

By the Court.
M. was the owner of sixty shares of stock in a-private corporation, and on November 11th, sold fifty shares of his stock to C., which shares of stock were on that day transferred on the books of the corporation. On January 1st, following, a dividend was declared by the corporation. M. demanded and received from the corporation such proportion of the dividend"on the fifty shares of stock sold to C., as the time from June 30th, to November 11th bore to the whole time from June 30th, to the date when the dividend was declared, upon the claim that it had been verbally agreed between him and C. at the time of the sale of the fifty shares of stock, that he was to receive the dividends earned by the stock from June 30th, to November 11th, and that C. was to receive the dividends earned by.the stock after November 11th.
C. having by suit compelled the corporation to pay him the portion of the dividend on his fifty shares of stock obtained by M., suit was brought by the corporation against M. to recover the money recovered by C. in his action against the corporation.
Held: That a certificate of stock in a private corporation represents the interest the owner and holder of it has in the entire assets of the corporation; and such holder is entitled to such proportion of any dividend, whether of what may be termed profits, or of the entire assets of the corporation, as his stock, at the time such dividend is declared, bears to the entire stock of the corporation.
2. All increase resulting from the business of the corporation is but an addition to the assets of the corporation, to which the holder of such certificate has no legal title.
3. The corporation being the legal owner of all the assets of the corporation, and each certificate of stock being but the evidence of the proportion of the assets to which the holder thereof would be entitled on a division or distribution, it follows that an assignment of such certificate passes to the assignee thereof the proportion of the entire corporate assets such certificate represents; *270and such assignee would be entitled to receive all dividends thereafter made while he remained the owner of such certificate.
Saltzgaber & Glenn, for plaintiff in error.
H. G. Richie, for defendant in error.
4. That as no profits are earned by the stock of a corporation, no reservation of the portion of the dividend then earned can be made upon a sale and transfer of such certificate of stock.
o. From these conclusions it follows, that at the time M. sold the fifty shares of stock to C., such sale and transfer vested in C. all the incidents thereto, including the right to all dividends thereafter, made.
6. The corporation being liable to C. for the full dividend on his fifty shares of stock, and M. having obtained a portion of the dividend due C., he was liable to the corporation for the amount he so wrongfully obtained.
For these reasons the judgment of the court of common pleas' must be affirmed.