Court Opinion

ID: 5461710
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:38:34.949615+00
Date Added: 2024-06-11T08:32:55.019548
License: Public Domain

Mullin, J.
Before proceeding to consider the questions arising on this appeal, it is necessary to ascertain the points decided by the Court of Appeals in the case of Ehle v. The Chittenango Bank, (24 N. Y. Rep. 548.)
In that case the bank declared a dividend payable in New York state currency. This currency was offered to the plaintiff, but he refused it, as it was then at a discount of one fourth of one per cent, and demanded that he be ■ paid in gold and silver or its equivalent. The general term of the Supreme Court held that the plaintiff was bound to receive the dividend in the property in which it was declared, and that he was not entitled to demand gold *67or silver. The j udgment of the general term was reversed, the Court of Appeals holding that the dividend, when declared, was payable in money; that it thereupon became a debt due from the bank to the stockholder, and could be paid only in the legal currency of the country if insisted upon by the stockholder.
The bank bills, it will be remembered, were tendered and refused. They were not money, and nothing but money could satisfy the plaintiff’s claim.
It necessarily follows that if a dividend cannot be paid in bank bills, which circulate as money, it surely cannot be paid in the worthless bills of an equally worthless government.
I am unable tó perceive why, within the case cited, the plaintiff was not entitled to recover for the dividends expressly declared to be payable in Confederate bills. I had supposed that it was competent for a corporation that had acquired property other than money sufficient in amount to authorize a division of it among the stockholders, to make such division, and that the stockholders were bound to receive it in the property appropriated to them. But if nothing but money will pay a dividend, then, of course, a dividend in property other than money cannot be made.
It is supposed that a different rule prevails where the property divided is the same identical property earned; that when this fact appears, then a dividend in property is admissible. This presents the question, preliminarily, whether the evidence that the earnings of the corporation were received in property other than money is competent; or whether it is not altering the resolution of the directors declaring the dividend, which is the evidence of the indebtedness of the corporation to its stockholders, and is, therefore, inadmissible. If the resolution declaring the dividend is the written admission of an indebtedness, payable in legal currency of the country, and the property *68received, and out of which the dividend is declared, is of less value than it would be if paid in money, then it is incompetent, as it alters the legal effect of the resolution, which is no more admissible than it would be to alter its terms.
If the resolution declaring the dividend should contain a recital that it was made from the same property which it had earned in its business, this technical difficulty might be obviated; but if the corporation can only divide money, as would seem to have been held in the case cited, then it could make no difference whether the recital was incorporated in the resolution or not.
It is not necessary, however, to discuss the question as to the effect of such a recital. It is not in the case, and I am quite certain that the fact cannot be proved by parol, so as to enable the company to lessen the amount to be paid to the stockholder. ' It is a matter of very little importance to the corporation whether it divides the property earned, or converts it into money and divides it. The loss, if any, falls on the stockholders; and as they only are to be affected, I am unable to perceive any reason why a dividend in property is not lawful.
It is conceded that a stockholder must prove a dividend before he can maintain an action for a dividend. And the only remaining question is whether a dividend is proved, in this suit.
The only evidence on the point is that of the stockholder himself, who swears that he went to Savannah in February or March, 1865, and was unable to find the defendant; its place of business was occupied by the Federal army, and the officers had gone, as he was' informed, into South Carolina. In August, 1865, after the return of Crowell from the South, he addressed to the defendants a letter in Which he stated that he still held his stock in the company; that he had received no dividends during the war, and knew nothing of the condition of the company. He desired *69to be'informed of the present condition and prospects of the company, and whether any, and if any, what dividends had been declared during the last four years, and what it was proposed to do in respect to them. This letter was answered by the president, on the 26th of the same month. After detailing the condition of the defendants’ road, and its prospects, the letter proceeds as follows: “ The company regularly declared dividends up to December, 1864, but every dividend, after June, 1861, was declared and made payable in Confederate'currency. The United States have seized all our Confederate notes, bonds, &c.”
It was not true that all the dividends after June, 1861, were declared or made payable in Confederate currency. When this letter was written, that currency was utterly valueless, and demand would not have made it any more valuable^
But if I am right in supposing that the defendants were liable for the four dividends above referred to, then a demand was necessary, unless the defendants by misleading Crowell, have precluded themselves from insisting upon a demand. I do not think that misleading Crowell, if he was misled, could estop the defendants from insisting on proof constituting so essential an element in the plaintiff’s cause of action. Ho demand was proved. The letter of Crowell does not demand the payment of the dividends. He wanted information which was necessary to enable him to make a demand. Ho one reading the letter would imagine that the writer was calling for the payment of dividends; and surely so important a matter should not be left to conjecture. It should be proved by as high evidence as is required to establish any other fact in the case. .
The defendants’ president, in his reply, was not as ingenuous as a man in his position should have been, when dealing with one of his stockholders; but that does not relieve the plaintiff from the performance of a manifest legal duty.
*70The judgment should be reversed, and a new trial ordered, costs to abide the event.