Court Opinion

ID: 5191213
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:36:23.298951+00
Date Added: 2024-06-11T08:26:55.173946
License: Public Domain

Williams, J. (dissenting):
; The interlocutory judgment appealed from should be modified as hereinafter stated, and as modified affirmed, with costs to respondent against appellants other than corporation, and with costs to corporation appellants against respondent.
The action was brought to determine the ownership of 225 shares of the capital stock of the defendant corporation and for equitable relief incidental to such ownership. The questions involved may be stated generally to be : '
First, whether the stock was at any time owned by the plaintiff? or the widow,his mother; and, second, whether anything has occurred since to deprive them of such ownership or to prevent plaintiff’s, recovery thereof.
The facts are somewhat complicated and should be clearly understood. There was no case or case and exceptions made or inserted in the record, and I must, therefore, be controlled by the decision of the trial court as to the facts upon which the conclusions of law. were based.
One Thomas Chester died February 18,1884. At the time of his death, and for some time prior thereto, he was the owner of 60 shares of the capital stock of the defendant corporation. The capital stock was then $40,000, divided into 400 shares of $100 each. He left him surviving his widow, Mary P. Chester, and four children, the plaintiff George T. Chester, and Elizabeth Chard, Kate C. Miller and Cora C. Tripp. He left a will, whereby he gave to each of his three daughters $20,000 and to his son a bond and mortgage for $40,000, made by the son and held by the father, and then gave his widow all the residue of liis' estate, real and personal, for her use and benefit during life, and after her death, in fee to his four children,.to be divided equally between them, and made his son and son-in-law, James F. Chard, executors. The will was admitted to probate April 18, 1884, and letters testamentary were issued to the executors named, who qualified and entered upon the. discharge of. *463their duties. On the 29th day of December, 1884, the certificate for the 60 shares of capital stock of the defendant corporation was surrendered by the executor Chard to the corporation and canceled, and a new certificate for said 60 shares was, by the procurement of said executor Chard, issued to the estate of Thomas Chester. On the 14th day of January, 1893, the capital stock of the defendant corporation was increased from $40,000 to $250,000; from 400 to 2,500 shares. Of the 2,100 shares newly issued, 100 shares were set aside as treasury stock and 2,000 shares were divided pro rata among the holders of the old stock, that is, 5 shares of new for each share of old stock. On the 28th day of February, 1893, the corporation issued a certificate for 300 shares of the newly issued stock to the estate of Thomas Chester, based upon its holding of 60 shares of the old stock. The widow, Mary P. Chester, died February 16, 1897, leaving a will whereby she gave all her interest in the' capital stock of the defendant corporation to the plaintiff, George T. Chester, and made him executor. The will was admitted to probate September 25, 1897, and letters testamentary were issued to the executor named, who qualified and entered upon the discharge of his duties.
Before proceeding further with the statement of facts, let us understand the claims made by the parties as to the first question involved herein, the original ownership of the stock, old and new. There is no dispute but that the 60 shares held by the father at the time of his death was a part of the corpus of his estate, and at the death of the widow belonged to all the children, one-fourth to each. The controversy arises over the 300 shares of newly issued stock. The plaintiff claims these shares never belonged to the corpus of the estate, but were income from the estate, and as such belonged to the widow absolutely and passed under her will to the plaintiff absolutely. Of the 360 shares of stock, the plaintiff was concededly the owner of 15 shares of the old stock, and 75 shares of the new stock. The question is whether he was the owner of the remaining 225 shares of the new stock, and this involves the question whether the 300 shares of new stock when issued, belonged wholly to the widow as income, or to the corpus of the estate, to the income from which alone she was entitled during her life. The further facts bearing upon the determination of this question are as follows:
*464The only dividend received by Thomas Chester upon the 60 shares of stock during his lifetime was February 7, 1882, $1,500. A large surplus of earnings was allowed to accumulate, which at the time of his death amounted to $289,341.88. The value of the stock at .the time of his death was $850 per share, in all $51,000,. as appraised in the inventory of the estate, based upon the last yearly statement made by the defendant corporation.
The dividends received by the widow, Mary P. Chester., upon the .60 shares of stock from the time of her husband’s death, until the increase of the capital stock in January, 1893, were: April 15,1884, $1,500; October 9,1884, $3,000 ; October 3,1885, $3,000 ; November 1, 1886, $6,000; December 5, 1887, $1,500; August 20,. 1888, $6,000; August 22, 1888, $6,000; August 31, 1888, $6,000; December 30, 1888, $7,050 ; September 16, 1889, $1,500 ;. January 27, 1891, $1,500; January 30, 1892, $6,000; January 11, 1893, $12,000 ; making in all. for the nine years $61,050, and at the time of the increase of the capital stock the surplus of earnings allowed to accumulate were $443,030.51, an increase during the nine years since the death of Thomas Chester of $153,688.69. After deducting the amount of the stock dividend made in increasing the capital stock $210,000, the surplus earnings still on hand were $233,030.57, which was $56,311.31 less than at the time of Thomas Chester’s death.
The dividends received by the widow, Mary P. Chester, from the time of the increase'of the capital stock, in 1893, until her death, in 1897, upon the 360 shares of stock, were, December 28, 1893, $7,200; January 10, 1895, $7,200; September 25, 1896, $18,000, making in all $32,400, and at the" time of her death the. surplus of earnings allowed to accumulate were $362,006.29, an increase during the four years of $128,975.63. These figures show that during the lifetime of the widow and after her husband’s death she received in all of cash dividends on the stock, the 60 shares of old and 300 shares of new, $93,450. There was also the stock dividend of 300 shares, or $30,000 at $100 per share, and there was during the time a total increase of the surplus earnings from $289,341.88 to $362,006.29, that is, $72,664.41.
After the death of the widow, Mary P. Chester, and February 4, 1898, there was a dividend of forty per cent paid upon the stock of the defendant corporation, which upon the 360 shares belonging.to *465the parties to this action amounted to $14,200.- And then in.the month of February, 1899, the corporation sold out all its property, except bills and accounts receivable and cash, for $553,861.71, and went into liquidation. It has paid certain liquidation dividends to its stockholders. The dividends upon the 360 shares have, however, been deposited in the Fidelity Trust Company .of Buffalo, LT. Y., to the amount of $79,200, to await the result of this action. There will be added to this amount of deposited dividends about $3,366, less some expenses of liquidation.
The plaintiff, George T. Chester, knew nothing of the increase of the stock and the issue of the 300 new shares, until after the death of the widow, his mother, Mary P. Chester. Whether she knew of it does not appear. In August, 1886, the widow and the plaintiff and Mrs. Chard and Mrs. Miller, by a writing executed by them, directed the executors of the estate to divide all moneys received by them from the defendant corporation from the date of such writing to January 1, 1889, belonging to the estate, equally between the four heirs, Mrs. Chard, Mrs. Miller, Mrs. Tripp and George T. Chester, the plaintiff. All the dividends received from the defendant corporation upon the 60 shares of stock, from the time of the death of Thomas Chester until the increase of the capital stock, were, with one exception, divided among the four children by the direction of the widow, and all the dividends received upon the 360 shares of stock, after the increase and up to the time of the widow’s death, were also divided among the four children by direction of the widow. Whether the writing above referred to was relied upon as such direction, or whether there was other direction, does not appeay. It does appear that by a writing made by the widow, February 27, 1888, she stated that she had always regarded the executors named in the will as trustees of her husband’s estate, for her benefit, and that she had always dealt with them as such, she being thus relieved personally of the charge and management of the estate, and asked that their accounts be settled before the surrogate, the same as if the will had expressly made them such trustees for her benefit during her life, and that the executors thereafter act as such trustees. And thereupon the settlement was made and decree entered April 17, 1888, upon a petition filed February 29, 1888; *466and in such petition and settlement the writing of August, 1886, was recognized as signed by all the four heirs, though the name of Mrs. Tripp does not appear signed to the writing in the record of the findings, by the trial court. The executor James F. Chard was, prior to. the death of Thomas Chester, a trustee of the defendant corporation and secretary thereof, and continued to be such trustee and secretary until the death of the widow, while the plaintiff, George T. Chester, was at no time a trustee or officer of the corporation. After the settlement of the estate above referred to, the executors continued to hold the stock of the defendant corporation with the consent of the widow and all the next of kin, the four children. When the certificate for the 300 shares of newly issued stock was made out, it was to the estate of Thomas Chester, and was delivered to the executor James F. Chard. Under these circumstances we can hardly assume, in the absence of an - express finding to that effect, that the widow had actual knowledge of the issue of the 300 shares of new stock, and that it was issued in the name of the estate and not in her name. The findings are that she received all the dividends from the old and the new stock, but this is rather a conclusion than otherwise; The real fact apparently was that the executor Chard, who acted for her and who had sole charge of this part of the business as trustee or otherwise (because the plaintiff had no knowledge of the increase of the stock), received all the dividends and divided them, and there was no more reason why' the widow should inquire and- know that the dividends were on - 360 rather than on 60 shares of the stock than that the plaintiff should. She had no personal charge or management of the business. She had imposed such care and management upon the executors as trustees or otherwise.. There, was more reason why the plaintiff should know about the increase of stock and form of the new. certificate than the widow.
Finally, as bearing upon this branch of the case, the court has found as a fact that the 300 shares of new stock represented and was a payment and distribution of income upon and from the 60 shares of stock owned and. possessed by Thomas Chester at his death, but it is not found whether such income was earned before or after the death of Thomas Chester.
These seem to me to be all the facts bearing upon the first ques*467tion involved here, the original ownership of the 300 shares of newly issued stock.
I think it is now well settled in this State as a general rule that as between a tenant for life and remaindermen, stock dividends belong to the life tenant if made during the life tenancy, though from earnings accumulated wholly or in part before such tenancy commenced.
In Riggs v. Cragg (89 N. Y. 487) it was said that this question had not then been considered by the court of last resort in this State, and it was not passed upon in that case. The question seems first to have been considered by the Court of Appeals in the case of Matter of Kernochan (104 N. Y. 618).
The will there gave to the executors portions of the estate in trust, to receive the rents, interest and income, and apply the same to the use of the widow during life, remainder to the beneficiaries named. The trust fund included certain shares of stock upon which a dividend was declared after the death of the testator, in part from earnings accumulated before his death. It was held that the widow was entitled to the whole of the dividend; that whether the earnings were accumulated before or after the death of the testator, they were not profits accruing -to, or owned by, the stockholders unless set apart by the corporation for their use, and they belonged to the widow because ascertained and declared after her husband’s death.
The court below had apportioned to the beneficiaries that portion of the dividend earned before the death of the testator, and to the widow that portion earned after such death, thus applying, a rule said to be .founded on general equity, viz., “ that when a fund is given for life to one beneficiary, and remainder over, the first shall have its earnings after his life tenancy begins, and the remainder-man the balance.” Judge Danforth, however, said: “I find nothing in the will which indicates that the testator intended any such investigation or division, or that any other than the ordinary rule which gives cash dividends, declared from accumulated earnings or profits, to the life tenant, should be applied. The direction to his executors is to receive the rents, interest and income of his estate, and apply the net amount of such rents or other income * * * to the use of his wife. From the shares in question no income could accrue, no profits arise, to the holder until ascertained and declared by the company, and allotted to the stockholder, and that *468act should he deemed to have been in the mind of the testator, and not the earnings or profits, as ascertained by a third person, or a court upon an investigation of the business and affairs óf the company either upon an inspection of their books or otherwise.”
In McLouth v. Hunt (154 N. Y. 179) the residuary estate was by a will given to his executors in trust, to “ take, receive, hold, care for, preserve, maintain, invest and reinvest, convert, sell, lease and collect the same,” and pay over a portion of such income to the use and benefit of his grandsons respectively during their minority,, and after arriving at the age of twenty-one years, to pay over to them the full income, and upon their arriving at the age of thirty-five years, the full amount'of principal with any accumulations thereon remaining, and in case of death before arriving at the age of • thirty-five years, the fund was given to other persons in fee. The testator died September 18, 1888. There was included in the trust estate 254 shares of Western Union Telegraph .Company stock, upon which a stock dividend of ten per Cent was declared November 10, 1892, upon the '■surplus earnings of the telegraph comj>any accumulated during the ten years prior thereto. The court, among other things^ was asked to detérmine whether this stock dividend belonged to the life tenants (so called) or to the remaindermen, whether it was income or part of the corpus of the estate. The trial court held that the dividends belonged to the life tenants and they were entitled to the same as earnings or income, and the Court of Appeals affirmed that decision. J udge O’Brien, writing for the court, considered all the- cases in this State and-elsewhere and arrived at the conclusion that the decision made by the court below was equitable and just and was supported by reason and authority. It is apparent the surplus earnings from which the dividend was declared were accumulated, á part before and a part after the death of the testator. The opinion was certainly based upon such an understanding of the facts, because Judge O’Brien states therein that, “the resolution recites that the earnings of the corporation had been withheld from the shareholders for almost ten years; that they had accumulated, and that it was the intention of the directors in taking such action, and the shareholders in consenting to it, to distribute such accumulated earnings to the shareholders in the form of stock certificates instead of money.”
In Matter of Rogers (22 App. Div. 428; 161 N. Y. 108) the *469will created trusts for the benefit of testator’s children during their lives with remainders to their issue. In the trust fund were shares of stock in a corporation. The testator died August 25,1888. The corporation continued in business until 1893, paying yearly dividends, at first of ten per cent and later of twenty per cent. Then it sold its plant, with raw material and that in process of manufacture, for $2,750,000, to be paid for in the stock of a new corporation. The stock of the new company was divided among the stockholders of the old company in the proportion of ten shares of the new stock for one of the old. The old corporation had still other property, of the value of $3,000,000, and the corporation sold this property and distributed the proceeds among its stockholders. The question was as to the rights of the life tenants and remaindermen in the new stock and proceeds of the other property sold. The referee before whom the case was first heard held that the whole fund was to be treated as capital or part of the corpus of the trust estate, and that the life tenants were entitled to no share in it. The surrogate modified the report of the referee, holding that 100 per cent of the cash dividend, and the dividends of the new stock, were capital, and that the remainder were profits or income, to which the life tenants were entitled. The decision of the surrogate was afiirmed in the Appellate Division and in the Court of Appeals. The case was decided in the Appellate Division November, 30,1897, the week after the decision of the Court of Appeals in McLouth v. Hunt (supra), which was decided November 23,1897. No reference was made by the Appellate Division to the McLouth-Hunt case, and we assume, therefore, the latter case was not brought to the attention of the Appellate Division in the 'Rogers case. Justice Cullen did, however, say in the Rogers case, “ While the corporation continues to do business or as is sometimes said, is a going concern, the law is settled in this State that a cash dividend is income and goes to the life tenants, no matter at what time the profits from which the dividend was declared may have accrued or have been accumulated.” (Citing the Kernochan Case, 104 N. Y. 618, above.)
In view of the McLouth-Hunt case we must add that the same is true of a stock dividend as of a cash dividend. The Appellate Division, however, held that the rule stated had no application to the Rogers case, where there was no dividend by a going corpora*470■tion, but a division made of the assets of a liquidating corporation among its stockholders. Later in his opinion Justice Cullen says : “ Had the company before transferring its plant to the new corporation, distributed this whole surplus or reserve fund among its stockholders, it would have gone to the life tenant, and no well-founded complaint could have been made that such a distribution was either illegal or inequitable-.” It further appears from the opinion of the Appellate Division that the life tenants took no exceptions, and made no objection to the decision of the surrogate, so far as it held that a portion of thé fund was capital and belonged to the remainder-men. The case cannot, therefore; be regarded as an authority so far as .the Appellate Division or Court of Appeals is concerned for the proposition that any part of the fund was capital :and belonged to the remaindermen. Ho authorities were cited by the Court of Appeals in its opinion, the only reference thereto being the statement that the cases to which their attention had been called furnished but little aid in the determination of the question presented under the peculiar facts of the case. The appeal -to the Court of Appeals was by the remaindermen alone. The life tenants did not appeal. This case, therefore, cannot be said in any way to have modified or overruled the former decision of the court in the MoLouth-Humt case.
It may be further noted that the Appellate Division in the first department, in December, 1900, followed the law as laid down in the MoLouth-Hunt case in Lowry v. Farmers' Loan & Trust Co. (56 App. Div. 408), and held that a stock dividend, declared out of undivided profits or surplus (a portion uf which was earned before the testator’s deáth), upon stock of a corporation set apart by. a trustee of a trust fund created by a will, belonged to the life beneficiary of the trust, and not to the remaindermen. ■
In the case we are considering it does not appear when the surplus earnings were accumulated from which the stock dividend was made, whether before or after, or both before and after the death of the testator. There was a surplus at the death of $289,341.88, and at the time this dividend was 'made this surplus had increased to $443,030.57. The dividend was $210,000. The whole of it may have been made from the surplus accumulated before the death. The whole of it could not have been made from the surplus accu*471mulated after the death, because the surplus so accumulated was only $153,688.69. It was made from the whole surplus accumulated up to the time it was made, without any limitation to that accumulated during any particular time. In any event, under the authorities we have referred to, the 300 shares of- new stock issued upon the 60 shares of old stock owned by the estate belonged to the widow, and the children had no interest therein.
I have very carefully considered the suggestions of counsel for the appellant and I find no justification for any different result growing out of the language of the will in question or the facts found by the trial court, It is suggested that in the McLouth-Hunt case the language of the will was peculiar in that it provided that the executors should pay the life tenants the full income, but this language was used because it had already been provided that prior to the life tenants coming of age, only portions of the income were to be paid to them, and then followed, the provision that from the age of twenty-one to thirty-five thq full income should be so paid.
This language could have no bearing upon the testator’s intention with reference to the disposition of any dividends upon the sixty shares of stock, made after his death. The remarks of Judge Danforth in the Kernochan case, above quoted, are quite applicable here. I find nothing in the will or in the condition of the property or' of the widow and next of kin, indicating any intention on the part of the testator to take this stock dividend out of the ordinary rule which gives the whole of it to the life tenant to the exclusion of the. remaindermen. There is no basis for any claim that the widow assented or admitted that the new stock belonged to the estate, by permitting the certificate to be taken to, and the stock to stand during her whole lifetime, in the name of the estate. It does not appear that she had any knowledge or information as to the form of the certificate or that the stock stood in the name of the estate.
My conclusion is • that the 300 shares of new stock belonged to the. widow from the time they were issued until her death, and the children had no interest therein. At her death the stock under her will passed to her son, the plaintiff George T. Chester. The remaining question is whether anything has occurred since the death of the widow which deprives the plaintiff of the present ownership of the stock, or prevents his recovery of the same.
*472As already stated, the widow died- February 16, 1897,-but- her will was not admitted to probate until September 25, 1897. At some time prior to September 30,1897 ' (just when does not appear), the plaintiff assigned and transferred' to his wife, Helen R. Chester, all his interest in-his father’s estate, and this assignment covered and included whatever interest he had in the-360 shares of stock as residuary legatee under that will. It did not cover or include whatever interest he acquired in the 300 shares of stock by his mother’s will. September 6, 1897, James F. Chard, plaintiff’s coexecutor under the father’s will, wrote the plaintiff that the estate owned 360 shares of stock in the. defendant corporation, and that as all parties desired the estate matters settled and adjusted, hé, as executor and trustee, would offer all the interest of the estate in such stock for sale to the highest bidder on the 4th day of October; 1897. ' Thereafter, and September 14, 1897, Helen R. Chester’ presented to the surrogate a petition wherein she stated the facts necessary to enable her to secure the relief asked for, which already appear, and need not be again repeated here, and stated, among other things, that the executors held- the 360 shares of stock, and that she, as her husband’s assignee, was entitled to 90 shares thereof,, and she asked that the stock belonging to her might be delivered to her and not sold. As a result of this application, with the assent of all the parties, the certificate for the 300 shares and the certificate for the-60 shares of stock were surrendered up to the corporation and canceled, and September 30, 1897, four new certificates, of 90 shares each were issued, one to Helen R. Chester and one to each of the three daughters of Thomas Chester, and the proceeding before the surrogate was discontinued. The plaintiff assented -to this division of the stock, It was while Helen R. Chester held this' stock that the forty per cent dividend was paid. February 4, 1898, she received on the 90 shares .$3,-600. On the 20th day of January, 1899, she assigned and transferred to her husband, the plaintiff, all her right, title and interest in the property and stock of the defendant corporation.' This action .was commenced January 31, 1899.
It does not appear when the plaintiff first claimed the whole 30.0-shares of stock under his mother’s will, except that it was prior to the commencement of this action.
It is apparent that neither the plaintiff nor -his wife supposed, *473when the stock ivas divided between the four parties, that such a division was other than in accordance with the real rights .of the parties. Just hów much information they had as to the facts connected with the issue of the 300 shares of stock it is impossible to say. They evidently were not informed as to the law, if they wóre as to the facts. Ho question was made as to the division being in accordance with the strict legal rights of the parties until just before the commencement of this action. There was no disagreement, no controversy as to the real rights of the parties in the stock at the time the division was made. That being so, I am unable to see how there was any compromise or settlement of any controversy or any consideration for the assent or agreement by plaintiff or his wife to divide the stock, giving each party 90 shares, or any estoppel preventing'the plaintiff from recovering his stock and tlie dividends paid and unpaid thereon since the death of his mother. It would seem that all the parties supposed that thé 300 shares of stock belonged to the estate of Thomas Chester, and acted upon that theory. Even if the facts were fully known, the law applicable to the facts was not understood, as the court has since held it to be.
In the absence of any consideration for the division, even a consideration growing out of a compromise or settlement of a disputed controversy, I am unable to see how the fact of the division of the stock has operated to deprive the plaintiff of the interest he would otherwise have therein.
Much litigation was had between the parties to this action other than the defendant corporation as to matters growing out of their interests in the residuary estate of Thomas Chester and the business of the old firm of Thornton & Chester, of which Thomas Chester was a member at the time of his death, and which was continued during the lifetime of the widow, and there was. also a contest of the will of the widow and mother, Mary P. Chester. Rone of these litigations, however, in any way related to or involved the interests of the parties in the stock in question, unless it was the contest over the will of Mary P. Chester, and the parties did not evidently regard that contest as in any way affecting their rights in the stock. Finally, Rovember 14, 1898, there were papers and writings executed between the parties settling their differences and litigations, except one action that was particularly specified, and then it was provided *474that it was expressly understood and agreed that none of the papers, nor all of them together, should be construed to release any claim between the parties except those expressly enumerated.
Ho claim had then been made or suggested as to this stock in' question, and no such claim was enumerated in the writings and agreements constituting the settlement thus made between the parties. The controversy in this action was not, therefore, settled by any express agreement made at that time. It was not .in the minds or within the contemplation of the parties. Under these, circumstances; I am unable to see how any estoppel as to this claim by plaintiff, of an interest in this stock, could arise. The consent to the discharge of the executors of the estate of Thomas Chester in no way affected this claim. Ho relief is sought against them.. Ho remedy against them in behalf of the. defendants, the three daughters, as to this stock was lost by this discharge. The 300 shares of stock never belonged to the estate, but to the widow. The executors never dealt with this stock so as to render them liable to the daughters of the testator in any way. The plaintiff now makes no claim and asks no relief against his coexecutor, Such coexecutor is not a party to- the action. More than this, these shares of stock were surrendered by the coexe'cutor of plaintiff and canceled, and the new certificates for 90 shares each were issued by consent of all the parties. Ho further claim could, therefore, be made against him on account of such stock by any of the parties.
The claim here sought to be enforced is not one against the estate ’ or its executors, but against the three daughters of the testator, who have received a portion of the 300 shares of stock, which never. belonged to the estate nor to them at all, but which has been received by such daughters without legal right and without their paying any consideration therefor.
I.am unable to perceive any reason why such claim should not be enforced, and the judgment, so far as it affords relief against them, should not be affirmed.
The corporation whose capital stock is in litigation is also a party to the action. It was a necessary party for various reasons.
The court, however, erroneously directed judgment in favor of the plaintiff and against the corporation itself for $9,000, the dividends upon the stock of plaintiff paid to the three daughters after *475the certificates of stock had been issued to them, and' before the corporation had gone into liquidation or had any notice of plaintiff’s claims to the stock, and also for the costs of the action. This relief was granted upon the theory that the dividends were Wrongfully paid to the daughters. It is said that the corporation knowing all the facts was bound to know the law, and, therefore, knew that these 300 shares of stock belonged to the plaintiff, and that the daughters had no interest therein. The stock, however, stood upon the corporation’s books in the name of the three daughters, and they held their certificates with the assent, and it may be said by the procurement, of the plaintiff and his wife. She commenced . the proceeding to procure the division of the stock, and the plaintiff added his affidavit to his wife’s petition, swearing to the truth thereof and stating his desire that the petition be granted. Thereupon the daughters and plaintiff’s coexecutor acceded to the desire of plaintiff and his wife, the proceeding was dismissed, and the division was made upon consent of all the parties. How could the corporation do otherwise than pay the dividends as it did ? It was not a wrongful payment. Ho matter who were the legal owners of the stock, all the parties directed its division as it was divided, and assented to the payment of the dividends in accordance with such division, and such payment relieved the corporation from all liability to respond again for such dividends. The payment of the dividends to the daughters was not wrongful, and the judgment, so far as it provided for a recovery of the dividends from the corporation, and for costs, was erroneous and should be modified and corrected.
My conclusion is, therefore, that the judgment appealed from should be modified by striking therefrom all provisions to .the effect that the defendant corporation wrongfully issued certificates of stock to the other defendants, and wrongfully paid dividends thereon to such other defendants, and that plaintiff have personal judgment and execution against such defendant corporation therefor, with interest and costs, or for any other amount, and as so modified affirmed, with costs to the respondent against the appellants qther than the corporation, and with costs to such corporation appellant against the respondent.
Judgment reversed and new trial ordered, with costs to the appellants to abide the event.