Court Opinion

ID: 5461712
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:38:34.955252+00
Date Added: 2024-06-11T08:32:55.022126
License: Public Domain

Ingraham, J.
I can see no reason why the resolutions of the corporation as to the dividends made do not conclude them. The corporation had the power to declare in what the dividend should be made, unless the case of Ehle v. The Chittenango Bank, (24 N. Y. Rep. 548,) may be considered as prohibiting such a dividend. That relates to a bank organized under the law of this state, and seems to be decided on the supposition that a bank could only divide its profits in money. Wright, J. says: “There was no authority to declare a dividend of the cash profits of the bank payable in depreciated bank notes.” In -the former part of the opinion he says: “ The dividend declared was not of uncurrent bills or property possessed by the bank, which might be specifically divided among the stockholders, but was a portion of the surplus or net earnings.” The reasonable construction of this case is, that the corporation might divide any specific property it held among the stockholders, but when it made a dividend of profits or surplus, it must be made payable in money.
Whether there is any thing in the laws of Georgia which confines dividends to profits, does not appear in this case, but it does appear that the defendants did make the four dividends, payable in dollars, without any limitation, and without specifying the payment to be in any currency *72whatever. The case referred to, I think, prevents an inquiry into the means out of which they determined to make the dividend. They did not limit it; and without such restriction, (whatever other effect might be given to it, with such limitation,) I think the corporation is concluded.
[New York General Term,
November 2, 1868.
I think, also, the letter of the stockholder was, under the circumstances, sufficient proof as to a demand. He had been to the place of business of the company and found the same closed and the officers departed from the same. Ho demand could then be made, and no other was necessary. The subsequent letter, inquiring what they intended to do about the dividends, was answered by saying that the corporation had made all the dividends payable in Confederate currency, (which was not true,) and that the United States government had seized all their Confederate notes, bonds, &c. He had a right to conclude from this letter that a further demand was unnecessary.
I think the judgment should be affirmed.
Judgment reversed, and new trial granted. ■
Ingralmn, Mullin and Feckhmn, Justices.]