Smith v. Taecker

TURRENTINE, J.,

pro

tem.

October 23, 1930, while defendants were owners of stock therein, the Caterpillar Tractor Company, a California corporation, through its board of directors, lawfully passed the following resolution:

[352]

“Be it resolved that this company declare a dividend of seventy-five cents per share, and an extra dividend of twenty-five cents per share on its outstanding capital stock, payable on or before the 29th day of November, 1930, to stockholders of record on the 15th day of November, 1930, at the close of business on said day.” On November 12, 1930, defendants sold and delivered to plaintiff 600 shares of stock of the corporation. Plaintiff remained the owner of the stock until after November 29, 1930; the transfer was not made on the books of the corporation until November 26, 1930. The corporation, pursuant to its resolution, paid the dividends to defendants on November 25, 1930, in the sum of $600. At the time of the sale of the stock nothing was provided by the parties either reserving or transferring the dividends especially as distinguished from the transfer of the stock. At the time the resolution was passed there were surplus earnings on hand sufficient to pay the dividends in question. Thereafter, plaintiff demanded of defendants payment to him of the $600 received by them as dividends pursuant to the resolution and upon a refusal to make the payment, plaintiff brought this action against the defendants to recover the $600 paid to them, alleging the facts as herein set out. The answer admits the allegations of the complaint. Plaintiff made a motion for judgment on the pleadings and the parties submitted said case on the complaint and answer. Thereupon judgment was entered for defendants, from which judgment plaintiff appeals.

Upon the declaration of a dividend by the board of directors of a corporation, the share of each stockholder vests in him as an individual

(Cogswell

v.

Second National Bank,

78 Conn. 75, 81 [60 Atl. 1059] ;

Jerome