Railway Co. v. Martin ( 1893 )

CoCKRipL, C. J.

The appellant insists, first, that the meeting of the board of directors at which the dividend sued for is alleged to have been declared is not shown to have been a valid assemblage of the board; and, second, that there is no evidence that a dividend was declared by the board at that or any other meeting.

1. The complaint alleges that the dividend was declared by the board at the annual meeting of the company’s directors ; the answer does not deny that the meeting was a stated or regular meeting ; it presents no issue therefore upon that fact, and it was unnecessary for the plaintiff to adduce any proof on the subject.

2. The secretary’s minutes of the meeting of the board show that the president presented his annual report showing- a profit in operating the road and the amount each stockholder would be entitled to as a dividend out of the net earnings. The minutes show also that a resolution was offered and seconded that the report be approved and the distribution of the profits be made among the stockholders according to the figures furnished by the report; but they failed to show that the resolution was ever voted upon or adopted ; nor was. there any direct evidence upon the subject.

It was proved, however, that the officers of the company had drawn their drafts upon the specific fund reported by the president in favor of each stockholder except the plaintiff; and that each stockholder, including the directors, had thus received the amount apportioned to him as a dividend by the president’s report. We thus have it that every director and officer of the corporation has acted upon the assumption that the resolution was adopted, and that every stockholder except the plaintiff has been permitted to draw his dividend in accordance with its provision. There is no disclaimer on the part of the company of the action of its officers in paying the previous dividends, nor any reason assigned for its refusal to pay the plaintiff except that he has failed to show that the resolution was reg'ularly adopted. In this suit by the only unpaid stockholder to recover his share of the profits as shown by the report, the com.pany cannot be heard to say that the resolution was not adopted. To permit it to do so would be to sanction discrimination between its stockholders and so to promote fraud.

Affirm.