*1 E’y Mich. Co. & et al. Lake Sh. Boardhan of case. Statement etc., et Executors, al., Respondents, Derick Boardman L. Railway Michigan Southern Com Shore The Lake pany, Appellant. company, a railroad preferred guaranteed issued Where stock holders, profits to dividends no are although are entitled when not specified earned, paid the amount of dividends to be yet are first entitled arrears, including of common all before holders stock guaranteed, and any thing. entitled to are property corporation any in a not entitled to of the
A shareholder profits a has made or a dividend declared. until division belongs a it of the at the When dividend is declared owners stock time, declaration, part of profits ; form until such assets but pro- by a of his carries with it his assignment an stockholder shares portionate including all undeclared share of assets dividends. judges of a are general While a rule the officers sole declaring dividends, will propriety courts not interfere discretion, where the divi- proper of their with exercise contract, requires the and fixed directors take clear dend is law, by an at right can be action court of before the asserted action action, necessary, compel to re- interpose to when equity will such strain, any right. by injunction, adverse to action such foreign corporation in this cannot avail itself of the A sued State statute this, has, statute, specified although the time limitations; and for action, continuously operated of the a rail- the commencement before State, property and therein. and has officers road in this preferred guaran- & N. certain In the M. I. Co. issued S. E. stock; that the therefor stated was entitled to teed the certificates stock cent, payable semi-annually, at the rate of ten dividends annual company, of the net of the days specified, earnings out share also excess, payment and that pro with the other of the stock rata thereby guaranteed. was with was Said consolidated dividends defendant, assuming paid obligations. latter its No dividends were subsequently and the arrears were not the said stock until paid upon In the commonstock. although were declared dividends dividends, purpose compel the back an action to stock, minutes, con- the book of showing authority for the issue M. directors of N. I. taining certain of the board said S. resolutions preferred guaranteed was authorizing R. R. the issue Co. objection the certificate under the offered and received in evidence Held, error; no by other varied evidence. the contract and could relating could be issue proceeding that the whole stock constituting the one transaction. taken in connectionas on author- of the directors declared The resolution et al. v. Lake Sh. & Mich. So. [Mar., *2 Statement oí case. always ized to paid be be any issued should out of earnings net before any portion applied pay Held, should be to dividends on the other stock. that this expressed ; was in effect the contract as in the certificate and that only preferred, under it the dividends were not but being guaranteed, specific a charge upon were cumulative and the accruing profits, and in any year profits case of a failure in to earn sufficient to the dividends they specified, paid to were be any as arrears before dividends were upon the common stock. proof plaintiffs’ There was no preferred except title to the stock the certi- Held, plaintiffs’ ficate issued'to proof testator. that in the absence of description the issue of other stock of this presumption was that plaintiffs’ portion a stock was of that issued, so authorized and that plaintiffs were the lawful owners. Held, Plaintiffs’ testator did not become owner of the stock until 1863. that the transfer to him carried with it all unpaid dividends. Hun, affirmed, (8 593), v. The distinguished. Hitt N. N. 71 Y. complaint judgment asked and the a specific performance directed the contract and upon restrained defendant from paying dividends that portion of represented its common stock which the common of the N. Held, paid. M. S. I. R. Co. until the amount of the was arrears error; plaintiff no that was equitable entitled to the granted. relief (3 Coey distinguished. v. & 113), B. C. D. B. B. Co. Irish L. R. [C. S.] held, Also, against that an action was maintainable defendant alone as the representative corporation of the with which the contract was made. that, Also, held, originally against corporation as the claim was a foreign by and as the articles of consolidation which defendant assumed the ob- ligation years action, took effect within six of the commencement of the claim; the statute of limitations did against plaintiffs’ not run also appear that any did not that action on the of defendant delay by induced prosecuting claim, plaintiff said was. was estopped by delay. such (78 184), (10 v. Hngland Y. Kent M. Co. N. v. Ad. & Coles Bank El. Q. 437), (6 474), Prendergast (1 Younge Pickard v. Sears id. v. Turton & Coll. 98), (1 198), (3 v. De Atk. & J. Nichols v. Gilson Gex Stafford Strofford 573), (3 436), (5 Currie Goold Ch. Matthews B. B. Co. Mad. G. N. 1, 384, 390) Part SJ, distinguished. Jurist [IT. organized as a Defendant was under statutes of several operate through of road running States continuous line those States previously corporations. operated by which had It the consolidated statutes, claimed that those so far as authorized the consolida- was States, repugnant provision U. adjoining tion S. 3), (art. conferring Congress power Constitution sub. on § regulate foreign among commerce with nations States. several Held, ; upon legislation Congress untenable in the absence of subject, power legislate existed in the so States. held, Also, plaintiff was entitled to recover interest. B’y Co. & Mich. So. Sh. et v. Lake Boabdhan al. of case. Statement upon where English authorities interest annui- down rule laid refused, apply. not to held ties was 12,1880; decided March (Argued November Appeal Term General Supreme judgment entered an order first Court, department, judicial favor 4,1879, June plaintiffs, made affirming judgment the court on trial at Term. decision of entered Special This S. Boardman, action plaintiffs’ brought George *3 in defendant to divi- 1875, testator, August, compel pay certain shares of stock held him dends and preferred by upon restrain it from dividends certain of paying upon portions until of and stock the claim was sat- its common plaintiff died after trial and isfied. The before original plaintiff having the were substituted. the decision present plaintiffs found the court are facts follows: substantially in or From and the until the 1857, about during year year the Southern and Northern Indiana 1869, Michigan Bailroad a and was created under the corporation existing Company States of laws of the Indiana Ohio, and respective Michigan, was owner of and in and rail- Illinois, engaged operating (cid:127) said States. About month of roads lying April, a the said become indebted to corporation having large a was devised to raise funds the issue of amount, plan pre- was for ferred submitted stock. plan approval their said annual stockholders regular and the same was thereupon approved April, meeting resolution On or vote or about adopted unanimously. then board of the 5th directors of the May, day to issue the said said voted and preferred stock, duly company for that resolution follows: unanimously adopted purpose That means for for “Resolved, purpose providing the unfunded debts of this payment company unfinished there its be there works, completion this com- created stock of hereby guaranteed preferred ‘ to the amount stock,’ denominated construction to be pany, dividends at stock shall entitled to be §3,000,000, B’y y. al. Lake &Sh. Mich. So. Co. [Mar., et Boardmas
Statement of case. rate of ten per cent annum, per cash semi-an- payable in New and in York, nually of such payment the said stock shall have guaranteed preference over priority stock of the and dividends at the rate remaining company, aforesaid shall be said always stock out paid upon guaranteed net before of said earnings company any portion shall be to the of dividends net earnings applied stock of the and in case the remaining company; earnings of the road shall enable the hereafter to divi- dends all of at a its stock rate ten cent exceeding per annum, then such be per entitled to guaranteed shall share, rata with other' such excess over pro ten cent annum. The first dividend on said stock will per the 1st of December thereafter payable next, on day 1st 1st of June and December each year.”
Notice was and to public given stockholders, books of opened amount of stock subscription was for and offered subscribed taken. The. book of minutes those, resolutions received in evidence under containing and exception. objection
No dividend whatever was declared or paid by company the said or construction stock from date upon guaranteed thereof until or of issue on about the 1st of 1863, day July, at or about which time the then directors of the said corpora- a tion declared and dividend of -five announced cent on so per much of said was then stock as on the payable outstanding, 1863, 1st for the teixmonths to that date. day August, prior After that and to the time of date, down the consolidation hereinafter the said de- mentioned, earned, company regularly clared and or dividend said of five paid per percentage for each said cent successive of six months stock. period upon realized and accumulated company surplus earnings and over above dividends so its board direct- paid, dividend of three and one-half ors declared announced its cent common upon payable per August and also declared dividend second paid, paid of like March two dividends 1865; said amount, payable et al. Lake Sh. Mich. 1881.]. So. B’t Co. Boardhas
Statement of case. if to sum sufficient, amountiifg applied purpose, arrears off the whole of dividends cancel or stock which was construction guaranteed outstanding time of this action. After commencement 1st said dividends were March, 1865, other declared and day the said the common stock. company 26, 1862, On November shares of said twenty-three pre- ferred stock were and a testator, certifi- assigned plaintiffs’ cate of the said shares was with such sale contemporaneously delivered to him; such certificate in the form being adopted board of and which was in directors, said blank printed filled in to be The form of the certificate is as up writing. follows: Southern omd Northern Indiana Railroad
“Michigan Com-
pany. “ Guaranteed ten cent stock. per “ This is to that.........................entitled certify each in the to................shares $100 capital Southern Northern Indiana Railroad Com- Michigan denominated construction said stock entitled stock; pany, dividends at the rate of ten cent annum, semi- per per payable York on the New 1st of June and annually December days out the net each of the said year, company; earnings is also entitled to share rata with the other stock of the pro excess of over ten cent an- company earnings per num, dividends as aforesaid is hereby The said stock is guaranteed. transferable on the books only of the said at their office of New York city the said stockholder in person, by.................., on the surrender of this attorney, certificate.
“In witness whereof the said have caused the company same to be and this certificate to be their registered, signed by and and their president treasurer countersigned* by secretary.” In or about of cer- pursuant provisions year tain acts of the of the States of Ohio, legislatures Pennsylvania, XXXIX.
Siokels—Yol. et al. B’t Co. Boardmah v. Lake Sh. & Mich. So. [Mar.,
Statement case. oí and Indiana Illinois, Southern and Michigan, Michigan Northern Indiana was and Railroad Company merged consoli- dated with the Lake Shore which owned Railway Company, and a railroad from the in the Erie, operated extending city said State of to the the said Pennsylvania, Toledo, city State of and Ohio, the consolidated so formed took and assumed the name of the Lake and Shore South- Michigan ern and Afterward, Railway Company. pursuant pro- visions of the act of the State New York, legislature “An act of certain entitled consolidation rail- authorizing road- and also companies,” passed May pursuant certain of the said laws States of provisions Pennsyl- Indiana and vania, Ohio, Buffalo and Illinois, Michigan, Railroad Erie created and Company, existing and under virtue of the laws of the States of New York and owned and which railroad Pennsylvania, operated from Buffalo the eastern terminus of the line of extending of the Lake Shore railway Michigan Railway Southern. and consolidated with the Lake Shore Company, merged Southern theAt time of Michigan Railway Company. such consolidation the Buffalo and Railroad Erie Company and the Lake Shore Southern Com- Michigan Railway owned and lines of taken to- railroad, which, operated pany line formed continuous of railroad extending gether, of Buffalo to said State of Illinois. city Chicago, so formed last-mentioned The said company merger assumed the name of and became and consolidation' „ Lake Shore Southern as the known Michigan Railway is the defendant in this action; the agree- Company, last consolidation mentioned was ment for merger and. in the officeof the of State of the secretary filed and recorded 14th 1869. on the of New York day August, State statutes the con- the several authorizing provisions By and all the liens of, all the creditors óf solidation, rights Indiana and Northern Southern Michigan property and were were to be preserved unimpaired'.; Railroad Company all debts, guarantees, of consolidation the said just agreement *6 et al. Mich. Boardman Lake Sh.'& B’t Statement of case. either
liabilities and of said obligations against existing to said at the time of companies, parties agreement taking effect consolidation, of said were assumed the said consoli- and dated all and contracts company; agreements existing between either of said the said of parties agreement consolidation and other or with or companies, any person per- out and said con- sons, to be carried performed by solidated company.
At defendant’s found counsel referee request additional facts: That has received dividends plaintiff 'following said on stock from and including 1,1863, semi-annually August until the trial this that said cause; Southern Michigan ¡Railroad and times, Northern Indiana had at all be- Company tween 1857, and 1, time when consol- April June, (the idated with the Lake Shore an office Railway Company), in the in city York, of business the State of New place New. treasurer, and that such its York, during period president, in the directors, of its resided State of New York; majority that it in the- had and owned State of York New at property 1, all times between time it 1857, consolidatedas April all that the defendant had at times aforesaid; since August, an 1869, officeand business place property city York, New in State of New and that York, such during its its treasurer, directors period president, majority York; resided within the State of New the certificate of the said evidence shares plaintiff, given or title to the of his stock only ownership proof ; he seeks this action that no dividends to recover were declared ¡Railroad Southern and Northern Indiana by Michigan time to the dividend made ariy prior pay-
Company on the stock that the 1863, able said question; August never at time claim back divi- company any recognized any dends on the debt or valid or question liability did not at it; said obligation any against after time (the time . August May, prior when it earn stock), its first dividend on this realize or have to-the which should applied pay- moneys ought *7 & Mich. So. B’t Co. [Mar., efc al. Lake Sh. Boardmah 164 oí Statement case. or on dividends on ment of plaintiffs’ guaran- which was authorized to be issued teed or construction as aforesaid. the said company
Further facts opinion. appear Edward S. Rapallo James Matthews appellant. of The stock and the contract between purchaser contained of the cer contract wording (Kent 180; 78 N. Y. Quicksilver Co., tificate. v. Mining 11 id. Wilson v. id. 593, 601; Dean, v. Cromwell, 74 McCluskey 3 Jur. 531; Co., v. Great Henry Ry. Northern [N. S.] F. R. 8 v. The H. & R. R. I. 1137; Co., P. 1, part Taft Co., R. R. 12 & v. The South Devon L. Stevens 310; Eng. 3Co., Jur., v. The North-eastern ; 229 Ry. part Eq. Crawford R. ; v. The East U. 31 406 1, 1093; R., L. Sturges Eq. Eng. 24 v. 329; Ill. R. R. Barb. Miller Co., Travers, Miller v. Cent. ; v. 5 244 Sanderson N. C. 425; 8 Piper, Bing. Bing. v. etc., 274; v. 8 Locks, Reed How. Prop Sargent [U. S.] of erred in 72.) 3 court Adams, [Mass.], Gray finding sue, that the shares of which are fact plaintiffs issue of the non $3,000,000 portion dividends has been there no evidence of proved, being stock with a of the issue. identity plaintiffs’ 42 N. Y. The court erred in Hubbell, v. 106-112.) (Putnam for the of dividends amount judgment unpaid plaintiffs giving from 1857 to view of the fact the whole during period testator did not become owner of the stock until that plaintiffs’ 553; 56 N. Y. v. The Allen, 1862. v. Globe LeRoy (Hyatt Hun, 8 2 Ch. 656 Hill v. Newechawanick ; Co., Ins. Edw. Co., v. Terre 29 Barb. N. Y. Jones 459; 593; Haute, 71 14 Wicklen v. Barb. A Paulson, Y. Van 196; N. 57 . visitorial over no cor powers court equity possesses general are conferred statute. such as except expressly porations, etc., v. Roch., 61; R., v. 46 Karnes Barb. Eddy, (Latimer 23 McIntosh, 599; v. Barb. Howe 107; 4 Abb. Bangs [N. S.] 666-8; 52 id. Co., 43 v. Erie Ry. id. Belmont Dennel, 505; v. Ch. v. Bk. Niagara, Hopk. Atty.-Gen. [2d ed.] al. Lake Sh. efc v. 165 Go. & Mich. Boardhaít Statement case. v. 6 La. Brown Mon 745; v. Bk. La., State La.
412;
L. &
Newark
118;
4
Jackson v.
Co.,
Eq.
mouthshire Ry.
Eng.
Bk.
2
277;
2
N.
Rex v.
J.],
Eng.,
R. R.
Vroom
Co.,
[3
v.
Abb.
& Ald.
Karnes Rochester
;
Gen.,
Barn.
[N.
107;
Swee
6 How. Pr.
Peckham,
Howe
Cropsey
S.]
Church v.
26 How.
Same,
Barb.
Madison Ave. B.
*8
ney,
The
Mutual
v.
Pr.
Ins. Co.
72;
Supervisors
Benefit
Life
10;
4 Barb.
32 id.
v.
359;
Hollenbeck,
Craig
N. Y.,
Livingston
5
193;
id.
Ch.
313;
Stone,
24
v.
Johns.
v.
Kempsall
Hyde,
3
id.
v.
Edw. Ch.
Cobb,
559;
Kissam,
v.
4
129.)
Hatch
Pfeer
of the
made with the
consolidation,
The
although
permission
more than
of co-
constituted
States,
species
various
nothing
and this defendant
of the various corporations,
partnership
one
of a
and cannot
sued as
individual.
nature
firm,
is in the
Bk.
Canal
1Co., Sumner, 46;
The Blackstone
v.
(Farnum
v.
13
& Miss.R. Co.
588; Ohio
Earle,
Peters,
v.
Augusta
M. R. Co.v.
295; Racine &
Farm
1 Black
Wheeler,
S.],
[U.
49 Ill.
v.
13
331;
Whitton,
Co.
Co.,
Railway
ers' L. & Trust
v.
94
S.
Dows,
Muller
U.
The
Wall. 270;
444-7.)
Otto]
[4
now
sums
estopped
are
recovering
plaintiffs
precluded
be distributed
oi-
which should
dividends,
money
rightly
those who are now
common stockholders.
benefit
go
(K
v.
Y.
Coles
Quicksilver
184;
78 N.
Co.,
Mining
ent
10 Ad. &
Rickard v.
Ellis, 437;
Seares,
v. The Bk.
Eng.,
6
Stafford legislatures of the several which the railroads States through run are, this action mentioned pleadings proofs far as relate to, so or authorize consolida for, provide railroads in the in violation of tion of the States, adjoining 3 of section 8 1 of the Constitution subdivision of article S. (Munn v. 94 United States. U. Illinois, [4 Otto] testator The loches and 13.) plaintiff’s acquiescence et al. v. Lake Sh. & Boardmah [Mar., 166 Mich. Statement case. aas bar to this action. Wait’s operated Actions and (1 De- fenses, 152, 153, 198.)
Lucien Birdseye This did in respondents. action volve internal affairs of a such foreign corporation as to the court of way deprive Costa jurisdiction. (Da Jones, Cow. Southern and Northern Michigan Indiana Railroad had lawful Company to issue the authority and to confer guaranteed question, and attach to claimed privileges plaintiffs this action. v. The M. S. & I. R. (Prouty N. R. 1Co., Hun, 663; Kent v. Quicksilver Y. Co., 78 N. Mining 181; Davis v. Prop’rs Androscoggin House in Meeting Lowell, Metc. 321; Bates v. Kennebeck R. R. C 49 Me. o., 491; Rutland, etc., R. R. v.Co. Thrall, Vt. Williston v. M. S. & N. I. R. R. 28 Penn. St. Co., 321; Lockhart v. Van Alstyne, Mich. 76; McLaughlin Detroit, etc., *9 R. 8 id. Co., 100; Evansville, etc., R. R. Co. 15 Ind. City E., 395; Hasel of v. hurst v. Savannah R. R. 43 Ga. Co., 13; Totten v. Tison, 54 139 id. Kent v. ; Quicksilver 12 53 Co., Hun, ; N. Y. 78 . 159; Howell v & N. W. R. Chicago Co., R. 51 ; Barb. 378 v. Hannibal & St. R. Bailey R. Wall. Joseph Co., 17 1 Dil 97; v. 174; Harrison Mexican lon, 12 R’y Co., Eng. [Moak’s Notes] v. 793; Eastern Union Gex, De & Sturge Co., 7 McN. G. R’y Matthews v. N. 158; Gt. 5 Jurist Co., R’y S.], 1, part p. [N. v. 284; & En. R. 29 R. Beav. Corry Londonderry Co., 263; Matter Steam Nav. L. 20 Anglo-Danubian Co., R., Eq. of Matter London 239; India Rubber L. 5 Co., R., of id. Matter 519; Slab Bangor, etc., L. Co., R., of 13 59; C., id. S. 20 Eng. 606; Matter [Moak’s Notes] Permanent London Co., Building ; 17 513 Weekly, of 21 L. 8; T. Redfield affirmed, on Railways, [N. S.] § Field on 237; 136; Green’s Corporations, Brice’s Ultra of the holders of this Vires, rights guaranteed it were created at the time corporation issuing against of and to issue creation the-stock. agreement (Kortright v. 20 Wend. 22 Bk., Com. id. 94; 348; Bank Buffalo & Mich. et al. Lake Sh. v. 167 Boardman of case. Statement v. 501; 20 Y.N. Bk., Ormsby & Traders' Attica Manuf. v. 72 id. v. id. 56 623; Hughes Same, M. Co., Vt. Copper v. 5 Barr. Bk., Carlisle 207; Congregation Presbyterian ; id. 10 345 v. Bank 373 ; Slaymaker Gettysburg, [Penn.] 49 491; Me. R. R. Co., & Ken. Bates Androscoggin v. 8 321; Metc. v. Lowell, House Davis Meeting Prop. of Co., 243; 2 Pick. Merrimack Bridge Essex Sargent Ellis v. 90, 98; 8 id. Pierce, Field Franklin Ins. Co., v. v. R. R. Co., v. Vt. & Mass. 102 Mass. 261; Richardson R. R. Co., Hannibal & St. Joseph 613; 44 Vt. Bailey v. v. 96; Wall. Ohio Dillon, affirmed, 1 17 174; City Ohio 489; 6 & C. St. R. Pittsburg & R. Co., Cleve. Toledo Bk. 126; 63 Penn. St. Agricultural R. Co. R. Alleghany, 273; id. Wilson, Bk. V. 256; 24 v. Me. Burr, Agricultural Mass. 101; 15 Merchants' Chester Glass Co. Dewey, v. Co. v. 405; 4 Pick. Evansville, R. R. v. etc., City Cook, Bk. v. Bk. 2 15 Ind. 395; England, Bing. Davis Evansville, 287; 28 Beav. Sloman 393; Co., v. Midland R. Taylor v. 2 14 Sim. v. ; Eden, Blackwell, 775 Ashley Bk. England, ; 57; 36 Barb. Warehousing Phœnix Bell, Hoagland v. 299 Y. N. N. Bk. v. Y. & N. 294; v. 67 Mechanics' Co. Badger, id. v. 599; ; 13 id. 17 499 Mc Stevens, R. Ketchum Co., H. R. 6 Duer, 574; Stevens v. South Prest., Cready Ramsay, S.] 313; 9 21 L. J. Ch. Hare, S. C., Co., R. Devon [N. 229 ; 12 L. & Eastern Union R. 316; Eq. Sturge Co., Eng. 406; & G. 158 31 L. & ; McN. Gex, De C., S. Eq. Eng. 7 J. Jurist C., R. S. v. N. E. Co., Kay Crawford Gt. Co., N. S.], Kay Henry p. [N. *10 & S.], 1, 1117; 3 Jurist S. 1 p. C., C., ; part Kay S. 723 [N. & 1 1, 1133; C., De Gex S. S.], part 3 Jurist 1; p. J. [N. 5 Jurist 606; N. R. S.], Co., Matthews G. Jones, part [N. v. v. 29 Beav. & 284; E. R. Co., Londonderry 1, p. Corry L. 19 358 v. Cas. Co., Mexican R. R., Eq. ; 263; Harrison 13 R. Lockhart v. 793 Notes]; Van Eng. C., S. [Moak’s annual 31 The Mich. the M. reports 76.) Alstyne, the annual I. Co., & N. R. R. defendant reports S. admitted evidence. B'r properly (London, E’y al. Sh. & 168 et v. Lake Mich. So. Co. Boardmah [Mar., Statement case. 3 320; R. Co. Exch. 6 Goodwin, & S. C. v. Railway Cases, R. R. v. 13 & B. Howard, 177; Phil.,W. How. 307; [U. S.] 24 Cochrane, v. Union Co. L. & Eastern R. Eng. 495; Eq. R. R. Co. v. & 29 Ind. 465; Ind., Cin. Jones, Lafayette C. C. & J. C. R. R. 40 Co. v. Ind. v. Powell, 374; Mother King 1 93, Case, 12 Vin. sell, Strange, 90, Abr. citing Thetford’s 2 16; P. N. pi. Camp. 100; v. Cope, Martin, Bretton King v. 30; Co. v. Cases, Peake’s 10 154; Johns. Turnpike McKean, v. 9 Co. 194, 205; v. Bank, Wood Owings Cow. Jefferson 5 Wheat. v. 420, 423-4; 3 Speed, Church Baptist Mulford, ; Duke Co., Halst. v. 182; 4 Rand. v. Gray Turnpike 578 10 Ala. Hall v. 82; 5 Ga. Cahawa Nav. ;239 Co., Ry Carey, & Ill. der v. Alton 13 R. R. 516; Citiz (3 Peck), Sangamon Co., v. ens' 49 City Penn. St. 251; R. Passenger Phila., P. W. & B. v. 13 R. Co. Howard, R. How. 307; [U. S.] 12 460, 470; v. Wheat. U. S. American Fur Co. v. Gooding, U. 2 Pet. S., 358, 364; v. Franklin Bk. Me. Steward, 37 v. 524; Smith 6 Cush. 513, Palmer, stock in on the are cumulative; question if is, guaranteed from time to time, accumulated paid arrears- regularly afterward, before dividends were paid on common stock. Part. 655*; Stevens v. South (Lindley Devon 313; 9 21 Alb. L. J. Ch. Hare, Co., 816; R’way Rep. [N. S.] 12 L. & 229 v. ; The East Eq. Sturge Union Eng. [S. C.] R'way & 158; De McN. G. 31 Gex, 7 L. & S. o., C., Eng. C Co., v. The North-eastern 3 406; Jur. Eq. R’y [N. Crawford 3 & J. 723; v. 1, 1093; S. Kay C., Great p. Henry part S.] 1117; 1 & 3 Jur. C., N. S. S.], p. Kay part R’y Co., [N. 1 De & 1133; S. Gex 3 Jur. 1; S.], part C., p. [N. Co., 5 Jur. Matthews v. The Gt. Jones, 606; Northern & 284; v. Ennis Londonderry S.], p. Corry [N. 29 Beav. v. & Down 263; Co., County killen Coey R. Belfast 2 C. L. Cork & Brandon R. 112; Irish Smith Co., Rep., L. R., India Co., Co., ubi Matter London Rubber supra; & 5 Port Modoc Slate Cas. Matter Bangor Eq. 21 Wend. L. R., Co., Hamilton, Slab Melhado Eq. Allen, 400, M. S. N. I. Co., R. R. ; Williston *11 & Mich. Co. Sh. efcal. v. Lake Boabdmah- 169 Statement case. 8 R. I. 310, 334-5; v. H. P. & F. R.
405; Taft Co., R. 1 653 Westchester Co., Hun, v. M. S. & N. R. R. ; I. Prouty Penn. St. 321; 77 Totten v. & Phil. R. R. v. Jackson, Co. v. 31 Mich. 54 Ga. Van 76- Lockhart Tison, 139; Alstyne, v. 8 id. Detroit & Mil. R. R. Co., etc.; McLaughlin, Jones v. Terre Haute & 57 N. Y. Rich'd R. R. 100; Co., 8 196 v. Newichawanick 71 Co., Hun, affirmed, 459; ; Hill Ill. 593 v. 13 id. etc., R. March ; Alton, Co., 516, 520; Rider R. 43 H. 9 v. Eastern R. N. v. State, R. B'k Co., Union 515; v. North-east R. 3 & 490; J. Co., Kay Yerg. Crawford 1 & v. Gt. N. De G. R. 744; 616, 637; State Co., Henry 30 v. Norwich & Worcester R. R. Conn. 290; Co., Conn. 28 v. Westchester & Penn. St. Phil. R. 329; R. Co., Everhart 35 536, 545; & Vt. B. R. R. v. Thrall, Co. Rutland Correy 29 v. v. & En. R. Beav. Cork 263; Smith Co., Londonderry 5 Ir. 65 Hutton v. R. ; & Brandon Eq. Co., Scarborough W. R. 2 & 13 De Sm. Harrison 574; 631; Co., Hotel Cliff 358 S. 12 ; C., L. 19 C. 793 R., Eq. Eng. v. R. Co., Mexican 10 Blatchf. C. 271; St. John v. Erie C. R. ; Co., [Moak’s Notes] 22 Wall. affirmed, 136.) party suing the fact that he is a holder of arrears is not affected these nearer or instead of remote, the shares more by purchase, being holder subscriber for original original v. Eastern 7 Hare, R. Co., the certificate. Union (Bagshaw 114 & G. ; 13 Jur. Ch. 2 McN. 602; 389; 27 114; Eng. S. C., 491; 2 Hall & 14 Jur. Westchester & Phil. 201; Twell. C., S. v. Penn. St. 77 R. R. Jackson, Co. objection the railroad of different States the consolidation of companies defendant could be effected or made to form the only present virtue of an act or acts of the under Congress and not of the different States, United States thereof, wholly 48; v. 1 untenable. Sumn. Blackstone Canal Co., (Farnum & The Racine R. R. Farmers' Loan Trust Co. v. Mississippi 260; 49 9 Am. L. 331; Ill. Co., B. R. P., &W. R. Reg. 392; Co. 10 How. Ohio Miss. R. R. Maryland, Black, The N. Y. & N. H. Milnor Wheeler, 53 N. Y. W. & B. R. R. Co. Co., R. Philadelphia, XXXIX. Siokels—Von. *12 So, et al. Lake & v. Boardmah Sh. B’t Co. Mich. 170 [Mar Court, Miller, Opinion per J.
v.
Objections upon certain of minutes resolu- the book company, containing of The directors Southern Northern tions Michigan Indiana Railroad which authorized issue of Company, “ stock of be denominated con- company guaranteed and the of dividends the same stock,” struction upon payment, the rate ten cent annum. these per per objection resolutions based proceedings mainly upon ground all of the certificate be- proceedings, prior issuing same, and such came certificate became the con- merged tract which could stockholders, between the other The resolution of not be varied testimony. al. efc Sh. Mich. So. Co. [Mar.,
172 Lake Boakdmaít Court, oí the J. “ directors declared that the dividends at the rate named shall he out said stock net earn always paid upon guaranteed any before of said net ings company, portion earnings shall be to the of dividends the remain applied stock of the and the book of contain ing company,” minutes, this and other to the ing matter, proceedings relating offered in evidence for the purpose showing authority the issue of the Such evidence is question. frequently resorted to in cases to create relating power preferred or the receive dividends guaranteed same. v. South Devon. R. R. 9 21 (Stevens Co., Hare, 313; L. Ch. & 229 L. E. ; Rep. Sturge Eng. [N. S.] R. R. Co., E. U. McN. & DeGex, G. L. Eng. *14 & 406; N. R. v. E. 3Co., R. Jur. Eq. [N. S.] Crawford 1093; v. G. N. R. R. id. part Henry 1133; Co., 1117,. Matthaur v. G. E. R. 5 N. R. Co., id., 284; part 1, Corey v. R. E. R. 29 263; Beav. Harri Londonderry Co., 358; Kent Mexican L. son v. R. L. 19 Co., R., Cas. Eq. v. Quicksilver Co., 78 N. Y. In the case last Mining 159.) charter, the cited, resolutions of by-law stockholders, other evidence of a similar character, were received with out and ere referred to in the any apparent objection, opinion in connection with the certificate. stock al The certificate, omits face in due form, be the of though may subject inquiry to ascertain whether it was issued. (Mechanics’ fraudulently v. & N. R. Bank N. Y. H. R. Co., 13 N. Y. In fact 599.) of itself is the certificate evidence show the merely tending the v. A. K. R. of shares. 49 (Bates Co., ownership the book annual resolutions, minutes, Me. The of re for the and other proceedings competent, purpose ports real character of the transaction and as a of the part showing of the same. is, claim the of itself' defendant certificate a and that the author-
did not only give preference, guaranty that it ized the dividend described certificate, admit evidence for the error to such vary- purpose changing, the contract. We or think that whole ing interpreting al. v. So. R’r & Mich. et Lake Sh. Boardhan 173 Court, per taken be of the stock the issue may relating proceeding entire transaction. and an one constituting connection to issue to show evidence authority resolutions were competent out and other proceedings carry stock; proposal the certificate as evidence the resolutions purpose and in issued, the terms upon what stock was actually what which it was so issued. these evince Altogether papers Without certificate, intention was. shareholder for, and would entitled to the shares which had been limit and the certificate did not circumscribe or his this render them definite and but more respect, rights think, evidence therefore, We specific. objected extrinsic cannot evidence or modify be considered vary, or contract, the written explain any ambiguity uncertainty We are referred to such contract. relating appellant’s counsel the doctrine to several cases uphold reported there is an face that where uncertainty meaning upon contract, to its and not to collateral wording, owing other evidence Miller circumstances, competent. (See N. Sanderson v. 244; v. C. Travers, Piper, Bing. Bing. 8 How. Sar Locks, Proprietor Reed [U. S.] These decisions relate to the con Adams, gent Gray, 72.) instrument alone, struction of not to case particular issued the circum corporate body, where *15 stances, as nature of and the contract, as the the acts and well are with such taken issue, to be into connected proceedings are cited, The eases not therefore, consideration. analogous. that doubt arise as to the com- however, any may Assuming, the we are of the from that, the evidence, opinion petency,of the the certificate were guaranty, plaintiffs language the the certificate to dividends. alone the intestate- By entitled of ten to at the rate was dividends cent per entitled per annum, the out of net earnings semi-annually payable company, it these dividends shall be guaranty agreed as The contract is as to amount explicit provided. paid shall out of which dividends and the source be paid, are also the times when The annually payable designated. v, et al. Lake B’y Sh. & Mioh. So. Oo. [Mar., Boardmak Court, per that the design was stockholders should evidently realize ten cent each per the investment year, semi-annually upon payable made. As were entitled to receive such actually dividends they from the net have ten cent in earnings upon vestment, this was absolutely guaranteed, necessarily follows that in the event that such should reach earnings that amount or at time failed, dividends must after any ward be net when earned and received paid earnings and fair reasonable company. interpretation is, contract the dividends were not to be only pre but, were cumulative and ferred, guaranteed, being specific arrears, to be paid before charge accruing profits, other dividends were divided the common any stock. The doctrine that shareholders are entitled to be preference first all amount of dividends and of arrears guaranteed, of dividends or interest before other shareholders are en titled to receive can receive no any thing, although they are where none as soon earned, as there are 'profits yet. any to divide are entitled same, they profits fully sup In v. N. R. 3Co., G. Jurist ported by Henry authority. affirmed 1, 1117, in' 3 S.], part upon appeal, reported [N. 1133, the rather than that of Jurist, preference right guaran involved, teed arrears was stockholders to and it was held that the had no Vice-Chancellor right . declare a dividend so as to affect the stock preference right and that entitled their holders, full dividend for which had since last divi period elapsed before the stockholder can take dividend dend, any ordinary and it affirmed, whatever. decision was appeal .the Upon n held that had shareholders to dividends preference ’the rate stipulated chargeable exclusively profits, pay able is divided before common share thing among “ Chancellor, if, holders. Lord That Cranworth, says: of a oh the declaration the fund be divided should dividend, insufficient entitled the claims of the shareholders satisfy *16 entitled to be those shareholders will be preference, paid all full out of dividends before the share- subsequent ordinary E’y Co. et al. 175 Lake & Mich. So. Sh. Boardmah Court, per last there In the case cited can receive holders any thing.’.’ and the same principle classes preferred were four v. N. E. at In in the case bar. as arises involved Crawford dividends 1093, S.], R. R. 3 Jurist Co., part preference [N. company held to be profits were charge upon held out dividend all the extent of the time, to preference here was, on the shares. The condition preference payable entitled to a certain rate that shares should be preference named, annum for the periods part perpetuity in. It said that thereafter on amount was actually paid ” ” “ “ interest and dividends should treated as words be v. E. R. Co. See, also, N. R. (31 synonymous. Sturge Eng. L. & which decides that the holders of Eq. 406) preference shares are to be amount arrears entitled out of paid any to such money belonging company applicable payment, before shall be made to the or any payment company, shareholders to dividends or interest. It is respect dinary claimed that in the last held that two cases was the prefer ence were because contract was not for charge, of dividends at fixed but because the divi times, dends out of the revenues of the payable any but we think those decisions were not made time; such but divi any ground, principle preference dends must which is well before estab others, paid any lished and the cases as well as cited, numerous supported by other authorities. on Part. (See 798; Lindley [4th ed.] Stevens v. South Devon R. 9 Hare, 313; Co., Eng. ; Co., L. Matthews v. G. N. R. R. Jurist Eq. S.], [N. L. E. R. R. 29 Beav. Har Co., Corey v. rison v. Mexican R. R. 19Co., Cas. Eq. if there as claimed,
Even we are unable to variation, this how can make we have perceive for, difference; seen, both the infer- being preferred guaranteed, ence to be drawn from nature of certainly obligation we add, certificate con- itself, and, very strong upon may that a clusive sum should be as dividends out of specific *17 R’y et al. v. Lake & Sh. Mich. Co. Boaedmak [Mar., the Court, Miller, J.
Opinion per net if there and, the were every none, as-soon earnings year, received, as the evident of the issue of stock. design counsel, the The defendant’s that the clauses in position as to certificate the net and the when time earnings are limit dividends to be and paid that the contract, holder “ entitled to out of the net dividends if only there earnings, the times at for the are of the specified any payment dividends, if he is not entitled to not, therefore, would be any, adverse and of the the obvious the- issue of the design company pre think, and we be ferred maintained. The cannot, state when the dividends shall ment of the be was not days payable contract, of the essence but merely designation owner had the times when the the dividend. right receive of the The substance effect is that these employed language out of net should be certain paid earnings and the times annum, rate for such -designated payment named to out the carry annual merely purpose paying If times had been no designated, dividends. have clear
dividends would out of unquestionable cases relied within the net proceeds, upon by respondent’s and it does not that counsel, affect, impair destroy right, enumerated. because were especially days guaranty certificate is entitled also inter weight great an, contract construed as may fairly pretation shall be out of the net the dividends earn agreement are made is an chargeable, guaranty ings engage ment shall be particular applied purpose, over and less to or common favored stock preference priority R. I. Co., Williston v. M. S. & N. holders. ( Allen, We think that the of the obvious rights plaint quite iffs do not rest the resolution cited alone, certificate must be considered as a of the arrangement, having this view, it is that the beyond preferred stock any question holder was entitled to dividends out of net earnings before the of dividends to common stock holder. that the shares of stock which the finding plaint- BoARDirAy et al. Lake Mich. So. Sh. & Court, per *18 three million issue of of the upon awere
iffs sue portion is, think, had we supported by no dividends paid, which was the the certificate found that the judge testimony. the and a title to ownership plaintiff’s only proof the under which of the circumstances plaint- there no proof he from whence derived the owner, certificate iff became except a the that he held certificate of title. proved plaintiff stock; and as the that dividends not certificate paid, a dividend of ten that the was to cent, stock pay per shows, stock of this there is no other and proof description, to the that the is favorable stock was theory presumption every that the was the of the three million, plaintiff a part of the same. lawful owner valid no for the of the think,
There we is, ground position that the court erred for the the counsel appellant, giving for the amount of dividends unpaid judgment plaintiffs the from 1857 to view of period intervening during the testator did not become owner of the fact that plaintiffs’ which the until 1862, stock findings judgment a in a The rule no shareholder is, doubt, was based. corpo title to the or of the cor has no legal ration property profits a is made a dividend declared. until division or When poration (cid:127) dividend to the of the share at done, the owner this is belongs a until the dividend is it is time, declared, portion an stock assignment the assets corporation, it its share of such which assets, with carries proportionate an incident all undeclared dividends. include necessarily with the transfer are the These assignment, pass subject as a of the capital (Hyatt of the stock portion company. Y. It follows that the transfer of 56 N. Allen, testator to him, car the stock plaintiffs’ assignment all or claims to ried with right profits earnings was embraced dividends, ordinarily lawfully a unless the of such facts transfer, within scope accompany render the case at an the transfer bar one and exceptional ing rule. within the Such fact urged general it is counsel, and insisted appellant’s — XXXIX. Yol. Siukels Boardhah et Lake al. v. Sh. & Mich. [Mar., Court, amade contract to certain dividends a upon contingency, which was the of net acquisition earnings by company, becomes of such right only complete upon happening and that the holder of the with whom the contingency, contract was made would become creditor upon acquisi- tion of such net and that the cannot claim earnings, plaintiffs these dividends their for stockholders, have capacity never been declared but of one who has only capacity made contract with We are unable to corporate body. the force of this that the perceive position, conceding *19 a the that contract is con- contract, depends plaintiffs upon relates to and constitutes an with, nected integral part as a stockholder. It cannot from be right separated plaintiffs’ virtue of the stock which the by plaintiffs rights accruing a it same, and thus and hold; being parceTof passes with the transfer as one of its and as an incidents, composing A sale or essential element thereof. . assignment law all transferred benefits to be derived by operation and all income or dividends or same, profits, right a constituent, dividends which formed contract, an and of the stock. When valuable portion inseparable the contract, happened specified contingency right and existed act fixed, to dividends became independent or its officers. It became absolute per- corporation a effect, without to that fect the stockholder declaration an the transfer. incident of stock upon passed a not chose action dividends were from the arising a be derived which could contract, only by separate assignment, instrument was no such transfer a required convey there is no same. con- Although usually special with the holders of stock to tract of declare divi- that does not alter or effect of the dends, con- yet change their hold stock and tract which become plaintiffs thereon; both cases the dividends entitled to itself and to the owner. We think it follow the stock belong sound that the maintained, cannot con- upon any principle, of dividends continues to each tract for the stock- payment efcal. Lake Sh. & Mich. So. R’t Co. Boardmah of the Court, the time he holder holds the stock and accrues only during only his that benefit a dis that during period, separate tinct of the dividends was essential in to con order assignment fer title the owner. Such a conclusion is adverse to the rule is general which a transfer of upheld by authority, stock of carries with it to the transferee its pro share of the assets of the divi portionate company, including dends have not which and all declared, the incidents and aof advantages appertain shareholder. The rights case of Hill Newitchawanic Co. affirmed Hun, (8 459), in' this court in N. T. on which is relied appeal, counsel, as the dividend appellant’s analogous, had been declared previous earnings virtually before sale, fixed, the time of was not but was left dis although with A distinction cretionary agent. recognized between dividend at a opinion already declared, payable future and division of future and it was day, earnings; prop held the former and not the owner, erly purchaser, entitled to the dividend.
We think there was no error in the of the trial judgment court because decrees specific performance grants *20 relief. The cause of action of an equitable is charac equitable ter, demanded cannot remedy be obtained an action by at It law. is not to recover the dividends alone, but to com the defendant to do what is and for the pel necessary proper of the contract and specific performance entered agreement the into Southern and Northern Indiana by Railroad Michigan the reference to or Company, construction stock guaranteed issued it. The that an account be by plaintiffs pray taken, the defendant be the compelled specifically perform and from agreement enjoined dividends" declaring paying any the common or stock of the unpreferred corporation, untjl holders of the or construction stock are all guaranteed paid. N W ithout some action of the officers there is corporation, no power and dividends; as are to be out the net this cannot be earnings, other man attained ner. al. Lake Sh. et Boardmah Mich. [Mar.. Court, of the the, cases cited where Court of English already (supra), interfered to restrain the
Chancery dividends to a shareholders of lower' until class the arrears due a those of were all In actions. case higher paid, equitable only rule, this excepted general right recovery depended an Parliament, act of there been an had appropria tion of the money. (Coey Down R. County Belfast Co.,2 Irish L. S.], 112.) [C. rule, as a
While, courts will not exercise general equity visitorial over and its officers powers are the sole corporations, as and in this dividends, judges propriety declaring will court not interfere with a respect exercise of proper discretion, their where the to the dividend is clear yet and fixed contract, directors to take by requires a,t action it can a before be asserted suit and a law, restraint is essential maintain injunction stock- right of. holder, of a court of is a interposition exer- equity proper cise its and should be In a such case the power upheld. is law and a court of can remedy inadequate, alone equity relief. In involved grant proper regard controversy in this it is that it action, one of apparent cogni- legal zance, a can be obtained an perfect remedy only equit- able here judgment requires specific perform- action.. ance of the contract, and relief could not such be obtained by an action to recover the dividends.
We are also that the of the defendant, opinion liability as a consolidated representative and that it be corporate established, cannot body, sufficiently a firm that the defendant is in the nature claimed and cannot trial, it sued was admitted the defend- alone. Upon ant was created corporate corporation duly organized when the defend- under the laws of several body, States, *21 which ant’s was the several formed, corporations corporation to form defendant owned operated consolidated the several line of one continuous railroad running through its named and’that defendant would ; States question of the several own existence or that corporations corporate R’y & Mich. So. Sh. ct al. Lake Boardhah Court, per of the is a defendant corporation it formed. was which de facto. with of consolidation secre and acts filed It its agreement made is evidence certified, of which, of a State, duly copy tary subd. was all 2), courts (Laws chap. § laws of trial, in evidence as well introduced other establish and those States, sufficiently appear together , the existence of defendant as a It is de body. jwre corporate also as a the decisions of several of recognized this and the- court, consolidation considered validity and affirmed. is held that two It where railroads are consoli as far dated, as one of the creditors one of com original the consolidated is the panies concerned, successor of the old but company; respect properties other it is a new and companies independent company, such has no claim creditor their con against original tract, but virtue itsof only by assumption obligations the old L. S. & M. R. R. Co., S. companies. (Prouty v.
N. Y. was distinct case taken, last point' - that cited, consolidation was not surrender of personal existence either of the identity corporate corporations. 62 N. Y. In the (See, also, Vanderbilt, Chase Matter id. 220.) Sage, We have the cases examined cited to sustain the carefully - of them for, contended none the charac- but position present bar, teristic features which or hold case distinguish under the trial the facts circumstances presented upon this action the defendant could not be sued as single corpo- and is not liable as such. Eor are we able to ration, discover laid down is not the effect of the which principle legiti- mate result and the consequence arrangement necessary under the various was consolidation of corporations in the defendant. The and became accomplished merged effect of the preferred consolidation evidently and no reason should constitute liability, exists prosecute the stockholders should be compelled why alone with whom their one of the corporations against remedy made. contract was originally *22 ] B’y Boakdjian et al. Lake &Sh. So'. Mich. Co. [Mar., Court, per of the
The claim that the have been plaintiffs guilty negligence loches their and have so asserting right, long acquiesced in the manner of the funds and distributing of the property that it is too late to that the doctrine complain, of an in pais demands serious estoppel consideration. applies, The whether the is, question the action delay bringing pre cludes a under the circumstances recovery, presented. arises defendant’s to upon contract, obligation right the dividends fixed the same as became thereby, other demand which the terms of an by provided makes The failure to of action agreement. pay per circumstances this can under de fect, only ordinary But was feated the statute of limitations. there .such an by defendant, acts of the such loches and acquiescence failure to and claim the dividends proceed by plaintiffs their or induced the testator, any way operated upon defendant to act what it otherwise would have differently asor or affected its ? done, interests injured principle. to such case is laid down Lord Pick applicable Denman, “ ard v. Ad. & El. rule Sears as follows: The of law (6 474), is clear that conduct, where his one, words or willfully causes another to believe the existence certain state him to act on that so as to alter his belief, induces things, own the former concluded from previous position, averring latter different state at the against existing things same Nor is it an time.” essential that to equitable estoppel mislead, should and it is if his sufficient party design acts calculated mislead and have misled another it in faith and reasonable care. upon acting good exercising Bank v. 30 N. Y. Hazzard, Within the (Manuf. rule it stated, can be said that defendant was misled conduct in plaintiffs, thereby duced act done, than it otherwise would have differently or to its- former A recurrence facts change position? the trial disclosed evinces that the action the defend ant was not all based apparent acquiescence in its the dividends. It plaintiffs neglect appears *23 R’y Co. et al. v. Lake Mich. Sh. &. Boabdmas 1881,] ,T. Miller, Court, per Opinion of the the time the of the when been, has ever since there expiration and a an and were active continuous due, dividends litigation, the the with in other courts sharp parties against controversy are defendant, the stockholders who and old corporation with the to recover dividends situated similarly plaintiffs, the annual introduced stock. Some of reports preferred trial to contain references in evidence -pendency and show dividends, actions for arrears of these clearly that the defendant well-ad- and was beyond any controversy of the and had full the claim vised knowledge preferred The affidavit for stockholders. pleadings, injunction, in in which the issued one of the suits brought, injunction was restrained funds from the old defendant from receiving and was also otherwise which proved, enjoined, and show existence of these conclusively litigations bring the same the defendant’s officers. knowledge directly The with the character defendant necessarily acquainted the claim with involved and of the questions litigation, face stockholders to the dividends; the preferred has with full of the no facts, claim, notice of nature these would acted otherwise if have ground insisting sued at an It was not had required early plaintiffs day. should sue for his share of stockholder each particular an the defendant from ac- preclude claiming it is that it was sufficient quite quiescence estoppel; claim the stock- the character of the advised of respective stockholders were arid other holders. plaintiffs entirely incur- in the result of suits without pending awaiting justified their on account of the hazard of lateness losing rights ring A of action existed favor of the demand. right of them continues which stockholders against corporation, against has defendant, who assumed is bound its debts which has not lost ac- by delay, obligations, The defendant in fact or loches. has acted without quiescence stockholders’ interests and funds to these diverted regard full entitled, with plaintiffs knowledge or without misled deceived misconduct facts and being any Boaedmah et al. Lake Sh. Mich. So. Co. [Mar., Court, or want of action on their doctrine of any part. estoppel such a has no acquiescence application case, can- defendant. be invoked to aid the The elements of an there has no are been mistake or mislead- (cid:127)estoppel wanting, nor from the ing, an ac- any delay arising injury bringing tion. It cannot valid that the con- any urged upon ground duct of the defendant reference to these dividends inwas influenced or affected respect plaintiffs’ delay *24 or that it sue, labored under was any misapprehension, igno- rant of or had not of the nature of the complete knowledge claim. plaintiffs’
We have cited in examined the cases this connection by and none of them sustain the counsel, appellant’s posi a tion that where indicate full the circumstances knowledge the facts in to a claim which and where made, regard may of claims advised, of other party presentation aof like which character, parties, subject litigation, that the doctrine of loches and can be invoked acquiescence In defense. each of these there was decisions strong direct evidence to establish in the action acquiescence had been taken, were suffered to with parties proceed out as to notice, so warrant the conclusion that the subsequent claimants assented to what was and thus ratified done, the ac tion taken. v. Kent Quicksilver Co., N. (See 78 Y. Mining Coles v. Bank 10 Ad. 184; & El. 437; Pickard England, v. 1 Sears, Turton, supra ; Prendergast Col. Younge 1 98; DeG. J. 193; Nichols v. Lee Stafford, Stafford v. Goold, Atk. 2 son, 3 Mad. Currie Ch. 426; Matthews N. v. G. R. R. 5 Jurist Co., S.], We 290.) [N. do these cases necessary not deem consider more fully, and it them will be found none of are adverse to the views we have expressed. demand is
We are also of not opinion plaintiff’s The arose of limitations. claim barred statute originally and the action based corporation, against foreign its the defendant of debts and liabilities under assumption by an act of the which, articles of consolidation, legislature R’y efcal. v. Lake Mich. So. &Sh. Boardmah Court, per Opinion of Secretary in the office of the articles and the filing in this sued A effect 1869. foreign took State, (Olcott limitations. the statute of itself of avail State cannot v. R. Co., 20 N. Y. Thompson v. The Tioga obtains, al And this rule R. R. 79.) Co., Barb. Tioga for the the action it has before commencement though carried in the statute time continuously operated specified and officerstherein. in this and has State, on railroad property N. R. R. Y. Co., C. 50 N. statutory (Rathbun as in sense if it can be suit, time for regarded bringing the date of consol to run until would begin applicable, after that the action was within six idation, years brought period. that the acts of no force think,
There we is, position which the rail- qf the several States through legislatures the consolidation or authorize far relafieto roads so run, 3 of in violation of subdivision are States, in the adjoining of the United Constitution the first article of the section of “ *25 the to confers power reg- which States, upon Congress the several nations and with ulate commerce foreign among has in re- States.”# It is not claimed legislated Congress the to exercise confer- or assumed power to the subject, spect decided that and it has not the Constitution, yet red by should conferred that the the cited requires power provision taken and is alone,, away entirely exercised (cid:127)be 'Congress The conclusion, the State the control legislatures. of such that in the absence legislation is inevitable therefore, the exists State upon legislate by Congress, power is itself, its which exercise, but It is not power subject. the -State the same with the exercise of power by inconsistent laws of such It is establishment by Congress legislature. and not the State, with the laws right as are inconsistent has the While, then, a uniform Congress to establish system. uniform laws on bankruptcy, to establish subject power on the the State to legislate this does not exclude right Con- exercised by is actually where power subject, except those Congress. laws conflict with and the State gress , XXXIX. SickelS —Vol. B’y efcal. Boardman Lake Sh. Mich. So. Co. [Mar., Gonrt, óf the v. Saunders, 12 Wheat. (Ogden 213; Sturges Croninshield, 4 id. 122, 191; Kent’s Coin. same rule ap to the plies which has been considered. The case legislation of Munn v. Illinois S. cited (94 U. 113) appellant’s counsel; and it is there held where warehouses are situated within State, may regulations them, not prescribe are used as those instruments withstanding they engaged as in inter-State, well State until commerce;- Congress acts in relations, reference their inter-State such regulations enforced, be even may though may operate indirectly commerce her immediate upon such beyond jurisdiction; law not to the Constitution. We are unable repugnant in the case discover cited conflicts with the any thing referred to in States laws to the pass regard consolidation of the and within railroads this de question, as well we are died, authorities cision, brought that the conclusion acts were constitutional question valid.
We have examined taken the various to the find- objections find, refusals to ings rulings regard evidence none of decisions of tlfe trial, court were erroneous in to the same. The to dismiss respect motion and for was also denied. complaint judgment properly error in the allowance of interest Nor was'there dividends. should affirmed. judgment Rapadlo
"All JJ., no concur, except taking Andrews, part. affirmed.
Judgment *26 (cid:127) in motion for this Upon other similar reargument it, cases decided with the was handed opinion down. following J. for a in motion these cases is reargument Miller, the that founded the counsel upon omitted ground appellant’s the to discuss as to the interest question legality allowing High. B’y Sh. efcal. Lake Boardmak
‘ Court, per Opinion of tile and that several decisions and authorities dividends, the upon the brief that were not cited upon appel- upon question to of the was not drawn lant’s counsel and the attention court that the is, the same. The of the defendant’s counsel position ten cent dividends were to contract which be by paid in nature of and certificate stock new issued upon interest and as an inducement to subscribing given parties obli- to advance to certain this amount necessary money pay and that of the in a gations period emergency fact in- interest thereon would be the allowance of point interest, or interest which is unauthor- terest compound upon which is never allowed of an law, ized case except by to that is well es- effect. rule express agreement general interest cannot be recovered tablished law compound an to the same entered into after it without has agreement pay Jackson, due. become Connecticut Johns. Ch. (State of 4 Barb. Emmott, Ackerman v. circumstances interest Under recoverable ordinary demand and a re dividends 'declared without previous upon arises whether the rule fusal stated question pay, in the case under state of facts presented applicable bar1. Under the of the stockholders board of resolutions and Northern Indiana Rail directors of the Southern Michigan the stock issued was to road be be Company guar proposed were issued that effect, anteed certificates preferred, out of dividends were to paid semi-annually should be the net before any portion earnings stock. of dividends remaining applied had I860, 28th stock of February, guaranteed Upon and otherwise and a cancellation been reduced purchase, have which could of $743,000, applied remained surplus arrears the payment the 1st of Au On plaintiff. question, including violation, of their directors open agreement gust, stock of a dividend common declared These a like dividend. and in March, $277,664.20, all arrears of dividends on were sufficient guar- amounts *27 Bo et al. v. ARMAS' Lake Sh. Mich. So. Co. [Mar., Court, anteed stock which were at the time this action outstanding was Other sums were afterward for dividends brought. paid the common of the stock violation holders rights These which guaranteed preferred moneys, stock. should have to the the dividends appropriated payment due the were thus stockholders, diverted preferred unlawfully ad-, from that taken for the purpose. security money vanced an was not nature of for the obligation repay- ment of alone, nor benefits or be money to payments derived therefrom were not substance or in effect interest loaned and therefore did not bear the upon money merely, character where allowance of inter- ordinary obligations est would be which the re- same, courts have compounding with disfavor and unauthorized. The garded preferred stockholders obtained an merely interest in-the assets thereby which entitled them to the dividends ordinary common same stockholders. The agreement pay or dividends was an inducement take preferred guaranteed were the re- provided only turn for the advanced. The taken therefore moneys security differs from an an dividend or annuity ordinary agreement interest. This rule should more where pay especially prevail the sums to be were allowed from time to time out paid only of the net to have been and were earnings ought applied dividends to wrongfully appropriated common stockholders who entitled to the" same be- fore the others were this By paid. illegal appropriation common stockholders received dividends if chose could have invested the same thus thereon, drawn interest while the stockholders have no such preferred advantage. out thus the funds of which the in- Having misappropriated terest was to preferred stockholders, com- should be interest on the sums which pany compelled pay their own act refused to prevented being paid. They contract or to what fulfill the do was law to required by the dividend he to which and com- plaintiff entitled, him to an action to enforce the of divi- declaration bring pelled *28 B’y High. & v. et al. Lake Sh. 189 Boardmaít Court, per
Opinion of the be ex- to no claim have these circumstances under dends a conse- interest as damages from empted a failure to obligation. of their plain perform quence refusal of the to company became damnified by plaintiff funds a when had for dividend declare they purpose his of such funds to interest accrued the diversion right It institute an action to enforce the same. to compelled being that there were no also be remarked to specific may declared, had and hence until the demand demand have differs been unavailable the case would entirely or an one where dividends have been declared annuity received or where has been or has been money appropriated for such remains to be done received nothing purpose when to it over demanded who is person except Mor entitled to same. does interfere with the receive interest on dividends because this an plaintiff right as no dividends had been declared and the action, equitable was to officers part plaintiff’s remedy compel such action dividends, declare no other could prop- in which relief could be obtained. adequate erly brought think, that the It is we to the interest plaintiff’s enough, the court exists to authorize to enforce his claim in this action. casebears no plaintiff’s analogy copartnerships one of the is not entitled to interest as when partners against is there the others. Mor such loches the plaint- enforcing make iff’s failure to demand, demand, or by by bringing at an earlier him from such in- a suit period estops claiming terest. has
The learned counsel for the cited several appellant where the courts have refused to allow in authorities English to annuitants arrears of an terest although annuity induced the courts to there circumstances which before v. 87; allow it. 1 Anderson v. (Aylmer Aylmer, Malloy, 3 1 & v. Mylne Schoales Booth Dwyer, Lycester, Lefroy, 4 De & J. 38 ; 459 v. G. ; Earl Craig, Ogle, of Mansfield Cases, Booth v. Lords Torre House of Brown, v. Bryant, 7 Jurist Coulton, 1, 207; Jenkins S.], part [N. Y., et al. 1ST. H. & R. R. Co. 1ST. et al. [Mar., Dumcomb
Statement of case. Simons, We have these cases given most consideration establish a they appear careful practice courts to refuse interest annuities English except circumstances, under one these special (3 Mylne Craig, *29 decided to have been of intention. appears upon question 459) The rule seems to have of modern earlier origin, cases are not the same direction. v. Litton, entirely (Litton Ferrers, P.1 Wms. Ferrers v. Robi 541; Cases, 2; Talbot’s nson v. Atk. id. Davis, Cumming, Drapers’ 211; Morris v. 2 Ves. v. Mor Sr. Morgan Dillingham, 2 Dick. that the de however, modern gan, Assuming, cisions are cases of this kind are notin when controlling, point the claim interest unlawful rests an appropriation which ar moneys properly applicable rears dividends is the case here. And where the party is hound to is in fault and who diverts or fails to pay apply in his hands for the money purpose paying laid due, are the rule down as to annuitants cannot shield legally it from the of the default. Such ex consequences party onerated for reason that he was bound to apparent lawfully n and could had he chosen to do failed so, utterly pay, this conceded neglected perform duty obligation. without stated,
Eor the reasons question -considering we are of the that the mo- opinion reargument, right tion denied. should be
All concur. denied.
Motion David S. etc., et al., The New Trustees, Duncomb York, Hous atonic Company et al. Railroad Northern corporation occupies of a fiduciary position, director and so is within disenabling the rule one powers with intrusted to be exercised for the others, respect benefit dealing his own behalf in in- matters volving the trust. (cid:127) it, corporation, claiming those to avoid through such depend upon question act- dealings does not whether the director was fraudulently good or in ing faith.