83 N.J. Eq. 705 | N.J. | 1914
The petition for rehearing calls our attention to an error in the vice-chancellor’s statement of facts. He says that neither the directors nor officers of tire defendant corporation have in the remotest way become parties to the agreement as to what are called the “segregated assets.” This is a slip of the pen. The mistake does not, however, affect the result. The question is whether the financial situation of the company justified the dividend. We agree with the vice-chancellor that it did, and we think it malíes no difference whether the directors in declaring the dividend acted under the compulsion of the agreement as the complainant says or of their own volition, independent of the agreement. If we assume that the agreement was illegal and one that could not be enforced, its existence interposes no obstacle to such action by the directors as would have been proper in the ordinary management of the company. If the holders of so large a majority of the stock had filed a bill to compel the declaration of a dividend, it would have been no answer for the directors to say we have entered into an illegal agreement requiring us to declare out as dividends the proceeds of the segregated assets when realized upon in the course of administration. The majority stockholders might well say that such agreement is no excuse for failure to p'erform your present duty.
In other respects, we think nothing need be added to the opinion of the learned vice-chancellor.
For affirmance — The Ciiibe-Justice, Swayze, Trenci-iard, Bergen, Minturn, Kalisoh, Bogert, Vredenburgi-i, White. PIeppenjieimer — 10.
For reversal — None.
