167 P. 580 | Or. | 1917
delivered the opinion of the court.
The will which is submitted as part of the petition shows many special bequests with a final residuary paragraph, and is in itself clear, definite, positive, and certain. It would seem that all that is necessary in order to know what is meant by the will is to read it: 40 Cyc., p. 1438.
In the interests of the beneficiaries named in the Sixth Article of the will it is claimed that the $180,000 received for the Cleveland mines and divided equally between Wilson and Mackay is still the property of the Idaho Investment Company, and the $90,000 so received by Richard Wilson, deceased, a year before his death, should be returned to that corporation by the executors of his estate; that the same belongs to the stockholders of that company and should go to
“A dividend is a corporate profit set aside, declared, and ordered by the proper corporate authorities to be paid to the stockholders on demand or at a fixed time.”
To the same effect see Williston v. Michigan So. etc. R. R. Co., 13 Allen (Mass.), 400; De Koven v. Alsop, 205 Ill. 309 (68 N. E. 930, 63 L. R. A. 587, 590). A dividend is usually considered a parcel of the mass of corporate property until declared and, therefore, incident to and parcel of the stock up to the time it is declared. Before its declaration it will pass with the sale or devise of the stock. Whoever owns the stock prior to the declaration of the dividend owns the dividend also. The moment the dividend is declared then it becomes separate and distinct from the
“A division of the profits is a dividend even though not called such and not construed such by the directors and stockholders.”
In the case of Grants Pass Hdw. Co. v. Calvert, 71 Or. 103 (142 Pac. 569), there was involved the question of whether certain property, to wit, the Layton Hotel, should be considered dividends so as to have passed out of the corporation before certain stockholders bought stock. A disposition of this property had been made and a controversy arose over the legal effect of what the stockholders and directors had done. Prior to January, 1911, Wolke, Calvert, and Patilla, then owning all the stock in the company and the officers thereof, decided that they would set this property apart as a property dividend for themselves and have a proper conveyance of it made. The company was in good financial condition. This court speaking through Mr. Justice Ramsey said:
“All the stockholders and the directors appear to have agreed that said property should be disposed of. When they had their annual stockholders’ meeting in January, 1911, the secretary made a report, and a dividend was declared, and the Layton Hotel property, valued at $3,666.66, was ‘charged off’ from the assets of the company, with the understanding that it should be conveyed to Patillo. * * We think that the officers of the plaintiff, when they authorized the making of said deeds, and when the deeds were executed, had knowl*618 edge and notice that said property had been set apart as a dividend to be conveyed to the defendants, and that they made said deeds to carry ont the said arrangement according to the intention formed by the company when the defendants and Patillo were the directors and sole stockholders thereof. We hold that the transfer of said hotel property to the defendants was, in effect, the payment of a dividend in property in accordance with the previous action and intention of the company. While the proceedings relating thereto, prior to the execution of the deeds, were not very formal, yet the evidence shows what the intention was, and the execution of the deeds carried out that intention fully.”
“Q. When the money was paid just tell the court what you and Mr. Wilson did about it.
“A. Well, we went to the Federal Company’s Mining and Smelting office, we transacted the business, surrendered the deed and got a check for $180,000.
“Q. The check was to whom?
“A. The Idaho Investment Company.
“Q. And the deed was executed by the Idaho Investment Company?
“A. Yes, sir. He was a director of the First National Bank and I was a stockholder and it was after banking hours and I went in the back way, into the back room, and we indorsed the check and he went in the front part of the bank. He said, ‘Walter, we might as well divide this.’ I says, ‘Yes.’ He says, ‘How will we divide it?’ I says, ‘I guess we had better halve it.’ He went out into the front part of the bank and brought me out a deposit check for ninety thousand dollars and he deposited ninety thousand dollars for himself.
“Q. Who indorsed the check ‘Idaho Investment Company?’
“A. He indorsed it as president and I indorsed it as treasurer.”
The only question that can be raised in regard to the disposition of the funds received for the-mines relates to the means adopted to accomplish the result. Walter Mackay and Bichard Wilson, as the owners of all the stock, had the right and power to divide that money as they did, but it is contended that they did not take the proper formal legal steps to do so. Such an objection could be made if anyone else had an interest in the matter other than these two men. Where all the interests agree and all affirmatively act together
4 4 Under modern business conditions, where the commonest every-day transactions are corporate acts, it would be intolerable if everything were required to be proved by a special resolution of the board of directors in each instance.”
See, also, McDonald v. Williams, 174 U. S. 397 (43 L. Ed. 1022, 19 Sup. Ct. Rep. 743).