A Treatise on the Law of Railroads Volume 1; Containing a Consideration of the Organization, Status and Powers of Railroad Corporations, and of the Rights and Liabilities Incident to the Location, Construction and Operation of Railroads Together with Thei (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1921 Excerpt: ...declared and partly paid, the corporation cannot defeat the payment of the rest by investing the remainder of the profits in permanent improvements. Beers v. Bridgeport Spring Co., 42 Conn. 17; Miller v. 11linois Central R. Co., 24 Barb. (N. Y.) 312. But it has been held that a dividend may be declared for a fiscal year subsequent to that in which the profits were earned. Mills v. Northern R. Co., L. R. 5 Ch. App. Cas. 621. 8 Karnes v. Rochester &c. R. Co.. 4 Abb. Pr. (N. Y.) N. S. 107, the court saying: "The court cannot undertake to say judicially that the future business of the corporation will be prosperous; nor has it any right to postpone the rights and claims of creditors to future earnings and accumulations, even if it could be certain they would accrue." Belfast &c. R. Co. v. Belfast, 77 Maine 445; Lord v. Brooks, 52 N. H. 72; March v. Eastern R. Co.. 43 N. H. 515. This rule is adhered to very strictly where holders of common stock seek to have a dividend declared, but where holders of preferred stock seek to enforce their rights, the courts sometimes depart very far from this rule in their efforts to assist them.. oo Vic. Ch. 16, 120. See however Bond v. Barrow &c. Co., (1902) 1 Ch. 353, 9 Manson 69. 71 L. J. Ch. 246. 359 (313). Power to borrow money or declare stock dividend.--It has been held that the company, where it has used profits for improvements, may lawfully borrow an equivalent sum of money with which to pay a dividend,92 or it may, when it has authority to increase its capital stock, declare a stock dividend.93 The corporation may, in general, it is said, borrow money to pay a dividend when a fair estimate of its assets and liabilities shows an excess of assets equal to the amount of the proposed div...