in re Boston & Roxbury Mill Corp.
| Decision Date | 17 June 1914 |
| Parties | In re BOSTON & ROXBURY MILL CORPORATION. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Tyler, Corneau & Eames, of Boston, for petitioner.
Theodore Tyndale, of Boston, prose.
It is contended by the petitioner that the right to recover these dividends has been barred by the statute of limitations. There is a conflict of decisions upon the question whether that statute begins to run against a stockholder's right of action for dividends declared by a corporation as soon as these have been declared and become payable, or not until there has been a repudiation by the corporation of the stockholder's right to require payment of the dividends. The former view has been taken by the British courts and sometimes has been followed in this county. In re Severn & Wye & Severn Bridge Ry., [1896] 1 Ch. 559; In re Artisans' Land & Mortgage Co., [1904] 1 Ch. 796; Smith v. Coke & Bandon Ry., Ir. Rep. 5 Eq. 65; In re Drogheda Steamship Packet Co., [1903] 1 Ir Rep. 512, 514; Winchester & Lexington Turnpike v Wickliffe's Adm'r, 100 Ky. 531, 38 S.W. 866, 66 Am. St. Rep. 356; Redhead v. Iowa Nat. Bank, 127 Iowa, 572, 577, 103 N.W. 796. The weight of authority in this country is in favor of the latter view. Kane v Bloodgood, 7 Johns. Ch. (N. Y.) 90, 122, 123, 11 Am. Dec. 417; Philadelphia, Wilmington & Baltimore R. R. v. Cowell, 28 Pa. 329, 339, 70 Am. Dec. 128; Bank of Louisville v. Gray, 84 Ky. 565, 575, 2 S.W. 168; Armant v. New Orleans & Carrolton R. R., 41 La. Ann. 1020, 7 So. 35. See, also, Tyson v. George's Creek Coal & Iron Co., 115 Md. 564, 81 A. 41, Kobogum v. Jackson Iron Co., 76 Mich. 498, 43 N.W. 602, and Bedford County v. Nashville, Chattanooga & St. Louis Ry., 14 Lea (Tenn.) 525. This sometimes has been put on the ground that an action for the recovery of dividends cannot be maintained without a prior demand, and so that the statute cannot begin to run until such a demand has been made. Hagar v. Union Nat. Bank, 63 Me. 509, 512, 513; Scott v. Central Railroad & Banking Co., 52 Barb. (N. Y.) 45; State v. Baltimore & Ohio R. R., 6 Gill (Md.) 363, 387. As to this ground see Whitney v. Cheshire R. R., 210 Mass. 263, 268, 96 N.E. 676, and Pierce v. State Nat. Bank, 215 Mass. 18, 101 N.E. 1060, 46 L. R. A. (N. S.) 693. But we do not need to pass upon this point.
Nor is it necessary for us to determine whether, by reason of the action of the petitioner in depositing the amount of these and other dividends in a separate fund apart from its other assets, that fund became a special fund charged with the payment of the dividends, so that a trust was created for their payment out of that fund, by reason of which the running of the statute of limitations would be prevented until there was a repudiation of the trust or a denial of the rights of the intestate thereunder. It was intimated in the leading English case that this might be so. In re Severn & Wye & Severn Bridge Ry., [1896] 1 Ch. 559. In this country it has been expressly so held. Le Blanc, 14 Hun (N. Y.) 8, and (on appeal) 75 N.Y. 598. That decision, though said to be a border case, was recognized as law in People v. Merchants & Mechanics Bank, 78 N.Y. 269, 34 Am. Rep. 532. See to the same effect Le Roy v. Globe Ins. Co., 2 Edw. Ch. (N. Y.) 657; Searles v. Gebbie, 115 A.D. 778, 101 N.Y.S. 199, affirmed in 190 N.Y. 533, 83 N.E. 1131; American Loan & Trust Co. v. Grand Rivers Co. (C. C.) 159 F. 775.
Lloyd the intestate became the owner of this stock in 1818. Then he seems wholly to have disappeared. Nothing since has been heard of him, although diligent inquiries have been made reaching back for many years succeeding the time when he became a stockholder. Dividend checks sent to him have failed of delivery. In 1843 the word 'deceased' was written against his name on a list of stockholders among the papers of the petitioner. This did not purport to be a statement that he has then or recently died. It indicates that the officers of the petitioner either had then learned of his earlier death or had inferred it from the fact that he had been unheard of for nearly 25 years. A presumption of his death arose in 1825, 7 years after he last had been heard of, though this was not conclusive. Flynn v. Coffee, 12 Allen, 133; George v. Clark, 186 Mass. 426, 71 N.E. 809. The case before us stands in the same position as if this were an action brought by the administrator of his estate against the petitioner to recover the amount of these dividends, to which the petitioner had pleaded the statute of limitations. The first of the dividends was declared in February, 1825; and the ordinary period of limitation, under R. L. c. 202, § 2, would not expire until February 14, 1831. Unless Lloyd survived that date, the cause of action would not be barred until two years after his administrator had been appointed and had given bond for the discharge of his trust; that is, not before July 17, 1915. R. L. c. 202, § 10; Gallup v. Gallup, 11 Metc. 445; Bates v. Kempton, 7 Gray, 382, 384. The purpose of the...
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