Northwestern Marble & Tile Co. v. Carlson

• Decision Date: 12 January 1912
• Docket Number: 17,349 - (192)
• Citation: 133 N.W. 1014,116 Minn. 438
• Parties: NORTHWESTERN MARBLE & TILE COMPANY v. CARL M. E. CARLSON
• Court: Minnesota Supreme Court

133 N.W. 1014

116 Minn. 438

NORTHWESTERN MARBLE & TILE COMPANY v. CARL M. E. CARLSON

Nos. 17,349 - (192)

Supreme Court of Minnesota

January 12, 1912

Action in the district court for Hennepin county to recover $940.57 alleged to be due upon an accounting. The case was tried before Booth, J., who made the findings and conclusions of law as set forth in the opinion. From an order denying plaintiff's motion for a new trial, it appealed. Affirmed.

SYLLABUS

Counterclaim -- unpaid dividend.

Action by a corporation against one of its stockholders upon an account stated. The answer asserted a counterclaim, based on an unpaid dividend. The trial court found that the financial condition of the corporation justified a dividend, that its board of directors declared a dividend of six per cent payable at such time as the finances of the corporation will in the judgment of the board of directors warrant, and further, that the stockholders were notified at their annual meeting that a dividend had been declared. Held, that the evidence sustains the findings of fact, that the existence of the dividend as a debt against the corporation was not dependent on any further action of the board, and that it was payable within a reasonable time.

A. B. Darelius, for appellant.

Olof L. Bruce, for respondent.

OPINION

START, C.J.

Appeal by the plaintiff from an order of the district court of the county of Hennepin denying its motion for a new trial. The complaint alleged an account stated between the parties, amounting to $940.57. The answer admitted the plaintiff's claim, and as a counterclaim alleged in effect that the plaintiff was indebted to the defendant in the sum of $1,020 for an unpaid dividend on his shares of stock of the plaintiff. The counterclaim was put in issue by the reply, and the issue tried by the court without a jury.

Findings of fact were made, which, so far as here material, are substantially as follows: The defendant was and is a stockholder of the plaintiff corporation, and the owner of one hundred seventy shares of its stock, of the par value of $17,000. During the year 1909 the plaintiff earned as net profits $6,717.78, and at the end of that year had as surplus and undivided profits $35,848.75. Thereupon, and on the seventh day of January, 1910, the board of directors of the plaintiff duly declared a dividend of six per cent on its capital stock. The board of directors passed a resolution, of which the following is a copy:

"Moved by Darelius, seconded by Hedwall, that a dividend of six per cent. be declared on the common stock, payable in common stock or in cash at the option of the stockholder, at such time as the finances of the firm will in the judgment of the board of directors warrant. Motion carried."

The undivided profits of the corporation, in its possession both then and since, were more than sufficient to pay such dividend upon all its capital stock. Immediately thereafter the board of directors duly announced at the annual meeting of the stockholders that the board had declared a dividend of six per cent on the capital stock. The trial court also found that it was agreed between the plaintiff's president and general manager and the defendant, and as a part of the contract out of which the plaintiff...