Graham v. First National Bank

We have gone over this case carefully and, upon the whole, are satisfied with the conclusions of the referee. It will not bo necessary to give our reasons in extenso, as the referee’s opinion is quite full and covers all the ground. The only point upon which we entertained any doubt was as to the fact of payment; but, after reviewing the testimony we think there was enough to sustain the finding. As to the legal conclusion, the referee, in our judgment, was entirely right.

The lex loci contractus aut actus should govern in the payment of corporate dividends. Any other rule would be inconvenient and almost intolerable. The declaration of the dividend imports a contract. Thereby the corporation agrees to pay the specified amount to the shareholders registered upon its books. Assumpsit would lie therefor. The place of such contract is that of the corporate action. The place of the act of payment, which is that designated' by the corporation, must also be considered. The company should not be required to look beyond the law of the place where such dividend contract is made and such act of payment is performed.

There can be no good reason why the rule in intestacy and succession should apply to such transactions inter vivos. There is no true analogy between the cases, and every consideration of public policy and business interest is opposed to the application of the lex domicilii to such payments.

It would be an exceedingly dangerous policy to require every corporation to look to the lex domicilii of each of its shareholders, under penalty of possibly being called upon to pay the dividend over again.

*333There being nothing in the objections to the admission and rejection of evidence, and the rulings throughout being substantially correct, the judgment should be affirmed, with costs.

Judgment affirmed.