7.Dodge v[1][1]. Ford Motor Co.

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1、Dodgev.FordMotorCo.FordMotorCompanywasincorporatedin1903underthelawsofMichiganwithauthorizedcapitalstockof$150,000ofwhich$100,000wasthenissued,$49,000forcash,$40,000forpatentsand$11,000forotherproperty.In1908,theauthorizedandissuedcapitalwasincreasedto$2,000,000bythedeclarationofastockdividendoutof

2、accumulatedprofits.Thereafteritsdirectorsregularlydeclaredcashdividendsattherate60percentperyearontheincreasedcapitalof$2,000,000andbetweenDecember,1911,andOctober,1915,alsodeclaredadditionalspecialcashdividendsfromtimetotimeamountinginallto$41,000,000.Thereafternospecialdividendsweredeclaredexcept

3、ionof$2,000,000declaredonNovember8,1916,beforetheanswersinthepresentcasewerefiled,andHenryFord,whocontrolledtheboardofdirector,hadstatedthatnomorespecialdividendswouldbedeclaredatpresentandthatthegreaterportionoftheprofitsshouldbeputbackintothebusinessinordertoexpandit,therebyincreasingemploymentan

4、dsellingalargernumberofcarsatalowerpricepercar.ThesurplusofthecorporationatJuly31,1916,was$112,000,000andithadcashandmunicipalbondsamountingtonearly$54,000,000.OnNovember2,1916,thedirectorsvotedtoexpend$11,325,000toerectblastfurnacesandotherplantinwhichtomanufactureironandotherproductsforuseinthema

5、nufactureofcars,andalso$5,150,000outofaprogramcallingfor$9,895,000forasubstantialduplicationofexistingplant.Thereupon,twominoritystockholders,owningonetenthofthecompany'sstock,broughtsuittocompelthedeclarationofanadditionaldividendofnotlessthan75percentoftheaccumulatedcashsurplus.Thecourtorderedthe

6、declarationofadividendof$19,275,385.96.Defendantsappealed.Ostrander,J.~...Whenplaintiffsmadetheircomplaintanddemandforfurtherdividends,theFordMotorCompanyhadconcludeditsmostprosperousyearofbusiness.Thedemandforitscarsatthepriceoftheprecedingyearcontinued.ItcouldmakeandcouldmarketintheyearbeginningA

7、ugust1,1916,morethan500,000cars.Salesofpartsandrepairswouldnecessarilyincrease.Thecostofmaterialswaslikelytoadvance,andperhapsthepriceoflabor,butitreasonablymighthaveexpectedaprofitfortheyearofupwardsof$60,