Peabody v. Interborough Rapid Transit Co.

Headnote

Stocks and stockholders ■— guaranty — action to recover arrears of dividends guaranteed by lessor of corporate property.

Peabody v. Interborough Rapid Transit Co., 213 App. Div. 857 j affirmed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the first judicial department, entered April 4, 1925, affirming a judgment in favor of plaintiff entered upon two orders of Special Term granting motions for judgment. The action was to recover arrears of dividends alleged to be guaranteed by defendant under a provision of a lease between the Manhattan Company, in which plaintiff was a shareholder, and defendant whereby the latter leased the railroads and property of the Manhattan Company. Upon each stock certificate held by plaintiff appeared the indorsement of the defendant in the following form: “ Dividends amounting to six per cent, per annum and an additional amount if earned not exceeding one per cent, per annum until January 1, 1906, and after that date dividends of seven per cent, per annum upon the par value of the outstanding capital stock of the Manhattan Railway Company are guaranteed and will be paid by the undersigned in accordance with the terms and provisions of a certain indenture made between the Manhattan Railway Company and the undersigned, entered into the 1st of January, 1903. Interborough Rapid Transit Company. By J. H. Campbell, Treasurer.”