This cause was tried at the. Special Term and a judgment was directed and entered for the plaintiff, from which the defendant •appeals. The findings of fact made by the court, which are material to the disposition -of the cause, are all supported by the evidence, and indeed do not seem to be disputed.
It appears that the defendant, E. P. Gleason Manufacturing Company, was a domestic corporation, and that one Francis Billing-ham was the owner of record and the proprietor of five shares of its capital stock, which he owned from January, 1872, until his death in September, 1902, and that the plaintiff is now the sole legatee and owner of those five shares. Connected with the shares was a scrip dividend (No. 6-7) issued by the defendant. In J uly,. 1875, it was- voted by the- corporation to declare a dividend of thirty-five dollars per share i/n cash and notes, and that scrip for the amount of the surplus be issued to the stockholders in proportion to stock then held by them a/nd subject to the same conditions. At a *478' meeting held on July 28, 1881, it. was voted to pay four per cent interest yearly on scrip dividends then held by members of, the company, semi-annual payments thereof'to begin on December 30, 1881. At an annual meeting held in July, 1.882, it was voted that profits be added, to outstanding scrip, and that new scrip dividends be issued for the whole amount, with- interest at four per cent to be paid semi-annually on January first and July first. At an annual meeting held in July, 1883, it was voted to pay one-half of a net balance outstanding in cash or notes with interest, and one-half in scrip dividend, and at a meeting held in July, 1884, a cash dividend of twelve dollars per share was voted. In July, 1890, the trustees were authorized to buy in any' of the company’s scrip offered for sale, and at a trustees’ meeting held in February, 1892, five thousand dollars was appropriated to the reduction of the scrip dividend account. [There was issued to Francis Billingham for and , representing an accumulation of scrip dividends declared at all these annual meetings a certificate 'in. the following words and figures*, viz.: ; ■
“No.. 67. '■ . 8935.29.
“E. P. Gleason Manufacturing Co.
“ This certifies that F. Billingham is entitled to Nine Hundred Thirty-Five 29/100 Dollars, Scrip Dividend, representing' the undivided earnings on Certificate No. . of the 'É. P. Gleason Manufacturing Co. for the year 18—, [seal.]
“This dividend is payable at the - pleasure of the Company, and in case of surrender of Certificate of stock-on. which it is issued, this Certificate is to be surrendered with it.
“ F. "W. BELMONT, Secretary-.
' “E. P. GLEASON,'. JPresideniP
Interest at the rate of four per cent on this certificate was .regularly paid upon it and the outstanding scrip certificates, of a like character. The scrip dividend account qf which the certificate No. 67 formed, a part was carried- on the books .of the defendant company as a liability, and was stated to be-such in reports and affidavits made by the company to the -tax authorities, and was set out as an item of the company’s ■ liabilities in the treasurers report to. the stockholders at-the annual meeting held in February, 1903. Some *479stockholders, who held scrip certificates of the same class and description as the certificate in suit, have been paid the amounts called for by their certificates, and some have accepted two-thirds of the amount called for by their- particular certificates in payment thereof. It is found by the court that the defendant was a close corporation, its stock and scrip, with the exception of a very small part, being owned and held by the trustees of. the estate of E. P. Gleason, and that the president and vice-president are trustees of said estate. There was a by-law of the company which provided that employees, etc., on retiring from the employment of the company (and Francis Billingham was an employee) >would be required to return the stock held by them to the company, for which' they would receive the same amount which- they paid for the stock, and a proportion of dividends when the next dividend thereafter should be declared and paid. After the- death of Mr. Billingham, the plaintiff tendered said scrip dividend certificate No. 67 to the company, and demanded payment thereof, which was refused, aiid likewise tendered with it the five shares of stock held by her husband at the time of his death. Some of the stockholders who were employees and relatives of Mr.E. P. Gleason were paid their scrip dividend certificates similar in every respect to the plaintiff’s without their retirement from the employ of the company and without the surrender and payment of the capital stock held by them. It is found as a fact that the year date in the certificate No. 67 was left blank because the certificate represented an accumulation, and not the dividend of any one year, and that the omission therein of the number of the stock certificate was an inadvertence. '
The facts found by the court below have been stated in full in order that the whole case may be presented compactly. The conclusions of law arrived at by the learned judge at Special Term were that the scrip dividend certificate No. 67, represented an accumulation of scrip dividends declared at annual meetings of the stockholders ; that it was within their power to make such dividends, and this certificate was issued,as evidence of a debt due Francis Billing-ham from the defendant company; that the directors or trustees of the defendant company ratified and adopted the declaration of scrip . dividends and the issue of the certificates therefor; that the plaintiff has title to the stock and the scrip dividend certificate ; that the *480condition expressed' in the certificate,- “ This dividend is payable- at. the pleasure of the Company,” rendered the dividend payable:within a reasonable time,, which time has expired; and tliat. payment by the company to-some of the stockholders, of their scrip dividends of the same class and description as the plaintiff’s, and- ariefusal to pay the plaintiff her scrip dividend, was an unlawful discrimination in the payment of dividends to-stockholders.; and it was adjudged that the plaintiff is entitled to judgment decreeing the amount of said scrip dividend certificate a valid obligation of the defendant, now presently payable, with the costs of the action. *
Hpoh the facts as found it is established' that the scrip dividend represented and was-intended tti constitute an- indebtedness of the company to the holder -of that certificate. The form of the certificate as well as its substance indicates an appropriation by the. company of a proportion of undivided • earnings to the holder of that certificate. That is to say, there was an appropriation of. $935.29 of scrip dividend representing -the undivided earnings on Billing-ham’s certificate. That constituted an indebtedness- of the company to Billingham. It-was,so much set apart and reserved for him as undivided earnings. His share was. ascertained and his right to it Was fixed. It was, a- divided share of past earnings,. and, as we think, became a severed indebtedness of the company, for nothing is better Understood than that a dividend when declared is á debt due absolutely to the stockholders.'' It was- an obligation perfect' and complete in its character, although payment was postponed to a future time. It was débitum in prmenti sól/oendum. in fuirn'o. The only answer to .that conclusion would be that the certificate' contains the statement that “This dividend is payable at the pleasure of the Company,” and hence the argument is made .that there was no dividend at all until the company should express its intention to pay. In view of the way in which these certificates have been treated- by the company -itself, that construction is- inadmissible. What is referred to in the clause just quoted is the time of payment—-not the .obligation- to pay.■ • That clause cannot he construed as a nullification of the preceding -one disclosing the existence-of the liability. .There were certain requirements, as appears by the findings of fact, -necessary to be complied with before the certificate was paid, but the plaintiff- offered to make- such compliance.
*481The finding of the' court below 'that the dividend was payable within a reasonable time, was, we think, correct, because of, the absolute nature of -the obligation; and whether that be so or not, it appears that a. dividend was .paid to other holders of certificates of a like character and class with that held by the plaintiff, and when the company elected to pay any holder it put all the holders on the same plane. It, therefore, cannot make a discrimination between holders of these certificates and favor one, while repudiating or ignoring the. claim of another. In a few words, this certificate represented an obligation of the company to pay a certain sum of money, the time at which payment was to be made being left to the determination .of the company, itself. The obligation being absolute, the payment was to be made within a reasonable time, and the plaintiff waited a reasonable time before bringing, this action. In. addition to that, by paying similar certificates - to the holders thereof the-company made all the certificates payable,, for it had no right of selection as to the payment of individual certificates.
The judgment, therefore, should be affirmed, with costs.
O’Brien and Hatch, JJ., concurred; McLaughlin and Laughlin, JJ., dissented.. " ^