Starring v. American Hair & Felt Co.

The Chancellor:

The defendant corporation has three kinds of stock outstanding. They are a $100.00 par value first preferred six per cent, cumulative stock; a no par value second preferred cumiulative stock, calling for a dividend of five dollars per share until July 1, 1940, and for six dollars per share thereafter; and a common stock of no par value.

The certificate of incorporation defines the rights, privileges and restrictions appertaining to the respective classes of stock. These, as applicable to dividends, are in summary as follows: the first claim on earnings for dividend purposes…