Philadelphia v. Philadelphia Transportation Co.

Opinion by

Mr. Chief Justice Horace Stern,

This is an appeal from the grant of a preliminary injunction restraining the payment of a dividend to its stockholders by the Philadelphia Transportation Company.

The dividend in question — one of thirty cents on each share of the common stock of the Company, payable October 1, 1956, — was declared by the Board of Directors on August 28, 1956. The action thus taken was over the objection of the City's members of the Board, who contended that the dividend was illegal in that it impaired the capital of the Company.

The City of Philadelphia, the Mayor of…