Coon v. Schlimme Dairy Co.

On September 15,1937, at a meeting of the board of directors of the Schlimme Dairy Company, a Michigan corporation, the following resolution was passed:

“Resolved, that a dividend be declared of $5 per share on outstanding stock on record as of September 15, 1937 — said dividend to be made payable in common stock, or cash, or optional for the shareholder.”

There were only three stockholders in the corporation: William F. Schlimme, Harold R. Coon, and Ernest J. Schwanbeck, who with Bernard W. Cruse and Roy I. Brown constituted the board of directors.

On December 18, 1937, William F. Schlimme, the…