Dodge v. United States

The Ford Motor Company, a Michigan corporation, had in its treasury at the close of the fiscal year ended July 31, 1916, a large cash surplus. Plaintiffs’ testator, a stockholder, demanded that a portion of this surplus be distributed as dividends in addition to the regular dividend. The directors refused the demand, and the plaintiffs brought equitable action to compel the distribution. The circuit and supreme courts of Michigan decided that the action of the directors in refusing to make the distribution was arbitrary and exceeded their discretion, and ordered them to make distribution of…