Beneficial Corp. v. Reading & Southwestern Street Railway Co.

This appeal presents the question whether stockholders of a lessor street railway company are entitled, under the provisions of a long term lease of all the company’s assets and franchises, to have the rent stipulated for in the lease paid by the lessee directly to them as dividends, although the board of directors of the company has by resolution directed the lessee to pay the rent to the company in order to provide funds for the payment of the debts of the company. The district court held that the company was entitled to receive the rent rather than its shareholders and entered a summary…