DODGE V. FORD MOTOR CO.
204 Mich. 459, 170 N.W. 668 (1919)
NATURE OF THE CASE: Dodge (Ps) objected to a decision of the lower court granting them a specified amount in dividends from Ford (D) corporation but denying their request for additional interest payments on those dividends.
FACTS: The Dodge family (P) were minority shareholders in Ford Motor Company (D). Henry Ford was the president of the company and owner of 58% of the stock. D had one of their best years ever in fiscal 1915 with a surplus of almost 112 million dollars. Past practice had been to declare increased dividends in good years. However, due to overriding corporate policy, additional dividends were not declared. This policy looked toward an annual reduction in the price of cars while improving their quality. A plant expansion or erection was contemplated even in lieu of this price reduction. Such a policy would result in a less profitable business. Mr. Ford testified on his desire to spread the benefits of the industrial system to the greatest possible extent 'to help men build up their lives and homes.' He felt D had made too much in profits and should share them with the public through the new policy. Ps contend that because the statute has prescribed that the total authorized capital stock shall be not less than $1,000, and not more than $25,000,000 and that it was no $50,000,000, D was required to issue dividends.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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