Charles Welch v. Atlantic Gulf & West Indies Steamship Lines

200 F.2d 199 Charles WELCH, Plaintiff-Appellant, v. ATLANTIC GULF & WEST INDIES STEAMSHIP LINES, Defendant-Appellee. No. 82. Docket 22473. United States Court of Appeals Second Circuit. Argued December 1, 1952. Decided December 19, 1952. Appeal from the United States District Court for the Eastern District of New York; Clarence G. Galston, Judge. Action by a holder of non-cumulative preferred stock to obtain a decree for payment of dividend arrears. From an adverse summary judgment, the plaintiff appeals. M. Mac Schwebel, New York City (Harry Silver, New York City, on the brief), for appellant. Greenman, Shea, Sandomire & Zimet, New York City (Frederick F. Greenman, Daniel M. Sandomire and Robert H. Haines, New York City, of counsel), for appellee. Before SWAN, Chief Judge, and CHASE and CLARK, Circuit Judges. PER CURIAM. — 1 — Judgment is affirmed on the opinion below, D.C., 101 F.Supp. 257. The appellant's effort to distinguish Guttmann v. Illinois Central R. Co., 2 Cir., 189 F.2d 927, certiorari denied 342 U.S. 867, 72 S.Ct. 107 cannot prevail. The sentence upon which counsel relies for the attempted distinction is a restriction upon the payment of dividends on the common stock; it does not impose an obligation to pay passed dividends on the non-cumulative preferred. That this is the correct interpretation is confirmed by the provision giving the corporation the option to purchase preferred stock at par, as well as by the provision governing liquidation and dissolution of the corporation.