CORPORATIONS--CAPITAL AND STOCK-RIGHT OF EMPLOYEE TO RECEIVE STOCK DIVIDEND UNDER STOCK PURCHASE AGREEMENT

Defendant's decedent, X, was executive vice-president and treasurer of plaintiff corporation. Intending to increase X's compensation, plaintiff drew up a plan calling for the sale of 100 shares of plaintiff's stock to X, plaintiff to have a lien on the stock certificate made out in X's name and the right to credit all dividends declared on the stock against its purchase price until fully paid. X was granted the right to vote the stock and to receive the dividends declared after full payment. The agreement specifically provided that X was not entitled to possession of the certificate, that the shares were to represent a personal, non-transferable interest of the employee, and that the plaintiff could repurchase such interest either upon X's death or the cessation of his employment.

X accepted the plan, dividends were declared and credited upon the price of the stock, and a stock dividend in X's name of 300 shares was declared. X died before the purchase price of the original stock had been fully credited to him. Conceding its liability for the cash dividend credits up to the time of death, plaintiff demanded that in pursuance of the original agreement defendant administrator release his interest in the certificate representing the stock dividend. The demand was refused.

On plaintiff's appeal from a decree denying specific performance of the agreement, held, reversed.

W. 0.

Barnes Co. v. Folsinski, 337 Mich. 370, 60 N.W. (2d) 302 (1953).