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Abraham v. Ordway

• 1894 • 158 U.S. 416 • Fuller Court
In the case of Abraham v. Ordway in 1894, the United States Supreme Court dealt with a dispute over stock dividends. The plaintiff, Abraham, was an English citizen who owned shares in a New York-based company and claimed that he had not received his share of dividends which were due to him. He sued Ordway, one of the directors of the company for these unpaid dividends. However, it was found that under New York law at that time (which governed this case), shareholders could only sue directors...Open Case
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Chief Fuller Court
Term: 1894
Docket: 274
158 U.S. 416
15 S. Ct. 894
39 L. Ed. 1036
1895 U.S. LEXIS 2266

Abraham v. Ordway

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Opinion Summary
AI Abstract

In the case of Abraham v. Ordway in 1894, the United States Supreme Court dealt with a dispute over stock dividends. The plaintiff, Abraham, was an English citizen who owned shares in a New York-based company and claimed that he had not received his share of dividends which were due to him. He sued Ordway, one of the directors of the company for these unpaid dividends. However, it was found that under New York law at that time (which governed this case), shareholders could only sue directors personally if they had committed fraudulent acts or misappropriated funds - neither allegation applied to Mr. Ordway's actions as director according to court findings. The Supreme Court ruled against Abraham stating that there was no evidence showing any wrongdoing by Mr. Ordway or other board members; hence they couldn't be held liable for paying out those dividends from their personal assets even though corporation itself might have been liable if it still existed when suit commenced but unfortunately it didn’t exist anymore because its charter expired before lawsuit started.

Dissent Summary
AI Abstract

In the dissenting opinion for Abraham v. Ordway, Justice Brewer expressed his disagreement with the majority's decision to uphold a lower court ruling that denied Abraham any relief from an alleged fraudulent stock transaction. He argued that while it was true that Abraham had not directly purchased stocks from Ordway, he had bought them in good faith from a third party who himself was deceived by Ordway’s misrepresentations about the company's financial status. Therefore, according to Justice Brewer, this indirect relationship should not absolve Ordway of responsibility for his deceitful actions which ultimately harmed Abraham financially. The justice further contended that if such deceptive practices were allowed without consequences simply because there wasn't direct contact between fraudster and victim, then it would set a dangerous precedent encouraging dishonesty in business transactions.

Opinion written by Justice JHarlan(1)
Decided: May 20, 1895
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