Bealey, J.
It appears from the material allegations of the amended bill, that the defendant corporation was organized under the laws of this Commonwealth March 4, 1912, with a capital of $2,000,000, one million of which consisted of preferred stock on which, a cumulative dividend' of seven per cent was payable quarterly, and one million of common stock. The shares of all the stock had a par value of $100, but on September 27, 1920, the common stock was changed to the same number of shares having no par value. The corporation September 30, 1923, had a surplus over the par value of the preferred stock of $830,635.48, and had paid dividends to April, 1914, but thereafter and to January, 1924, the dividends were passed, leaving on January 1, 1924, accumulated dividends amounting to $700,000, or $70 on every share. The plaintiff, the holder of three hundred shares of the preferred stock, brought the present suit June 26, 1924, to compel the corporation, and the individual defendants, its president and directors, to declare and pay to her the share of accumulated dividends to which she claims to be entitled.
[533]*533The plaintiff’s rights as a stockholder as between herself, the corporation, and other stockholders are contractual. Page v. Whittenton Manuf. Co. 211 Mass. 424, 427. The terms of the contract are to be found in the agreement of association as stated in the preferred stock certificates, and the provisions of the statute under which the corporation was organized, and has functioned. Page v. Whittenton Manuf. Co., supra. It is provided, that preferred stockholders shall be entitled to dividends at the rate of seven per cent per annum commencing April 1, 1912, and no more, payable from the surplus or net profits of «the corporation quarterly on the first days of July, October, January and April. The dividends shall be cumulative and payable before any dividends on the common stock shall be payable or set aside; so that in any year that dividends amounting to seven per cent have not been paid, the deficiency shall be payable before any dividend shall be payable upon, or set aside for the common stock. A dividend however is payable only when it has been declared. The declaration of the dividend creates not only the dividend, but the right of the stockholder to demand and receive it. Boston Safe Deposit & Trust Co. v. Adams, 219 Mass. 175, 177. Smith v. Cotting, 231 Mass. 42. The certificate follows the power given to the corporation by St. 1903, c. 437, § 27, and the terms of the certificate mean that the plaintiff in common with stockholders of her class is to receive current and accrued dividends before the common stockholders can participate in the distribution of net profits. Field v. Lamson & Goodnow Manuf. Co. 162 Mass. 388, 394. Gardner Savings Bank v. Taber-Prang Art Co. 189 Mass. 363, 365.
It is alleged, that notwithstanding the contract and the surplus applicable to the payment of dividends, the defendants in violation of the plaintiff’s rights illegally declined to make payment, and have unlawfully caused the surplus and net profits to be converted into capital assets without her consent which are to be shared in accordance with the votes of the stockholders at a special meeting held April 30,1924. The business affairs of the corporation seem [534]*534to have gradually become unsatisfactory, and the efforts of the directors to devise some mode of relief culminated in calling this meeting when they submitted a plan of reorganization. It was voted to increase the capital stock by the issue of ten thousand shares of second preferred stock without par value to be disposed of as might be determined by the board of directors, and that the agreement of association and articles of association be amended by striking out the provisions as to preferred stock and. substituting other “Stock Provisions” which are fully stated in the record. The first paragraph of the first section of these provisions is the same as those of the certificate previously described. But this is followed by the provision, that “when all dividends have accumulations accruing after January 1, 1924, on the preferred stock have been paid, the Second Preferred stock shall be entitled to dividends at the rate of $3.50 a year and no more. Dividends on the Second Preferred stock shall be cumulative from the date of issue only for each fiscal year during which the earnings are in excess of an amount” necessary to pay current preferred dividends, accumulations on the preferred stock for the fiscal years since January 1, 1924, during which current dividends were not earned, and to “make up the deficiencies in the surplus caused by the payment of preferred dividends for any fiscal year since January 1, 1924, during which said dividends were not earned. . . . But in no case shall the dividends on the Second Preferred Stock be cumulative for an amount in excess of the amount by which the earnings exceed the above three limitations.”
We assume, in the absence of any allegations to the contrary, that the reorganization was adopted by a vote of at least two thirds of each class of stock outstanding and entitled to vote. The alterations in its agreement of association, or articles of organization, and classification of stock, were therefore valid, and bound the plaintiff. St. 1903, c. 437, §§ 27, 40. G. L..c. 156, §§ 14,42. Durfee v. Old Colony & Fall River Railroad, 5 Allen, 230. Page v. Whittenton Manuf. Co., supra. We have not overlooked her contention, that the new stock provisions impaired the right of [535]*535sharing in the distribution of assets upon dissolution of the corporation. But under the new provisions she was entitled upon any liquidation, dissolution or winding up to be paid in full both the principal amount of her shares, and the unpaid accumulated or accrued dividends. The second preferred stockholders out of the assets remaining were to receive $70 a share, and any dividends accumulated or accrued thereon, and if any balance remained it was to be divided among the holders of the common stock. The original articles of organization as well as the new provisions having expressly provided, that in the event of liquidation the plaintiff shall be paid in full both the principal amount of her shares, and the unpaid dividends accrued thereon, there was no breach of contract, or impairment of vested rights to property. Reynolds v. Royal Arcanum, 192 Mass. 150. Granara v. Italian Catholic Cemetery Association, 218 Mass. 387.
The directors under the amended articles of organization sent to the plaintiff and other stockholders a letter formulating a plan by which stockholders should receive one share of second preferred stock without par value in exchange for a release of their dividends in arrears. It is-immaterial that a large number of the preferred stockholders accepted the proposal, and surrendered their stock- The plaintiff, who did not assent, alleges, that the directors June 16, 1924, voted to pay a dividend of $35,000 on the preferred stock which amount has been deposited in- the defendant bank, and is an indebtedness to her, and other preferred stockholders whose accumulated dividends have not been paid or released, to be ratably distributed. The declaration of a dividend, however, if justified by net profits, rested in the sound discretion of the directors unless they were controlled or limited by statute, charter, by-law or vote of the stockholders, to which no reference is found in the bill. Fernald v. Frank Ridlon Co. 246 Mass. 64.
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Bealey, J.
It appears from the material allegations of the amended bill, that the defendant corporation was organized under the laws of this Commonwealth March 4, 1912, with a capital of $2,000,000, one million of which consisted of preferred stock on which, a cumulative dividend' of seven per cent was payable quarterly, and one million of common stock. The shares of all the stock had a par value of $100, but on September 27, 1920, the common stock was changed to the same number of shares having no par value. The corporation September 30, 1923, had a surplus over the par value of the preferred stock of $830,635.48, and had paid dividends to April, 1914, but thereafter and to January, 1924, the dividends were passed, leaving on January 1, 1924, accumulated dividends amounting to $700,000, or $70 on every share. The plaintiff, the holder of three hundred shares of the preferred stock, brought the present suit June 26, 1924, to compel the corporation, and the individual defendants, its president and directors, to declare and pay to her the share of accumulated dividends to which she claims to be entitled.
[533]*533The plaintiff’s rights as a stockholder as between herself, the corporation, and other stockholders are contractual. Page v. Whittenton Manuf. Co. 211 Mass. 424, 427. The terms of the contract are to be found in the agreement of association as stated in the preferred stock certificates, and the provisions of the statute under which the corporation was organized, and has functioned. Page v. Whittenton Manuf. Co., supra. It is provided, that preferred stockholders shall be entitled to dividends at the rate of seven per cent per annum commencing April 1, 1912, and no more, payable from the surplus or net profits of «the corporation quarterly on the first days of July, October, January and April. The dividends shall be cumulative and payable before any dividends on the common stock shall be payable or set aside; so that in any year that dividends amounting to seven per cent have not been paid, the deficiency shall be payable before any dividend shall be payable upon, or set aside for the common stock. A dividend however is payable only when it has been declared. The declaration of the dividend creates not only the dividend, but the right of the stockholder to demand and receive it. Boston Safe Deposit & Trust Co. v. Adams, 219 Mass. 175, 177. Smith v. Cotting, 231 Mass. 42. The certificate follows the power given to the corporation by St. 1903, c. 437, § 27, and the terms of the certificate mean that the plaintiff in common with stockholders of her class is to receive current and accrued dividends before the common stockholders can participate in the distribution of net profits. Field v. Lamson & Goodnow Manuf. Co. 162 Mass. 388, 394. Gardner Savings Bank v. Taber-Prang Art Co. 189 Mass. 363, 365.
It is alleged, that notwithstanding the contract and the surplus applicable to the payment of dividends, the defendants in violation of the plaintiff’s rights illegally declined to make payment, and have unlawfully caused the surplus and net profits to be converted into capital assets without her consent which are to be shared in accordance with the votes of the stockholders at a special meeting held April 30,1924. The business affairs of the corporation seem [534]*534to have gradually become unsatisfactory, and the efforts of the directors to devise some mode of relief culminated in calling this meeting when they submitted a plan of reorganization. It was voted to increase the capital stock by the issue of ten thousand shares of second preferred stock without par value to be disposed of as might be determined by the board of directors, and that the agreement of association and articles of association be amended by striking out the provisions as to preferred stock and. substituting other “Stock Provisions” which are fully stated in the record. The first paragraph of the first section of these provisions is the same as those of the certificate previously described. But this is followed by the provision, that “when all dividends have accumulations accruing after January 1, 1924, on the preferred stock have been paid, the Second Preferred stock shall be entitled to dividends at the rate of $3.50 a year and no more. Dividends on the Second Preferred stock shall be cumulative from the date of issue only for each fiscal year during which the earnings are in excess of an amount” necessary to pay current preferred dividends, accumulations on the preferred stock for the fiscal years since January 1, 1924, during which current dividends were not earned, and to “make up the deficiencies in the surplus caused by the payment of preferred dividends for any fiscal year since January 1, 1924, during which said dividends were not earned. . . . But in no case shall the dividends on the Second Preferred Stock be cumulative for an amount in excess of the amount by which the earnings exceed the above three limitations.”
We assume, in the absence of any allegations to the contrary, that the reorganization was adopted by a vote of at least two thirds of each class of stock outstanding and entitled to vote. The alterations in its agreement of association, or articles of organization, and classification of stock, were therefore valid, and bound the plaintiff. St. 1903, c. 437, §§ 27, 40. G. L..c. 156, §§ 14,42. Durfee v. Old Colony & Fall River Railroad, 5 Allen, 230. Page v. Whittenton Manuf. Co., supra. We have not overlooked her contention, that the new stock provisions impaired the right of [535]*535sharing in the distribution of assets upon dissolution of the corporation. But under the new provisions she was entitled upon any liquidation, dissolution or winding up to be paid in full both the principal amount of her shares, and the unpaid accumulated or accrued dividends. The second preferred stockholders out of the assets remaining were to receive $70 a share, and any dividends accumulated or accrued thereon, and if any balance remained it was to be divided among the holders of the common stock. The original articles of organization as well as the new provisions having expressly provided, that in the event of liquidation the plaintiff shall be paid in full both the principal amount of her shares, and the unpaid dividends accrued thereon, there was no breach of contract, or impairment of vested rights to property. Reynolds v. Royal Arcanum, 192 Mass. 150. Granara v. Italian Catholic Cemetery Association, 218 Mass. 387.
The directors under the amended articles of organization sent to the plaintiff and other stockholders a letter formulating a plan by which stockholders should receive one share of second preferred stock without par value in exchange for a release of their dividends in arrears. It is-immaterial that a large number of the preferred stockholders accepted the proposal, and surrendered their stock- The plaintiff, who did not assent, alleges, that the directors June 16, 1924, voted to pay a dividend of $35,000 on the preferred stock which amount has been deposited in- the defendant bank, and is an indebtedness to her, and other preferred stockholders whose accumulated dividends have not been paid or released, to be ratably distributed. The declaration of a dividend, however, if justified by net profits, rested in the sound discretion of the directors unless they were controlled or limited by statute, charter, by-law or vote of the stockholders, to which no reference is found in the bill. Fernald v. Frank Ridlon Co. 246 Mass. 64. The directors were to decide in view of the general financial condition of the corporation and the funds available for dividends, whether the amount set aside should be appropriated to the partial payment of dividends which had accumulated, or whether the [536]*536preferred stockholders of record June 24, 1924, should be paid for the period from January 1, 1924, to July 1, 1924, a dividend of $3.50 a share. It is manifest, that no dividend has been voted on the common stock, and the dividend declared was payable to all preferred stockholders including the plaintiff.
The accumulated dividends were not as the plaintiff also contends a charge upon the fund which she can enforce. It never was appropriated for the specific purpose of paying her demands. The directors on the record did not act unlawfully and without authority, and if the plaintiff intended to impeach their conduct as having been a breach of trust and hence fraudulent, she should have specifically so charged; general suggestions or intimations are insufficient. Barron v. International Trust Co. 184 Mass. 440, 443. Cosmopolitan Trust Co. v. S. L. Agoos Tanning Co. 245 Mass. 69, 73.
The single justice correctly ruled that the demurrer should be sustained, and a decree dismissing the bill with costs is to be entered.
Ordered accordingly.