In mercantile law. The goods and wares of a merchant or tradesman, kept for sale and traffic. In a larger sense. The capital of a merchant or other person, including his merchandise, money, and credits, or, in other words, the entire property employed In business. In corporation law. The capital
More... In mercantile law. The goods and wares of a merchant or tradesman, kept for sale and traffic. In a larger sense. The capital of a merchant or other person, including his merchandise, money, and credits, or, in other words, the entire property employed In business. In corporation law. The capital or principal fund of a corporation or joint-stock company, formed by the contributions of subscribers or the sale of shares, and considered as the aggregate of a certain number of shares severally owned by the members or stockholders of the corporation; also the proportional part of the capital which is owned by an individual stockholder; also the Incorporeal property which is represented by the holding of a certificate of stock; and in a wider and more remote sense, the right of a shareholder to participate in the general management of the company and to share proportionally in its net profits or earnings or in the distribution of assets on dissolution. See Thayer v. Wathen, 17 Tex. Civ. App. 882, 44 S. W. 906; Burrall v. Bush wick R. Co., 75 N. Y. 216; State V. Lewis, 118 Wis. 432, 95 N. W. 888; Heller v. National Marine Bank, 89 Md 602, 43 Atl. 800, 45 L. R. A. 438, 73 Am. St Rep. 212; Trask v. Magulre, 1& Wall. 402, 21 I* Ed. 938: Harrison v. Vines, 46 Tex. 15. The funded Indebtedness of a. state or government also, is often represented by stocks, shares of which are held by Its creditors at interest. In the law of descent. The term is used, metaphorically, to denote the original progenitor of a family, or the ancestor from whom the persons in question are all descended; such descendants being called "branches". Classes of corporate stock. Preferred stock is a separate portion or class of the stock of a corporation, which Is accorded, by the charter or by-laws, a preference or priority in respect to dividends, over the remainder of the stock of the corporation, which in that case is called "common" stock. That is, holders of the preferred stock are entitled to receive dividends at a fixed annual rate, out of the net earnings or profits of the corporation, before any distribution of earnings is made to the common stock. If the earnings applicable to the payment of dividends are not more than sufficient for such fixed annual dividend, they will be entirely absorbed by the preferred stock. If they are more than sufficient for the purpose, the remainder may be given entirely to the common stock (which is the more usual custom) or such remainder may be distributed pro rata to both classes of the stock, in which case the preferred stock is said to "participate" with the common. The fixed dividend on preferred stock may be "cumulative" or "non-cumulative." In the former case, if the stipulated dividend on preferred stock is not earned or paid in any one year, it becomes a charge upon the surplus earnings of the next and succeeding years, and all such accumulated and unpaid dividends on the preferred stock must be paid off before the common stock is entitled to receive dividends. In the case of "non-cumulative" preferred stock, Its preference for any given year Is extinguished by the failure to earn or pay its dividend in that year. If a corporation has no class of preferred stock, all its stock is common stock. The word "common" in this connection signifies that all the holders of such stock are entitled to an equal pro rata division of profits or net earnings, If any there be, without any preference or priority among themselves. "Deferred" stock is rarely issued by American corporations, though it is not uncommon in England. This kind of stock is distinguished by the fact that the payment of dividends upon it is expressly postponed until some other class of stock has received a dividend, or until some certain liability or obligation of the corporation is
discharged. If there is a class of "preferred" stock, the common stock may In this sense be said to be "deferred," and the term is sometimes used as equivalent to "common" stock. But it is not impossible that a corporation should have three classes of stock: (1) Preferred, (2) common, and (3) deferred; the latter class being postponed, In respect to participation in profits, until both the preferred and the common stock had received dividends at a fixed rate. See Cook, Corp. 8 12; State v. Railroad Co., 16 S. C. 528; Scott v. Railroad Co., 03 Md. 475, 49 Atl. 327: Jones v. Railroad Co., 67 N. H. 234, 30 Atl. 614, 68 Am. St Rep. 650; Lockhart v. Van Alstyne, 31 Mich. 76, 18 Am. Rep. 156; Burt v. Rattle, 31 Ohio St. 116; Storrow v. Mfg. Ass'n, 87 Fed. 616, 31 C. C. A. 139. -Capital stock. See that title.-Certificate of stock. See CERTIFICATE.-Guarantied stock. Stock of a corporation which is entitled to receive dividends at a fixed annual rate, the payment of which dividends is guarantied by some outside person or corporation. See Field v. Lamson, etc., Mfg. Co.. 162 Mass. 388, 38 N. E. 1126, 27 I* R. A. 136.-Public stocks. Tbe funded or bonded debt of a government or state.-Special stook of a corporation, in Massachusetts, is authorized by statute. It is limited in amount to two-fifths of the actual capital. It is subject to redemption by tne corporation at par after a fixed time. The corporation is bound to pay a fixed annual dividend on it as a debt The holders of it are in no event liable for the debts of the corporation beyond their stock; and an issue of special stock makes all the general stockholders liable for all debts and contracts of the corporation until the special stock is fully redeemed. American Tube Works v. Boston Mach. Co., 139 Mass. 5, 29 N. E. 63.-Stock association. A joint-stock company, (q. v.)-Stock-broker. One who buys and sells stock as the agent of others. Banta v. Chicago, 172 111. 204, 50 N. E. 233, 40 L. R. A. 611; Little Rock v. Barton, 33 Ark. 436; Gast v. Buckley (Ky.) 64 S. W. 632.-Stock corporation. A corporation having a capital stock divided into shares, and which is authorized by law to distribute to the holders thereof dividends or shares of the surplus profits of the corporation. Buker y. Steele (Co. Ct) 43 N. Y. Supp. 350.-Stock dividend. See DIVIDEND.-Stock-exchange. A voluntary association of persons (not usually a corporation) who, for convenience in the transaction of business with each other, have associated themselves to provide a common place for the transaction of their business; an association of stock-brokers. Dos Passes, Stock-Brok. 14. The building or room used by an association of stock-brokers for meeting for the transaction of their common business.-Stockjobber. A dealer in stock; one who buys and sells stock on his own account on speculation. State v. Debenture Co., 51 La. Ann. 1874. 26 South. 600-Stock-note. The term "stock-note" has no technical- meaning, and may as well apply to a note given on the sale of stock which the bank had purchased or taken in the payment of doubtful debts as to a note given on account of an original subscription to stock. Dunlap v. Smith, 12 111. 402.-Watered stook. Stock issued by way of increase or addition to the nominal capital stock of the corporation, and passing into the hands of stockholders either by purchase or in the form of a stock dividend, but which does not represent or correspond to any increase in the actual capital or actual value of the assets of the corporation. See Appeal 6f Wiltbank, 64 Pa. 260, 3 Am. Rep. 58o.
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