Shares are either preference or common. Preferred entitle the holder to a priority in the dividends or earnings over common stock. Guaranteed stuck is the same thing. In England, the transfer is by separate deed; in America, the deed or power of attorney is printed on the back of the share certificate, the transfer being signed in blank by the registered owner. The registered owner in England is generally a prominent banking or issue firm. It is through such registered owner that the holder receives his dividends. American railroad shares are, thus treated, virtually as bearer scrip. 'With a transfer so signed they can be dealt in ith the same impunity as bills and notes. In case of the sale of the stock, this power of attorney becomes irrevocable; but if such power of attorney is forged, or is made by a person not competent to make it, the company is liable for allowing the transfer: A company may refuse to allow a transfer until satisfied of the party's right to make it. Apart from a blank transfer so signed as above, Americtt shares are non-negotiable.
Municipal Securities.—The power to borrow money and issue bonds therefor is not included among the implied powers of a municipal corpora tion ; but when a debt has been lawfully incurred, a municipal corpai atioa is not prohibited from issuing bonds for its payment. But such a corporation possesses the incidental or implied power to borrow money and issue bonds therefor in order to carry out its express powers, or any affecting its legitimate objects. Where a statute confers a power to borrow money and fixes the limit, a municipality cannot exceed that amount. There is an irreconcilable conflict amongst the authorities as to the power of municipal corporations to issue bonds, or other commercial paper, having the qualities of negotiable instruments. But it is easy, and it seems usual, for the State legislatures to confer the rower to issue negotiable bonds. Thus it may be taken that in the ordinary course, under American law, such bonds are in the commercial sense negotiable. For precise knowledge, however, as to the legal effect of any municipal bond in particular, it would be necessary to consult the laws of the State to which the municipality belongs. Here it may be remarked that the United States is a union of independent States, each having its own independent legislature and making its own laws. Bonds which were valid under the decisions of their own State Court at the time they were issued will be upheld by the Federal Court, even though the State Court has over ruled its earlier decisions and held that they were issued without authority. Regularly issued, they are not subject to prior equities in the hands of holders for value who look before maturity and want notice. As against bond fide holders for value, payment of interest on such bonds will stop the corporation from setting up a mere irregularity in their issue. The coupons usually attached thereto are detachable, and when detached are themselves negotiable. The holder of a coupon may sue thereon in his own name, even
though he is not the owner of the bond.
Private Corporations.—The capital stock herein is divided into shares, which are received by the subscribers to the corporation, according to the amount of their respective subscriptions. A share thus represents the interest which its holder, who is called a stockholder, has in the cor poration. The number and value of the shares into which the capital is divided, the voting power of the stockholders, and many other details, depend upon the statutory regulations, or, in their absence, the agreement of the parties forming the corporation. The ownership of shares is attested by a certificate usually, but not necessarily, under the corporate seal. Apart from such a certificate, the presence of a party's name on the stock books of the company is evidence of ownership. Shares are non-negotiable ; but, as in the case of railroad shares, stock certificates with a power to transfer them endorsed thereon in blank, can be dealt in with nearly the same im punity as bills or notes ; and so, upon the sale of the stock under such an endorsed power, the latter becomes irrevocable, and makes the certificate practically negotiable. The general rights of a stockholder are to attend stockholders' meetings and to participate in the profits of the business ; to require that the corporate property and funds shall not be diverted from their original purposes, and if the company becomgs insolvent to have its property applied to the payment of its debts. For the invasion of these rights by the officer of a company, a stockholder may sue at law or in equity, according to the nature of the case. All remedies for injury to the property or rights of such a corporate body must be prosecuted in the name of a company ; all demands against the company must be prosecuted against it by name. But where the officers and managers of a company, by fraud and collusion with third persons, are sacrificing, or are about to betray or sacrifice, the interests of the company, a stockholder may, for such breaches of trust and conspiracy, call the guilty parties to an account in a court of equity. The books of a corporation are said to be the common property of all the stockholders, and are subject to their inspection for proper purposes and at proper times ; the right may be enforced by mandamus. After shares are legally fully paid, no further payment can be required from the shareholders. In some States, however, this rule is partially modified by statute. A suit for unpaid calls may be brought against a stockholder without notice ; when a receiver has been appointed the call is made by decree of the Court. If a creditor of a corporation has obtained a judgment against the corporation, and execution thereon has been returned unsatisfied, he may proceed directly against stockholders for unpaid calls.