STOCK. In Mercantile Law. The capital of a merchant, tradesman, or other person, including his merchandise,. money, and cred its. The goods and wares he has for sale and traffic.
In Corpbration Law. A right to partake, according to the amount of the party's sub scription, of the surplus profits obtained from the use 'and disposal 'of the capital stock of the company. Ang. & A. Corp. § 557.
The capital stock of a corporation is that money or property which is put into a fund by those who, by subscription therefor, be come members of the corporate body. Bur rall Y. R. Co., 75 N. Y. 211. The phrase cap ital stock has been objected to, as the two words hirie separate meanings, capital being the sum subscribed and paid into the com pany, and stock being the thing which the subscriber receives for what he pays in: Dos Passos, St. Brokers 579. See People v. Com'rs of Taxes and Assessments, 23 N. Y. 192. The interest which each person has in the corporation is termed a share, which is the right to participate in the profits of the corporation, and, upon its dissolution, in the division of its assets. See Burrall v. R. Co., 75 N. Y. 211. "Capital stock" has been held to mean the amount contributed by the share holders, and not the property of the compa ny; State v. Morristown Fire Ass'n, 23 N. J. L. 195.
Capital stock is the sum fixed by the cor porate charter as the amount paid in or to be paid in by the stockholders for the prosecu tion of the business of the corporation and for the benefit of corporate creditors. Cook, St. & Stockh. § 9. It is to be clearly distin guished from the amount of property pos sessed by the corporation ; id.
The property or means contributed by the stockholders as the fund or basis for the busi ness or enterprise for which the corporation or association was formed. Bailey v. Clark, 21 Wall. (U. S.) 284, 22 L. Ed. 651. See defini tions in People v. Coleman, 126 N. Y. 433, 27 N. E. 818, 12 L. R. A. 762 ; St. Louis, I. M. & S. Ry. v. Loftin, 30 Ark. 693 ; Bent v. Hart, 10 Mo. App. 146. Capita] stock is a different thing from shares of stock ; the latter are evidences of ownership ; Wilkes Barre De posit & Say. Bk. v. Wilkes Barre, 148 Pa. 601, 24 Atl. 111. Stock is commonly used to mean shares of stock, and it has been so held in a tax statute ; Lockwood v. Weston, 61 Conn. 211, 23 Atl. 9.
The capital stock of a corporation differs widely in legal import from the aggregate shares into which it is divided by its charter (Farrington v. Tennessee, 95 U S. 686, 24 L. Ed. 558; People v. Coleman, 126 N. Y. 437, 27 N. E. 818, 12 L. R. A. 762) ; while the former
includes only the fund of money or other property derived by it from the sale or ex change of its shares of stock, the latter rep resents the totality of the corporate assets and property ; Hamor v. Engineering Co., 84 Fed. 396.
A share of stock is a right which its owner has in the management, profits, and ultimate assets of the corporation. Cook, St. & Stockh. § 12. So, also, In re C]ementi, 92 N. Y. 592 ; Van Allen v. Assessors, 3 Wall. (U. S.) 585, 18 L. Ed. 229. It is the right to participate in stockholders' meetings, and in the profits of the business, and to require that the cor porate property shall not be diverted from the original purposes ; Forbes v. R. Co., 2 Woods 331, Fed. Cas. No. 4,926.
The number of shares depends upon the statutory regulations, or in their absence the agreement of the parties forming the corpora tion ; Somerset & K. R. Co. v. Cushing, 45 Me. 524. Shares may be arranged in classes, oue class being preferred to another in the distribution of profits ; Kent v. MM. Co., 78 N. Y. 159. Voting may be restricted to a cer tain class.
The ownership of shares is usually at tested by a certificate issued under the cor porate seal ; and when a new transfer is effected, such certificate is surrendered and cancelled, and a new one is issued to the transferee. A certificate need not be un der seal; Coddington v. R. Co., 103 U. S. 409, 26 L. Ed. 400. But a person may be the owner of shares in a corporation without holding such certificate ; Field v. Pierce, 102 Mass. 261; see Schaeffer v. Ins. Co., 46 Mo. 248; and, strictly speaking, a company need not issue any certificates or muniments of title, if not required to do so by law or its charter ; Agricultural Bk. v. Burr, 24 Me. 256. The presence of a party's name on the stock' books of the company is evidence of his ownership of shares; Appeal of Bank of Commerce, 73 Pa. 59. The possession of a corporate certificate of stock, duly issued, is a continuing affirmation of ownership of the stock by the person named therein ; First Nat. Bank v. Lanier, 11 Wall. (U. S.) 369, 20 L. Ed. 172 ; which generally creates an estoppel against the company in favor of the holder; Holbrook v. Zinc Co., 57 N. Y. 616; though in England it is said to be mere ly a solemn affirmation that the specified amount of stock stands on the stock books in the name of the person specified in the certificate; L. R. 7 H. L. 496. Every stock holder is entitled to a certificate of his shares; Cecil Nat. Bank v. Bank, 105 U. S. 217, 26 L. Ed. 1039.