As to a peculiar issue of deferred stock, see 39 Leg. Int. 98 (S. C. Pa.). The term is sometimes used in contra-distinction to pre ferred stock to indicate stock which receives a dividend only after the payment of a divi dend on preferred stock.
"Special stock" is issued by corporations in Massachusetts. It is limited to two-fifths of the actual capital ; it is subject to redemp tion at a fixed time; the holder is entitled to a half-yearly dividend, as upon a debt ; the holders are not liable for the debts of the company, and the general stockholders are liable for all the debts until the special stock is redeemed. See Cook, St. & Stockh. §§ 13, 276.
Interest bearing stock has been recognized by the courts. The contract to pay interest is lawful only when interest is to be paid out of net earnings ; Miller v. R. Co., 40 Pa. 237, 80 Am. Dec. 570; Barnard v. R. Co., 89 Mass. (7 Allen) 512; and in this view is merely a species of preferred stock.
At common law, a corporation cannot pur chase shares of its own capital stock ; 9 Ch. App. 54; but such a purchase is held legal and allowable ; Douglas v. Daily News Co., 160 Ill. App. 506; West v. Grocery Co., 109 Ia. 488, 80 N. W. 555 ; Schaun v. Brandt, 116 Md. 560, 82 Atl. 551; Lindsay v. Co-operative Ass'n, 186 Mass. 371, 71 N. E. 797; Cole v. Realty Co., 169 Mich. 347, 135 N. W. 329 ; U. S. Steel Corp. v. Hodge, 64 N. J. Eq. 807, 54 Atl. 1, 60 L. R. A. 742 ; Richards v. Ernst Wiener Co., 207 N. Y. 59, 100 N. E. 592; Blalock v. Mfg. Co., 110 N. C. 99, 14 S. E. 501; Sweeney v. Underwriters Co., 29 S. D. 576, 137 N. W. 379 ; San Antonio Hardware Cu. v. Sanger (Tex.) 151 S. W. 1104: Rogers v. Say. Ass'n, 30 Utah, 188, 83 Pac. 754. Na tional banks are prohibited from purchasing shares of their own stock ; U. S. R. S. § 5201. When a corporation buys shares of its own stock, the capital stock is not reduced by that amount, nor is the stock merged; Ralston v. Rank, 112 Cal. 208, 44 Pac. 476. So long as the corporation retains the ownership, the stock is lifeless, without rights or powers, but at any time the corporation may resus citate it by selling and transferring it to the purchaser, and it may be sold at its market value, and need not be held for its par value, as is necessary in an original issue of stock ; Belknap v. Adams, 49 La. Ann. 1350, 22
South. 382. As a general rule a corporation has no implied power to purchase shares of the capital stock of another corporation. A railroad company unless expressly authorized so to do, cannot purchase shares of stock in another railroad company ; Central IL Co. v. Collins, 40 Ga. 582.
See DIVIDENDS; VOTING TRUST; OVER-ISSUE; STOCKHOLDER ; CORPORATIONS ; FOUNDERS' SHARES; PARTNERS.
English Law. In reference to the invest ment of money, the term "stock" implies those sums of money contributed towards raising a fund whereby certain objects, as of trade and commerce, may be effected. It is also employed to denote the moneys ad vanced to government, which constitute a part of the national debt, whereupon a cer tain amount of interest is payable. Since the introduction of the system of borrowing upon interminable annuities, the meaning of the word "stock" has become gradually changed; and, instead of signifying the security upon which loans are advanced, it has for a long time signified the principal of the loans them selves. In this latter sense we speak of the sale, purchase, and transfer of stock ; Moz. & W. See Cavanaugh, Money Securities.
Stock, in England, signifies a number of paid-up shares, so united that the owner may subdivide it and transfer it in large or small quantities, irrespective of the number and par value of the shares ; Cook, St. & Stockh. § 12. Stock can only exist in the paid-up state; L. R. 7 H. L. 717.
Debenture stock "is merely borrowed capi tal consolidated into one mass for the sake of convenience. Instead of each lender hav ing a separate bond or mortgage, he has a certificate entitling him to a certain sum, be big part of one large loan." Lindl. Com panies 195. It has no connection with stock as commonly used in this country. See Sim onson, Deb. & Deb. St.
Descents. A metaphorical expression which designates in the genealogy of a family the person from whom others are descended: those persons who have so descended are call ed branches. See 1 Roper, Leg. 103 ; 2 Belt. Suppl. Yes. 307; BRANCH; DESCENT; LINE; STIRPES.
Farm Stock. See FENCES; RUNNING AT LARGE.