Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/599

CHAP. IX.] CORPORATION AND SHAREHOLDERS. [§ 572. ration, its capital, affairs, and profits to come, as any other holder of a share. Certificates of stock were issued under this bj^-law, that gave no expression of anj^thing different from that. When that by-law was adopted, it was as much the law of the corporation as if its pro visions had been a part of the charter. (Presbyterian Church v. City of New York, 5 Cow. 538.) So it is said in Grant on Corporations, page 80, in a qualified way. Thereby, and by the certificate, as between it and every stock- holder, the capital stock of the company was fixed in amount, in the number of shares into which it was divisible, and in the peculiar and relative value of each share. The by-law entered into the compact between the corporation and every taker of a share ; it was in the nature of a contract between them. The holding and owning of a share gave a right which could not be divested without the assent of the holder and owner ; or unless the power so to do had been reserved in some way. (Mech. Bank v. N. Y. and K H. R. R. Co., 13 K Y. 599-627.) Shares of stock are in the nature of chases in action, and give the holder a fixed right in the division of the profits or earn- ings of a compan}^ so long as it exists, and of its effects when it is dissolved. That right is as inviolable as is any in prop- erty, and can no more be taken away or lessened against the will of the owner than can any other right, unless power is reserved in the first instance, when it enters into the constitu- tion of the right ; or is properly derived afterwards from a superior lawgiver. The certificate of stock is the muniment of the shareholder's title, and evidence of his right. It ex- presses the contract between the corporation and his co-stock- holders and himself ; and that contract cannot, he being un- willing, be taken away from him or changed as to him without his prior dereliction, or under the conditions above stated. Now it is manifest that any action of a corporation which takes hold of the shares of its capital stock already sold and in the hands of lawful owners, and divides them into two classes, one of which is thereby given prior right to a receipt of a fixed sum from the earnings before the other may have any receipt therefrom, and is given an equal share afterwards with the other in what earnings may remain, destroys the equality of 579