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Articles 601 - 630 of 697

Full-Text Articles in Securities Law

Trusts-Apportionment Of Dividends Between Life Beneficiaries And Remaindermen - Depletion Of Oil Reserve Apr 1933

Trusts-Apportionment Of Dividends Between Life Beneficiaries And Remaindermen - Depletion Of Oil Reserve

Michigan Law Review

Stock in an oil company was left in trust to pay the income to life beneficiaries with remainder over. For income-tax purposes the company deducted from income a figure for depletion of oil reserve, but at the close of each year it added directly to surplus account the same amount which had been deducted for depletion. Since the books of the company thus indicated that its management did not regard the drawing of oil from its wells as reducing the value of its property the court held that dividends, so far as they are made out of this amount, should …

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Quasi-Contracts - Measure Of Recovery On Infant's Disaffirmance Jan 1933

Quasi-Contracts - Measure Of Recovery On Infant's Disaffirmance

Michigan Law Review

On November 1, 1928, an infant caused to be delivered to a brokerage firm shares of stock in which he had an interest or equity of $3,342.09. The brokerage firm had been carrying a margin account with the infant which was continued until it was closed April 2, 1929, by payment to him of $70.99. While yet in his minority he rescinded the agreement with his brokers, and disaffirmed the entire transaction. In an action for the recovery of the value of his equity in the shares of stock as of November 1, 1928, minus the sum paid to him …

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Banks And Banking - Liability Of Stockholders For Debts In Insolvencies Occurring After Transfer Of Stock, Warren W. Kennerly Jun 1932

Banks And Banking - Liability Of Stockholders For Debts In Insolvencies Occurring After Transfer Of Stock, Warren W. Kennerly

Michigan Law Review

The effect of the holding of the Sanders case is of special interest at the present time because of the large number of recent bank failures. This decision may possibly result in former stockholders of Illinois state banks and the heirs of former stockholders being subjected to an assessment on stock that was disposed of several decades ago. The holding is applicable only to state banks, since national banks are not subject to state regulation. It would not be surprising if this Illinois holding should be followed in Nebraska, since the latter state has already based some of its rulings …

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Corporations - Situs Of Stock For Purpose Of Transfer Jun 1932

Corporations - Situs Of Stock For Purpose Of Transfer

Michigan Law Review

O, of New York, owned certificates of stock in a Delaware corporation, which were indorsed in blank. E stole the certificates and sold them to P, who purchased in good faith and sent them in for transfer on the books of the corporation. On refusal of the corporation to make the transfer, P sued in Delaware for conversion, claiming that the title was transferred under the law of New York where he purchased. Held, under sec. 72 of the Delaware General Corporation Law (Rev. Code 1915, sec. 1986) "the situs of stock in a Delaware Corporation, in a suit …

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Corporations - Obligation To Refund Dividends Paid Out Of Capital May 1932

Corporations - Obligation To Refund Dividends Paid Out Of Capital

Michigan Law Review

The general rule is fairly well established that, where dividends are paid, in whole or in part, out of the capital stock, corporate creditors, being such when the dividend was declared, or becoming such at any subsequent time, may, to the extent of their claims, if such claims are not otherwise paid, compel the stockholders to whom the dividend has been paid to refund whatever portion of the dividend was taken out of the capital stock. This, however, has been modified in the federal courts to the extent that where the dividend, although paid entirely out of capital, was received …

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Corporations - New Types Of Securities Under Blue Sky Legislation May 1932

Corporations - New Types Of Securities Under Blue Sky Legislation

Michigan Law Review

The plaintiff company, in order to secure capital to finance the purchase and construction of retail gasoline stations and bulk plants in Wisconsin, proposed to sell coupon books for the sum of $35 per book. Purchases made with these coupons entitled the holder of the book to certain credits which, upon accumulation, were to be redistributed to him in cash upon presentation of coupons in the amount of 25 cents or more. Along with each coupon book there was to be issued to each purchaser a so-called good-will contract which, after stating its purpose as being to secure the good …

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Corporations -Apportionment Of Part Payment Of Purchase Price Of Stocks Bought In A Unit Apr 1932

Corporations -Apportionment Of Part Payment Of Purchase Price Of Stocks Bought In A Unit

Michigan Law Review

The defendant corporation entered into contracts for the sale of stock in blocks of three shares, two shares of first preferred at fifty dollars each par value and one share of second preferred at fifty dollars par value, the three shares to be sold in a unit for one hundred and thirty-five dollars. The contract contained an agreement that after six monthly payments had been made on the stock, upon default of the remaining payments the corporation would issue certificates of indebtedness for the amount paid in. In the dissolution of the corporation and the distribution of the assets, the …

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Corporations - Issue Of Stock Apr 1932

Corporations - Issue Of Stock

Michigan Law Review

The Eastman Kodak Company, a New Jersey corporation, entered into a contract with Vereinigte Fabriken Photagraphischer Papiere of Dresden, a German corporation, whereby it was agreed that the German company would discontinue the manufacture and sale of "Collodion papers" in North America, Great Britain, France, Spain, and Portugal and that those territories would be given over exclusively to the Eastman Company for the manufacture and sale of this paper. In consideration of this concession the Eastman Company issued 28,450 shares of its no par stock to the German company. This stock was later seized by the United States Alien Property …

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Pledge - Liability Of Pledgee For Depreciation Of Corporate Stock Apr 1932

Pledge - Liability Of Pledgee For Depreciation Of Corporate Stock

Michigan Law Review

The plaintiff brought suit to recover the value of a promissory note for which the defendant had pledged corporate stock as collateral security. Defendant filed a counterclaim for the depreciation in value of the stock between the time he had requested the plaintiff to sell and the time of bringing the suit. Held, that plaintiff was not liable for the depreciation of the stock since the pledgor had made no offer to pay pledgee such sum as would together with the price for which the stock could have been sold satisfy the note. People's Nat. Bank & Trust Co. …

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Corporations - Right Of Pledgee Of Stock To Dividends Under The Uniform Stock Transfer Act Apr 1932

Corporations - Right Of Pledgee Of Stock To Dividends Under The Uniform Stock Transfer Act

Michigan Law Review

The plaintiff was the pledgee of stock in the defendant corporation, the record title to the stock still being held in the name of the pledgor. The defendant, without notice of this assignment, voluntarily liquidated, giving the record holder a check both for the normal dividend on the stock, which had not been paid for the current year, and for his supposed interest in the distribution of the capital assets. This action was instituted by the pledgee to make the defendant account for the money paid over to the pledgor. The applicable statute is section 3 of the Uniform Stock …

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Trusts-Duty Of The Trustee To Sell Stock In A Falling Market Mar 1932

Trusts-Duty Of The Trustee To Sell Stock In A Falling Market

Michigan Law Review

Securities were turned over to defendant as trustee, among which were issues of common stock in two sugar companies, under the direction that the trustees were authorized to continue all investments of the testator without any personal liability in doing so. In the executor's accounting the stocks were valued per share at $22 and $12.25 respectively. In the present accounting, instituted by the beneficiary on becoming entitled to the corpus of the trust estate, the stocks had fallen to $7 and $.50 respectively. The trust company was experienced in the handling of securities and its officers were advised not to …

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Corporations - Restrictions Upon Transfer Of Corporate Stock Mar 1932

Corporations - Restrictions Upon Transfer Of Corporate Stock

Michigan Law Review

Due to the flexibility and fluctuation of proprietorship in corporations, attempts have frequently been made to restrict effectively along certain lines the free transfer of corporate stock. Such efforts have been motivated by a desire to secure a continuity of management, or to insure ownership by stockholders deemed actually advantageous to the success of the common undertaking.

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Corporations - Right Of Stockholders To Compel Leave To Inspect Books Of A Delaware Corporation Mar 1932

Corporations - Right Of Stockholders To Compel Leave To Inspect Books Of A Delaware Corporation

Michigan Law Review

At common law an incident to the ownership of stock in a corporation is the right or privilege to inspect the books or records of the corporation. The right is analogous to that of partners to examine the records and books of the firm. However, it is not an absolute, unqualified right at common law, but one which is conditional on the good faith and proper purposes of the stockholder.

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Corporations - Rate Of Interest On Bonds And Interest Coupons After Maturity Dec 1931

Corporations - Rate Of Interest On Bonds And Interest Coupons After Maturity

Michigan Law Review

Defendant issued a series of coupon junior income bonds with interest at 5 per cent payable from income at such times as directors deemed prudent. The bonds and some of the coupons not having been paid at maturity, defendant maker redeemed them thereafter with interest to the redemption date at the contract rate (5 per cent). Plaintiff, holder of bonds and coupons, sues to recover the legal rate of interest (6 per cent) after maturity of bonds and coupons. Held, (1) The local law where payable will be followed as to interest on the bond after maturity (in Massachusetts …

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Corporations-Dividends On Non-Cumulative Preferred Stock Jun 1931

Corporations-Dividends On Non-Cumulative Preferred Stock

Michigan Law Review

Plaintiff held non-cumulative preferred stock in the defendant corporation. From 1925 through 1928 no dividends were declared upon this stock; although earnings were sufficient they were used instead for property improvements. Since 1928, dividends have been paid regularly on this stock at the specified rate. In 1930 a dividend was declared on the common stock. Plaintiff sued to have this amount paid instead as a dividend on the preferred stock, and to enjoin any payment of dividends on the common stock until full dividends were paid on the non-cumulative preferred stock for the period from 1925 to 1928. Held, …

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Trusts-Stock Dividends-Apportionment Between Life Estate And Corpus May 1931

Trusts-Stock Dividends-Apportionment Between Life Estate And Corpus

Michigan Law Review

The will of the testator gave his widow a life estate in all his property. The estate contained, inter alia, shares of the capital stock of a corporation. After several years the corporation was dissolved, and a "dissolution dividend" was declared which distributed to each stockholder a pro rata share of the proceeds of the sale of all the assets of the corporation. The question in the case was whether any, and if so, how much, of this dividend was to go to the life tenant. It was shown that the earnings of the corporation had been paid out regularly …

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Brokers-Liability In Conversion For Sale Of Stolen Bonds May 1931

Brokers-Liability In Conversion For Sale Of Stolen Bonds

Michigan Law Review

Plaintiffs, brokers, sold on the Exchange as agents for a supposedly reputable customer, certain negotiable bonds. Purchasers, upon learning that the bonds had been stolen, returned them to the plaintiffs who, pursuant to a rule of the Exchange, substituted other bonds of unquestioned title. In an action by the plaintiffs against an insurance company, subrogated to the rights of the original owners, for a declaration of ownership, held, for the plaintiffs. Gruntal v. National Security Co. (N. Y., Nov., 1930) 173 N.E. 682.

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Corporations--Cumulative Preferred Stock-Effect Of By-Laws Apr 1931

Corporations--Cumulative Preferred Stock-Effect Of By-Laws

Michigan Law Review

An action was brought by preferred stockholders, during voluntary liquidation of a corporation, for payment of dividends, alleged to be cumulative, which had been passed on account of deficits during the two preceding years. The statutory provision giving the power to issue stock required the articles of incorporation to indicate, when any of the stock was preferred, whether or not the dividends should be cumulative. The articles stipulated that the preferred stock should be entitled to a six per cent dividend out of the net yearly income before any dividend should be paid on the common stock. A by-law, adopted …

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Quasi-Contracts--Duress--Economic Pressure-Adequacy Of Legal Remedies Dec 1930

Quasi-Contracts--Duress--Economic Pressure-Adequacy Of Legal Remedies

Michigan Law Review

The plaintiff deposited funds with the defendant, a stock-broker, as security for his margin account. The defendant without authority sold short on the plaintiff's account a large number of shares of stock and threatened to use the plaintiff's deposits to cover the sale unless the plaintiff would authorize a purchase for that purpose. The plaintiff under protest authorized the defendant to purchase the stock, which in the meanwhile had increased in value. The plaintiff then brought suit to recover the difference between the sale and the re-purchase prices plus the defendant's commissions and transfer taxes. Held, on demurrer that …

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Corporations-Stock Conversion-Obligation Of Interstate Carrier Nov 1930

Corporations-Stock Conversion-Obligation Of Interstate Carrier

Michigan Law Review

Plaintiff, holding preferred stock of the defendant railroad convertible into common stock, sought to exercise his right of conversion, and on the railroad's failure to comply, filed the present suit for damages. The answer set up as an affirmative defense that the defendant, an interstate common carrier, is subject to the jurisdiction of the Interstate Commerce Commission; by the 1920 amendment to the Interstate Commerce Act, 49 U. S. C. A. sec. 20a, it was made unlawful for any carrier to issue stock except by the Commission's sanction; on Feb. 7, 1927, for the first time demand was made for …

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Some Legal Problems Connected With Stock Market Transactions, S. Ashley Guthrie, Henry F. Tenney Nov 1930

Some Legal Problems Connected With Stock Market Transactions, S. Ashley Guthrie, Henry F. Tenney

Michigan Law Review

If any one were asked what was the most dramatic event of the last year, he probably refer at once to the collapse of the great Bull Market on the New York Stock Exchange. This was not only a dramatic event, but it was literally a tragedy for hundreds of thousands of people. Securities shrank to less than half their former inflated values and hundreds of millions of dollars in cash and paper profits were lost over night, or possibly we should say over two nights, for the crash occurred in two stages, one in October and one in November, …

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Intercorporate Stockholding Under Section 7 Of The Clayton Act Jun 1929

Intercorporate Stockholding Under Section 7 Of The Clayton Act

Michigan Law Review

It is notorious that the Clayton Act was passed in response to misguided popular agitation based upon erroneous notions as to the scope and effect of the Sherman Anti-Trust Law, and in fulfilment of, campaign promises voiced not only by Wilson, but embodied in the platforms of all three political parties in 1912. Stevens, "The Federal Trade Commission Act," 4 AMER. ECON. REV. 840; "The Clayton Act," 5 ibid. 38; Henderson, THE FEDERAL TRADE COMMISSION, p. 16; Barrett, "The Federal Trade Commission," 81 CENT. L. J.; 166-171, 183-189, 201-207; Taft, THE ANTI-TRUST ACT AND THE SUPREME COURT. Even without the …

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Right Of Holders Of Preferred Stock To Participate In The Distribution Of Profits, Jay Finley Christ May 1929

Right Of Holders Of Preferred Stock To Participate In The Distribution Of Profits, Jay Finley Christ

Michigan Law Review

When, in the management of the affairs of corporate enterprises, a surplus is available for the payment of dividends, the question often arises, "In what proportions is this fund to be distributed, as between holders of common stock and holders of preferred stock?" When the contract, whether in the by-laws, the subscription agreement, the certificate, or any other form, makes clear the intent of the parties, one way or another, such intent is, of course, controlling. But the intent of the parties may not always be clearly expressed, and in the latter event the rights of the parties are determined …

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The Influence Of Securities Regulation Upon Standards Of Corporation Financing, Forrest B. Ashby Jun 1928

The Influence Of Securities Regulation Upon Standards Of Corporation Financing, Forrest B. Ashby

Michigan Law Review

During the first years of the present century both promotional and manipulative swindling in connection with stocks and bonds flourished in the face of the obsolescent and poorly enforced fraud laws which were administered by prosecutors and courts inexperienced in corporate finance. It was not until 1911, after the securities problem had been put squarely before it by the state banking commissioner, that the Kansas legislature passed the first blue sky law to check the issuance and sale of unsound corporate obligations. Since 1911 the development of securities legislation has proceeded until at the present time forty-six states have statutes …

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Publicity Of Accounts And Directors' Purchases Of Stock, A. A. Berle Jr. Jun 1927

Publicity Of Accounts And Directors' Purchases Of Stock, A. A. Berle Jr.

Michigan Law Review

Two debates have been carried on in recent years, whose echoes are at present much before the attention both of the public and the courts. The older and quieter one, maintained in the law reviews and in a line of conflicting judicial decisions, concerns the duty, if any, resting on a corporate director who bought or sold shares of stock in his own corporation. The newer and more violent discussion, reverberating through the daily newspapers, the lay magazines, and the financial chronicles, has dealt with corporate accounts; whether they should be public and to what extent; and if not, how …

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Taxation-Jurisdiction To Levy An Inheritance Tax May 1927

Taxation-Jurisdiction To Levy An Inheritance Tax

Michigan Law Review

A Massachusetts decedent by will created a trust in stocks and bonds. By the terms of the trust the trustee was to pay the income to the settlor's daughter during her life and upon her death was to pay the corpus to such persons as she should by will appoint. She died domiciled in North Carolina leaving a will appointing her husband and son to receive the property. North Carolina imposed an inheritance tax under a statute making the exercise of the power of appointment subject to the tax in the same manner as though the property belonged absolutely to …

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Situs Of Corporate Shares For Administration Purposes Feb 1927

Situs Of Corporate Shares For Administration Purposes

Michigan Law Review

Questions concerning the situs of corporate shares for tax purposes have been productive of much litigation and a fairly extensive body of authority on the subject has accumulated. Cases dealing with the situs of shares for purposes of administration, on the other hand, arc very rare. This latter fact may be ascribed to the acceptance, in all states except Illinois and Mississippi, of the common law rule that the distribution of personal property shall be governed by the law of the decedent's domicil. But in those two jurisdictions, the legislature has provided that, "All personal property situated in this state …

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Voting Trust Agreements, Maurice Finkelstein Feb 1926

Voting Trust Agreements, Maurice Finkelstein

Michigan Law Review

To the student who approaches the study of the law from the point of view of the legal philosophers-from Von Jhering to Pound-the detailed analysis of the law of private corporations in America will seem strange. Accustomed to think of law as a striving to maintain a balance such as the Poundian balance of social interests, he finds in the corporation law of the United States a co-existence of various systems without regard to the conflict of interests thereby created. Each state has its own rules of law and its own policies shaped by a medley of causes. Many states …

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Is Non-Cumulative Preferred Stock Cumulative? May 1925

Is Non-Cumulative Preferred Stock Cumulative?

Michigan Law Review

A corporation may not lawfully pay dividends except out of profits, this limitation representing one important distinction between stockholders and creditors. Furthermore, as a general rule, stockholders have no right to dividends even out of earnings until they have been declared, it being within the discretion of the directors whether any payment shall be made or not. N. Y. L. E. & W. v. Nickals, 119 U. S. 296. True, this power of the directors is limited by the rule of reasonableness. Dodge v. Ford Motor Co. 204 Mich. 459. But an action to compel a distribution of …

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The Income Tax Liability Of Dividends In Liquidation, Roswell F. Magill Apr 1925

The Income Tax Liability Of Dividends In Liquidation, Roswell F. Magill

Michigan Law Review

The development of a scheme at once equitable and constitutional for the taxation of corporate distributions has been one of the more difficult problems confronting Congress and the courts since the adoption of the income tax amendment. Doubtless the chief reason for this difficulty has been the fact that the income tax liability of a shareholder upon such a distribution "has not been determinable merely by ascertaining whether the amounts received are the variety of receipts commonly regarded by their recipients as income,- in a word, by determining whether they constitute a "gain" to the shareholder. Rather, it is a …

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