1417/ to contracts, engage in business, sue and be sued and taxed. It is the owner of all the corporate property, real and personal, and within the powers conferred upon it by the charter can deal with it as absolutely as a private individual can with his own. The whole title to it is in the corporation, and the shareholders are neither tenants in common nor in any legal sense the owners of it. * A shareholder cannot acquire title to any of the property of the corporation through the operation of the law as an administrator acquires the title to the personal property of his intestate. A corporate act alone can affect that result. When the act, as did the act in the present case, transfers to the shareholders shares of the capital stock of another corporation, it is taxable under said section 270. * The judgment should be affirmed, without costs. SECTION 2.-RIGHTS OF THE PREFERRED STOCKHOLDERS STERNBERGH et al. v. BROCK et al. (Supreme Court of Pennsylvania, 1909. 225 Pa. 279, 74 Atl. 166, POTTER, J. On July 7, 1899, four manufacturing concerns, the Pennsylvania Bolt & Nut Company, J. H. Sternbergh & Son, the Lebanon Iron Company, and the East Lebanon Iron Company, entered into an agreement, by which they were to transfer to a proposed corporation the whole of their respective "plants, franchises, good will, business, patents, trade-marks, and property of every sort and kind." The agreement further provided that they should receive for the property so transferred full-paid and nonassessable preferred stock of the proposed corporation of the par value of $50 per share, of which $3,000,000 worth were to be issued and divided among them in designated proportions. The agreement also provided: "The said preferred stock shall have an accumulative preference of five per cent. (5%) dividend annually, payable quarterly on the first days of January, April, July and October, and the first preference as to the distribution of the assets of the company; and further none of the property or franchises of the proposed company can be mortgaged without the consent of at least a majority of the preferred stock." Common stock to the extent of $17,000,000 was also to be issued, divided into 340,000 shares, with a par value of $50 each, upon which $5 per share was to be paid in cash. In pursuance of this agreement, the American Iron & Steel Company was incorporated on August 21, 1899, under the laws of Pennsylvania, for the manufacture of iron and steel products. * * * By resolution adopted at the stockholders' meeting of August 23, 1899, it was provided "that the preferred stock whose issue was thereby authorized to the amount of $3,000,000 should be entitled (a) ‘to receive a cumulative yearly dividend of five per cent., payable quarterly on the first days of January, April, July, and October, in each year, before any dividends shall be set apart or paid on the common stock; (b) to be paid in full both principal and accrued dividends in the event of liquidation or dissolution of the company before any amount shall be paid to the holders of the common or general stock; (c) to require the consent in writing of a majority of the holders thereof to the creation of any mortgage.' * * * From the organization of the company until the year 1907 the holders of preferred stock were paid the stipulated 5 per cent. annual dividend, and no more, while all profits above the amount so paid were distributed by dividends to the common stockholders. In March, 1907, a quarterly dividend of 2 per cent. was declared by the directors upon all the stock, both preferred and common, which was at the rate of 8 per cent. per annum. J. H. Sternbergh, who was a holder of the common stock, filed this bill in equity against the directors and treasurer of the company and the corporation itself, alleging that the preferred stockholders were not entitled to receive more than 5 per cent. per annum on the par value of their stock, and praying the court to enjoin the payment to them of the dividend declared in excess of one-quarter of that amount. * * * Three questions are raised by the arguments of counsel on this appeal: (1) Whether preferred stock issued by a company incorporated under the corporation act of 1874 is limited as to dividends to the amount of its preference; or whether, after payment of an equal amount as dividend on the common stock, it is entitled to participate in the distribution of the remaining profits, if any. (2) Whether, under the agreement and resolution in the present case, the preferred stockholders can receive dividends of more than 5 per cent. per annum on the par value of their stock. (3) Whether the alleged fact that for a long series of years the preferred stockholders were paid without objection on their part only 5 per cent. per annum and the entire balance of profits was paid to the common stockholders is to be considered in determining the present rights of the parties. * * * Where there is no stipulation in the contract to the contrary, the weight of authority clearly favors the right of preferred stockholders to share with the common stockholders in all profits distributed, after the latter have received an amount equal to the stipulated dividend on the preferred stock. "In the absence of special provisions, the holders of preferred stock in a corporation are in precisely the same position, both with respect to the corporation itself and with respect to creditors of the corporation, as the holders of common stock, except only that they are entitled to receive dividends on their shares, to the extent guaranteed or agreed upon before any dividends can be paid to the holders of common stock." 2 Clark & Marshall on Priv. Corp. (1901) § 417c. "A share of stock is a share of stock, whether preferred or common." 1 Cook on Corps. § 269, note. See, also, 1 Elliott on Railroads (2d Ed.) § 84; 2 Beach on Priv. Corp. § 501. We do not find anything in the agreement or resolution in the present case which limited the preferred stockholders to a dividend of 5 per cent. per annum upon their stock. With regard to the contention that the court should follow the construction placed upon the contract, which it is alleged the parties followed for a series of years-that is, by paying to the preferred stockholders only the stipulated 5 per cent. dividends, and awarding the remaining profits to the common stockholders-the trial judge does not find that any such construction was established, and he further finds that, except in the years 1905 and 1906, the dividends paid on the common stock were less than 5 per cent. of its par value. In discussing this feature he says: "Has there grown up any usage in the company at variance with the rights of the preferred stockholders as ascertainable from a fair reading of the resolutions under which the preferred shares were issued? The plaintiffs assert that there is such a custom, and, in support of their statement, point to the tlividends paid on the common stock during the first 16 months of the company's existence, which aggregated $1.25 per share on the common stock, a return of more than 18 per cent. per annum on the sum paid in on this stock, while during the same period the holders of preferred stock accepted without murmur dividends at the yearly rate of 5 per cent. on their shares. The effect of this evidence is entirely overcome, however, by the consideration that the dividends paid on the common stock yielded less than 2 per cent. on its par value. It is to be assumed that, before the holders of preferred stock could claim more than the 5 per cent. dividends that they received, the holders of the common stock were entitled to receive a dividend of the same percentage on the par value of their shares. To refuse them this right would be unjust. True it is that they had paid in only 10 per cent. of the amount of their subscriptions, and that the company had the use of but a comparatively small part of what they were obligated to pay in if called on, but the company enjoyed the credit of having such a resource as the unpaid subscriptions to its stock, and the common stockholders had at risk in the venture, not only what money they had paid in, but all for which they were still liable. It was proper, therefore, that the par value of their stock should be taken as the basis of their share in the company's profits, and, until they received more than 5 per cent. per annum on that basis (which they never did prior to 1905), the holders of preferred stock had no reason to complain." This conclusion commends itself We see no need in the present case for looking beyond the terms of the contract. We think it was properly construed by the court below. The assignments of error are overruled, and the decree is affirmed. SECTION 3.-RIGHT TO INSPECT CORPORATE BOOKS POWELSON v. TENNESSEE EASTERN ELECTRIC CO. et al. (Supreme Judicial Court of Massachusetts, 1915. 220 Mass. 380, 107 N. E. 997, Ann. Cas. 1917A, 102.) DE COURCY, J. This is a petition in equity under section 30 of the business corporation law, seeking an inspection of the stock and transfer books of the defendant corporation. It is provided in that section that "the stock and transfer books of every corporation, which shall contain a complete list of all stockholders, their residences and the amount of stock held by each, shall be kept at an office of the corporation in this commonwealth for the inspection of its stockholders.' Liability for damage caused by a refusal to exhibit the books, etc., is specified; and the section concludes as follows: "The Supreme Judi cial Court or the superior court shall have jurisdiction in equity, upon petition of a stockholder, to order any or all of said copies, books or records to be exhibited to him and to such other stockholders as may become parties to said petition, at such a place and time as may be designated in the order." The preliminary objection that Powelson, as one of the three voting trustees, cannot exercise the rights of a stockholder under the statute need not be considered. It is admitted that the intervening petitioner, the Tennessee Mutual Development Company, was the owner of ten shares of the common stock of the defendant corporation, that it duly made a demand to inspect the stock and transfer books of the electric company, and that the demand was refused. It has become a party to the petition and can invoke the statute. Hereinafter it will be referred to as the plaintiff. It is settled that the common-law right of a stockholder to inspect the books of a corporation is a qualified and not an absolute right. *. * * Where the right has been given by statute it has been decided in many jurisdictions that unless the statute imposes restrictions or limitations, the right is absolute, and the motive or purpose of the stockholder in seeking to exercise it is not the proper subject of judicial inquiry. * The scope of our statute is narrower than the common-law right of inspection, as it deals only with the records, stock and transfer books. The present application is confined to the stock and transfer books and is made for the alleged purpose of obtaining a complete list of the stockholders and their residences. The right of a stockholder to obtain this information has been recognized by the Legislature of this commonwealth since 1858. * The language of St. 1903, c. 437, § 30, and the history of the legislation on the subject indicate that the stockholder's right to know the names, addresses and extent of interest of his associates in the common enterprise, who with him must elect directors to manage the business of the company, is an absolute right. * * As we construe the report, however, it is not necessary to decide whether a stockholder is entitled to the relief here asked for regardless of his motive or purpose. The single justice, after hearing the parties, ruled that the plaintiff should have the right to make the inspection prayed for. It is reasonably to be inferred that he was satisfied that the plaintiff was acting in good faith. The fact, if it is a fact, that Powelson, by reason of prior litigation, desires to change the administration of the company, and has instituted these proceedings with that in view, is entirely consistent with an honest belief that a change in management and policy will advance the interests of the corporation and his own rights as a stockholder. * * * The order for inspection is to issue as prayed for. The details as to time and manner will be designated in the order as settled by a single justice. Ordered accordingly. SECTION 4.-RIGHT TO PARTICIPATE IN NEW ISSUES OF STOCK STOKES v. CONTINENTAL TRUST CO. OF CITY OF NEW YORK. (Court of Appeals of New York, 1906. 186 N. Y. 285, 78 N. E. 1090, 12 L. R. A. [N. S.] 969, 9 Ann. Cas. 738.) This action was brought by a stockholder to compel his corporation to issue to him at par such a proportion of an increase made in its capital stock as the number of shares held by him before such increase bore to the number of all the shares originally issued, and in case such additional shares could not be delivered to him for his damages in the premises. VANN, J. * * * Thus the question presented for decision is whether according to the facts found the plaintiff had the legal right to subscribe for and take the same number of shares of the new stock that he held of the old? The subject is not regulated by statute, and the question presented has never been directly passed upon by this court, and only to a limited extent has it been considered by courts in this state. * * * er sum. * * In other jurisdictions the decisions support the claim of the plaintiff. * * * The leading authority is Gray v. Portland Bank, decided in 1807 and reported in 3 Mass. 364, 3 Am. Dec. 156. * * * The court held that stockholders who held old stock had a right to subscribe for and take new stock in proportion to their respective shares. As the corporation refused this right to the plaintiff he was permitted to recover the excess of the market value above the par value, with interest. In the course of its argument the court said: "A share in the stock or trust when only the least sum has been paid in is a share in the power of increasing it when the trustee determines or rather when the cestuis que trustent agree upon employing a great* A vote to increase the capital stock, if it was not the creation of a new and disjointed capital, was in its nature an agreement among the stockholders to enlarge their shares in the amount or in the number to the extent required to effect that increase. If from the progress of the institution and the expense incurred in it any advance upon the additional shares might be obtained in the market, this advance upon the shares relinquished belonged to the whole, and was not to be disposed of at the will of a majority of the stockholders to the partial benefit of some and exclusion of others." This decision has stood unquestioned for nearly a hundred years and has been followed generally by courts of the highest standing. It is the foundation of the rule upon the subject that prevails, almost without exception, throughout the entire country. * * * * * * In Jones v. Morrison, 31 Minn. 140, 152, 16 N. W. 854, it was said: "When the proposition that a corporation is trustee of the corporate property for the benefit of the stockholders in proportion to the stock held by them is admitted (and we find no well-considered case which denies it), it covers as well the power to issue new stock as any other franchise or property which may be of value, held by the corporation. The value of that power, where it has actual value, is given to it by the property acquired and the business built up with |