Warren v. King

Citations

• 108 U.S. 389
• 2 S. Ct. 789
• 27 L. Ed. 769
• 1883 U.S. LEXIS 1050

Syllabus

<p>Preferred Stock — Railroads.</p> <p>Certificates of preferred stock of the Ohio and Mississippi Railway Company were issued, containing the following language : “Thepreferred stock is to be and remain' a first claim upon the property of the company after its indebtedness, and the holder thereof shall be entitled to receive from the net earnings of the company seven per cent, per annum, payable semi-annually, and.to have such interest paid in full, for each and every year, before any payment of dividend upon the common stock ; and whenever the net earnings of the corporation which shall'be applied in payment of interest on the preferred stock and of dividends on the common stock shall be more than sufficient to pay both said.interest of seven per cent, on the preferred stock in full, and seven per cent, dividend upon the common stock, for the year in which said net earnings are so applied, then the excess of such net eamings after such payments shall be divided upon the preferred and common shares equally, share by share : ” Held, That the preferred stockholders had no claim on the property superior to that of creditors under debts contracted by the company subsequently to the issue of the preferred stock, and that their only valid claim was one to a priority over the holders of common stock.</p>