Film Producers (Inc.) v. Jordan

Corporations—Division of Capital Stock into Classes Having Different Par Values—Preferences as to Voting Power and Stockholders-’ Liability.—The division of the capital stock of a corporation having an aggregate value of one million dollars into fifty thousand shares of common stock of the par value of one dollar each, and forty-seven thousand five hundred shares of preferred stock of the par value of twenty dollars each, is violative of the provisions of subdivision 6 of section 290 of the Civil Code, in that by reason of the difference in the par value of the two classes of stock, a preference is given as to the voting power of -the common stock, while as to the liability of stockholders to the creditors of the corporation a preference is given to the preferred stock. The Secretary of State is justified in his refusal to file articles of incorporation embodying such a division.