The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1900-03-06

the corporation keeps the cash and issues the directly the
shareholders pay, cash and then receive, back in pay
stock While the action Of the corporation de-
Gliding whether the earnings aI he retained capital paid
ont d. dividends i binding and while earnings when converted
into capital be regarded a. capital 10 the corporation and
thereafter capital the holder Of the stock representing it.
till doe follow the corporation in acting dos
effect declare dividend. Ii the corporation should pay cash
10 those who wished and then a, back the
stock the payment conceded would be dividend. and
thereafter the would be capital the corporation and the
stock would represent capital just the IF
direct issue representing earnings In other words. what
the earnings after the transaction does prevent the
action itself from amounting the payment
dividend
Secondly, the intention Of the Of the 1t
agreed side, that granor interfere
with the internal management Of the corporation when
in what dividend, shall be paid but that he may direct
whom they shall they have been paid. The
which follow present English rule then argue that in
like the present which special directions given the
Of the intended that what should be
and what capital should be determined by corporation
and that the corporation may earnings capital
by issuing stock dividend them cash other dv
dend the method pursued any particular determine
whether the dividend Is be capital income On the other
hand Is argued and with good believe. that while
it of corporation law when how dividends
shall be paid vet law whom they shall
90 Of this kind when they have been paid and that
corporation ought be permitted by the form of
action determine the ownership Of property between third
parties that while corporation decides whether
earnings shall be capital far the corporation
concerned determine that question the
tenant and remandeman that that for the determine
under law that equity which has with trusts disre
CARDS form and g the substance; that the general nten
ton Of the of the which be given effect the
absence of special directions Is that the shall
the income regardless of the form which received
that of fact stock dividends they
represent earnings generally regarded upon
or income OF the stock rather than change in the form
of the evidence of ownership People ordinarily would not
nguh between which cash paid then received
back payment for stock par and which
issued directly avoid useless labor The earnings
ton of profits the very object for which business corporations
exist and in of this kind the general intention
tor that those profits when earned and distributed shall
the life and while he under say or
when they shall be distributed any han,n the
things say whether they shall be earned vet
he may say and the absence manifest contrary intention
must be presumed to intend that when earned and distributed
they shall income irrespective of the particular which
the corporation may happen choose for And
far earnings distributed it mmatera corpus
of the whether they paid cash stock If they
paid in cash they reduce the value of the stock much they
paid stock of the value they reduce the the
old stock equal
For these adopt the that
dividends alike and regards them income so far as
they represent earnings In this argument have considered
stock dividends only far they represent earnings and aside
from the matter of premiums which shall proceed
consider.
We have not adopted and required by the
OF this case to the Pennsylvania rule of apporonment
OF dividends whether stock reference to the time
when the profits of which they paid earned
required to upon the question whether socaed dividend
whether cash Stock shall be appooned with reference
between capital and earnings We have
cash dividend paid of capital would be held the
remandeman and should be paid partly earnings and
partly out of capital would be apporoned accordingly be
Tt
with stock dividend. 1t be appooned according
represents capital earnings The life entitled the
earnings only and therefore stock only so far repre-
sen earnings If the value of eompanys property business
should increase from natural and apart from accumulated
earnings such increase would be incident corpus
would be for the benefit the remanderman and should