Certificates of stock, bonds and other negotiable paper are apt to be regarded by business men as the equivalents of tangibles and, so, are normally dealt with by them as such. Nevertheless, stock certificates and negotiable paper represent intangibles. A stock certificate, for example, represents a share in the corporation. The owner of the share has a number of inchoate claims which are not always susceptible of exact delineation. Theoretically the owner is entitled to his proper share of the balance remaining on hand after discharge of obligations upon the dissolution of the corporation. He is also entitled to dividends; if earned, and may, depending on the character of his stock, participate in the selection of corporate directors. Bonds and other negotiable paper are likewise evidence of intangibles, namely, the primary or secondary obligations of those whose names are attached to the paper to pay the amounts designated therein. Even a bill of lading or a warehouse receipt is not a full substitute for the tangible which it represents. It merely creates a duty on the part of a carrier or warehouseman to deliver on presentment of the paper. If the paper is negotiable or seminegotiable the person to whom it has been issued may transfer to another by some designated manner a similar right to delivery. However, whatever wishful thinking there may be, the paper never becomes the full equivalent of the goods deposited or shipped. At most it creates a limited right to delivery. Its negotiability creates a power to destroy by negotiation the claims of certain individuals to delivery and to convey to another the right to possession. In the field of Conflict of Laws courts have tended, on the whole, to emphasize the thesis that stock certificates and negotiable paper constitute no more than evidence of intangibles and so have tended to deal with problems concerning them as problems concerning the intangibles which they represent.
George W. Stumberg,
Commercial Paper and the Conflict of Laws,
6 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol6/iss3/3