In this work, a viscous potential flow analysis is used to investigate capillary surface waves between two horizontal finite fluid layers. The two layers have finite conductivities and admit mass and heat transfer. A general dispersion relation is derived. The presence of finite conductivities together with the dielectric permeabilities makes the horizontal electric field play a dual role in the stability criterion. The phenomenon of negative viscosity is observed. A new growth rate parameter, depending on the kinematical viscosity of the lower fluid layer, is found and has a stabilizing effect on the unstable modes. The growth rates and neutral stability curve are given and applied to air-water interface. The effects of various parameters are discussed for the Kelvin-Helmholtz and the Rayleigh-Taylor instabilities.