Robert C. (Robert Cushing) Cumming.

The annotated corporation laws of all the states, generally applicable to stock corporations ... in three volumes online

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electricity In this State may make contracts
and lease power, or any part thereof, to any
person or corporation. (L. 1894, p. 114.)

Corporation to redeem certificates for
wa^es.
9 1871. Any corporation or person doing
business of any kind in this State, who shall
isue checks or written evidences of indebted-
ness for the wages of laborers, shall redeem
at full value, in cash, such written evidences
of indebtedness, on demand and presentation
to the proper person on the regular monthly
pay day, and if there be no regular monthly
pay-day, then upon demand and presenta-
tion on any regular business day, after thirty
days from the issuance thereof; and for
every failure to redeem such evidences of
indebtedness, said corporation or person
shall be liable to the owner thereof in the
sum of ten dollars, to be recovered by suit,
unless said corporation or person shall, upon
the trial, prove insolvency or actual ina-
bility to redeem at the time of demand
and presentation. (L. 1888, p. 48.)

TTse or borrowing for personal use pro-
hibited.
S 1872. No oflScer or agent of any bank or
other corporation shall use or borrow for
himself, directly or indirectly, any money or
other property belonging to any corporation
of which he is an officer or agent, without
the permission of a majority of the board
of directors, or a committee of the board
authorized to act (L. 1887, p. 94.)

See Penal Code, U 212, 213, post, for criminal
liablUty.



Blacklisting prohibited.

§ 1873. If any corporation doing business
in this State, or any agent or employee of
such corporation, after having discharged
any employee from the service of such com-
pany, shall prevent or attempt to prevent
by word, writing, sign or other means;
directly or indirectly, such discharged em-
ployee from obtaining employment with any
other person or corporation, such person,
agent, employee or corporation shall be liable
in penal damages to such discharged person,
but this section shall not be construed to
prohibit any person or corporation from giv-
ing in writing any other person or corpora-
tion to whom such discharged person has
applied for employment, a truthful state-
ment of the reasons for such discharge, and
shall furnish to such discharged employee
on his application, to such address as may
be given by such discharged employee,
within ten days of such application, a true
copy of any such written statement (Act
1891, August 13.)

Liability.

S 1874. If any corporation doing business
in this State, shall authorize or permit, with
its knowledge and consent, any of its or
their officers, agents or employees to commit
any of the acts prohibited in the preceding
section (except as provided), such corpora-
tlon shall be liable in treble damages to
such employee so prevented from obtaining
emplojrment, to be recovered In a civil ac-
tion. (Act 1891, August 13.)

Famish cause of diflchar£^.

§ 1875. Any person, officer, agent, em-
ployer, or company or corporation aforesaid,
after having discharged any employee from
the service of any such corporation, upon
written demand by such employee, shall
furnish to him, within ten days from the
application for the same, a full statement
In writing of the cause of his discharge, and
if any such person, officer, agent, employer
or corporation shall refuse within ten days
after demand to furnish such statement to
such discharged employee, it shall be ever
after unlawful for any such person or cor-
poration to furnish any statement of the
cause of such discharge to any persoh or
corporation or In any way blacklist, or to
prevent such discharged person from pro-
curing employment elsewhere, subject to
the penalties prescribed. (Act 1891, August
13.)

Bules as to trials for violations.

§ 1876. On the trial of any person for
offending against the provisions of this
article, any other person who may have
authorized or permitted, with knowledge
and consent any such offense, or who may
have participated In the same, shall be a
competent witness, and be compelled to



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GEORGIA.



Dissolution, etc.— Code, §§ 1879-1883.



give evidence, and nothing then said by
such witness shall at any time be received
or given in evidence against him in any
prosecution against the said witness, ex-
cept on an indictment for perjury, in any
matter to which he may have testified.
On the trial of any person for any vio-
lation of this article, the prosecution shall
have the authority and process of the court
trying the case to compel the production in
court, to be used in evidence in the case,
of the books and papers of any such person,
company or corporation, and a failure to
produce the same, after such reasonable
notice as the court may in each case pro-
vide, shall be a contempt of court, and pun-
ishable as such as against the custodian or
person, company or corporation having the
control or in charge of such books, and
papers, who shall fail to produce the same;
Provided, That said written cause of dis-
charge, when so made as aforesaid, at the
request of such discharged employee shall
never be used as the cause for an action
for slander or for libel, either civil or crim-
inal, against the person or authority furnish-
ing the same. (Act 1891, August 13.)

Duty of person receiving request.

§ 1877. Any person, company or corpo-
ration, who has received any request or
notice in writing, sign, word or otherwise,
from any other person, company or corpora-
tion, preventing or attempting to prevent the
employment of any person discharged from
the service of either of the latter, on demand
of such discharged employee, shall furnish
to such employee, within ten days after such
demand, a true statement of the nature of
such request or notice, and if in writing, a
copy of the same, and if assign, the inter-
pretation thereof, with the name of the per-
son, company or corporation furnishing the
same, with the place of business of the per-
son or authority furnishing the same, and a
violation of this section shall subject the
offender to all the penalties, civil and crimi-
nal, provided by the foregoing sections. (Act
1891, August 13.)

Applicable to combined corporations.

§ 1878. The provisions of this article shall
apply to and prevent under all the penal-
ties aforesaid, railroad companies or cor-
porations, under the same general manage-
ment and control but having separate divis-
ions, superintendents, or master mechanics,
master machinists or similar officers for
separate or different lines, their officers,
agents and employers* from preventing or
attempting to prevent, the employment of
any such discharged person by any other
separate division, or officer, or agent or
employer* of any such separate railroad
line or lines. (Act 1891, August 13.)



• So in Code; should be ** employee."



Public corporations.

S 1879. PubUc corporations being estab*
lished for public purposes, are always sub-
ject to dissolution by the act of the general
assembly. (Code 1882, § 1681.)

Private charters.

§ 1880. In all cases of private charters
hereafter granted the State reserves the
right to withdraw the franchise, unless such
right is expressly negatived in the charter.
(Code 1882, § 1082.)

See Const., art. I, p. 2.

[Section cited. State r. R. R. Co.. CO Ga. 270:
R. & B. Co. V. State, 64 id. 401.

Where exclusive authority is vested In a private
corporation by its charter, general assembly re-
tains power to modify or restrict such exclusive
grant. R. R. Co. v. R. R. Co., 40 Ga. 152.]

Heretofore granted.

§ 1881. rrivate corporations heretofore
created, without the reservation of the right
of dissolution, and where individual rights
have become vested, are not subject to dis-
solution at the will of the State. (Code
1882, § 1G83.)

See Const, art I, par. 2.

[Section cited. R. & B. Co. v. State, 54 G a.
404.]

How dissolved.

§ 1882. Every corporation is dissolved, 1.
By expiration of its charter; 2. By forfeiture
of its charter; 3. By a surrender of Its fran-
chises; 4. By the death of all its members
without provisions for a succession. (Code
1882, § 1684.)

[Section construed. Logan v. R. R. Co., 87
Ga. 533; s. c, 13 S. B. Rep. 516. Cited. Youni? r.
Moses, 53 Ga. 029. Bankruptcy does not terminate
corporate existence nor vacate office of directors.
Holland v. Heynian, 60 Ga. 174. Rights of cred-
itors after dlspolution, how enforced. Logan v.
R. R. Co., supra.

Dissolved corporation cannot prosecute pending
suits, when, van Pelt v. B. ft L. Assn., 87 Ga.
370; s. c, 13 S. E. Rep. 674.]

How forfeited.

§ 1883. A corporation may forfeit its
charter: 1. By a willful violation of any of
the essential conditions on which It is
j?ranted; 2. By a misuser or non-user of its
franchises. This dissolution dates from the
judgment of a court of competent Jurisdic-
tion declaring the forfeiture. (Code iaS2,
§ 1685.)

See Const, art I, par. 8.

[Section cited. Young v. Moses, 63 Ga. 629.

A private corporation cannot be deprived of Ita
franchise except by judicial Judgment upon a
quo warranto. State v. Mayor, 5 Ga. 250. If a
corporation be dissolved or surrendered the offi-
cers under it share its fate. Id. Corporation
may be dissolved for a breach of trust Young
V Harrisons, 6 Ga. 130.



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19



Dissolution; liability of stockholders — Code, §§ 1884-1888.



No advantage can be taken of any non-naer or
misuser on part of corporation, by any defendant
In any collateral action. Id.; R. R. Co. y. R. R.
Co.. 14 Ga. 327.

The fact of one person becoming owner of all
stock and property of a corporation does not
render a corporation dormant, or forfeit fran-
chises, and It Is still suable In its corporate
name. Mfg. CJo. v. White, 42 Ga. 148.

Charter of corporation may be forfeited for
what. City y. Gas Light Co., 71 Ga. 106. For-
feiture and dissolution can be affected only by
judgment of court so declaring, but only from
such Judgments. Id.

Misuser or non-user cannot be set up collaterally
as a defense to an action. Id.]

Surrender.

§ 1884. A corporation may be dissolved by
a voluntary surrender of Its franchises to the
State. In such case such surrender does
not relieve its officers or members from any
liability for the debts of the corporation.
(Code 1882, § 1686.)

Forfeiture for delinquent taxes. S 876. See
8 1888. Individual liabiUty. i 1889 (8).

[Individuals who compose a corporation may,
by contract or in law. Incur liabilities, during its
existence, which will survive the charter. High-
tower V. Thornton, 8 Ga. 480. Though at com-
mon law, upon dissolution, debts due to and from
corporation are extinguished. Id.

Under Code, a corporation may, by voluntary
surrender of its franchises, terminate Its exist-
ence. Bank v. Heard, 87 Ga. 401. But If created
by legislative act, the surrender must be ac-
cepted by the general assembly. Id.]

Death of members.

§ 1885. The death of all the members of a
corporation, or of so many of them as to ren-
der it impossible under the charter to pro-
vide a succession, is a dissolution thereof.
(Code 1882, § 1687.)

Disposition of assets.

§ 1886. Upon the dissolution of a corpora-
tion; for any cause, all of the property, and
assets of every description belonging to the
corporation shall constitute a fund — first for
the payment of its debts, and then for equal
distribution among its members. To this end
the superior court of the county where such
corporation was located shall have power to
appoint a receiver, under proper restrictions,
properly to administer such assets under its
direction. (Code 1882, § 1688.)

(Creditors of Insolvent corporation, whose
charter has been forfeited, and who nave ex-
hausted their legal remedies against It, may sue
In chancery, for the assets of that corporation,
and have them applied In payment of debt. High-
tower V. Mustlan. 3 Ga. 506.

It is only In a strong case that equity will, at
Instance of minority stockholder, interfere with
management of affairs of a corporation, and ap-
point a receiver. General charges of fraud, Il-
legality or mismanngoment are InsufTlcIent and
demurrable. Hand v. Dexter, 41 Ga. 454.

A preference by mortgage given by an Insolvent
corporation for the purpose of securing payment
of an antecedent debt Is not void merelv because
a director, liable as surety on such debt, would
be incidentally benefited. Atlas Tack Co. v.
Uacon Hardware Co., 101 Ga. 891; 29 8. B. Rep.
27 a897).



Procedure to get at assets In hands of officer
or agent of dissolved corporation. Young v.
Moses, 53 Ga. 628.

A Judgment obtained before filing of petition in
equitable proceeding for administering the assets
of an Insolvent corporation Is entitled to prefer-
ence over claim of unsecured creditors and claims
secured by mortgage. Otherwise as to judgment
obtained after such petition was filed. LubroUne
on Co. V. Athens Savings Bk., 104 Ga. 876; 80
S. B. Rep. 409 (1898).]

Collateral liability.

§ 1887. The dissolution of a corporation,
from any cause, shall not, In any manner,
affect any collateral or ultimate or other lia-
bility, legally Incurred by any of its offlceni
or members. (Code 1882, § 1689.)

[Right to have unpaid stock drawn In, to ex-
tinguish outstanding debts, is as clear and strong
after as before dissolution. Hlghtower v.
Thornton, 8 Ga. 486. Action against directors
of bank for overissue does not abate by expira-
tion of charter during pendency of suit. Moultrie
V. Smiley, 16 Ga. 289. Above section alters the
common-law rule. Robinson v. Lane, 19 Ga. 888.
Liability of directors continue notwithstanding ex-
piration of charter. Hargroves v. Chambers, 80
Ga. 581.]

Liability of stockholder after transfer of
stock.

§ 1888. Whenever a stockholder in any
corporation is Individually liable under the
charter, and shall transfer his stock, he shall
be exempt from such liability by such trans-
fer, unless such corporation shall fall within
six months from the date of such transfer.
(Act of 1894, December 18.)

Transfer, when complete. { 1856.

[Transfers of stock made void by charter If
made within six months previous to failure of
corporation liability. Lumpkin v. Jones, 1 Ga. 27.

The personal liability of a corporate stockholder
for debts of corporation continues until the stock-
holder has sold and transferred his stock and
given notice thereof under the Code. Brobston
v. Downing. 22 8. B. Rep. 277.

With or without a clause In charter restraining
personal statutory liability of stockholders to
amount of stock at Its par value at the time
dfbt in question was created, liability exists and
continues for any debt Incurred by the corpora-
tion at any time until stockholder who claims
to be exempt by reason of having sold and
transferred his stock before debt was created has
Elven notice of such sale conformably to section
1496 of the Code. Brobston v. Downing, 95 Ga.
505: s. c, 22 S. E. Itep. 277.

Where personal statutory liability of stock-
holders Is to be apportioned amongst all agree-
ing to the relative amount of stock severally by
each, and where corporation Is Insolvent and has
no assets applicable to payment of its unsecured
creditors, one or more of these creditors may
bring suit, in behalf of those of others who may
choose to come in and be made parties, against
all the stockholders and enforce their statutory
liability and apportion the amount which each
should contribute to discharge the claims of the
various creditors. Brobston v. Downing, 95 Ga.
o()5; 8. c, 22 S. B. Rep. 277.

Where It was stipulated In original contract of
subscription, that It was ** to be binding upon
onch party hereto when $50,000 has been bona
flde subscribed, and not before,*' and the sub-
scriptions actually amount to less than that
nniount, none of the subscribers were legally
bound to pay. Branch v. Augtista Glass Works,
05 Ga. 573; s. c, 23 S. E. Rep. 128.



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Dissolution; suits; judgments — Code, §§ 1889-1894.



Creditors of an insolvent corporation, the direc-
tors of which, having full control of Its affairs,
have misappropriated its assets so as to put the
same beyond reach of these creditors, may unite
In an equitable petition for purpose of subject-
ing these creditors to individual liability because
of said misappropriation. Ellis v. Tullman, 95
Ga. 445; s. c, 22 S. B. Rep. 568.

"Where stock of an incorporated company la
pledged by the owner as collateral security for
payment of a debt, the pledfjee Is, as a general
rule, entitled to collect and receive the dividends
thereon unless this right Is reserved by pledgor
at the time pledge Is made. Guarantee Co. v.
East Rome, 96 Ga. 511; s. c, 23 S. R. Rep. 503.

Where president, secretary and treasurer act-
ually know that certain shares of stock therein
have been transferre<l by the person In whose
name the stock stands on the company's books,
to another, such knowledge Is notice to the cor-
poration itself. Guarantee Co. v. East Rome, OO
Ga. 511; s. c, 23 S. E. Rep. 503.

In' the absence of express statutory authority
the stock of oue corporation cannot be consoli-
dated with that of another, against objection
of a majority of stockholders in their corporation.
Tompkins v. Comptln, 93 Ga. 520; 21 S. E. Rep. 79.

Where corporation has authority to Increase
Its capital from 110,000 to $50,0<>0, and It only
Increases It to $15,000, which amount was fullj
paid up, and It has appropriated all of Its prop-
erty for its debts, there are no unpaid subserlp-
tlons which the stockholders are liable for. Hale
V. Iron Co., 94 Ga. 61; 22 S. E. Rep. 217.

Calls for payment of subscriptions which are
payable ** as the directors may direct," cannot
be made by mere street conversation between
president and directors of corporation. In which
they " agree " that he may call In the subscrip-
tions as needed. Such calls must be made by
corporate action on part of dlrootors. Branch v.
Augusta Glass Works, 95 Ga. 573; s. c, 23 S. B.
Rep. 128.]

Liability when corporation fails.

§ 1889. The stookholders In whose names
the capital stock stnnds upon the books of
such corporation at the date of Its failure
shall be primarily liable to respond upon
such individual liability; but upon proof
made that nny shareholders at the date
of the failure are insolvent, recourse
may be had ajjainst the person from
whom such insolvent shareholder received
his stock, if within a period of six months
prior to the date of the failure of such cor-
poration. (Act of 1804, December 18.)

[As against a general creditor of a corporation,
which has ceased to exercise its franchises, the
stockholders are not liable as trustees ex maleflclo.
There is no privity between the stockholders and
creditors. The liability of the corporation must
be first established. Lamar v. Allison, 101 Ga. 270;
28 S. E. Rep. 686 (1897).]

Liability of stockholder an asset.

§ 1890. Such individual liability shall be
an assent of such corporation, to be enforced
by the assijjnee, receiver, or other officer
having the legal right to collect, marshal
and distribute the as.<?et8 of such failed
corporation. (Act of 1804, December 18.)

List of stockholders to be exhibited.

§ 1891. All corporations, whose sharehold-
ers are individually liable under their char-
ter, shall keep on hand at all times a true
and correct list of the shareholders, and it
shall be the right of any creditor to inspect



the same at any time during the business
hours of any working day. The president
and other officers shall produce such lists,
whenever required by any creditor of said
corporation. (Act 1804, December 18.)

Penal liability for failure to allow Inspection.
Penal Code, f 594.

Members of Joint-stock companies, cor-
porations, etc., how sued.

§ 1892. In all suits against the members of
a private association, joint-stock company,
or the members of existing or dikssolved cop-
porations, to recover a debt due by the asso-
ciation, company, or corporation, of which
they are or have been members, or for the ai>-
propriation of money or funds in their bands
to the payment of such debt, the plaintlft
or complainant in such suit may institute
the same, and proceed to Judgment therein
against all or any one or more of the mem-
bers of such association, company, or corpo-
ration, or any other person liable, and
recover of the member or members sued the
amount of unpaid stock in his hands, or
other indebtedness of each member or mem-
bers: Provided, The same does not exceed
the amount of the plaintifiTs debt against
such association, company, or corporation;
and If it exceeds such debt, then so much
only as will be sufficient to satisfy such
debt. (Code 1882, § 3307.)

See § 1852 (1), note.

[Snit may be brought in usnal way by citlseo
of Georgia against a corporation, thongh cause of
action arose In another State. Berry v. R. B. Co.,
.H9 Ga. 555. Section referred to and construed.
R. R. Co. V. McDanlel, 56 Ga. 195.]

Notice to stockholders and effect of.

§ 1893. Plaintiffs, within one month after
the institution of any suit against any cor-
poration, Joint-stock or manufacturing com-
pany, may publish once a week, for four suc-
cessive weeks, in some public gazette of
this State, notice of the commencement of
said suit or suits, and said publication shall
operate as notice to each stockholder in said
corporation. Joint-stock or manufacturing
company, for the purposes hereinafter
mentioned. (Code 1882, § 3371.)

[Notice by publication under this section need
not appear of record. Stone v. Davidson, 66 Gi.
179. Section referred to and construed. Heard
V. Sibley, 52 Ga. 311; Gresham v. Crossland, 69
Id. 278.]

Judgment or decree.

§ 1894. Wben notice has been given as pro-
vided In the preceding sections, and a Judg-
ment or decree has been obtained against
any corporation, Joint-stock or manufac-
turing company, where the individual or pri-
vate property of the stockholders Is bound
for the whole or any part of the debts of said
incorporation, Joint-stock or manufacturing
company, execution shall first be issued
against the goods and chattels, lands and



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21



Actions; process — Code, §§ 1895-1899.



tenements of said corporation, Joint-stock or
manufacturing company; and upon the re-
turn thereof by the proper officer, with the
entry thereon of ** no property to be found,"
then, and in that case, the cleric, or other
officer, upon an applitcation of the plaintiff,
his agent, or attorney, accompanied with a
certificate as hereinafter directed to be ob-
tained, forthwith shall issue an execution
against each of the stockholders (if required)
for their ratable part of said debt and cost of
suit, in proportion to their respective shares,
or other liabilities under their charter of
incorporation. (Code 1882, § 3372.)

[Section referred to and constraed. Heard y.
Sibley, 52 Ga. 311.

Judgment creditor of corporation may go into
a court of equity to reach equitable nssets of cor-
poration, to exhaust his legal remedies. Stlnson
V. Williams. 35 Ga. 170.

Bqulty will compel payment of sufficient per
cent, or unpaid stock to meet debts. R. R. Co.
V. McDanlel, 66 Ga. 191.

Judgments of stockholders against company may
be set off In equity against suit under indlvldunl
liability calls. Boyd v. Hall, 56 Ga. 663. But
•uch Judgment may be nttncked for fraud. Id.
"Where charter provides that stockholders shall
be liable pro rata for debts of company, recovery
of entire debt may be out of one, provided It does
not exceed defendant's proportion, id.]

Presiding officer bound to give names, etc.
§ 1895. It shaU be the duty of the presi-
dent or presiding officer of such incoiT)ora-
tlon, Joint-stock or manufacturing company,
by whatever name he may be designated,
upon application of the plaintiff, his agent,
or attorney, forthwith to give a certificate,
under oath, of the stockholders in said com-
pany, and the number of shares owned by
each at the time of the rendition of judg-
ment against said company; and if, upon ap-
plication by the plaintiff, his agent, or
attorney, the president, or officer aforesaid,
shall refuse to give a certificate as aforesaid,
or shall abscond or conceal himself to avoid
givlmg the same, the plaintiff, his agent, or
attorney may make oath of such refusal, and
the clerk, or other officer, shall Issue an exe-
cution against such president or presiding



Online LibraryRobert C. (Robert Cushing) CummingThe annotated corporation laws of all the states, generally applicable to stock corporations ... in three volumes → online text (page 17 of 92)