Chatham Bank v. Brobston & Co.

27 S.E. 790, 99 Ga. 801, 1897 Ga. LEXIS 6

• Court: Supreme Court of Georgia
• Decided: February 15, 1897
• Status: Published

Opinion

Lumpkin, Justice, and Gober, Judge.

The 9th. section of the charter of the Brunswick State Bank declares, “That said corporation shall be- responsible to its creditors to the extent of its property and assets, .and the stockholders, in addition thereto, shall be individually liable, equally and ratably, and not one fo-r another as sureties, to the creditors of such oorp oration, for all contracts and debts of said corporation, to the extent of the amount of their stock therein, at the par value thereof, respectively, at the time the debt was created, in addition to the amount invested in such shares.” Section 1496 of the code: of 1882 reads as follows: “When a stockholder in any bank or other corporation is individually liable under the charter,, and shall transfer his stock, he shall be exempt from such liability, unless he ¡receives a written notice from a creditor, within six months after such transfer, of his intention to hold him liable: Provided, he shall give notice once a month, for six months, of such transfer, immediately thereafter, in two newspapers in or nearest the place whore such institution shall keep its principal office.”

In the cases of Brobston & Co. et al. v. Downing, and Same v. The Chatham Bank, 95 Ga. 505, this court in effect decided that a stockholder in this bank was individually liable for his pro rata part of the debts of the corporation created before he became a stockholder, as well as for a like proportion of the indebtedness incurred by it while he held his stock. This decision controls the present cases. Upon a review of it, duly allowed, Chief Justice Simmons and Justice Lumpkin are of the opinion that it should be affirmed ; and Judge Gober, being thus bound by it, of necessity concurs in the judgments now rendered. He is nevertheless of the opinion that in dealing with the cases reported in 95 Ga., supra, the court, in so far as it held that a stockholder of this bank could be made liable for any debt created by it before he actually became a stockholder, misconstrued that portion of the bank’s charter which is quoted above. If free to do so, he would hold that, under the language just referred to, the individual liability of a stockholder of this corporation is limited to such debts only as were contracted during the time he was an owner of stock and up to the date when, relatively to such liability, he legally severed his connection with the corporation. We all .agree that any such owner, although he may have transferred his stock, would still be bound, under the above cited ¡section of the code, for whatever liability the charter fixed upon him, unless he gave the notice provided for by that section.

In 1894, :an act was passed by the General Assembly which materially modifies the law bearing upon this subject, in that it dispenses with any necessity for a stockholder, upon transferring his stock, to publish notice of the fact in order to be discharged from liability. That arct declares that “whenever a stockholder in any bank or other corporation is individually liable under the charter, .and shall transfer his stock, he shall be exempt from such liability by such transfer, unless such bank or other corporation shall fail within six months from the date of such transfer.” Acts of 1894, p. 76; Civil Code, §1888. In view of the radical change thus made in the law, the difference of opinion which exists between the majority and the minority of the court 'as constituted for the hearing of the cases now in hand is, apparently, of but little practical importance, save as affecting the result of the present litigation. If another ease should arise the decision of which would depend upon the question as to which we disagree, the whole matter would still be open to review by'a bench of six justices. Accordingly, we have agreed among ourselves to let the present decision stand upon the head-notes as announced, with the foregoing explanation of our reasons for not entering upon a discussion as to what should be the proper construction of the bank charter now under consideration.

Judgment in each case affirmed on conditions.