Clarke v. Armstrong

106 S.E. 289, 151 Ga. 105, 1921 Ga. LEXIS 166
Supreme Court of Georgia·Decided February 17, 1921·No. No. 1890·Published·Cited by 3 cases

Opinion

Beck, P. J.

(After stating the foregoing facts.) A reading of the foregoing statement of the substance of the pleadings in this case will disclose the fact that many important questions affecting military companies, both those which have been incorporated and those not incorporated, are involved:— questions affecting not only the property rights that may have been acquired by such companies or corporations, but affecting their very existence. But there is one controlling question; and the proper determination of that, under our view of the case as presented, will render the decision' of the other questions in the ease unnecessary.

The demurrer in the casé, upon one ground, raises the point that [111] the petitioners below do not show that they have such an interest-in the property involved in the controversy as authorizes them to maintain this suit. The petitioners’ general contention is, that the act of Congress of June 3, 1916, called the National defense act, had the effect of superseding and destroying the State legislation granting the charter to the Gate City Guard, and that when the troops composing the guard were drafted into the service of the Government, they were thereby discharged from the militia, and the effect was to destroy the State military organization theretofore existing, as the members of that organization who went into the Federal service stood thereby discharged from the militia, according to the terms of the act; and that all those who failed to enter the service and take the' oath were likewise discharged •from the militia by the State Government through the Adjutant-General, and the effect of this was to leave the organization wholly without members. And they further insist that by no enactment prior to June, 1916, did Congress assume exclusive jurisdiction of organizing, arming, and disciplining the militia and of prescribing the' discipline by which the State should train the militia, and never until the act of 1916 did Congress forbid the States from maintaining any other military organizations; and that therefore the Gate City Guard continued to exist up to June 3, 1916, at which time, by the enactment of the law referred to, the Gate City Guard as a military organization was effectively destroyed, and that the property then belonging to it was subject to be distributed according to the law controlling the assets belonging to corporations at the time of their dissolution, and that those members of the Gate City Guard who were members at the time of the dissolution were entitled to have the assets of the corporation divided among themselves equally, after the debts of the company were paid. They claim the right to this property under the provisions of the Civil Code, § 2245, as follows; Upon the dissolution of a corporation, 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.” If the section just quoted did not [112] have the effect of giving to petitioners the right to have the property divided and to participate in a division of the same, then they had no right to maintain this suit. For, if the effect of the act of Congress relatively to the continued existence of the company was as petitioners contend, nevertheless, if' upon its dissolution they were not entitled to have the property distributed among those who were members at the time ,of the termination of the existence of the company, they have no standing in court for any of the purposes sought by their, petition. And we do not think that section 2245 of the Code, above quoted, is applicable in ease of a dissolution of a corporation like the one under consideration here. The expression, "equal distribution among its members,” has not the controlling force attributed to it in the argument of counsel for defendants in error, where it is insisted that the provision for " equal ” distribution shows conclusively that the statute is applicable to corporations like that involved here; but as the statute was intended to make provision for the distribution of the assets of corporations generally, where certificates of shares of stock are issued and held by the members of the corporation, the word "equal” must imply, not absolute equality of amount, but equality of right entitling each member to an amount pajuible from the proceeds of the assets of the corporation proportionate to his interest in the corporation’s property or to the amount of the shares of stock held by each member.

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Clarke v. Armstrong, 106 S.E. 289, 151 Ga. 105, 1921 Ga. LEXIS 166 (Ga. 1921).

106 S.E. 289 (Clarke v. Armstrong) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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