O.C.G.A. § 14-2-1133 (2019)

Annotations

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, deci-

sions under former Code 1872, § 1678, former Code 1882, § 1678, former Civil

Code 1895, § 1851, former Civil Code 1910, § 2283, Ga. L. 1937-38, Ex. Sess., p. 214, § 10, former Code 1933, § 22-202 and Code Section 14-2-21, which were repealed by Ga. L. 1988, p. 1070, § 1, effective July 1, 1989, are included in the annotations for this section. Rule of ejusdem generis not applied to this Code section. - Although the rule of ejusdem generis is accepted by Georgia courts, there appears to be no Georgia case applying this rule in the context of former Code 1933, § 22-202. Schnorbach v. Fuqua, 70 F.R.D. 424 (S.D. Ga. 1975) (decided under former Code 1933, § 22-202). Scope of corporation’s powers. - The powers of a corporation are limited to those which are common to all corporations, except such additional valid powers as may be specifically conferred by the authority creating it. Clement A. Evans & Co. v. Waggoner, 197 Ga. 857, 30 S.E.2d 915 (1944) (decided under Ga. L. 1937-38, Ex. Sess., p. 214, § 10). ‘‘Direct interest’’ includes more than participants. - Judicial construction has not confined the meaning of the term ‘‘direct interest’’ to the participants alone, but has extended it to include others upon whom the determination of the subject matter may have a secondary effect, so long as the effect, as to them, is not merely contingent, uncertain or conjectural. Choctaw Lumber Co. v. Atlanta Band Mill, Inc., 88 Ga. App. 701, 77 S.E.2d 333, cert. denied, 210 Ga. 166, 78 S.E.2d 515 (1953) (decided under Ga. L. 1937-38, Ex. Sess., p. 214, § 10). Specific joint undertaking. - Corporation is not debarred from entering upon a specific joint undertaking, provided the nature of the enterprise comes within the scope of its ordinary and legitimate powers. Clement A. Evans & Co. v. Waggoner, 197 Ga. 857, 30 S.E.2d 915 (1944) (decided under Ga. L. 1937-38, Ex. Sess., p. 214, § 10). Corporation cannot lend credit for accommodation of third person. - No corporation, whether public or private, organized under the laws of this state can, in absence of express charter authority so to do, lend its credit for mere accommodation of third persons. Nalley Land & Inv.

Co. v. Merchants’ & Planters’ Bank, 178 Ga. 818, 174 S.E. 618 (1934), later appeal, 187 Ga. 142, 199 S.E. 815 (1938) (decided under former Civil Code 1910, § 2283). National bank in negotiating its paper can bind itself for the payment thereof by its endorsement thereon; but it cannot guarantee the payment of the paper of others, or become surety thereon, solely for the benefit of the latter. Nalley Land & Inv. Co. v. Merchants’ & Planters’ Bank, 178 Ga. 818, 174 S.E. 618 (1934), later appeal, 187 Ga. 142, 199 S.E. 815 (1938) (decided under former Civil Code 1910, § 2283). Accommodation endorsement of commercial paper. - Authority to make an accommodation endorsement of commercial paper will not be implied from the power to lend or borrow money on such paper and generally to exercise the powers usually incident to corporations under the laws of this state. Nalley Land & Inv. Co. v. Merchants’ & Planters’ Bank, 178 Ga. 818, 174 S.E. 618 (1934), later appeal, 187 Ga. 142, 199 S.E. 815 (1938) (decided under former Civil Code 1910, § 2283). Credit union authorized to receive security deed from debtors. - A credit union, like any other corporation organized under the laws of this state, is authorized to receive a security deed from its debtors. Cole v. Georgia Cent. Credit Union, 243 Ga. 60, 252 S.E.2d 485 (1979) (decided under former Code 1933, § 22-202). Effect of change in shareholders. - The object of incorporation is to create an artificial being with perpetual life, or life for a term of years, and it does not cease to be such, although all of the natural persons who were first members of the organization die, sell their interest, or otherwise cease to be stockholders. Mathis v. Morgan, 72 Ga. 517, 53 Am. R. 847 (1884) (decided under former Code 1882, § 1678). Effect of bankruptcy. - The bankruptcy of a corporation does not put an end to the corporate existence, nor vacate the office of its directors. Holland v. Heyman & Bro., 60 Ga. 174 (1878); National Sur. Co. v. Medlock, 2 Ga. App. 665, 58 S.E. 1131 (1907) (decided under former Code 1872, § 1678, and former Civil Code 1895, § 1851).

CORPORATIONS & PARTNERSHIPS

Effect of administrative dissolution. - The general powers of a corporation exist independently of the purpose for continued existence stated in the provision for administrative dissolution. Fulton Paper Co. v. Reeves, 212 Ga. App. 341, 441 S.E.2d 881 (1994).

Cited in Knickerbocker Tax Sys. v. Texaco, Inc., 130 Ga. App. 383, 203 S.E.2d 290 (1973); Freeman v. Allstate Bus. Sys., 166 Ga. App. 249, 304 S.E.2d 97 (1983).

RESEARCH REFERENCES Am. Jur. 2d. - 18 Am. Jur. 2d, Corporations, §§ 45 et seq., 65 et seq. 18A Am. Jur. 2d, Corporations, § 222 et seq. 18B Am. Jur. 2d, Corporations, §§ 1264 et seq., 1291 et seq. C.J.S. - 18 C.J.S., Corporations, §§ 67, 143 et seq. 19 C.J.S., Corporations, §§ 518 et seq., 651 et seq. ALR. - Right of business corporation to use its funds or property for humanitarian purposes, 3 ALR 443. Liability of corporation on contracts of promoters, 17 ALR 452; 49 ALR 673; 123 ALR 726. Conclusiveness of decision of corporate officers or directors that property is of sufficient value to warrant a loan under the powers of the corporation, 18 ALR 645. Personal liability of directors as affected by terms of contract or form of signature, 33 ALR 1353; 51 ALR 319. Power of corporation to pass title to real property which it holds in excess of its powers, 37 ALR 204; 62 ALR 494. Corporation’s payment of bonus to officers or employees, 40 ALR 1423; 88 ALR 751; 164 ALR 1125. Right of corporation to sue on contract made by promoters before its organization, 66 ALR 1425. Insurance on life of officer for benefit of private corporation, 75 ALR 1362; 143 ALR 293. Right of officer or director of private corporation to purchase in his own interest at a judicial or other public sale of the corporate property, 76 ALR 439. Personal liability on contract made by ‘‘trustees’’ or others in closing affairs of dissolved corporation, 76 ALR 1478. Lien of mortgage securing corporate bonds as affected by exchange of bonds for those of reorganized or new corporations, 81 ALR 139. Statutory added liability of stockhold-

ers of bank or other corporation as affected by sale of, or other transaction in relation to, assets, 100 ALR 1276. Construction, application, and effect of statutory provision that directors or corporation may remove officer, agent, or employee at pleasure, 111 ALR 894. Validity of contract between corporations as affected by directors or officers in common, 114 ALR 299; 33 ALR2d 1060. Power of corporation to change obligations to stockholders, 117 ALR 1290. Power of corporation to enforce a contract made after taking the steps necessary to put its corporate existence beyond collateral attack, as affected by limited amount of capital subscribed or paid in, 128 ALR 874. Computation of fund to be provided by private employer for payment of pension or retirement allowance to employees, 153 ALR 818. Competency of stockholder as a witness where corporation is a party to a suit prosecuted by or against the personal representative of a decedent, 163 ALR 1215. Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation, 9 ALR2d 1306. Conditions accompanying or following dissolution of lessee corporation, as breach of covenant against assignment or sublease, 12 ALR2d 179. Requisites as to definiteness of agreement to pay employee share of profits, 18 ALR2d 211. Validity of security for contemporaneous loan to corporation by officer, director, or stockholder, 31 ALR2d 663. Power of a business corporation to donate to a charitable or similar institution, 39 ALR2d 1192. Construction of ‘‘net profits,’’ ‘‘earnings,’’ or the like, in provision for profit-sharing

bonus for corporate officers or employees, 49 ALR2d 1129. Power of a particular officer or agent of business corporation to bind it by a donation to a charity or similar institution, 50 ALR2d 447. Expenses incurred by competing factions within corporation in soliciting proxies as charge against corporation, 51 ALR2d 873. Leasing of real estate by foreign corporation, as lessor or lessee, as doing business within state within statutes prescribing conditions of right to do business, 59 ALR2d 1131. Corporation’s power to enter into partnership or joint venture, 60 ALR2d 917. Power of secretary or treasurer of corporation to institute litigation for it, 64 ALR2d 900. Criminal liability of corporate officer who issues worthless checks in corporate name, 68 ALR2d 1269. Rights and liabilities as between employer and employee with respect to general bonus or profit-sharing plan, 81 ALR2d 1066. Rights and liabilities as between employer and employee with respect to employee stock options, 96 ALR2d 176. Power and authority of president of business corporation to execute commercial paper, 96 ALR2d 549.

Liability of corporation for torts of subsidiary, 7 ALR3d 1343. Failure to issue stock as factor in disregard of corporate entity, 8 ALR3d 1122. Liability of corporation for contracts of subsidiary, 38 ALR3d 1102. Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to do business, 50 ALR3d 1020. Private pension plans: statements in literature distributed to employees as controlling over provisions of general plan, 50 ALR3d 1270. Construction and operation of private pension plan provision for distribution of pension funds upon termination of plan, 55 ALR3d 767. Charitable contributions by public utility as part of operating expense, 59 ALR3d 941. Power of corporation to make political contribution or expenditure under state law, 79 ALR3d 491. Validity, construction, and effect of statutory provisions concerning capital requisites of state incorporation of bank, 79 ALR3d 1190. Right of corporation to discharge employee who asserts rights as stockholder, 84 ALR3d 1107.