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Smith v. Citizens and Southern Bank
Atkinson, J.
1. “Persons who organize a company and transact business in its name, before the minimum capital stock has been subscribed for, are liable to creditors to make good the minimum capital stock with interest.” Civil Code, § 2220. The liability thus provided for is obviously for the purpose of creating a fund, when the subscriptions to the amount of the minimum capital stock shall have been paid, for the ultimate benefit of those who may extend credit to the corporation; and such persons have the right to presume that the statute has been complied with, and to rely, if necessary, upon the statutory liability of those failing to observe the law. Organizers of a company who transact business in its name before the minimum capital stock has been subscribed for are considered as committing a fraud upon those who may extend credit to the company, and the statute imposes a liability upon them. John V. Farwell Co. v. Jackson Stores, 137 Ga. 174 (3), 175 (73 S. E. 13). Upon principle the statute applies to private corporations generally, including among others banking corporations chartered under the Civil Code, § 2262 et seq.
2. While it is provided that no bank shall.be incorporated with less than a specified amount of capital stock (Civil Code, § 2269), that provision of the law does not purport to limit the power to incorporate a bank with a minimum capital stock greater than that specified in the statute. It is optional with the institution whether it will name a maximum amount of capital stock and a minimum amount of capital stock; and where but one amount is named, that is both the maximum and minimum amount of capital stock of the company within the meaning of the Civil Code, § 2220. Rosenheim v. Horne, 10 Ga. App. 582 (4), 587 (73 S. E. 953).
3. The rulings announced in the preceding notes dispose of the controlling questions in the case; and there was no error in overruling the demurrers, nor in refusing to grant a new trial upon any ground taken.
Judgment affirmed.
All the Justices concur.