Foy & Shemwell v. Georgia-Alabama Power Co.

• Decision Date: 23 April 1924
• Docket Number: 52.,51
• Citation: 298 F. 643
• Parties: FOY & SHEMWELL et al. v. GEORGIA-ALABAMA POWER CO. et al. SAME v. GEORGIA-ALABAMA POWER CO.
• Court: U.S. District Court — Southern District of Georgia

298 F. 643

FOY & SHEMWELL et al. v. GEORGIA-ALABAMA POWER CO. et al.

SAME v. GEORGIA-ALABAMA POWER CO.

Nos. 51, 52.

United States District Court, S.D. Georgia.

April 23, 1924

Alston Alston, Foster & Moise, of Atlanta, Ga., and Pope & Bennet and Lippitt & Burt, all of Albany, Ga., for plaintiffs.

Little Powell, Smith & Goldstein, of Atlanta, Ga., and Milner &amp Farkas, of Albany, Ga., for defendants.

BARRETT District Judge.

Bill No. 51 in the caption is by certain stockholders of the Georgia-Alabama Power Company against said company and others; No. 52 is against such company alone. Both were brought in the superior court of Dougherty county, Ga Removal of each was had to the District Court of the United States, and in each a motion to remand is made. Both parties agree that both causes are removable, if the Georgia-Alabama Power Company is, for jurisdictional purposes, a citizen of North Carolina, and not a citizen of Georgia.

The Georgia-Alabama Power Company (hereinafter called company) was, prior to August 17, 1920, chartered under the laws of the state of North Carolina, and was a citizen of said state for all purposes. On August 17, 1920, there was approved an act of the General Assembly of the state of Georgia (Acts 1920, p. 151) captioned:

'An act to authorize foreign corporations doing business in the state of Georgia to become domesticated and to provide the means therefor and the consequence thereof.'

Such act provides that any foreign corporation, desiring to be domesticated, shall file in the office of the clerk of the superior court of the county in Georgia wherein it desires to have its principal place of business a petition, showing that it desires to become domesticated, and shall set out a certified copy of the charter granted by its home state and a certified copy of the resolution adopted by a majority of its stockholders authorizing the filing of such petition, which petition shall be published in the manner required by the laws of this state for incorporation by the superior courts. After such publication the petition shall be examined by the judge of the superior court, and, if it is found that the purpose 'of said corporation is not against the public policy of the state, an order shall be entered domesticating the said company. ' If any of the provisions of the home charter are such as would not have been granted by Georgia, 'such powers shall not be exercised within this state. ' The domestication shall extend for 20 years, unless the original charter would expire earlier, in which event only to the duration of the original charter, unless it be renewed by the home state. 'A certified copy of the proceedings granting said petition shall be filed with the secretary of this state. ' 'The petition shall state the principal office of said company in Georgia, the amount of capital stock authorized, the amount of capital stock subscribed for, whether preferred or common, and the amount actually paid. The said corporation shall have no power which it could not have acquired, if it had been incorporated under the laws of Georgia. The state of Georgia shall have the same visitorial power over such domesticated corporations as it has over corporations created under the laws of Georgia.'

After compliance with the requirements of such act, there was passed by the judge of the superior court of Dougherty county, Ga., an order domesticating the Georgia-Alabama Power Company. Thereafter there were certain condemnation proceedings instituted and contracts entered into by said company, in which it was recited that such company was a Georgia corporation. A certified copy of the proceedings of domestication was not filed with the secretary of state of Georgia. There was no formal acceptance of the domesticating order, and there was introduced an affidavit of the president of said company that, 'at one time said corporation decided to domesticate under the laws of Georgia * * * of 1920, page 151, but after filing its petition and certified copies in the clerk's office of the superior court of Dougherty county said company decided not to domesticate, and so advised and instructed its attorneys; that said company has never exercised any rights or privileges of a domesticated corporation, nor has said company by any corporate act accepted the domestication of said corporation.' 1. Was said company domesticated under the act of 1920? It is urged that acceptance, either formal or by conduct, is essential; and that neither the precedent act of the stockholders directing the application for domestication nor the acts in pais are sufficient to constitute acceptance. It is beyond question that generally a charter must be accepted before the corporation exists, and the same principle applies to domestication. Fletcher, Cyclopedia Corporations, vol. 1, Sec. 405, and volume 8, Sec. 5712; Bridge Co. v. Wood, 14 Ga. 80; Brooke v. Day, 129 Ga. 694, 59 S.E. 769; Adams v. Overland Co., 27 Ga.App. 531, 109 S.E. 413. But such acceptance need not be proved by formal acts or acts in pais subsequent to the grant of the charter. I do not overlook that in Brooke v. Day, 129 Ga. supra, it is stated that the acts of acceptance must be after the grant of the charter. I think that decision must be limited to the special facts, and is not controlling or convincing under the facts of this case. Indeed, it has been held that:

'In the case of corporations formed under general laws (our italics), no acceptance is necessary. Under such circumstances, compliance by the corporators with the statutory conditions precedent to incorporation takes the place of an acceptance and is all that is required. ' Fletcher, Cyclopedia Corporations, vol. 1, Sec. 405.

The resolution adopted by the stockholders of this North Carolina corporation contained this language:

'That this company do become domesticated under the laws of the state of Georgia, and that it do accept the terms, conditions, and privileges of a certain act of the Legislature of the state of Georgia approved on the . . . day of August, 1920, entitled 'An act to authorize foreign corporations doing business in the state of Georgia to become domesticated and to provide the means therefor and the consequences thereof.''

And thereafter every step prescribed for the domestication, inclusive of the grant of the order of domestication by the judge of the superior court of Dougherty county, was taken. It is true that the direction that 'a certified copy of the proceedings granting said petition shall be filed with the secretary of this state' was not complied with. This failure I consider a mere informality or irregularity. This provision of the statute is very different from those statutes forbidding doing any business in a state by a foreign corporation until a certified copy of its charter shall have been filed with the secretary of state, as discussed in R.C.L. vol. 12, Secs. 38 and 39.

Acceptance of domestication was formal, affirmative, and definite, though prior to the order of domestication. Such acceptance might have been revocable at any time prior to the grant of the order of domestication, but not subsequent to its being an accomplished fact. 'The government cannot compel persons to become an incorporated body without their consent. And this consent, either express or implied, is generally subsequent (italics ours), in point of time, to the creation of the charter. ' Bridge Co. v. Wood, 14 Ga. 80-86.

The principle which I consider sound, and therefore controlling, is that stated in City of Atlanta v. Gate City Gas Co., 71 Ga. 106 (1):

'If a charter is granted after having been applied for, acceptance may be presumed from such previous application.' That certain provisions of the general law of Georgia as to incorporating make this inapplicable to corporations thereunder, and that such decision was in a case where a charter was granted by a special act of the Legislature, do not impair its soundness or prevent its applicability here, and especially in view of the language of the resolution quoted above.

Furthermore there were ample acts in pais to prove acceptance of domestication. The chief benefit to be obtained from domestication was the exercise of the right of eminent domain, and in the exercise of this right thus obtained it was recited, on at least two occasions, that this company was domesticated under the laws of Georgia, or was a Georgia corporation, and one or more contracts contained like recitals. Error in such recital, if error it was, cannot be laid solely upon the unauthorized acts of the attorneys at law, for the vice president and secretary of the company signed at least some of such papers. Such proof of acceptance is sufficient. Louisville Trust Co. v. Louisville, etc., Ry. Co., 75 F. 433(4), 444, 22 C.C.A. 378 (C.C.A. Sixth Circuit); Fletcher, Cyclopedia Corporations, vol. 1, Secs. 246 and 405, and...