Source: https://supreme.justia.com/cases/federal/us/281/643/
Timestamp: 2019-04-24 07:54:03+00:00

Document:
the assessment was made was not required by the state law or that a notice actually given by mailing it fifteen days before the meeting, addressed to the stockholder at his address last known to the bank, was insufficient. P. 281 U. S. 646.
2. In assailing the constitutionality of a state statute, the burden rests upon the complainant to establish that it infringes the constitutional guarantee which he invokes. If the state court has not otherwise construed it, and it is susceptible of an interpretation which conforms to constitutional requirements, doubts must be resolved in favor of the state. P. 281 U. S. 647.
Appeal from a judgment sustaining a recovery by the Bank in an action to collect an assessment from a stockholder.
This is an appeal from a judgment of the Supreme Court of Georgia, upholding the constitutionality of the provisions of the Georgia statutes regulating the assessment, by corporate action, of shareholders of state banking institutions whose capital has become impaired. 149 S.E. 645. Section 1 of Art. VI Georgia Banking Law, Act of August 26th, Ga.Laws, 1925, p. 126, amending Art. VI, Ga.Laws, 1919, pp. 135, 152; Ga.Civil Code 1926, § 2366, (48), (49).
"it shall be the duty of the officers and directors of the bank receiving such notice to immediately call a special meeting of the stockholders for the purpose of making an assessment upon its stockholders sufficient to cover the impairment."
Section 2 authorizes the bank, in addition to other remedies, to bring suit against stockholders for the amount of the assessment. The supreme court of the state, construing the statute, has held that an assessment under the provisions of § 1 (formerly in § 2 of Article VI of the Georgia Banking Law, Ga.Laws 1919, p. 135) is a voluntary act on the part of the stockholders, who may, at their election, by action taken at the stockholders meeting, levy the assessment or decline to levy it and permit the liquidation of the bank of the superintendent of banks, who may levy an assessment under another provision of the statute not now involved. Smith v. Mobley, 166 Ga.195. Art.. VI and VII of the Georgia Banking Law, Ga.Laws, 1919, p. 135.
net indebtedness of the bank exceeded its capital. Certain depositors of the bank having undertaken to release their claims so that its indebtedness would equal its capital, the superintendent of banks agreed to surrender his control of the bank if its stockholders would authorize a levy of an assessment of 100 percent of the par value of the stock. A stockholders meeting, held October 22, 1926, at which a majority of the shares was represented, adopted resolutions assessing the stock accordingly.
The present suit to recover the assessment upon appellant's shares was brought in the Superior Court of Wilkes County, and its judgment in favor of the respondent was affirmed by the state supreme court. Appellant, by his pleadings, challenged the constitutionality of the statute upon the ground, relied on here, that § 1, by its failure to provide for notice to stockholders of the special meeting for the purpose of levying the assessment, denies due process of law guaranteed by the Fourteenth Amendment.
Petitioner thus seeks to raise the question whether one who acquires stock in a corporation, notice of whose meetings is dispensed with by state law, can, for that reason alone, invoke the due process clause to set aside corporate action adversely affecting his interest as a stockholder.
corporate meetings to be called by reasonable notice to stockholders. See Stow v. Wyse, 7 Conn. 214; Wiggin v. First Freewill Baptist Church, 8 Metc. 301, 312; Stevens v. Eden Meeting-House Society, 12 Vt. 688, 689. That, we think, in the absence of a controlling decision of the highest court of Georgia, must be taken to be the implied requirement of § 1.
Notice was in fact given in the present case, as appears by the agreed statement of facts, by mailing it fifteen days before the meeting, addressed to petitioner at his address last known to the bank. It does not appear whether he received the notice. In the face of this record, we cannot assume either that notice was not required by the law of the state or that that actually given was insufficient.
In assailing the constitutionality of a state statute, the burden rests upon appellant to establish that it infringes the constitutional guarantee which he invokes. If the state court has not otherwise construed it, and it is susceptible of an interpretation which conforms to constitutional requirements, doubts must be resolved in favor of, and not against, the state. See No. 454, Corporation Commission of Oklahoma, etc. v. Lowe, etc., ante, p. 281 U. S. 431; South Utah Mines & Smelters v. Beaver County, 262 U. S. 325, 262 U. S. 331.
"Section 1. Assessment of stockholders."
Whenever the Superintendent of Banks shall find that the capital stock of any bank has become impaired or reduced as much as ten percent of its par value from losses or any other causes, the Superintendent of Banks shall notify and require such bank to make good its capital stock so impaired or reduced within sixty (60) days, by an assessment upon the stockholders thereof, and it shall be the duty of the officers and directors of the bank receiving such notice to immediately call a special meeting of the stockholders for the purpose of making an assessment upon its stockholders sufficient to cover the impairment of the capital, payable in cash at which meeting such assessment shall be made, provided that such bank may reduce its capital to the extent of the impairment of such reduction will not place its capital below the amount required by this Act. At any such special meeting of the stockholders a majority of the stock outstanding at the time shall be deemed a quorum, and such assessment may be made upon a majority vote of the quorum present.

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