Bridges v. Southern Bell Telephone &c. Co.

Evans, P. J. (After stating the facts.) Two reasons are advanced for denying the plaintiff the relief which he seeks; one is that he was not a stockholder, and the other that he is estopped by his conduct from attacking the sale. We will pretermit any discussion of the evidence relied on to show a sale of his stock, because the plaintiff never parted with his stock certificate, and declined to receive the purchase-price. Whether he violated his contract to sell his stock, or whether the purchaser failed to comply with the terms of sale, may be passed by; as the stock certificate with its transfer was never delivered to the purchaser. Nevertheless we think the evidence was sufficient to show an estoppel against the plaintiff from having the relief which he seeks.' In his affidavit submitted at the interlocutory hearing the plaintiff deposed that the sale was not authorized by any resolution of the stockholders, nor was the corporate seal impressed upon the deed. There was no evidence to the contrary. But the deed was actually made in the corporation’s name; the corporate name purporting to have been signed by its president and attested by its secretary. Treating the deed as being informally executed, and the sale as being without proper corporate action, we think, for the purposes of this case, the minority stockholder is estopped from attacking the validity of the purchaser’s title. The Bainbridge Telephone Company admits the execution of the deed and the receipt of the money, and expressly ratifies the sale. It further appears that the purchaser paid full value for the property, and that the Bainbridge Company was unsuccessfully operating the business at the time of the sale. It also appears, that the petitioner knew of the pending negotiations for the sale of the telephone system to the Southern Bell Telephone and Telegraph Company; that he co-operated with the officials of the Bainbridge Telephone Company in bringing about the sale, agreeing with its president that it was to the best interest of the corporation to make the sale; that he was instrumental in obtaining the assent of the authorities of the town of Brinson to'the sale; that he knew that the sale was consummated; and that after the Southern Bell Telephone and Telegraph Company liad been put in possession of the property it expended large sums of money in improving it, [254] without any dissent or objection on the part of petitioner. There was no evidence of any fraud or collusion between the Bainbridge Telephone Company and the Southern Bell Company in making the sale, or of any intention to defraud the plaintiff. Notwithstanding the plaintiff participated in bringing about the sale, and observed the purchaser making valuable improvements on the faith of its legality, it was not until after such improvements were made,- and six months after the sale, that he protested against its validity or propriety. B.efore a minority stockholder may proceed for acts ultra vires against the corporation, its officers, and those participating therein, he must show not only that the act is ultra vires, and that the majority stockholders are illegally pursuing in the name of the corporation a course in violation of the rights of shareholders, but also that he acted promptly. Civil Code of 1910, § 2224. If a minority stockholder joostpones his complaint that the corporate act is ultra vires or irregular for an unreasonable time, or, after full knowledge of the facts, stands by and allows large operations to be completed or money expended, before he brings suit, his laches and acquiescence bar him of any right to equitable relief with respect thereto. Alexander v. Searcy, 81 Ga 536 (8 S. E. 630, 12 Am. St. Rep. 337). After a careful review of the evidence we do not think that the judge abused his discretion in refusing the extraordinary relief sought by the plaintiff. The plaintiff in error complains of certain rulings on evidence; but in view of the foregoing discussion of the grounds upon which we place our decision, it becomes unnecessary to discuss them. Judgment affirmed. All the Justices concur.