Peoples Bank v. Southern Investment Co.

Gilbert, J. 1. The petition sets forth a cause of action by minority stockholders against a bank incorporated under the laws of Georgia, and the directors of said bank, complaining of acts of said bank and said directors in illegally lending money and allowing overdrafts. Civil Code (1910), § 2224; Ga. Laws 1919, p. 216, §§ 19, 22, 8 Park’s Code Supp. §§ 2281 (s), 2281 (v); Weslosky v. Quarterman, 123 Ga. 312 (51 S. E. 426). Compare Bush v. Bonner, 156 Ga. 143(2) (118 S. E. 658); Albright v. Fulton County Home Builders, 151 Ga. 485 (107 S. E. 335), where it was held that the allegations were insufficient to set out a case by minority stockholders. 2. The court was authorized to hold, under the allegations of the petition, that plaintiffs acted with such promptness as the law required, and that they were not, on account of lack of diligence, estopped from bringing the suit. (a) It is alleged in the petition “that as soon as petitioners learned of the illegal transactions on the part of said bank directors, as aforesaid, they undertook to have the books of said bank audited, which request [32] therefor was denied by the said bank; that the affairs of said bank were in the hands of the said directors, whose wrongful and illegal actions and personal liabilities to said bank were the subject-matters of complaint, and whose interests were antagonistic to the bank and its stockholders, and who exercised controlling influence over a majority of the stockholders, and as a result of this condition petitioners have not been able to obtain any redress for their wrongs.” (6) It is further alleged in the petition “that said directors were not in a position to sue themselves for wrongs committed by themselves against the bank; and it is accordingly the right of the petitioners, in behalf of themselves and other stockholders at interest, to proceed against the directors aforesaid, and to enforce against them the personal liability which they have incurred to said bank.” 3. It does not appear from the petition that the bank had been taken over by the State superintendent of banks, or that the bank was in condition to authorize such action. If this had been alleged, a different question would be presented. 4. The court did not err in overruling the demurrer to the petition. [31] Banks and Banking, 7 C. J. p. 572, n. 52 New. [32] No. 5670. March 17, 1927. Judgment affirmed. All the Justices concur. W. W. Dykes, for plaintiffs in error. M. F. Adams and W. H..Key, contra.