Case ID: ga_189/html/0355-02.html
Source: Caselaw Access Project
Author: {"author": "Bell, Justice.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Collins & Glennville Railroad Co. et al. v. Bradley et al.
    
   Bell, Justice.

1. This being a suit by minority stockholders, one of whom was a director, against the other directors, and the corporation, for appointment of a receiver and other relief, whether or not the allegations were otherwise sufficient to state a cause of action, the petition was defective and subject to general demurrer because it did not show that the plaintiffs had made an earnest effort to obtain redress at the hands of the directors and stockholders, or why this could not be done, or that it was not reasonable to require it. Code, § 22-711; Alexander v. Seatroy, 81 Ga. 536 (2) (8 S. E. 630, 12 Am. St. R. 337) ; Smith v. Coolidge Banking Co., 147 Ga. 7 (92 S. E. 519) ; Albright v. Button County Home Builders, 151 Ga. 485 (107 S. E. 335) ; Bush v. Bonner, 156 Ga. 143 (118 S. E. 658); Smith v. Albright-England Co., 171 Ga. 544 (3) (156 S. E. 313); Nussbaum v. Nussbaum, 186 Ga. 773 (199 S. E. 169) ; Nussbaum v. Nussbaum, 188 Ga. 224 (3 S. E. 2d, 721).

No. 12973.

November 29, 1939.

2. The foregoing conclusion is not altered by the allegations regarding misapplication of funds by the president, permitted and allowed by a majority of the board of directors, three of whom, according to the petition, admitted knowledge of such misapplication. The right of recovery, if any, upon this account, being in the corporation, the plaintiffs could not proceed as minority stockholders without alleging facts to bring the case within the rule referred to above. See Colquitt v. Howatrd, 11 Ga. 556 (3) ; Bush v. Bonner, supra; Peoples Bank of Richland v. Southern Investment Co., 164 Ga. 31 (137 S. E. 547).

3. The facts that some of the defendants filed an answer in which they joined with the plaintiffs in praying for a receiver, and that other stockholders intervened and prayed for the same relief, did not aid the petition as to its sufficiency to withstand general demurrers filed by other defendants. Atlanta & Carolina Railway Co. v. Carolina Portland Cement Co., 140 Ga. 650 (4) (79 S. E. 555); Pollard v. Blalock, 147 Ga. 406 (2) (94 S. E. 226); Elliot v. Macauley, 177 Ga. 96 (169 S. E. 358).

4. Under the foregoing principles, the court erred in overruling the general demurrers to the petition; and since this ruling rendered the further proceedings nugatory, it was consequent error to appoint a receiver.

Judgment reversed.

All the Justices ooneur.

C. L. Cowart, for plaintiffs in error.

P. M. Anderson and Bldloclc & Blalock, contra.