46 S.E.2d 122 | Ga. | 1948
1. Where the judgment rendered, permitting the opening of a default, is based on conflicting evidence, the discretion vested in the trial court will not be controlled unless manifestly abused.
2. A bylaw of a corporation requiring a stockholder, before selling his stock, to afford other stockholders an opportunity to purchase such stock at a stipulated price, is not void per se as being against public policy. A petition charging several defendants with a conspiracy to violate such an agreement sets forth a cause of action.
3. A petition charging a named defendant with acts of willful misfeasance, and resulting injury to the petitioner, alleges a cause of action.
The petitioner prayed for an accounting of the affairs of the corporation from January 1, 1946, and for an adjustment of certain amounts alleged to be illegally expended by the defendants in charge of the affairs of the corporation, for the appointment of a receiver, and for a rescission of the attempted sale of stock by Dennis to the Stephenses. General and special equitable and legal relief was prayed against the Stephenses. Special relief was prayed against Eden.
The record shows that Dennis failed to file any defensive pleadings within the time provided by law (Ga. L. 1946, p. 777, § 18). After the expiration of the period for filing defensive pleadings as a matter of right, Dennis presented a motion to open the default judgment. All parties were notified and given and opportunity to present evidence. The trial judge entered an order permitting Dennis to file defensive pleadings, and to pay the accrued costs. This order was later revoked and a new order entered permitting court costs to be paid as of a later date and permitting opening of default at the later date. Dennis immediately filed a demurrer to the petition, which was later amended. The demurrer of Dennis was sustained and the petition dismissed as to him.
The demurrer of J. Fred Eden was sustained and the petition dismissed as to him. The exceptions here are to the order opening the default as to Dennis and to the judgments sustaining the demurrers of Dennis and Eden. 1. The first question for determination here is whether or not the trial court erred in permitting the default to be opened and defensive pleadings to be filed by the defendant, Belmont Dennis. Section 21 of the Rules of Procedure Act (Ga. L. 1946, p. 778) provides in part: "At any time before final judgment, the judge, in his discretion, upon payment of costs, may allow the default to be opened for providential cause preventing the filing of a plea, or for excusable neglect, or where the judge, from all the facts, shall determine that a proper case has been made for the default to be opened, on terms to be fixed by the court." This rule follows the former law, except that the discretion of the trial judge may be exercised "at any time before final judgment," whereas under the former law his authority was limited to "the trial term."
The evidence offered by the plaintiff in error would have authorized a finding that Dennis could have filed defensive pleadings within the period prescribed by law. There was evidence offered by the defendant Dennis in support of his contention that, due to a severe illness, he was unable to devote the time and attention necessarily required in the preparation of his pleadings and defenses.
Where the judgment rendered, permitting the opening of a default, is based on conflicting evidence, the discretion vested in the trial court will not be controlled unless manifestly abused. Here there was sufficient evidence to show that Dennis's delay was "excusable neglect," since his physician testified that during the months of May, June, and July of 1947 he was not able to transact any business such as properly assisting in preparing and filing defensive pleadings. It was during these months that the defendant could have filed defensive pleadings as a matter of right, had he been able to do so. Under all of the evidence, it was not error for the trial court to open the default and permit Dennis to file his pleadings.
2. The next question for determination is whether or not the petition states a cause of action against the defendant Dennis. The petition charges Dennis and named defendants with a conspiracy to buy and sell the stock of the corporation in violation of an alleged bylaw prohibiting the sale of stock to an outsider until after such stock has been offered to the other stockholders *235 at par value plus 10 percent. The defendant contends that such a bylaw, if in existence during the time of the acts complained of, is invalid, being against public policy and in restraint of trade.
The Code (Ann. Supp.), § 22-1827 (f), provides: "Every corporation, by virtue of its existence as such, shall have power: . . (f) To make bylaws not inconsistent with the Constitution or laws of the United States or of this State or of its charter for the exercise of its corporate powers, the management, regulation and government of its affairs and property, the transfer of its stock, and the calling and holding of meetings of its stock-holders and directors."
From the allegations of the petition in this case, it does not appear that the bylaw in question is against public policy. A bylaw of a corporation, requiring a stockholder to offer his stock to other stockholders at a stipulated consideration before selling such stock to third persons, is not any more against public policy than a contract of like character between individuals. In Cothran v. Witham,
The rule laid down in the Cothran case is in accord with the general rule that a bylaw of a corporation such as is alleged in the present case is valid and binding. In 13 Am. Jur. p. 413, § 338, the rule is stated as follows: "Whether a bylaw requiring a stockholder before selling his stock to afford the corporation or other stockholders an opportunity to purchase the same is valid, is the subject of conflicting decisions. According to the *236 weight of authority, such a bylaw is valid and binding upon thestockholder, either as a regulation within the powers of thecorporation or as a contract obligation voluntarily undertaken bythe stockholder. [Italics ours.] The contrary view has, however, also been taken."
The petition in this case states a cause of action which entitles the petitioner to the opportunity of providing his allegations, and the court erred in sustaining the general demurrer filed by the defendant Dennis.
3. "An agent is personally liable to those injured by his misfeasance or act of negligence, but ordinarily he is not liable for mere nonfeasance." Kimbrough v. Boswell,
Paragraph 13 of the petition charges the defendant, J. Fred Eden, with certain acts of misfeasance. The allegations of the petition set out a cause of action against this defendant, and the court erred in sustaining his general demurrer and in dismissing the case as to him.
Judgment affirmed in part, and reversed in part. All theJustices concur, except Duckworth, P. J., absent on account ofillness, and Wyatt, J., who took no part in the consideration ordecision of this case.