21 S.E.2d 698 | Ga. | 1942
The petition in equity by minority stockholders against the corporation, its president and secretary, and the wife of the president, alleging fraudulent conversions of the asserts by the president, aided and abetted by the secretary and the president's wife, and showing that the major portion of the corporate assets had been removed beyond the limits of the State, and admitting that no effort had been made to obtain redress at the hands of the directors or stockholders, but reciting that it *389 was impracticable and useless to make such effort, does not show a right of the petitioners to maintain the suit, in that it shows that no effort has been made to obtain redress within the corporation, and shows no reason why it could not have been done, or that it was unreasonable to require it. Accordingly, it was not error to dismiss the petition on the motion of the defendants.
The defendants filed a motion to dismiss the action, one ground of the motion being that no cause of action was alleged. The motion was sustained, and the petitioners excepted.
"So long as the majority of stockholders confine themselves within the charter powers, a court of equity will *392
require a strong case of mismanagement or fraud before it will interfere with the internal management of affairs of a corporation." Code, § 22-710. The majority have a right to manage these affairs as they wish, so long as they keep within their charter and act in good faith. Equity will not interfere to prevent unwise or improvident acts or policies. Hand v.Dexter,
In Colquitt v. Howard,
Recognizing the rule requiring a minority stockholder to make an earnest effort to obtain redress at the hands of the directors *395 and stockholders, as contained in subsection 5 of § 22-711, the petitioners claim the right to maintain this suit by virtue of the alternative therein, to wit, it was unreasonable to require it. The requirements there stated can not be avoided by such a general assertion of the petitioners' opinion or conclusion. They have the burden of making it appear by averments in the petition that they have made the required efforts to obtain redress within the corporation, or showing by averments of specific facts why this could not be done, or that it was unreasonable to require it to be done. The petitioners stand upon the single statement that, under the circumstances, seeking redress at the hands of the directors or stockholders would have been impracticable and useless. This is not sufficient. Without deciding whether the averments of the petition meet the conditions required under either subsection 1, 2, 3, or 4 of the Code, § 22-711, but assuming for the present that the petition is sufficient in that respect, there is nothing alleged to show why appeal to the directors and stockholders could not have been made in this case. Therefore subsection 5 is not satisfied. If all of the allegations of the petition are true, and knowledge of such facts had been brought to the directors and stockholders, nothing to the contrary appearing, it will be presumed that they would have acted just as promptly as petitioners in providing adequate measures to conserve the assets and protect the interests of the corporation. The petition by minority stockholders was not maintainable, and the judge did not err in dismissing the action.
Judgment affirmed. All the Justices concur.