9 S.E.2d 650 | Ga. | 1940
In this suit by a minority stockholder of a non-resident corporation, in behalf of himself and other stockholders, against one director and other parties, seeking damages because of alleged injuries to the corporation, and recovery of properties formerly owned by the corporation, the failure to make the corporation a party was a fatal defect. The demurrer on the ground that the corporation was not made a party should have been sustained.
The defendants demurred on numerous grounds, among which were, (1) because the Loxair Corporation of Florida has not been made a party, (2) that the petition alleges no cause of action; and (3) that it fails to show that any attempt has been made to obtain redress from the directors of the corporation. To a judgment overruling the demurrer the defendants excepted.
The first question which we must determine is whether or not the non-resident corporation is an indispensable party to this action brought by a minority stockholder. In Colquitt v. Howard,
Counsel for the defendant in error concede this to be the general rule, but advance the argument that the peculiar facts of the present case take it out of that rule. It is urged that the non-resident corporation, having no agency or place of business in this State, is not subject to the jurisdiction of the courts of this State, and thus can not be made a party. They contend that the provision of the Code, § 3-105, that "for every right there shall be a remedy, and every court having jurisdiction of the one may, if necessary, frame the other," authorizes the maintenance of this action under these circumstances, without making the corporation a party. A vital reason why the provisions of this section afford no support to the position of the defendant in error is that it expressly requires that the court have jurisdiction. As noted above, the trial court was without jurisdiction of an interested and essential party. Furthermore, the laws of this State confer no right upon a minority stockholder *478
to maintain an action without making the corporation a party. Hence the plaintiff can claim no right under the law without at the same time meeting the conditions set by the law as a prerequisite to that right. McClean v. Bradley, 282 Fed. 1011, and Crumlish v. Shenandoah Valley Railroad Co.,
But the defendant in error further insists that all of the reasons for the rule requiring the corporation to be made a party are satisfied in the present case, in that all of the stockholders are either in court or their interests are represented. This argument misses the reason why the corporation must be made a party at all. The corporation is a legal entity and is controlled only by its officers and agents; and no stockholder, in the absence of authority from the corporation, has the right or power to bind the corporation. A further answer to this argument is that Searing, according to the specific averments of the petition, owns half of the stock of the corporation, is a recently elected director, is a resident of the State of Florida, and is not a party to this suit. If this suit broke down, the defendants would be subject to another suit. If it succeeded, they would be subject to another recovery in an action by the corporation, founded upon the identical grounds upon which the present suit is based. The averments of the petition neither show that every right of the petitioner could not be amply protected within the corporation nor show that he could not prosecute his suit in the courts of the State of Florida where the corporation is domiciled and where half of the directors and the owner of half of the stock reside. The demurrer raising the point that the corporation was not a party should have been sustained.
Judgment reversed. All the Justices concur.