149 Ga. 620 | Ga. | 1919
The judge of the superior court of Fulton County, in response to a petition filed by three named stockholders of the Citizens Bank of East Point, made an order requiring the receiver of the bank to bring suit against the directors of the bank, to require them to account to the stockholders for their loss by reason of the alleged failure of the directors, to perform their duty, or duties, as such. Suit was accordingly filed, by the, receiver against several persons alleged to be the directors of the bank. The petition alleged that the bank had lost large sums of money on account of bad loans made by the cashier of the bank, by reason of the negligence and nonfeasance on the part of the directors, and because of the failure of the directors to perform the duties required of them by the by-laws of the bank and the laws of the State o^ Georgia. The prayers of the petition were, for a judgment against the defendants, for the use of three named stockholders, for the cost of their stock to them, besides interest, after deducting dividends which had been paid upon the stock; that such other persons as might be similarly situated be permitted to come in and be made parties to the case; and that judgment be rendered for such persons; and that the directors be required to account to all stockholders, not directors, for any loss sustained by them by reason of the negligence of.the defendants. The plaintiff in error, J. C. Woodward, filed general and special demurrers to. the petition. The several grounds of the special demurrer were sustained, save one; but the court did not pass upon the general demurrer at that time and allowed the plaintiff thirty days within which to amend. Within the time allowed the plaintiff offered several amendments for the purpose of curing the defects pointed out by the special demurrer. The amendments were allowed over the objection of the defendant on the ground that the petition, as it stood, set out no cause of action against him, and did not contain enough to amend by. Woodward also renewed his original demurrer to the amendment as offered, and also to the petition as a whole after the amendment was allowed.. Certain paragraphs of the amendment were stricken on special demurrer; after which all the demurrers were overruled, and Woodward excepted.
The question to be determined is, what is the measure of duty imposed upon bank directors by the laws of this Plate and the bylaws of the bank, and whether the plaintiff in error is liable to
The degree of care required of directors is thus laid down in Thompson on Corp. § 1266: “The measure of liability must necessarily be the degree of care required’, and the degree of care which directors are bound to exercise depends on their relation to the corporation. The courts that adhere to the principle that directors are the agents of the corporation apply to them the same rules in the measure of liability as those imposed upon the agents oí natural persons who receive a compensation for their services. The general rule as to the measure of care, skill, and diligence required of the directors of a corporation may be said to be such as prudent men exercise in the conduct of their own affairs, and this must be determined in each case in view of the circumstances. The rule as otherwise expressed is that directors must answer for ordinary neglect; and 'ordinary neglect’ is understood to be the omission of that care which every man of common prudence takes of his own concerns. In a recent Missouri ease, on the examination and citation of many authorities, the court adopted the rule that the directors of a bank were only required to act in good faith and
In Stone v. Rottman, 183 Mo. 552 (82 S. W. 76), Fox, J., delivered the opinion of the court, and. set forth.with approval the language of the referee in that case, who said: “The degree of care directors are bound to exercise cannot be better stated than in the opinion of Chief Justice Fuller in the leading case of Briggs v. Spaulding, 141 U. S. 132, 1. c. 150 [11 Sup. Ct. 924, 930, 35 L. ed. 662]: ‘No one of the defendants is charged with the misappropriation or misapplication of, or interference with, any property of the bank, nor with carelessness in respect to any particular property; but with the omission of duty which, if performed, would have prevented certain losses, in respect of which complainant seeks to charge them. . . Treated as a cause of action in favor of the corporation, a liability of this kind should not lightly be imposed in the absence of any element of positive misfeasance, and solely upon the ground of passive negligence; and it must be made to appear that the losses for which defendants are required to respond were the natural and necessary consequences of omission on their part. . . In any view the degree of care to which these defendants are bound is that which ordinarily prudent and diligent men would exercise under similar circumstances, and in determining that the restrictions of the statute and the usages of business should be taken into account. What may be negligence in one ease may not be want of ordinary care in another, and the question of negligence is therefore ultimately a question of fact, to be determined under all the circumstances.' And again, in the same
The Civil Code of this State (1910), § 2267, defines the duties of directors of State banks as follows: “The business of the corporation shall be under the management and control of a board of directors, to consist of not less than three nor more than fifteen members of the corporation, who must be owners and holders of one or more shares of the capital stock in good faith. The board of directors shall exercise only such powers as may be legally delegated to them by the stockholders, or by the by-laws adopted by the 'stockholders. The board of directors shall be elected by the stockholders at such time and place, and for such term, as may be appointed by the by-laws.” It will thus be seen that the directors can only exercise such powers as may be legally delegated
In the light of the principles above announced, how stands this case? From what has been said with reference to the allegations of the petition, which' must be construed more strongly against the pleader, nothing appears showing a joint action of the board of directors, as such, authorizing the loans above two hundred and fifty dollars, which proved worthless, so as to hold the directors jointly liable. Nor is it made to appear by the petition that the
Judgment reversed.