Cole v. Farmers Bank & Trust Co, 596.

• Citation: 221 N.C. 249,20 S.E.2d 54
• Decision Date: 06 May 1942
• Docket Number: No. 596.,596.
• Court: United States State Supreme Court of North Carolina
• Parties: COLE et al. v. FARMERS BANK & TRUST CO., et al.

20 S.E.2d 54
221 N.C. 249

COLE et al.
v.
FARMERS BANK & TRUST CO., et al.

No. 596.

Supreme Court of North Carolina.

May 6, 1942.

Appeal from Superior Court, Richmond County; F. Donald Phillips, Judge.

Action by A. B. Cole, executor, and others, against the Farmers Bank and Trust Company and another, to restrain defendants from completing a proposed sale of certain shares of stock of defendant bank. From an interlocutory order directing an audit of books of the bank at the bank's expense, defendants appeal.

Appeal dismissed.

The appeal is from an interlocutory order authorizing an audit of the books of the defendant Bank. The order was entered in the above entitled cause pending in the superior court of Richmond County. The plaintiffs instituted the action to restrain defendants from carrying through the sale of certain shares of stock of the defendant Bank, which sale in the manner proposed, it is alleged, will injuriously affect the interests of the plaintiffs, minority stockholders. Pending the action plaintiffs moved in accordance with C.S. § 1146 for an audit of the books of defendant Bank to be made at the expense of the Bank. This was denied by Judge Pless, then presiding, on the ground that the request for the audit was not signed by twenty-five per cent of the stockholders, as required by the statute. Thereafter another request for an audit was served on defend-

[20 S.E.2d 55]

ants, signed by more than twenty-five per cent of all the stockholders of the Bank, and, upon failure of the Bank to commence the audit within the statutory period, motion upon notice was filed before Judge Phillips, resident Judge, who allowed the motion, and ordered the audit to be made at the expense of the Bank, as provided by C.S. § 1146.

The defendants excepted to the order of Judge Phillips, and appealed to the Supreme Court.

B. M. Covington, of Wadesboro, and Fred W. Bynum, of Rockingham, for appellants.

John A. McRae, of Charlotte, and J. C. Sedberry, of Rockingham, for appellees.

DEVIN, Justice.

The defendants base their objection to the order of Judge Phillips upon two grounds; first, that the statute, C.S. § 1146, authorizing compulsory audit of the books of a private corporation, does not apply to banks, and, second, that the plaintiffs are bound by the ruling of Judge Pless denying their previous motion for an audit at the expense of the Bank.

Neither of these objections can be sustained. The statute is primarily concerned with the protection of the rights of minority...