Cole v. Farmers Bank & Trust Co.
| Decision Date | 06 May 1942 |
| Docket Number | 596. |
| Parties | COLE et al. v. FARMERS BANK & TRUST CO., et al. |
| Court | North Carolina Supreme Court |
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 defendants 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.
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 stockholders, and has reference to private corporations as distinguished from municipal, public, or quasi public corporations. It embraces all domestic corporations organized for profit in which the beneficial interests and pro rata ownership are represented by shares of stock, and is applicable as well to banks and trust companies organized under the laws of North Carolina as to other business or industrial corporations. Rhodes v. Love, 153 N.C. 468, 472, 69 S.E. 436. By sec. 87, Chap. 4, Public Laws 1921, Michie's Code, § 224(j), it is provided that the laws relating to private corporations are applicable to banks, unless inconsistent with the business of banking.
The fact that Judge Pless ruled against the plaintiffs upon an application which did not meet the requirements of the statute cannot be held to estop the plaintiffs from thereafter moving upon another request with additional signers which did comply in all respects with the provisions of the statute. Revis v. Ramsey, 202 N.C. 815, 164 S.E. 358; Cox v. Cox, 221 N.C. 19, 18 S.E.2d 713. Upon the facts found by Judge Phillips the order appealed from was properly entered.
It should be noted that the solvency and financial strength of the Bank were in nowise questioned. Indeed the plaintiffs allege that the stock of the Bank is worth $600 per share. The Bank did not and does not now object to a proper and reasonable audit of its books at the instance of stockholders, but does object to being charged with the cost thereof.
While we have undertaken to dispose of the points raised by defendants' appeal, we think the case was improvidently brought to this court. The appeal is fragmentary and premature. Hinton v. Life Ins. Co., 116 N.C. 22, 21 S.E. 201. Defendants' right to review ultimately the ruling of the Judge below is not denied, but to recognize the right of immediate appeal from an interlocutory order as to an incidental question, arising in the course of the litigation, is not in accord with approved appellate procedure. Well considered decisions of this Court hold that the progress of an action...
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