Crittenden v. Southern Home Bldg. & Loan Ass'n
| Decision Date | 11 July 1900 |
| Citation | 111 Ga. 266,36 S.E. 643 |
| Court | Georgia Supreme Court |
| Parties | CRITTENDEN. v. SOUTHERN HOME BUILDING & LOAN ASS'N. |
CORPORATIONS — BY-LAWS — AMENDMENT — ACTION BY STOCKHOLDER—PETITION —DEMURRER—APPEAL.
1. A business corporation may make amendments to its by-laws which are not inconsistent with its charter or constitution. Consequently an allegation in a petition that the defendant, a corporation, made specified amendments to its by-laws, does not negative its authority so to do, when there is no allegation that these amendments were contrary to the defendant's charter or constitution.
2. Where given amendments to the by-laws of such a corporation were, under its charter and constitution, allowable, they were not, as to a particular stockholder, fraudulent or void merely because made without his knowledge, or because he "has never ratified, acquiesced in, or consented to, the same."
3. A stockholder who brings an action against a corporation, and in his petition alleges that certain amendments to its by-laws were in violation of his contract with the defendant, must set out the contract with sufficient fullness to enable the court to determine whether or not his allegation is well founded.
4. When the petition in such a case alleges that the plaintiff is entitled under the by-laws to recover a designated amount as the withdrawal value of his stock, it is incumbent upon him to show, by the terms of his contract, that his rights to recover such withdrawal value accrued under the contract in connection with the by-laws; and, to do this, it is essential that the terms of the contract be set forth.
5. When a demurrer to a petition is based on several grounds, and the court in terms sustains some of them, and thereupon dismisses the petition, the judgment will be affirmed, whether these grounds were well taken or not, if the other grounds of the demurrer were good.
(Syllabus by the Court.)
Error from city court of Atlanta; H. M. Reid, Judge.
Action by O. H. Crittenden against the Southern Home Building & Loan Association. From a judgment sustaining a demurrer in part, plaintiff brings error. Affirmed.
Malcolm Johnson, for plaintiff in error.
W. A. Wimbish and Ligon Johnson, for defendant in error.
LEWIS, J. O. H. Crittenden brought suit in the city court of Atlanta against the Southern Home Building & Loan Association, alleging defendant's indebtedness to him to be the sum of $1,005, principal, besides interest, for money had and received to his use. The following were substantially the allegations in the petition: On December 17, 1889, he subscribed for 10 shares of the capital stock in said corporation, and paid as a membership fee thereon $10, and as dues on said shares $678, in monthly installments of $6 each, covering a period of 113 months, to wit, from January, 1890, to May, 1899, both inclusive. On September 1, 1890, he subscribed to 5 other shares of the capital stock of said corporation, and paid as a membership fee thereon $5, and as dues on said 5 shares $312, in monthly installments of $3 each, covering a period of 104 months, to wit, from October, 1890, to May, 1899, both inclusive, making an aggregate amount of $1,005. When petitioner subscribed for the stock and made payments on the same, defendant accepted the subscriptions and payments under contract that it was a true building and loan association, on the ordinary plan, upon which petitioner relied, and knew nothing to the contrary until since the last payment made by him in May, 1899, since which time he has made no other payments. He avers that defendant is not a building and loan association: First, because it requires members to pay on loans a fixed or arbitrary premium, and not a premium which is the result of free and open competition among the members, or of any competition at all; second, because there is a material want of mutuality among the members in the benefits and burdens of the association, in that loans are not made to members tendering sufficient and proper security, as the result of free and fair competition, but arbitrarily, by the board of directors; third, in addition to the regular interest charge of 6 per cent. per annum on loans, some members are required to pay a fixed or arbitrary premium of 6 per cent. per annum, while others are required to pay a fixed or arbitrary premium of 4 per cent. per annum only; fourth, on or about December —, 1897, defendant materially changed several of its most important by-laws, which materially violates its contracts with petitioner and a large majority of its members, and changes the relation of its members to each other. The petition then goes on to briefly mention the changes made in the bylaws, to the effect, for instance, of abolishing the expense fund, repealing the by-law with reference to time for withdrawal of stock by members, etc. It was alleged that these changes violated defendant's contract with petitioner to his great injury, and his prayer was to recover back the money he had paid into the association. There is a second count in the petition, for a further cause of action, in which plaintiff claims the sum of $1,341.65, besides interest, for the withdrawal value of his stock. It is alleged that the by-laws of defendant provided that stock might be withdrawn upon giving 60 days' notice to the association by the stockholder of his intention to withdraw, and that when withdrawn after seven years, and before maturity, the holder shall receive the actual book value of same, as shown by the last statement of the division of profits. More than 60 days before the filing of this suit, petitioner filed an application to withdraw his stock, the actual book value thereof on that date being $1,341.65. He claims to have perfected his right of withdrawal, and complied with all requirements of defendant in the premises, but defendant fails and refuses to pay him the withdrawal value of his stock. He therefore seeks a recovery, also, of $1,341.65. To this petition a demurrer was filed upon the following grounds: (1) Petitioner fails to set forth in sufficient form and detail the alleged contract between him and defendant. (2) Petitioner avers that the contract between him and defendant is in writing, and fails to state in sufficient detail the nature of the contract and the terms thereof. (3) Petition fails to show any good and sufficient reason why plaintiff, being a stockholder, is entitled to a judgment. (4) Petition fails to show that there are any funds available for payment of withdrawals. (5) Petition fails to show that the withdrawal claim of the plaintiff had ever been reached. (6) Petition fails to show that plaintiff paid his dues, so as to entitle him to withdrawal. (7) Paragraph 4 of petition is argumentative, and conclusions of law, and indefinite and vague, and should be stricken; that it contains immaterial matter. Paragraph 6 of the petition is demurred to on the same ground. After argument by counsel, the judge rendered his judgment sustaining the demurrer and dismissing the ease, under the following order: ...
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