Hansell v. Citizens and Southern Nat. Bank

• Decision Date: 13 May 1957
• Docket Number: No. 19635,19635
• Parties: Granger HANSELL v. CITIZENS AND SOUTHERN NATIONAL BANK.
• Court: Georgia Supreme Court

Page 622

98 S.E.2d 622

213 Ga. 205

Granger HANSELL v. CITIZENS AND SOUTHERN NATIONAL BANK.

No. 19635.

Supreme Court of Georgia.

May 13, 1957.

Syllabus by the Court

1. The petition stated a case for a declaratory judgment.

2. A minority stockholder may proceed in equity against a corporation in behalf of himself and other stockholders for ultra vires acts of its officers and directors, even though such acts may result in a benefit to the stockholder.

3. If the laws of Georgia do not permit the establishment of branches by the defendant, a national bank, in cities other then Savannah, the courts of Georgia may grant appropriate relief irrespective of any approval granted by the Comptroller of the Currency of the United States for the establishment of branch banks in cities other than the City of Savannah.

4. Under the provisions of the National Banking Act (12 U.S.C.A. § 94), the trial court had jurisdiction to entertain this action.

5. The last sentence of sec. 3 of the act of 1956 (Ga.L.1956, p. 309), viz: 'Also in municipalities now having branches of a bank with a holding company relation, such banks may make branches of existing holding company banks; and in the future in cities of over 80,000 population, according to the 1950 or any subsequent census, now having branches of a bank, present branches will have the same privilege of additional branches as permitte do other banks,' is unconstitutional and void, the same being a special law and violative of art. 1, sec. 4, par. 1 of the Constitution of Georgia (Code Ann. § 2-401).

6. The trial court erred in sustaining the general demurrers and in dismissing the petition.

Moise, Post & Gardner, Atlanta, Connerat, Dunn, Hunter, Cubbedge & Houlihan, Savannah, for plaintiff in error.

Alston Sibley, Miller, Spann & Shackelford, Atlanta, Douglas, Adams & Adams, Savannah, for defendant in error.

ALMAND, Justice.

This is an action brought by a minority stockholder against The Citizens and Southern National Bank, a national banking corporation, seeking a declaratory judgment declaring a provision of an act of the General Assembly of Georgia (Ga.L.1956, p. 309) to be unconstitutional and void, and any permit issued on the strength thereof by the Comptroller of the Currency to be of no force and effect, and praying that the defendant be enjoined from establishing or operating any new branches in any city or municipality of the State of Georgia its than in the City of Savannah, where its principal office is located. Petitioner alleges that, pursuant to said unconstitutional act of the General Assembly, the officers and directors of the defendant bank are proceeding to act ultra vires and in violation of the regulatory laws of this State covering the establishment of branch banks, and, unless enjoined, they will proceed to establish illegal branch banks and expend excessive sums in doing so to the detriment of the stockholders. The case is before this court on review of a judgment whereby certain demurrers were sustained to the petition as amended, and the same was thereafter dismissed.

The petition, as finally amended, fully set out numerous constitutional attacks upon the act in question and, together with the attached exhibits, fully reviewed the entire history of banking in this State, setting forth the various statutes which regulate the banking business and are pertinent to this case. In substance, these are as follows:

(a) Prior to the general Banking Act of 1919, there were no statutory restrictions on branch banking in Georgia, but in 1919 (Ga.L.1919, p. 135), the Superintendent of Banks was authorized to approve the establishment of branches in the same city or elsewhere if satisfied that the public convenience and advantage would be promoted.

(b) In 1927, a general act (Ga.L.1927, p. 195) was passed prohibiting the establishment of new branch banks in the State.

(c) In 1929, the General Assembly enacted two statutes (Ga.L.1929, pp. 214, 215 authorizing the establishment of branch banks in cities, 'now or hereafter having a population of not less than eighty thousand or more than one hundred and twenty-five thousand' and 'having a population of not less than 200,000', in which the principal office of said bank is located.

(d) The act of 1956 (Ga.L.1956, p. 309) deals with restrictions on banks having a holding-company relation, and authorized present branches of a bank with a holdingcomapny relation to make branches of existing holding-company banks, and in the future in cities of over 80,000 population, now having branches of a bank, present branches will have the same privilege of additional branches as permitted to other banks.

(e) Title 12, U.S.C., sections 21-95 (12 U.S.C.A. § 36), known as the National Banking Act, authorizes national banks to establish and operate new branches 'at any point within the State * * * if such establishment and operation are at the time authorized to State banks by the statute law of the State.'

Under the authority of (d) and (e) above, the defendant national bank is allegedly establishing and operating new branches which are here sought to be enjoined because the State law authorizing the same is unconstitutional. The petition raises the following constitutional questions in regard to the act: (a) it is a special law enacted in a case where there is already a general law: (b) it is lacking in uniformity throughout the State; (c) the basis for the classification has no reasonable relation to the subject matter; (d) being a special law, it lacks the proper notification by publication of the intent to apply for local legislation; (e) it has more than one subject matter; (f) it violates the due-process and equal-protection clauses of the State, art. 1, § 1, pars. 2, 3, and Federal, Amend. 14, Constitutions; (g) it is vague and indefinite and a reasonable construction cannot be applied so as to determine its meaning.

The demurrers, in substance, set out: that no cause of action is alleged; that the State court lacks jurisdiction; that the petition fails to allege valid constitutional attacks; and that there is a nonjoinder of necessary parties. The lower court, in sustaining the general demurrers, wrote a lengthy opinion explaining its ruling, which was that: (a) the court lacked jurisdiction; (b) the action was a collateral attack on the action of the Comptroller of the Currency and he was an indispensable party to the suit; (c) the plaintiff failed to show uncertainty and insecurity entitling him to declaratory relief; and (d) in the event that the court was in error on any of the above then the statute attacked is, nevertheless, not subject to any of the attacks made on its constitutionality. Thereafter, the petition was dismissed, and the exceptions here are to that dismissal and to the sustaining of the general demurrers.

1. The trial court held that the petition failed to state a case for declaratory judgment. In substance, the petition alleged: that the plaintiff owned 800 shares of the capital stock in the defendant bank; that the defendant has applied to the Comptroller of the Currency of the United States for permits to establish branch banks in Atlanta, Macon, and possibly places other than in Savannah; that, under the National Banking Act, supra, a national bank is authorized to establish and operate a new branch only if the establishment and operation thereof is at the time authorized to State banks by the statute law of the State; that the defendant claimed that it had authority to establish branches in cities other than Savannah by virtue of sec. 3 of the Act of 1956, supra; that any and all permits which the Comptroller of the Currency may issue to the defendant, and the application of any act towards the opening, maintenance, or operation of a branch bank in any city outside of Savannah, 'are and will be unconstitutional, void, illegal and of no force or effect because they are contrary to and in violation of' specified provisions of the Constitution of Georgia; that on July 6, 1956, plaintiff, as a stockholder of defendant bank, addressed a letter to the president of said bank protesting the contemplated establishment of branch banks in cities other than Savannah, demanded that no such banks be established because the last sentence of sec. 3 of the act of 1956, supra, was void and unconstitutional as being a special law, and requested that his objections be submitted to the stockholders of the bank; that the president of the defendant bank replied by letter on July 10, 1956, and stated that the board of directors had elected to proceed immediately to establish branch offices in Atlanta and Macon when permission was granted, and 'if the constitutionality of the act is to be tested, it can be done here without jeopardizing our present affiliates'; that on July 24, 1956, the Comptroller of the Currency approved the issuance of a permit to the defendant to establish a branch bank in Atlanta. The plaintiff further alleged: 'In the event defendant proceeds to establish a branch bank or branches, as herein complained of, and it should be finally determined that such establishment is unconstitutional or illegal, then such branches would have to be closed down and disposed of and not further operated by the defendant, and the Charter of defendant would be subject to action of forfeiture or revocation, and great losses in the establishment of facilities, in advertisements, in promotional work, in salaries, and in development of businesses would authomatically occur, all to the great detriment of petitioner'; and that, 'unless enjoined, defendant will proceed to establish branch banks as above set forth, and will expend sums in excess of $100,000.00 in doing so, and will place its right to operate in jeopardy and subject its charter to cancellation because of its violation of law. Once these branch banks are established, it will be expensive to disestablish them, and this expense can be...