CORPORATIONS—DIRECTORS—EQUITY—STOCKHOLDERS' SUIT—ACTIONS—JOINDER OF CAUSES.
1. Complainant's bill alleged that three years before, at a meeting of the stockholders of the bank, of which the defendants were directors and complainant a stockholder, it was resolved that the officers of the bank wind up its affairs and return the stock with its profits to the stockholders; that 40 per cent, of the stock had not been returned; that the officers were still conducting a banking business, and through their deficient business capacity there had been a large loss of assets; that complainant had in vain sought information as to the bank's affairs and a distribution of her stock, and she prayed for an accounting by the directors and the appointment of a receiver. Held, that the bill was not demurrable on the ground that the relief could only be granted in a suit by the corporation.
2. That a bill filed by a stockholder of a bank, which was in process of liquidation, asked for an accounting on the part of the directors, as well as for the appointment of a receiver, did not render the bill demurrable, as stating two causes of action.
Appeal from common pleas circuit court of Barnwell county; Ernest Gary, Judge.
Suit by Myrtis V. Mathews against the Bank of Allendale and others. From a decree sustaining a demurrer to the complaint, complainant appeals. Reversed.
Legare & Holman, R. C. Holman, and B. T. Rice, for appellant.
J. O. Patterson, W. T. Gary, Bellinger, Townsend & O'Bannon, and Robt. Aldrich, for respondents.
POPE, J. A demurrer to the complaint was sustained by the circuit judge. From his judgment an appeal was taken. Thus it will be necessary to set out the complaint, the grounds of demurrer, the judgment ap pealed from, and the grounds of appeal. This action was commenced by service of summons and complaint in 1899; and this appeal is taken from an order sustaining a demurrer to the complaint herein. The amended complaint was as follows:
"The plaintiff above named, complaining of the defendants, by this, her amended complaint, on behalf of herself and all others of the stockholders of the defendant who will come into this action and share the expenses thereof, alleges: (1) That the bank is now, and was at the time hereinafter mentioned, a corporation duly organized and chartered under the laws of said state, and as such was authorized to do a general banking business; that said bank has its principal office or place of business at Allendale, in the county aforesaid. (2) That the said bank of Allendale was organized according to law and received its charter in the year A. D. 1890, and the said bank organized with a capital of fifty thousand dollars, divided into five hundred shares, of the par value of one hundred dollars per share. (3) That the plaintiff purchased ten shares of the capital stock of the said bank soon after its organization, and is now the owner and holder of the ten shares of the capital stock of said bank as represented by certificate No. 84. (4) That the defendant C. M. Hiers was elected president of said bank at the first meeting of the directors after its organization, and has been annually elected such president since that time, and is now the president of said bank. (5) That the defendants W. V. Gill, F. M. Young, T. H. Johnston, and C. M. Hiers were elected directors of said bank at the time of its organization, and have been continuously elected since that time, and are now the directors of said bank. (6) That the Bank of Allendale commenced business under favorable auspices, and did a general banking business after its organization. That the principal business was the discounting of notes of farmers in the county of Barnwell, to whom money was lent at high and usurious rates of interest, ranging from ten to twelve per cent. (7) That C. P. Allen was elected cashier of said bank at the time of its organiza-tion, and held such office until the date of his death, in the year 1897, and that C. B. Parmer was elected his successor, and is now the cashier of said bank. (8) That in the year A. D. 1896, the stockholders of said bank, in meeting assembled, resolved to wind up Its affairs and return the capital stock to its shareholders, together with all profits, earnings, and accumulations thereof, and that the officers of said bank were charged with the duty of collecting the assets and returning the same to the shareholders. (9) That, in accordance with said resolution, sixty per cent of the capital stock of said bank has been returned to the stockholders, the plaintiff receiving her installments so returned as follows: Two hundred dollars on May 22, 1896, two hundred dollars on the — day of —, 189-and two hundred dollars on November 18, 1897; making a total of sixty per cent of the capital stock of said bank returned to the plaintiff on her said ten shares of stock. (10) That the plaintiff has received no part or portion of the forty per cent, due on her stock, and is informed and believes that a large number of the stockholders are similarly situated. That the plaintiff has from time to time made earnest efforts to have said bank return the balance of the said stock, consisting of forty per cent, thereof as aforesaid, but all her efforts have been unavailing and of no effect. (11) That the plaintiff is informed and believes, and upon such information alleges, that the balance of the capital stock of said bank, amounting to twenty thousand dollars, is unreasonably and without excuse withheld from the plaintiff and the other stockholders in a like position. (12) That the plaintiff further alleges upon information and belief that 0. M. Hiers, the president of said bank, and W. V. Gill, one of its directors, have controlled and directed the affairs or policy of said bank almost exclusively since its organization, and especially since said bank has gone into voluntary liquidation as aforesaid. (13) That on the 28th of February, 1896, about the time the said bank resolved to go into liquidation, in a statement made by said bank through its cashier, C. P. Allen, it was reported that said bank had on hand three thousand dollars of surplus, and one thousand five hundred and twenty-four and 19/100 dollars ($1,524.19) undivided profits, and this plaintiff alleges that no part thereof has ever been paid over to her as a stockholder or otherwise; and that notwithstanding an earnest effort has been made on her part to have a satisfactory adjustment and settlement of the affairs of said bank, she has been unable to induce said bank, or its officers and agents having its affairs under control, to make any settlement with her in regard to the matters above mentioned. (14) That the plaintiff has applied repeatedly for the last two years to said bank and its officers for information concerning its affairs, and for a distribution
of the balance of the capital stock thereof, and has endeavored to ascertain when said bank would finally wind up and pay over the balance of the forty per cent, of stock and the earnings thereon as aforesaid, but she has been unable to get any satisfaction concerning the same. (15) That the above-named plaintiff is informed and believes, aud upon such information alleges, that the said C. M. Hiers and W. V. Gill, in violation of the instruction of the stockholders, have been conducting a banking business with the capital of the said bank, have been receiving deposits, making loans and discounts, and doing an exchange business through said bank in the same manner as was done before the resolution of the stockholders to wind up the affairs of said bank was passed. (16) That the affairs of said bank have been exclusively managed, controlled, and directed by C. M. Hiers and W. V. Gill, two of the directors, who are large shareholders in the capital stock of said bank, and that they have not used due and proper diligence in carrying out the instructions of the stockholders as above set forth. (17) That the said bank and its officers and agents having its affairs under their said custody and control have been grossly negligent and derelict in their duty towards the stockholders of said bank and the management of its affairs, and in failing to return the balance of the capital stock to such shareholders. That more than three years have elapsed since the resolution of the stockholders to wind up the affairs of said bank, and return the capital stock to its owners, together with all accumulations and profits; and, notwithstanding the defendants have had ample opportunity to wind up the affairs of said bank and return the capital stock to its shareholders, they have failed to do so. (18) That the plaintiff made frequent attempts from time to time, as before stated, to secure a statement from the bank as to the condition of said bank, and as to the time when the capital stock would be returned, and a final settlement made, and the plaintiff but recently, within the last five months, secured a statement to the effect that more than eleven thousand dollars of the remaining twenty thousand dollars of the capital stock has been carried to the profit and loss account. (19) That at the time the stockholders resolved to liquidate or wind up the affairs of said bank, and return the capital stock to the shareholders, the officers of said bank made a statement to the effect that the bank was in a sound financial condition, and that, besides the assets of the bank, it was reported it had a large surplus on hand, as above set forth, and that the recent report submitted, to the effect that eleven thousand dollars of the assets of said bank had been carried to the profit and loss account, is utterly at variance with and contradictory of the previous report That on account of the conduct and attitude of the officers managingthe affairs of said bank as aforesaid. It Is imperative, in order to preserve...
