Witham v. Cohen

• Decision Date: 29 March 1897
• Parties: WITHAM v. COHEN et al.
• Court: Georgia Supreme Court

28 S.E. 505

100 Ga. 670

WITHAM v. COHEN et al.

Supreme Court of Georgia

March 29, 1897

Syllabus by the Court.

1. A petition, filed against three defendants, alleging, among other things, that the plaintiff purchased of one of the defendants certain stock in a banking corporation, which was duly transferred and assigned to him by such defendant, the latter at the same time executing a power of attorney authorizing the stock so sold to be transferred to the plaintiff on the books of the corporation, and further alleging that after such sale and assignment, and the execution of such power of attorney, said defendant made and executed to the other defendants a proxy or power of attorney by which the latter were authorized by said defendant to, and did in fact, at an annual meeting of the stockholders of the corporation subsequently held, vote the stock so previously purchased by the plaintiff, against his will and over his protest, all this being done in pursuance of a conspiracy among all the defendants made for the purpose of defrauding and swindling the plaintiff of his just rights in the use and control of his property, sets out facts sufficient in law to show the commission by the defendants of a tort against the property rights of the plaintiff; and consequently a cause of action accrues in favor of the latter against the former which will prevail as against a general demurrer.

2. Where, in such petition, it is further, alleged that the plaintiff had an agreement with a majority of the stockholders of the corporation whereby he was to be elected at the ensuing annual meeting of such stockholders, president of the bank, for a stated term of years, and at a given salary per annum; that he owned himself, and under this agreement held, proxies to vote such an amount of the capital stock of the corporation, in connection with that purchased from one of said defendants, as would have secured his election as contemplated; that on the day of said meeting he still held, and was prepared to vote, said proxies, and accordingly would have been elected president of the bank but for the fact that the defendants, knowing of the existence of the arrangement by which he was to be elected presidents, and in order to defeat his election, "knowingly, willfully, maliciously, and corruptly" appeared at said meeting, and voted, against his consent and over his protest, the proxy so wrongfully and illegally executed, thus defeating his election as president of the corporation,--such allegations, as against a general demurrer, are good, as a basis for the recovery of damages flowing from the defeat of the arrangement of the plaintiff, by which he alleges he would have been elected president of the bank resulting from the tortious and intentional action of the defendants.

3. As the case goes back for another hearing, and inasmuch as there may be hereafter amendments made, or proofs submitted, materially changing its present aspect, no intimation as to the elements or measure of damages which the plaintiff may be entitled to recover is now made, except that in so far as the recovery, if any, may relate to loss of salary, it would in any event be limited to one year's salary; the declaration showing that the bank's officers were to be elected annually.

Error from city court of Atlanta; H. M. Reid, Judge.

Action by W. S. Witham against Henry Cohen and others. From a judgment sustaining defendants' demurrer to the petition, plaintiff brings error. Reversed.

John F. Methvin and Van Epps, Ladson & Leftwich, for plaintiff in error.

Shannon & Worley and Ellis & Gray, for defendants in error.

LITTLE J.

Witham filed in the city court of Atlanta his action for damages against Cohen, Arnold, and Smith, jointly. The cause coming on to be heard, the defendants demurred generally, on the ground that the declaration set forth no sufficient cause of action against them. The court below sustained this demurrer and dismissed the petition, whereupon the plaintiff excepted and assigns error upon the judgment of the presiding judge sustaining the demurrer and dismissing his petition. According to the allegations contained in the petition, Witham owned certain shares of stock in the Bank of Elberton, and on a given date purchased five additional shares from Cohen, one of the defendants, who in turn executed to Witham a transfer and assignment of the stock, together with a power of attorney authorizing the bank's cashier to transfer the stock to Witham on the books of the corporation. Subsequently to this purchase there was held an annual meeting of the stockholders of the bank, on the 9th day of April, 1895, for the purpose of electing a board of directors for the ensuing year, and the election of a president, vice president, and cashier. At such meeting, according to the rules of the bank, the owner, holder, or legal representative of each share of stock was entitled to one vote in the election of officers and directors of the bank. On the day of the annual meeting, Witham owned and controlled, by proxy, a majority of the stock of the bank, which entitled him to the office of president. Prior to this annual meeting, Witham had made an arrangement and agreement with the majority of the stockholders of the bank, to accept the office of president of the bank, for a term of five years, at a yearly salary of $500; and accordingly, by virtue of this agreement, and of the fact that on the day of the meeting he owned and controlled, in his own right and by proxy, a majority of the stock of the bank, he would have been elected to the office of president, but for the action of the defendants hereinafter set out. Each of the defendants knew of the purpose and desire of the majority of the stockholders of the bank as to the election of Witham to the office of president. They had knowledge of the fact that Cohen had sold the five shares of stock to Witham; and with this knowledge, and in order to thwart the will and purpose of the majority of the stockholders, and defeat the election of Witham as president of the bank at the annual meeting, and in pursuance of a conspiracy among them, made for the purpose of defrauding and swindling Witham of his just rights in the use and control of his property, Cohen after such sale and transfer of his stock to Witham, and the delivery of the power of attorney by which the same was to be transferred on the books of the corporation, made and executed to Arnold and Smith a proxy or power of attorney by which the latter were authorized by Cohen to, and did in fact, knowingly, willfully, maliciously, and corruptly, and for the purpose of defeating Witham's election, appear at the annual meeting, and vote the stock so previously purchased by and assigned to Witham, against his will and over his protest, in consequence of which his election as president,...