Atlanta Real Estate Co. v. Atlanta National Bank

75 Ga. 40

• Court: Supreme Court of Georgia
• Decided: February 9, 1886
• Status: Published

Opinion

Hall, Justice.

The complainants, who are shareholders of the stock of the “ Southern Railway Security Company,” exhibited their bill against certain directors and managers of the affairs of that company, and against the Atlanta Real Estate Company. They allege that the first-named defendants converted the assets of the Southern Railway Security Company to their own use, and when they had done so, ceased to conduct business in the name of that company, and suspended its functions and operations. A portion of the effects of the company thus diverted are traced through various channels and hands into the Atlanta Real Estate Company, which it is charged belongs to and is controlled by the active managers of the first-named company. The purpose of this well conceived and skilfully drawn bill is to trace these effects thus misapplied, and to restore them, with their increase, to the complainants and such other shareholders in the company as may come in and make themselves parties, and who have been injured by this wrongful conversion of the property belonging jointly to-all the members of the corporation, and to hold accountable, not only the directors and managers of the corporation, but likewise all persons who, with knowledge of their misconduct, aided and assisted them in misapplying such funds.

1. That such of the defendants as controlled the corporation or had charge of its effects are trustees for the stockholders, is a proposition too well established to be denied (Code, §1688; Mora wetz Corp., §559), and that both they and others who, with a knowledge of their misappropriation aided them in diverting its property, would be liable to the injured parties, is an equally well-s ettled principle. This is embodied in §3151 of our Code, to which, with the citations under it, we refer as conclusive upon the point.

2. That the bill is properly brought in the name of the complainants in behalf of themselves and such of their cocorporators as are in a similar condition, is likewise well established. It is well settled, too, that a court of equity is the proper forum to afford the relief sought by this suit; indeed, it is the only tribunal that can adjust and settle fully the various interests of the parties and remove the impediments which have been put in the way of those who complain that they have been thus wronged. Morawetz on Corp., §662; Manier vs. Hooper’s Telegraph Works, L. R., 9 Ch. App. Cases, 350; Cramer vs. Bird, L. R., 6 Equity Cases, 143 Bacon et al. vs. Robertson et al., 18 Howard, 480.

3. The bill is not multifarious, nor is it open to objection, either because of a misjoinder of parties or causes of action. These points are covered by the decision in the City Bank of Macon vs. Bartlett, 71 Ga., 797.

4. There is no prayer either for the appointment of a receiver or injunction previous to the final trial, and the bill was properly filed without the sanction of the judge. The case does not fall within the rule laid down in Knoxville Iron Works vs. Wilkins, Post & Co., at the last term of the court,

* as was argued by the able counsel for plaintiffs in error.

5. What has been said disposes of the remaining grounds of the demurrer, which, as we think, was properly overruled.

Judgment affirmed.

74 Ga., 493.