Graves v. Decatur

146 S.E. 630, 167 Ga. 678, 1929 Ga. LEXIS 20
Supreme Court of Georgia·Decided January 18, 1929·No. Nos. 6533, 6534·Published·Cited by 3 cases

Opinion

Hill, J.

(After stating the foregoing facts.) This case is making its fourth appearance in this tribunal. Graves v. District Grand Lodge, 155 Ga. 147 (116 S. E. 613); 161 Ga. 110 (129 S. E. 783). And see Daniel v. Jones, 146 Ga. 583 (supra), involving questions concerning this same District Grand Lodge. The record has increased in size with the years, since its first appearance in 1916, now containing, including the briefs, practically 1500 typewritten pages. It has required much time and patience to examine [686]*686and consider this voluminous record, and yet we have examined it carefully, and believe we have reached the correct conclusion. Fortunately, counsel for plaintiffs in error in their brief say: “There are but two narrow points of law involved in these bills of exception. . . These two points are these: 1. Was the auditor correct in ruling that the amendment to the civil charter of the lodge corporation, striking paragraph six, thus separating the corporation from the order of Odd Fellows, valid and binding upon the intervenors, while admitting, and so finding as matter of fact, that said intervenors did not vote in favor of the same or consent to the same, while the same was only approved by a majority of 589 delegates, out of a membership in the corporation of 30,000 to 40,-000, at a convention held in 1917; and while the same was not submitted to the subcommittee of management,- nor submitted to the local lodges of the order, as provided by the laws of the national and State bodies themselves, assuming that such private laws were applicable to such legislation at all ? 2. Were the intervenors guilty of such laches as bar a recovery?” The facts stated in the cases cited above, together with those heretofore set out, will be sufficient for a clear understanding of the points decided. The case came before the court below on exceptions to the overruling of exceptions to the report of the auditor to whom the case had been referred. The record shows that Hattie Mae Decatur, one of the defendants in error, filed a petition in Fulton superior court, alleging that she was the beneficiary named in an endowment certificate issued by the District Grand Lodge No. 18 of the Grand United Order of Odd Fellows of Georgia, a corporation; that the corporation was indebted to the plaintiff in the sum of $500 named in the certificate; that the corporation was insolvent. She prayed for a receiver, etc. In 1925 George L. Bell was appointed permanent receiver of all the assets of the defendant. In September, 1926, A. Graves et al. (the Graves faction) filed an intervention in the above-stated cause, alleging as hereinbefore set out.

As only two points are insisted upon and argued in the brief of the plaintiffs.in error, we will consider only those two points. Was the charter amendment granted on October 1, 1917, valid and binding? Paragraph.6 of the original charter, which was stricken by the amendment of October 1,1917, was as follows: “The aforesaid corporation shall be governed and controlled by an executive [687]*687committee, which shall constitute a board of directors . . in accordance with the rules, by-laws and regulations enacted by the members of the corporation through their representatives in annual communication assembled.” A new paragraph (6) was substituted therefor. The intervenors, A. Graves et al., or at least a portion of them, were present at the Macon convention, and the Graves faction was there represented. It appears from the report of the auditor, as a finding of fact, that when the resolution authorizing the amendment to the charter was offered not a dissenting vote was cast; that the Graves faction was present at the convention when the 'amendment was offered and adopted; and that there was no dissenting vote on the question. So far as the record discloses, therefore, the vote in favor of the amendment was unanimous. In 14 C. J. § 199, it is stated: “Stockholders or members of a corporation may be estopped by acts, acquiescence, or laches from denying the acceptance of an amendment or the validity thereof. Although there may have been a fundamental change wrought by an amendment to the charter or act' of incorporation, such as might release a shareholder seasonably dissenting therefrom in the proper mode, yet unless he does so dissent and make a fair attempt to procure a rescission of his contract of subscription on that ground, or to prevent the corporation from acting in conformity with the amendment, he will become estopped from subsequently claiming that he has been released from his contract of subscription by reason of the amendment.” In 1 Thompson on Corporations (3d ed.), § 410, the author states that “An acceptance was held to be sufficient where the resolution was passed without a dissenting vote, but the majority of the members present refused to vote.” If the Graves faction, who were members or stockholders of the defendant corporation, were present at the Macon convention when the resolution to amend the charter of the defendant corporation was proposed, and they declined to vote, and the vote on the resolution was declared in favor of the adoption of the proposed amendment, they will not be heard later to complain that the vote was not passed by the requisite majority. They stood by in silence, and will be held to have acquiesced in the ruling of the presiding officer of the convention, to the effect that the amendment was adopted. The intervenors and those representing the Graves faction were present and participated in the proceedings of the 'convention at [688]*688Macon. Presumably they heard the resolution proposing the amendment to the charter read; and if they remained silent and refused to vote, and declined to express at the time any dissent from the action of the convention, they will not be heard, years later, to complain that the amendment was not legally passed by the requisite number of votes.

Are the intervenors, and the class represented by them, guilty of such laches in asserting their claims to the property in the hands of the receiver of the corporation as to prevent a recovery by them P In the auditor’s finding of fact on this question he determined that the intervenors were not entitled to the relief prayed for, on account of their laches. The auditor found that since the year 1902 the corporation had carried on the purposes of the organization both as' a fraternal association and as a business entity; that by the consent decree of August 3, 1917, the convention was to be held in Macon for the purpose of electing its officers and applying to the court for a restoration of the assets belonging to the corporation; that at this convention six of the intervenors were present; that on September 18, 1917, Hudson, one of the intervenors, together with a number of others, sought to enjoin the amendment to the charter, upon practically the same grounds now urged against the legality of the amendment; that an injunction was denied; that on December 27, 1917, a meeting of a number of lodges was held and a voluntary organization was effected, at which officers were elected, including A.

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