# Davis v. Appalachian Electric Co-Operative, Inc.

> Tennessee Supreme Court · November 6, 1963 · 213 Tenn. 215

URL: https://www.frixlaw.com/law-library/cases/9671412

## Case

- **Full name:** Coy E. Davis Et Al. v. Appalachian Electric Cooperative, Inc.
- **Court:** Tennessee Supreme Court
- **Decided:** November 6, 1963
- **Citations:** 213 Tenn. 215; 17 McCanless 215; 373 S.W.2d 450; 1963 Tenn. LEXIS 500
- **Precedential status:** Published
- **Opinion:** Concurrence by Dyer
- **Judges:** White, Dyer, Burnett, Dyee, Holmes, Clement
- **Cited by:** 2 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9671412

## How later opinions describe it (automated extraction)

- discussing members of an electric cooperative as the equivalent of shareholders of a corporation
- discussing the policy rationale for the exhaustion rule

## Opinion text

Dyer, Justice
(concurring).
I concur in the opinion prepared for the Court by my Brother White, but in addition to the reasons therein set out I set forth the following reasons which are, in my opinion, cogently logical and reasonable.
In the first place, the courts are not inclined to substitute their judgment for that of the management of the corporation, whether it be for profit or non-profit, when there is no charge of mismanagement, fraud or corruption.
It may be that the Trustees herein have failed to make refunds as required by T.C.A. 65-2516. If this be so, the appellees have their remedy under the statutes and bylaws which govern the appellant’s operation. Our common law requires that appellees exhaust these and any *226 other remedies they may have before seeking the aid of the courts.
T.C.A. 65-2509 provides for the adoption of the original by-laws by the board of trustees and that thereafter the by-laws shall be adopted, amended or repealed by its members. This section requires that such by-laws shall set forth the rights and duties of members and trustees and may contain other provisions for the regulation and management of the affairs of the co-operative not inconsistent with this Chapter (176, Acts of 1939), or with its articles of incorporation.
T.C.A. 65-2514 provides for annual and special meetings of the members. Pursuant to the aforesaid authority, the by-laws of appellant provide that special meetings of the members may be called by the Board of Trustees, by any three Trustees, by the President, or upon a written request signed by at least ten per cent of all the members.
A quorum at such meeting shall consist of the presence in person of three per cent of all the members of the co-operative, or two hundred members, whichever is the lesser, for the transaction of the business of all meetings of the members, whether regular or special. By a majority vote at such meeting the appellees might direct the Trustees to act in accordance with their vote.
Under T.C.A. 65-2524 it is provided that members may embody any proposition in a petition signed by ten per cent of the members and present it to the trustees who are then required to hold a special meeting of the members at which said proposition may be presented .for a vote of the members. The words “any proposition” may have been intended by the Legislature to refer only to *227 consolidation, merger, conversion, or the like. I find it unnecessary to construe the applicability or meaning of “any proposition” to the case here.
It is sufficient to say that the appellees have a remedy both under the statutes and under the by-laws of the appellant which they have failed to exhaust before seeking redress in the courts. The general common law rule set out in the opinion of my Brothers requires exhaustion of these remedies before suit.
Since the Act and the by-laws provide a procedure within the co-operative corporation for redress of grievances of its members and this remedy has not been exhausted, and the case does not come within the exception to the general rule requiring such prior action by the members, it follows that the action of the chancellor in overruling the demurrer must be reversed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9671412. Public record. Not legal advice.