Case Name: Henry C. Gardiner et al., Plaintiffs and Appellants, v. Jeremiah Pollard et al., Defendants and Respondents
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1863-02-21
Citations: 10 Bosw. 674
Docket Number: 
Parties: Henry C. Gardiner et al., Plaintiffs and Appellants, v. Jeremiah Pollard et al., Defendants and Respondents.
Judges: (Before Bosworth, Ch. J., and Moncrief and Robertson, J. J.)
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 23
Pages: 674–693

Head Matter:
Henry C. Gardiner et al., Plaintiffs and Appellants, v. Jeremiah Pollard et al., Defendants and Respondents.
1. A stockholder of a corporation cannot, in an action for damages against the directors, whom he alleges have fraudulently misapplied the property of the corporation, and thereby rendered his stock valueless, recover for any damage which consists solely of his loss of the share of the assets embezzled by them.
2. To maintain such action, he must show that he has sustained damages beyond the intrinsic depreciation of the value of the stock, by the removal of such assets. An allegation, in the complaint, that the stock had become valueless, is not sufficient.
3. In order to recover his share of the damages for injury done to the corporation, by the embezzlement of its assets, he must make the corporation a party to the action.
4. Where the plaintiff in such an action seeks to charge the defendants as trustees, a third person who combined with them in the wrongful acts complained of, cannot properly be made a party defendant.
(Before Bosworth, Ch. J., and Moncrief and Robertson, J. J.)
Heard, February 1;
decided, February 21, 1863.
This was an appeal from an .order sustaining a demurrer to the complaint of the plaintiff.
The defendants in the action were Jeremiah Pollard, William M. Eddy, Samuel B. Caswell, Newton Deuel, Augustus Z. Huggins, Alden H. Eddy, Henry Wood, and Joseph J. Van Burén.
The contents of the pleadings are stated in the following opinion of the Chief Justice, before whom the demurrer was heard and sustained, at Special Term, in January, 1863.
Bosworth, Ch. J. This action is brought to recover damages for alleged acts of the defendants, whereby the plaintiff’s stock in the Nevada Water Company has, as it is charged, been rendered valueless, and the plaintiff has been deprived of dividends he otherwise would have received, to a large amount.
The misconduct imputed to some or all of the defendants, and which, it is alleged, has caused this injury, consists;—first, of the receipt by the defendant Pollard, and the wrongful appropriation to his own use and that of the said Eddys, between February 3, 1859, and November 5, 1861, of the net income of the property of the corporation, to the amount of over $150,000; — and if the tenth and eleventh articles of the complaint are intended to specify additional misappropriations, then, second, of the misappropriation of the sums therein mentioned, in the manner therein stated.
The allegations of the complaint are, in substance, to the effect, that between the 3d of February, 1859, and the 1st of December, 1860, the defendants, Pollard, Wm. M. and A. H. Eddy, and S. B. Caswell, all but Caswell being Trustees of the Company, entered into a conspiracy to embezzle the income of said Company, and to defraud the plaintiff of the value of his stock and of- the dividends thereon; and that by the aid and acts of the other defendants, in pursuance of said conspiracy, all the income, amounting to over $200,000, has been embezzled, the Company rendered insolvent, and the plaintiff’s stock, of the value of over $80,000, rendered valueless; and that the plaintiff has also been deprived of more than $15,000 in dividends; xvherefor he prays judgment for damages to the amount of $100,000.
Caswell has separately demurred to the complaint, and the other five defendants above named have jointly demurred to it, on the grounds that it does not state facts constituting a cause of action; that there is a misjoinder of causes of action; and that there is a defect of parties in that the corporation is a necessary party."1
There are several adjudged cases, to the effect that the corporation is a necessary party. (Bdbinson v. Smith, 3 Paige, 232; Cunningham v. Pell, 5 Id., 607; Allen v. Curtis, 26 Conn., 456; Stetson v. Faxon, 19 Pick., 155; Smith v. Surd, 12 Mete., 371; Sodsdon v. Copeland, 16 Maine, 314; Sersey v. Yeazie, 24 Id., 9.)
These decisions proceed on the principle, that all the moneys misappropriated by Pollard, whether gross proceeds or net income, were the moneys.of the corporation, and the damage caused by the misconduct is primarily and directly caused to the corporation; the defendants are liable to the corporation, and the latter can recover therefor, and is the only party having, at common law, any right of action by reason of the premises.
It is quite obvious, that if the abstraction of this money has rendered the company insolvent and thereby made the stock valueless, a recovery of the money by the corporation itself, with interest, might restore the value of the stock and enable the company to make dividends. And if the plaintiff can maintain this suit, and recover on it his aliquot part of the whole damage, he may obtain a double compensation, by means of the recovery in Ms suit and of one by the corporation for the same cause.
It is difficult to state any rule which authorizes a stockholder, as such, to release one who has embezzled funds of a corporation, with such effect as to impair the remedy or right of the corporation to recover the whole sum embezzled, with interest.
The corporation is the only party that can properly sue. If it refuse, then a stockholder, on allegation of that fact, may sue on behalf of himself and other stockholders, and make the corporation a party defendant.
This complaint is defective in substance, in that the suit is neither brought by the corporation, nor is" it made a defendant on an allegation showing the necessity therefor.
Ho decision has been cited in conflict with those above quoted.
The case of Gaffney v. Colville, (6 Hill, 567,) is brought on a statute giving, in a particular class of cases, a right of action to a stockholder.
Cageaux v. Mali, (25 Barb., 578,) was brought to recover damages for impairing the value of plaintiff’s stock, by issuing spurious stock. The Court assumed (whether correctly or not, I do not stop to consider) that the company was not liable for the spurious stock, and that the damage was primarily and directly damage to the stockholders.
The grounds on which the judgment in that case proceeds, does not conflict with the decisions (snjwa) to the point that, in a case like the present, the corporation is a necessary party.
Upon authority, therefore, as well as principle, the demurrers are, in this respect, well taken.
It is also objected to the complaint, that several causes of action are improperly united. The complaint (in its eighth article) alleges that, between the 3d of February, 1859, and the 1st of December, 1860, Pollard, the two Eddys and Caswell entered into a conspiracy to injure the plaintiff and plunder the corporation.
The allegations of the complaint next following, down to its twenty-first article, consist of statements of acts done by the defendants severally, except the defendant Van Burén. The name of the latter is not mentioned, except in the title of the complaint, prior to the twenty-first article.
That article states, that between the 1st of June and the 4th of ^November, 1861, Deuel, Wood, Huggins, Van Burén and A. H. Eddy “ entered into a further combination-for the fraudulent purpose of further carrying out “the objects of the said conspiracy,” tc? cause themselves to be elected trustees, and as such trustees to do certain acts therein mentioned; the doing'of these acts; and that they did such acts “ with full knowledge of said conspiracy and of the objects of the same, and of all the acts and transactions hereinbefore charged against the other defendants.” The twenty-second article states, that each and every act and transaction of the said defendants herein-before charged, were done by them and each of them for the fraudulent purpose of carrying out the objects of the said conspiracy.
I am not prepared to hold, peculiar and inartificial as the structure of this complaint may be, that all the defendants are not liable, assuming it to be true, that each did what he is charged with doing, with knowledge of the conspiracy first stated, in pursuance thereof, and for the purpose of consummating its fraudulent and unlawful objects.
Whether concert of purpose can be shown, or that each did what he is charged with doing, with knowledge of the fraudulent scheme and purpose first stated, and what proof will establish such facts, are questions which do not arise on these demurrers.
The defendants must have judgments for the cause first above considered, but with liberty to the plaintiff to amend his complaint and make the corporation a party, on stating sufficient cause therefor, on payment of the costs of the demurrers.
Prom the order entered on this decision, the plaintiff appealed.
H. C. Gardiner, plaintiff, appellant, in person.
I. A demurrer founded on the 6th subdivision of the statute, applies only to such defects as would render the count bad on a general demurrer at law, or bad for want of equity in Chancery. (Richards v. Edick, 17 Barb., 262; Graham v. Camman, 5 Duer, 698; Peabody v. Washington Co. Mut. Ins. Co., 20 Barb., 340.)
A complaint is not bad on demurrer, if it actually contain the elements of a cause of action, however inartifieially they may be stated. (People, &c., v. Mayor, &c., of New York, 28 Barb., 240 ; 8 Abbotts’ Pr., 7; Buzzard v. Knapp, 12 How. Pr., 504.)
A joint demurrer to a complaint by several defendants will be overruled, if the complaint shows a cause of action by the plaintiffs, or a portion of them, against some of the defendants. (The People v. Mayor, &c., of New York, 28 Barb., 240.)
II. The defendants, being trustees and officers of the Nevada Water Company, stand in the relation of agents and trustees to the plaintiff, as stockholder in said company. (Cumberland Coal Co. v. Sherman, 30 Barb., 571; Robinson v. Smith, 3 Paige, 222; Percy v. Millaudon, 3 La. R., [O. S.,] 568; Hodges v. New Eng. Screw Co., 1 R. I. R. 312; Verplanck v. Merc. Ins. Co., 1 Edw. Ch., 84; Redfield on Railways, 494; Benson v. Heathorn, 1 Younge & Coll., 326; The York & North Midland Railway Co. v. Hudson, 16 Beav., 485; Aberdeen Railway Co. v. Blakie, 1 McQueen, 461; Scott v. Depeyster, 1 Edw., 542; Clagett v. Kilbourn, 1 Black. U. S. R., 349; N. Y. & N. H. R. R. Co. v. Schuyler, 17 N. Y. R., 595; 1 Lind. Law of Part., 494; Story’s Agency, §§ 217, 232; Crook v. Jewett, 12 How. Pr., 19; Bissell v. Michigan, &c., R. R. Co., 22 N. Y. R., 275; House v. Cooper, 16 How. Pr., 293; Austin v. Daniels, 4 Denio, 301; Attorney-General v. Corporation of Leicester, 7 Beav., 176; Ponchartrain R. R. Co. v. Paulding, 11 La. R., [O. S.,] 41; Angel & Ames on Corp., § 314, p. 372; Gaffney v. Colville, 6 Hill, 567; Cross v. Sackett, 6 Abbotts’ Pr., 265; Id., 270, note; Cazeaux v. Mali, 25 Barb., 578; Mead v. Mali, 15 How. Pr., 347.)
III. The cause of action stated in the complaint is the damage to the plaintiff on account of his stock being made valueless to him. And the facts which constitute that cause are the unlawful acts of the defendants in pursuance of a conspiracy.
, The damage sustained by the plaintiff is the ground of the action, not the conspiracy. (Skinner v. Gunton, 1 Saund., 230; Jones v. Baker, 7 Cow., 445; Hutchins v. Hutchins, 7 Hill, 104; Livermore v. Herschell, 3 Pick., 36.)
1. A conspiracy makes every act done in pursuance of it illegal and. fraudulent, though innocent and lawful in itself. 1
All confederacies wrongfully to prejudice another are misdemeanors at common law, whether the intention is to injure his property, his person, or his character. (Chitty’s Crim. Law, 1139; approved, 4 Metc., 125; also, in case of Lambert v. The People, 9 Cow., 579; People v. Fisher, 14 Wend., 16; 1 Bishop on Crim. Law, § 437; 2 Id., §§ 160, 161; Van Pelt v. McGraw, 4 Comst., 110, 9 Coke, 55; 6 Term R., 628; Cockshall and the Mayor, &c., of Boalton's Case, Mich. R., 31 & 32 Eliz. in Com. Pleas; Leonard’s R., 189, A. 269; Gregory v. Duke of Brunswick, 47 Eng. Com. L., [1 Car. & K.,] 23; Phelps v. Goddard, 1 Tyler, 60 ; Rex v. Mawbey, 6 T. R., 636; Commonwealth v. Judd, 2 Mass. R., 336; State of Maryland v. Buchanan, 5 H. & J., 317-368; Domat’s Civil Law, [by Stranahan,] 350, § 783.)
2. And in addition to the fraudulent and unlawful character given to the acts done, it makes each and. every, the joint act of all. (Sheple v. Page, 12 Verm. R., 533; Hutchins v. Hutchins, 7 Hill, 107 ; Regina v. Murphy, 34 Eng. Com. Law, [8 Car. & P.,] 297 ; People v. Mather, 4 Wend., 230; Livermore v. Herschell, 3 Pick., 36 ; Forsyth v. Edminston, 11 How. Pr., 411.)
3. The conspiracy need not be alleged, for it is a conclusion to be drawn from the facts stated. (Upton v. Vail, 6 Johns., 182; Patten v. Gurney, 17 Mass. R., 185; People v. Mather, 4 Wend., 230; Hooker v. Vandewater, 4 Den., 349; Jones v. Baker, 7 Cow., 445; Eason v. Westerbrook, 2 Murphy, [N. C.,] 329.)
4. - And if it appear that two or more persons, by their acts, are pursuing the same object, often by .the same means, one performing part of an act, or a series of acts, and the others completing it for the attainment of the object, it is a conspiracy. (Regina v. Murphy, 34 Eng. Com. Law, [8 Car. & P.,] 297 ; People v. Mather, 4 Wend., 261; Savil v. Roberts, 1 Salk., 13; Anon., 3 Id., 97; Molony v. Dows, 15 How., 263 ; 2 Greenl. Ev., 257, § 254; Dexter v. Speur, 4 Mason, 115, per Story, J.; Upton v. Vail, 6 Johns., 183, per Kent, J.; Barney v. Dewey, 13 Id.. 225; Yates v. Joyce, 11 Id., 140 ; Swan v. Saddlemire, 8 Wend., 680.)
IY. The ground of demurrer that several causes of action have been improperly united, is in the nature of a plea in abatement.
It does not distinctly specify the grounds of objection to the complaint, in that it does not point out the alleged several causes' of action, nor does it show, how they have been -improperly united. (Purdy v. Carpenter, 6 How. Pr., 362; Hinds v. Twedle, 7 Id., 278; Grant v. Lasher, 2 Code R., 2; Hunter v. Frisbee, Id., 59; Loomis v. Tifft, 16 Barb., 541.)
A demurrer does not lie to a complaint for the defect of not separately stating two causes of action, they being such as might be united in one complaint. If improperly stated, the remedy is by motion.
Moreover, there is but one cause of action. (Brinkerhoff v. Brown, 6 Johns. Ch., 139; Fellows v. Fellows, 4 Cow., 696.)
The subject of this action is The llevada Water Company, and its property; The cause or ground of the action is the damage to the plaintiff, as stockholder in said company, occasioned by the fraudulent acts of the defendants in connection with the said company audits property. (Hammond v. Hudson River Iron and Manuf. Co., 20 Barb., 384; Dennis v. Kennedy, 19 Id., 529 ; Jeroliman v. Cohen, 1 Duer, 633; Spier v. Robinson, 9 How. Pr., 329; Durant v. Gardner, 10 Abbotts’ Pr., 445; Brinkerhoff v. Brown, 6 Johns. Ch., 139 ; Code, § 167; N. Y. & N. H. R. R. v. Schuyler, 17 N. Y. R., 604.)
Y. If true that the defendants have been improperly joined, the defendants could not demur on this ground, either at common law or under the Code. And if it was a good ground, it could not be assigned by joint demurrer.' (1 Chitt. Pl., 86; Peabody v. Washington Mut. Ins. Co., 20 Barb., 342; Brownson v. Gifford, 8 How. Pr., 389 ; Richards v. Edick, 17 Barb., 262; De Witt v. Swift, 3 How. Pr., 282; Simpson v. Loft, 8 Id., 236; N. Y. & N. H. R. R. Co. v. Schuyler, 7 Abbotts’ Pr., 41; 17 N. Y. R., 592; Churchill v. Trapp, 3 Abbotts’ Pr., 306; Pinckney v. Wallace, 1 Id., 82; Gregory v. Oaksmith, 12 How. Pr., 134; Whitbeck v. Edgar, 2 Barb. Ch., 106; Cherry v. Monro, Id., 618.)
YI. The objection that The Eevada Water Company should be made a party to the action either as plaintiff or defendant, would be, at common law, a plea in abatement, and the same rules are applicable to it. In this respect the Code has made no change. (Gardiner v. Clark, 6 How. Pr., 449.)
1. The language used in assigning the fourth ground of demurrer is so vague and uncertain that it is impossible to understand what the pleader intended.
The demurrer certainly does not state that there is a defect of parties plaintiff, nor does it state that there is a defect of parties defendant.
Ho ground of demurrer is here assigned. (Purdy v. Carpenter, 6 How. Pr., 362; Skinner v. Stuart, 13 Abbotts’ Pr., 442.)
2. The Hevada Water Company is not a proper party to be joined as plaintiff. (Code of Pro., §§ 111, 117; Ang. & Ames on Corp., 7th ed., 525, § 560; Cazeaux v. Mali, 25 Barb., 582; 1 Chitt. Pl., 63.)
3. The company is not a proper party defendant. (Van Santv. Pl., 155; Brinkerhoff v. Browm, supra.)
VII. The Court cannot allow the defendants to withdraw their demurrer and plead over. (2 R. S., 3d ed., 448.)
It does not appear that this demurrer was interposed in good faith, but, on the contrary, it does appear that it was interposed in bad faith, and solely for delay.
VIII. The Court erred in not overruling the demurrers, and rendering judgment absolute for the plaintiff.
The value of the stock will, of course, depend on the condition of the corporation, but the corporation, so far as its own property is concerned, is not affected by that value. (Hart v. State Bank, 2 Dev. Eq., 111; Brightwell v. Mallory, 10 Yerg., 196; State v. Franklin Bank, 10 Ohio R., 90-97.)
Each stockholder sustains his separate loss on his own stock. (Mead v. Mali, 15 How. Pr., 350.)
A depreciation of the market value of stock is a legal damage to the owner. (Cazeaux v. Mali, 25 Barb., 578; Mead v. Mali, 15 How. Pr., 347; Kortright v. Commercial Bank of Buffalo, 20 Wend., 90.)
The allegation of damage in the complaint is sufficient, and the plaintiff is entitled to recover, both immediate and consequential damages. (Molony v. Dows, 15 How., 263, and cases there cited; Phelps v. Goddard, 1 Tyler, 60; Patten v. Gurney, 17 Mass. R., 185; Barney v. Dewey, 13 Johns., 225; Gallager v. Brunel, 6 Cow., 346.)
The plaintiff has shown fraud, coupled with damage, and, upon principles as permanent as any in our jurisprudence, is entitled to recover, and be completely indemnified.
The law is well settled, and beyond question, that parties may be liable in damages for fraud, and to be punished criminally for mutually agreeing to do that which would have rendered neither of them liable, if singly he had done, by the same means, the thing agreed upon. (State v. Buchanan, 5 Harris & Johns., 317; Sydserff v. Reg., 11 Q. B., 245; 12 Jur., 418; People v. Richards, 1 Mich. R., 216; Commonwealth v. Ridgway, 2 Ashmead, 247; Reg. v. Gompertz, 9 Q. B., 824; 16 Law J., Q. B., 121; Twitchell v. Commomwealth, 9 Barr, 211; Commomwealth v. Warren, 6 Mass. R., 74; Commomwealth v. Ward, 1 Id., 473; Patten v. Gurney, 17 Id., 182, 184; Bean v. Bean, 12 Id., 21; Rhoads v. Commomwealth, 3 Harris, [Pa.,] 272; Reg. v. Macarty, 2 East, P. C., 823 ; 6 Mod., 301; 2 Ld. Raym., 1179; Reg. v. Orbell, 6 Mod., 42; Reg. v. Button, 11 Q. B., 929; The State v. Simons, 4 Strob., 266; The State v. DeWitt, 2 Hill, [S. C.,] 282; The State v. Younger, 1 Dev., 357; Lambert v. People, 7 Cow., 166; 9 Id., 578; Levi v. Levi, 6 Car. & P., 239; Reg. v. Wilson, 8 Id., 111.)
The defendants are liable directly to the plaintiff, on the ground that they are his agents, and have violated their duties and obligations to him by acts of gross fraud. • (Story’s Agency, § 217.)
IX. The law is well settled in this State, in England, and by the Supreme Court of the United States, that the directors of a corporation are the agents of its stockholders. (Cumberland Coal Co. v. Sherman, 30 Barb., 159, and cases cited; Scott v. Depeyster, 1 Edw., 542; N. Y. & N. H. R. R. Co. v. Schuyler, 17 N. Y. R., 595; 1 Lindley’s Law of Partnership, 495; Bennett’s Case, 18 Beav., 339; 5 De G., M. & G., 284; Benson v. Heathorn, 1 Y. & C. C. C., 326; York, &c., R. R. Co. v. Hudson, 16 Beav., 495; Maxwell v. Port Tennant Co., 24 Id., 495; Aberdeen R. R. Co. v. Blaikie, 1 Macqueen, 461; Claggett v. Kilbourn, 1 Black’s U. S. R., 349.) It thus appears that plaintiff, upon two grounds, is entitled to recover full compensation in damages, for:
1. The depreciation of the value of his stock.
2. For being deprived of the use of his dividends.
3. The dividends themselves.
4. For his trouble, inconvenience and expense. But, under the complaint in this action, he can only recover for the injuries sustained under the 1st and 2d specification of damages. And these are injuries to him individually, and for which he alone can sue.
X. Upon the authority of the eases cited, it appears that the facts stated in the complaint, and the prayer for relief show:
-1. That this is a special action on the case, in the nature of , a conspiracy, and that the plaintiff is entitled to a judgment in damages for such amount as the Jury shall find. The defendants are clearly nob privileged to coinmit frauds because of their fiduciary relations to the plaintiff.
2. That it is an action on the case for fraud, coupled with damage.
3. That it is au action in assumpsit for the fraudulent violation by the defendants of their duties as the agents of the plaintiff. Such is the form of complaint in this action, that not one cent of the damages recovered under it could ever be sued for by the company.
XI. If the Court can grant relief such as is specified in the prayer, without additional parties, it should do so, although the plaintiffs would be entitled to further relief if the proper parties were before the Court. (Dart v. Palmer, 1 Barb Ch., 99.)
XII. Where conspiracy is charged, the defendants cannot demur on the ground that several causes of action have been improperly united. The conspiracy must first •be denied. (Conro v. Port Henry Iron Co., 12 Barb., 57; Fellows v. Fellows, 4 Cow., 696.)
John E. Burrill, for defendants, respondents.
I. The gist of the action is the damage by the wrongful acts of the defendants, and the allegation of conspiracy is of no importance as respects the cause and ground of the action. (Hutchins v. Hutchins, 7 Hill, 107; Jones v. Baker, 7 Cow., 445.)
II. The plaintiff must show that some wrong has been done which has been attended with special damage to himself, and that all of the defendants have united in the commission of such wrong. (Same cases.)
III. All the acts charged against the defendants (other than those alleged to have been done by them as trustees,) consist of having misappropriated and converted the mon eys and property of The Nevada Water Company.
IY. For any misappropriations or conversion of property of the companjs defendants are liable to the company only. (12 Metc., 371; 1 Freem. Ch., 174; Rohinson v. Smith, 3 Paige, 232; Allen v. Curtis, 26 Conn. R., 457; Bate v. Graham, 1 Kern., 237.)
Y. If the action could be maintained in the name of the plaintiff, the corporation must be a party. (Same cases; 16 How. Pr., 293; Wells v. Jewett, 11 Id., 242; Bell v. Mali, Id., 254; Cunningham v. Pell, 5 Paige, 607, 613.)
YI. The action, if maintainable by any stockholder, should be brought in the name of all, or in the name of the plaintiff for the benefit of all. (Wells v. Jewett, 11 How. Pr., 242; Cunningham v. Bell, 5 Paige, 607, 613.)
YII. If Pollard used the money of the company to purchase mining claims, and used the money and property of the company to work them, the company may maintain an action, either to establish their claim to the property purchased, and to compel an account of earnings, or to recover the money and value of the property.
YHI. If the company or those having the charge and control of its affairs do not choose to institute proceedings to enforce such rights, but refuse so to do, the plaintiff may, on an averment of such facts, entitle himself to prosecute such action in his own name. (Oases under 5th and 6th points.)
IX. An action against the trustees of the company, for any breach or omission of duty, depends upon principles peculiar to the relations of trustees, and wholly inapplicable to the defendants not standing in that relation. (Oode, § 167, sub. 7.)
X. Part of the charges against the defendants, Deuel, Wood, Huggins, Yan Burén and Eddy, are for violation of duty as trustees. The trustees are responsible individu ally, not jointly. (Franklin Fire Ins. Co. v. Jenkins, 3 Wend., 138.)
XI. There is a misjoinder of causes of action, because:
1. Some of the causes of action are against some of the parties as trustees, and are based on claims against them as such, while others are made against the same and other defendants in an individual capacity.
2. Some of the charges based on claims against the defendants as trustees, do not affect all the defendants. Caswell never was a trustee.
3. These charges against the several defendants as trustees, are improperly united with charges made against the defendants as individuals, and which do not affect all the defendants.
XII. The plaintiff fails to show that the acts complained of have been productive of special damage to himself.

Opinion:
By tub Court — Bobertson, J.
The plaintiff complains of the decision at Special Term, because the Court viewed what he considered as a special action on the case at common law, as a suit in equity for an account to which the corporation of which he is a stockholder should be a necessary party. He virtually, however, surrenders any special right of action against the defendants, for what he terms, in the complaint, a " conspiracy" independently of their acts. Xor does he urge that, by reason of such conspiracy, such acts became more or less actionable. He only seeks to avail himself of such conspiracy as an element in the cause of action against the defendants, in that they are thereby made jointly liable (Sheple v. Page, 12 Verm. R., 533; Hutchins v. Hutchins, 7 Hill, 107) for every act charged. The injury really complained of is the reduction of his stock to worthlessness by the joint acts of the defendants.
The cases certainly sustain the view, that no action lay at law for merely conspiring together to injure a third person. In respect to it as a misdemeanor and crime, a different rale prevailed. (Chit. Crim. Law, 1139; Lambert v. People, 9 Cow., 579; People v. Fisher, 14 Wend., 16; 2 Bishop on Crim. Law, § 160, 161; 9 Coke, 56; King v. Mawbey, 6 Tenn. R., 636; Commonwealth v. Judd, 2 Mass. R., 336.) In a civil suit, the only cause of action must be acts done pursuant to the conspiracy, whereby the plaintiff was injured. Tlie eases to sustain this, cited by the plaintiff, are Skinner v. Gunton, (1 Saund., 230,) Jones v. Baker, (7 Cow., 445,) Hutchins v. Hutchins, (7 Hill, 104,) and Livermore v. Herschell, (3 Pick., 36,) which they do fully.
It is true there are cases in which acts, innocent or praiseworthy in themselves, may become the subject of an action, when they are the cause of injury and committed with that object in view. Such is the discharge of a party without giving bail, which is blameless when done in the exercise of judicial discretion, but becomes actionable when done for an improper motive, which is conclusively established by an agreement to that effect between a magistrate, his clerk and the jailer. (Cockshall v. The Mayor of Boalton, Leonard's R., 189, A 269.) Or hissing at a theatre, an authorized mode of expressing disapprobation, becomes actionable when done maliciously, as evidenced by a previous combination for the purpose, to drive an obnoxious performer from the stage. (Gregory v. Duke of Brunswick, 47 Eng. Com. L., [1 Car. & P.,] 23.) So, too, the arrest of a party' in a State, although lawful otherwise, is unlawful, if done after bringing him within its jurisdiction by deceitful practices. (Phelps v. Goddard, 1 Tyler, 60.) In such cases the previous concert of the parties is conclusive evidence of an evil intent, and the action is, therefore, though improperly, called one for a " conspiracy." But, in this case, the acts done were illegal and did not need to-be referred to the previous conspiracy, in order to be characterized, and the injury to the plaintiff was complete without regard to it; it is not, therefore, even technically, an action for a conspiracy. It is true the acts done accomplished the injury designed; but the law always infers that parties intend the natural consequences of their acts. And hence the action is resolved into one simply of indemnity to the plaintiff for a wrong done to him by acts imputable to the defendants jointly.
In this view it becomes important to ascertain whether the injury to the plaintiff was done solely to property of his, distinct from that of any other person, or to an interest held jointly by himself and others; and, if the latter, whether the injury to his interest was special and separate. The allegation in the complaint is, that by reasoji of the conspiracy, and the acts of the defendants to carry out the same, the plaintiff has been deprived of a large sum, "which he would otherwise have received as dividends," and his stock has also been rendered valueless to him. The acts complained of were the appropriation, by different defendants, of.the income and assets of the corporation, to their own use. I do not think the allegation, that the stock had become valueless, equivalent to one that it had sunk below the point it would reach in consequence of all the property of the company being misappropriated, or that the plaintiff's share of the assets so embezzled, if restored to him, would not completely indemnify him for any loss. In other words, that it was not equivalent to alleging that the plaintiff sustained any loss by the defendants' acts beyond Ms interest as stockholder in the property embezzled by them, as property of the corporation.
Possibly there may be cases in which directors or other agents of a corporation may be liable, directly, to stockholders, for acts done by them, inflicting special injury on the latter beyond that done to the corporation as an artificial person. Thus, slanders affecting the value of the stock, the issue of spurious stock, which is equivalent to a false assertion of the amount issued, (Cazeaux v. Mali, 25 Barb., 578,) the depreciation of the market value of stock below its intrinsic worth, by abstraction of the funds of a corporation, as in Stetson v. Faxon, (19 Pick., 147,) may be the subjects of individual actions by stockholders. But in the last case stockholders ought only to be allowed to recover as damages the difference between the depreciated market value of the stock and its intrinsic depreciation by the removal of the assets. Because, for the injury to his interest in the assets of the company by the withdrawal of such assets, he is entitled to a share of the damages recovered by the corporation, and, therefore, he has not sustained damages to the full amount of the depreciation of the stock caused by such removal of assets. Although, in such cases, it may be a presumption of law that the value o£ the stock has fallen by the embezzlement of the assets, (N. Y. & N. Haven R. R. Co. v. Schuyler, ubi sup.,) there is no such presumption that it has fallen below what its diminution would be by the defraudation of the stockholder of his right to the assets embezzled. If it has fallen in the market below that, so as to deprive the plaintiff of. the benefit of a sale, and render the restoration of the value of such assets not a sufficient indemnity, the plaintiff is bound to allege it in his complaint, and prove it.
There is no reason why, if the depreciation of the value of the stock by the embezzlement of the assets is only equal to the share of such assets belonging to each stockholder, the interposition of the artificial person of the corporation, the mere creature of the law, should entitle such stockholder to double compensation for the same loss. In the-case of an unincorporated association, or partnership, the same acts might be done by employees, and yet no one has ever thought of contending that each associate or partner had a right of action for injury to his interest in such association or firm against such employees, in addition to the joint action maintainable by the partners or associates, and yet the only difference between that and the case before us is that an act of incorporation, rendering the . association an artificial person, is interposed? because the interest in the former is as much a vendible commodity, capable of having a market value, as shares of stock, and, therefore, is as capable of depreciation by the acts of agents. Upon the principles contended for in this case the creditor of a solvent debtor might bring an action directly against any agents of the latter, who, being intrusted with all his property, should convert it to their own use, and thereby deprive him. of the means of recovering his debt.
I cannot doubt, therefore, that this complaint is defective, if the action be one at common law, in not alleging special damage to the plaintiff, by the defendants' acts, beyond that inflicted on the corporation, and indirectly on all the stockholders jointly, (Stetson v. Faxon, 19 Pick., 147,) because the corporation represents the plaintiff in prosecutions for all such damages, and to the extent of that sum the plaintiff has not directly sustained damage* because he has the means of indemnity.
I do not perceive that any supposed liability by the defendants, as trustees or agents, if they were all such, would help the plaintiff's case. It is not very clear from the cases where Courts have undertaken to make directors responsible to stockholders directly, for misconduct, upon what principle they proceeded. They are termed both trustees and agents of the stockholders; widely different relations. In none of such cases were all the consequences of a trust or agency attributed, such as constantly to have accounts rendered, or the profits distributed as fast as they were received. There may be a confidential relation subsisting between a stockholder and a director, creating a certain duty by the latter to the former, or certain rights in the former, which gives the former a right to prevent or sue for malfeasance of the latter. But I think it will be found that neither " trustee" nor " agent " expresses such relation, and that bailee of the capital of the corporation to perform specific duties therewith, comes much more near to it. The Revisers deemed it necessary to provide expressly for the direct liability of directors to stockholders, (2 R. S., 589, § 1; Id., 591, § 10,) which was unnecessary, if they were either trustees or agents. The cases- cited of The Attorney-General v. Corporation of Leicester, (7 Beav., 176,) Ponchartrain R. R. Co. v Paulding, (11 La. R., O. S., 41.) Benson v. Heathorn, (1 Younge & Coll. C. C., 326) Hodges v. N. E. Screw Co., (1 R. I. R., 312,) Verplanck v. Merc. Ins. Co., (1 Edw. Ch., 86,) York and Midland R. W. Co. v. Hudson, (16 Beav., 485,) Aberdeen Co. v. Bleakie, (1 McQuirk, 461,) made the corporation a party. In Austin v. Daniels, (4 Den., 301,) only the liability to the corporation is spoken of. The case of Robinson v. Smith, (3 Paige, 232,) does not state to whose benefit the personal liability of the defectors is to accrue, or by whom the suit is to be brought. In Scott v. Depeyster, (1 Edw. Ch., 542,) it was merely decided that directors of a corporation were not liable for the forgery and embezzlement of an officer whom they had no reason to suspect of any misconduct. And in the case of The N. Y. & N. H. R. R. Co. v. Schuyler et al., (17 N. Y. R., 595,) the complaint was sustained as demurrer on the ground that the corporation was the trustee and guardian of the stockholders entitled to protect them against the claims of the holders of spurious stock. ^Notwithstanding, therefore, what is said in Cumberland Coal Co. v. Sherman, (30 Barb., 571,) Robinson v. Smith, (ubi sup.,) Scott v. Depeyster, (ubi sup.,) Verplanck v. Merc. Ins. Co., (ubi sup.,) N. Y. & N. H. R. R. Co. v. Schuyler et al., (ubi sup.,) and even in Crook v. Jewett, (12 How. Pr., 21,) the law does not appear by any means settled that the director holds the relation of either trustee or agent to the stockholder, with all its attributes, so as to incur all the legal liabilities attached to that relation. If the directors, however, are trustees, there is a misjoinder of defendants, as the defendant Caswell was not a director, but a mere bookkeeper.
If this action, therefore, be not a common law action, it is only sustainable as one in equity, commenced by a party interested to compel the defendants to restore to the corporation. property converted by them, so as to enable the plaintiff to get his share. And to such an action the corporation is a necessary party as the trustee of the other stockholders. The plaintiff does not, in such case, by making the company a defendant, proceed against it for any misfeasance or seek any relief, except having his share of what is restored by the defendants. And he cannot even make it a party defendant without giving it the option of becoming a party plaintiff jointly with himself. The cases cited by the Ohief Justice, in his opinion at Special Term, sustains the necessity of adding the corporation as a party.
In Crook v. Jewett, (12 How. Pr., 21,) on a motion to discharge an order of arrest, it was held that the illegal sale of certain property belonging to a corporation by certain of its officers, was an embezzlement in a fiduciary capacity, making such officers liable to arrest, and that it was no objection that the action was brought in the name of a stockholder, because such an action might be so brought against directors of the corporation for injury to his interests. It does not appear that any objection was taken in such case, for want of parties, or how far the plaintiff had sustained peculiar injury, and it was on a summary application. It can hardly be relied on as authority to show that where there is no peculiar damage to the plaintiff, he can bring suit against directors without the intervention of the corporation as a party, if its omission is objected to.
The law of this case may be summed up in three propositions:
I. That the plaintiff cannot recover in an action at law against the defendants as trustees of the corporation for any damage by their acts, which consists solely of his loss of his share of the assets embezzled by them.
II. That he has not alleged any damage to himself specially, beyond such loss.
III. That in order to get his share of the damages, for injury done to the corporation by the embezzlement of its assets, he must make such corporation a party to the action.
And if the defendants are to be made liable as trustees, then the defendant Caswell is not properly a party as not being one, and the order in his favor should at least be affirmed.
The order below should, therefore, be affirmed, with ten dollars costs, with liberty to the plaintiff to amend in twenty days.