Case Name: Abbie S. Nash and Others, Appellants, v. The Hall Signal Company, Respondent, Impleaded with Others
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1895-11
Citations: 97 N.Y. Sup. Ct. 354
Docket Number: 
Parties: Abbie S. Nash and Others, Appellants, v. The Hall Signal Company, Respondent, Impleaded with Others.
Judges: Yan Brunt, P. J., concurred.
Reporter: Supreme Court Reports (Hun)
Volume: 97
Pages: 354–360

Head Matter:
Abbie S. Nash and Others, Appellants, v. The Hall Signal Company, Respondent, Impleaded with Others.
Corporation — right of a stockholder to sue for the torts of directors — non-residence, not presumed — bona fide holding of stock, presumed — when a complaint is i multifarious — who may object.
Where a corporation refuses to prosecute individual directors who are alleged to have been guilty of an abuse of their trust, or of a misapplication of the funds of the corporation, and such directors are still in control, stockholders are . entitled to sue for redress in their own name.
An objection taken by demurrer to the jurisdiction of the court based upon the non-residence of the plaintiffs, is not tenable unless the fact of non-residence appears upon the face of the complaint.
Where a demurrer is interposed to a complaint in an action brought by stockholders, who allege that the directors of a corporation have abused their trust and misapplied the corporate funds, the court will presume that all the plaintiffs are bona fide holders of their stock; and where it does not appear affirmatively upon the face of the complaint that any one of the plaintiffs acquired his stock subsequent to the transactions complained of, the court cannot regard an allegation to that effect contained in one of the grounds of demurrer.
Where two causes of action are joined in the same complaint, a demurrer to the complaint upon the ground that all of the defendants are not affected by . both causes of action will lie, even at the instance of a defendant who is so affected.
If “A & B, directors in a corporation, waste its funds during one year, and B and C, directors, by some act not connected with the first devastavit, waste the corporate funds in another year, the three cannot be joined as defendants in an equitable action brought by or in behalf of the corporation to compel them to account for and pay the damages sustained by reason of these independent wrongful acts.”
A complaint so drawn is multifarious, within the meaning of subdivision 7 of section 488 of the Code of Civil Procedure.
O’Brien, J., dissenting.
Appeal by tlie plaintiffs, Abbie S. Nasli and others, from an interlocutory judgment of tlie Supreme Court in favor of the defendant, The Hall Signal Company, entered in the office of the clerk of the county of New York on the 3d day of July, 1895, upon the decision of the court rendered after a trial at the New York Special Term sustaining the said defendant’s demurrer to the complaint, with notice of an intention to bring up for review upon such appeal an order entered in said clerk’s office on the 24th day . of June, 1895, sustaining the demurrer, and directing the entry of judgment.
Austin Abbott, for the appellants.
Gharles M. Ka/rle, J. 8. JO Amor earn and Witter & Kenyon, for the respondent.

Opinion:
Follett, J.:
In case A and «B, directors in a corporation, waste its funds during one year, and B and 0, directors, by some act not connected with the first devastavit, waste its funds in another year, the three cannot be joined in an equitable action brought by or in behalf of the corporation to compel them to account for and pay the damages sustained by these independent, wrongful acts. Wasting the property of a corporation by its directors is a tort. A is not liable for the acts of B and 0, and C is not liable for the acts of A and B, and these independent, tortious acts constitute distinct causes of action which cannot be united in one complaint. .
The interlocutory judgment should be affirmed, with costs, on the opinion of Lawrence, J., at Special Term.
Yan Brunt, P. J., concurred.
Judgment affirmed, with costs.